CEOInterviews.AIE40: Chairman and CEO of Kite Realty – John Kite (Live from ICSC)

H

Host0:00

It's impossible in my opinion to achieve extreme success in whatever you're doing without people lifting you up all the way. That's been the cornerstone of our success: we've had people who have gone out of their way to help us when they didn't have to, and so you try to pay that back.

Welcome to the Matthews Mentality Podcast. In this episode, we are here with John Kite in New York City at ICSC, which for listeners not in the real estate industry is a big trade show and conference. It's in New York; there's another big one in Vegas, but we're sitting here in beautiful New York City. John has served as Chairman and CEO of Kite Realty Group since the company's IPO in August of 2004. He is responsible for the company's strategic planning, operations, and growth. Kite Realty Group currently has 179 operating properties, over 30 million square feet, and an enterprise value of $8.7 billion. John, welcome to the podcast.

J

John Kite1:17

Kyle, thanks for having me.

H

Host1:22

You've probably been coming to this show for a minute, right?

J

John Kite1:24

Yeah, a long time. I don't even think I want to answer that because it's going to age me, but I've definitely been coming for a long time.

H

Host1:35

Day-to-day life of a public CEO. What's it like?

J

John Kite1:38

It's no different than what you're doing or anybody else is doing. We're all busy. It's fun, sometimes it's grinding, but you know, it's always something new. We've got a great team. We focus a lot in our organization about collectively working the whole company together to get to the same goal. So it has its days that are tough, just like everybody else, but it also has some great days. It's fun to be in New York and meeting with clients. It's all about customers, so this is the place to do it.

H

Host2:17

I want to hear and get into your story, but talk to us a little industry knowledge. I feel like there's a little optimism, a good buzz. Obviously retail has had really good operations for the last couple years, but even from the capital markets and transactions, it feels like people think the markets are kind of coming out of a drought and getting better. What are your thoughts?

J

John Kite2:35

I think retail's had a nice resurgence in the last couple years. It only took 15 years to get there. It only took an apocalypse that lasted for 15 years but didn't really happen. I would tell you that the greatest thing right now is that there seems to be a consensus that retail open-air real estate is a good place to invest. When people start to talk like that and take action around those things, it's just great for all of us. There's more buzz around retail real estate institutionally, which candidly, pre-COVID and during COVID, nobody talked about retail. No one talked about investing in retail. All people talked about was that it's ending. It's great that that's over.

H

Host3:31

I haven't heard that conversation in years. In your humble opinion, and your opinion matters, what do you think has been the driver of this resurgence in retail?

J

John Kite3:40

There's so many things, Kyle. You probably know more about it than me, but from my perspective, a big part of it is that there's been very little new supply. You don't see people building shopping centers at scale like they used to. In the late '90s, 2000s, all the way to 2007, people were delivering product every day, left and right, and centers were going up everywhere. There was a lot of greenfield development. You just don't see that today. So one of the biggest drivers is that supply is low on a relative basis. And demand, post-COVID, really changed so much in the way people live that retail became a focus again. People realized it's not just where I go to do whatever I'm doing—going to the grocery store or some other service business or maybe apparel—they're also going to be in a place with other people. COVID made it clear that we need to be around people. So that's been a big part of it in my mind.

H

Host4:57

I think I heard this and just repeated it as fact: more GLA, more leasable area, has been taken offline in retail over the last 15-20 years than had been constructed. Is that true?

J

John Kite5:10

I've heard that. Sounds cool, right? That's the cool thing about stats like that. Sounds good to me.

H

Host5:16

Talk to me. Let's go back in time. I want the audience to get to know John Kite, the story of the person. You're out of Indianapolis, right? Is that where you're from, where you grew up?

J

John Kite5:28

Yep, grew up in Indy. My family is actually from—my father's from the South, grew up in Georgia and Florida. After he met my mom, they moved to Indianapolis, I think in the very early 1960s, and we've been there ever since. My dad was in the construction business, so I've been around construction and real estate my whole home life. But I loved Indy. Good market, good people, good Midwestern values. It's hokey but true. That's where I'm raising my family as well, and it's great.

