As filed with the Securities and Exchange Commission
on June 7, 2024
Registration
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KITE REALTY GROUP TRUST
KITE REALTY GROUP, L.P.
(Exact Name of Registrant as Specified in Its Charter)
|
Maryland (Kite Realty Group Trust)
Delaware (Kite Realty Group, L.P.)
(State or Other Jurisdiction of
Incorporation or Organization) |
11-3715772
20-1453863
(I.R.S. Employer
Identification Number) |
30 S. Meridian Street
Suite 1100
Indianapolis, IN 46204
(317) 577-5600
(Address, Including
Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Heath R. Fear
Executive Vice President and Chief Financial Officer
Kite Realty Group Trust
30 S. Meridian Street
Suite 1100
Indianapolis, IN 46204
(317) 577-5600
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)
Copy
to:
David W. Bonser
Hogan Lovells US LLP
555 Thirteenth Street, N.W.
Washington, D.C. 20004-1109
(202) 637-5600
Approximate date of commencement of proposed
sale to the public:
From time to time after the effective date of this registration statement.
If the only securities being
registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.¨
If any of the securities
being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x
If this Form is filed
to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the
Commission pursuant to Rule 462(e) under the Securities Act, check the following box. x
If this Form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Kite Realty Group Trust: |
|
|
|
| Large accelerated filer |
x |
Accelerated filer |
¨ |
| Non-accelerated filer |
¨ |
Smaller reporting company |
¨ |
| |
|
Emerging growth company |
¨ |
| |
|
|
|
| Kite Realty Group, L.P.: |
|
|
|
| Large accelerated filer |
¨ |
Accelerated filer |
¨ |
| Non-accelerated filer |
x |
Smaller reporting company |
¨ |
| |
|
Emerging growth company |
¨ |
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act.
PROSPECTUS
Kite Realty Group Trust
Common Shares, Preferred Shares, Depositary
Shares, Warrants and Rights
Kite Realty Group, L.P.
Debt Securities
We may offer, from time to time, one or more series
or classes, separately or together, and in amounts, at prices and on terms to be set forth in one or more supplements to this prospectus,
the following securities:
| · | depositary shares representing our preferred shares, |
| · | warrants exercisable for our common shares, preferred shares or depositary shares representing preferred shares, and |
| · | rights to purchase common shares. |
Kite Realty Group, L.P. (the “Operating
Partnership”) may offer, from time to time, one or more series of debt securities (including convertible or exchangeable debt instruments),
separately or together, and in amounts, at prices and on terms to be set forth in one or more supplements to this prospectus.
Our common shares, preferred shares, depositary
shares, warrants and rights, together with the debt securities of the Operating Partnership, are referred to herein collectively as the
“securities.” We and the Operating Partnership may offer the securities separately or together, in separate series or classes
and in amounts, at prices and on terms described in one or more supplements to this prospectus.
This prospectus describes some of the general
terms and conditions that may apply to the securities. The specific terms and conditions of any securities being offered will be provided
in prospectus supplements to this prospectus. The applicable prospectus supplement will also contain information, where applicable, about
U.S. federal income tax considerations relating to, and any listing on a securities exchange of, the securities covered by the prospectus
supplement. It is important that you read both this prospectus and the applicable prospectus supplement before you invest in any of the
securities.
We
and the Operating Partnership may offer the securities directly to investors, through agents designated from time to time by them or
us, or to or through underwriters or dealers on a continuous or delayed basis. If any agents, underwriters or dealers are involved in
the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement with, between
or among them, will be set forth, or will be calculable from the information set forth, in an accompanying prospectus supplement. For
more detailed information, see “Plan of Distribution” on page 73. No securities may be sold without delivery
of a prospectus supplement describing the method and terms of the offering of those securities.
Our common shares are listed on the New York Stock
Exchange (the “NYSE”) under the symbol “KRG.” On June 6, 2024, the last reported sale price of our common
shares on the NYSE was $22.27 per share. Our principal executive offices are located at 30 S. Meridian Street, Suite 1100, Indianapolis, Indiana
46204 and our telephone number is (317) 577-5600.
Investing in the securities involves risks.
See the risks described under “Risk Factors” in Item 1A of our most recent Annual Report on Form 10-K and Item 1A of
each subsequently filed Quarterly Report on Form 10-Q (which documents are incorporated by reference herein), as well as the other
information contained or incorporated by reference in this prospectus or in any prospectus supplement hereto before making a decision
to invest in our securities. See “Incorporation of Certain Information by Reference” and “Where To Find Additional Information”
in this prospectus.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
This prospectus is dated June 7, 2024
TABLE OF CONTENTS
Page
About
This Prospectus
This prospectus is part of an automatic shelf
registration statement that we filed with the Securities and Exchange Commission (the “SEC”), utilizing a “shelf”
registration process. Under this process, we and the Operating Partnership may, from time to time, sell the offered securities described
in this prospectus and any accompanying prospectus supplement in one or more offerings. Additionally, under the shelf registration process,
in certain circumstances, we may provide a prospectus supplement that will contain specific information about the terms of a particular
offering. We may also provide a prospectus supplement to add, update or change information contained in this prospectus. We may offer
securities directly, through agents, or to or through underwriters. A prospectus supplement may describe the terms of the plan of distribution
and set forth the names of any underwriters involved in the sale of our common shares. See “Plan of Distribution” in this
prospectus. You should read both this prospectus and any prospectus supplement, together with additional information described below under
the headings “Where to Find Additional Information,” “Incorporation of Certain Information by Reference” and any
additional information you may need to make your investment decision.
You should rely only on the information provided
or incorporated by reference in this prospectus or any applicable prospectus supplement. Neither we nor the Operating Partnership have
authorized anyone to provide you with different or additional information. Neither we nor the Operating Partnership are making an offer
to sell these securities in any jurisdiction where the offer or sale of these securities is not permitted. You should not assume that
the information appearing in this prospectus, any applicable prospectus supplement or the documents incorporated by reference herein or
therein is accurate as of any date other than their respective dates. The business, financial condition, liquidity, results of operations
and prospects of the Company and the Operating Partnership may have changed since those dates.
You
should read carefully the entire prospectus and any applicable prospectus supplement, as well as the documents incorporated by reference
in the prospectus and any applicable prospectus supplement, which we and the Operating Partnership have referred you to in “Incorporation
of Certain Information by Reference” on page 75 of this prospectus (including the risks described under “Risk
Factors” in Item 1A of our most recent Annual Report on Form 10-K and Item 1A of each subsequently filed Quarterly Report
on Form 10-Q), before making an investment decision. Information incorporated by reference after the date of this prospectus may
add, update or change information contained in this prospectus. Any information in such subsequent filings and any applicable prospectus
supplement that is inconsistent with this prospectus will supersede the information in this prospectus or any earlier prospectus supplement.
When used in this prospectus, except where the
context otherwise requires, the terms “we,” “us,” “our” and the “Company” refer to Kite
Realty Group Trust, a Maryland real estate investment trust, and those entities owned or controlled by the Company, including the Operating
Partnership, and all references to the “Operating Partnership” refer to Kite Realty Group, L.P., a Delaware limited partnership.
Cautionary
Note Regarding Forward-Looking Statements
This prospectus and the documents incorporated
by reference herein, together with other statements and information publicly disseminated by us, contain certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such statements are based on assumptions and expectations
that may not be realized and are inherently subject to risks, uncertainties and other factors, many of which cannot be predicted with
accuracy and some of which might not even be anticipated. Future events and actual results, performance, transactions or achievements,
financial or otherwise, may differ materially from the results, performance, transactions or achievements, financial or otherwise, expressed
or implied by the forward-looking statements.
Risks, uncertainties and other factors that might
cause such differences, some of which could be material, include, but are not limited to:
| · | economic, business, banking, real estate and other market conditions, particularly in connection with low or negative growth in the
U.S. economy as well as economic uncertainty (including a potential economic slowdown or recession, rising interest rates, inflation,
unemployment, or limited growth in consumer income or spending); |
| · | financing risks, including the availability of, and costs associated with, sources of liquidity; |
| · | our ability to refinance, or extend the maturity dates of, our indebtedness; |
| · | the level and volatility of interest rates; |
| · | the financial stability of our tenants; |
| · | the competitive environment in which we operate, including potential oversupplies of, or a reduction in demand for, rental space; |
| · | acquisition, disposition, development and joint venture risks; |
| · | property ownership and management risks, including the relative illiquidity of real estate investments, and expenses, vacancies or
the inability to rent space on favorable terms or at all; |
| · | our ability to maintain our status as a real estate investment trust (“REIT”) for U.S. federal income tax purposes; |
| · | potential environmental and other liabilities; |
| · | impairment in the value of real estate property we own; |
| · | the attractiveness of our properties to tenants, the actual and perceived impact of e-commerce on the value of shopping center assets,
and changing demographics and customer traffic patterns; |
| · | business continuity disruptions and a deterioration in our tenants’ ability to operate in affected areas or delays in the supply
of products or services to us or our tenants from vendors that are needed to operate efficiently, causing costs to rise sharply and inventory
to fall; |
| · | risks related to our current geographical concentration of properties in the states of Texas, Florida, and North Carolina and the
metropolitan statistical areas of New York, Atlanta, Seattle, Chicago, and Washington, D.C.; |
| · | civil unrest, acts of violence, terrorism or war, acts of God, climate change, epidemics, pandemics, natural disasters and severe
weather conditions, including such events that may result in underinsured or uninsured losses or other increased costs and expenses; |
| · | changes in laws and government regulations including governmental orders affecting the use of our properties or the ability of our
tenants to operate, and the costs of complying with such changed laws and government regulations; |
| · | possible short-term or long-term changes in consumer behavior due to COVID-19 and the fear of future pandemics; |
| · | our ability to satisfy environmental, social or governance standards set by various constituencies; |
| · | insurance costs and coverage, especially in Florida and Texas coastal areas; |
| · | risks associated with cybersecurity attacks and the loss of confidential information and other business disruptions; |
| · | other factors affecting the real estate industry generally; and |
| · | other risks identified in this prospectus and, from time to time, in other reports we file with the SEC or in other documents that
we publicly disseminate, including, in particular, the section titled “Risk Factors” in our Annual Report on Form 10-K
for the fiscal year ended December 31, 2023. |
Neither we nor the Operating Partnership undertake
any obligation to publicly update or revise these forward-looking statements, whether as a result of new information, future events or
otherwise.
Risk
Factors
You
should carefully consider the risks and uncertainties described in and other information contained in our Annual Report on Form 10-K for the year ended December 31, 2023, which is incorporated by reference herein, together with all other information contained in
or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and
other information contained in any applicable prospectus supplement before acquiring any of such securities. If any of the risk factors
were to occur, our business, financial condition, liquidity, results of operations, and prospects could be materially adversely affected.
As a result, the market price of the securities could decline, and you could lose part or all of your investment.
Our
Company
We are a publicly held REIT that, through our
majority-owned subsidiary, the Operating Partnership, owns interests in various operating subsidiaries and joint ventures engaged in the
ownership, operation, acquisition, development, and redevelopment of high-quality, open-air shopping centers and mixed-use assets that
are primarily grocery-anchored and located in high-growth Sun Belt markets and select strategic gateway markets in the United States. Following
our merger with Retail Properties of America, Inc. (“RPAI”) in 2021, we became a top-five open-air shopping center REIT
based upon market capitalization. We derive our revenue primarily from the collection of contractual rents and reimbursement payments
from tenants under existing lease agreements at each of our properties. Therefore, our operating results depend materially on, among
other things, the ability of our tenants to make required lease payments, the health and resilience of the U.S. retail sector, interest
rate volatility, stability in the banking sector, job growth, the real estate market, and overall economic conditions.
As of March 31, 2024, we owned interests
in 180 operating retail properties totaling approximately 28.1 million square feet and one office property with 0.3 million square feet.
Of the 180 operating retail properties, 10 contain an office component. We also owned two development projects under construction as of
this date and an additional two properties with future redevelopment opportunities.
Our
common shares are listed on the NYSE, trading under the symbol “KRG.” We were formed as a REIT in the state of Maryland in
2004. Our principal executive offices are located at 30 S. Meridian Street, Suite 1100, Indianapolis, Indiana 46204, and
our telephone number is (317) 577-5600. We maintain a website at www.kiterealty.com. The information contained on
or connected to our website is not incorporated by reference into, and you must not consider the information to be a part of, this prospectus
or any applicable prospectus supplement.
The
Operating Partnership
The Operating Partnership was formed as a limited
partnership in the state of Delaware in 2004. Substantially all of our consolidated assets are held by, and we conduct substantially all
of our activities through, the Operating Partnership and its wholly owned subsidiaries. We are the sole general partner of the Operating
Partnership and, as of March 31, 2024, own approximately 98.3% of the common partnership interests in the Operating Partnership.
The remaining 1.7% of the common partnership interests are owned by the limited partners. The Operating Partnership’s principal
executive offices are located at 30 S. Meridian Street, Suite 1100, Indianapolis, Indiana 46204, and its telephone number
is (317) 577-5600.
Additional
information about us and our subsidiaries is included in documents incorporated by reference into this prospectus. The foregoing information
about us is only a general summary and is not intended to be comprehensive. For additional information about us, you should refer to
the information under “Where to Find Additional Information” on page 75 and “Incorporation of Certain
Information by Reference” on page 75 of this prospectus.
Use
of Proceeds
Unless otherwise described in the applicable prospectus
supplement to this prospectus used to offer specific securities, we and the Operating Partnership, as the case may be, intend to use the
net proceeds from the sale of securities under this prospectus for general corporate purposes, which may include acquisitions of additional
properties, the repayment of outstanding indebtedness, capital expenditures, the expansion, redevelopment and/or improvement of properties
in our portfolio, working capital and other general purposes. The net proceeds may be temporarily invested prior to such use.
Description
of Capital Shares
General
Our declaration of trust currently provides that
we may issue up to 490,000,000 common shares of beneficial interest, par value $0.01 per share, and 20,000,000 preferred shares of beneficial
interest, par value $0.01 per share. As of May 31, 2024, 219,654,226 common shares were issued and outstanding, and there were no
preferred shares issued and outstanding.
Maryland law and our declaration of trust provide
that none of our shareholders is personally liable for any of our obligations solely as a result of that shareholder’s status as
a shareholder.
Description
of Common Shares
Voting Rights of Common Shares
Subject to the provisions of our declaration of
trust regarding restrictions on the transfer and ownership of shares of beneficial interest, each outstanding common share entitles the
holder to one vote on all matters submitted to a vote of shareholders, including the election of trustees, and, except as provided with
respect to any other class or series of shares of beneficial interest, the holders of such common shares will possess the exclusive voting
power. There is no cumulative voting in the election of trustees, which means that the holders of a plurality of the outstanding common
shares, voting as a single class, can elect all of the trustees then standing for election.
Under the Maryland statute governing real estate
investment trusts formed under the laws of that state, which we refer to as the Maryland REIT law, a Maryland REIT generally cannot amend
its declaration of trust or merge unless recommended by its board of trustees and approved by the affirmative vote of shareholders holding
at least two-thirds of the shares entitled to vote on the matter. Our declaration of trust provides that shareholders shall be entitled
to vote only on: (a) the election and removal of trustees; (b) amendments to our declaration of trust; (c) termination
of our existence; (d) mergers, consolidations, and transfers of all or substantially all of our assets; (e) such matters as
the trustees direct for shareholder approval or ratification; and (f) such matters as are properly brought before a meeting of shareholders
pursuant to the bylaws. The election of trustees requires a majority of all the votes cast in an uncontested election at a meeting of
our shareholders at which a quorum is present, and removal of trustees requires a vote of not less than two-thirds of all of the votes
entitled to be cast and must be for cause. Generally, amendments to our declaration of trust, mergers, consolidations, transfers of all
or substantially all of our assets, and termination of our existence by dissolution all require approval by at least two-thirds of all
the votes entitled to be cast. Our declaration of trust permits the trustees to amend the declaration of trust from time to time to qualify
as a REIT under the Internal Revenue Code or the Maryland REIT law, without the affirmative vote or written consent of the shareholders.
Any other matter submitted for approval or ratification or brought before a shareholder meeting for action would require the approval
of a majority of the votes cast, unless the trustees established a greater threshold for approval.
Dividends, Liquidation and Other Rights
All common shares offered by this prospectus will
be duly authorized, fully paid and nonassessable. Holders of our common shares will be entitled to receive dividends when, as and if declared
by our board of trustees out of assets legally available for the payment of dividends. They also will be entitled to share ratably in
our assets legally available for distribution to our shareholders in the event of our liquidation, dissolution or winding up, after payment
of or adequate provision for all of our known debts and liabilities. These rights will be subject to the preferential rights of any other
class or series of our shares and to the provisions of our declaration of trust regarding restrictions on transfer of our shares.
Holders of our common shares will have no preference,
conversion, exchange, sinking fund, redemption or appraisal rights and will have no preemptive rights to subscribe for any of the securities.
Subject to the restrictions on transfer of shares contained in our declaration of trust and to the ability of the board of trustees to
create common shares with differing voting rights, all common shares will have equal dividend, liquidation and other rights.
Power to Classify and Reclassify Shares and
Issue Additional Common Shares or Preferred Shares
Our declaration of trust authorizes our board
of trustees to classify any unissued preferred shares and to reclassify any previously classified but unissued common shares and preferred
shares of any series from time to time in one or more series, as authorized by the board of trustees. Prior to issuance of shares of each
class or series, the board of trustees is required by the Maryland REIT law and our declaration of trust to set for each such class or
series, subject to the provisions of our declaration of trust regarding the restrictions on transfer of shares of beneficial interest,
the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications
and terms or conditions of redemption for each such class or series. As a result, our board of trustees could authorize the issuance of
preferred shares that have priority over the common shares with respect to dividends and rights upon liquidation and with other terms
and conditions that could have the effect of delaying, deterring or preventing a transaction or a change in control that might involve
a premium price for holders of common shares or otherwise might be in their best interest.
To permit us increased flexibility in structuring
possible future financings and acquisitions and in meeting other needs that might arise, our declaration of trust allows us to issue additional
common shares or preferred shares and to classify or reclassify unissued common shares or preferred shares and thereafter to issue the
classified or reclassified shares without shareholder approval, unless shareholder approval is required by applicable law or the rules of
any stock exchange or automated quotation system on which our securities may be listed or traded. Although we have no present intention
of doing so, we could issue a class or series of shares that could delay, deter or prevent a transaction or a change in control that might
involve a premium price for holders of common shares or might otherwise be in their best interests.
Holders of our common shares do not have preemptive
rights, which means they have no right to acquire any additional shares that we may issue at a subsequent date.
Transfer Agent and Registrar
The transfer agent and registrar for our common
shares is Broadridge Financial Solutions, Inc.
Certain Provisions of Maryland Law and Our Declaration
of Trust and Bylaws
The following description of certain provisions
of Maryland law and of our declaration of trust and bylaws is only a summary. For a complete description, we refer you to the applicable
Maryland law, our declaration of trust and bylaws.
Number of Trustees; Vacancies
Our declaration of trust and bylaws provide that
the number of our trustees will be established by a vote of a majority of the members of our board of trustees. Our bylaws provide that
any vacancy, including a vacancy created by an increase in the number of trustees, may be filled only by a vote of a majority of the remaining
trustees, even if the remaining trustees do not constitute a quorum. Pursuant to our declaration of trust, each of our trustees is elected
by our shareholders to serve until the next annual meeting and until their successors are duly elected and qualify. Under Maryland law,
our board may elect to create staggered terms for its members.
Our bylaws provide that at least a majority of
our trustees will be “independent,” with independence being defined in the manner established by our board of trustees and
in a manner consistent with listing standards established by the NYSE.
Removal of Trustees
Our declaration of trust provides that a trustee
may be removed only with cause and only upon the affirmative vote of at least two-thirds of the votes entitled to be cast in the election
of trustees. Absent removal of all of our trustees, this provision, when coupled with the provision in our bylaws authorizing our board
of trustees to fill vacant trusteeships, may preclude shareholders from removing incumbent trustees and filling the vacancies created
by such removal with their own nominees.
Business Combinations
Maryland law prohibits “business combinations”
between a Maryland REIT and an interested shareholder or an affiliate of an interested shareholder for five years after the most recent
date on which the interested shareholder becomes an interested shareholder. These business combinations include a merger, consolidation,
share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities.
Maryland law defines an interested shareholder as:
| · | any person who beneficially owns 10% or more of the voting power of the REIT’s shares; or |
| · | an affiliate or associate of the REIT who, at any time within the two-year period prior to the date in question, was the beneficial
owner of 10% or more of the voting power of the then outstanding voting shares. |
A person is not an interested shareholder under
Maryland law if the board of trustees approves in advance the transaction by which the person otherwise would have become an interested
shareholder. However, in approving a transaction, the board of trustees may provide that its approval is subject to compliance, at or
after the time of approval, with any terms and conditions determined by the board of trustees.
After the five-year prohibition, any business
combination between a Maryland REIT and an interested shareholder generally must be recommended by the board of trustees and approved
by the affirmative vote of at least:
| · | 80% of the votes entitled to be cast by holders of the REIT’s then outstanding shares of beneficial interest; and |
| · | two-thirds of the votes entitled to be cast by holders of the voting shares other than shares held by the interested shareholder with
whom or with whose affiliate the business combination is to be effected or shares held by an affiliate or associate of the interested
shareholder. |
These super-majority vote requirements do not
apply if the common shareholders receive a minimum price, as described under Maryland law, for their shares in the form of cash or other
consideration in the same form as previously paid by the interested shareholder for its shares.
The statute permits various exemptions from its
provisions, including business combinations that are approved by the board of trustees before the time that the interested shareholder
becomes an interested shareholder.
Our board of trustees has approved a resolution
that exempts us from the provisions of the Maryland business combination statute described above but may opt to make these provisions
applicable to us in the future.
Control Share Acquisitions
Maryland law provides that “control shares”
of a Maryland REIT acquired in a “control share acquisition” have no voting rights unless approved by a vote of two-thirds
of the votes entitled to be cast on the matter. Shares owned by the acquiror or by officers or trustees who are employees are excluded
from the shares entitled to vote on the matter. “Control shares” are issued and outstanding voting shares that, if aggregated
with all other shares previously acquired by the acquiring person, or in respect of which the acquiring person is able to exercise or
direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquiring person to exercise or
direct the exercise of the voting power in electing trustees within one of the following ranges of voting power:
| · | one-tenth or more but less than one-third; |
| · | one-third or more but less than a majority; or |
| · | a majority or more of all voting power. |
Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained shareholder approval. A “control share acquisition”
means the acquisition of outstanding control shares subject to certain exceptions.
A person who has made or proposes to make a control
share acquisition may compel our board of trustees to call a special meeting of shareholders to be held within 50 days of demand to consider
the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction of certain conditions,
including an undertaking to pay the expenses of the special meeting. If no request for a special meeting is made, we may present the question
at any shareholders’ meeting.
If voting rights are not approved at the shareholders’
meeting or if the acquiring person does not deliver the statement required by Maryland law, then, subject to certain conditions and limitations,
the issuer may redeem for the fair value any or all of the control shares, except those for which voting rights have previously been approved.
Fair value is determined without regard to the absence of voting rights for the control shares and as of the date of the last control
share acquisition or of any meeting of shareholders at which the voting rights of the shares were considered and not approved. If voting
rights for control shares are approved at a shareholders’ meeting, the acquiror may then vote a majority of the shares entitled
to vote, and all other shareholders may exercise appraisal rights. The fair value of the shares for purposes of these appraisal rights
may not be less than the highest price per share paid by the acquiror in the control share acquisition. The control share acquisition
statute does not apply to shares acquired in a merger, consolidation or share exchange if the issuer is a party to the transaction, nor
does it apply to acquisitions approved by or exempted by the declaration of trust or bylaws.
Our bylaws contain a provision exempting any and
all acquisitions of our common shares from the control shares provisions of Maryland law. However, our board of trustees may opt to make
these provisions applicable to us at any time by amending or repealing this provision in the future and may do so on a retroactive basis.
Unsolicited Takeovers
Subtitle 8 of Title 3 of the Maryland General
Corporation Law (the “MGCL”), as applicable to Maryland REITs, permits a Maryland REIT with a class of equity securities registered
under the Exchange Act and at least three independent trustees to elect to be subject, by provision in its declaration of trust or bylaws
or a resolution of its board of trustees, and notwithstanding any provision in its declaration of trust or bylaws, to any or all of the
following five provisions:
| · | a two-thirds vote requirement for removing a trustee; |
| · | a requirement that the number of trustees be fixed only by vote of the trustees; |
| · | a requirement that a vacancy on the board be filled only by the affirmative vote of a majority of the remaining trustees then in office
(even if the remaining trustees do not constitute a quorum) and for the remainder of the full term of the class of trustees in which the
vacancy occurred; and |
| · | a majority requirement for the calling of a shareholder-requested special meeting of shareholders. |
Through provisions in our declaration of trust
and bylaws unrelated to Subtitle 8 of Title 3 of the MGCL, (i) trustees may only be removed for cause and by the vote of not less
than two-thirds of the outstanding shares then entitled to vote; and (ii) our bylaws already require the request of holders of at
least a majority of votes entitled to be cast to call a special meeting of shareholders, unless such special meeting is called by the
chair of our board of trustees, the president, the chief executive officer, or a majority of our trustees.
Our board of trustees has the power, under Maryland
law, without shareholder approval, and notwithstanding any provision of our declaration of trust or bylaws, to elect to be subject to
any of the other provisions described above.
Merger, Amendment of Declaration
of Trust
Under the Maryland REIT law, a Maryland REIT generally
cannot terminate its existence by dissolution, amend its declaration of trust or merge with another entity unless recommended by the board
of trustees and approved by the affirmative vote of shareholders holding at least two-thirds of the shares entitled to vote on the matter
unless a lesser percentage, but not less than a majority of all the votes entitled to be cast on the matter, is set forth in the REIT’s
declaration of trust. Our declaration of trust does not alter this two-thirds voting standard. Our declaration of trust, including its
provisions on removal of trustees, may be amended only by the affirmative vote of the holders of two-thirds of the votes entitled to be
cast on the matter. Under the Maryland REIT law and our declaration of trust, our trustees are permitted, without any action by our shareholders,
to amend the declaration of trust from time to time to qualify as a REIT under the Internal Revenue Code or the Maryland REIT law without
the affirmative vote or written consent of the shareholders.
Limitation of Liability and Indemnification
Our declaration of trust limits the liability
of our trustees and officers for money damages, except for liability resulting from:
| · | actual receipt of an improper benefit or profit in money, property or services; or |
| · | a final judgment based upon a finding of active and deliberate dishonesty by the trustee or officer that was material to the cause
of action adjudicated. |
Our declaration of trust requires us, to the maximum
extent permitted by Maryland law, to indemnify, and to pay or reimburse reasonable expenses to, any of our present or former trustees
or officers or any individual who, while a trustee or officer and at our request, serves or has served another entity, employee benefit
plan or any other enterprise as a trustee, director, officer, partner or otherwise. Our declaration of trust and bylaws require us, to
the maximum extent permitted by Maryland law, to indemnify each present or former trustee or officer who is made a party to a proceeding
by reason of his or her service to us.
Maryland law permits us to indemnify our present
and former trustees and officers against liabilities and reasonable expenses actually incurred by them in any proceeding unless:
| · | the act or omission of the trustee or officer was material to the matter giving rise to the proceeding and was committed in bad faith; |
| · | was the result of active and deliberate dishonesty; |
| · | the trustee or officer actually received an improper personal benefit in money, property or services; or |
| · | in a criminal proceeding, the trustee or officer had reasonable cause to believe that the act or omission was unlawful. |
In addition, Maryland law prohibits us from indemnifying
our present and former trustees and officers for an adverse judgment in an action by us or in a derivative action or if the trustee or
officer was adjudged to be liable for an improper personal benefit.
Our bylaws and Maryland law require us, as a condition
to advancing expenses in certain circumstances, to obtain:
| · | a written affirmation by the trustee or officer of his or her good faith belief that he or she has met the standard of conduct necessary
for indemnification; and |
| · | a written undertaking to repay the amount paid or reimbursed if the standard of conduct is not met. |
In addition, we have entered into indemnification
agreements with each of our trustees and executive officers that provide for indemnification to the maximum extent permitted by Maryland
law.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to trustees, officers or persons controlling the registrant pursuant to the foregoing provisions,
the registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Act
and is therefore unenforceable.
Operations
We generally are prohibited from engaging in certain
activities, including acquiring or holding property or engaging in any activity that would cause us to fail to qualify as a REIT.
Term and Termination
Our declaration of trust provides for us to have
a perpetual existence. Pursuant to our declaration of trust, and subject to the provisions of any of our classes or series of shares of
beneficial interest then outstanding and the approval by a majority of the entire board of trustees, our shareholders, at any meeting
thereof, by the affirmative vote of at least two-thirds of all of the votes entitled to be cast on the matter, may approve a plan of liquidation
and dissolution.
Meetings of Shareholders
Under our bylaws, annual meetings of shareholders
are to be held each year at a date and time as determined by our board of trustees. Special meetings of shareholders may be called only
by a majority of the trustees then in office, by the chair of our board of trustees, our President or our Chief Executive Officer. Special
meetings of shareholders shall also be called by the chair of the board of trustees upon the written request of shareholders entitled
to cast at least a majority of all votes entitled to be cast at any such meeting. Only matters set forth in the notice of the special
meeting may be considered and acted upon at such a meeting. Our bylaws provide that any action required or permitted to be taken at a
meeting of shareholders may be taken without a meeting by unanimous written consent, if that consent sets forth that action and is signed
by each shareholder entitled to vote on the matter and any other shareholder entitled to notice of a meeting of shareholders (but not
to vote thereat) has waived in writing any right to dissent from such action, and such consent and waiver are filed with the minutes of
proceedings of the shareholders.
Advance Notice of Trustee Nominations
and New Business
Our bylaws provide that, with respect to an annual
meeting of shareholders, nominations of persons for election to our board of trustees and the proposal of business to be considered by
shareholders at the annual meeting may be made only:
| · | pursuant to our notice of the meeting; |
| · | by or at the direction of our board of trustees; or |
| · | by a shareholder who was a shareholder of record both at the time of the provision of notice and at the time of the meeting who is
entitled to vote at the meeting and has complied with the advance notice procedures set forth in our bylaws. |
With respect to special meetings of shareholders,
only the business specified in our notice of the meeting may be brought before the meeting of shareholders and nominations of persons
for election to our board of trustees may be made only:
| · | by or at the direction of our board of trustees; or |
| · | provided that the meeting has been called in accordance with our bylaws, by a shareholder who was a shareholder of record both at
the time of the provision of notice and at the time of the meeting who is entitled to vote at the meeting in the election of each individual
so nominated and has complied with the advance notice provisions set forth in our bylaws. |
Exclusive Forum
Our bylaws provide that, unless we consent in
writing to the selection of an alternative forum, (i) the Circuit Court for Baltimore City, Maryland, or, if that Court does not
have jurisdiction, the United States District Court for the District of Maryland, Northern Division, shall be the sole and exclusive forum
for (a) any Internal Corporate Claim as defined under the MGCL, (b) any derivative action or proceeding brought in the right
or on behalf of the Company, (c) any action asserting a claim of breach of any duty owed by any trustee, officer, employee or agent
of the Company to the Company or its shareholders, (d) any action asserting a claim against the Company or any trustee, officer,
employee or agent of the Company arising pursuant to any provision of the Maryland REIT law, the Company’s declaration of trust
or bylaws, or (e) any action asserting a claim against the Company or any trustee, officer, employee or agent of the Company that
is governed by the internal affairs doctrine, and (ii) the federal district courts of the United States of America shall, to the
fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising
under the Securities Act, as amended. In the event that any action or proceeding described in clause (i) is pending in the Circuit
Court for Baltimore City, Maryland, our bylaws require that any shareholder that is a party to such proceeding or claim shall cooperate
in seeking to have the action or proceeding assigned to the Maryland Business and Technology Case Management Program.
Possible Anti-Takeover Effect
of Certain Provisions of Maryland Law and of Our Declaration of Trust and Bylaws
The business combination provisions of Maryland
law (if our board of trustees opts to make them applicable to us), the control share acquisition provisions of Maryland law (if the applicable
provision in our bylaws is rescinded), the “unsolicited takeover” provisions of Maryland law (if our board of trustees elect
for any of such provisions to be applicable), the limitations on removal of trustees, the restrictions on the acquisition of our shares
of beneficial interest, the power to issue additional common shares or preferred shares and the advance notice provisions of our bylaws
could have the effect of delaying, deterring or preventing a transaction or a change in control that might involve a premium price for
holders of the common shares or might otherwise be in their best interest.
Description
of Preferred Shares
The following description sets forth certain general
terms of the preferred shares to which any prospectus supplement may relate. This description and the description contained in any prospectus
supplement are not complete and are in all respects subject to and qualified in their entirety by reference to our declaration of trust,
the applicable articles supplementary that describes the terms of the related class or series of preferred shares, and our bylaws, each
of which we will make available upon request.
General
Subject to the limitations prescribed by Maryland
law and our declaration of trust and bylaws, our board of trustees is authorized to establish the number of shares constituting each series
of preferred shares and to fix the designations and powers, preferences and relative, participating, optional or other special rights
and qualifications, limitations or restrictions thereof, including such provisions as may be desired concerning voting, redemption, dividends,
dissolution or the distribution of assets, conversion or exchange, and such other subjects or matters as may be fixed by resolution of
the board of trustees or duly authorized committee thereof. The preferred shares will, when issued, be fully paid and nonassessable and
will not have, or be subject to, any preemptive or similar rights.
The prospectus supplement relating to the series
of preferred shares offered thereby will describe the specific terms of such securities, including:
| · | the title and stated value of such preferred shares; |
| · | the number of such preferred shares offered, the liquidation preference per share and the offering price of such preferred shares; |
| · | the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation thereof applicable to such preferred
shares; |
| · | whether dividends shall be cumulative or non-cumulative and, if cumulative, the date from which dividends on such preferred shares
shall accumulate; |
| · | the voting rights, if any, of the preferred shares; |
| · | the procedures for any auction and remarketing, if any, for such preferred shares; |
| · | the provisions for a sinking fund, if any, for such preferred shares; |
| · | the provisions for redemption, if applicable, of such preferred shares; |
| · | any listing of such preferred shares on any securities exchange; |
| · | the terms and conditions, if applicable, upon which such preferred shares will be convertible into our common shares, including the
conversion price (or manner of calculation thereof) and conversion period; |
| · | any material federal income tax considerations; |
| · | any limitations on issuance of any series of preferred shares ranking senior to or on a parity with such series of preferred shares
as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; |
| · | in addition to those limitations described below, any other limitations on actual and constructive ownership and restrictions on transfer,
in each case as may be appropriate to preserve our status as a REIT; and |
| · | any other specific terms, preferences, rights, limitations or restrictions of such preferred shares. |
Description
of Depositary Shares
General
We may issue receipts for depositary shares, each
of which will represent a fractional interest of a preferred share of a particular series, as specified in the applicable prospectus supplement.
Preferred shares of each series represented by depositary shares will be deposited under a separate deposit agreement among us, the depositary
named therein and the holders from time to time of the depositary receipts. Subject to the terms of the applicable deposit agreement,
each owner of a depositary receipt will be entitled, in proportion to the fractional interest of a preferred share of a particular series
represented by the depositary shares evidenced by such depositary receipt, to all the rights and preferences of the preferred shares represented
by such depositary shares (including dividend, voting, conversion, redemption and liquidation rights).
The depositary shares will be evidenced by depositary
receipts issued pursuant to the applicable deposit agreement. Immediately following the issuance and delivery of the preferred shares
by us to a preferred share depositary, we will cause such preferred shares depositary to issue, on our behalf, the depositary receipts.
Copies of the applicable form of deposit agreement and depositary receipt may be obtained from us upon request, and the statements made
hereunder relating to the deposit agreement and the depositary receipts to be issued thereunder are summaries of certain provisions thereof
and do not purport to be complete and are subject to, and qualified in their entirety by reference to, all of the provisions of the applicable
deposit agreement and related depositary receipts.
Dividends and Other Distributions
The preferred share depositary will distribute
all cash dividends or other cash distributions received in respect of the preferred shares to the record holders of depositary receipts
evidencing the related depositary shares in proportion to the number of such depositary receipts owned by such holders, subject to certain
obligations of holders to file proofs, certificates and other information and to pay certain charges and expenses to the preferred shares
depositary.
