INDIANAPOLIS—Kite Realty Group Trust andInland Diversified Real Estate Trust, whichannounced a $1-2-billion merger in February, are in thelatter stages of making the union a reality. The two REITs saidFriday that the final exchange ratio had been determined, with eachshare of Inland Diversified common stock converted into 1.707shares of Kite Realty common stock upon the merger's closing.

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A special meeting of Inland Diversified's shareholders is slatedfor this coming Tuesday at the REIT's Oak Brook, IL headquarters.The Inland Diversified board has recommended shareholder approval,and the company says shareholder votes thus far have been 94% inapproval of the merger.

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Following the merger, which is expected to occur on or aroundJuly 1, the combined company will retain the name Kite Realty GroupTrust. It will continue to trade on the New York Stock Exchangeunder the symbol KRG.

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The merger will double Kite's retail portfolio from 10.1 millionowned square feet to 20.3 million owned square feet. The InlandDiversified portfolio of 57 properties was 95.3% leased as of thispast Dec. 31. The acquisition will open some new markets for Kite,including Westchester County in New York State; Bayonne, NJ; LasVegas; Salt Lake City; and Virginia Beach, VA.

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“Inland Diversified has assembled a very well located,high quality portfolio,” Kite Realty's chairman and CEOJohn A. Kite, who will serve as chairman and CEOof the combined company, said in February. “The asset and tenantquality and strong demographic profile will be a great complementto our portfolio.”

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Kite said in February that after the merger closed, it expectedto dispose of three multifamily assets owned by Inland Diversifiedas well as Inland Diversified's securities portfolio. Proceeds fromthese sales will be used to further repay debt and delever thebalance sheet.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.