H

Host6:11

I've been through Indy a couple times for work, but also spent some time there for the Super Bowl a few years back. You guys had a big one. Me and my brothers went and had a good time. Fun city. You just had a Taylor Swift concert too. Did you go to that?

J

John Kite6:28

Yeah, so I'm going to out myself. Not in Indianapolis—I went down to the one in South Florida with my wife and my 11- and 7-year-old. I am a convert, full-on Swiftie. I'm a Swiftie, dude.

H

Host6:41

I'm not the biggest fan of her music, not in a bad way, just it's not necessarily my first play. I probably know more songs than I should because my daughter DJs and gets to pick the songs. But she's a juggernaut. It was one of the best productions I've ever seen. The energy—I was feeling it. Credit to her. I look up to her as an entrepreneur.

J

John Kite7:05

I agree. My wife said she's never been in a place where she felt more positive energy than at that concert. There was a lot of good vibe.

H

Host7:16

Okay, so Indy. Your dad was from the South but ended up in Indianapolis. Brothers, sisters?

J

John Kite7:22

I've got an older brother, Paul, who's two years older than me. We had a brother who passed away when we were very young. I was eight, my brother was ten. It was a very unfortunate thing, but Paul and I are very close.

H

Host7:42

Your brother passing away—you remember that, right?

J

John Kite7:46

Oh yeah, yeah. Tough time. Things happen in your life that shape you. Generally speaking, if you're lucky enough to be around long enough, you're going to have some tough stuff happen. It was a very tough time, a dark time, but we all powered through. It's just one of those things that happens.

H

Host8:12

Getting back to something you touched on earlier: your dad being in construction. Do you assign credit to that for giving you a start in real estate?

J

John Kite8:19

My dad and his brother had a painting and drywall business and grew it in the '60s, '70s, and '80s. They were in a position where they started to invest in some real estate deals as just investors. At that point, my brother Paul, who I was talking about, had come back to Indianapolis from Dallas—he went to SMU—and was working for a real estate company. So there was an opening to try to start doing real estate deals themselves. I was still working for a bank in Chicago at that time, and that's how it got started. Very small, not much to it, but that's how it got going. There's no doubt that he put us in a position to succeed.

H

Host9:18

Do you remember as a kid going to these properties? Did he drag you along?

J

John Kite9:22

I do remember being in college. Well, when I was younger than that, I would go to construction job sites. He used to travel around—it was that kind of contractor where they would go somewhere and position themselves there for the project. So we went all over the place, a lot of manufacturing plants and stuff. You pick stuff up without even knowing you're picking it up—jargon, things like that. You speak the language now.

H

Host9:51

Full disclosure to the audience: I've known John for years, so I already know the answer to this question. Tennis player, right? Growing up?

J

John Kite9:56

Oh yeah, back in the day.

H

Host10:02

If I'm not mistaken, that ultimately played into your decision of college?

J

John Kite10:08

Tennis for me growing up—as I mentioned when our brother passed away—was one of those things where everything in your life changes. At that point, we were very traditional sports kids: football, baseball, stuff like that. We didn't play tennis. When this happened, I think my parents were looking for something completely different. Somehow we found tennis. Both my brother and I played. I played very competitively, all over the country in tournaments as a kid, and ended up going to college at DePauw and playing there. At that point, I thought, 'Look, there's only so far I can go with this. Might as well get the best education out of the whole process.' That's why we decided to go there.

H

Host11:03

When you went to school, in addition to tennis, from an academic pursuit, did you choose a major or focus? Did you know you wanted to eventually end up in the real estate industry?

J

John Kite11:13

Not really, because at that point our family business was very much construction. It was interesting, but it wasn't something I really wanted to do, at least I didn't think I did. At school, tennis was a big part of it, but learning how to be competitive was all part of life. You just grew up being competitive. Then I got to the point where I realized, 'Okay, what's next?' So I decided to study econ.