In the event of a distribution other than in cash,
the preferred shares depositary will distribute property received by it to the record holders of depositary receipts entitled thereto,
subject to certain obligations of holders to file proofs, certificates and other information and to pay certain charges and expenses to
the preferred shares depositary, unless the preferred shares depositary determines that it is not feasible to make such distribution,
in which case the preferred shares depositary may, with our approval, sell such property and distribute the net proceeds from such sale
to such holders.
No distribution will be made in respect of any
depositary share to the extent that it represents any preferred shares converted into other securities.
Withdrawal of Shares
Upon surrender of the depositary receipts at the
corporate trust office of the applicable preferred shares depositary (unless the related depositary shares have previously been called
for redemption or converted into other securities), the holders thereof will be entitled to delivery at such office, to or upon such holder’s
order, of the number of whole or fractional preferred shares and any money or other property represented by the depositary shares evidenced
by such depositary receipts. Holders of depositary receipts will be entitled to receive whole or fractional preferred shares on the basis
of the proportion of preferred shares represented by each depositary share as specified in the applicable prospectus supplement, but holders
of such preferred shares will not thereafter be entitled to receive depositary shares therefor. If the depositary receipts delivered by
the holder evidence a number of depositary shares in excess of the number of depositary shares representing the number of preferred shares
to be withdrawn, the preferred shares depositary will deliver to such holder at the same time a new depositary receipt evidencing such
excess number of depositary shares.
Redemption of Depositary Shares
Whenever we redeem preferred shares held by the
preferred shares depositary, the preferred shares depositary will redeem as of the same redemption date the number of depositary shares
representing preferred shares so redeemed, provided we shall have paid in full to the preferred shares depositary the redemption price
of the preferred shares to be redeemed plus an amount equal to any accrued and unpaid dividends thereon to the date fixed for redemption.
The redemption price per depositary share will be equal to the corresponding proportion of the redemption price and any other amounts
per share payable with respect to the preferred shares. If fewer than all the depositary shares are to be redeemed, the depositary shares
to be redeemed will be selected pro rata (as nearly as may be practicable without creating fractional depositary shares) or by any other
equitable method determined by us that will not result in a violation of the ownership restrictions in our declaration of trust. See “Restrictions
on Ownership.”
From and after the date fixed for redemption,
all dividends in respect of the preferred shares so called for redemption will cease to accrue, the depositary shares so called for redemption
will no longer be deemed to be outstanding and all rights of the holders of the depositary receipts evidencing the depositary shares so
called for redemption will cease, except the right to receive any moneys payable upon such redemption and any money or other property
to which the holders of such depositary receipts were entitled upon such redemption and surrender thereof to the preferred shares depositary.
Voting of the Preferred Shares
Upon receipt of notice of any meeting at which
the holders of the applicable preferred shares are entitled to vote, the preferred shares depositary will mail the information contained
in such notice of meeting to the record holders of the depositary receipts evidencing the depositary shares which represent such preferred
shares. Each record holder of depositary receipts evidencing depositary shares on the record date (which will be the same date as the
record date for the preferred shares) will be entitled to instruct the preferred shares depositary as to the exercise of the voting rights
pertaining to the amount of preferred shares represented by such holder’s depositary shares. The preferred shares depositary will
vote the amount of preferred shares represented by such depositary shares in accordance with such instructions, and we will agree to take
all reasonable action which may be deemed necessary by the preferred shares depositary in order to enable the preferred shares depositary
to do so. The preferred shares depositary will abstain from voting the amount of preferred shares represented by such depositary shares
to the extent it does not receive specific instructions from the holders of depositary receipts evidencing such depositary shares. The
preferred shares depositary shall not be responsible for any failure to carry out any instruction to vote, or for the manner or effect
of any such vote made, as long as any such action or non-action is in good faith and does not result from negligence or willful misconduct
of the preferred shares depositary.
Liquidation Preference
In the event of our liquidation, dissolution or
winding up, whether voluntary or involuntary, the holders of each depositary receipt will be entitled to the fraction of the liquidation
preference accorded each preferred share represented by the depositary shares evidenced by such depositary receipt, as set forth in the
applicable prospectus supplement.
Conversion of Preferred Shares
The depositary shares, as such, are not convertible
into common shares or any of our other securities or property. Nevertheless, if so specified in the applicable prospectus supplement relating
to an offering of depositary shares, the depositary receipts may be surrendered by holders thereof to the preferred shares depositary
with written instructions to the preferred shares depositary to instruct us to cause conversion of the preferred shares represented by
the depositary shares evidenced by such depositary receipts into whole common shares or other preferred shares, and we have agreed that
upon receipt of such instructions and any amounts payable in respect thereof, we will cause the conversion thereof utilizing the same
procedures as those provided for delivery of preferred shares to effect such conversion. If the depositary shares evidenced by a depositary
receipt are to be converted in part only, a new depositary receipt or receipts will be issued for any depositary shares not to be converted.
No fractional common shares will be issued upon conversion, and if such conversion would result in a fractional share being issued, an
amount will be paid in cash by us equal to the value of the fractional interest based upon the closing price of the common shares on the
last business day prior to the conversion.
Amendment and Termination of Deposit Agreement
The form of depositary receipt evidencing the
depositary shares which represent the preferred shares and any provision of the deposit agreement may at any time be amended by agreement
between us and the preferred shares depositary. However, any amendment that materially and adversely alters the rights of the holders
of depositary receipts or that would be materially and adversely inconsistent with the rights granted to the holders of the related preferred
shares will not be effective unless such amendment has been approved by the existing holders of at least two-thirds of the applicable
depositary shares evidenced by the applicable depositary receipts then outstanding. No amendment shall impair the right, subject to certain
exceptions in the deposit agreement, of any holder of depositary receipts to surrender any depositary receipt with instructions to deliver
to the holder the related preferred shares and all money and other property, if any, represented thereby, except in order to comply with
law. Every holder of an outstanding depositary receipt at the time any such amendment becomes effective shall be deemed, by continuing
to hold such receipt, to consent and agree to such amendment and to be bound by the deposit agreement as amended thereby.
The deposit agreement may be terminated by us
upon not less than 30 days’ prior written notice to the preferred shares depositary if (i) such termination is necessary to
preserve our status as a REIT or (ii) a majority of each series of preferred shares affected by such termination consents to such
termination, whereupon the preferred shares depositary shall deliver or make available to each holder of depositary receipts, upon surrender
of the depositary receipts held by such holder, such number of whole or fractional preferred shares as are represented by the depositary
shares evidenced by such depositary receipts together with any other property held by the preferred shares depositary with respect to
such depositary receipts. We have agreed that if the deposit agreement is terminated to preserve our status as a REIT, then we will use
our best efforts to list the preferred shares issued upon surrender of the related depositary shares on a national securities exchange.
In addition, the deposit agreement will automatically terminate if (i) all outstanding depositary shares shall have been redeemed,
(ii) there shall have been a final distribution in respect of the related preferred shares in connection with our liquidation, dissolution
or winding up and such distribution shall have been distributed to the holders of depositary receipts evidencing the depositary shares
representing such preferred shares or (iii) each related preferred share shall have been converted into our securities not so represented
by depositary shares.
Charges of Preferred Shares Depositary
We will pay all transfer and other taxes and governmental
charges arising solely from the existence of the deposit agreement. In addition, we will pay the fees and expenses of the preferred shares
depositary in connection with the performance of its duties under the deposit agreement. However, holders of depositary receipts will
pay the fees and expenses of the preferred shares depositary for any duties requested by such holders to be performed which are outside
of those expressly provided for in the deposit agreement.
Resignation and Removal of Depositary
The preferred shares depositary may resign at
any time by delivering to us notice of its election to do so, and we may at any time remove the preferred shares depositary, any such
resignation or removal to take effect upon the appointment of a successor preferred shares depositary. A successor preferred shares depositary
must be appointed within 60 days after delivery of the notice of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus of at least $10,000,000.
Miscellaneous
The preferred shares depositary will forward to
holders of depositary receipts any reports and communications from the Company which are received by the preferred shares depositary with
respect to the related preferred shares.
Neither the preferred shares depositary nor the
Company will be liable if it is prevented from or delayed in, by law or any circumstances beyond its control, performing its obligations
under the deposit agreement. The obligations of us and the preferred shares depositary under the deposit agreement will be limited to
performing their duties thereunder in good faith and without negligence (in the case of any action or inaction in the voting of preferred
shares represented by the depositary shares), gross negligence or willful misconduct, and we and the preferred shares depositary will
not be obligated to prosecute or defend any legal proceeding in respect of any depositary receipts, depositary shares or preferred shares
represented thereby unless satisfactory indemnity is furnished. We and the preferred shares depositary may rely on written advice of counsel
or accountants, or information provided by persons presenting preferred shares represented thereby for deposit, holders of depositary
receipts or other persons believed in good faith to be competent to give such information, and on documents believed in good faith to
be genuine and signed by a proper party.
In the event the preferred shares depositary shall
receive conflicting claims, requests or instructions from any holders of depositary receipts, on the one hand, and us, on the other hand,
the preferred shares depositary shall be entitled to act on such claims, requests or instructions received from us.
Restrictions on Ownership
Holders of depositary receipts will be subject
to the ownership restrictions of the declaration of trust. See “Restrictions on Ownership.”
Description
of Warrants
We may offer by means of this prospectus warrants
for the purchase of our preferred shares, depositary shares representing preferred shares or common shares. We may issue warrants separately
or together with any other securities offered by means of this prospectus, and the warrants may be attached to or separate from such securities.
Each series of warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent specified
therein. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any obligation
or relationship of agency or trust for or with any holders or beneficial owners of warrants.
The applicable prospectus supplement will describe
the following terms, where applicable, of the warrants in respect of which this prospectus is being delivered:
| · | the title and issuer of such warrants; |
| · | the aggregate number of such warrants; |
| · | the price or prices at which such warrants will be issued; |
| · | the currencies in which the price or prices of such warrants may be payable; |
| · | the designation, amount and terms of the securities purchasable upon exercise of such warrants; |
| · | the designation and terms of the other securities with which such warrants are issued and the number of such warrants issued with
each such security; |
| · | if applicable, the date on and after which such warrants and the securities purchasable upon exercise of such warrants will be separately
transferable; |
| · | the price or prices at which and currency or currencies in which the securities purchasable upon exercise of such warrants may be
purchased; |
| · | the date on which the right to exercise such warrants shall commence and the date on which such right shall expire; |
| · | the minimum or maximum amount of such warrants which may be exercised at any one time; |
| · | information with respect to book-entry procedures, if any; |
| · | any material federal income tax considerations; and |
| · | any other material terms of such warrants, including terms, procedures and limitations relating to the exchange and exercise of such
warrants. |
Description
of Rights
We may issue rights to our shareholders for the
purchase of common shares. Each series of rights will be issued under a separate rights agreement to be entered into between us and a
bank or trust company, as rights agent, all as set forth in the prospectus supplement relating to the particular issue of rights. The
rights agent will act solely as our agent in connection with the certificates relating to the rights of such series and will not assume
any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The rights
agreement and the rights certificates relating to each series of rights will be filed with the SEC and incorporated by reference as an
exhibit to the registration statement of which this prospectus is a part.
The applicable prospectus supplement will describe
the terms of the rights to be issued, including the following, where applicable:
| · | the date for determining the shareholders entitled to the rights distribution; |
| · | the aggregate number of common shares purchasable upon exercise of such rights and the exercise price; |
| · | the aggregate number of rights being issued; |
| · | the date, if any, on and after which such rights may be transferable separately; |
| · | the date on which the right to exercise such rights shall commence and the date on which such right shall expire; |
| · | any material federal income tax considerations; and |
| · | any other terms of such rights, including terms, procedures and limitations relating to the distribution, exchange and exercise of
such rights. |
Description
of Debt Securities
The debt securities will be issued in one or more
series under the indenture, dated as of September 26, 2016, between the Operating Partnership, as issuer, and U.S. Bank National
Association, as trustee. References herein to the “Indenture” refer to such indenture and references to the “Trustee”
refer to such trustee or any other trustee for any particular series of debt securities issued under the Indenture. The terms of the debt
securities of any series will be those specified in or pursuant to the Indenture and in the applicable debt securities of that series
and those made part of the Indenture by the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”).
The following description of selected provisions
of the Indenture and the debt securities is not complete, and the description of selected terms of the debt securities of a particular
series included in the applicable prospectus supplement also will not be complete. You should review the Indenture and the form of the
applicable debt securities, which forms have been or will be filed as exhibits to the registration statement of which this prospectus
is a part or as exhibits to documents which have been or will be incorporated by reference in this prospectus. To obtain a copy of the
Indenture or the form of the applicable debt securities, see “Where to Find Additional Information” in this prospectus. The
following description of debt securities and the description of the debt securities of the particular series in the applicable prospectus
supplement are qualified in their entirety by reference to all of the provisions of the Indenture and the applicable debt securities,
which provisions, including defined terms, are incorporated by reference in this prospectus. Capitalized terms used but not defined in
this section shall have the meanings assigned to those terms in the Indenture.
The following description of debt securities describes
general terms and provisions of the series of debt securities to which any prospectus supplement may relate. When the debt securities
of a particular series are offered for sale, the specific terms of such debt securities will be described in the applicable prospectus
supplement. If any particular terms of such debt securities described in a prospectus supplement are inconsistent with any of the terms
of the debt securities generally described in this prospectus, then the terms described in the applicable prospectus supplement will supersede
the terms described in this prospectus.
General
The debt securities of each series will constitute
the unsubordinated obligations of the Operating Partnership and will rank on a parity in right of payment with all of its other existing
and future unsubordinated indebtedness. The Operating Partnership may issue an unlimited principal amount of debt securities under the
Indenture. The Indenture provides that debt securities of any series may be issued up to the aggregate principal amount which may be authorized
from time to time by the Operating Partnership. Please read the applicable prospectus supplement relating to the debt securities of the
particular series being offered thereby for the specific terms of such debt securities, including, where applicable:
| · | the title of the series of debt securities; |
| · | the aggregate principal amount of debt securities of the series and any limit thereon; |
| · | whether such debt securities are to be issuable in global form or as Registered Securities; |
| · | the date or dates, or the method or methods, if any, by which such date or dates shall be determined, on which the Operating Partnership
will pay the principal of and premium, if any, on debt securities of the series, or the method used to determine such date or dates; |
| · | the rate or rates, which may be fixed or variable, at which debt securities of the series will bear interest, if any, or the method
or methods, if any, used to determine such rate or rates; |
| · | the basis used to calculate interest, if any, on the debt securities of the series if other than a 360-day year of twelve 30-day months; |
| · | the date or dates, if any, from which interest on the debt securities of the series will accrue, or the method or methods, if any,
used to determine such date or dates; |
| · | the date or dates, if any, on which the interest on the debt securities of the series will be payable and the record dates for any
such payment of interest; |
| · | the terms and conditions, if any, upon which the Operating Partnership is required to, or may, at its option, redeem debt securities
of the series; |
| · | the terms and conditions, if any, upon which the Operating Partnership will be required to repurchase debt securities of the series
at the option of the holders of debt securities of the series; |
| · | the terms of any sinking fund or analogous provision; |
| · | if other than the entire principal amount thereof, the portion of the principal amount of the debt securities of the series which
will be payable upon acceleration if other than the full principal amount; |
| · | the authorized denominations in which debt securities of the series will be issued, if other than minimum denominations of $2,000
and any integral multiple of $1,000 in excess thereof; |
| · | the place or places where (1) amounts due on the debt securities of the series will be payable, (2) the debt securities
of the series may be surrendered for registration of transfer or exchange, (3) the debt securities of the series may be surrendered
for conversion or exchange and (4) notices or demands to or upon the Operating Partnership in respect of the debt securities of the
series or the Indenture may be served, if different than the corporate trust office of the Trustee; |
| · | the terms and conditions, if any, upon which the debt securities will be convertible into and/or exchangeable for equity of the Operating
Partnership or any other Person, other securities, cash or other property, as applicable; |
| · | if other than U.S. dollars, the currency or currencies in which purchases of, and payments on, the debt securities of the series must
be made, the manner of determining the equivalent thereof in Dollars for any purpose, and the ability, if any, of the Operating Partnership
or the holders of debt securities of the series to elect for payments to be made in any other currency or currencies and the terms and
conditions upon which such election may be made; |
| · | whether the amount of payments on the debt securities of the series may be determined with reference to an index, formula, or other
method or methods (any of those debt securities being referred to as “Indexed Securities”) and the manner used to determine
those amounts; |
| · | any addition to, modification of, or deletion of, any covenant or Event of Default with respect to debt securities of the series or
any guarantee; |
| · | whether the securities will be secured; |
| · | the covenants subject to covenant defeasance; |
| · | the terms and conditions, if any, upon which debt securities are to be issuable upon the exercise of warrants; |
| · | the identity of the depositary for the global debt securities; |
| · | the circumstances under which the Operating Partnership or any guarantor will pay Additional Amounts on such securities in respect
of any tax, assessment, or other governmental charge and whether the Operating Partnership will have the option to redeem such securities
rather than pay the Additional Amounts; |
| · | if there is more than one trustee, the identity of the trustee that has any obligations, duties and remedies with respect to the debt
securities and, if not the trustee, the identity of each security registrar, paying agent or authenticating agent with respect to the
debt securities; |
| · | the terms of any guarantee of the debt securities and the identity of any guarantor or guarantors of the debt securities; |
| · | if the principal amount payable at the stated maturity of the debt securities of the series will not be determinable as of any one
or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of
any date; |
| · | whether the debt securities will not be issued in a transaction registered under the Securities Act and any restriction or condition
on the transferability of the debt securities of such series; |
| · | the exchanges, if any, on which the debt securities of the series may be listed; |
| · | the price or prices at which the debt securities of the series will be sold; |
| · | if debt securities issuable in global form are to be issuable in definitive form, then the forms and terms related to such issuance; |
| · | the Person to whom any interest on any Registered Security shall be payable, if other than the Person in whose name such security
is registered at the close of business on the Regular Record Date for such payment and the manner in which any interest payable on a temporary
global security will be paid if other than in the manner provided in the Indenture; |
| · | any additional covenants subject to waiver by the act of the holders of debt securities pursuant to the Indenture; and |
| · | any other terms of debt securities of the series and any deletions from or modifications or additions to the Indenture in respect
of such securities. |
As used in this prospectus, references to the
principal of and premium, if any, and interest, if any, on the debt securities of a series include Additional Amounts, if any, payable
on the debt securities of such series in that context.
The Operating Partnership may issue debt securities
as original issue discount securities to be sold at a discount below their principal amount. In the event of an acceleration of the maturity
of any original issue discount security, the amount payable to the holder upon acceleration will be determined in the manner described
in the applicable prospectus supplement. Important U.S. federal income tax and other considerations applicable to original issue discount
securities will be described in the applicable prospectus supplement.
The terms of the debt securities of any series
may be inconsistent with the terms of the debt securities of any other series, and the terms of particular debt securities within any
series may be inconsistent with each other. Unless otherwise specified in the applicable prospectus supplement, the Operating Partnership
may, without the consent of, or notice to, the holders of the debt securities of any series, reopen an existing series of debt securities
and issue additional debt securities of that series.
Other than to the extent provided with respect
to the debt securities of a particular series and described in the applicable prospectus supplement, the Indenture will not contain any
provisions that would limit the ability of the Operating Partnership to incur indebtedness or to substantially reduce or eliminate the
Operating Partnership’s consolidated assets, which may have a material adverse effect on the ability of the Operating Partnership
to service the Operating Partnership’s indebtedness (including the debt securities) or that would afford holders of the debt securities
protection in the event of:
(1) a highly leveraged or similar transaction
involving the Operating Partnership’s management, or any affiliate of any of those parties,
(2) a change of control, or
(3) a reorganization, restructuring, merger,
or similar transaction involving the Operating Partnership or its affiliates.
Registration, Transfer, Payment and Paying Agent
Unless otherwise specified in the applicable prospectus
supplement, each series of debt securities will be issued in registered form only, without coupons.
Unless otherwise specified in the applicable prospectus
supplement, the debt securities will be payable and may be surrendered for registration of transfer or exchange at an office of the Operating
Partnership or an agent of the Operating Partnership in The City of New York. The Operating Partnership, at its option, may make payments
of interest on any interest payment date on any debt security that is not a global debt security by check mailed to the address of the
person entitled to receive that payment or by wire transfer to an account maintained by the payee with a bank located in the United States.
Any interest not punctually paid or duly provided
for on any interest payment date with respect to the debt securities of any series will forthwith cease to be payable to the holders of
those debt securities on the applicable regular record date and may either be paid to the persons in whose names those debt securities
are registered at the close of business on a special record date for the payment of the interest not punctually paid or duly provided
for to be fixed by the Trustee, notice whereof shall be given to the holders of those debt securities not less than 10 days prior to the
special record date, or may be paid at any time in any other lawful manner, all as completely described in the Indenture.
Subject to certain limitations imposed on debt
securities issued in book-entry form, the debt securities of any series will be exchangeable for other debt securities of the same series
and of a like aggregate principal amount and tenor of different authorized denominations upon surrender of those debt securities at the
designated place or places. In addition, subject to certain limitations imposed upon debt securities issued in book-entry form, the debt
securities of any series may be surrendered for registration of transfer or exchange thereof at the designated place or places if duly
endorsed or accompanied by a written instrument of transfer. No service charge shall be made for any registration of transfer or exchange,
redemption or repayment of debt securities, but the Operating Partnership may require payment of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in connection with certain of those transactions.
Unless otherwise specified in the applicable prospectus
supplement, the Operating Partnership will not be required to:
| · | issue, register the transfer of or exchange debt securities of any series during a period beginning at the opening of business 15
days before mailing of a notice of redemption of debt securities of that series of like tenor and terms to be redeemed and ending at the
close of business on the day of that mailing; |
| · | register the transfer of or exchange any debt security, or portion of any debt security, called for redemption, except the unredeemed
portion of any debt security being redeemed in part; or |
| · | issue, register the transfer of or exchange a debt security which has been surrendered for repurchase at the option of the holder,
except the portion, if any, of the debt security not to be repurchased. |
Outstanding Debt Securities
In determining whether the holders of the requisite
principal amount of outstanding debt securities have given any request, demand, authorization, direction, notice, consent, or waiver under
the Indenture:
| · | the principal amount of an original issue discount security that shall be deemed to be outstanding for these purposes shall be that
portion of the principal amount of the original issue discount security that would be due and payable upon acceleration of the original
issue discount security as of the date of the determination; |
| · | the principal amount of any Indexed Security that shall be deemed to be outstanding for these purposes shall be the principal amount
of the Indexed Security determined on the date of its original issuance, unless otherwise provided in the Indenture; |
| · | the principal amount of a debt security denominated in a foreign currency shall be the U.S. dollar equivalent, determined on the date
of its original issuance, of the principal amount of the debt security; and |
| · | a debt security owned by the Operating Partnership or any obligor on the debt security or any affiliate of the Operating Partnership
or such other obligor shall be deemed not to be outstanding. |
Redemption and Repurchase
The debt securities of any series may be redeemable
at the Operating Partnership’s option or may be subject to mandatory redemption by the Operating Partnership as required by a sinking
fund or otherwise. In addition, the debt securities of any series may be subject to repurchase by the Operating Partnership at the option
of the holders. The applicable prospectus supplement will describe the terms and conditions regarding any optional or mandatory redemption
or option to repurchase the debt securities of the related series.
Covenants
Any material covenants applicable to the debt
securities of the applicable series will be specified in the applicable prospectus supplement.
Events of Default
Unless otherwise specified in the applicable prospectus
supplement, an Event of Default with respect to the debt securities of any series is defined in the Indenture as being any of the following
events:
| (1) | default for 30 days in the payment of any installment of interest or Additional Amounts payable with respect to such interest under
the debt securities of that series; |
| (2) | default in the payment of the principal of or premium, if any, on or, any Additional Amounts payable in respect of any principal of
or premium, if any, on the debt securities of that series, when the same becomes due and payable or default is made in the deposit of
any sinking fund payment with respect to the debt securities of that series when due; |
| (3) | the Operating Partnership fails to comply with any of the Operating Partnership’s other agreements contained in the debt securities
or the Indenture (other than an agreement a default in whose performance or whose breach is elsewhere specifically dealt with in the Indenture
or which has expressly been included in the Indenture solely for the benefit of a series of debt securities other than that series) upon
receipt by the Operating Partnership of notice of such default by the Trustee or receipt by the Operating Partnership and the Trustee
of notice of such default by holders of not less than twenty five percent (25%) in aggregate principal amount of the debt securities of
that series then outstanding and the Operating Partnership fails to cure (or obtain a waiver of) such default within 60 days after the
Operating Partnership receives such notice; |
| (4) | failure to pay any recourse indebtedness for monies borrowed by the Operating Partnership, any guarantor or any Significant Subsidiary
in an outstanding principal amount in excess of $50 million at final maturity or upon acceleration after the expiration of any applicable
grace period, which recourse indebtedness is not discharged, or such default in payment or acceleration is not cured or rescinded, within
30 days after written notice of such failure to the Operating Partnership from the Trustee (or to the Operating Partnership and the Trustee
from holders of at least twenty five percent (25%) in principal amount of the outstanding debt securities of that series); or |
| (5) | specified events of bankruptcy, insolvency, or reorganization with respect to the Operating Partnership, any guarantor or any Significant
Subsidiary. |
No Event of Default with respect to any particular
series of debt securities necessarily constitutes an Event of Default with respect to any other series of debt securities. The Trustee
is required to give notice to holders of the debt securities of the applicable series within 90 days after the Trustee has actual knowledge
(as such knowledge is described in the Indenture) of a default relating to such debt securities.
If an Event of Default specified in clause (5) above
occurs, then the principal of, and premium, if any, on all the outstanding debt securities of the applicable series and unpaid interest,
if any, accrued thereon shall automatically become immediately due and payable. If any other Event of Default with respect to the outstanding
debt securities of the applicable series occurs and is continuing, either the Trustee or the holders of at least 25% in aggregate principal
amount of the debt securities of that series then outstanding may declare the principal of, and premium, if any, on, or if debt securities
of that series are original issue discount securities such lesser amount as may be specified in the terms of that series of debt securities,
and unpaid interest, if any, accrued thereon to be due and payable immediately. However, upon specified conditions, the holders of a majority
in aggregate principal amount of the debt securities of that series then outstanding may rescind and annul any such declaration of acceleration
and its consequences.
The Indenture provides that no holders of debt
securities of any series may institute any proceedings, judicial or otherwise, with respect to the Indenture, or for the appointment of
a receiver or Trustee, or for any remedy thereunder, except in the case of failure of the Trustee, for 60 days, to act after it has received
written notice of an Event of Default with respect to such series from a holder of a debt security of such series, a written request to
institute proceedings in respect of such Event of Default from the holders of at least 25% in aggregate principal amount of the outstanding
debt securities of that series, as well as an offer of indemnity or security satisfactory to it, and no inconsistent direction has been
given to the Trustee during such 60 day period by the holders of a majority in aggregate principal amount of the outstanding debt securities
of that series. Notwithstanding any other provision of the Indenture, each holder of a debt security will have the right, which is absolute
and unconditional, to receive payment of the principal of and premium, if any, and interest, if any, and any Additional Amounts on that
debt security on the respective due dates for those payments, and in the case of any debt security which is convertible into or exchangeable
for other securities or property, to convert or exchange as the case may be, such debt security in accordance with its terms, and to institute
suit for the enforcement of those payments and any such right to convert or exchange, and this right shall not be impaired without the
consent of such holder.
Subject to the provisions of the Trust Indenture
Act requiring the Trustee, during the continuance of an Event of Default under the Indenture, to act with the requisite standard of care,
the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the
holders of debt securities of any series unless those holders have offered the Trustee indemnity or security satisfactory to it. The holders
of a majority in aggregate principal amount of the outstanding debt securities of any series will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee, or of exercising any trust or power conferred upon the
Trustee, provided that the direction would not conflict with any rule or law or with the Indenture or with any series of debt securities,
such direction would not be unduly prejudicial to the rights of any other holder of debt securities of that series (or the debt securities
of any other series) not joining in such action or could not involve the Trustee in personal liability, and the Trustee may take any other
action deemed proper by the Trustee which is not inconsistent with such direction.
Within 120 calendar days after the close of each
fiscal year, the Operating Partnership and, if applicable, any guarantor, must deliver to the Trustee an officers’ certificate stating
whether or not each certifying officer has knowledge of any default and, if so, specifying each such default and the nature and status
thereof.
The Operating Partnership will deliver to the
Trustee, within 30 calendar days of becoming aware of (i) any default in the performance or observance of any covenant, agreement
or condition contained in the Indenture, or (ii) any Event of Default, an officers’ certificate specifying with particularity
such default or Event of Default and further stating what action the Operating Partnership has taken, is taking or proposes to take with
respect thereto.
Modification, Waivers and Meetings
The Indenture permits the Operating Partnership
and the Trustee, with the consent of the holders of a majority in aggregate principal amount of the outstanding debt securities of each
series issued under the Indenture and affected by a modification or amendment (voting as separate classes), to modify or amend any of
the provisions of the Indenture or of the debt securities of the applicable series or the rights of the holders of the debt securities
of the applicable series under the Indenture. However, no modification or amendment shall, without the consent of the holder of each outstanding
debt security affected thereby:
| · | change the stated maturity of the principal of, or premium, if any, or any installment of interest, if any, on, or any Additional
Amounts, if any, with respect to, any debt securities; |
| · | reduce the principal of or any premium on any debt securities or reduce the rate (or modify the calculation of such rate) of interest
on or the redemption or repurchase price of any debt securities, or any Additional Amounts payable with respect to any debt securities
or related guarantee or change the Operating Partnership’s or any guarantor’s obligation to pay Additional Amounts; |
| · | reduce the amount of principal of any original issue discount securities that would be due and payable upon acceleration of the maturity
of any debt security; |
| · | adversely affect any right of repayment or repurchase at the option of any holder; |
| · | change any place where, or the currency in which, the principal of, any premium or interest on, or any Additional Amounts with respect
to any debt security or guarantee is payable; |
| · | impair the right to institute suit to enforce the payment of any debt securities or guarantee on or after their stated maturity (or,
in the case of redemption on or after the Redemption Date, or on or after the date for repayment or repurchase); |
| · | in the case of any debt security which is convertible into or exchangeable for other securities or property, impair the right to institute
suit to enforce the right to convert or exchange such Security in accordance with its terms; |
| · | reduce the percentage of the outstanding debt securities of any series whose holders must consent to any modification or amendment
or any waiver of compliance with specific provisions of such Indenture or specified defaults under the Indenture and their consequences; |
| · | reduce the requirements for a quorum or voting at a meeting of holders of the applicable debt securities; |
| · | modify the sections of the Indenture setting forth the provisions of the Indenture that may not be amended without the consent of
holders, or providing for the waiver of past defaults and the waiver of certain covenants, except to increase any such percentage or provide
that certain other provisions of the Indenture cannot be modified or waived without the consent of holder of each outstanding debt security
of such series; |
| · | release a guarantor from any of the obligations under a guarantee except as permitted under the Indenture; or |
| · | make any change that adversely affects the right, if any, to convert or exchange any debt security for common equity or other securities
or property. |
The Indenture also contains provisions permitting
the Operating Partnership and any guarantor, as applicable, and the Trustee, without the consent of the holders of any debt securities,
to modify or amend the Indenture, among other things:
| · | to evidence a successor to the Operating Partnership or any guarantor, if applicable, as under the Indenture, or successive successions,
and the assumption by any such successor of the covenants of the Operating Partnership or any guarantor; |
| · | to add to the covenants of the Operating Partnership or any guarantor for the benefit of the holders of all or any series of debt
securities or to surrender any right or power conferred upon the Operating Partnership or any guarantor in the Indenture; |
| · | to add to the Events of Default in a manner that benefits the holders of all or any series of debt securities issued under the Indenture; |
| · | to establish the form or terms of debt securities of any series, and the form of the guarantee of debt securities of any series (provided
that any such deletions, additions and changes shall not be applicable to any other series of debt securities then outstanding); |
| · | to make any change necessary to comply with any requirement of the SEC in connection with the Indenture under the Trust Indenture
Act; |
| · | to provide for any guarantee of the holders of debt securities of a series, to secure the debt securities or to confirm and evidence
the release, termination or discharge of any guarantee of or lien securing the debt securities when such release, termination or discharge
is permitted by the Indenture; |
| · | to provide for the acceptance of appointment by a successor trustee or facilitate the administration of the trusts under the Indenture
by more than one trustee; |
| · | to cure any ambiguity, defect or inconsistency in the Indenture; |
| · | to make any change that would provide any additional rights or benefits to the holders of debt securities or that does not adversely
affect the legal rights under the Indenture of any holder in any material respect; |
| · | to supplement any of the provisions of the Indenture to the extent necessary to permit or facilitate defeasance and discharge of any
series of debt securities, provided, that the action shall not adversely affect the interests of the holders of debt securities; |
| · | to provide for the issuance of additional debt securities, subject to the limitations established in the Indenture; |
| · | to comply with the rules of any applicable Depository or the rules or regulations of any securities exchange or automated
quotation system on which any of the debt securities may be listed or traded; |
| · | to add to or change any provisions of the Indenture to such extent as is necessary to permit or facilitate the issuance of debt securities
in uncertificated form; |
| · | to amend or supplement any provision contained in the Indenture, in any supplemental indenture or in any debt securities, provided
that the amendment or supplement (i) does not (a) apply to any outstanding debt securities issued before the date of the amendment
or supplement and entitled to the benefits of that provision, or (b) modify the rights of holders of any such debt securities with
respect to such provision, or (ii) becomes effective only when no security described in clause (i)(a) is outstanding; or |
| · | to conform the terms of the Indenture or the debt securities of a series, as applicable, to the description thereof contained in any
prospectus, prospectus supplement or other offering document relating to the offer and sale of such debt securities. |
The holders of a majority in aggregate principal
amount of the outstanding debt securities of any series may waive the Operating Partnership’s compliance with some of the restrictive
provisions of the Indenture, which may include covenants, if any, which are specified in the applicable prospectus supplement. The holders
of a majority in aggregate principal amount of the outstanding debt securities of any series may, on behalf of all holders of debt securities
of that series, waive any past default under the Indenture with respect to the debt securities of that series and its consequences, except
a default which is continuing (i) in the payment of the principal of, or premium, if any, or interest, if any, on, and any Additional
Amounts with respect to, the debt securities of that series, (ii) with respect to the conversion or exchange of a series of debt
securities convertible or exchangeable into common equity of the Operating Partnership, or (iii) in respect of a covenant or provision
which cannot be modified or amended without the consent of the holder of each outstanding debt security of the affected series.
The Indenture contains provisions for convening
meetings of the holders of a series of debt securities. A meeting may be called at any time by the Trustee, and also, upon the Operating
Partnership’s or any guarantor’s request, or the request of holders of at least 10% in aggregate principal amount of the outstanding
debt securities of any series. Notice of a meeting must be given in accordance with the provisions of the Indenture. Except for any consent
which must be given by the holder of each outstanding debt security affected in the manner described above, any resolution presented at
a meeting or adjourned meeting duly reconvened at which a quorum, as described below, is present may be adopted by the affirmative vote
of the holders of a majority in aggregate principal amount of the outstanding debt securities of the applicable series. However, any resolution
with respect to any request, demand, authorization, direction, notice, consent, waiver, or other action which may be made, given or taken
by the holders of a specified percentage, other than a majority, in aggregate principal amount of the outstanding debt securities of a
series may be adopted at a meeting or adjourned meeting duly reconvened at which a quorum is present by the affirmative vote of the holders
of that specified percentage in aggregate principal amount of the outstanding debt securities of that series. Any resolution passed or
decision taken at any meeting of holders of debt securities of any series duly held in accordance with the Indenture will be binding on
all holders of debt securities of that series. The quorum at any meeting called to adopt a resolution, and at any reconvened meeting,
will be persons holding or representing a majority in aggregate principal amount of the outstanding debt securities of the applicable
series, subject to exceptions; provided, however, that if any action is to be taken at that meeting with respect to a consent or waiver
which may be given by the holders of a supermajority in aggregate principal amount of the outstanding debt securities of a series, the
persons holding or representing that specified supermajority percentage in aggregate principal amount of the outstanding debt securities
of that series will constitute a quorum.
