Kite Realty Closes on 2 of 3 from BVT

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INDIANAPOLIS- Kite Realty Group Trust has acquired a 156,308-sf center in Austin, TX and a 144,134-sf center in Vero Beach, FL. The locally based shopping center REIT paid $52.4 million in debt and cash for the properties.The centers are two of three that Kite Realty in March agreed to acquire from retail funds of Munich-based BVT Equity Holdings. Kite Realty says the agreement to acquire the third property is no longer linked to its agreement to acquire the other two, but still may be acquired.The more expensive of the two acquired properties is Plaza Volente, a neighborhood shopping center in northwest Austin that was acquired for approximately $35.9 million. The H-E-B Grocery anchored center is 100% leased by a variety of national and local tenants, including Hollywood Video and Papa John’s. The other acquired center is Indian River Square, a community shopping center on Highway 60 in Vero Beach that cost Kite $16.5 million. Office Depot and Bealls Department Store anchor the 100% leased center. The centers were acquired with $12.4 million of equity and $42 million of new 10-year fixed rate debt at an interest rate of 5.42%. The property exorcised from the deal–Fountain Oaks, a 160,600-sf center in Atlanta, GA, that was developed in 2004 and is 92.8% leased–requires the assumption of $13.7 million in debt as part of the $26-million purchase price.BVT acquires grocery-anchored neighborhood shopping centers throughout the US and groups these into investment funds. These funds are then marketed to mid-level German investors. The RIF program was rolled out in 1994 and, to date eight funds have been offered and fully subscribed. The Austin and Vero Beach properties were sold by US Retail Income Fund VIII-E LP and US Retail Income Fund IV LP, respectively. The Atlanta property is owned by US Retail Income Fund VIII-D.Kite Realty owns interests in 41 operating properties totaling 5.8 million sf. It has another 10 properties totaling 1.7 million sf under development. The Austin and Vero Beach buys bring Kite’s year-to-date acquisitions to $67 million. It stated full-year goal for 2005 is $80 million.