H

Host11:44

So economics was your focus?

J

John Kite11:46

I was an econ major, which led me to an opportunity to get a job at a bank. All these little sliding doors in your life—which ones you go through, your Venn diagram.

H

Host11:55

How were you as a student?

J

John Kite11:58

Not great. That's why we go into real estate. I started off pretty poorly, but the only good thing is year after year, maybe slightly better, slightly better. They say it's not how you start, it's how you finish. It just wasn't my primary focus. I was much more focused on competition, tennis, and social stuff. By the time I got to college, towards the end—junior year, senior year—I realized I needed to turn things around. I was able to just barely turn them around enough to be in a position to get a job at a bank. So that was great.

H

Host12:42

Nowadays you're a polished public CEO. What would your professor in college have seen in the young John Kite?

J

John Kite12:49

Great question. Maybe one or two. I had a couple that were important to me in terms of encouraging me despite past performance.

H

Host13:03

If someone's listening and they're in college, always give your best effort and strive to be number one. But you're saying the door may not be closed on them to run a big company one day?

J

John Kite13:10

Yeah, I'm saying you have a chance. Everybody's got a chance.

H

Host13:15

I usually ask this at the end, but I'm going to use the window here. What do you think, fast forward in terms of the success you've experienced, what is the driver for you that you think led to opportunities continuing to present themselves?

J

John Kite13:28

Just like you guys in your business, you have to fail so often just to get to that one win. Once you realize that you're going to fail more than you're going to succeed at almost anything you do, then you begin to realize that's just fuel. You need to treat that failure as fuel to the fire. Perseverance is another way of saying it—just being able to get up when you get knocked down. All those old cheesy sayings: keep going, keep fighting, never accept defeat. It's going to happen, but then you come back and just never give up. Keep moving forward, keep getting off the mat. You've got to have a little chip on your shoulder, the desire to prove yourself.

H

Host14:25

What would you say your chip has been historically?

J

John Kite14:31

For us, it's where we started to where we are. We started off as a tiny, tiny little business. Even when I joined the business in '89, '90, it was an extremely small, undercapitalized small company that's grown to be a pretty reasonable-sized business. It's all determination and people saying you can't do it. For us, it's always been as a team: when people tell us you can't do it, that can't be done, that's just like music. The doubters—you hear it all the time in the sports world. The Kansas City Chiefs won the Super Bowl last year, and I kind of laughed. They were the number one odds going into the season to win the Super Bowl, and they win it, and they're interviewing the players, and the players say, 'Everybody doubted us, no one thought we could do it.' Well, hold on—everyone thought you could do it. Nobody doubted you. But that's competitors and champions. People who find success seem to create this narrative. It's also the people you surround yourself with. It's super important. It's impossible to achieve extreme success in whatever you're doing without people lifting you up all the way. That's been the cornerstone of our success: we've had people who have gone out of their way to help us when they didn't have to, and so you try to pay that back.

H

Host16:00

Is that something you look for in your teammates you hire at Kite? Do you look for a chip in them, and what do you look for when hiring?

J

John Kite16:13

When you have an organization of reasonable size—we're not that big. We have almost a couple hundred properties and an $8.7 billion enterprise value, but when it gets right down to it, we have around 250 people. It's a pretty small group, enough that you can really try to have this collective energy. So the answer is yes. When we hire people, we're hoping we're bringing on people who want to collaborate and want other people to succeed around them, not just themselves. You have to have your own self-fulfillment, but I think as long as we're trying to find people who have this bigger objective, and it's also great when you have teammates who believe, 'Hey, no one counted me out.' So I appreciate the fact that you brought me in. Let's go. Gratitude for the opportunity and believing in them.

H

Host17:11

Let's talk about the path to growing this really big platform from humble beginnings. You graduate college and start at a bank, not real estate. Commercial lending. Tell us about that experience.