Discharge, Defeasance and Covenant Defeasance
Satisfaction and Discharge
Upon the Operating Partnership’s direction,
the Indenture shall cease to be of further effect with respect to the debt securities of any series specified by the Operating Partnership,
subject to the survival of specified provisions of the Indenture, including (unless the accompanying prospectus supplement provides otherwise)
the Operating Partnership’s obligation to repurchase such debt securities at the option of the holders thereof, if applicable, and
the Operating Partnership’s, or any guarantor’s, if applicable, obligation to pay Additional Amounts in respect of such debt
securities to the extent described below, when:
(A) all outstanding debt securities of that
series have been delivered to the Trustee for cancellation, subject to exceptions, or
(B) all debt securities of that series have
become due and payable or will become due and payable at their maturity within one year or are to be called for redemption within one
year, and the Operating Partnership has deposited with the Trustee, in trust, funds in the currency in which the debt securities of that
series are payable in an amount sufficient to pay and discharge the entire indebtedness on the debt securities of that series, including
the principal thereof and, premium, if any, and interest, if any, thereon, and, to the extent that (x) the debt securities of that
series provide for the payment of Additional Amounts and (y) the amount of any Additional Amounts which are or will be payable is
at the time of deposit reasonably determinable by the Operating Partnership, in the exercise of its sole discretion, those Additional
Amounts, to the date of such deposit, if the debt securities of that series have become due and payable, or to the maturity or redemption
date of the debt securities of that series, as the case may be;
and, in either case
| · | the Operating Partnership has paid all other sums payable under the Indenture with respect to the debt securities of that series (including
amounts payable to the Trustee); and |
| · | the Trustee has received an officers’ certificate and an opinion of counsel to the effect that all conditions precedent to the
satisfaction and discharge of the Indenture in respect of the debt securities of such series have been satisfied. |
If the debt securities of any series provide for
the payment of Additional Amounts, the Operating Partnership or any guarantor, as applicable, will remain obligated, following the deposit
described above, to pay Additional Amounts on those debt securities to the extent that they exceed the amount deposited in respect of
those Additional Amounts as described above.
Defeasance and Covenant Defeasance
Unless otherwise specified in the applicable prospectus
supplement, the Operating Partnership may elect with respect to the debt securities of the particular series either:
| · | to defease and discharge itself and any guarantor from any and all obligations with respect to those debt securities (“legal
defeasance”), except for, among other things: |
(A) the obligation to pay Additional
Amounts, if any, upon the occurrence of specified events of taxation, assessment, or governmental charge with respect to payments on those
debt securities to the extent that those Additional Amounts exceed the amount deposited in respect of those amounts as provided below;
(B) the obligations to register
the transfer or exchange of those debt securities;
(C) the obligation to replace
mutilated, destroyed, lost, or stolen debt securities;
(D) the obligation to maintain
an office or agent of the Operating Partnership in The City of New York, in respect of those debt securities;
(E) the rights of holders of
such outstanding debt securities to receive payments from moneys held in trust when such payments are due;
(F) the obligation, if applicable,
to repurchase those debt securities at the option of the holders thereof; and
(G) the rights, powers, trusts,
duties and immunities of the trustee; or
| · | to be released from its obligations and the obligations of any guarantor with respect to those debt securities under (A) certain
covenants in the Indenture related to the preservation of the rights (charter and statutory) and franchises of the Operating Partnership
and (B) if applicable, other covenants as may be specified in the applicable prospectus supplement, and any omission to comply with
those obligations shall not constitute a default or an Event of Default with respect to those debt securities (“covenant defeasance”), |
in either case upon the irrevocable deposit with the Trustee, in trust
for that purpose, of an amount in the currency in which those debt securities are payable at maturity or, if applicable, upon redemption,
and/or government obligations (as defined in the Indenture) which through the scheduled payment of principal and interest in accordance
with their terms will provide money, in an amount sufficient, in the written opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and any premium and any interest on, and, to the extent that (x) those debt securities provide
for the payment of Additional Amounts and (y) the amount of the Additional Amounts which are or will be payable is at the time of
deposit reasonably determinable by the Operating Partnership, in the exercise of its reasonable discretion, the Additional Amounts with
respect to, those debt securities, and any mandatory sinking fund or analogous payments on those debt securities, on the due dates for
those payments. If the cash and government obligations deposited are sufficient to pay the outstanding debt securities of the applicable
series on a particular redemption date, the Operating Partnership shall have given the Trustee irrevocable instructions to redeem those
debt securities on that date.
The legal defeasance or covenant defeasance described
above shall only be effective if, among other things:
| · | it shall not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument
to which the Operating Partnership is a party or is bound; |
| · | in the case of legal defeasance, the Operating Partnership shall have delivered to the Trustee an opinion of independent counsel acceptable
to the Trustee confirming that: |
(A) the
Operating Partnership has received from, or there has been published by, the Internal Revenue Service a ruling; or
(B) since
the date of the Indenture, there has been a change in applicable federal income tax law,
| · | in either case to the effect that, and based on this ruling or change the opinion of counsel shall confirm that, the holders of the
debt securities of the applicable series will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the
legal defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if the legal defeasance had not occurred; |
| · | in the case of covenant defeasance, the Operating Partnership shall have delivered to the Trustee an opinion of independent counsel
reasonably acceptable to the Trustee to the effect that the holders of the debt securities of the applicable series will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of the covenant defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred; |
| · | no Event of Default or default which with notice or lapse of time or both would become an Event of Default with respect to debt securities
of the applicable series shall have occurred and be continuing on the date of the deposit into trust; |
| · | solely in the case of legal defeasance, no Event of Default arising from specified events of bankruptcy, insolvency, or reorganization
with respect to the Operating Partnership or any guarantor or default which with notice or lapse of time or both would become such an
Event of Default shall have occurred and be continuing during the period ending on the 91st day after the date of the deposit into trust;
and |
| · | the Operating Partnership shall have delivered to the Trustee an officers’ certificate and legal opinion to the effect that
all conditions precedent to the legal defeasance or covenant defeasance, as the case may be, have been satisfied. |
In the event the Operating Partnership effects
covenant defeasance with respect to debt securities of any series and those debt securities are declared due and payable because of the
occurrence of any Event of Default other than an Event of Default with respect to the covenants as to which covenant defeasance has been
effected, which covenants would no longer be applicable to the debt securities of that series after covenant defeasance, the amount of
monies and/or government obligations deposited with the Trustee to effect covenant defeasance may not be sufficient to pay amounts due
on the debt securities of that series at the time of any acceleration resulting from that Event of Default. However, the Operating Partnership
would remain liable to make payment of those amounts due at the time of acceleration.
The applicable prospectus supplement may further
describe the provisions, if any, permitting or restricting legal defeasance or covenant defeasance with respect to the debt securities
of a particular series.
Concerning the Trustee
The Indenture provides that there may be more
than one Trustee under the Indenture, each with respect to one or more series of debt securities. If there are different Trustees for
different series of debt securities, each Trustee will be a Trustee of a trust or trusts separate and apart from the trust or trusts administered
by any other Trustee under the Indenture. Unless otherwise indicated in any applicable prospectus supplement, any action permitted to
be taken by a Trustee may be taken by such Trustee only with respect to the one or more series of debt securities for which it is the
Trustee under the Indenture. Any Trustee under the Indenture may resign or be removed with respect to one or more series of debt securities.
All payments of principal of, and premium, if any, and interest on, and all registration, transfer, exchange, authentication and delivery
(including authentication and delivery on original issuance of the debt securities) of, the debt securities of a series will be effected
by the Trustee with respect to that series at an office designated by the Trustee.
We may maintain corporate trust relationships
in the ordinary course of business with the Trustee. The Trustee shall have and be subject to all the duties and responsibilities specified
with respect to an indenture trustee under the Trust Indenture Act. Subject to the provisions of the Trust Indenture Act, the Trustee
is under no obligation to exercise any of the powers vested in it by the Indenture at the request of any holder(s) of debt securities,
unless offered indemnity satisfactory to the Trustee in its sole discretion by the holder(s) against the costs, expense and liabilities
which might be incurred thereby.
Under the Trust Indenture Act, the Indenture is
deemed to contain limitations on the right of the Trustee, should it become a creditor of the Operating Partnership, to obtain payment
of claims in some cases or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee
may engage in other transactions with the Operating Partnership. If it acquires any conflicting interest under the Trust Indenture Act
relating to any of its duties with respect to the debt securities, however, it must eliminate the conflict or resign as Trustee.
Governing Law
The Indenture, the debt securities and any related
guarantees will be governed by, and construed in accordance with, the laws of the State of New York.
Notices
All notices to holders of debt securities shall
be validly given if in writing and mailed, first-class postage prepaid, to them at their respective addresses in the register maintained
by the Trustee, or if delivered electronically pursuant to the applicable procedures of the Depository.
Book-Entry,
Delivery and Form
The debt securities will be issued in the form
of one or more fully registered global securities (“Global Notes”) that will be deposited with, or on behalf of, The Depository
Trust Company (“DTC”), and registered in the name of DTC’s nominee, Cede & Co. The Global Notes may be transferred,
in whole and not in part, only to DTC, to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the
Global Notes may not be exchanged for definitive debt securities in registered certificated form (“Certificated Notes”) except
in the limited circumstances described below. See “Exchange of Global Notes for Certificated Notes.” Except in the limited
circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of
debt securities in certificated form. Investors may elect to hold their interest in the Global Notes through either DTC, Clearstream Banking,
société anonyme (“Clearstream”) or Euroclear Bank S.A./N.V. (“Euroclear”) if they are participants
in these systems, or indirectly through organizations which are participants in these systems. Clearstream and Euroclear in turn will
hold interests in such Global Notes as Participants (as defined below) on the books of DTC.
Depository Procedures
The following description of the operations and
procedures of DTC, Euroclear and Clearstream is provided solely as a matter of convenience. These operations and procedures are solely
within the control of the respective settlement systems and are subject to changes by them. The Operating Partnership takes no responsibility
for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters.
DTC has advised the Operating Partnership that
DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the “Participants”)
and to facilitate the clearance and settlement of transactions in those securities between the Participants through electronic book-entry
changes in accounts of its Participants. The Participants include securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and
trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively,
the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC
only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each
security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Operating Partnership
that, pursuant to procedures established by it:
| · | upon deposit of the Global Notes, DTC will credit the accounts of the Participants designated by the underwriters with portions of
the principal amount of the Global Notes; and |
| · | ownership of these interests in the Global Notes will be shown on, and the transfer of ownership of these interests will be effected
only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interest in the Global Notes). |
Investors in the Global Notes who are Participants
may hold their interests therein directly through DTC. Investors in the Global Notes who are not Participants may hold their interests
therein indirectly through organizations (including Euroclear and Clearstream) which are Participants. All interests in a Global Note,
including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held
through Euroclear or Clearstream may also be subject to the procedures and requirements of such systems. The laws of some states require
that certain persons take physical delivery in definitive form of securities that they own. Consequently, the ability to transfer beneficial
interests in a Global Note to such persons will be limited to that extent. Because DTC can act only on behalf of the Participants, which
in turn act on behalf of the Indirect Participants, the ability of a person having beneficial interests in a Global Note to pledge such
interests to persons that do not participate in the DTC system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests.
Except as described below, owners of interests
in the Global Notes will not have debt securities registered in their names, will not receive physical delivery of debt securities in
certificated form and will not be considered the registered owners or “holders” thereof under the indenture governing the
debt securities for any purpose.
Payments in respect of the principal of, and interest
and premium, if any, on, a Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered
holder under the indenture governing the debt securities. Under the terms of the indenture, the Operating Partnership and the trustee
will treat the persons in whose names the debt securities, including the Global Notes, are registered as the owners of the debt securities
for the purpose of receiving payments and for all other purposes. Consequently, neither the Operating Partnership, the trustee nor any
agent of them has or will have any responsibility or liability for:
| · | any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made
on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records
or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes;
or |
| · | any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. |
DTC has advised the Operating Partnership that
its current practice, upon receipt of any payment in respect of securities such as the debt securities (including principal and interest),
is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe that it will
not receive payment on such payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership
of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect
Participants to the beneficial owners of debt securities will be governed by standing instructions and customary practices and will be
the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or us. Neither
we nor the trustee will be liable for any delay by DTC or any of the Participants or the Indirect Participants in identifying the beneficial
owners of the debt securities, and we and the trustee may conclusively rely on and will be protected in relying on instructions from DTC
or its nominee for all purposes.
DTC has advised the Operating Partnership that
it will take any action permitted to be taken by a holder of debt securities only at the direction of one or more Participants to whose
account DTC has credited the interests in the debt securities and only in respect of such portion of the aggregate principal amount at
maturity of the debt securities as to which such Participant or Participants has or have given such direction. However, if there is an
Event of Default under the debt securities, DTC reserves the right to exchange the debt securities for legended debt securities in certificated
form, and to distribute such debt securities to its Participants.
Exchange of Global Notes for Certificated Notes
A Global Note is exchangeable for Certificated
Notes if:
| · | DTC (a) notifies the Operating Partnership that it is unwilling or unable to continue as depositary for the Global Notes or (b) has
ceased to be a clearing agency registered under the Exchange Act and, in either case, the Operating Partnership fails to appoint a successor
depositary within 90 days after it receives such notice or of its becoming aware of such cessation; |
| · | the Operating Partnership, at its option and subject to DTC’s procedures, notifies the trustee in writing that the Operating
Partnership elects to cause the issuance of the Certificated Notes; or |
| · | upon request from DTC if there has occurred and is continuing a default or Event of Default with respect to the debt securities. |
Beneficial interests in a Global Note may be exchanged
for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the indenture. In all
cases, Certificated Notes delivered in exchange for any Global Note or beneficial interests in Global Notes will be registered in the
names, and issued in any approved denominations, requested by or on behalf of DTC (in accordance with its customary procedures).
Exchange of Certificated Notes for Global Notes
Certificated Notes, if any, may be exchanged for
beneficial interests in Global Notes.
Same-Day Settlement and Payment
The underwriters will settle the debt securities
in immediately available funds. The Operating Partnership will make payments in respect of the debt securities represented by the Global
Notes (including principal, premium, if any, and interest) by wire transfer of immediately available funds to the accounts specified by
DTC or its nominee. The Operating Partnership will make all payments of principal, interest and premium, if any, with respect to Certificated
Notes by wire transfer of immediately available funds to the accounts specified by the holders of the Certificated Notes or, if no such
account is specified, by mailing a check to each such holder’s registered address. The debt securities represented by the Global
Notes are expected to trade in DTC’s Same-Day Funds Settlement System, and any permitted secondary market trading activity in such
debt securities will, therefore, be required by DTC to be settled in immediately available funds. The Operating Partnership expects that
secondary trading in any Certificated Notes will also be settled in immediately available funds.
Because of time zone differences, the securities
account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a Participant will be credited, and any
such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day
(which must be a business day for Euroclear and Clearstream) immediately following the settlement date of DTC. DTC has advised the Operating
Partnership that cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear
or Clearstream participant to a Participant will be received with value on the settlement date of DTC but will be available in the relevant
Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.
Restrictions
on Ownership
In order to qualify as a REIT under the Internal
Revenue Code, our shares must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year. Also, no more than 50% of the value of our outstanding shares (after taking into
account options to acquire shares) may be owned, directly, indirectly, or through attribution, by five or fewer individuals at any time
during the last half of each taxable year (as defined in the Internal Revenue Code to include certain entities).
Because our board of trustees believes that it
is essential for us to qualify as a REIT and for anti-takeover reasons, our declaration of trust, subject to certain exceptions, contains
restrictions on the number of our shares of beneficial interest that a person may own. Our declaration of trust provides that:
| · | no person, other than an excepted holder or a designated investment entity (each as defined in the declaration of trust), may own
directly, or be deemed to own by virtue of the attribution provisions of the Internal Revenue Code, more than 7%, in value or number of
shares, whichever is more restrictive, of our issued and outstanding common shares; |
| · | no person may own directly or indirectly, or be deemed to own through attribution, more than 9.8% in number or value or any class
of series of preferred shares; |
| · | no one excepted holder, which means members of the Kite family, their family members and certain entities controlled by them, treated
as an individual, may currently acquire or hold, directly or indirectly, shares in excess of 21.5% in number or value, whichever is more
restrictive, of our issued and outstanding common shares after application of the relevant attribution rules; |
| · | no designated investment entity may acquire or hold, directly or indirectly (or through attribution), shares in excess of the designated
investment entity limit of 9.8%, in value or number of shares, whichever is more restrictive, of the outstanding shares of any class or
series of shares; |
| · | no person shall beneficially own shares that would result in our otherwise failing to qualify as a REIT (including but not limited
to ownership that would result in our owning (directly or constructively) an interest in a tenant that is described in Section 856(d)(2)(B) of
the Internal Revenue Code if the income derived by us (either directly or indirectly through one or more partnerships or limited liability
companies) from such tenant would cause us to fail to satisfy any of the gross income requirements of Section 856(c) of the
Internal Revenue Code); |
| · | no person shall beneficially or constructively own our shares of beneficial interest that would result in us being “closely
held” under Section 856(h) of the Internal Revenue Code or otherwise cause us to fail to qualify as a REIT; and |
| · | no person shall transfer our shares of beneficial interest if such transfer would result in our shares of beneficial interest being
owned by fewer than 100 persons. |
The declaration of trust defines a “designated
investment entity” as:
| 1. | an entity that is a pension trust that qualifies for look-through treatment under Section 856(h)(3) of the Internal Revenue
Code; |
| 2. | an entity that qualifies as a regulated investment company under Section 851 of the Internal Revenue Code; or |
| 3. | an entity that (i) for compensation engages in the business of advising others as to the value of securities or as to the advisability
of investing in, purchasing, or selling securities; (ii) purchases securities in the ordinary course of its business and not with
the purpose or effect of changing or influencing control of us, nor in connection with or as a participant in any transaction having such
purpose or effect, including any transaction subject to Rule 13d-3(b) of the Exchange Act, as amended; and (iii) has or
shares voting power and investment power within the meaning of Rule 13d-3(a) under the Exchange Act, as amended; so long as
each beneficial owner of such entity, or in the case of an investment management company, the individual account holders of the accounts
managed by such entity, would satisfy the 7% ownership limit on common shares or the 9.8% ownership limit on preferred shares if such
beneficial owner or account holder owned directly its proportionate share of the shares held by the entity. |
Our board of trustees may waive the 7% ownership
limit for common shares, the 9.8% ownership limit for preferred shares, or the 9.8% designated investment entity limit, for a shareholder
that is not an individual if such shareholder provides information and makes representations to the board that are satisfactory to the
board, in its reasonable discretion, to establish that such person’s ownership in excess of the 7% limit for common shares, the
9.8% limit for preferred shares or the 9.8% designated investment entity limit, as applicable, would not jeopardize our qualification
as a REIT.
Any person who acquires or attempts or intends
to acquire beneficial or constructive ownership of our shares that will or may violate any of the foregoing restrictions on transferability
and ownership will be required to give written notice immediately to us and provide us with such other information as we may request in
order to determine the effect of such transfer on our status as a REIT. If any transfer of shares or any other event would otherwise result
in any person violating the ownership limits described above, then our declaration of trust provides that (a) the transfer will be
void and of no force or effect with respect to the prohibited transferee with respect to that number of shares that exceeds the ownership
limits and (b) the prohibited transferee would not acquire any right or interest in the shares. Such events will result in the automatic
transfer of our common shares to a charitable trust, which will be responsible for selling the common shares to permitted transferees
and distributing at least a portion of the proceeds to the prohibited transferees. The foregoing restrictions on transferability and ownership
will not apply if our board of trustees determines that it is no longer in our best interests to attempt to qualify, or to continue to
qualify, as a REIT.
All certificates representing our shares will
bear a legend referring to the restrictions described above.
Every owner of more than 5% (or such lower percentage
as required by the Internal Revenue Code or the regulations promulgated thereunder) of all classes or series of our shares, including
common shares, will be required to give written notice to us within 30 days after the end of each taxable year stating the name and address
of such owner, the number of shares of each class and series of shares that the owner beneficially owns and a description of the manner
in which such shares are held. Each such owner shall provide to us such additional information as we may request in order to determine
the effect, if any, of such beneficial ownership on our status as a REIT and to ensure compliance with the ownership limitations. In addition,
each shareholder shall upon demand be required to provide to us such information as we may request, in good faith, in order to determine
our status as a REIT and to comply with the requirements of any taxing authority or governmental authority or to determine such compliance.
These ownership limitations could delay, deter
or prevent a transaction or a change in control that might involve a premium price for the common shares or might otherwise be in the
best interest of our shareholders.
Material
U.S. Federal Income Tax Considerations
The following is a summary of certain U.S. federal
income tax considerations relating to our qualification and taxation as a real estate investment trust, a “REIT,” and the
acquisition, holding, and disposition of (i) our common shares, preferred shares and depositary shares (together with common shares
and preferred shares, the “shares”) as well as our warrants and rights, and (ii) debt securities issued by our Operating
Partnership (together with the shares, the “securities”). For purposes of this discussion, references to “our Company,”
“we” and “us” mean only Kite Realty Group Trust and not its subsidiaries or affiliates. This summary is based
upon the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations, rulings and other administrative
interpretations and practices of the Internal Revenue Service (the “IRS”) (including administrative interpretations and practices
expressed in private letter rulings which are binding on the IRS only with respect to the particular taxpayers who requested and received
those rulings), and judicial decisions, all as currently in effect, and all of which are subject to differing interpretations or to change,
possibly with retroactive effect. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position
contrary to any of the tax consequences described below. We have not sought and will not seek an advance ruling from the IRS regarding
any matter discussed in this section. The summary is also based upon the assumption that we will operate our Company and its subsidiaries
and affiliated entities in accordance with their applicable organizational documents. This summary is for general information only, and
does not purport to discuss all aspects of U.S. federal income taxation that may be important to a particular investor in light of its
investment or tax circumstances, or to investors subject to special tax rules, including:
| · | tax-exempt organizations, except to the extent discussed below in “- Taxation of U.S. Shareholders-Taxation of Tax-Exempt Shareholders,” |
| · | non-U.S. corporations, non-U.S. partnerships, non-U.S. trusts, non-U.S. estates, or individuals who are not taxed as citizens or residents
of the United States, all of which may be referred to collectively as “non-U.S. persons,” except to the extent discussed below
in “- Taxation of Non-U.S. Shareholders” and “- Taxation of Holders of Debt Securities Issued by our Operating Partnership-Non-U.S.
Holders of Debt Securities,” |
| · | regulated investment companies, or “RICs,” |
| · | REITs, financial institutions, |
| · | subchapter S corporations, |
| · | foreign (non-U.S. governments), |
| · | persons subject to the alternative minimum tax provisions of the Code, |
| · | persons holding the shares as part of a “hedge,” “straddle,” “conversion,” “synthetic security”
or other integrated investment, |
| · | persons holding the shares through a partnership or similar pass-through entity, |
| · | persons with a “functional currency” other than the U.S. dollar, |
| · | persons holding 10% or more (by vote or value) of the beneficial interest in us, except to the extent discussed below, |
| · | persons who do not hold the shares as a “capital asset” within the meaning of Section 1221 of the Code, |
| · | corporations subject to the provisions of Section 7874 of the Code, |
| · | persons otherwise subject to special tax treatment under the Code. |
This summary does not address state, local or
non-U.S. tax considerations. This summary also does not consider tax considerations that may be relevant with respect to securities we
(or our Operating Partnership) may issue, or selling security holders may sell, other than our shares and certain debt instruments of
our Operating Partnership described below. Each time we or selling security holders sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that sale and may add to, modify or update the discussion below as appropriate.
Each prospective investor is advised to consult
his or her tax advisor to determine the impact of his or her personal tax situation on the anticipated tax consequences of the acquisition,
ownership and sale of our shares, warrants, and rights, and/or debt securities issued by our Operating Partnership. This includes the
U.S. federal, state, local, foreign and other tax considerations of the ownership and sale of our shares, warrants, and rights, and/or
debt securities issued by our Operating Partnership and the potential changes in applicable tax laws.
Taxation of our Company as a REIT
We elected to be taxed as a REIT commencing with
our first taxable year ended December 31, 2004. A REIT generally is not subject to U.S. federal income tax on the “REIT taxable
income” (generally, taxable income of the REIT subject to specified adjustments, including a deduction for dividends paid and excluding
net capital gain) that it distributes to shareholders provided that the REIT meets the annual REIT distribution requirement and the other
requirements for qualification as a REIT under the Code. We believe that we are organized and have operated, and we intend to continue
to operate, in a manner to qualify for taxation as a REIT under the Code. However, qualification and taxation as a REIT depend upon our
ability to meet the various qualification tests imposed under the Code, including (through our actual annual, or in some cases quarterly,
operating results) requirements relating to income, asset ownership, distribution levels and diversity of share ownership. Given the complex
nature of the REIT qualification requirements, the ongoing importance of factual determinations and the possibility of future changes
in our circumstances, we cannot provide any assurances that we will be organized or operated in a manner so as to satisfy the requirements
for qualification and taxation as a REIT under the Code. See “ – Failure to Qualify as a REIT” for potential tax consequences
if we fail to qualify as a REIT.
The sections of the Code that relate to our qualification
and taxation as a REIT are highly technical and complex. This discussion sets forth the material aspects of the sections of the Code that
govern the U.S. federal income tax treatment of a REIT and its shareholders. This summary is qualified in its entirety by the applicable
Code provisions, relevant rules and Treasury Regulations, and related administrative and judicial interpretations.
Taxation of REITs in General
For each taxable year in which we qualify for
taxation as a REIT, we generally will not be subject to U.S. federal corporate income tax on our REIT taxable income (generally, taxable
income of the REIT subject to specified adjustments, including a deduction for dividends paid and excluding net capital gain) that is
distributed annually to our shareholders. This treatment substantially eliminates the “double taxation” at the corporate and
shareholder levels that generally results from an investment in a non-REIT “C” corporation. A non-REIT “C” corporation
is a corporation that generally is required to pay tax at the corporate level. Double taxation means taxation once at the corporate level
when income is earned and once again at the shareholder level when the income is distributed. In general, the income that we generate
is taxed only at the shareholder level upon a distribution of dividends to our shareholders.
U.S. shareholders generally will be subject to
taxation on dividends distributed by us (other than designated capital gain dividends and “qualified dividend income”) at
rates applicable to ordinary income, instead of at lower capital gain rates. For taxable years beginning before January 1, 2026,
generally, U.S. shareholders that are individuals, trusts or estates may deduct 20% of the aggregate amount of ordinary dividends distributed
by us, subject to certain limitations. Capital gain dividends and qualified dividend income will continue to be subject to a maximum 20%
rate (excluding the 3.8% tax on “net investment income”). All references to tax rates in this discussion captioned “Material
U.S. Federal Income Tax Considerations” are to the rates that currently are in effect under existing law, but there have been proposals
from time to time to change certain tax rates, at least for certain taxpayers. There can be no assurance that one or more of those proposals,
or other proposals that may be made in the future, might not be enacted into law.
Any net operating losses, foreign tax credits
and other tax attributes of a REIT generally do not pass through to our shareholders, subject to special rules for certain items
such as the net capital gains that we recognize.
Even if we qualify for taxation as a REIT, we
will be subject to U.S. federal income tax in the following circumstances:
| 1. | We will be taxed at regular corporate rates on any undistributed REIT taxable income (generally, taxable income of the REIT subject
to specified adjustments, including a deduction for dividends paid and excluding net capital gain). |
| 2. | If we have (1) net income from the sale or other disposition of “foreclosure property” that is held primarily for
sale to customers in the ordinary course of business, or (2) other non-qualifying income from foreclosure property, such income will
be subject to tax at the highest corporate rate. |
| 3. | Our gain from “prohibited transactions” will be subject to a 100% tax. In general, prohibited transactions are sales or
other dispositions of property held primarily for sale to customers in the ordinary course of business other than foreclosure property. |
| 4. | If we fail to satisfy either the 75% gross income test or the 95% gross income test, as discussed below, but our failure is due to
reasonable cause and not due to willful neglect and we nonetheless maintain our qualification as a REIT because of specified cure provisions,
we will be subject to a 100% tax on an amount equal to (a) the greater of (1) the amount by which we fail the 75% gross income
test or (2) the amount by which we fail the 95% gross income test, as the case may be, multiplied by (b) a fraction intended
to reflect our profitability. |
| 5. | We will be subject to a 4% nondeductible excise tax on the excess of the required distribution over the sum of amounts actually distributed,
excess distributions from the preceding tax year and amounts retained for which U.S. federal income tax was paid, if we fail to make the
required distributions by the end of a calendar year. The required distribution for each calendar year is equal to the sum of: |
| · | 85% of our REIT ordinary income for the year; |
| · | 95% of our REIT capital gain net income for the year other than capital gains we elect to retain and pay tax on as described below;
and |
| · | any undistributed taxable income from prior taxable years. |
| 6. | We will be subject to a 100% penalty tax on certain rental income we receive when a taxable REIT subsidiary provides services to our
tenants, on certain expenses deducted by a taxable REIT subsidiary on payments made to us and on income for services rendered to us by
a taxable REIT subsidiary, if the arrangements among us, our tenants, and our taxable REIT subsidiaries do not reflect arm’s-length
terms. |
| 7. | If we acquire any assets from a non-REIT “C” corporation in a carry-over basis transaction, we would be liable for U.S.
federal corporate income tax, at the highest applicable corporate rate for the “built-in gain” with respect to those assets
if we disposed of those assets within five years after they were acquired. To the extent that assets are transferred to us in a carry-over
basis transaction by a partnership in which a corporation owns an interest, we will be subject to this tax in proportion to the non-REIT
“C” corporation’s interest in the partnership. Built-in gain is the amount by which an asset’s fair market value
exceeds its adjusted tax basis at the time we acquire the asset. The results described in this paragraph assume that the non-REIT “C”
corporation will not elect, in lieu of this treatment, to be subject to an immediate tax when the asset is acquired by us. |
| 8. | We may elect to retain and pay U.S. federal income tax on our net long-term capital gain. In that case, a U.S. shareholder would include
its proportionate share of our undistributed long-term capital gain (to the extent that we make a timely designation of such gain to the
shareholder) in its income, would be deemed to have paid the tax we paid on such gain, and would be allowed a credit for its proportionate
share of the tax deemed to have been paid, and an adjustment would be made to increase the basis of the U.S. shareholder in our common
shares. |
| 9. | If we violate the asset tests (other than certain de minimis violations) or other requirements applicable to REITs, as described below,
but our failure is due to reasonable cause and not due to willful neglect and we nevertheless maintain our REIT qualification because
of specified cure provisions, we will be subject to a tax equal to the greater of $50,000 or the amount determined by multiplying the
net income generated by such non-qualifying assets by the highest rate of tax applicable to non-REIT “C” corporations during
periods when such assets would have caused us to fail the asset test. |
| 10. | If we fail to satisfy a requirement under the Code which would result in the loss of our REIT qualification, other than a failure
to satisfy a gross income test, or an asset test as described in paragraph 9 above, but nonetheless maintain our qualification as a REIT
because the requirements of certain relief provisions are satisfied, we will be subject to a penalty of $50,000 for each such failure. |
| 11. | If we fail to comply with the requirements to send annual letters to our shareholders requesting information regarding the actual
ownership of our shares and the failure was not due to reasonable cause or was due to willful neglect, we will be subject to a $25,000
penalty or, if the failure is intentional, a $50,000 penalty. |
| 12. | The earnings of any subsidiaries that are non-REIT “C” corporations, including any taxable REIT subsidiary, are subject
to U.S. federal corporate income tax. |
| 13. | As the “successor” to Inland Diversified for U.S. federal income tax purposes as a result of the Inland Merger, if Inland
Diversified failed to qualify as a REIT for a taxable year before the Inland Merger or for the taxable year that includes the Inland Merger,
and no relief is available, as a result of the Inland Merger we would inherit any corporate tax liabilities of Inland Diversified for
Inland Diversified’s open tax years (possibly extending back six years to Inland Diversified’s 2013 tax year), including penalties
and interest. |
| 14. | As the “successor” to RPAI for U.S. federal income tax purposes as a result of the RPAI Merger, if RPAI failed to qualify
as a REIT for a taxable year before the RPAI Merger or for the taxable year that includes the RPAI Merger, and no relief is available,
as a result of the RPAI Merger we would inherit any corporate tax liabilities of RPAI for RPAI’s open tax years (possibly extending
back six years to RPAI’s 2015 tax year), including penalties and interest. |
Notwithstanding our qualification as a REIT, we
and our subsidiaries may be subject to a variety of taxes, including payroll taxes and state, local, and foreign income, property and
other taxes on our assets, operations and/or net worth. We could also be subject to tax in situations and on transactions not presently
contemplated.
Requirements for Qualification as a REIT
The Code defines a “REIT” as a corporation,
trust or association:
| 1. | that is managed by one or more trustees or directors; |
| 2. | that issues transferable shares or transferable certificates to evidence its beneficial ownership; |
| 3. | that would be taxable as a domestic corporation, but for Sections 856 through 859 of the Code; |
| 4. | that is neither a financial institution nor an insurance company within the meaning of certain provisions of the Code; |
| 5. | that is beneficially owned by 100 or more persons; |
| 6. | not more than 50% in value of the outstanding shares or other beneficial interest of which is owned, actually or constructively, by
five or fewer individuals (as defined in the Code to include certain entities and as determined by applying certain attribution rules)
during the last half of each taxable year; |
| 7. | that makes an election to be a REIT for the current taxable year, or has made such an election for a previous taxable year that has
not been revoked or terminated, and satisfies all relevant filing and other administrative requirements established by the IRS that must
be met to elect and maintain REIT status; |
| 8. | that uses a calendar year for U.S. federal income tax purposes; |
| 9. | that meets other applicable tests, described below, regarding the nature of its income and assets and the amount of its distributions;
and |
| 10. | that has no earnings and profits from any non-REIT taxable year at the close of any taxable year. |
The Code provides that conditions (1), (2), (3) and
(4) above must be met during the entire taxable year and condition (5) above must be met during at least 335 days of a taxable
year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Conditions (5) and (6) do not apply
until after the first taxable year for which an election is made to be taxed as a REIT. Condition (6) must be met during the last
half of each taxable year. For purposes of determining share ownership under condition (6) above, a supplemental unemployment compensation
benefits plan, a private foundation or a portion of a trust permanently set aside or used exclusively for charitable purposes generally
is considered an individual. However, a trust that is a qualified trust under Code Section 401(a) generally is not considered
an individual, and beneficiaries of a qualified trust are treated as holding shares of a REIT in proportion to their actuarial interests
in the trust for purposes of condition (6) above.
We believe that we have been organized, have operated
and have issued sufficient shares of beneficial interest with sufficient diversity of ownership to allow us to satisfy the above conditions.
In addition, our declaration of trust contains restrictions regarding the transfer of shares of beneficial interest that are intended
to assist us in continuing to satisfy the share ownership requirements described in conditions (5) and (6) above. If we fail
to satisfy these share ownership requirements, we will fail to qualify as a REIT unless we qualify for certain relief provisions described
below.
To monitor our compliance with condition (6) above,
we are generally required to maintain records regarding the actual ownership of our shares. To do so, we must demand written statements
each year from the record holders of specified percentages of our shares pursuant to which the record holders must disclose the actual
owners of the shares (i.e., the persons required to include in gross income the dividends paid by us). We must maintain a list of those
persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if we fail to
comply with these record-keeping requirements. A shareholder that fails or refuses to comply with the demand is required by Treasury Regulations
to submit a statement with its tax return disclosing the actual ownership of our shares and other information. If we comply with the record-keeping
requirement and we do not know or, exercising reasonable diligence, would not have known of our failure to meet condition (6) above,
then we will be treated as having met condition (6) above.
To qualify as a REIT, we cannot have at the end
of any taxable year any undistributed earnings and profits that are attributable to a non-REIT taxable year. We elected to be taxed as
a REIT beginning with our first taxable year in 2004 and we have not succeeded to any earnings and profits of a non-REIT “C”
corporation. Therefore, we do not believe we have had any undistributed non-REIT earnings and profits (and do not believe that we inherited
any un-distributed non-REIT earnings and profits in any prior transactions).
