"The yield seeing in development is so compelling in thedevelopment business that we are putting capital in development ata much greater impact than in acquisitions," Kite told investors."The yields of high-quality shopping centers have significantlydecreased in the last couple of years."

The current pipeline now stands at $176 million, with projectcompletion dates slated for this year and 2007. While the company'starget markets include Indiana, Florida and Texas, with 80% of thecompany's base rents coming from those markets, Kite says a greaterpriority has been placed on Florida. Recently, the company acquired55 acres in the sunshine state for future development.

During the fourth quarter of 2005, Kite added two new projectsto the development pipeline and acquired undeveloped land forfuture projects. Located in Noblesville, IN, Stoney Creek CommonsII will be a 49,330-sf shopping center located adjacent to a Lowe'sand outlots developed by the company in 2000. Kite also acquiredapproximately 12 acres in Westfield, IN. In the fourth quarter, thecompany added Bridgewater Marketplace, Phase I, an approximately51,000-sf neighborhood shopping center to be constructed on the12-acre parcel, to the development pipeline at an anticipated totalproject cost of $15.3 million.