J

John Kite17:24

I was lucky to get hired. I got hired by Harris Bank in Chicago, which is now part of Bank of Montreal, bought by BMO. But when I was there, it was Harris Bank, Harris Trust and Savings Bank. This is in 1987. I put myself in a position where I was able to get these interviews and hit it off with the right people. They took a chance on me. There were others who on paper probably would have made more sense for a commercial banking job, but with my background, competitiveness, and the way I went about it—dynamic interviewer, I think in that particular one, yes. The person who interviewed me, Brad Chapin, came to campus. He was a great guy, we hit it off. I happened to see him that same night at a bar on campus. We had a couple beers. It's a strategy. I went up to him, and I think that was it. Most people would have been afraid to do that. Other friends of mine who had the same interview were there with me, but I just went and talked to the guy. We hit it off, and obviously it helped me.

H

Host18:56

Was going to a bank something you had identified as a career pathway?

J

John Kite19:02

It was a bit of a stretch for me. My other opportunities were much more sales-driven. I had a couple other offers, including a real estate broker. I did do some brokerage in the very early stages. But it was a stretch for me, and I had to work hard to succeed at it. Other people had finance backgrounds; I was econ, which is more general. But I thought this was a great place to start, it would set me up.

H

Host19:36

What did they have you working on?

J

John Kite19:39

It was a division called—essentially the sales side of commercial lending. We would do business development, go out and develop clients. We had to do the underwriting, but you'd also bring in a more senior banker to help with the underwriting so you could learn. That's where I learned how to read a balance sheet, income statement, do cash flow. They invested a lot in us. We had classes with university professors from Northwestern and University of Chicago. It was a great experience.

H

Host20:12

Fast forward, that foundation probably helps you in your current role, right?

J

John Kite20:15

Absolutely. It would have been my version of a mini-MBA. I did not get an MBA, so this was my little mini version.

H

Host20:24

Did you enjoy your time doing it?

J

John Kite20:25

Loved it.

H

Host20:27

What was your day-to-day? Nine to five, five days a week, or seven days a week, all-consuming?

J

John Kite20:32

It wasn't quite like the investment banking world—I happen to have a son in that right now. It was more traditional banking, but we had this sales part of our role, so we had to get out in the market a lot. We did tons of cold calls. We used to track them not on a computer, on paper. I can't imagine that now. We had to have a certain number of hard calls—our definition of a hard call was actually visiting with the client. Soft calls were phone calls. So a big chunk of my daily routine was that. We used to call it door knocking. Later in my career, it was called crashing, and now it's called an ambush. Sometimes I'll be at the office and see the guys, 'Yo, we just ambushed two clients.' 'How'd it go?' 'One yelled at us and told us to get lost, the other we got a second meeting.' God bless.

H

Host21:37

I would have been too afraid. I'd be like, 'Oh, we definitely did that.' The ambush. But it was this unique combination of financial discipline and learning, plus the sales part. It was all young people. We had 22 people in our group, everybody was young, a ton of fun. Having people at a similar stage of career in the foxhole with you. I definitely took away things from that experience that still come into play today. Everything happens for a reason.

So you're there three or four years, and then over to Kite Development. What was the catalyst for the prodigal son coming home?

J

John Kite22:21

It was really my brother, who was already there working to try to develop this thing. My dad was still running his construction business but also helping my brother with his real estate. One day we just had a conversation. It happened to be in 1990, and we were in a recession. The bank was starting to lay people off. I was safe, still had my job, but they wanted me to shift into a more traditional banker role without the ability to go out. Imagine you as a boring banker—it would have been tough for me. I was thinking about doing it because I really loved the organization, but some of my other friends had left, it was changing. One day I got a phone call: 'Hey, would you think about coming back?' It was just timing. A lot of this is timing. I said sure, and I just kind of started over. I left being a banker and went back to Indianapolis. Next thing I know, I'm cold-calling retail. That's how I started—I was a cold caller.

H

Host23:47

What did you do at that time? What was the title?

J

John Kite23:52

The company had one shopping center and one office building that they had acquired in these partnerships that they were now managing—my brother and my dad. I got involved. I thought I was going to do finance because that was my background, but I quickly learned there wasn't a lot to finance. 'Go lease some space.' So I started learning how to lease. I had never done that before, had no real real estate experience. That literally went to cold calling and doing all that good stuff, and started learning the business. It's amazing what you can do with a cold call.