As the “successor” to Inland Diversified
for U.S. federal income tax purposes as a result of the Inland Merger, if Inland Diversified failed to qualify as a REIT for a taxable
year before the Inland Merger or the taxable year that includes the Inland Merger, and no relief is available, in connection with the
Inland Merger we would succeed to any undistributed earnings and profits accumulated by Inland Diversified for the taxable periods that
it did not qualify as a REIT, and we would have to pay a special dividend and/or employ applicable deficiency dividend procedures (including
significant interest payments to the IRS) to eliminate such earnings and profits. Although Inland Diversified believed that it was organized
and operated in conformity with the requirements for qualification and taxation as a REIT for each of its taxable years prior to the taxable
year that includes the Inland Merger, Inland Diversified did not request a ruling from the IRS that it qualified as a REIT and thus
no assurance can be given that it qualified as a REIT. See also “- Failure to Qualify as a REIT” for a discussion of the adverse
impact that Inland Diversified’s failure to qualify as a REIT might have on our qualification as a REIT if we are regarded as the
“successor” to Inland Diversified under the REIT rules.
As the “successor” to RPAI for U.S.
federal income tax purposes as a result of the RPAI Merger, if RPAI failed to qualify as a REIT for a taxable year before the RPAI Merger
or the taxable year that includes the RPAI Merger, and no relief is available, in connection with the RPAI Merger we would succeed to
any undistributed earnings and profits accumulated by RPAI for the taxable periods that it did not qualify as a REIT, and we would have
to pay a special dividend and/or employ applicable deficiency dividend procedures (including significant interest payments to the IRS)
to eliminate such earnings and profits. Although RPAI believed that it was organized and operated in conformity with the requirements
for qualification and taxation as a REIT for each of its taxable years prior to the taxable year that includes the RPAI Merger, RPAI did
not request a ruling from the IRS that it qualified as a REIT and thus no assurance can be given that it qualified as a REIT. See also
“- Failure to Qualify as a REIT” for a discussion of the adverse impact that RPAI’s failure to qualify as a REIT might
have on our qualification as a REIT if we are regarded as the “successor” to RPAI under the REIT rules.
Effect of Subsidiary Entities
Ownership
of Interests in Partnerships and Limited Liability Companies. In the case of a REIT which is a partner in a partnership or
a member in a limited liability company treated as a partnership for U.S. federal income tax purposes, Treasury Regulations provide that
the REIT will be deemed to own its pro rata share of the assets of the partnership or limited liability company, as the case may be, based
on its capital interests in such partnership or limited liability company. Our capital interest in a partnership or limited liability
company is based on either our percentage ownership of the capital of the partnership or limited liability company or based on the allocations
provided in the applicable partnership or limited liability company operating agreement, using the more conservative calculation. Also,
the REIT will be deemed to be entitled to the income of the partnership or limited liability company attributable to its pro rata share
of the assets of that entity. The assets and gross income of the partnership or limited liability company retain the same character in
the hands of the REIT for purposes of Section 856 of the Code, including satisfying the gross income tests and the asset tests. Thus,
our pro rata share of the assets and items of income of our Operating Partnership, including our Operating Partnership’s share of
these items of any partnership or limited liability company in which it owns an interest, are treated as our assets and items of income
for purposes of applying the requirements described in this prospectus, including the income and asset tests described below.
We have included a brief summary of the rules governing
the U.S. federal income taxation of partnerships and limited liability companies and their partners or members below in “- Tax Aspects
of Our Ownership of Interests in the Operating Partnership and other Partnerships and Limited Liability Companies.” We generally
have control of our Operating Partnership and substantially all of the subsidiary partnerships and limited liability companies in which
our Operating Partnership has invested and intend to continue to operate them in a manner consistent with the requirements for our qualification
and taxation as a REIT. In the future, we may be a limited partner or non-managing member in some of our partnerships and limited liability
companies. If such a partnership or limited liability company were to take actions which could jeopardize our qualification as a REIT
or require us to pay tax, we may be forced to dispose of our interest in such entity. In addition, it is possible that a partnership or
limited liability company could take an action which could cause us to fail a REIT income or asset test, and that we would not become
aware of such action in a time frame which would allow us to dispose of our interest in the partnership or limited liability company or
take other corrective action on a timely basis. In that case, we could fail to qualify as a REIT unless entitled to relief, as described
below.
Under the Bipartisan Budget Act of 2015, liability
is imposed on the partnership (rather than its partners) for adjustments to reported partnership taxable income resulting from audits
or other tax proceedings. The liability can include an imputed underpayment of tax, calculated by using the highest marginal U.S. federal
income tax rate, as well as interest and penalties on such imputed underpayment of tax. Using certain rules, partnerships may be able
to transfer these liabilities to their partners. In the event any adjustments are imposed by the IRS on the taxable income reported by
any subsidiary partnerships, we intend to utilize certain rules to the extent possible to allow us to transfer any liability with
respect to such adjustments to the partners of the subsidiary partnerships who should properly bear such liability. However, there is
no assurance that we will qualify under those rules or that we will have the authority to use those rules under the operating
agreements for certain of our subsidiary partnerships.
Ownership
of Interests in Qualified REIT Subsidiaries. We may acquire 100% of the stock of one or more corporations that are qualified
REIT subsidiaries. A corporation will qualify as our qualified REIT subsidiary if we own 100% of its stock and it is not a taxable REIT
subsidiary. A qualified REIT subsidiary will not be treated as a separate corporation, and all assets, liabilities and items of income,
deduction and credit of a qualified REIT subsidiary will be treated as our assets, liabilities and such items (as the case may be) for
all purposes of the Code, including the REIT qualification tests. For this reason, references in this discussion to our income and assets
should be understood to include the income and assets of any qualified REIT subsidiary we own. Our ownership of the stock of a qualified
REIT subsidiary will not violate the restrictions against ownership of securities of any one issuer which constitute more than 10% of
the voting power or value of such issuer’s securities or more than 5% of the value of our total assets, as described below in “-
Asset Tests Applicable to REITs.”
Ownership
of Interests in Taxable REIT Subsidiaries. A taxable REIT subsidiary of ours is a corporation other than a REIT in which we
directly or indirectly hold stock, and that has made a joint election with us to be treated as a taxable REIT subsidiary under Section 856(l) of
the Code. A taxable REIT subsidiary also includes any corporation other than a REIT in which a taxable REIT subsidiary of ours owns, directly
or indirectly, securities (other than certain “straight debt” securities), which represent more than 35% of the total voting
power or value of the outstanding securities of such corporation. Other than some activities relating to lodging and health care facilities,
a taxable REIT subsidiary may generally engage in any business, including the provision of customary or non-customary services to our
tenants without causing us to receive impermissible tenant service income under the REIT gross income tests. A taxable REIT subsidiary
is required to pay regular U.S. federal income tax, and state and local income tax where applicable, as a non-REIT “C” corporation.
In addition, a taxable REIT subsidiary may be prevented from deducting interest on debt, including debt funded directly or indirectly
by us, if certain tests are not satisfied. If dividends are paid to us by one or more of our taxable REIT subsidiaries, then a portion
of the dividends we distribute to shareholders who are taxed at individual rates will generally be eligible for taxation at lower capital
gains rates, rather than at ordinary income rates. See “- Taxation of U.S. Shareholders-Taxation of Taxable U.S. Shareholders-Qualified
Dividend Income.”
Generally, a taxable REIT subsidiary can perform
impermissible tenant services without causing us to receive impermissible tenant services income under the REIT income tests. However,
several provisions applicable to the arrangements between us and our taxable REIT subsidiaries ensure that such taxable REIT subsidiaries
will be subject to an appropriate level of U.S. federal income taxation. For example, taxable REIT subsidiaries are limited in their ability
to deduct interest payments in excess of a certain amount, including interest payments made directly or indirectly to us, as described
below in “– Annual Distribution Requirements.” In addition, we will be obligated to pay a 100% excise tax on some payments
we receive or on certain expenses deducted by our taxable REIT subsidiaries, and on income earned by our taxable REIT subsidiaries for
services provided to, or on behalf of, us, if the economic arrangements between us, our tenants and such taxable REIT subsidiaries are
not comparable to similar arrangements among unrelated parties. Our taxable REIT subsidiaries, and any future taxable REIT subsidiaries
acquired by us, may make interest and other payments to us and to third parties in connection with activities related to our properties.
There can be no assurance that our taxable REIT subsidiaries will not be limited in their ability to deduct interest payments made to
us. In addition, there can be no assurance that the IRS might not seek to impose the 100% excise tax on a portion of payments received
by us from, or expenses deducted by, or service income imputed to, our taxable REIT subsidiaries. See “- Failure to Satisfy the
Gross Income Tests” for further discussion of these rules and the 100% excise tax.
We own subsidiaries that have elected to be treated
as taxable REIT subsidiaries for U.S. federal income tax purposes. Each of our taxable REIT subsidiaries is taxable as a non-REIT “C”
corporation and has elected, together with us, to be treated as our taxable REIT subsidiary or is treated as a taxable REIT subsidiary
under the 35% subsidiary rule discussed above. We may elect, together with other corporations in which we may own directly or indirectly
stock, for those corporations to be treated as our taxable REIT subsidiaries.
Gross Income Tests
To qualify as a REIT, we must satisfy two gross
income tests that are applied on an annual basis. First, in each taxable year at least 75% of our gross income (excluding gross income
from prohibited transactions, certain hedging transactions, as described below, and certain foreign currency transactions) must be derived
from investments relating to real property or mortgages on real property, generally including:
| 1. | “rents from real property”; |
| 2. | dividends or other distributions on, and gain from the sale of, shares in other REITs; |
| 3. | a gain from the sale of real property or mortgages on real property, in either case, not held for sale to customers; |
| 4. | interest income derived from mortgage loans secured by real property; and |
| 5. | income attributable to temporary investments of new capital in stocks and debt instruments during the one-year period following our
receipt of new capital that we raise through equity offerings or issuance of debt obligations with at least a five-year term. |
Second, at least 95% of our gross income in each
taxable year (excluding gross income from prohibited transactions, certain hedging transactions, as described below, and certain foreign
currency transactions) must be derived from some combination of income that qualifies under the 75% gross income test described above,
as well as other income sources generally including (a) dividends, (b) interest (including interest income from debt instruments
issued by publicly offered REITs), and (c) gain from the sale or disposition of stock or securities (including gain from the sale
or other disposition of debt instruments issued by publicly offered REITs), in either case, not held for sale to customers.
Rents
from Real Property. Rents we receive will qualify as “rents from real property” for the purpose of satisfying the
gross income requirements for a REIT described above only if several conditions are met. These conditions relate to the identity of the
tenant, the computation of the rent payable, and the nature of the property lease.
| 1. | First, the amount of rent must not be based in whole or in part on the income or profits of any person. However, an amount we receive
or accrue generally will not be excluded from the term “rents from real property” solely by reason of being based on a fixed
percentage or percentages of receipts or sales; |
| 2. | Second, we, or an actual or constructive owner of 10% or more of our shares, must not actually or constructively own 10% or more of
the interests in the tenant, or, if the tenant is a corporation, 10% or more of the voting power or value of all classes of stock of the
tenant. Rents received from such tenant that is a taxable REIT subsidiary, however, will not be excluded from the definition of “rents
from real property” as a result of this condition if either (i) at least 90% of the space at the property to which the rents
relate is leased to third parties, and the rents paid by the taxable REIT subsidiary are comparable to rents paid by our other tenants
for comparable space or (ii) the property is a qualified lodging facility or a qualified health care property and such property is
operated on behalf of the taxable REIT subsidiary by a person who is an “eligible independent contractor” (as
described below) and certain other requirements are met; |
| 3. | Third, rent attributable to personal property, leased in connection with a lease of real property, must not be greater than 15% of
the total rent received under the lease. If this requirement is not met, then the portion of rent attributable to personal property will
not qualify as “rents from real property”; and |
| 4. | Fourth, for rents to qualify as rents from real property for the purpose of satisfying the gross income tests, we generally must not
operate or manage the property or furnish or render services to the tenants of such property, other than through an “independent
contractor” who is adequately compensated and from whom we derive no revenue or through a taxable REIT subsidiary. To the extent
that impermissible services are provided by an independent contractor or taxable REIT subsidiary, the cost of the services generally must
be borne by the independent contractor or taxable REIT subsidiary. We anticipate that any services we provide directly to tenants will
be “usually or customarily rendered” in connection with the rental of space for occupancy only and not otherwise considered
to be provided for the tenants’ convenience. We may provide a minimal amount of “non-customary” services to tenants
of our properties, other than through an independent contractor or taxable REIT subsidiary, but we intend that our income from these services
will not exceed 1% of our total gross income from the property. If the impermissible tenant services income exceeds 1% of our total income
from a property, then all of the income from that property will fail to qualify as rents from real property. If the total amount of impermissible
tenant services income does not exceed 1% of our total income from the property, the services will not “taint” the other income
from the property (that is, it will not cause the rent paid by tenants of that property to fail to qualify as rents from real property),
but the impermissible tenant services income will not qualify as rents from real property. We are deemed to have received income from
the provision of impermissible services in an amount equal to at least 150% of our direct cost of providing the service. |
We monitor (and intend to continue to monitor)
the activities provided at, and the non-qualifying income arising from, our properties and believe that we have not provided services
at levels that will cause us to fail to meet the income tests. We provide services and may provide access to third party service providers
at some or all of our properties. Based upon our experience in the retail markets where the properties are located, we believe that all
access to service providers and services provided to tenants by us (other than through a qualified independent contractor or a taxable
REIT subsidiary) either are usually or customarily rendered in connection with the rental of real property and not otherwise considered
rendered to the occupant, or, if considered impermissible services, will not result in an amount of impermissible tenant service income
that will cause us to fail to meet the income test requirements. However, we cannot provide any assurance that the IRS will agree with
these positions.
Income we receive that is attributable to the
rental of parking spaces at the properties will constitute rents from real property for purposes of the REIT gross income tests if the
services provided with respect to the parking facilities are performed by independent contractors from whom we derive no income, either
directly or indirectly, or by a taxable REIT subsidiary. We believe that the income we receive that is attributable to parking facilities
will meet these tests and, accordingly, will constitute rents from real property for purposes of the REIT gross income tests.
We may in the future hold one or more hotel properties.
We expect to lease any such hotel properties to our taxable REIT subsidiary (or to a joint venture entity in which our taxable REIT subsidiary
will have an interest). In order for rent paid pursuant to a REIT’s leases to constitute “rents from real property,”
the leases must be respected as true leases for U.S. federal income tax purposes. Accordingly, the leases cannot be treated as service
contracts, joint ventures or some other type of arrangement. The determination of whether the leases are true leases for U.S. federal
income tax purposes depends upon an analysis of all the surrounding facts and circumstances. We intend to structure the leases so that
the leases will be respected as true leases for U.S. federal income tax purposes. With respect to the management of the hotel properties,
the taxable REIT subsidiary (or the taxable REIT subsidiary-joint venture entity-lessee) intends to enter into a management contract with
a hotel management company that qualifies as an “eligible independent contractor.” A taxable REIT subsidiary must not directly
or indirectly operate or manage a lodging or health care facility or, generally, provide to another person, under a franchise, license
or otherwise, rights to any brand name under which any lodging facility or health care facility is operated. Although a taxable REIT subsidiary
may not operate or manage a lodging facility, it may lease or own such a facility so long as the facility is a “qualified lodging
facility” and is operated on behalf of the taxable REIT subsidiary by an “eligible independent contractor.” A “qualified
lodging facility” is, generally, a hotel at which no authorized gambling activities are conducted, and includes the customary amenities
and facilities operated as part of, or associated with, the hotel. “Customary amenities” must be customary for other properties
of a comparable size and class owned by other owners unrelated to the REIT. An “eligible independent contractor” is an independent
contractor that, at the time a management agreement is entered into with a taxable REIT subsidiary to operate a “qualified lodging
facility,” is actively engaged in the trade or business of operating “qualified lodging facilities” for a person or
persons unrelated to either the taxable REIT subsidiary or any REITs with which the taxable REIT subsidiary is affiliated. A hotel management
company that otherwise would qualify as an “eligible independent contractor” with regard to a taxable REIT subsidiary of a
REIT will not so qualify if the hotel management company and/or one or more actual or constructive owners of 10% or more of the hotel
management company actually or constructively own more than 35% of the REIT, or one or more actual or constructive owners of more than
35% of the hotel management company own 35% or more of the REIT (determined with respect to a REIT whose shares are regularly traded on
an established securities market by taking into account only the shares held by persons owning, directly or indirectly, more than 5% of
the outstanding shares of the REIT and, if the stock of the eligible independent contractor is publicly traded, 5% of the publicly traded
stock of the eligible independent contractor). We intend to take all steps reasonably practicable to ensure that none of our taxable REIT
subsidiaries will engage in “operating” or “managing” any hotels and that the hotel management companies engaged
to operate and manage hotels leased to or owned by the taxable REIT subsidiaries will qualify as “eligible independent contractors”
with regard to those taxable REIT subsidiaries. We expect that rental income we receive, if any, that is attributable to the hotel properties
will constitute rents from real property for purposes of the REIT gross income tests.
Interest
Income. “Interest” generally will be non-qualifying income for purposes of the 75% or 95% gross income tests if
it depends in whole or in part on the income or profits of any person. However, interest based on a fixed percentage or percentages of
receipts or sales may still qualify under the gross income tests. We do not expect to derive significant amounts of interest that will
not qualify under the 75% and 95% gross income tests.
Dividend
Income. Our share of any dividends received from any taxable REIT subsidiaries will qualify for purposes of the 95% gross income
test but not for purposes of the 75% gross income test. We do not anticipate that we will receive sufficient dividends from any taxable
REIT subsidiaries to cause us to exceed the limit on non-qualifying income under the 75% gross income test. Dividends that we receive
from other qualifying REITs will qualify for purposes of both REIT income tests.
Income
from Hedging Transactions. From time to time, we may enter into hedging transactions with respect to one or more of our assets
or liabilities. Any such hedging transactions could take a variety of forms, including the use of derivative instruments such as interest
rate swap or cap agreements, option agreements, and futures or forward contracts. Income of a REIT, including income from a pass-through
subsidiary, arising from “clearly identified” hedging transactions that are entered into to manage the risk of interest rate
or price changes with respect to borrowings, including gain from the disposition of such hedging transactions, to the extent the hedging
transactions hedge indebtedness incurred, or to be incurred, by the REIT to acquire or carry real estate assets (each such hedge, a “Borrowings
Hedge”), will not be treated as gross income for purposes of either the 95% gross income test or the 75% gross income test. Income
of a REIT arising from hedging transactions that are entered into to manage the risk of currency fluctuations with respect to our investments
(each such hedge, a “Currency Hedge”) will not be treated as gross income for purposes of either the 95% gross income test
or the 75% gross income test provided that the transaction is “clearly identified.” This exclusion from the 95% and 75% gross
income tests also will apply if we previously entered into a Borrowings Hedge or a Currency Hedge, a portion of the hedged indebtedness
or property is disposed of, and in connection with such extinguishment or disposition we enter into a new “clearly identified”
hedging transaction to offset the prior hedging position. In general, for a hedging transaction to be “clearly identified,”
(1) it must be identified as a hedging transaction before the end of the day on which it is acquired,
originated, or entered into; and (2) the items of risks being hedged must be identified “substantially contemporaneously”
with entering into the hedging transaction (generally not more than 35 days after entering into the hedging transaction). To the extent
that we hedge with other types of financial instruments or in other situations, the resultant income will be treated as income that does
not qualify under the 95% or 75% gross income tests unless the hedge meets certain requirements and we elect to integrate it with a specified
asset and to treat the integrated position as a synthetic debt instrument. We intend to structure any hedging transactions in a manner
that does not jeopardize our qualification as a REIT but there can be no assurance we will be successful in this regard.
Income
from Prohibited Transactions. Any gain that we realize on the sale of any property (other than the sale of foreclosure property)
held as inventory or otherwise held primarily for sale to customers in the ordinary course of business, including our share of any such
gain realized by our Operating Partnership, either directly or through its subsidiary partnerships and limited liability companies, will
be treated as income from a prohibited transaction that is subject to a 100% penalty tax. Under existing law, whether property is held
as inventory or primarily for sale to customers in the ordinary course of a trade or business is a question of fact that depends on all
the facts and circumstances surrounding the particular transaction. However, we will not be treated as a dealer in real property with
respect to a property that we sell for the purposes of the 100% tax if (i) we have held the property for at least two years for the
production of rental income prior to the sale, (ii) capitalized expenditures on the property in the two years preceding the sale
are less than 30% of the net selling price of the property, and (iii) we either (a) have seven or fewer sales of property (excluding
certain property obtained through foreclosure) for the year of sale; or (b) the aggregate adjusted basis of property sold during
the year is 10% or less of the aggregate adjusted basis of all of our assets as of the beginning of the taxable year; or (c) the
fair market value of property sold during the year is 10% or less of the aggregate fair market value of all of our assets as of the beginning
of the taxable year; or (d) the aggregate adjusted basis of property sold during the year is 20% or less of the aggregate adjusted
basis of all of our assets as of the beginning of the taxable year and the aggregate adjusted basis of property sold during the three-year
period ending with the year of sale is 10% or less of the aggregate tax basis of all of our assets as of the beginning of each of the
three taxable years ending with the year of sale; or (e) the fair market value of property sold during the year is 20% or less of
the aggregate fair market value of all of our assets as of the beginning of the taxable year and the fair market value of property sold
during the three-year period ending with the year of sale is 10% or less of the aggregate fair market value of all of our assets as of
the beginning of each of the three taxable years ending with the year of sale. If we rely on clauses (b), (c), (d), or (e) in the
preceding sentence, substantially all of the marketing and development expenditures with respect to the property sold must be made through
an independent contractor from whom we derive no income or our taxable REIT subsidiary. The sale of more than one property to one buyer
as part of one transaction constitutes one sale for purposes of this “safe harbor.”
We intend to hold our properties for investment
with a view to long-term appreciation, to engage in the business of acquiring, developing and owning our properties and to make occasional
sales of the properties as are consistent with our investment objectives. However, the IRS may successfully contend that some or all of
the sales made by us or our Operating Partnership or its subsidiary partnerships or limited liability companies are prohibited transactions.
In that case, we would be required to pay the
100% penalty tax on our allocable share of the gains resulting from any such sales.
Income
from Foreclosure Property. We generally will be subject to tax at the maximum corporate rate on any net income from foreclosure
property, including any gain from the disposition of the foreclosure property, other than income that constitutes qualifying income for
purposes of the 75% gross income test. Foreclosure property is real property and any personal property incident to such real property
(1) that we acquire as the result of having bid on the property at foreclosure, or having otherwise reduced the property to ownership
or possession by agreement or process of law, after a default (or upon imminent default) on a lease of the property or a mortgage loan
held by us and secured by the property, (2) for which we acquired the related loan or lease at a time when default was not imminent
or anticipated, and (3) with respect to which we made a proper election to treat the property as foreclosure property. Any gain from
the sale of property for which a foreclosure property election has been made and remains in place generally will not be subject to the
100% tax on gains from prohibited transactions described above, even if the property would otherwise constitute inventory or dealer property.
To the extent that we receive any income from foreclosure property that does not qualify for purposes of the 75% gross income test, we
intend to make an election to treat the related property as foreclosure property if the election is available (which may not be the case
with respect to any acquired “distressed loans”).
Failure
to Satisfy the Gross Income Tests. If we fail to satisfy one or both of the 75% or 95% gross income tests for any taxable year,
we may nevertheless qualify as a REIT for that year if we are entitled to relief under the Code. These relief provisions will be generally
available if (1) our failure to meet these tests was due to reasonable cause and not due to willful neglect and (2) following
our identification of the failure to meet the 75% and/or 95% gross income tests for any taxable year, we file a schedule with the IRS
setting forth a description of each item of our gross income that satisfies the gross income tests for purposes of the 75% or 95% gross
income test for such taxable year in accordance with Treasury Regulations. It is not possible, however, to state whether in all circumstances
we would be entitled to the benefit of these relief provisions. If these relief provisions are inapplicable to a particular set of circumstances,
we will fail to qualify as a REIT. As discussed above in “- Taxation of our Company as a REIT- General,” even if these
relief provisions apply, a tax would be imposed based on the amount of non-qualifying income. We intend to take advantage of any and all
relief provisions that are available to us to cure any violation of the income tests applicable to REITs.
Redetermined
Amounts. Any redetermined rents, redetermined deductions, excess interest, or redetermined taxable REIT subsidiary service
income we generate will be subject to a 100% penalty tax. In general, redetermined rents are rents from real property that are overstated
as a result of services furnished by one of our taxable REIT subsidiaries to any of our tenants, redetermined deductions and excess interest
represent amounts that are deducted by a taxable REIT subsidiary for amounts paid to us that are in excess of the amounts that would have
been deducted based on arm’s-length negotiations, and redetermined taxable REIT subsidiary service income is gross income (less
deductions allocable thereto) of a taxable REIT subsidiary attributable to services provided to, or on behalf of, us that is less than
the amounts that would have been paid by us to the taxable REIT subsidiary if based on arm’s-length negotiations. Rents we receive
will not constitute redetermined rents if they qualify for the safe harbor provisions contained in the Code. Safe harbor provisions are
provided where:
| 1. | amounts are excluded from the definition of impermissible tenant service income as a result of satisfying the 1% de minimis exception; |
| 2. | a taxable REIT subsidiary renders a significant amount of similar services to unrelated parties and the charges for such services
are substantially comparable; |
| 3. | rents paid to us by tenants leasing at least 25% of the net leasable space of the REIT’s property who are not receiving services
from the taxable REIT subsidiary are substantially comparable to the rents paid by the REIT’s tenants leasing comparable space who
are receiving such services from the taxable REIT subsidiary and the charge for the service is separately stated; or |
| 4. | the taxable REIT subsidiary’s gross income from the service is not less than 150% of the taxable REIT subsidiary’s direct
cost of furnishing the service. |
While we anticipate that any fees paid to a taxable
REIT subsidiary for tenant services will reflect arm’s-length rates, a taxable REIT subsidiary may under certain circumstances provide
tenant services which do not satisfy any of the safe-harbor provisions described above. Nevertheless, these determinations are inherently
factual, and the IRS has broad discretion to assert that amounts paid between related parties should be reallocated to clearly reflect
their respective incomes. If the IRS successfully made such an assertion, we would be required to pay a 100% penalty tax on the redetermined
rent, redetermined deductions or excess interest, as applicable.
Asset Tests
At the close of each calendar quarter, we must
satisfy the following tests relating to the nature and diversification of our assets. For purposes of the asset tests, a REIT is not treated
as owning the stock of a qualified REIT subsidiary or an equity interest in any entity treated as a partnership otherwise disregarded
for U.S. federal income tax purposes. Instead, a REIT is treated as owning its proportionate share of the assets held by such entity.
| 1. | At least 75% of the value of our total assets must be represented by some combination of “real estate assets,” cash, cash
items, U.S. government securities, and, in some circumstances, stock or debt instruments purchased with new capital. For purposes of this
test, real estate assets include interests in real property, such as land and buildings, leasehold interests in real property, stock of
other corporations that qualify as REITs (and debt instruments issued by publicly offered REITs, interests in mortgages on interests in
real property and personal property leased in connection with real property to the extent that rents attributable to such personal property
are treated as “rents from real property”), and some types of mortgage-backed securities and mortgage loans. Assets that do
not qualify for purposes of the 75% asset test are subject to the additional asset tests described below. |
| 2. | Not more than 25% of our total assets may be represented by securities other than those described in the first bullet above; |
| 3. | Except for securities described in the first bullet above and the last bullet below and securities in qualified REIT subsidiaries
and taxable REIT subsidiaries, the value of any one issuer’s securities owned by us may not exceed 5% of the value of our total
assets. |
| 4. | Except for securities described in the first bullet above and the last bullet below and securities in qualified REIT subsidiaries
and taxable REIT subsidiaries, we may not own more than 10% of any one issuer’s outstanding voting securities. |
| 5. | Except for securities described in the first bullet above and the last bullet below and securities in qualified REIT subsidiaries
and taxable REIT subsidiaries, and certain types of indebtedness that are not treated as securities for purposes of this test, as discussed
below, we may not own more than 10% of the total value of the outstanding securities of any one issuer. |
| 6. | Not more than 20% of the value of our total assets may be represented by the securities of one or more taxable REIT subsidiaries. |
| 7. | Not more than 25% of our total assets may be represented by debt instruments issued by publicly offered REITs that are “nonqualified”
debt instruments (e.g., not secured by interests in mortgages on interests in real property and personal property leased in connection
with real property to the extent that rents attributable to such personal property are treated as “rents from real property”). |
The 10% value test does not apply to certain “straight
debt” and other excluded securities, as described in the Code, including (1) loans to individuals or estates; (2) obligations
to pay rent from real property; (3) rental agreements described in Section 467 of the Code; (4) any security issued by
other REITs; (5) certain securities issued by a state, the District of Columbia, a foreign government, or a political subdivision
of any of the foregoing, or the Commonwealth of Puerto Rico; and (6) any other arrangement as determined by the IRS. In addition,
(1) a REIT’s interest as a partner in a partnership is not considered a security for purposes of the 10% value test; (2) any
debt instrument issued by a partnership (other than straight debt or other excluded security) will not be considered a security issued
by the partnership if at least 75% of the partnership’s gross income is derived from sources that would qualify for the 75% REIT
gross income test; and (3) any debt instrument issued by a partnership (other than straight debt or other excluded security) will
not be considered a security issued by a partnership to the extent of the REIT’s interest as a partner in the partnership.
For purposes of the 10% value test, debt will
meet the “straight debt” safe harbor if (1) neither we, nor any of our controlled taxable REIT subsidiaries (i.e., taxable
REIT subsidiaries more than 50% of the vote or value of the outstanding stock of which is directly or indirectly owned by us), own any
securities not described in the preceding paragraph that have an aggregate value greater than one percent of the issuer’s outstanding
securities, as calculated under the Code, (2) the debt is a written unconditional promise to pay on demand or on a specified date
a sum certain in money, (3) the debt is not convertible, directly or indirectly, into stock, and (4) the interest rate and the
interest payment dates of the debt are not contingent on the profits, the borrower’s discretion or similar factors. However, contingencies
regarding time of payment and interest are permissible for purposes of qualifying as a straight debt security if either (1) such
contingency does not have the effect of changing the effective yield of maturity, as determined under the Code, other than a change in
the annual yield to maturity that does not exceed the greater of (i) 5% of the annual yield to maturity or (ii) 0.25%, or (2) neither
the aggregate issue price nor the aggregate face amount of the issuer’s debt instruments held by the REIT exceeds $1,000,000 and
not more than 12 months of unaccrued interest can be required to be prepaid thereunder. In addition, debt will not be disqualified from
being treated as “straight debt” solely because the time or amount of payment is subject to a contingency upon a default or
the exercise of a prepayment right by the issuer of the debt, provided that such contingency is consistent with customary commercial practice.
Our Operating Partnership owns 100% of the interests
of one or more taxable REIT subsidiaries. We are considered to own our pro rata share (based on our ownership in the Operating Partnership)
of the interests in each taxable REIT subsidiary equal to our proportionate share (by capital) of the Operating Partnership. Each taxable
REIT subsidiary is taxable as a non-REIT “C” corporation and has elected, together with us, to be treated as our taxable REIT
subsidiary. So long as each taxable REIT subsidiary qualifies as such, we will not be subject to the 5% asset test, 10% voting securities
limitation or 10% value limitation with respect to our ownership interest in each taxable REIT subsidiary. In the future, we may elect,
together with other corporations in which we own directly or indirectly stock, for those corporations to be treated as our taxable REIT
subsidiaries. We believe that the aggregate value of our interests in our taxable REIT subsidiaries does not exceed, and in the future
it will not exceed, 20% of the aggregate value of our gross assets. To the extent that we own an interest in an issuer that does not qualify
as a REIT, a qualified REIT subsidiary, or a taxable REIT subsidiary, we believe that our pro rata share of the value of the securities,
including debt, of any such issuer does not exceed 5% of the total value of our assets. Moreover, with respect to each issuer in which
we own an interest that does not qualify as a qualified REIT subsidiary or a taxable REIT subsidiary, we believe that our ownership of
the securities of any such issuer complies with the 10% voting securities limitation and 10% value limitation.
No independent appraisals have been obtained to
support these conclusions and we cannot provide any assurance that the IRS will not disagree with our determinations.
Failure
to Satisfy the Asset Tests. The asset tests must be satisfied not only on the last day of the calendar quarter in which we,
directly or through pass-through subsidiaries, acquire securities in the applicable issuer, but also on the last day of the calendar quarter
in which we increase our ownership of securities of such issuer, including as a result of increasing our interest in pass-through subsidiaries.
After initially meeting the asset tests at the close of any quarter, we will not lose our status as a REIT for failure to satisfy the
asset tests at the end of a later quarter solely by reason of changes in the relative values of our assets (including a discrepancy caused
solely by the change in the foreign currency exchange rate used to value a foreign asset). If failure to satisfy the asset tests results
from an acquisition of securities or other property during a quarter, we can cure this failure by disposing of sufficient non-qualifying
assets within 30 days after the close of that quarter. An acquisition of securities could include an increase in our interest in our Operating
Partnership, the exercise by limited partners of their redemption right relating to units in the Operating Partnership or an additional
capital contribution of proceeds of an offering of our shares of beneficial interest. We intend to continue to maintain adequate records
of the value of our assets to ensure compliance with the asset tests and to take any available action within 30 days after the close of
any quarter as may be required to cure any noncompliance with the asset tests. Although we plan to take steps to ensure that we satisfy
such tests for any quarter with respect to which testing is to occur, there can be no assurance that such steps will always be successful.
If we fail to timely cure any noncompliance with the asset tests, we will cease to qualify as a REIT, unless we satisfy certain relief
provisions.
The failure to satisfy the 5% asset test, or the
10% vote or value asset tests can be remedied even after the 30-day cure period under certain circumstances. Specifically, if we fail
these asset tests at the end of any quarter and such failure is not cured within 30 days thereafter, we may dispose of sufficient assets
(generally within six months after the last day of the quarter in which our identification of the failure to satisfy these asset tests
occurred) to cure such a violation that does not exceed the lesser of 1% of our assets at the end of the relevant quarter or $10,000,000.
If we fail any of the other asset tests or our failure of the 5% and 10% asset tests is in excess of the de minimis amount described
above, as long as such failure was due to reasonable cause and not willful neglect, we are permitted to avoid disqualification as a REIT,
after the 30-day cure period, by taking steps including the disposing of sufficient assets to meet the asset test (generally within six
months after the last day of the quarter in which our identification of the failure to satisfy the REIT asset test occurred), paying a
tax equal to the greater of $50,000 or the highest U.S. federal corporate income tax rate of the net income generated by the non-qualifying
assets during the period in which we failed to satisfy the asset test, and filing in accordance with applicable Treasury Regulations a
schedule with the IRS that describes the assets that caused us to fail to satisfy the asset test(s). We intend to take advantage of any
and all relief provisions that are available to us to cure any violation of the asset tests applicable to REITs. In certain circumstances,
utilization of such provisions could result in us being required to pay an excise or penalty tax, which could be significant in amount.
Annual Distribution Requirements
To qualify as a REIT, we are required to distribute
dividends, other than capital gain dividends, to our shareholders each year in an amount at least equal to:
| 1. | the sum of: (1) 90% of our “REIT taxable income” ( generally, taxable income of the
REIT subject to specified adjustments, including a deduction for dividends paid and excluding net capital gain); and (2) 90% of our
after tax net income, if any, from foreclosure property; minus |
| 2. | the sum of specified items of non-cash income. |
For purposes of this test, non-cash income means
income attributable to leveled stepped rents, original issue discount included in our taxable income without the receipt of a corresponding
payment, cancellation of indebtedness or income attributable to a like-kind exchange that is later determined to be taxable.
We generally must make dividend distributions
in the taxable year to which they relate. Dividend distributions may be made in the following year in two circumstances. First, if we
declare a dividend in October, November, or December of any year with a record date in one of these months and pay the dividend on
or before January 31 of the following year. Such distributions are treated as both paid by us and received by each shareholder on
December 31 of the year in which they are declared. Second, distributions may be made in the following year if they are declared
before we timely file our tax return for the year and if made with or before the first regular dividend payment after such declaration.
These distributions are taxable to our shareholders in the year in which paid, even though the distributions relate to our prior taxable
year for purposes of the 90% distribution requirement.
