AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this Agreement) is entered into as of April 5, 2004 by and among Kite Realty Group Trust, a Maryland real estate investment trust (the REIT), KRG Construction, LLC, an Indiana limited liability company (the Limited Liability Company) and Kite Construction, Inc, an Indiana corporation (the Acquired Company).

WHEREAS, the REIT and Kite Realty Group, L.P., a Delaware limited partnership, of which the REIT is the indirect general partner (Kite Realty), are considering engaging in various related transactions pursuant to which, among other things, (i) Kite Realty would acquire interests in various entities that own or lease real estate properties in which certain affiliated persons of the Acquired Company have interests; (ii) the Limited Liability Company, of which the REIT is the sole member, would acquire interests in certain service businesses currently conducted by the Acquired Company and certain affiliated persons, and (iii) the REIT would effect an initial public offering of its common shares and contribute the proceeds therefrom for a like number of units of partnership interest in Kite Realty (the Kite IPO, and together with the other transactions described above, the Kite IPO Transactions);

WHEREAS, the authorized capital stock of the Acquired Company consists of 1000 shares of common stock, without par value (the Common Stock), of which 122 shares are issued and outstanding;

WHEREAS, the shareholders listed on Schedule 1 attached hereto (the Shareholders) own 100% of the issued and outstanding Common Stock of the Acquired Company;

WHEREAS, the REIT is the sole member of the Limited Liability Company;

WHEREAS, the parties hereto have determined it to be in their respective best interests, on the terms and conditions hereinafter set forth, that the Acquired Company be merged with and into the Limited Liability Company, with the Limited Liability Company surviving (the Merger) and the Shareholders receiving common shares of beneficial interest, par value $0.01 per share, of the REIT (REIT Common Shares);

WHEREAS, for federal income tax purposes, it is intended that the Merger shall qualify as a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code), and that this Agreement shall constitute a plan of reorganization under Section 368(a) of the Code;

WHEREAS, the Board of Directors of the Acquired Company has approved and adopted this Agreement and the Merger, on the terms and subject to the conditions set forth in this Agreement, proposed and recommended that the shareholders of the Acquired Company approve and adopt this Agreement and the Merger and submitted this Agreement and the Merger for approval and adoption by the shareholders of the Acquired Company;

WHEREAS, concurrently with the execution and delivery of this Agreement, the Shareholders are approving and adopting this Agreement and the Merger, on the terms and subject to the conditions set forth in this Agreement, including the other transactions contemplated hereby, by unanimous written consent of the Shareholders dated as of the date hereof (the Shareholder Consent), in accordance with the applicable provisions of the Indiana Business Corporation Law (the IBCL) and the articles of incorporation and by-laws of the Acquired Company; and

WHEREAS, the REIT, as the sole member of the Limited Liability Company, has approved and adopted this Agreement and the Merger, on the terms and subject to the conditions set forth in this Agreement, including the other transactions contemplated hereby in accordance with the applicable provisions of the Indiana Business Flexibility Act (the IBFA) and the operating agreement of the Limited Liability Company.

NOW, THEREFORE, for good and valuable consideration and in consideration of the foregoing and of the representations, warranties, covenants and agreements hereinafter set forth, the parties, each intending to be legally bound hereby, agree as follows:

ARTICLE I:                                  PLAN OF MERGER

1.1                                 Merger. Upon the terms and subject to the conditions hereof, and in accordance with the provisions of Section 23-18-7 et. seq. of the IBFA and Section 23-1-40 et. seq. of the IBCL, the Acquired Company shall be merged with and into the Limited Liability Company at the Effective Time (as defined below).  The Limited Liability Company shall be the surviving entity resulting from the Merger (the Surviving Entity), and the separate existence of the Acquired Company will cease.  The Surviving Entity shall continue its existence as a limited liability company under the laws of the State of Indiana, and its name shall be changed to Kite Construction, LLC.

1.2                                 Closing. Subject to the terms and conditions of this Agreement, the closing hereunder (the Closing) shall occur, at the election of the REIT, (i) one business day prior to the closing of the Kite IPO, (ii) concurrently with the closing of the Kite IPO, or (iii) one business day following the closing of the Kite IPO, which date the Limited Liability Company shall designate in writing to the Acquired Company at least five business days prior to such date, at the same location as the closing of the Kite IPO, provided that the conditions for the Closing as set forth in Article IV hereof shall have occurred (or have been waived by the party that benefits from such conditions), and this Agreement shall not have been terminated pursuant to Article VI hereof.  The date on which the Closing occurs is referred to herein as the Closing Date.

1.3                                 Effective Time. If all the conditions to the Merger set forth in Article IV shall have been satisfied or waived in accordance herewith and this Agreement shall not have been terminated as provided in Article VI, following the Closing, the parties hereto shall, at such time as they deem advisable, cause articles of merger (the Articles of Merger) to be filed with the Secretary of State of the State of Indiana in accordance with Section 23-1-40-5 and other applicable provisions of the IBCL and the applicable provisions

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of the IBFA. The Merger shall become effective on the filing of the Articles of Merger with the Secretary of State of the State of Indiana, or such other time specified in the Articles of Merger (the Effective Time).

1.4                                 Operating Agreement. The operating agreement of the Limited Liability Company in effect immediately prior to the Effective Time shall be the operating agreement of the Surviving Entity (subject to any subsequent amendment).

1.5                                 Effects of the Merger. The merger shall have the effects set forth in Section 23-1-40-6 of the IBCL and Section 23-18-7-5 of the IBFA.

1.6                                 Taxation. It is intended that the Merger shall be treated, for federal income tax purposes, as a reorganization under Section 368(a) of the Code and that this Agreement shall constitute a plan of reorganization under Section 368(a) of the Code. It is also intended that the Limited Liability Company be disregarded as an entity separate from its owner for federal income tax purposes. For this reason, the Limited Liability Company will not elect to be classified as a corporation for any period prior to the effective time of the Merger. The Limited Liability Company will be treated by default as an entity disregarded as separate from its owner pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) for all periods prior to the effective time of the Merger.  Furthermore, it is intended that, if permissible under relevant state law, the Limited Liability Company be disregarded as an entity separate from its owner for state tax purposes.

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