H

Host24:31

I think it's where everything starts. We can't ever stop doing it.

J

John Kite24:35

Never. You hear that, brokers out there? Never stop.

H

Host24:38

How long were you in that role?

J

John Kite24:40

I was in that role for a little while, probably a year. Then we started getting a little success, had a couple of things, and I started getting more involved as more of a partner, getting involved in the financing. We had to go out and raise money and get bank loans. So I did use my skill set at that point a little bit. There was a Kite Realty and Advisor time. We went through this evolution as a private company where you just kind of start getting into stuff. We get a little bit of success in the real estate business, but then we realized there was this opportunity to try to generate fees through advisory services—really managing and helping manage real estate portfolios for pension funds. That was KMI. It wasn't direct property management; it was more asset management. We would outsource and basically be the liaison for the pension fund on what to do with these assets. In the beginning, it was very much trying to turn some stuff around—we were in turnaround mode. But what it did was open the door a little bit. As we talked about these doors opening in life, a door opened where all of a sudden we started meeting institutional capital, getting to know people who later on in our career became more important to us. That became Kite Companies.

H

Host26:03

I'm looking at the timeline: President of Kite Companies. Was the business growing linearly at the time, or was there an acceleration at a certain point where you guys really turned up the volume?

J

John Kite26:17

After we got this advisory business going, it started to accelerate. Then we got to a point where retail became a bigger part of our world, and we were doing build-to-suit transactions for guys like Lowe's Home Improvement, Walgreens, and Staples. One thing leads to another. There was no master plan. There was never a thought that we'd be sitting here. There's definitely never a thought that you'd be interested in talking to me. We were fortunate. People helped us. When I stop and really reflect on it, luck plays into it. But I think we were pretty decent partners, and people were willing to help us. That's what happened.

H

Host27:06

Were there a couple key hires along the way that you felt were game-changers?

J

John Kite27:18

As I said, I started fully doing this in 1990. About 1994, one of my lifelong friends, who's now our President and Chief Operating Officer, Tom McGowan, joined the business. That was a leap for him because he was at a kind of established, well-known local developer with nice offices, and we were—I don't even know if you could call it scrappy, we were just unknown. But we were lifelong friends, and it was an opportunity for him to be more involved in actually building a business as opposed to just being somewhere that had already matured. It turned out great. He was a critical part of the company, helped us attract other people. Everybody we've added to the business has really had that same mentality: keep going, get better people, add to it. Tom was one of the critical ones. We also have guys in senior positions like our head of leasing, Greg Poets, who has been there for longer than I can remember—let's say 30 years. Our head of development, Mark Jenkins, also been there for longer than I can remember—say 30 years. These guys all started with us when we were nobody. They left established places to come to us. I'm leaving out names, which I hate because this is about the team. I wouldn't be here if it wasn't for all of them.

H

Host28:59

To leave an established place to go to an unknown, you either are a great salesman or you paid them a ton of money, or both.

J

John Kite29:05

I think it was just an opportunity to have fun. We tried not to pay too much, but it was all upside. I sold them on the cost of living in Indianapolis in the mid-'90s. It was still a pretty cheap place to live. But there were critical people along the way. We've had a lot of long-term employees, and I'm very appreciative of that.

H

Host29:40

With those teammates and a little bit of your leadership, you got to a point in 2004 that you said, 'Let's go public.' What drove that? Let's not assume the audience knows why someone would go public. What are the benefits and drawbacks?