To the extent that we do not distribute all of
our net capital gain or distribute at least 90%, but less than 100%, of our “REIT taxable income,” as
adjusted, we will be required to pay tax on that amount at regular corporate tax rates. We intend to make timely distributions sufficient
to satisfy these annual distribution requirements. In this regard, the partnership agreement of our Operating Partnership authorizes us,
as general partner of our Operating Partnership, to take such steps as may be necessary to cause our Operating Partnership to distribute
to its partners an amount sufficient to permit us to meet these distribution requirements. In certain circumstances we may elect to retain,
rather than distribute, our net long-term capital gains and pay tax on such gains. In this case, we could elect for our shareholders to
include their proportionate share of such undistributed long-term capital gains in income, and to receive a corresponding credit for their
share of the tax that we paid. Our shareholders would then increase their adjusted basis of their stock by the difference between (1) the
amounts of capital gain dividends that we designated and that they included in their taxable income, minus (2) the tax that we paid
on their behalf with respect to that income.
To the extent that in the future we may have available
net operating losses carried forward from prior tax years, such losses may reduce the amount of distributions that we must make in order
to comply with the REIT distribution requirements. Such losses, however, (1) will generally not affect the character, in the hands
of our shareholders, of any distributions that are actually made as ordinary dividends or capital gains; and (2) cannot be passed
through or used by our shareholders. See “- Taxation of U.S. Shareholders-Taxation of Taxable U.S. Shareholders-Distributions Generally.”
If we fail to distribute during each calendar
year at least the sum of (a) 85% of our REIT ordinary income for such year, (b) 95% of our REIT capital gain net income for
such year, and (c) any undistributed taxable income from prior periods, we would be subject to a non-deductible 4% excise tax on
the excess of such required distribution over the sum of (x) the amounts that we actually distributed (taking into account excess
distributions from prior years), and (y) the amounts of income we retained and on which we paid U.S. federal corporate income tax.
In addition, if we were to recognize built-in-gain
on the disposition of any assets acquired from a non-REIT “C” corporation in a transaction in which our basis in the assets
was determined by reference to the non-REIT “C” corporation’s basis (for instance, if the assets were acquired in a
tax-free reorganization), we would be required to distribute at least 90% of the built-in-gain net of the tax we would pay on such gain.
We expect that our REIT taxable income (determined
before our deduction for dividends paid) will be less than our cash flow because of depreciation and other non-cash charges included in
computing REIT taxable income. Accordingly, we anticipate that we will generally have sufficient cash or liquid assets to enable us to
satisfy the distribution requirements described above.
However, from time to time, we may not have sufficient
cash or other liquid assets to meet these distribution requirements due to timing differences between the actual receipt of income and
actual payment of deductible expenses, and the inclusion of income and deduction of expenses in arriving at our taxable income. If these
timing differences occur, we may need to arrange for short-term, or possibly long-term, borrowings or need to pay dividends in the form
of taxable dividends in order to meet the distribution requirements. Further, under amendments to Section 451 of the Code, subject
to certain exceptions, we must accrue income for U.S. federal income tax purposes no later than when such income is taken into account
as revenue in our financial statements, which could create additional differences between REIT taxable income and the receipt of cash
attributable to such income. In addition, Section 162(m) of the Code places a per-employee limit of $1 million on the amount
of compensation that a publicly held corporation may deduct in any one year with respect to its chief executive officer and certain other
highly compensated executive officers. Changes to Section 162(m) eliminated an exception that formerly permitted certain performance-based
compensation to be deducted even in excess of $1 million, which may have the effect of increasing our REIT taxable income. If these timing
difference occur, we may need to arrange for short-term, or possibly long-term, borrowings or pay dividends in the form of taxable stock
dividends in order to meet the distribution requirements.
We may be able to rectify a failure to meet the
distribution requirement for a year by paying “deficiency dividends” to our shareholders in a later year, which may be included
in our deduction for dividends paid for the earlier year. Thus, we may be able to avoid being taxed on amounts distributed as deficiency
dividends. However, we will be required to pay interest to the IRS based upon the amount of any deduction claimed for deficiency dividends.
The Code limits the deductibility of net interest
expense paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” subject to
certain exceptions. Any deduction in excess of the limitation is carried forward and may be used in a subsequent year, subject to the
30% limitation. Adjusted taxable income is determined without regard to certain deductions, including those for net interest expense and
net operating loss carryforwards. If we or our subsidiaries, as applicable, are eligible to make and make a timely election (which is
irrevocable), the 30% limitation does not apply to a trade or business involving real property development, redevelopment, construction,
reconstruction, rental, operation, acquisition, conversion, disposition, management, leasing or brokerage, within the meaning of Section 469(c)(7)(C) of
the Code. If this election is made, depreciable real property (including certain improvements) held by the relevant trade or business
must be depreciated under the alternative depreciation system under the Code, which is generally less favorable than the generally applicable
system of depreciation under the Code. If we do not make the election or if the election is determined not to be available with respect
to all or certain of our business activities, the interest deduction limitation could result in us having more REIT taxable income and
thus increase the amount of distributions we must make to comply with the REIT requirements and avoid incurring corporate level tax. Similarly,
the limitation could cause our taxable REIT subsidiaries to have greater taxable income and thus potentially greater corporate tax liability.
We may be able to rectify a failure to meet the
distribution requirement for a year by paying “deficiency dividends” to our shareholders in a later year, which may be included
in our deduction for dividends paid for the earlier year. Thus, we may be able to avoid being taxed on amounts distributed as deficiency
dividends. However, we will be required to pay interest to the IRS based upon the amount of any deduction claimed for deficiency dividends.
Record-Keeping Requirements
We are required to comply with applicable record-keeping
requirements. Failure to comply could result in monetary fines.
Failure to Qualify as a REIT
If we fail to satisfy one or more requirements
for REIT qualification other than gross income and asset tests that have the specific savings clauses, we can avoid termination of our
REIT qualification by paying a penalty of $50,000 for each such failure, provided that our noncompliance was due to reasonable cause and
not willful neglect.
If we fail to qualify for taxation as a REIT in
any taxable year and the relief provisions do not apply, we will be subject to U.S. federal income tax on our taxable income, determined
without reduction for amounts distributed to shareholders. Additionally, we may also be subject to certain taxes enacted by the Inflation
Reduction Act of 2022 that are applicable to non-REIT corporations, including the nondeductible 1% excise tax on certain stock repurchases.
If we fail to qualify for taxation as a REIT, we will not be required to make any distributions to shareholders, and any distributions
that are made to shareholders will not be deductible by us. As a result, our failure to qualify for taxation as a REIT would significantly
reduce the cash available for distributions by us to our shareholders. In addition, if we fail to qualify for taxation as a REIT, all
distributions to shareholders, to the extent of our current and accumulated earnings and profits, will be taxable as regular corporate
dividends and will not be eligible for the 20% deduction on REIT dividends that may be available to U.S. shareholders that are individuals,
trusts, or estates for taxable years prior to 2026. However, such dividends paid to U.S. shareholders that are individuals, trusts, or
estates may be taxable at the preferential income tax rates (i.e., the 20% maximum U.S. federal rate) for qualified dividends. In addition,
subject to the limitations of the Code, corporate distributees may be eligible for the dividends-received deduction. Unless entitled to
relief under specific statutory provisions, we also will be disqualified from taxation as a REIT for the four taxable years following
the year during which qualification was lost.
In addition, if we were to be considered the “successor”
to another REIT under the REIT rules and that REIT failed to qualify as a REIT at the time it combined with us through a merger or
otherwise, the IRS might seek to assess that we would not be eligible to qualify to elect REIT status until the fifth taxable year following
the year during which the other REIT was disqualified, unless it is entitled to relief under applicable statutory provisions. If we violated
or in the future violate any of the requirements for REIT qualification, there can be no assurance that we would be entitled to any statutory
relief. We intend, however, to take advantage of any and all relief provisions that are available to us to cure any violation of the requirements
applicable to REITs.
Tax Aspects of Our Ownership of Interests in
the Operating Partnership and other Partnerships and Limited Liability Companies
General
Substantially all of our investments are owned
indirectly through Kite Realty Group, L.P., our Operating Partnership. In addition, our Operating Partnership holds certain of its investments
indirectly through subsidiary partnerships and limited liability companies that we believe are treated as partnerships or as disregarded
entities for U.S. federal income tax purposes. In general, entities that are classified as partnerships or as disregarded entities for
U.S. federal income tax purposes are “pass-through” entities which are not required to pay U.S. federal income tax. Rather,
partners or members of such entities are allocated their pro rata shares of the items of income, gain, loss, deduction and credit of the
entity, and are required to include these items in calculating their U.S. federal income tax liability, without regard to whether the
partners or members receive a distribution of cash from the entity. We include in our income our pro rata share of the foregoing items
for purposes of the various REIT gross income tests and in the computation of our REIT taxable income (generally, taxable income of the
REIT subject to specified adjustments, including a deduction for dividends paid and excluding net capital gain). Moreover, for purposes
of the REIT asset tests, we include our pro rata share of assets, based on capital interests, of assets held by our Operating Partnership,
including its share of its subsidiary partnerships and limited liability companies. See “- Requirements for Qualification as a REIT-Effect
of Subsidiary Entities-Ownership of Interests in Partnerships and Limited Liability Companies.”
Entity Classification
Our interests in our Operating Partnership and
the subsidiary partnerships and limited liability companies involve special tax considerations, including the possibility that the IRS
might challenge the status of one or more of these entities as a partnership or disregarded entity, and assert that such entity is an
association taxable as a corporation for U.S. federal income tax purposes. If our Operating Partnership, or a subsidiary partnership or
limited liability company, were treated as an association, it would be taxable as a corporation and would be required to pay an entity-level
tax on its income. In this situation, the character of our assets and items of gross income could change and could preclude us from satisfying
the REIT asset tests and possibly the REIT income tests. See “- Requirements for Qualification as a REIT-Gross Income Tests,”
and “- Asset Tests.” This, in turn, would prevent us from qualifying as a REIT. See “- Failure to Qualify as a REIT”
for a discussion of the effect of our failure to meet these tests for a taxable year. In addition, a change in our Operating Partnership’s
or a subsidiary partnership’s or limited liability company’s status as a partnership for tax purposes might be treated as
a taxable event. If so, we might incur a tax liability without any related cash distributions.
We believe our Operating Partnership and each
of our other partnerships and limited liability companies (other than our taxable REIT subsidiaries) will be treated for U.S. federal
income tax purposes as a partnership or disregarded entity. Pursuant to Treasury regulations under Section 7701 of the Code, a partnership
will be treated as a partnership for U.S. federal income tax purposes unless it elects to be treated as a corporation or would be treated
as a corporation because it is a “publicly traded partnership.” A “publicly traded partnership” is any partnership
(i) the interests in which are traded on an established securities market or (ii) the interests in which are readily tradable
on a “secondary market or the substantial equivalent thereof.”
The Company and the Operating Partnership currently
take the reporting position for U.S. federal income tax purposes that the Operating Partnership is not a publicly traded partnership.
There is a risk, however, that the right of a holder of Operating Partnership units to redeem the units for common shares could cause
Operating Partnership units to be considered readily tradable on the substantial equivalent of a secondary market. Under the relevant
Treasury regulations, interests in a partnership will not be considered readily tradable on a secondary market or on the substantial equivalent
of a secondary market if the partnership qualifies for specified “safe harbors,” which are based on the specific facts and
circumstances relating to the partnership. We and the Operating Partnership believe that the Operating Partnership will qualify for at
least one of these safe harbors at all times in the foreseeable future. The Operating Partnership cannot provide any assurance that it
will continue to qualify for one of the safe harbors mentioned above.
If the Operating Partnership is a publicly traded
partnership, it will be taxed as a corporation unless at least 90% of its gross income consists of “qualifying income” under
Section 7704 of the Code. Qualifying income is generally real property rents and other types of passive income. We believe that the
operating partnership will have sufficient qualifying income so that it would be taxed as a partnership, even if it were a publicly traded
partnership. The income requirements applicable to us in order for us to qualify as a REIT under the Code and the definition of qualifying
income under the publicly traded partnership rules are very similar. Although differences exist between these two income tests, we
do not believe that these differences would cause the Operating Partnership not to satisfy the 90% gross income test applicable to publicly
traded partnerships.
If our Operating Partnership were taxable as a
corporation, most, if not all, of the tax consequences described herein would be inapplicable. In particular, we would not qualify as
a REIT because the value of our ownership interest in our Operating Partnership would exceed 5% of our assets and we would be considered
to hold more than 10% of the voting securities (and more than 10% of the value of the outstanding securities) of another corporation (see
“- Requirements for Qualification as a REIT-Asset Tests” above). In this event, the value of our shares could be materially
adversely affected (see “- Failure to Qualify as a REIT” above).
Allocations of Partnership Income, Gain, Loss
and Deduction
The partnership agreement generally provides that
items of operating income and loss will be allocated to the holders of units in proportion to the number of units held by each such unit
holder. Certain limited partners have agreed, or may agree in the future, to guarantee debt of our Operating Partnership, either directly
or indirectly through an agreement to make capital contributions to our Operating Partnership under limited circumstances. As a result
of these guarantees or contribution agreements, such limited partners could under limited circumstances be allocated net loss that would
have otherwise been allocable to us.
If an allocation of partnership income or loss
does not comply with the requirements of Section 704(b) of the Code and the Treasury Regulations thereunder, the item subject
to the allocation will be reallocated in accordance with the partners’ interests in the partnership. This reallocation will be determined
by taking into account all of the facts and circumstances relating to the economic arrangement of the partners with respect to such item.
Our Operating Partnership’s allocations of taxable income and loss are intended to comply with the requirements of Section 704(b) of
the Code and the Treasury Regulations promulgated under this section of the Code.
Tax Allocations with Respect to the Properties
Under Section 704(c) of the Code, income,
gain, loss and deduction attributable to appreciated or depreciated property that is contributed to a partnership in exchange for an interest
in the partnership, must be allocated in a manner so that the contributing partner is charged with the unrealized gain or benefits from
the unrealized loss associated with the property at the time of the contribution. The amount of the unrealized gain or unrealized loss
is generally equal to the difference between the fair market value or book value and the adjusted tax basis of the property at the time
of contribution (referred to as a book-tax difference hereinafter, as adjusted from time to time). These allocations are solely for U.S.
federal income tax purposes and do not affect the book capital accounts or other economic or legal arrangements among the partners. The
partnership agreement requires that these allocations be made in a manner consistent with Section 704(c) of the Code.
Treasury Regulations issued under Section 704(c) of
the Code provide partnerships with a choice of several methods of accounting for book-tax differences. We and our Operating Partnership
have agreed to use the “traditional method” for accounting for book-tax differences for the properties initially contributed
to our Operating Partnership. Under the traditional method, which is the least favorable method from our perspective, the carryover basis
of contributed properties in the hands of our Operating Partnership (i) may cause us to be allocated lower amounts of depreciation
and other deductions for tax purposes than would be allocated to us if all contributed properties were to have a tax basis equal to their
fair market value at the time of the contribution and (ii) in the event of a sale of such properties, could cause us to be allocated
taxable gain in excess of our corresponding economic or book gain (or taxable loss that is less than our economic or book loss) with respect
to the sale, with a corresponding benefit to the contributing partners. Therefore, the use of the traditional method could result in our
having taxable income that is in excess of economic income and our cash distributions from the Operating Partnership. This excess taxable
income is sometimes referred to as “phantom income” and will be subject to the REIT distribution requirements described in
“- Annual Distribution Requirements.” Because we rely on our cash distributions from the Operating Partnership to meet the
REIT distribution requirements, the phantom income could adversely affect our ability to comply with the REIT distribution requirements
and cause our shareholders to recognize additional dividend income without an increase in distributions. See “- Requirements for
Qualification as a REIT” and “- Annual Distribution Requirements.” We and our Operating Partnership have not yet decided
what method will be used to account for book-tax differences for other properties acquired by our Operating Partnership in the future.
Any property acquired by our Operating Partnership in a taxable transaction will initially have a tax basis equal to its fair market value
and, accordingly, Section 704(c) of the Code will not apply.
Taxation of U.S. Shareholders
Taxation of Taxable U.S. Shareholders
This section summarizes the taxation of U.S. shareholders
that are not tax-exempt organizations. For these purposes, the term “U.S. shareholder” is a beneficial owner of our shares
that is, for U.S. federal income tax purposes:
| 1. | a citizen or resident of the United States; |
| 2. | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under
the laws of the United States or of a political subdivision thereof (including the District of Columbia); |
| 3. | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| 4. | any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S.
persons have the authority to control all substantial decisions of the trust, or (2) it has a valid election in place to be treated
as a U.S. person. |
If an entity or arrangement treated as a partnership
for U.S. federal income tax purposes holds our shares, the U.S. federal income tax treatment of a partner generally will depend upon the
status of the partner and the activities of the partnership. A partner of a partnership holding our shares should consult its own tax
advisor regarding the U.S. federal income tax consequences to the partner of the acquisition, ownership and disposition of our shares
by the partnership.
Distributions
Generally. So long as we qualify as a REIT, distributions out of our current or accumulated earnings and profits that are not
designated as capital gains dividends or “qualified dividend income” will be taxable to our taxable U.S. shareholders as ordinary
income and will not be eligible for the dividends-received deduction in the case of U.S. shareholders that are corporations. For purposes
of determining whether distributions to holders of shares are out of current or accumulated earnings and profits, our earnings and profits
will be allocated first to any outstanding preferred shares and then to our outstanding common shares. Dividends received from REITs are
generally not eligible to be taxed at the preferential qualified dividend income rates currently available to individual U.S. shareholders
who receive dividends from taxable non-REIT “C” corporations. However, for taxable years prior to 2026, generally U.S. stockholders
that are individuals, trusts or estates may deduct 20% of the aggregate amount of ordinary dividends distributed by us, subject to certain
limitations.
Capital
Gain Dividends. We may elect to designate distributions of our net capital gain as “capital gain dividends.” Distributions
that we properly designate as “capital gain dividends” will be taxable to our taxable U.S. shareholders as long-term capital
gains without regard to the period for which the U.S. shareholder that receives such distribution has held its shares. Designations made
by us will only be effective to the extent that they comply with Revenue Ruling 89-81, which requires that distributions made to different
classes of shares be composed proportionately of dividends of a particular type. If we designate any portion of a dividend as a capital
gain dividend, a U.S. shareholder will receive an IRS Form 1099-DIV indicating the amount that will be taxable to the shareholder
as capital gain. Corporate shareholders, however, may be required to treat up to 20% of some capital gain dividends as ordinary income.
Recipients of capital gain dividends from us that are taxed at U.S. federal corporate income tax rates will be taxed at the normal U.S.
federal corporate income tax rates on these dividends.
We may elect to retain and pay taxes on some or
all of our net long-term capital gains, in which case U.S. shareholders will be treated as having received, solely for U.S. federal income
tax purposes, our undistributed capital gains as well as a corresponding credit or refund, as the case may be, for taxes that we paid
on such undistributed capital gains, which taxes will be deemed to have been paid by the U.S. shareholders. A U.S. shareholder will increase
the basis in its shares by the difference between the amount of capital gain included in its income and the amount of tax it is deemed
to have paid. A U.S. shareholder that is a corporation will appropriately adjust its earnings and profits for the retained capital gain
in accordance with Treasury Regulations to be prescribed by the IRS. Our earnings and profits will be adjusted appropriately.
We will classify portions of any designated capital
gain dividend or undistributed capital gain as either:
| 1. | a long-term capital gain distribution, which would be taxable to non-corporate U.S. shareholders at a maximum rate of 20% (excluding
the 3.8% tax on “net investment income”), and taxable to U.S. shareholders that are corporations at a maximum rate of 21%;
or |
| 2. | an “unrecaptured Section 1250 gain” distribution, which would be taxable to non-corporate U.S. shareholders at a
maximum rate of 25%, to the extent of previously claimed depreciation deductions. |
Distributions from us in excess of our current
and accumulated earnings and profits will not be taxable to a U.S. shareholder to the extent that they do not exceed the adjusted basis
of the U.S. shareholder’s shares in respect of which the distributions were made. Rather, the distribution will reduce the adjusted
basis of these shares. To the extent that such distributions exceed the adjusted basis of a U.S. shareholder’s shares of our shares,
the U.S. shareholder generally must include such distributions in income as long-term capital gain, or short-term capital gain if the
shares have been held for one year or less. In addition, any dividend that we declare in October, November or December of any
year and that is payable to a shareholder of record on a specified date in any such month will be treated as both paid by us and received
by the shareholder on December 31 of such year, provided that we actually pay the dividend before the end of January of
the following calendar year.
To the extent that we have available net operating
losses and capital losses carried forward from prior tax years, such losses may reduce the amount of distributions that we must make in
order to comply with the REIT distribution requirements. See “- Taxation of our Company as a REIT” and “- Requirements
for Qualification as a REIT-Annual Distribution Requirements.” Such losses, however, are not passed through to U.S. shareholders
and do not offset income of U.S. shareholders from other sources, nor would such losses affect the character of any distributions that
we make, which are generally subject to tax in the hands of U.S. shareholders as dividends to the extent that we have current or accumulated
earnings and profits. Under amendments to Section 172 of the Code, our deduction for any net operating loss carryforwards arising
from losses we sustain in taxable years beginning after December 31, 2017 is limited to 80% of our REIT taxable income (determined
without regard to the deduction for dividends paid), and any unused portion of losses arising in taxable years ending after December 31,
2017 may not be carried back, but may be carried forward indefinitely.
The maximum amount of dividends that we may designate
as capital gain and as “qualified dividend income” (discussed below) with respect to any taxable
year may not exceed the dividends actually paid by us with respect to such year, including dividends paid by us in the succeeding tax
year that relate back to the prior tax year for purposes of determining our dividends-paid deduction.
Qualified
Dividend Income. We may elect to designate a portion of our distributions paid to shareholders as “qualified dividend
income.” A portion of a distribution that is properly designated as qualified dividend income is taxable to non-corporate U.S. shareholders
as capital gain, provided that the shareholder has held the shares with respect to which the distribution is made for more than 60 days
during the 121-day period beginning on the date that is 60 days before the date on which such shares become ex-dividend with respect to
the relevant distribution. The maximum amount of our distributions eligible to be designated as qualified dividend income for a taxable
year is equal to the sum of:
| 1. | the qualified dividend income received by us during such taxable year from non-REIT corporations (including our taxable REIT subsidiaries); |
| 2. | the excess of any “undistributed” “REIT taxable income” (generally, taxable
income of the REIT subject to specified adjustments, including a deduction for dividends paid and excluding net capital gain) recognized
during the immediately preceding year over the U.S. federal income tax paid by us with respect to such undistributed “REIT taxable
income” (generally, taxable income of the REIT subject to specified adjustments, including a deduction
for dividends paid and excluding net capital gain); and |
| 3. | the excess of (i) any income recognized during the immediately preceding year attributable to the sale of a built-in-gain asset
that was acquired in a carry-over basis transaction from a non-REIT “C” corporation with respect to which we are required
to pay U.S. federal income tax, over (ii) the U.S. federal income tax paid by us with respect to such built-in gain. |
Generally, dividends that we receive will be treated
as qualified dividend income for purposes of the first bullet above if (A) the dividends are received from (i) a U.S. corporation
(other than a REIT or a RIC), (ii) any of our taxable REIT subsidiaries, or (iii) a “qualifying foreign corporation,”
and (B) specified holding period requirements and other requirements are met. A foreign corporation (other than a “foreign
personal holding company,” a “foreign investment company,” or “passive foreign investment company”) will
be a qualifying foreign corporation if it is incorporated in a possession of the United States, the corporation is eligible for benefits
of an income tax treaty with the United States that the Secretary of Treasury determines is satisfactory, or the stock of the foreign
corporation on which the dividend is paid is readily tradable on an established securities market in the United States. We generally expect
that an insignificant portion, if any, of our distributions from us will consist of qualified dividend income. If we designate any portion
of a dividend as qualified dividend income, a U.S. shareholder will receive an IRS Form 1099-DIV indicating the amount that will
be taxable to the shareholder as qualified dividend income.
Passive
Activity Losses and Investment Interest Limitations. Distributions we make and gain arising from the sale or exchange by a
U.S. shareholder of our shares will not be treated as passive activity income. As a result, U.S. shareholders generally will not be able
to apply any “passive losses” against this income or gain. Distributions we make, to the extent they do not constitute a return
of capital, generally will be treated as investment income for purposes of computing the investment interest limitation. A U.S. shareholder
may elect, depending on its particular situation, to treat capital gain dividends, capital gains from the disposition of shares and income
designated as qualified dividend income as investment income for purposes of the investment interest limitation, in which case the applicable
capital gains will be taxed at ordinary income rates. We will notify shareholders regarding the portions of our distributions for each
year that constitute ordinary income, return of capital and qualified dividend income.
Distributions
to Holders of Depositary Shares. Owners of depositary shares will be treated for U.S. federal income tax purposes as if they
were owners of the underlying preferred shares represented by such depositary shares. Accordingly, such owners will be entitled to take
into account, for U.S. federal income tax purposes, income and deductions to which they would be entitled if they were direct holders
of underlying preferred shares. In addition, (i) no gain or loss will be recognized for U.S. federal income tax purposes upon the
withdrawal of certificates evidencing the underlying preferred shares in exchange for depositary receipts, (ii) the tax basis of
each share of the underlying preferred shares to an exchanging owner of depositary shares will, upon such exchange, be the same as the
aggregate tax basis of the depositary shares exchanged therefor, and (iii) the holding period for the underlying preferred shares
in the hands of an exchanging owner of depositary shares will include the period during which such person owned such depositary shares.
Dispositions
of Our Shares. If a U.S. shareholder sells, redeems or otherwise disposes of its shares in a taxable transaction, it will recognize
gain or loss for U.S. federal income tax purposes in an amount equal to the difference between the amount of cash and the fair market
value of any property received on the sale or other disposition and the holder’s adjusted basis in the shares for tax purposes.
In general, a U.S. shareholder’s adjusted basis will equal the U.S. shareholder’s acquisition cost, increased by the excess
for net capital gains deemed distributed to the U.S. shareholder (discussed above) less tax deemed paid on it, and reduced by distributions
that are treated as returns on capital, rather than taxable dividends.
In general, capital gains recognized by individuals
and other non-corporate U.S. shareholders upon the sale or disposition of our shares will be subject to a maximum U.S. federal income
tax rate of 20% (excluding the 3.8% tax on “net investment income”), if our shares are held for more than one year, and will
be taxed at ordinary income rates of up to 37% if the stock is held for one year or less. Gains recognized by U.S. shareholders that are
corporations are subject to U.S. federal income tax at a maximum rate of 21% whether or not such gains are classified as long-term capital
gains. The IRS has the authority to prescribe, but has not yet prescribed, Treasury Regulations that would apply a capital gain tax rate
of 25% (which is higher than the long-term capital gain tax rates for non-corporate U.S. shareholders) to a portion of capital gain realized
by a non-corporate U.S. shareholder on the sale of our shares that would correspond to the REIT’s “unrecaptured Section 1250
gain.” U.S. shareholders should consult with their own tax advisors with respect to their capital gain tax liability.
Capital losses recognized by a U.S. shareholder
upon the disposition of our shares that were held for more than one year at the time of disposition will be considered long-term capital
losses and are generally available only to offset capital gain income of the shareholder but not ordinary income (except in the case of
individuals, who may offset up to $3,000 of ordinary income each year). In addition, any loss upon a sale or exchange of our shares by
a U.S. shareholder who has held the shares for six months or less, after applying holding period rules, will be treated as a long-term
capital loss to the extent of distributions that we make that are required to be treated by the U.S. shareholder as long-term capital
gain.
If a shareholder recognizes a loss upon a subsequent
disposition of our shares in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury Regulations
involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss-generating transaction
to the IRS. These regulations, though directed towards “tax shelters,” are broadly written, and apply to transactions that
would not typically be considered tax shelters. The Code imposes significant penalties for failure to comply with these requirements.
U.S. shareholders should consult their tax advisors concerning any possible disclosure obligation with respect to the receipt or disposition
of our shares, or transactions that we might undertake directly or indirectly.
Redemption
of Preferred Shares and Depositary Shares. Whenever we redeem any preferred shares held by the depositary, the depositary will
redeem as of the same redemption date the number of depositary shares representing the preferred shares so redeemed. The treatment accorded
to any redemption by us for cash (as distinguished from a sale, exchange or other disposition) of our preferred shares to a holder of
such preferred shares can only be determined on the basis of the particular facts as to each holder at the time of redemption. In general,
a holder of our preferred shares will recognize capital gain or loss measured by the difference between the amount received by the holder
of such shares upon the redemption and such holder’s adjusted tax basis in the preferred shares redeemed (provided the preferred
shares are held as a capital asset) if such redemption (i) is “not essentially equivalent to a dividend” with respect
to the holder of the preferred shares under Section 302(b)(1) of the Code, (ii) is a “substantially disproportionate”
redemption with respect to the shareholder under Section 302(b)(2) of the Code, or (iii) results in a “complete termination”
of the holder’s interest in all classes of our shares under Section 302(b)(3) of the Code. In applying these tests, there
must be taken into account not only any series or class of the preferred shares being redeemed, but also such holder’s ownership
of other classes of our shares and any options (including stock purchase rights) to acquire any of the foregoing. The holder of our preferred
shares also must take into account any such securities (including options) which are considered to be owned by such holder by reason of
the constructive ownership rules set forth in Sections 318 and 302(c) of the Code.
If the holder of preferred shares owns (actually
or constructively) none of our voting shares, or owns an insubstantial amount of our voting shares, based upon current law, it is probable
that the redemption of preferred shares from such a holder would be considered to be “not essentially equivalent to a dividend.”
However, whether a distribution is “not essentially equivalent to a dividend” depends on all of the facts and circumstances,
and a holder of our preferred shares intending to rely on any of these tests at the time of redemption should consult its tax advisor
to determine their application to its particular situation.
Satisfaction of the “substantially disproportionate”
and “complete termination” exceptions is dependent upon compliance with the respective objective tests set forth in Section 302(b)(2) and
Section 302(b)(3) of the Code. A distribution to a holder of preferred shares will be “substantially disproportionate”
if the percentage of our outstanding voting shares actually and constructively owned by the shareholder immediately following the redemption
of preferred shares (treating preferred shares redeemed as not outstanding) is less than 80% of the percentage of our outstanding voting
shares actually and constructively owned by the shareholder immediately before the redemption, and immediately following the redemption
the shareholder actually and constructively owns less than 50% of the total combined voting power of the Company. Because our preferred
shares are nonvoting shares, a shareholder would have to reduce such holder’s holdings (if any) in our classes of voting shares
to satisfy this test.
If the redemption does not meet any of the tests
under Section 302 of the Code, then the redemption proceeds received from our preferred shares will be treated as a distribution
on our shares as described under “- Taxation of U.S. Shareholders-Taxation of Taxable U.S. Shareholders-Distributions Generally,”
and “- Taxation of Non-U.S. Shareholders-Distributions Generally.” If the redemption of a holder’s preferred shares
is taxed as a dividend, the adjusted basis of such holder’s redeemed preferred shares will be transferred to any other shares held
by the holder. If the holder owns no other shares, under certain circumstances, such basis may be transferred to a related person, or
it may be lost entirely.
With respect to a redemption of our preferred
shares that is treated as a distribution with respect to our shares, which is not otherwise taxable as a dividend, the IRS had proposed
Treasury regulations that would require any basis reduction associated with such a redemption to be applied on a share-by-share basis
that could result in taxable gain with respect to some shares, even though the holder’s aggregate basis for the shares would be
sufficient to absorb the entire amount of the redemption distribution (in excess of any amount of such distribution treated as a dividend).
Additionally, these proposed Treasury regulations did not permit the transfer of basis in the redeemed shares of the preferred shares
to the remaining shares held (directly or indirectly) by the redeemed holder. Instead, the unrecovered basis in our preferred shares would
be treated as a deferred loss to be recognized when certain conditions are satisfied. These proposed Treasury regulations have been withdrawn
and, although the IRS has reaffirmed its support for a share-by-share basis recovery approach, there is no indication as to whether regulations
or other guidance on this issue will be promulgated in the future.
Net
Investment Income Tax. In certain circumstances, certain U.S. shareholders that are individuals, estates or trusts are subject
to a 3.8% tax on “net investment income,” which includes, among other things, dividends on and gains from the sale or other
disposition of REIT shares. U.S. shareholders should consult their own tax advisors regarding this legislation.
Taxation of Tax-Exempt Shareholders
U.S. tax-exempt entities, including qualified
employee pension and profit-sharing trusts and individual retirement accounts, generally are exempt from U.S. federal income taxation.
Such entities, however, may be subject to taxation on their unrelated business taxable income (“UBTI”). While some investments
in real estate may generate UBTI, the IRS has ruled that dividend distributions from a REIT to a tax-exempt entity generally do not constitute
UBTI. Based on that ruling, and provided that (1) a tax-exempt shareholder has not held our shares as “debt financed property”
within the meaning of the Code (i.e., where the acquisition or holding of our shares is financed through a borrowing by the U.S. tax-exempt
shareholder), (2) our shares are not otherwise used in an unrelated trade or business of a U.S. tax-exempt shareholder, and (3) we
do not hold an asset that gives rise to “excess inclusion income,” distributions that we make and income from the sale of
our shares generally should not give rise to UBTI to a U.S. tax-exempt shareholder.
Tax-exempt shareholders that are social clubs,
voluntary employee benefit associations, supplemental unemployment benefit trusts, or qualified group legal services plans exempt from
U.S. federal income taxation under Sections 501(c)(7), (c)(9), or (c)(17) of the Code, respectively, or single parent title-holding corporations
exempt under Section 501(c)(2) and whose income is payable to any of the aforementioned tax-exempt organizations, are subject
to different UBTI rules, which generally require such shareholders to characterize distributions from us as UBTI unless the organization
is able to properly claim a deduction for amounts set aside or placed in reserve for certain purposes so as to offset the income generated
by its investment in our shares. These shareholders should consult with their tax advisors concerning these set aside and reserve requirements.
In certain circumstances, a pension trust that
(1) is described in Section 401(a) of the Code, (2) is tax exempt under Section 501(a) of the Code, and
(3) owns more than 10% of the value of our shares could be required to treat a percentage of the dividends as UBTI, if we are a “pension-held
REIT.” We will not be a pension-held REIT unless:
| 1. | either (1) one pension trust owns more than 25% of the value of our shares, or (2) one or more pension trusts, each individually
holding more than 10% of the value of our shares, collectively own more than 50% of the value of our shares; and |
| 2. | we would not have qualified as a REIT but for the fact that Section 856(h)(3) of the Code
provides that shares owned by such trusts shall be treated, for purposes of the requirement that not more than 50% of the value of the
outstanding shares of a REIT is owned, directly or indirectly, by five or fewer “individuals” (as
defined in the Code to include certain entities), as owned by the beneficiaries of such trusts. |
The percentage of any REIT dividend from a “pension-held
REIT” that is treated as UBTI is equal to the ratio of the UBTI earned by the REIT, treating the REIT as if it were a pension trust
and therefore subject to tax on UBTI, to the total gross income of the REIT. An exception applies where the percentage is less than 5%
for any year, in which case none of the dividends would be treated as UBTI. The provisions requiring pension trusts to treat a portion
of REIT distributions as UBTI will not apply if the REIT is able to satisfy the “not closely held requirement” without relying
upon the “look-through” exception with respect to pension trusts. As a result of certain limitations on the transfer and ownership
of our common and preferred shares contained in our declaration of trust, we do not expect to be classified as a “pension-held REIT,”
and accordingly, the tax treatment described above with respect to pension-held REITs should be inapplicable to our tax-exempt shareholders.
Taxation of Non-U.S. Shareholders
The following discussion addresses the rules governing
U.S. federal income taxation of non-U.S. shareholders. For purposes of this summary, “non-U.S. shareholder” is a beneficial
owner of our shares that is not a U.S. shareholder (as defined above under “- Taxation of U.S. Shareholders-Taxation of Taxable
U.S. Shareholders”) or an entity that is treated as a partnership for U.S. federal income tax purposes. These rules are complex,
and no attempt is made herein to provide more than a brief summary of such rules. Accordingly, the discussion does not address all aspects
of U.S. federal income taxation and does not address state local or foreign tax consequences that may be relevant to a non-U.S. shareholder
in light of its particular circumstances. Prospective non-U.S. shareholders are urged to consult their tax advisors to determine the impact
of U.S. federal, state, local and foreign income tax laws on their ownership of our common shares or preferred shares, including any reporting
requirements.
Distributions
Generally. As described in the discussion below, distributions paid by us with respect to our common shares, preferred shares
and depositary shares will be treated for U.S. federal income tax purposes as either:
| 1. | ordinary income dividends; |
| 2. | long-term capital gain; or |
| 3. | return of capital distributions. |
This discussion assumes that our shares will continue
to be considered regularly traded on an established securities market for purposes of the Foreign Investment in Real Property Tax Act
of 1980 (“FIRPTA”), provisions described below. If our shares are no longer regularly traded on an established securities
market, the tax considerations described below would materially differ.
Ordinary
Income Dividends. A distribution paid by us to a non-U.S. shareholder will be treated as an ordinary income dividend if the
distribution is payable out of our earnings and profits and:
| 1. | not attributable to our net capital gain; or |
| 2. | the distribution is attributable to our net capital gain from the sale of U.S. Real Property Interests, or “USRPIs,” and
the non-U.S. shareholder owns 10% or less of the value of our common shares at all times during the one-year period ending on the date
of the distribution. |
In general, non-U.S. shareholders will not be
considered to be engaged in a U.S. trade or business solely as a result of their ownership of our shares. In cases where the dividend
income from a non-U.S. shareholder’s investment in our shares is, or is treated as, effectively connected with the non-U.S. shareholder’s
conduct of a U.S. trade or business, the non-U.S. shareholder generally will be subject to U.S. federal income tax at graduated rates,
in the same manner as U.S. shareholders are taxed with respect to such dividends. Such income must generally be reported on a U.S. income
tax return filed by or on behalf of the non-U.S. shareholder. The income may also be subject to the 30% branch profits tax in the case
of a non-U.S. shareholder that is a corporation.
Generally, we will withhold and remit to the IRS
30% (or lower applicable treaty rate) of dividend distributions (including distributions that may later be determined to have been made
in excess of current and accumulated earnings and profits) that could not be treated as capital gain distributions with respect to the
non-U.S. shareholder (and that are not deemed to be capital gain dividends for purposes of the FIRPTA withholding rules described
below) unless:
| 1. | a lower treaty rate applies and the non-U.S. shareholder files an IRS Form W-8BEN or Form W-8BEN-E (or applicable successor
form), as applicable, evidencing eligibility for that reduced treaty rate with us; or |
| 2. | the non-U.S. shareholder files an IRS Form W-8ECI (or applicable successor form) with us claiming that the distribution is income
effectively connected with the non-U.S. shareholder’s trade or business; or |
| 3. | the non-U.S. shareholder is a foreign sovereign or controlled entity of a foreign sovereign and also provides an IRS Form W-8EXP
claiming an exemption from withholding under section 892 of the Code. |
Return
of Capital Distributions. Unless (A) our shares constitute a USRPI, as described in “- Dispositions of Our
Shares” below, or (B) either (1) the non-U.S. shareholder’s investment in our shares is effectively connected with
a U.S. trade or business conducted by such non-U.S. shareholder (in which case the non-U.S. shareholder will be subject to the same treatment
as U.S. shareholders with respect to such gain) or (2) the non-U.S. shareholder is a nonresident alien individual who was present
in the United States for 183 days or more during the taxable year and has a “tax home” in the United States (in which case
the non-U.S. shareholder will be subject to a 30% tax on the individual’s net capital gain for the year or such lower rate specified
by an applicable income tax treaty), distributions that we make which are not dividends out of our earnings and profits will not be subject
to U.S. federal income tax. If we cannot determine at the time a distribution is made whether or not the distribution will exceed current
and accumulated earnings and profits, the distribution will be subject to withholding at the rate applicable to dividends. The non-U.S.
shareholder may seek a refund from the IRS of any amounts withheld if it subsequently is determined that the distribution was, in fact,
in excess of our current and accumulated earnings and profits. If our shares constitute a USRPI, as described below, distributions that
we make in excess of the sum of (1) the non-U.S. shareholder’s proportionate share of our earnings and profits, and (2) the
non-U.S. shareholder’s basis in its shares, will be taxed under FIRPTA at the rate of tax, including any applicable capital gains
rates, that would apply to a U.S. shareholder of the same type (e.g., an individual or a corporation, as the case may be), and the collection
of the tax will be enforced by a refundable withholding tax at a rate of 15% of the amount by which the distribution exceeds the non-U.S.
shareholder’s share of our earnings and profits.
Capital
Gain Dividends. A distribution paid by us to a non-U.S. shareholder will be treated as long-term capital gain if the distribution
is paid out of our current or accumulated earnings and profits and:
| 1. | the distribution is attributable to our net capital gain (other than from the sale of USRPIs) and we timely designate the distribution
as a capital gain dividend; or |
| 2. | the distribution is attributable to our net capital gain from the sale of USRPIs and the non-U.S. common shareholder owns more than
10% of the value of common shares at any point during the one-year period ending on the date on which the distribution is paid. |
Long-term capital gain that a non-U.S. shareholder
is deemed to receive from a capital gain dividend that is not attributable to the sale of USRPIs generally will not be subject to U.S.
federal income tax in the hands of the non-U.S. shareholder unless:
| 1. | the non-U.S. shareholder’s investment in our shares is effectively connected with a U.S. trade or business of the non-U.S. shareholder,
in which case the non-U.S. shareholder will be subject to the same treatment as U.S. shareholders with respect to any gain, except that
a non-U.S. shareholder that is a corporation also may be subject to the 30% (or lower applicable treaty rate) branch profits tax; or |
| 2. | the non-U.S. shareholder is a nonresident alien individual who is present in the United States for 183 days or more during the taxable
year and has a “tax home” in the United States in which case the nonresident alien individual will be subject to a 30% tax
on his capital gains. |
Under FIRPTA, distributions that are attributable
to net capital gain from the sale by us of USRPIs and paid to a non-U.S. shareholder that owns more than 10% of the value of our shares
at any time during the one-year period ending on the date on which the distribution is paid will be subject to U.S. tax as income effectively
connected with a U.S. trade or business. The FIRPTA tax will apply to these distributions whether or not the distribution is designated
as a capital gain dividend, and, in the case of a non-U.S. shareholder that is a corporation, such distributions also may be subject to
the 30% (or lower applicable treaty rate) branch profits tax.
Any distribution paid by us that is treated as
a capital gain dividend or that could be treated as a capital gain dividend with respect to a particular non-U.S. shareholder will be
subject to special withholding rules under FIRPTA. We will withhold and remit to the IRS 21% (or, to the extent provided in Treasury
Regulations, 20%) of any distribution that could be treated as a capital gain dividend with respect to the non-U.S. shareholder, whether
or not the distribution is attributable to the sale by us of USRPIs. The amount withheld is creditable against the non-U.S. shareholder’s
U.S. federal income tax liability or refundable when the non-U.S. shareholder properly and timely files a tax return with the IRS.
Certain non-U.S. pension funds that are “qualified
foreign pension funds” as defined by Section 897(l) of the Code and certain non-U.S. publicly traded entities that are
“qualified shareholders” as defined by Section 897(k) of the Code may be entitled to exceptions to the FIRPTA tax
with respect to distributions we pay. Non-U.S. shareholders should consult their tax advisors regarding the application of these exceptions.
Undistributed
Capital Gain. Although the law is not entirely clear on the matter, it appears that amounts designated by us as undistributed
capital gains in respect of our shares held by non-U.S. shareholders generally should be treated in the same manner as actual distributions
by us of capital gain dividends. Under this approach, the non-U.S. shareholder would be able to offset as a credit against their U.S.
federal income tax liability resulting therefrom their proportionate share of the tax paid by us on the undistributed capital gains treated
as long-term capital gains to the non-U.S. shareholder, and generally receive from the IRS a refund to the extent their proportionate
share of the tax paid by us were to exceed the non-U.S. shareholder’s actual U.S. federal income tax liability on such long-term
capital gain. If we were to designate any portion of our net capital gain as undistributed capital gain, a non-U.S. shareholder should
consult its tax advisors regarding taxation of such undistributed capital gain.
Dispositions
of Our Shares. Unless our shares constitute a USRPI, a sale of our shares by a non-U.S. shareholder generally will not be subject
to U.S. federal income taxation under FIRPTA. Generally, subject to the discussion below regarding dispositions by “qualified shareholders”
and “qualified foreign pension funds,” with respect to any particular shareholder, our shares will constitute a USRPI only
if each of the following three statements is true:
| 1. | Fifty percent or more of our assets on any of certain testing dates during a prescribed testing period consist of interests in real
property located within the United States, excluding for this purpose, interests in real property solely in a capacity as creditor; |
| 2. | We are not a “domestically-controlled qualified investment entity.” A domestically-controlled qualified investment entity
includes a REIT, less than 50% of value of which is held directly or indirectly by non-U.S. shareholders at all times during a specified
testing period. Although we believe that we are and will remain a domestically-controlled REIT, because our shares are publicly traded,
we cannot guarantee that we are or will remain a domestically-controlled qualified investment entity; and |
| 3. | Either (a) our shares are not “regularly traded,” as defined by applicable Treasury regulations, on an established
securities market; or (b) our shares are “regularly traded” on an established securities market and the selling non-U.S.
shareholder has held over 10% of our outstanding common shares any time during the five-year period ending on the date of the sale. |
Certain non-U.S. pension funds that are “qualified
foreign pension funds” as defined by Section 897(l) of the Code and certain non-U.S. publicly traded entities that are
“qualified shareholders” as defined by Section 897(k) of the Code may be entitled to exceptions to the FIRPTA tax
with respect to the sale of our shares. Non-U.S. shareholders should consult their tax advisors regarding the application of these exceptions.
Specific wash sales rules applicable to sales
of shares in a domestically-controlled qualified investment entity could result in gain recognition, taxable under FIRPTA, upon the sale
of our shares even if we are a domestically-controlled qualified investment entity. These rules would apply if a non-U.S. shareholder
(1) disposes of our shares within a 30-day period preceding the ex-dividend date of a distribution, any portion of which, but for
the disposition, would have been taxable to such non-U.S. shareholder as gain from the sale or exchange of a USRPI, (2) acquires,
or enters into a contract or option to acquire, other shares of our shares during the 61-day period that begins 30 days prior to such
ex-dividend date, and (3) if our shares are “regularly traded” on an established securities market in the United States,
such non-US stockholder has owned more than 10% of our outstanding shares at any time during the one-year period ending on the date of
such distribution.
If gain on the sale of our shares were subject
to taxation under FIRPTA, the non-U.S. shareholder would be required to file a U.S. federal income tax return and would be subject to
the same treatment as a U.S. shareholder with respect to such gain, subject to the applicable alternative minimum tax and a special alternative
minimum tax in the case of non-resident alien individuals, and, if our common shares were not “regularly traded” on an established
securities market, the purchaser of the shares generally would be required to withhold 15% of the purchase price and remit such amount
to the IRS.
Gain from the sale of our shares that would not
otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a non-U.S. shareholder as follows: (1) if the
non-U.S. shareholder’s investment in our shares is effectively connected with a U.S. trade or business conducted by such non-U.S.
shareholder, the non-U.S. shareholder will be subject to the same treatment as a U.S. shareholder with respect to such gain, or (2) if
the non-U.S. shareholder is a nonresident alien individual who was present in the U.S. for 183 days or more during the taxable year and
has a “tax home” in the United States, the nonresident alien individual will be subject to a 30% tax on the individual’s
capital gain.
Taxation of Holders of Our Warrants and Rights
Warrants.
Holders of our warrants will not generally recognize gain or loss upon the exercise of a warrant. A holder’s basis in the preferred
shares, depositary shares representing preferred shares or common shares, as the case may be, received upon the exercise of the warrant
will be equal to the sum of the holder’s adjusted tax basis in the warrant and the exercise price paid. A holder’s holding
period in the preferred shares, depositary shares representing preferred shares or common shares, as the case may be, received upon the
exercise of the warrant will not include the period during which the warrant was held by the holder. Upon the expiration of a warrant,
the holder will recognize a capital loss in an amount equal to the holder’s adjusted tax basis in the warrant. Upon the sale or
exchange of a warrant to a person other than us, a holder will recognize gain or loss in an amount equal to the difference between the
amount realized on the sale or exchange and the holder’s adjusted tax basis in the warrant. Such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if the warrant was held for more than one year. Upon the sale of the warrant to us,
the IRS may argue that the holder should recognize ordinary income on the sale. Prospective holders of our warrants should consult their
own tax advisors as to the consequences of a sale of a warrant to us.
Rights.
In the event of a rights offering, the tax consequences of the receipt, expiration, and exercise of the rights we issue will be addressed
in detail in a prospectus supplement. Prospective holders of our rights should review the applicable prospectus supplement in connection
with the ownership of any rights and consult their own tax advisors as to the consequences of investing in the rights.
Dividend Reinvestment and Share Purchase Plan
General
We plan to offer shareholders, prospective shareholders
and unit holders the opportunity to participate in our Dividend Reinvestment and Share Purchase Plan, which is referred to herein as the
“DRIP.” Although we do not currently plan to offer any discount in connection with the DRIP, we reserve the right to offer
a discount on shares purchased with reinvested dividends or cash distributions and shares purchased through the optional cash investment
feature.
Amounts Treated as a Distribution
Generally, a DRIP participant will be treated
as having received a distribution with respect to our shares for U.S. federal income tax purposes in an amount determined as described
below.
| 1. | A shareholder who participates in the dividend reinvestment feature of the DRIP and whose dividends are reinvested in our shares purchased
from us will be treated for U.S. federal income tax purposes as having received a distribution from us with respect to our shares equal
to the fair market value of our shares credited to the shareholder’s DRIP account on the date the dividends are reinvested. The
amount of the distribution deemed received (and that will be reported on the Form 1099-DIV received by the shareholder) may exceed
the amount of the cash dividend that was reinvested, due to a discount being offered on the purchase price of the shares purchased. |
| 2. | A shareholder who participates in the dividend reinvestment feature of the DRIP and whose dividends are reinvested in our shares purchased
in the open market, will be treated for U.S. federal income tax purposes as having received (and will receive a Form 1099-DIV reporting)
a distribution from us with respect to its shares equal to the fair market value of our shares credited to the shareholder’s DRIP
account (plus any brokerage fees and any other expenses deducted from the amount of the distribution reinvested) on the date the dividends
are reinvested. If we offer a discount on our shares purchased on the open market in the future, the amount of the distribution the shareholder
will be treated as receiving (and that will be reported on the Form 1099-DIV received by the shareholder) may exceed the cash distribution
reinvested as a result of any such discount. |
| 3. | A shareholder who participates in both the dividend reinvestment and the cash investment features of the DRIP and who purchases our
shares through the cash investment feature of the DRIP will be treated for U.S. federal income tax purposes as having received a distribution
from us with respect to its shares equal to the fair market value of our shares credited to the shareholder’s DRIP account on the
date the shares are purchased less the amount paid by the shareholder for our shares (plus any brokerage fees and any other expenses paid
by the shareholder). |
| 4. | A shareholder who participates in the optional cash purchase through the DRIP will not be treated as receiving a distribution from
us if no discount is offered. |
| 5. | Newly enrolled participants who are making their initial investment in our common shares through the DRIP’s optional cash purchase
feature and therefore are not currently our shareholders should not be treated as receiving a distribution from us, even if a discount
is offered. |
| 6. | Although the tax treatment with respect to a shareholder who participates only in the cash investment feature of the DRIP and does
not participate in the dividend reinvestment feature of the DRIP is not entirely clear, we will report any discount offered as a distribution
to that shareholder on Form 1099-DIV. Shareholders are urged to consult with their tax advisor regarding the tax treatment to them
of receiving a discount on cash investments in our shares made through the DRIP. |
In the situations described above, a shareholder
will be treated as receiving a distribution from us even though no cash distribution is actually received. These distributions will be
taxable in the same manner as all other distributions paid by us, as described above under “- Taxation of U.S. Shareholders-Taxation
of Taxable U.S. Shareholders,” “- Taxation of U.S. Shareholders-Taxation of Tax-Exempt Shareholders,” or “- Taxation
of Non-U.S. Shareholders,” as applicable.
Basis
and Holding Period in Shares Acquired Pursuant to the DRIP. The tax basis for our shares acquired by reinvesting cash distributions
through the DRIP generally will equal the fair market value of our shares on the date of distribution (plus the amount of any brokerage
fees paid by the shareholder). Accordingly, if we offer a discount on the purchase price of our shares purchased with reinvested cash
distributions, the tax basis in our shares would include the amount of any discount. The holding period for our shares acquired by reinvesting
cash distributions will begin on the day following the date of distribution.
The tax basis in our shares acquired through an
optional cash investment generally will equal the cost paid by the participant in acquiring our shares, including any brokerage fees paid
by the shareholder. If we offer a discount on the purchase price of our shares purchased by making an optional cash investment, then the
tax basis in those shares also would include any amounts taxed as a dividend. The holding period for our shares purchased through the
optional cash investment feature of the DRIP generally will begin on the day our shares are purchased for the participant’s account.
Withdrawal
of Shares from the DRIP. When a participant withdraws stock from the DRIP and receives whole shares, the participant will not
realize any taxable income. However, if the participant receives cash for a fractional share, the participant will be required to recognize
gain or loss with respect to that fractional share.
Effect
of Withholding Requirements. Withholding requirements generally applicable to distributions from us will apply to all amounts
treated as distributions pursuant to the DRIP. See “- Information Reporting and Backup Withholding Tax Applicable to Shareholders-U.S.
Shareholders-Generally” and “- Information Reporting and Backup Withholding Tax Applicable to Shareholders-Non-U.S. Shareholders-Generally”
for discussion of the withholding requirements that apply to other distributions that we pay. All withholding amounts will be withheld
from distributions before the distributions are reinvested under the DRIP. Therefore, if a U.S. shareholder is subject to withholding,
distributions which would otherwise be available for reinvestment under the DRIP will be reduced by the withholding amount.
Information Reporting and Backup Withholding
Tax Applicable to Shareholders
U.S. Shareholders - Generally
In general, information-reporting requirements
will apply to payments of distributions on our shares and payments of the proceeds of the sale of our shares to some U.S. shareholders,
unless an exception applies. Further, the payer will be required to withhold backup withholding tax on such payments if:
| 1. | the payee fails to furnish a taxpayer identification number (“TIN”), to the payer or to establish an exemption from backup
withholding; |
| 2. | the IRS notifies the payer that the TIN furnished by the payee is incorrect; |
| 3. | there has been a notified payee under-reporting with respect to interest, dividends or original issue discount described in Section 3406(c) of
the Code; or |
| 4. | there has been a failure of the payee to certify under the penalty of perjury that the payee is not subject to backup withholding
under the Code. |
Some shareholders may be exempt from backup withholding.
Any amounts withheld under the backup withholding rules from a payment to a shareholder will be allowed as a credit against the shareholder’s
U.S. federal income tax liability and may entitle the shareholder to a refund, provided that the required information is furnished to
the IRS.
U.S. Shareholders - Withholding
on Payments in Respect of Certain Foreign Accounts.
As described below, certain future payments made
to “foreign financial institutions” and “non-financial foreign entities” may be subject to withholding at a rate
of 30%. U.S. shareholders should consult their tax advisors regarding the effect, if any, of this withholding provision on their ownership
and disposition of our common stock. See “- Non-U.S. Shareholders - Withholding on Payments to Certain Foreign Entities”
below.
Non-U.S. Shareholders - Generally
Generally, information reporting will apply to
payments or distributions on our shares, and backup withholding described above for a U.S. shareholder will apply, unless the payee certifies
that it is not a U.S. person or otherwise establishes an exemption. The payment of the proceeds from the disposition of our shares to
or through the U.S. office of a U.S. or foreign broker will be subject to information reporting and, possibly, backup withholding as described
above for U.S. shareholders, or the withholding tax for non-U.S. shareholders, as applicable, unless the non-U.S. shareholder certifies
as to its non-U.S. status or otherwise establishes an exemption, provided that the broker does not have actual knowledge that the shareholder
is a U.S. person or that the conditions of any other exemption are not, in fact, satisfied. The proceeds of the disposition by a non-U.S.
shareholder of our shares to or through a foreign office of a broker generally will not be subject to information reporting or backup
withholding. However, if the broker is a U.S. person, a controlled foreign corporation for U.S. federal income tax purposes, or a foreign
person 50% or more of whose gross income from all sources for specified periods is from activities that are effectively connected with
a U.S. trade or business, a foreign partnership 50% or more of whose interests are held by partners who are U.S. persons, or a foreign
partnership that is engaged in the conduct of a trade or business in the United States, then information reporting generally will apply
as though the payment was made through a U.S. office of a U.S. or foreign broker unless the broker has documentary evidence as to the
non-U.S. shareholder’s foreign status and has no actual knowledge to the contrary.
Applicable Treasury regulations provide presumptions
regarding the status of shareholders when payments to the shareholders cannot be reliably associated with appropriate documentation provided
to the payor. If a non-U.S. shareholder fails to comply with the information reporting requirement, payments to such person may be subject
to the full withholding tax even if such person might have been eligible for a reduced rate of withholding or no withholding under an
applicable income tax treaty. Because the application of these Treasury regulations varies depending on the non-U.S. shareholder’s
particular circumstances, non-U.S. shareholders are urged to consult their tax advisor regarding the information reporting requirements
applicable to them.
Backup withholding is not an additional tax. Any
amounts that we withhold under the backup withholding rules will be refunded or credited against the non-U.S. shareholder’s
U.S. federal income tax liability if certain required information is furnished to the IRS. Non-U.S. shareholders should consult their
own tax advisors regarding application of backup withholding in their particular circumstances and the availability of and procedure for
obtaining an exemption from backup withholding under current Treasury regulations.
Non-U.S. Shareholders - Withholding
on Payments to Certain Foreign Entities
The Foreign Account Tax Compliance Act (“FATCA”)
imposes a 30% withholding tax on certain types of payments made to “foreign financial institutions” and certain other non-U.S.
entities unless certain due diligence, reporting, withholding, and certification obligations requirements are satisfied.
As a general matter, FATCA imposes a 30% withholding
tax on dividends in respect of our shares if paid to a foreign entity unless either (i) the foreign entity is a “foreign financial
institution” that undertakes certain due diligence, reporting, withholding, and certification obligations, or in the case of a foreign
financial institution that is a resident in a jurisdiction that has entered into an intergovernmental agreement to implement FATCA, the
entity complies with the diligence and reporting requirements of such agreement, (ii) the foreign entity is not a “foreign
financial institution” and identifies certain of its U.S. investors, or (iii) the foreign entity otherwise is exempted under
FATCA. While withholding under FATCA would have applied to payments of gross proceeds from the sale or other disposition of our shares
on or after January 1, 2019, proposed Treasury Regulations eliminate FATCA withholding on payments of gross proceeds entirely. Taxpayers
generally may rely on these proposed Treasury Regulations until final Treasury Regulations are issued.
If withholding is required under FATCA on a payment
related to our shares, investors that otherwise would not be subject to withholding (or that otherwise would be entitled to a reduced
rate of withholding) generally will be required to seek a refund or credit from the IRS to obtain the benefit of such exemption or reduction
(provided that such benefit is available). Prospective investors should consult their tax advisors regarding the effect of FATCA in their
particular circumstances.
Taxation of Holders of Debt Securities Issued
by our Operating Partnership
The following discussion summarizes certain U.S.
federal income tax considerations relating to the purchase, ownership and disposition of debt securities issued by our Operating Partnership.
This summary assumes the debt securities will be issued with no more than a de minimis amount of original issue discount for U.S.
federal income tax purposes. This summary only applies to investors that will hold their debt securities as “capital assets”
(within the meaning of Section 1221 of the Code) and purchase their debt securities in the initial
offering at their issue price. If such debt securities are purchased at a price other than the offering price, the amortizable bond premium
or market discount rules may apply, which are not described herein. Prospective holders should consult their own tax advisors regarding
these possibilities. This section also does not apply to any debt securities treated as “equity” rather than debt for U.S.
federal income tax purposes.
The tax consequences of owning any debt securities
issued with more than a de minimis original issue discount, floating rate debt securities, convertible or exchangeable debt securities,
indexed debt securities or other debt securities not covered by this discussion that we offer will be discussed in the applicable prospectus
supplement.
U.S. Holders of Debt Securities
This section summarizes the taxation of U.S. Holders
of debt securities that are not tax-exempt organizations. For these purposes, the term “U.S. Holder” is a beneficial owner
of our debt securities that is, for U.S. federal income tax purposes:
| 1. | a citizen or resident of the United States; |
| 2. | a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under
the laws of the United States or of a political subdivision thereof; |
| 3. | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
| 4. | any trust if (1) a U.S. court is able to exercise primary supervision over the administration of such trust and one or more U.S.
persons have the authority to control all substantial decisions of the trust, or (2) it has a valid election in place to be treated
as a U.S. person. |
If an entity or arrangement treated as a partnership
for U.S. federal income tax purposes holds our debt securities, the U.S. federal income tax treatment of a partner generally will depend
upon the status of the partner and the activities of the partnership. A partner of a partnership holding our debt securities should consult
its own tax advisor regarding the U.S. federal income tax consequences to the partner of the acquisition, ownership and disposition of
our debt securities by the partnership.
Payments
of Interest. Interest on a debt security will generally be taxable to a U.S. Holder as ordinary interest income at the time
it is received or accrued, in accordance with the U.S. Holder’s regular method of tax accounting for U.S. federal income tax purposes.
Sale,
Exchange, Retirement, Redemption or Other Taxable Disposition of the Debt Securities. Upon a sale, exchange, retirement, redemption
or other taxable disposition of debt securities, a U.S. Holder generally will recognize taxable gain or loss in an amount equal to the
difference, if any, between the “amount realized” on the disposition and the U.S. Holder’s adjusted tax basis in such
debt securities. The amount realized will include the amount of any cash and the fair market value of any property received for the debt
securities (other than any amount attributable to accrued but unpaid interest, which will be taxable as ordinary income (as described
above under “-Taxation of Holders of Debt Securities Issued by our Operating Partnership-U.S. Holders of Debt Securities-Payments
of Interest”) to the extent not previously included in income). A U.S. Holder’s adjusted tax basis in a debt security generally
will be equal to the cost of the debt security to such U.S. Holder decreased by any payments received on the debt security other than
stated interest. Any such gain or loss generally will be capital gain or loss and will be long-term capital gain or loss if the U.S. Holder’s
holding period for the debt security is more than one year at the time of disposition. For noncorporate U.S. Holders, long-term capital
gain generally will be subject to reduced rates of taxation. The deductibility of capital losses against ordinary income is subject to
certain limitations.
Information
Reporting and Backup Withholding. Payments of interest on, or the proceeds of the sale, exchange or other taxable disposition
(including a retirement or redemption) of, a debt security are generally subject to information reporting unless the U.S. Holder is an
exempt recipient (such as a corporation). Such payments may also be subject to U.S. federal backup withholding unless (1) the U.S.
Holder is an exempt recipient (such as a corporation), or (2) prior to payment, the U.S. Holder provides a taxpayer identification
number and certifies as required on a duly completed and executed IRS Form W-9 (or permitted substitute or successor form), and otherwise
complies with the requirements of the backup withholding rules. Backup withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be allowed as a refund or credit against that U.S. Holder’s U.S. federal income tax liability
provided the required information is timely furnished to the IRS.
Net
Investment Income. In certain circumstances, certain U.S. Holders that are individuals, estates, or trusts are subject to a
3.8% tax on “net investment income,” which includes, among other things, interest income and net gains from the sale, exchange
or other taxable disposition (including a retirement or redemption) of the debt securities, unless such interest payments or net gains
are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive
activities or securities or commodities trading activities). Investors in debt securities should consult their own tax advisors regarding
the applicability of this tax to their income and gain in respect of their investment in the debt securities.
Tax-Exempt Holders of Debt Securities
In general, a tax-exempt organization is exempt
from U.S. federal income tax on its income, except to the extent of its UBTI (as defined above under “- Taxation of U.S. Shareholders-Taxation
of U.S. Tax-Exempt Shareholders”). Interest income accrued on the debt securities and gain recognized in connection with dispositions
of the debt securities generally will not constitute UBTI unless the tax-exempt organization holds the debt securities as debt-financed
property (e.g., the tax-exempt organization has incurred “acquisition indebtedness” with respect to such debt security). Before
making an investment in the debt securities, a tax-exempt investor should consult its tax advisors with regard to UBTI and the suitability
of the investment in the debt securities.
Non-U.S. Holders of Debt Securities
The following discussion addresses the rules governing
U.S. federal income taxation of Non-U.S. Holders of debt securities. For purposes of this summary, “Non-U.S. Holder” is a
beneficial owner of our debt securities that is not (i) a U.S. Holder (as defined above under “- U.S. Holders of Debt Securities”)
or (ii) an entity treated as a partnership for U.S. federal income tax purposes.
Payments
of Interest. Subject to the discussions below concerning backup withholding and FATCA (as defined below), all payments of interest
on the debt securities made to a Non-U.S. Holder will not be subject to U.S. federal income or withholding taxes under the “portfolio
interest” exception of the Code, provided that:
| 1. | interest on the debt security is not effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the
United States (or, if provided by an applicable income tax treaty, is not attributable to a United States permanent establishment), |
| 2. | the Non-U.S. Holder does not own, actually or constructively, 10% or more of the capital or profits interest in the Operating Partnership, |
| 3. | the Non-U.S. Holder is not a controlled foreign corporation with respect to which the Operating Partnership is a “related person”
(within the meaning of Section 864(d)(4) of the Code), |
| 4. | the Non-U.S. Holder is not a bank whose receipt of interest on a debt security is described in Section 881(c)(3)(A) of the
Code, and |
| 5. | either (1) the Non-U.S. Holder provides its name and address on an IRS Form W-8BEN or IRS Form W-8BEN-E (or other applicable
form) and certifies, under penalties of perjury, that it is not a U.S. Holder, or (2) the non-U.S. Holder holds its debt securities
through certain foreign intermediaries and satisfies the certification requirements of applicable United States Treasury regulations.
Special certification rules apply to non-U.S. Holders that are pass-through entities rather than corporations or individuals. |
The applicable Treasury Regulations provide alternative
methods for satisfying the certification requirement described above. In addition, under these Treasury Regulations, special rules apply
to pass-through entities and this certification requirement may also apply to beneficial owners of pass-through entities. If a Non-U.S.
Holder cannot satisfy the requirements described above, payments of interest will generally be subject to the 30% U.S. federal withholding
tax, unless the Non-U.S. Holder provides the applicable withholding agent with a properly executed (1) IRS Form W-8BEN or IRS
Form W-8BEN-E (or other applicable form) claiming an exemption from or reduction in withholding under an applicable income tax treaty
or (2) IRS Form W-8ECI (or other applicable form) stating that interest paid on the debt securities is not subject to U.S. federal
withholding tax because it is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States
(as discussed below under “-Non-U.S. Holders of Debt Securities-Income Effectively Connected with a U.S. Trade or Business”).
Sale,
Exchange, Retirement, Redemption or Other Taxable Disposition of the Debt Securities. Subject to the discussions below concerning
backup withholding and FATCA and except with respect to accrued but unpaid interest, which generally will be taxable as interest and may
be subject to the rules described above under “- Non-U.S. Holders of Debt Securities-Payments of Interest,” a Non-U.S.
Holder generally will not be subject to U.S. federal income or withholding tax on the receipt of payments of principal on a debt security,
or on any gain recognized upon the sale, exchange, retirement, redemption or other taxable disposition of a debt security, unless:
| 1. | such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business within the United States, in which
case such gain will be taxed as described below under “- Non-U.S. Holders of Debt Securities-Income Effectively Connected with a
U.S. Trade or Business,” or |
| 2. | such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition,
and certain other conditions are met, in which case such Non-U.S. Holder will be subject to tax at 30% (or, if applicable, a lower treaty
rate) on the gain derived from such disposition, which may be offset by U.S. source capital losses. |
Income
Effectively Connected with a U.S. Trade or Business. If a Non-U.S. Holder is engaged in a trade or business in the United States,
and if interest on the debt securities or gain realized on the sale, exchange or other taxable disposition (including a retirement or
redemption) of the debt securities is effectively connected with the conduct of such trade or business, the Non-U.S. Holder generally
will be subject to regular U.S. federal income tax on such income or gain in the same manner as if the Non-U.S. Holder were a U.S. Holder.
If the Non-U.S. Holder is eligible for the benefits of an income tax treaty between the United States and the Non-U.S. Holder’s
country of residence, any “effectively connected” income or gain generally will be subject to U.S. federal income tax only
if it is also attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States. In addition,
if such a Non-U.S. Holder is a foreign corporation, such holder may also be subject to a branch profits tax equal to 30% (or such lower
rate provided by an applicable income tax treaty) of its effectively connected earnings and profits, subject to certain adjustments. Payments
of interest that are effectively connected with a U.S. trade or business will not be subject to the 30% U.S. federal withholding tax provided
that the Non-U.S. Holder claims exemption from withholding. To claim exemption from withholding, the Non-U.S. Holder must certify its
qualification, which generally can be done by filing a properly executed IRS Form W-8ECI (or other applicable form).
Information
Reporting and Backup Withholding. Generally, we must report annually to the IRS and to Non-U.S. Holders the amount of interest
paid to Non-U.S. Holders and the amount of tax, if any, withheld with respect to those payments. Copies of these information returns reporting
such interest and withholding may also be made available under the provisions of a specific treaty or agreement to the tax authorities
of the country in which the Non-U.S. Holder resides. In general, a Non-U.S. Holder will not be subject to backup withholding or additional
information reporting requirements with respect to payments of interest that we make, provided that the statement described above in last
bullet point under “- Non-U.S Holders of Debt Securities-Interest” has been received and we do not have actual knowledge or
reason to know that the holder is a U.S. person, as defined under the Code, that is not an exempt recipient. In addition, proceeds from
a sale or other disposition of a debt security by a Non-U.S. Holder generally will be subject to information reporting and, depending
on the circumstances, backup withholding with respect to payments of the proceeds of the sale or disposition (including a retirement or
redemption) of a debt security within the United States or conducted through certain U.S. or U.S.-related financial intermediaries, unless
the statement described above has been received and we do not have actual knowledge or reason to know that the holder is a U.S. person.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund
or a credit against a non-U.S. holder’s U.S. federal income tax liability if the required information is furnished in a timely manner
to the IRS.
Additional
Withholding Requirements. As discussed above under “- Information Reporting and Backup Withholding Tax Applicable to
Shareholders-Non-U.S. Shareholders-Withholding on Payments to Certain Foreign Entities,” FATCA imposes a 30% withholding tax on
certain types of payments made to “foreign financial institutions” and certain other non-U.S. entities unless certain due
diligence, reporting, withholding, and certification obligations requirements are satisfied.
As a general matter, payments to Non-U.S. Holders
that are foreign entities (whether as beneficial owner or intermediary) of interest on a debt obligation of a U.S. issuer will be subject
to a withholding tax (separate and apart from, but without duplication of, the withholding tax described above) at a rate of 30%, unless
various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or
accounts with those entities) have been satisfied. While withholding under FATCA would have applied to payments of gross proceeds from
the sale or other disposition of a debt obligation of a U.S. issuer on or after January 1, 2019, proposed Treasury Regulations eliminate
FATCA withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final
Treasury Regulations are issued.
If withholding is required under FATCA on a payment
related to the debt securities, Non-U.S. Holders that otherwise would not be subject to withholding (or that otherwise would be entitled
to a reduced rate of withholding) generally will be required to seek a refund or credit from the IRS to obtain the benefit of such exemption
or reduction (provided that such benefit is available). Prospective investors should consult their tax advisors regarding the effect of
FATCA in their particular circumstances.
Other Tax Considerations
State, Local and Foreign Taxes
We may be required to pay tax in various state
or local jurisdictions, including those in which we transact business, and our shareholders may be required to pay tax in various state
or local jurisdictions, including those in which they reside. Our state and local tax treatment may not conform to the U.S. federal income
tax consequences discussed above. In addition, a shareholder’s state and local tax treatment may not conform to the U.S. federal
income tax consequences discussed above. Consequently, prospective investors should consult with their tax advisors regarding the effect
of state and local tax laws on an investment in our shares and depositary shares.
A portion of our income is earned through our
taxable REIT subsidiaries. The taxable REIT subsidiaries are subject to U.S. federal, state and local income tax at the full applicable
corporate rates. In addition, a taxable REIT subsidiary will be limited in its ability to deduct interest payments in excess of a certain
amount made directly or indirectly to us. To the extent that our taxable REIT subsidiaries and we are required to pay U.S. federal, state
or local taxes, we will have less cash available for distribution to shareholders.