J

John Kite29:54

It's also situational. It just happened to be the timing. Fast-forwarding to the 2003 timeframe, the company's growing, our portfolio's growing, but the one thing we're challenged with is capital. We don't have a consistent source of institutional capital. We knew capital people—they put stuff in, they don't put stuff in. It was always very ad hoc, deal by deal. We had a couple fits and starts with programmatic joint ventures. We did one way back with a company called H&R Financial—just a high-octane lender. It became very expensive and was really more debt than equity. Eventually, we get to this point where we have success in some form, but we're held back. Earlier in our careers, we were doing all kinds of product types: office, retail, industrial, hotels—we did a lot of hotel stuff. Then closer to 2004, we very much narrowed in on retail. Long story short, I have a brother-in-law who was in the investment banking business. One day he said, 'Hey, why don't you guys go public?' This was 2003. I very specifically remember thinking, 'You must be crazy. There's no way. We're too small.' It just kind of opened the door to thinking about it. Once we dug in and started to look at it, it became more real. Plus, the timing was very good. 2004-2005 saw a lot of IPOs, a great period for real estate. The total value of the business at that point was probably $300 million. That's 20 years ago, and now it's almost $9 billion. Even inflation-adjusted, that sounds smaller. The IPO itself was reasonable size—$240 million. What led us to it was this thought: if we can have more permanent capital, we can really grow the business, create more opportunities for our employees, do things we want to be able to do. Is it the right decision or wrong decision? Time has shown it's gone okay. We're still here.

H

Host32:47

You talk about timing: 2004, 2005, 2006 were really good, but heading into 2007, 2008, 2009, 2010, the GFC. For you personally, as the captain of the ship, what was the most difficult time in anyone in this building's lifetime? How was that?

J

John Kite33:09

It was tough. Candidly, it was very, very difficult. It left a mark that will be there forever. We barely survived. We were not well positioned going into the GFC from a capital standpoint. Even though we were public, we were overleveraged at the time and made some mistakes. It definitely took a huge toll on all of us in the organization. We had to go through a right-sizing and a very difficult time. Personally, those were dark days in terms of business. I was fortunate to have a great family—my wife Christina, best decision I've ever made in my life. My kids at the time were young, two of the three I have now. Without that, I don't know what would have happened.

H

Host34:15

What helped you outside of your wife and family? Was there any daily practice or specific thing you did to cope with the fear, anxiety, and dark emotions that come with possibly seeing your entire life's work fail?

J

John Kite34:34

That was a real possibility—that we wouldn't make it through. Unfortunately, you get put in a position of having to really contemplate what's next if this doesn't work. First and foremost, the people closest to you, your family, get you through these tough times. But it's the team. Our team was unbelievable during that period. People understood the reality and complexity of it. But it was going back to that drive to not let this happen. We just couldn't let it happen. You're working 14, 15 hours a day, every day. Weekends are the same as weekdays. How do you get yourself out of it? Eventually, because we were public, we were able to tap into the public markets to recapitalize the business and start over.

H

Host35:37

Was there a moment where you really thought, 'Okay, I think we're going to make it out of this'? Like a relief, maybe when the capital came in or a deal got done?

J

John Kite35:44

It was a bunch of things. I remember sitting around watching Congress vote on TARP and things like that to create liquidity—much like we went through in COVID. Those were things the government did that were good and kept people going. For us particularly, it was when we came back to the public market and issued equity, quite a large amount for the size of the company. We recapitalized the business, paid down debt. At that point, we knew we may not like the price or the impact, but we were going to live to fight another day. We like being in business. We've got people who depend on us, families that depend on us. We were never just going to fold up.

H

Host36:39

What year was that?

J

John Kite36:41

2009. Over the next couple years, it was just slowly coming out of it, maybe every day by a hundredth of a degree getting better.

H

Host37:03

Suppressed trauma?

J

John Kite37:06

There's no question. It's definitely not on my calendar. It's not an anniversary.

H

Host37:22

Talk to us about a big moment. When the Inland deal went down, was that a big moment? I think it was 2015?

J

John Kite37:31

When we bought Inland Diversified, it was 2014. It was a big moment because it was part of this rebirth of the business. We survived 2008-2009, did some other things to get better in 2010, 2011, 2012. Come to 2014, this opportunity came around to potentially buy this business. We did, and it doubled the size of our company in this M&A transaction. It put us on another plane, another level. It was great. In the darkest days, you never imagine that you'd have opportunities. That's probably the lesson: dark days are dark, but there are opportunities ahead. If you do this long enough, you fight your way through, and there'll be great stuff that comes out on the other end. That was the beginning of that for us.