Tax Shelter Reporting
If a holder recognizes a loss as a result of a
transaction with respect to our shares of at least (i) for a holder that is an individual, S corporation, trust or a partnership
with at least one non-corporate partner, $2 million or more in a single taxable year or $4 million or more in a combination of taxable
years, or (ii) for a holder that is either a corporation or a partnership with only corporate partners, $10 million or more in a
single taxable year or $20 million or more in a combination of taxable years, such holder may be required to file a disclosure statement
with the IRS on Form 8886. Direct shareholders of portfolio securities are in many cases exempt from this reporting requirement,
but shareholders of a REIT currently are not excepted. The fact that a loss is reportable under these regulations does not affect the
legal determination of whether the taxpayer’s treatment of the loss is proper. Shareholders should consult their tax advisors to
determine the applicability of these regulations in light of their individual circumstances.
Legislative or Other Actions Affecting REITs
The rules dealing with U.S. federal income
taxation are constantly under review by persons involved in the legislative process and by the IRS and the U.S. Treasury Department. We
cannot give you any assurances as to whether, or in what form, any proposals affecting REITs or their shareholders might be enacted, but
these changes might include, in particular, increases in the U.S. federal income tax rates that apply to various categories of holders
of our shares in certain circumstances, possibly with retroactive effect. Changes to the U.S. federal tax laws and interpretations thereof
could adversely affect an investment in our shares. Investors should consult with their tax advisors regarding the effect of potential
changes to the U.S. federal tax laws and on an investment in our shares.
Plan
of Distribution
Unless otherwise set forth in a prospectus supplement
accompanying this prospectus, we and the Operating Partnership may sell the securities offered pursuant to this prospectus to or through
one or more underwriters or dealers, or we and the Operating Partnership may sell the securities to investors directly or through agents.
Any such underwriter, dealer or agent involved in the offer and sale of the securities will be named in the applicable prospectus supplement.
We and the Operating Partnership may sell securities directly to investors on our own behalf in those jurisdictions where we are authorized
to do so.
Underwriters may offer and sell the securities
at a fixed price or prices which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. We and the Operating Partnership also may, from time to time, authorize dealers or agents to offer
and sell the securities upon such terms and conditions as may be set forth in the applicable prospectus supplement. In connection with
the sale of any of the securities, underwriters may receive compensation from us in the form of underwriting discounts or commissions
and may also receive commissions from purchasers of the securities for whom they may act as agent. Underwriters may sell the securities
to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters
or commissions from the purchasers for whom they may act as agents.
Our common shares may also be sold in one or more
of the following transactions: (i) block transactions (which may involve crosses) in which a broker-dealer may sell all or a portion
of such shares as agent, but may position and resell all or a portion of the block as principal to facilitate the transaction; (ii) purchases
by any such broker-dealer as principal, and resale by such broker-dealer for its own account pursuant to a prospectus supplement; (iii) a
special offering, an exchange distribution or a secondary distribution in accordance with applicable NYSE or other stock exchange, quotation
system or over-the-counter market rules; (iv) ordinary brokerage transactions and transactions in which any such broker-dealer solicits
purchasers; (v) sales “at the market” to or through a market maker or into an existing trading market, on an exchange
or otherwise, for such shares; and (vi) sales in other ways not involving market makers or established trading markets, including
direct sales to purchasers.
Any underwriting compensation paid by us or the
Operating Partnership to underwriters or agents in connection with the offering of the securities, and any discounts or concessions or
commissions allowed by underwriters to participating dealers, will be set forth in the applicable prospectus supplement. Dealers and agents
participating in the distribution of the securities may be deemed to be underwriters, and any discounts and commissions received by them,
and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions.
Underwriters, dealers and agents may be entitled,
under agreements entered into with us or the Operating Partnership, to indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act. Unless otherwise set forth in an accompanying prospectus supplement, the obligations of
any underwriters to purchase any of the securities will be subject to certain conditions precedent, and the underwriters will be obligated
to purchase all of such securities, if any are purchased.
Underwriters, dealers and agents may engage in
transactions with, or perform services for, us, the Operating Partnership and our respective affiliates in the ordinary course of business.
If indicated in the prospectus supplement, we
and the Operating Partnership may authorize underwriters or other agents to solicit offers by institutions to purchase securities from
us or the Operating Partnership pursuant to contracts providing for payment and delivery on a future date. Institutions with which we
may make these delayed delivery contracts include commercial and savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others. The obligations of any purchaser under any such delayed delivery contract will be
subject to the condition that the purchase of the securities shall not at the time of delivery be prohibited under the laws of the jurisdiction
to which the purchaser is subject. The underwriters and other agents will not have any responsibility with regard to the validity or performance
of these delayed delivery contracts.
In connection with the offering of the securities
hereby, certain underwriters, and selling group members and their respective affiliates may engage in transactions that stabilize, maintain
or otherwise affect the market price of the applicable securities. Such transactions may include stabilization transactions effected in
accordance with Rule 104 of Regulation M promulgated by the SEC pursuant to which such persons may bid for or purchase securities
for the purpose of stabilizing their market price. The underwriters in an offering of securities may also create a “short position”
for their account by selling more securities in connection with the offering than they are committed to purchase from us or the Operating
Partnership. In such case, the underwriters could cover all or a portion of such short position by either purchasing securities in the
open market following completion of the offering of such securities or by exercising any overallotment option granted to them by us or
the Operating Partnership. In addition, the managing underwriter may impose “penalty bids” under contractual arrangements
with other underwriters, which means that they can reclaim from an underwriter (or any selling group member participating in the offering)
for the account of the other underwriters, the selling concession with respect to securities that are distributed in the offering but
subsequently purchased for the account of the underwriters in the open market. Any of the transactions described in this paragraph or
comparable transactions that are described in any accompanying prospectus supplement may result in the maintenance of the price of the
securities at a level above that which might otherwise prevail in the open market. None of such transactions described in this paragraph
or in an accompanying prospectus supplement are required to be taken by any underwriters and, if they are undertaken, may be discontinued
at any time without notice.
We and the Operating Partnership may sell the
securities in exchange in whole or part for consideration other than cash. This consideration may consist of services or products, whether
tangible or intangible, and including services or products we may use in our business; outstanding debt or equity securities of our company
or one or more of its subsidiaries; debt or equity securities or assets of other companies, including in connection with investments,
joint ventures or other strategic transactions, or acquisitions; release of claims or settlement of disputes; and satisfaction of obligations,
including obligations to make payments to distributors or other suppliers and payment of interest on outstanding obligations. We and the
Operating Partnership may sell the securities as part of a transaction in which outstanding debt or equity securities of our company or
one or more of our subsidiaries are surrendered, converted, exercised, canceled or transferred.
Our common shares are listed on the NYSE under
the symbol “KRG.” Any securities that we or the Operating Partnership issue, other than common shares, will be new issues
of securities with no established trading market and may or may not be listed on a national securities exchange, quotation system or over-the-counter
market. Any underwriters or agents to or through which securities are sold by us or the Operating Partnership may make a market in such
securities, but such underwriters or agents will not be obligated to do so and any of them may discontinue any market making at any time
without notice. No assurance can be given as to the liquidity of or trading market for any securities sold by us or the Operating Partnership.
Legal
Matters
The validity of the securities offered by means
of this prospectus and certain U.S. federal income tax matters have been passed upon for us and the Operating Partnership by Hogan Lovells
US LLP.
Experts
The consolidated financial statements and related
schedule III of the Company as of December 31, 2023 and 2022, and for each of the years in the three-year period ended December 31,
2023, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2023,
have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent registered
public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing.
The consolidated financial statements and related
schedule III of the Operating Partnership as of December 31, 2023 and 2022, and for each of the years in the three-year period ended
December 31, 2023, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31,
2023, have been incorporated by reference herein and in the registration statement in reliance upon the reports of KPMG LLP, independent
registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and
auditing.
Where
to Find Additional Information
We and the Operating Partnership have filed with
the SEC a “shelf” registration statement on Form S-3, including exhibits, schedules and amendments filed with the registration
statement, of which this prospectus is a part, under the Securities Act, with respect to the securities that may be offered by this prospectus.
This prospectus is a part of that registration statement but does not contain all of the information in the registration statement. We
and the Operating Partnership have omitted parts of the registration statement in accordance with the rules and regulations of the
SEC. For further information with respect to us, the Operating Partnership and the securities that may be offered by this prospectus,
reference is made to the registration statement, including the exhibits and schedules to the registration statement. Statements contained
in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete and,
where that contract or other document has been filed as an exhibit to the registration statement, each statement in this prospectus is
qualified in all respects by the exhibit to which the reference relates.
We and the Operating Partnership are subject to
the informational requirements of the Exchange Act, and, in accordance therewith, we and the Operating Partnership are required to file
annual, quarterly and current reports, proxy statements and other information with the SEC. Our SEC filings, including the registration
statement and its exhibits and schedules, are available to you on the SEC’s website (http://www.sec.gov), which contains
reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The reference
to the SEC’s Internet site is intended to be an inactive textual reference only. We maintain a website at http://www.kiterealty.com,
where you can also find any document we and the Operating Partnership file with the SEC. You should not consider information on our website
to be part of this prospectus.
Our securities are listed on the NYSE, and all
material filed by us with the NYSE can be inspected at the offices of the NYSE, 11 Wall Street, New York, New York 10005.
Incorporation
of Certain Information by Reference
SEC rules allow us and the Operating Partnership
to incorporate information into this prospectus by reference, which means that we and the Operating Partnership disclose important information
to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part
of this prospectus, except to the extent superseded by information contained herein or by information contained in documents filed with
or furnished to the SEC after the date of this prospectus. This prospectus incorporates by reference the documents set forth below that
have been previously filed with the SEC:
We also incorporate by reference into this prospectus
additional documents that we may file with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act from the date of
this prospectus until we have sold all of the securities to which this prospectus relates or the offering is otherwise terminated; provided,
however, that we are not incorporating any information furnished under either Item 2.02 or Item 7.01 of any Current Report on Form 8-K.
You may request a copy of these filings, at no
cost, by contacting Investor Relations, Kite Realty Group, 30 S. Meridian Street, Suite 1100, Indianapolis, IN 46204, by
telephone at 317-577-5600 or by visiting our website, www.kiterealty.com. The information contained on our website is not part
of this prospectus. Our reference to our website is intended to be an inactive textual reference only.
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses,
other than underwriting discounts and commissions, payable by us and the Operating Partnership in connection with the sale and distribution
of the securities being registered.
| SEC Registration Fee | |
$ | | * |
| Accountant’s Fees and Expenses | |
| | ** |
| Legal Fees and Expenses | |
| | ** |
| Printing Expenses | |
| | ** |
| Miscellaneous | |
| | ** |
| TOTAL | |
$ | | * |
| * | In accordance with Rule 456(b) and as set forth in footnote (2) to the “Calculation of Registration Fee”
table on the front cover page of this registration statement, we and the Operating Partnership are deferring payment of the registration
fee for the securities. |
| ** | The applicable prospectus supplement will set forth the estimated aggregate amount of expenses payable in respect of any offering
of securities. |
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Maryland law permits a Maryland REIT to include
in its declaration of trust a provision eliminating the liability of its trustees and officers to the REIT and its shareholders for money
damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or
(b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. Our declaration of
trust contains a provision that limits the liability of our trustees and officers to us and our shareholders to the maximum extent permitted
by Maryland law.
The Maryland REIT law permits a Maryland REIT
to indemnify and advance expenses to its trustees, officers, employees and agents to the same extent as permitted by the MGCL for directors
and officers of Maryland corporations. The MGCL permits a corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding
to which they may be a party by reason of their service in those or other capacities unless it is established that (a) the act or
omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or
(ii) was a result of active and deliberate dishonesty, (b) the director or officer actually received an improper personal benefit
in money, property or services, or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe
that the act or omission was unlawful. However, Maryland law prohibits indemnifying present and former trustees and officers for an adverse
judgment in an action by the corporation or in a derivative action or if the trustee or officer was adjudged to be liable for an improper
personal benefit.
Our declaration of trust provides that we shall
indemnify, to the maximum extent permitted by Maryland law in effect from time to time, any individual who is a present or former trustee
or officer, including any individual who, at our request, serves or has served as a director, officer, partner, trustee, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or
liability to which such person may become subject or which such person may incur by reason of service in such capacity. In accordance
with the MGCL and our declaration of trust, our bylaws require us, as a condition to advancement of expenses, to obtain (a) a written
affirmation by the trustee or officer of his or her good faith belief that he or she has met the applicable standard of conduct necessary
for indemnification and (b) a written undertaking by or on his or her behalf to repay the amount paid or reimbursed by us if it shall
ultimately be determined that the applicable standard of conduct was not met. We have the power, with the approval of our board of trustees,
to provide such indemnification or payment or reimbursement of expenses to any present or former trustee or officer who served a predecessor
of our Company and to any employee or agent of our Company or a predecessor of our Company. Maryland law also requires us to indemnify
a trustee or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made
a party by reason of his or her service in that capacity.
In addition, we have entered into indemnification
agreements with each of our trustees and executive officers to provide for indemnification to the maximum extent permitted by Maryland
law.
The partnership agreement of our Operating Partnership
provides that our Operating Partnership is required to indemnify, to the fullest extent permitted by Delaware law, (1) us, (2) the
respective trustees, directors and officers of the Operating Partnership and the Company, and (3) such other persons (including affiliates
of the Company, the Operating Partnership or a limited partner) as we may designate from time to time (whether before or after the event
giving rise to potential liability) in our sole and absolute discretion, unless it is established by a final determination of a court
of competent jurisdiction that: (a) the act or omission of the indemnitee was material to the matter giving rise to the proceeding
and either was committed in bad faith or was the result of active and deliberate dishonesty, (b) the indemnitee actually received
an improper personal benefit in money, property or services, or (c) in the case of any criminal proceeding, the indemnitee had reasonable
cause to believe that the act or omission was unlawful.
ITEM 16. EXHIBITS.
| Exhibit No. |
|
Description |
| 1.1* |
|
Form of Common Shares Underwriting Agreement |
| 1.2* |
|
Form of Preferred Shares Underwriting Agreement |
| 1.3* |
|
Form of Depositary Shares Underwriting Agreement |
| 1.4* |
|
Form of Warrants Underwriting Agreement |
| 1.5* |
|
Form of Rights Underwriting Agreement |
| 1.6* |
|
Form of Debt Securities Underwriting Agreement |
| 3.1 |
|
Articles of Amendment and Restatement of Declaration of Trust of Kite Realty Group Trust, as supplemented and amended (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of Kite Realty Group Trust filed with the SEC on February 28, 2022) |
| 3.2 |
|
Third Amended and Restated Bylaws of Kite Realty Group Trust, effective November 8, 2023 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Kite Realty Group Trust filed with the SEC on November 9, 2023) |
| 4.1* |
|
Form of Deposit Agreement for Depositary Shares |
| 4.2* |
|
Form of Equity Warrant Agreement |
| 4.3* |
|
Form of Rights Agreement |
| 4.4 |
|
Indenture, dated as of
September 26, 2016, between Kite Realty Group, L.P., as issuer, and U.S. Bank National Association, as trustee (incorporated
by reference to Exhibit 4.1 to the Current Report on Form 8-K of Kite Realty Group Trust and Kite Realty Group, L.P. filed
with the SEC on September 27, 2016) |
| 4.5* |
|
Form of Debt Security |
| 5.1 |
|
Opinion of Hogan Lovells US LLP regarding the legality of the securities being registered |
| 8.1 |
|
Opinion of Hogan Lovells US LLP regarding certain tax matters |
| * | To be filed, if necessary, by amendment or incorporated by reference in connection with the offering of specific securities. |
ITEM 17. UNDERTAKINGS.
| (a) | The undersigned registrants hereby undertake: |
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the
“Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in this registration statement
or any material change to such information in this registration statement; |
provided, however, that subparagraphs (i), (ii) and
(iii) of this section do not apply if the information required to be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is part of this registration statement.
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the
termination of the offering. |
| (4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
| (i) | Each prospectus filed by either registrant pursuant to Rule 424(b)(3) shall be deemed to be part of this registration statement
as of the date the filed prospectus was deemed part of and included in this registration statement; and |
| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in
reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing
the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in this registration
statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of
sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and
any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus
that is a part of this registration statement or made in a document incorporated or deemed incorporated by reference into this registration
statement or prospectus that is a part of this registration statement will, as to a purchaser with a time of contract of sale prior to
such effective date, supersede or modify any statement that was made in this registration statement or prospectus that was part of this
registration statement or made in any such document immediately prior to such effective date; or |
| (5) | That, for the purpose of determining liability of the registrants under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: |
Each of the undersigned registrants undertakes
that in a primary offering of securities of such undersigned registrant pursuant to this registration statement, regardless of the underwriting
method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following
communications, such undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities
to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to
by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) | The undersigned registrants hereby undertake that, for the purpose of determining any liability under the Securities Act of 1933,
each filing of the registrants’ annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein and the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. |
| (c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of either of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by either
or both of the registrants of expenses incurred or paid by a trustee, officer or controlling person of either registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee, officer or controlling person in connection with the securities
being registered, the registrants will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue. |
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, as amended, each registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis, State of Indiana, on June 7, 2024.
| |
KITE REALTY
GROUP TRUST |
| |
|
| |
By: |
/s/ JOHN A. KITE |
| |
John A. Kite |
| |
Chairman
and Chief Executive Officer |
| |
|
| |
KITE REALTY
GROUP, L.P. |
| |
|
| |
By: |
Kite Realty Group Trust, sole
general partner |
| |
|
| |
By: |
/s/ JOHN A. KITE |
| |
John A. Kite |
| |
Chairman
and Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes
and appoints John A. Kite and Heath R. Fear, and each of them, such person’s true and lawful attorneys-in-fact and agents, with
full power of substitution and resubstitution, from such person and in each person’s name, place and stead, in any and all capacities,
to sign any and all pre- and post-effective amendments to this registration statement, any subsequent registration statement for the same
offering which may be filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and any and all pre- or post-effective
amendments thereto and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities
and Exchange Commission, granting unto said attorney-in-facts and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as that person might or could
do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or any substitute therefore may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| /s/ JOHN A. KITE |
Chairman, Chief Executive Officer, and Trustee
(Principal Executive Officer) |
June 7, 2024 |
| John A. Kite |
|
|
| /s/ HEATH R. FEAR |
Executive Vice President and Chief Financial Officer
(Principal Financial Officer) |
June 7, 2024 |
| Heath R. Fear |
|
|
| /s/ DAVID E. BUELL |
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer) |
June 7, 2024 |
| David E. Buell |
|
|
| /s/ BONNIE S. BIUMI |
Trustee |
June 7, 2024 |
| Bonnie S. Biumi |
|
|
| /s/ DERRICK BURKS |
Trustee |
June 7, 2024 |
| Derrick Burks |
|
|
| /s/ VICTOR J. COLEMAN |
Trustee |
June 7, 2024 |
| Victor J. Coleman |
|
|
| /s/ STEVEN P. GRIMES |
Trustee |
June 7, 2024 |
| Steven P. Grimes |
|
|
| /s/ CHRISTIE B. KELLY |
Trustee |
June 7, 2024 |
| Christie B. Kelly |
|
|
| /s/ PETER L. LYNCH |
Trustee |
June 7, 2024 |
| Peter L. Lynch |
|
|
| /s/ DAVID R. O’REILLY |
Trustee |
June 7, 2024 |
| David R. O’Reilly |
|
|
| /s/ BARTON R. PETERSON |
Trustee |
June 7, 2024 |
| Barton R. Peterson |
|
|
| /s/ CHARLES H. WURTZEBACH |
Trustee |
June 7, 2024 |
| Charles H. Wurtzebach |
|
|
| /s/ CAROLINE L. YOUNG |
Trustee |
June 7, 2024 |
| Caroline L. Young |
|
|
Exhibit 5.1
 |
Hogan Lovells US LLP
Columbia Square
555 Thirteenth Street, NW
Washington, DC 20004
T +1 202 637 5600
F +1 202 637 5910
www.hoganlovells.com |
June 7, 2024
Kite Realty Group Trust
Kite Realty Group, L.P.
30 S. Meridian Street
Suite 1100
Indianapolis, IN 46204
To the addressees referred to above:
We are acting as counsel to Kite Realty Group
Trust, a Maryland real estate investment trust (the “Company”), and Kite Realty Group, L.P., a Delaware limited partnership
(the “Operating Partnership”), in connection with their registration statement on Form S-3, as amended (the “Registration
Statement”), filed with the Securities and Exchange Commission relating to the proposed public offering of an unlimited amount
of one or more series of the following securities: (i) common shares of beneficial interest of the Company, par value $0.01 per
share (the “Common Shares”), (ii) preferred shares of beneficial interest of the Company, par value $0.01 per
share (the “Preferred Shares”), (iii) subscription rights to purchase Common Shares (the “Rights”),
(iv) Preferred Shares represented by depositary receipts (the “Depositary Shares”), (v) warrants to purchase
Preferred Shares (the “Preferred Share Warrants”), (vi) warrants to purchase Common Shares (the “Common
Share Warrants”), (vii) warrants to purchase Depositary Shares (the “Depositary Share Warrants”), and
(viii) debt securities of the Operating Partnership (the “Debt Securities” and, together with the Common Shares,
Preferred Shares, Rights, Depositary Shares, Preferred Share Warrants, Common Share Warrants and Depositary Share Warrants, the “Securities”),
all of which may be sold from time to time and on a delayed or continuous basis, as set forth in the prospectus which forms a part of
the Registration Statement, and as to be set forth in one or more supplements to the prospectus. This opinion letter is furnished to
you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. § 229.601(b)(5),
in connection with the Registration Statement.
For purposes of this opinion letter, we have
examined copies of such agreements, instruments and documents as we have deemed an appropriate basis on which to render the opinions
hereinafter expressed. In our examination of the aforesaid documents, we have assumed the genuineness of all signatures, the legal capacity
of all natural persons, the accuracy and completeness of all documents submitted to us, the authenticity of all original documents, and
the conformity to authentic original documents of all documents submitted to us as copies (including pdfs). As to all matters of fact,
we have relied on the representations and statements of fact made in the documents so reviewed, and we have not independently established
the facts so relied on. This opinion letter is given, and all statements herein are made, in the context of the foregoing.
Hogan Lovells US
LLP is a limited liability partnership registered in the state of Delaware. “Hogan Lovells” is an international legal practice
that includes Hogan Lovells US LLP and Hogan Lovells International LLP, with offices in: Alicante Amsterdam Baltimore Berlin Beijing
Birmingham Boston Brussels Colorado Springs Denver Dubai Dusseldorf Frankfurt Hamburg Hanoi Ho Chi Minh City Hong Kong Houston Johannesburg
London Los Angeles Luxembourg Madrid Mexico City Miami Milan Minneapolis Monterrey Munich New York Northern Virginia Paris Philadelphia
Riyadh Rome San Francisco São Paulo Shanghai Silicon Valley Singapore Sydney Tokyo Warsaw Washington, D.C. Associated Offices:
Budapest Jakarta Shanghai FTZ. Business Service Centers: Johannesburg Louisville. For more information see www.hoganlovells.com
Board of Trustees
Kite Realty Group Trust | 2 | June 7, 2024 |
For purposes of this opinion letter, we have
assumed that (i) the issuance, sale, amount and terms of any Securities of the Company or the Operating Partnership to be offered
from time to time will have been duly authorized and established by proper action of the board of trustees of the Company, in its individual
capacity and/or in its capacity as the general partner of the Operating Partnership, on behalf of the Operating Partnership, as applicable,
or a duly authorized committee of such board (“Board Action”) consistent with the procedures and terms described in
the Registration Statement and in accordance with the Company’s Articles of Amendment and Restatement of Declaration of Trust,
as amended and supplemented, and the Company’s Third Amended and Restated Bylaws and applicable Maryland real estate investment
trust and corporate law or the Operating Partnership’s certificate of limited partnership and agreement of limited partnership
and applicable Delaware limited partnership law, as applicable, in each case in a manner that does not violate any law, government or
court-imposed order or restriction or agreement or instrument then binding on the Company or the Operating Partnership, as applicable,
or otherwise impair the legal or binding nature of the obligations represented by the applicable Securities; (ii) at the time of
offer, issuance and sale of any Securities, the Registration Statement shall have become effective under the Securities Act of 1933,
as amended (the “Act”), and no stop order suspending its effectiveness will have been issued and remain in effect;
(iii) any Preferred Share Warrants will be issued under one or more equity warrant agreements, each to be between the Company and
a financial institution identified therein as a warrant agent; (iv) any Common Share Warrants will be issued under one or more equity
warrant agreements, each to be between the Company and a financial institution identified therein as a warrant agent; (v) any Depositary
Share Warrants will be issued under one or more equity warrant agreements, each to be between the Company and a financial institution
identified therein as a warrant agent; (vi) prior to any issuance of Preferred Shares or Depositary Shares, appropriate articles
supplementary shall be filed and accepted for record by the Maryland State Department of Assessments and Taxation; (vii) any Depositary
Shares will be issued under one or more deposit agreements by the financial institution identified therein as a depositary, each deposit
agreement to be between the Company and the financial institution identified therein as a depositary; (viii) any Rights will be
issued under one or more rights agreements; (ix) any Debt Securities will be issued pursuant to the indenture, dated as of September 26,
2016, between the Operating Partnership, as issuer, and U.S. Bank National Association, as trustee, filed as Exhibit 4.4 to the
Registration Statement, and as amended or supplemented from time to time in accordance with its terms (the “Indenture”);
(x) the indenture under which any Debt Securities are issued will be qualified under the Trust Indenture Act of 1939, as amended;
(xi) if being sold by the issuer thereof, the Securities will be delivered against payment of valid consideration therefor and in
accordance with the terms of the applicable Board Action authorizing such sale and any applicable underwriting agreement or purchase
agreement and as contemplated by the Registration Statement and/or the applicable prospectus supplement; (xii) the laws of the State
of New York will be the governing law under any warrant agreement, deposit agreement or rights agreement; (xiii) the Company will
remain a Maryland real estate investment trust; and (xiv) the Securities will not be issued in violation of the ownership limit
contained in the Company’s Articles of Amendment and Restatement of Declaration of Trust, as amended and supplemented.
To the extent that the obligations of the Company
with respect to the Securities may be dependent upon such matters, we assume for purposes of this opinion that the other party under
the warrant agreement for any Preferred Share Warrants, Common Share Warrants or Depositary Share Warrants, under the deposit agreement
for any Depositary Shares, under any rights agreement for any Rights, and under the Indenture for any Debt Securities, namely, the warrant
agent, the rights agent, the depositary or the trustee, respectively, is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization; that such other party is duly qualified to engage in the activities contemplated by such
warrant agreement, deposit agreement, rights agreement or Indenture, as applicable; that such warrant agreement, deposit agreement, rights
agreement or Indenture, as applicable, has been duly authorized, executed and delivered by the other party and constitutes the legal,
valid and binding obligation of the other party enforceable against the other party in accordance with its terms; that such other party
is in compliance with respect to performance of its obligations under such warrant agreement, deposit agreement, rights agreement or
Indenture, as applicable, with all applicable laws, rules and regulations; and that such other party has the requisite organizational
and legal power and authority to perform its obligations under such warrant agreement, deposit agreement, rights agreement or Indenture,
as applicable.
Board of Trustees
Kite Realty Group Trust | 3 | June 7, 2024 |
This opinion letter is based as to matters of
law solely on the applicable provisions of the following, as currently in effect: (i) as to the opinions given in paragraphs (a),
(b), (c), (d), (e), (f) and (g), Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland, as
amended; (ii) as to the opinions given in paragraph (h), the Delaware Revised Uniform Limited Partnership Act; and (iii) as
to the opinions given in paragraphs (c), (d), (e), (f), (g) and (h), the laws of the State of New York (but not including any laws,
statutes, ordinances, administrative decisions, rules or regulations of any political subdivision below the state level). We express
no opinion herein as to any other statutes, rules or regulations (and in particular, we express no opinion as to any effect that
such other statutes, rules or regulations may have on the opinions expressed herein).
Based upon, subject to and limited by the foregoing,
we are of the opinion that:
(a) The
Common Shares (including any Common Shares duly issued upon the exchange or conversion of Preferred Shares that are exchangeable for
or convertible into Common Shares or upon the exercise of Common Share Warrants and receipt by the Company of any additional consideration
payable upon such conversion, exchange or exercise), upon due execution and delivery on behalf of the Company of certificates therefor,
including global certificates, or the entry of the issuance thereof in the books and records of the Company, as the case may be, will
be validly issued, fully paid and nonassessable.
(b) The
Preferred Shares (including any Preferred Shares represented by Depositary Shares or that are duly issued upon the exercise of Preferred
Share Warrants and receipt by the Company of any additional consideration payable upon such exercise), upon due execution and delivery
on behalf of the Company of certificates therefor, including global certificates, or the entry of the issuance thereof in the books and
records of the Company, as the case may be, will be validly issued, fully paid and nonassessable.
(c) The
Rights, upon due execution and delivery of a rights agreement relating thereto on behalf of the Company and the rights agent named therein
and upon due execution and delivery of one or more certificates bearing such terms on behalf of the Company, will constitute valid and
binding obligations of the Company.
(d) The
depositary receipts evidencing the Depositary Shares, upon due countersignature thereof and issuance against a deposit of duly authorized
and validly issued Preferred Shares in accordance with the deposit agreement relating thereto, will be validly issued and entitle the
holders thereof to the rights specified in such depositary receipts and deposit agreement.
(e) The
Preferred Share Warrants, upon due execution and delivery of an equity warrant agreement relating thereto on behalf of the Company and
the warrant agent named therein and due authentication of the Preferred Share Warrants by such warrant agent, and upon due execution
and delivery of the Preferred Share Warrants on behalf of the Company, will constitute valid and binding obligations of the Company.
(f) The
Common Share Warrants, upon due execution and delivery of an equity warrant agreement relating thereto on behalf of the Company and the
warrant agent named therein and due authentication of the Common Share Warrants by such warrant agent, and upon due execution and delivery
of the Common Share Warrants on behalf of the Company, will constitute valid and binding obligations of the Company.
(g) The
Depositary Share Warrants, upon due execution and delivery of an equity warrant agreement relating thereto on behalf of the Company and
the warrant agent named therein and due authentication of the Depositary Share Warrants by such warrant agent, and upon due execution
and delivery of the Depositary Share Warrants on behalf of the Company, will constitute valid and binding obligations of the Company.
Board of Trustees
Kite Realty Group Trust | 4 | June 7, 2024 |
(h) The
Debt Securities, upon authentication by such trustee and due execution and delivery on behalf of the Operating Partnership in accordance
with the Indenture and any supplemental indenture or officer’s certificate or order relating thereto, will constitute valid and
binding obligations of the Operating Partnership.
The opinions expressed in paragraphs (c), (d),
(e), (f), (g) and (h) above with respect to the valid and binding nature of obligations may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws affecting creditors’ rights and remedies (including, without limitation,
the effect of statutory and other law regarding fraudulent conveyances and fraudulent, preferential or voidable transfers) and by the
exercise of judicial discretion and the application of principles of equity, good faith, fair dealing, reasonableness, conscionability
and materiality (regardless of whether the Securities are considered in a proceeding in equity or at law), including, without limitation,
principles limiting the availability of specific performance and injunctive relief.
This opinion letter has been prepared for use
in connection with the Registration Statement. We assume no obligation to advise of any changes in the foregoing subsequent to the effective
date of the Registration Statement.
We hereby consent to the filing of this opinion
letter as Exhibit 5.1 to the Registration Statement and to the reference to this firm under the caption “Legal Matters”
in the prospectus constituting a part of the Registration Statement. In giving this consent, we do not thereby admit that we are an “expert”
within the meaning of the Act.
| |
Very truly yours, |
| |
|
| |
/s/ Hogan Lovells US LLP |
| |
|
| |
HOGAN LOVELLS US LLP |
Exhibit 8.1
 |
Hogan Lovells US LLP
Columbia Square
555 Thirteenth Street, NW
Washington, DC 20004
T +1 202 637 5600
F +1 202 637 5910
www.hoganlovells.com |
June 7,
2024
Kite Realty Group Trust
Kite Realty Group, L.P.
30 S. Meridian Street
Suite 1100
Indianapolis, Indiana 46204
Ladies and Gentlemen:
We have acted as tax counsel to Kite Realty Group
Trust, a Maryland real estate investment trust (the “Company”), and Kite Realty Group, L.P., a Delaware limited partnership
(the “Operating Partnership”), in connection with their registration statement on Form S-3, as amended (the “Registration
Statement”), filed with the Securities and Exchange Commission relating to the proposed public offering of an unlimited amount of
one or more series of the following securities: (i) common shares of beneficial interest of the Company, par value $0.01 per share (the
“Common Shares”), (ii) preferred shares of beneficial interest of the Company, par value $0.01 per share (the “Preferred
Shares”), (iii) subscription rights to purchase Common Shares, (iv) Preferred Shares represented by depositary receipts, (v) warrants
to purchase Preferred Shares, (vi) warrants to purchase Common Shares, (vii) warrants to purchase Depositary Shares, and (viii) debt
securities of the Operating Partnership, all of which may be sold from time to time and on a delayed or continuous basis, as set forth
in the prospectus (the “Prospectus”) which forms a part of the Registration Statement, and as to be set forth in one or more
supplements to the Prospectus. In connection with the filing of the Registration Statement, we have been asked to provide you with opinions
regarding U.S. federal income tax matters specifically set forth below under the caption “Opinions.”
Bases for Opinions
The opinions set forth in this letter are based
on relevant current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations thereunder
(including proposed and temporary Treasury Regulations), and interpretations of the foregoing as expressed in court decisions, applicable
legislative history, and the administrative rulings and practices of the Internal Revenue Service (the “IRS”), including
its practices and policies in issuing private letter rulings, which are not binding on the IRS except with respect to a taxpayer that
receives such a ruling, all as of the date hereof. These provisions and interpretations are subject to change by the IRS, Congress and
the courts (as applicable), which may or may not be retroactive in effect and which might result in material modifications of our opinions.
Our opinions do not foreclose the possibility of a contrary determination by the IRS or a court of competent jurisdiction, or of a contrary
position taken by the IRS or the Treasury Department in regulations or rulings issued in the future. In this regard, an opinion of counsel
with respect to an issue represents counsel’s best professional judgment with respect to the outcome on the merits with respect
to such issue, if such issue were to be litigated, but an opinion is not binding on the IRS or the courts, and is not a guarantee that
the IRS will not assert a contrary position with respect to such issue or that a court will not sustain such a position asserted by the
IRS.
Kite Realty Group Trust
Kite Realty Group, L.P.
June 7, 2024
Page 2
In rendering the following opinions, we have
examined such statutes, regulations, records, agreements, certificates and other documents as we have considered necessary or appropriate
as a basis for the opinions, including but not limited to:
| (1) | the Registration Statement, including
the Prospectus, which forms a part of the Registration Statement; |
| (2) | the discussion under the caption “Material
U.S. Federal Income Tax Considerations” contained in the Registration Statement (the
“Tax Disclosure”); and |
| (3) | certain organizational documents of
the Company and its subsidiaries (those documents referred to in clauses (1) through
(3), the “Reviewed Documents”). |
The opinions set forth in this letter are premised
on, among other things, the written representations of the Company and the Operating Partnership contained in a letter to us (including
all exhibits and attachments thereto) executed by an officer of the Company dated as of the date hereof (the “Management Representation
Letter”). Although we have discussed the Management Representation Letter with the signatories thereto, for purposes of rendering
our opinions we have not made an independent investigation or audit of the facts set forth in the Reviewed Documents and the Management
Representation Letter. We consequently have relied upon the representations and statements of the Company and the Operating Partnership
as described in the Reviewed Documents and the Management Representation Letter, and assumed that the information presented in such documents
or otherwise furnished to us is accurate and complete in all material respects. We are not aware of any facts inconsistent with the statements
in the Management Representation Letter.
In this regard, we have assumed with your consent the following:
| (1) | that (A) all of the representations
and statements as to factual matters set forth in the Reviewed Documents and the Management
Representation Letter are true, correct, and complete in all material respects as of the
date hereof, (B) any representation or statement as to factual matters in the Reviewed
Documents and the Management Representation Letter made as a belief or made “to the
knowledge of” or similarly qualified is true, correct, and complete in all material
respects as of the date hereof, without such qualification, (C) each agreement described
in the Reviewed Documents is valid and binding in accordance with its terms, and (D) each
of the obligations of the Company, and its subsidiaries, as described in the Reviewed Documents,
has been or will be performed or satisfied in accordance with its terms; |
| (2) | the genuineness of all signatures, the
proper execution of all documents, the authenticity of all documents submitted to us as originals,
the conformity to originals of documents submitted to us as copies, and the authenticity
of the originals from which any copies were made; |
Kite Realty Group Trust
Kite Realty Group, L.P.