H

Host38:26

I would tell the agents, 'Listen, in a good year like 2004 or 2021, you're not as good as you thought you were. And in a bad year like 2023, you're not as bad as you thought you were. The truth is probably in the middle. Just keep plugging ahead, you'll be all right.' So I remember the Inland deal. Then fast forward, COVID hits. Did you get a GFC feeling around that time? Dark, like 'Oh my gosh'?

J

John Kite38:55

They called it essential retail. The government was saying what could stay open and what couldn't. There had to have been a quarter where a significant chunk of rent wasn't paid. That must have been pretty wild.

H

Host39:22

It was. It's great to think back how you react in these challenging situations. Ironically, I had been to the Super Bowl that year, in February 2020, right before COVID. People were talking about it. I was at OAC in Nashville in late February, and people were fist bumping. It was the first time I thought, 'This is weird. Something's happened.' I remember coming back from that and getting with the team, saying, 'Something's off. We need to really dig into this more.' We started doing our research, talking to people in the medical field. It became really clear that this was not just going to go away in a little period of time. People were saying, 'Oh, it'll be around for six weeks,' or 'Two weeks to slow the spread.' Bottom line, we hunkered down right then. We started doing a daily meeting every morning at 10:00 AM. Multiple people in the company would get together and go through all of our collections. Every day that went by, it would get worse and worse. But the good thing is we jumped on it early. We had a system. We talked to our customers and worked with them, did the best we could. But we also said, 'Look, we have obligations. We can't just not get paid because we have to pay people.' It worked out better than most. When you fast forward, our collections were some of the highest in the shopping center space. I really think it's because we jumped on it early and had a plan.

You approached it like a business partnership instead of a landlord-tenant top-down relationship. 'We're partners, we've got to work together.' Is that also a philosophy you apply to people management?

J

John Kite42:12

We try to. Sometimes you have to say no, you've got to do this because I told you. But generally, we try to be as good as we can be. It's a tough business, and there are days where it is what it is. Going back to that period, it started to feel like, 'Oh my God, here we go again. How could it possibly be happening to us again?' These events are supposed to be spread way out. You had 2008-2009, and here we are not even 20 years later, it's happening again. But pretty quickly, we figured out this is different. It turns out to be a very good thing for our business. People began to appreciate how important shopping centers are in their life, how important they are in their communities. It actually ended up being the renaissance of our business. Printing $7 trillion also helps. I forgot to mention all the free money, the stimulus checks. Buy some shoes, baby.

H

Host43:18

How are things going today? What does the future look like? Where is Kite Realty heading?

J

John Kite43:24

Things are good. As you started off, the business is strong. We're positioned pretty well. Our portfolio is pretty weighted in the Sun Belt, so we're in markets that are growing the fastest. Our customers are doing well. The business is stable. The company is stronger than it's ever been. We have one of the lowest debt-to-EBITDA ratios in our space, which means we have one of the strongest balance sheets. We're now the fifth largest open-air shopping center REIT, starting from the very bottom. That's nice. We'll see. It's gone well for a while, so we have to be thinking about what could happen, what shoe could drop, and be prepared. We talk about that a lot internally—always being ready for whatever outcome. We'll fight whatever fight we see in front of us. But it does feel good right now. The business is good.

H

Host44:25

Number five. How do we get to number one?