June 7, 2024
Page 3
| (3) | that any documents as to which we have
reviewed only a form were or will be duly executed without material changes from the form
reviewed by us; |
| (4) | the Merger (as defined in the Company’s
Current Report on Form 8-K, filed with the SEC on October 22, 2021) was consummated
in a manner consistent with the Company’s representations included in the Management
Representation Letter; and |
| (5) | that from and after the date of this
letter, the Company will comply with its representation contained in the Management Representation
Letter that the Company will utilize all appropriate “savings provisions” (including
the provisions of Sections 856(c)(6), 856(c)(7), and 856(g) of the Code, and the provision
included in Section 856(c)(4) of the Code (flush language) allowing for the disposal
of assets within 30 days after the close of a calendar quarter, and all available deficiency
dividend procedures) available to the Company under the Code in order to correct any violations
of the applicable REIT qualification requirements of Sections 856 and 857 of the Code, to
the full extent the remedies under such provisions are available. |
Any material variation or difference in the facts
from those set forth in the documents that we have reviewed and upon which we have relied (including, in particular, the Registration
Statement, the Prospectus, and the Management Representation Letter) may adversely affect the conclusions stated herein.
Opinions
Based upon and subject to the assumptions and
qualifications set forth herein, including, without limitation, the discussion in the next two paragraphs below, we are of the opinion
that:
| (1) | the Company has been organized and has operated in conformity
with the requirements for qualification and taxation as a real estate investment trust (a “REIT”) under the Code for each
of its taxable years beginning with its taxable year ended December 31, 2017, and the Company’s current organization and current
and proposed method of operation (as described in the Registration Statement, the Prospectus, the Tax Disclosure, and the Management
Representation Letter) will enable it to meet the requirements for qualification and taxation as a REIT under the Code for its taxable
year ending December 31, 2024 and future taxable years; and |
| (2) | the portions of the discussion in the Tax Disclosure that describe
applicable provisions of U.S. federal income tax law are correct in all material respects as of the date hereof. |
The Company’s qualification and taxation
as a REIT under the Code depends upon the ability of the Company to meet on an ongoing basis (through actual quarterly and annual operating
results, distribution levels, diversity of share ownership and otherwise) the various requirements imposed under the Code for qualification
and taxation as a REIT, and upon the Company utilizing any and all appropriate “savings provisions” (including the provisions
of Sections 856(c)(6), 856(c)(7), and 856(g) of the Code and the provision included in Section 856(c)(4) of the Code (flush
language) allowing for the disposal of assets within 30 days after the close of a calendar quarter, and all available deficiency dividend
procedures) available to the Company under the Code to correct violations of specified REIT qualification requirements of Sections 856
and 857 of the Code. Our opinions set forth above do not foreclose the possibility that the Company may have to utilize one or more of
these “savings provisions” in the future, which could require the Company to pay an excise tax and/or penalty tax (either
of which could be significant in amount) in order to maintain its REIT qualification. We have not undertaken at this time and will not
undertake to review the Company’s compliance with these requirements on a continuing basis, nor will we do so in the future. Accordingly,
no assurance can be given that the actual results of the Company’s operations, the sources of its income, the nature of its assets,
the level of its distributions to shareholders and the diversity of its share ownership for any given taxable year will satisfy the requirements
under the Code for qualification and taxation as a REIT.
Kite Realty Group Trust
Kite Realty Group, L.P.
June 7, 2024
Page 4
This opinion letter addresses only the specific
U.S. federal income tax matters set forth above and does not address any other U.S. federal, state, local or foreign legal or tax issues.
This opinion letter has been prepared for your use in connection with the filing of the Registration Statement and speaks as of the date
hereof. We assume no obligation by reason of this opinion letter or otherwise to advise you of any changes in our opinions subsequent
to the delivery of this opinion letter. Except as provided in the next paragraph below, this opinion letter may not be used or relied
upon by any person other than you or for any other purpose and may not be disclosed, quoted, or filed with a governmental agency or otherwise
referred to without our prior written consent.
We hereby consent to (i) the filing of this
opinion letter as Exhibit 8.1 to the Registration Statement and (ii) the reference to Hogan Lovells US LLP under the caption
“Legal Matters” in the Prospectus. In giving this consent we do not thereby admit that we are an “expert” within
the meaning of the Securities Act of 1933, as amended.
Very truly yours,
/s/ HOGAN LOVELLS US LLP
HOGAN LOVELLS US LLP
Exhibit 23.1
Consent of
Independent Registered Public Accounting Firm
We consent to
the use of our reports dated February 20, 2024, with respect to the consolidated financial statements of Kite Realty Group Trust,
and the effectiveness of internal control over financial reporting, incorporated herein by reference, and to the reference to our firm
under the heading "Experts" in the prospectus.
| /s/ KPMG LLP |
|
| Indianapolis, Indiana |
|
| June 7, 2024 |
|
Exhibit 23.2
Consent of
Independent Registered Public Accounting Firm
We consent to
the use of our reports dated February 20, 2024, with respect to the consolidated financial statements of Kite Realty Group L.P.,
and the effectiveness of internal control over financial reporting, incorporated herein by reference, and to the reference to our firm
under the heading "Experts" in the prospectus.
Indianapolis,
Indiana
June 7, 2024
Exhibit 25.1
securities
and exchange commission
Washington, D.C. 20549
FORM T-1
Statement
of Eligibility Under
The
Trust Indenture Act of 1939 of a
Corporation
Designated to Act as Trustee
Check if an Application to Determine Eligibility
of
a
Trustee Pursuant to Section 305(b)(2) ¨
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
91-1821036
I.R.S. Employer Identification No.
800
Nicollet Mall
Minneapolis, Minnesota |
55402 |
| (Address
of principal executive offices) |
(Zip
Code) |
Linda Garcia
U.S. Bank Trust Company, National Association
190 S. LaSalle Street
Chicago, Illinois 60603
(312) 332-6781
(Name, address and telephone number of agent for
service)
KITE REALTY GROUP, L.P.
(Issuer with respect to
the Securities)
| Delaware |
20-1453863 |
| (State
or other jurisdiction of incorporation or organization) |
(I.R.S.
Employer Identification No.) |
30
S. Meridian Street
Indianapolis, Indiana |
46204 |
| (Address
of Principal Executive Offices) |
(Zip
Code) |
Debt Securities
(Title of the Indenture
Securities)
FORM T-1
| Item 1. |
GENERAL INFORMATION. Furnish the following information as to the Trustee. |
| a) | Name and address of each examining or supervising authority to which
it is subject. |
Comptroller of the Currency
Washington, D.C.
| b) | Whether it is authorized to exercise corporate trust powers. |
Yes
| Item 2. |
AFFILIATIONS WITH THE OBLIGOR. If the obligor is an affiliate of the Trustee, describe each such affiliation. |
None
| Items 3-15 |
Items 3-15 are not applicable because to the best of the Trustee's knowledge, the obligor is not in default under any Indenture
for which the Trustee acts as Trustee. |
| Item 16. |
LIST OF EXHIBITS: List below all exhibits filed as a part of this statement of eligibility and qualification. |
1. A
copy of the Articles of Association of the Trustee, attached as Exhibit 1.
2. A
copy of the certificate of authority of the Trustee to commence business, attached as Exhibit 2.
3. A
copy of the authorization of the Trustee to exercise corporate trust powers, included as Exhibit 2.
4. A
copy of the existing bylaws of the Trustee, attached as Exhibit 4.
5. A
copy of each Indenture referred to in Item 4. Not applicable.
6. The
consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.
7. Report of Condition of the Trustee as of March 31, 2024, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.
SIGNATURE
Pursuant
to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
a national banking association organized and existing under the laws of the United States of America, has
duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized,
all in the City of Chicago, State of Illinois on the 7th of June, 2024.
| By: |
/s/
Linda Garcia |
| | |
Linda Garcia |
| | |
Vice President |
Exhibit 1
ARTICLES OF ASSOCIATION
OF
U. S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION
For the purpose of organizing an association
(the “Association”) to perform any lawful activities of national banks, the undersigned enter into the following Articles
of Association:
FIRST.
The title of this Association shall be U. S. Bank Trust Company, National Association.
SECOND.
The main office of the Association shall be in the city of Portland, county of Multnomah, state of Oregon. The business of
the Association will be limited to fiduciary powers and the support of activities incidental to the exercise of those powers. The Association
may not expand or alter its business beyond that stated in this article without the prior approval of the Comptroller of the Currency.
THIRD.
The board of directors of the Association shall consist of not less than five nor more than twenty-five persons, the exact
number to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a
majority of the shareholders at any annual or special meeting thereof. Each director shall own common or preferred stock of the Association
or of a holding company owning the Association, with an aggregate par, fair market, or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director, or (iii) the date of that person's most recent election
to the board of directors, whichever is more recent. Any combination of common or preferred stock of the Association or holding company
may be used.
Any vacancy in the board of directors may be filled
by action of a majority of the remaining directors between meetings of shareholders. The board of directors may increase the number of
directors up to the maximum permitted by law. Terms of directors, including directors selected to fill vacancies, shall expire at the
next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite
the expiration of a director's term, the director shall continue to serve until his or her successor is elected and qualified or until
there is a decrease in the number of directors and his or her position is eliminated.
Honorary or advisory members of the board of directors,
without voting power or power of final decision in matters concerning the business of the Association, may be appointed by resolution
of a majority of the full board of directors, or by resolution of shareholders at any annual or special meeting. Honorary or advisory
directors shall not be counted to determined the number of directors of the Association or the presence of a quorum in connection with
any board action, and shall not be required to own qualifying shares.
FOURTH.
There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought
before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day
of each year specified therefor in the Bylaws, or if that day falls on a legal holiday in the state in which the Association
is located, on the next following banking day. If no election is held on the day fixed or in the event of a legal holiday on the
following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of
directors, or, if the directors fail to fix the day, by shareholders
representing two-thirds of the shares issued and outstanding. In all cases, at least 10 days’ advance notice of the meeting shall
be given to the shareholders by first-class mail.
In all elections of directors, the number of votes
each common shareholder may cast will be determined by multiplying the number of shares he or she owns by the number of directors to
be elected. Those votes may be cumulated and cast for a single candidate or may be distributed among two or more candidates in the manner
selected by the shareholder. On all other questions, each common shareholder shall be entitled to one vote for each share of stock held
by him or her.
A director may resign at any time by delivering
written notice to the board of directors, its chairperson, or to the Association, which resignation shall be effective when the notice
is delivered unless the notice specifies a later effective date.
A
director may be removed by the shareholders at a meeting called to remove him or her, when notice of the meeting stating that the purpose
or one of the purposes is to remove him or her is provided, if there
is a failure to fulfill one of the affirmative requirements for qualification, or for cause; provided, however, that a director may not
be removed if the number of votes sufficient to elect him or her under
cumulative voting is voted against his or her removal.
FIFTH.
The authorized amount of capital stock of the Association shall be 1,000,000 shares of common stock of the par value of ten
dollars ($10) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of
the United States. The Association shall have only one class of capital stock.
No holder of shares of the capital stock of any
class of the Association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the Association,
whether now or hereafter authorized, or to any obligations convertible into stock of the Association, issued, or sold, nor any right
of subscription to any thereof other than such, if any, as the board of directors, in its discretion, may from time to time determine
and at such price as the board of directors may from time to time fix.
Transfers
of the Association's stock are subject to the prior written approval of a federal depository institution regulatory agency. If no
other agency approval is required, the approval of the Comptroller of the Currency must be obtained prior to any such transfers.
Unless otherwise specified in the Articles of Association
or required by law, (1) all matters requiring shareholder action, including amendments to the Articles of Association must be approved
by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to
one vote per share.
Unless otherwise specified in the Articles of Association
or required by law, all shares of voting stock shall be voted together as a class, on any matters requiring shareholder approval.
Unless otherwise provided in the Bylaws, the record
date for determining shareholders entitled to notice of and to vote at any meeting is the close of business on the day before the first
notice is mailed or otherwise sent to the shareholders, provided that in no event may a record date be more than 70 days before the meeting.
The Association, at any time and from time to time,
may authorize and issue debt obligations, whether subordinated, without the approval of the shareholders. Obligations classified as debt,
whether subordinated, which may be issued by the Association without the approval of shareholders, do not carry voting rights on any
issue, including an increase or decrease in the aggregate number of the securities, or the exchange or reclassification of all or part
of securities into securities of another class or series.
SIXTH.
The board of directors shall appoint one of its members president of this Association and one of its members chairperson of
the board and shall have the power to appoint one or more vice presidents, a secretary who shall keep minutes of the directors' and shareholders'
meetings and be responsible for authenticating the records of the Association, and such other officers and employees as may be required
to transact the business of this Association. A duly appointed officer may appoint one or more officers or assistant officers if authorized
by the board of directors in accordance with the Bylaws.
The board of directors shall have the power to:
| (1) | Define the
duties of the officers, employees, and agents of the Association. |
| (2) | Delegate
the performance of its duties, but not the responsibility for its duties, to the officers,
employees, and agents of the Association. |
| (3) | Fix
the compensation and enter employment contracts with its officers and employees upon reasonable
terms and conditions consistent with applicable law. |
| (4) | Dismiss
officers and employees. |
| (5) | Require
bonds from officers and employees and to fix the penalty thereof. |
| (6) | Ratify
written policies authorized by the Association's management or committees of the board. |
| (7) | Regulate
the manner any increase or decrease of the capital of the Association shall be made; provided
that nothing herein shall restrict the power of shareholders to increase or decrease the
capital of the Association in accordance with law, and nothing shall raise or lower from
two-thirds the percentage required for shareholder approval to increase or reduce the capital. |
| (8) | Manage and
administer the business and affairs of the Association. |
| (9) | Adopt
initial Bylaws, not inconsistent with law or the Articles of Association, for managing the
business and regulating the affairs of the Association. |
| (10) | Amend or
repeal Bylaws, except to the extent that the Articles of Association reserve this power in
whole or in part to the shareholders. |
| (12) | Generally
perform all acts that are legal for a board of directors to perform. |
SEVENTH.
The board of directors shall have the power to change the location of the main office to any authorized branch within the
limits of the city of Portland, Oregon, without the approval of the shareholders, or with a vote of shareholders owning two-thirds of
the stock of the Association for a location outside such limits and upon receipt of a certificate of approval from the Comptroller of
the Currency, to any other location within or outside the limits of the city of Portland, Oregon, but not more than thirty miles beyond
such limits. The board of directors shall have the power to establish or change the location of any office or offices of the Association
to any other location permitted under applicable law, without approval of shareholders, subject to approval by the Comptroller of the
Currency.
EIGHTH.
The corporate existence of this Association shall continue until termination according to the laws of the United States.
NINTH.
The board of directors of the Association, or any shareholder owning, in the aggregate, not less than 25 percent of the stock
of the Association, may call a special meeting of shareholders at any time. Unless otherwise provided by the Bylaws or the laws of the
United States, or waived by shareholders, a notice of the time, place, and purpose of every annual and special meeting of the shareholders
shall be given by first-class mail, postage prepaid, mailed at least 10, and no more than 60, days prior to the date of the meeting to
each shareholder of record at his/her address as shown upon the books of the Association. Unless otherwise provided by the Bylaws, any
action requiring approval of shareholders must be effected at a duly called annual or special meeting.
TENTH.
These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote
of the holders of a majority of the stock of the Association, unless the vote of the holders of a greater amount of stock is required
by law, and in that case by the vote of the holders of such greater amount; provided, that the scope of the Association's activities
and services may not be expanded without the prior written approval of the Comptroller of the Currency. The Association's board of directors
may propose one or more amendments to the Articles of Association for submission to the shareholders.
In
witness whereof, we have hereunto set our hands this 11th of June, 1997.
Exhibit 2
Exhibit 4
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION
AMENDED AND RESTATED
BYLAWS
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual
Meeting. The annual meeting of the shareholders, for the election of directors and the transaction of any other proper business,
shall be held at a time and place as the Chairman or President may designate. Notice of such meeting shall be given not less than ten
(10) days or more than sixty (60) days prior to the date thereof, to each shareholder of the Association, unless the Office of the
Comptroller of the Currency (the “OCC”) determines that an emergency circumstance exists. In accordance with applicable law,
the sole shareholder of the Association is permitted to waive notice of the meeting. If, for any reason, an election of directors is
not made on the designated day, the election shall be held on some subsequent day, as soon thereafter as practicable, with prior notice
thereof. Failure to hold an annual meeting as required by these Bylaws shall not affect the validity of any corporate action or work
a forfeiture or dissolution of the Association.
Section 1.2. Special
Meetings. Except as otherwise specially provided by law, special meetings of the shareholders may be called for any purpose, at any
time by a majority of the board of directors (the “Board”), or by any shareholder or group of shareholders owning at least
ten percent of the outstanding stock.
Every such special meeting, unless otherwise provided
by law, shall be called upon not less than ten (10) days nor more than sixty (60) days prior notice stating the purpose of the meeting.
Section 1.3. Nominations
for Directors. Nominations for election to the Board may be made by the Board or by any shareholder.
Section 1.4. Proxies.
Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing. Proxies shall be valid only for one meeting
and any adjournments of such meeting and shall be filed with the records of the meeting.
Section 1.5. Record
Date. The record date for determining shareholders entitled to notice and to vote at any meeting will be thirty days before the date
of such meeting, unless otherwise determined by the Board.
Section 1.6. Quorum
and Voting. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting
of shareholders, unless otherwise provided by law, but less than a quorum may adjourn any meeting, from time to time, and the meeting
may be held as adjourned without further notice. A majority of the votes cast shall decide every question or matter submitted to the
shareholders at any meeting, unless otherwise provided by law or by the Articles of Association.
Section 1.7. Inspectors.
The Board may, and in the event of its failure so to do, the Chairman of the Board may appoint Inspectors of Election who shall determine
the presence of quorum, the validity of proxies, and the results of all elections and all other matters voted upon by shareholders at
all annual and special meetings of shareholders.
Section 1.8. Waiver
and Consent. The shareholders may act without notice or a meeting by a unanimous written consent by all shareholders.
Section 1.9. Remote
Meetings. The Board shall have the right to determine that a shareholder meeting not be held at a place, but instead be held solely
by means of remote communication in the manner and to the extent permitted by the General Corporation Law of the State of Delaware.
ARTICLE II
Directors
Section 2.1. Board of
Directors. The Board shall have the power to manage and administer the business and affairs of the Association. Except as expressly
limited by law, all corporate powers of the Association shall be vested in and may be exercised by the Board.
Section 2.2. Term of
Office. The directors of this Association shall hold office for one year and until their successors are duly elected and qualified,
or until their earlier resignation or removal.
Section 2.3. Powers.
In addition to the foregoing, the Board shall have and may exercise all of the powers granted to or conferred upon it by the Articles
of Association, the Bylaws and by law.
Section 2.4. Number.
As provided in the Articles of Association, the Board of this Association shall consist of no less than five nor more than twenty-five
members, unless the OCC has exempted the Association from the twenty-five- member limit. The Board shall consist of a number of members
to be fixed and determined from time to time by resolution of the Board or the shareholders at any meeting thereof, in accordance with
the Articles of Association. Between meetings of the shareholders held for the purpose of electing directors, the Board by a majority
vote of the full Board may increase the size of the Board but not to more than a total of twenty-five directors, and fill any vacancy
so created in the Board; provided that the Board may increase the number of directors only by up to two directors, when the number of
directors last elected by shareholders was fifteen or fewer, and by up to four directors, when the number of directors last elected by
shareholders was sixteen or more. Each director shall own a qualifying equity interest in the Association or a company that has control
of the Association in each case as required by applicable law. Each director shall own such qualifying equity interest in his or her
own right and meet any minimum threshold ownership required by applicable law.
Section 2.5. Organization
Meeting. The newly elected Board shall meet for the purpose of organizing the new Board and electing and appointing such officers
of the Association as may be appropriate. Such meeting shall be held on the day of the election or as soon thereafter as practicable,
and, in any event, within thirty days thereafter, at such time and place as the Chairman or President may designate. If, at the time
fixed for such meeting, there shall not be a quorum present, the directors present may adjourn the meeting until a quorum is obtained.
Section 2.6. Regular
Meetings. The regular meetings of the Board shall be held, without notice, as the Chairman or President may designate and deem suitable.
Section 2.7. Special
Meetings. Special meetings of the Board may be called at any time, at any place and for any purpose by the Chairman of the Board
or the President of the Association, or upon the request of a majority of the entire Board. Notice of every special meeting of the Board
shall be given to the directors at their usual places of business, or at such other addresses as shall have been furnished by them for
the purpose. Such notice shall be given at least twelve hours (three hours if meeting is to be conducted by conference telephone) before
the meeting by telephone or by being personally delivered, mailed, or electronically delivered. Such notice need not include a statement
of the business to be transacted at, or the purpose of, any such meeting.
Section 2.8. Quorum
and Necessary Vote. A majority of the directors shall constitute a quorum at any meeting of the Board, except when otherwise provided
by law; but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held as adjourned without further notice.
Unless otherwise provided by law or the Articles or Bylaws of this Association, once a quorum is established, any act by a majority of
those directors present and voting shall be the act of the Board.
Section 2.9. Written
Consent. Except as otherwise required by applicable laws and regulations, the Board may act without a meeting by a unanimous written
consent by all directors, to be filed with the Secretary of the Association as part of the corporate records.
Section 2.10. Remote
Meetings. Members of the Board, or of any committee thereof, may participate in a meeting of such Board or committee by means of
conference telephone, video or similar communications equipment by means of which all persons participating in the meeting can hear each
other and such participation shall constitute presence in person at such meeting.
Section 2.11. Vacancies.
When any vacancy occurs among the directors, the remaining members of the Board may appoint a director to fill such vacancy at any regular
meeting of the Board, or at a special meeting called for that purpose.
ARTICLE III
Committees
Section 3.1. Advisory
Board of Directors. The Board may appoint persons, who need not be directors, to serve as advisory directors on an advisory board
of directors established with respect to the business affairs of either this Association alone or the business affairs of a group of
affiliated organizations of which this Association is one. Advisory directors shall have such powers and duties as may be determined
by the Board, provided, that the Board's responsibility for the business and affairs of this Association shall in no respect be delegated
or diminished.
Section 3.2. Trust Audit
Committee. At least once during each calendar year, the Association shall arrange for a suitable audit (by internal or external auditors)
of all significant fiduciary activities under the direction of its trust audit committee, a function that will be fulfilled by the Audit
Committee of the financial holding company that is the ultimate parent of this Association. The Association shall note the results of
the audit (including significant actions taken as a result of the audit) in the minutes of the Board. In lieu of annual audits, the Association
may adopt a continuous audit system in accordance with 12 C.F.R. § 9.9(b).
The Audit Committee of the financial holding
company that is the ultimate parent of this Association, fulfilling the function of the trust audit committee:
(1) Must
not include any officers of the Association or an affiliate who participate significantly in the administration of the Association’s
fiduciary activities; and
(2) Must
consist of a majority of members who are not also members of any committee to which the Board has delegated power to manage and control
the fiduciary activities of the Association.
Section 3.3. Executive
Committee. The Board may appoint an Executive Committee which shall consist of at least three directors and which shall have, and
may exercise, to the extent permitted by applicable law, all the powers of the Board between meetings of the Board or otherwise when
the Board is not meeting.
Section 3.4. Trust Management
Committee. The Board of this Association shall appoint a Trust Management Committee to provide oversight of the fiduciary activities
of the Association. The Trust Management Committee shall determine policies governing fiduciary activities. The Trust Management Committee
or such sub-committees, officers or others as may be duly designated by the Trust Management Committee shall oversee the processes related
to fiduciary activities to assure conformity with fiduciary policies it establishes, including ratifying the acceptance and the closing
out or relinquishment of all trusts. The Trust Management Committee will provide regular reports of its activities to the Board.
Section 3.5. Other Committees.
The Board may appoint, from time to time, committees of one or more persons who need not be directors, for such purposes and with such
powers as the Board may determine; however, the Board will not delegate to any committee any powers or responsibilities that it is prohibited
from delegating under any law or regulation. In addition, either the Chairman or the President may appoint, from time to time, committees
of one or more officers, employees, agents or other persons, for such purposes and with such powers as either the Chairman or the President
deems appropriate and proper. Whether appointed by the Board, the Chairman, or the President, any such committee shall at all times be
subject to the direction and control of the Board.
Section 3.6. Meetings,
Minutes and Rules. An advisory board of directors and/or committee shall meet as necessary in consideration of the purpose of the
advisory board of directors or committee, and shall maintain minutes in sufficient detail to indicate actions taken or recommendations
made; unless required by the members, discussions, votes or other specific details need not be reported. An advisory board of directors
or a committee may, in consideration of its purpose, adopt its own rules for the exercise of any of its functions or authority.
ARTICLE IV
Officers
Section 4.1. Chairman
of the Board. The Board may appoint one of its members to be Chairman of the Board to serve at the pleasure of the Board. The Chairman
shall supervise the carrying out of the policies adopted or approved by the Board; shall have general executive powers, as well as the
specific powers conferred by these Bylaws; and shall also have and may exercise such powers and duties as from time to time may be conferred
upon or assigned by the Board.
Section 4.2. President.
The Board may appoint one of its members to be President of the Association. In the absence of the Chairman, the President shall preside
at any meeting of the Board. The President shall have general executive powers, and shall have and may exercise any and all other powers
and duties pertaining by law, regulation or practice, to the office of President, or imposed by these Bylaws. The President shall also
have and may exercise such powers and duties as from time to time may be conferred or assigned by the Board.
Section 4.3. Vice President.
The Board may appoint one or more Vice Presidents who shall have such powers and duties as may be assigned by the Board and to perform
the duties of the President on those occasions when the President is absent, including presiding at any meeting of the Board in the absence
of both the Chairman and President.
Section 4.4. Secretary.
The Board shall appoint a Secretary, or other designated officer who shall be Secretary of the Board and of the Association, and shall
keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these Bylaws to be given;
shall be custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records
of all transactions of the Association; shall, upon request, authenticate any records of the Association; shall have and may exercise
any and all other powers and duties pertaining by law, regulation or practice, to the Secretary, or imposed by these Bylaws; and shall
also perform such other duties as may be assigned from time to time by the Board. The Board may appoint one or more Assistant Secretaries
with such powers and duties as the Board, the President or the Secretary shall from time to time determine.
Section 4.5. Other Officers.
The Board may appoint, and may authorize the Chairman, the President or any other officer to appoint, any officer as from time to time
may appear to the Board, the Chairman, the President or such other officer to be required or desirable to transact the business of the
Association. Such officers shall exercise such powers and perform such duties as pertain to their several offices, or as may be conferred
upon or assigned to them by these Bylaws, the Board, the Chairman, the President or such other authorized officer. Any person may hold
two offices.
Section 4.6. Tenure
of Office. The Chairman or the President and all other officers shall hold office until their respective successors are elected and
qualified or until their earlier death, resignation, retirement, disqualification or removal from office, subject to the right of the
Board or authorized officer to discharge any officer at any time.
ARTICLE V
Stock
Section 5.1. The Board
may authorize the issuance of stock either in certificated or in uncertificated form. Certificates for shares of stock shall be in such
form as the Board may from time to time prescribe. If the Board issues certificated stock, the certificate shall be signed by the President,
Secretary or any other such officer as the Board so determines. Shares of stock shall be transferable on the books of the Association,
and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to such person's shares, succeed to all rights of the prior holder of such shares. Each certificate of stock shall
recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. The Board
may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the Association for stock transfers,
voting at shareholder meetings, and related matters, and to protect it against fraudulent transfers.
ARTICLE VI
Corporate Seal
Section 6.1. The Association
shall have no corporate seal; provided, however, that if the use of a seal is required by, or is otherwise convenient or advisable pursuant
to, the laws or regulations of any jurisdiction, the following seal may be used, and the Chairman, the President, the Secretary and any
Assistant Secretary shall have the authority to affix such seal:
ARTICLE VII
Miscellaneous Provisions
Section 7.1. Execution
of Instruments. All agreements, checks, drafts, orders, indentures, notes, mortgages, deeds, conveyances, transfers, endorsements,
assignments, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts,
affidavits, bonds, undertakings, guarantees, proxies and other instruments or documents may be signed, countersigned, executed, acknowledged,
endorsed, verified, delivered or accepted on behalf of the Association, whether in a s capacity or otherwise, by any officer of the Association,
or such employee or agent as may be designated from time to time by the Board by resolution, or by the Chairman or the President by written
instrument, which resolution or instrument shall be certified as in effect by the Secretary or an Assistant Secretary of the Association.
The provisions of this section are supplementary to any other provision of the Articles of Association or Bylaws.
Section 7.2. Records.
The Articles of Association, the Bylaws as revised or amended from time to time and the proceedings of all meetings of the shareholders,
the Board, and standing committees of the Board, shall be recorded in appropriate minute books provided for the purpose. The minutes
of each meeting shall be signed by the Secretary, or other officer appointed to act as Secretary of the meeting.
Section 7.3. Trust Files.
There shall be maintained in the Association files all fiduciary records necessary to assure that its fiduciary responsibilities have
been properly undertaken and discharged.
Section 7.4. Trust Investments.
Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and according
to law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association
a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may
invest under law.
Section 7.5. Notice.
Whenever notice is required by the Articles of Association, the Bylaws or law, such notice shall be by mail, postage prepaid, e- mail,
in person, or by any other means by which such notice can reasonably be expected to be received, using the address of the person to receive
such notice, or such other personal data, as may appear on the records of the Association.
Except where specified otherwise in these Bylaws,
prior notice shall be proper if given not more than 30 days nor less than 10 days prior to the event for which notice is given.
ARTICLE VIII
Indemnification
Section 8.1. The Association
shall indemnify such persons for such liabilities in such manner under such circumstances and to such extent as permitted by Section 145
of the Delaware General Corporation Law, as now enacted or hereafter amended. The Board may authorize the purchase and maintenance of
insurance and/or the execution of individual agreements for the purpose of such indemnification, and the Association shall advance all
reasonable costs and expenses (including attorneys’ fees) incurred in defending any action, suit or proceeding to all persons entitled
to indemnification under this Section 8.1. Such insurance shall be consistent with the requirements of 12 C.F.R. § 7.2014 and
shall exclude coverage of liability for a formal order assessing civil money penalties against an institution-affiliated party, as defined
at 12 U.S.C. § 1813(u).
Section 8.2. Notwithstanding
Section 8.1, however, (a) any indemnification payments to an institution-affiliated party, as defined at 12 U.S.C. § 1813(u),
for an administrative proceeding or civil action initiated by a federal banking agency, shall be reasonable and consistent with the requirements
of 12 U.S.C. § 1828(k) and the implementing regulations thereunder; and (b) any indemnification payments and advancement
of costs and expenses to an institution-affiliated party, as defined at 12 U.S.C. § 1813(u), in cases involving an administrative
proceeding or civil action not initiated by a federal banking agency, shall be in accordance with Delaware General Corporation Law and
consistent with safe and sound banking practices.
ARTICLE IX
Bylaws: Interpretation and Amendment
Section 9.1. These Bylaws
shall be interpreted in accordance with and subject to appropriate provisions of law, and may be added to, altered, amended, or repealed,
at any regular or special meeting of the Board.
Section 9.2. A copy of
the Bylaws and all amendments shall at all times be kept in a convenient place at the principal office of the Association, and shall
be open for inspection to all shareholders during Association hours.
ARTICLE X
Miscellaneous Provisions
Section 10.1. Fiscal
Year. The fiscal year of the Association shall begin on the first day of January in each year and shall end on the thirty-first
day of December following.
Section 10.2. Governing
Law. This Association designates the Delaware General Corporation Law, as amended from time to time, as the governing law for its
corporate governance procedures, to the extent not inconsistent with Federal banking statutes and regulations or bank safety and soundness.
***
(February 8, 2021)
Exhibit 6
CONSENT
In accordance with Section 321(b) of
the Trust Indenture Act of 1939, the undersigned, U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION hereby consents that reports of examination
of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Dated: June 7, 2024
| By: |
/s/
Linda Garcia |
| | |
Linda Garcia |
| | |
Vice President |
Exhibit 7
U.S. Bank Trust Company, National Association
Statement of Financial Condition
as of 3/31/2024
($000’s)
| | |
3/31/2024 | |
| Assets | |
| | |
| Cash and Balances Due From
Depository Institutions | |
$ | 1,429,213 | |
| Securities | |
| 4,389 | |
| Federal Funds | |
| 0 | |
| Loans & Lease Financing Receivables | |
| 0 | |
| Fixed Assets | |
| 1,270 | |
| Intangible Assets | |
| 577,915 | |
| Other Assets | |
| 161,425 | |
|
Total Assets | |
$ | 2,174,212 | |
| | |
| | |
| Liabilities | |
| | |
| Deposits | |
$ | 0 | |
| Fed Funds | |
| 0 | |
| Treasury Demand Notes | |
| 0 | |
| Trading Liabilities | |
| 0 | |
| Other Borrowed Money | |
| 0 | |
| Acceptances | |
| 0 | |
| Subordinated Notes and Debentures | |
| 0 | |
| Other Liabilities | |
| 361,240 | |
| Total
Liabilities | |
$ | 361,240 | |
| | |
| | |
| Equity | |
| | |
| Common and Preferred Stock | |
| 200 | |
| Surplus | |
| 1,171,635 | |
| Undivided Profits | |
| 641,137 | |
| Minority Interest in Subsidiaries | |
| 0 | |
| Total
Equity Capital | |
$ | 1,812,972 | |
| | |
| | |
| Total Liabilities and Equity Capital | |
$ | 2,174,212 | |
Exhibit 107
Calculation of Filing Fee Tables
Form S-3
(Form Type)
KITE REALTY GROUP TRUST
KITE REALTY GROUP, L.P.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward
Securities
| |
Security
Type |
Security Class Title |
Fee
Calculation
or Carry
Forward
Rule(1) |
Amount
Registered(2) |
Proposed
Maximum
Offering Price
Per Unit(2) |
Maximum
Aggregate
Offering
Price(2) |
Fee
Rate(1) |
Amount of
Registration
Fee(1) |
Carry
Forward
Form Type |
Carry
Forward File
Number |
Carry
Forward
Initial
Effective
Date |
Filing Fee
Previously
Paid In
Connection
with Unsold
Securities to
be Carried
Forward |
|
| Newly Registered Securities |
| Kite Realty Group Trust |
| Fees to Be Paid |
Equity |
Common Shares, par value $.01 per share |
Other |
- |
- |
- |
- |
- |
|
|
|
|
| |
Equity |
Preferred Shares, par value $.01 per share |
Other |
- |
- |
- |
- |
- |
|
|
|
|
| |
Equity |
Depositary Shares, representing Preferred Shares (3) |
Other |
- |
- |
- |
- |
- |
|
|
|
|
| |
Other |
Warrants |
Other |
- |
- |
- |
- |
- |
|
|
|
|
| |
Other |
Rights |
Other |
- |
- |
- |
- |
- |
|
|
|
|
| Kite Realty Group, L.P. |
| |
Debt |
Debt Securities |
Other |
- |
- |
- |
- |
- |
|
|
|
|
|
Fees
Previously Paid |
- |
- |
- |
- |
- |
- |
- |
- |
|
|
|
|
| Carry Forward Securities |
|
Carry
Forward Securities |
- |
- |
- |
- |
|
- |
|
- |
- |
- |
- |
- |
| |
Total Offering Amounts |
|
- |
|
- |
|
|
|
|
| |
Total Fees Previously Paid |
|
|
|
- |
|
|
|
|
| |
Total Fee Offsets |
|
|
|
- |
|
|
|
|
| |
Net Fee Due |
|
|
|
- |
|
|
|
|
| (1) | The registrant is deferring payment of all of the registration fee in accordance with Rules 456(b) and 457(r) under
the Securities Act of 1933, as amended. |
| (2) | An unspecified aggregate initial offering of the securities of each identified class is being
registered as may from time to time be offered by the registrants at unspecified prices, along with an indeterminate number of securities
that may be issued upon exercise, settlement, exchange or conversion of securities offered hereunder. Separate consideration may or may
not be received for securities that are issuable on exercise, conversion or exchange of other securities or that are represented by depositary
shares. |
| (3) | Each depositary share will be issued under a deposit agreement, will represent a specified interest in a preferred share or equity
share and will be evidenced by a depositary receipt. |
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