J

John Kite44:30

In enterprise value? Size-wise, that would be Kimco. You can't—Conor and Ross? Come on. Such nice people. There are a lot of great people in this business, a lot of smart people. You only say that because we're being recorded. As soon as these cameras are off, I'm going to tell you what Conor said about you yesterday. I did see him yesterday. Ross even worse. As long as it wasn't our friend Don trash-talking me. Don's just a bad guy. It is what it is. But he's our bad guy. To continue to grow, I don't think we're driven off of size as much as we are trying to have the best quality shopping center portfolio we can possibly have. Let's drive growth. That's the biggest thing we want to do—figure out how to get more growth out of these assets. There's always a push-pull with the retailer and the landlord. You can't just—these are our customers, so there's a balance you have to live. When you look at the occupancy cost of our space, it's very low. There's real opportunity to continue to drive growth. The push-pull is better now because for a while, landlords didn't have a ton of leverage. It was like, 'Whatever you want, okay, here you go.' But now it's more balanced. I've definitely noticed that. It's a fair balance right now.

H

Host46:17

I know of all people you do not like to talk about yourself, but I've got to put you on the hot seat. You've been doing this a long time. How much more gas in the tank? What does the future look like for John Kite?

J

John Kite46:28

Ironically, I'm sitting here, I can see our sign from your little booth right here. I walked by you in a meeting earlier. I'm looking at that—that's a nice sign. We've got a lot of drive. You keep saying 'we'—I want you to say 'I'—we have a lot of drive. I have a lot of drive because of the people around me. You should run for office. That's what makes it fun. Coming into the office, it's fun to be around the people we have on our team. I truly believe we have the best team in the business. I will say that very confidently. Talking about my team, they're the best. We have the best people, the hardest workers I've seen. People care. That drives me. We're competitive. If the right situation avails itself, of course we think we could handle a bigger platform. But it has to be the right situation, it has to make sense financially. We are very active right now, looking at stuff and opportunities. One-off deals are starting to happen. The market has gotten a little more liquid. As long as there's financial stability—I'm less focused on where interest rates are at a particular point in time versus the stability that underlies that. I think we're in a pretty good place for that. 2025 should see opportunity. We saw that Blackstone-RC deal the other day. That's a good signal to the market. Same thing always happens: everybody says maybe a deal will happen, maybe it won't, and then the next thing you know, a very smart institutional investor says this company is worth 30% more than where it's been trading. That's the interesting part of this business. Good day for retail.

H

Host48:29

Whenever that day comes, far out, when you hang up your cleats, how would you like to be described? What was John like? What's your legacy?

J

John Kite48:42

Hopefully, team player. Wants to build a successful group of people. Fair, but not easy—fair. Competitive. At the end of the day, people know that I'm competitive. People in our company know that. I think they want you to be all in. We are all in. They know you're all in.

H

Host49:21

How would you describe your mentality as it relates to your approach professionally over the years?

J

John Kite49:27

I haven't really thought about a specific mentality, but generally speaking, it's what we talked about earlier: no matter what happens, we keep going. No matter what failures we have, we figure it out. If there's a wall, we've got to figure out how to get through it—maybe through it, over it, under it. All those corny things. In our particular business, in physical shopping center retail, you have to have that desire to keep going because it's tough. Business is tough.

H

Host50:05

The word, if I may give you, is resilient. While retail's been resilient, the resilient John Kite. John, I can't thank you enough for being here. Your story's great. I love hanging out with you.

J

John Kite50:17

Kyle, I appreciate it. Thank you for the time. I know you're the most popular man here, jumping from meeting to meeting. I express gratitude for taking the time. I look forward to hanging out. Let me just say, I love what you're doing. This show's great. How many listeners are you up to?

H

Host50:29

In total, hundreds of thousands. Per episode is pretty significant now. I'm shocked.

J

John Kite50:41

When are we going to see you spin this thing off? Listen, I'm just trying to be like Jake Paul. I'm going to challenge Mike Tyson to a boxing match so I can make $40 million. Then I'll promote you respectfully. I don't have to show up anymore. But what you guys have done here is pretty cool. I'm seeing other people with little booths popping up. Often imitated, never duplicated. Congratulations to you guys, congratulations to your team.

H

Host51:08

Let's get down. Let's get down. Give you one more night. One more night to get this. We've had a million nights just like this. So let's get down, let's get down.

E40: Chairman and CEO of Kite Realty – John Kite (Live from ICSC)

About John Kite