Cedar Realty Trust, Inc. (CDR) Q1 2020 Earnings Conference Call May 14, 2020 5:00 PM ET Company Representatives Bruce Schanzer - Chief Executive Officer Robin Zeigler - Chief Operating Officer Philip Mays - Chief Financial Officer Nicholas Partenza - Director, Financial Reporting Conference Call Participants Todd Thomas - KeyBanc Capital Collin Mings - Raymond James Floris van Dijkum - Compass Point Operator Welcome to the First Quarter 2020, Cedar Realty Trust Earnings Conference Call. As a reminder, this ...

[PART I – FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Wheeler REIT and its subsidiaries for the period ended March 31, 2020 - The report includes unaudited condensed consolidated financial statements for the three months ended March 31, 2020 and 2019, and the balance sheet as of December 31, 2019[7](index=7&type=chunk)[23](index=23&type=chunk) - Statements are prepared in accordance with GAAP for interim financial statements and reflect all necessary normal recurring adjustments[23](index=23&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Provides a snapshot of the company's financial position, detailing assets, liabilities, and equity as of March 31, 2020, and December 31, 2019 Key Balance Sheet Items (in thousands) | Item | March 31, 2020 | December 31, 2019 | Change (%) | | :--------------------------------- | :------------- | :---------------- | :--------- | | Investment properties, net | $406,815 | $416,215 | -2.26% | | Cash and cash equivalents | $6,695 | $5,451 | 22.82% | | Restricted cash | $16,543 | $16,140 | 2.50% | | Total Assets | $479,149 | $484,365 | -1.08% | | Loans payable, net | $336,277 | $340,913 | -1.36% | | Total Liabilities | $367,794 | $371,133 | -0.90% | | Total Shareholders' Equity | $19,492 | $23,927 | -18.53% | | Total Equity | $21,563 | $26,007 | -17.10% | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Details the company's financial performance, including revenue, expenses, and net loss, for the three months ended March 31, 2020 and 2019 Key Income Statement Items (in thousands) | Item | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Total Revenue | $15,574 | $15,995 | -2.63% | | Total Operating Expenses | $11,994 | $12,379 | -3.11% | | Operating Income | $3,554 | $5,455 | -34.85% | | Interest expense | $(4,400) | $(4,793) | 8.20% | | Other expense | $(1,024) | $0 | -100.00% | | Net (Loss) Income | $(1,877) | $655 | -386.56% | | Net Loss Attributable to Wheeler REIT Common Shareholders | $(5,525) | $(3,015) | -83.27% | | Loss per share: Basic and Diluted | $(0.57) | $(0.31) | -83.87% | - Net Loss Attributable to Wheeler REIT Common Shareholders increased significantly from **$(3,015) thousand** in Q1 2019 to **$(5,525) thousand** in Q1 2020[12](index=12&type=chunk) [Condensed Consolidated Statements of Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Equity) Outlines changes in the company's equity, including total equity and accumulated deficit, for the three months ended March 31, 2020 - Total Equity decreased from **$26,007 thousand** at December 31, 2019, to **$21,563 thousand** at March 31, 2020, primarily due to dividends and distributions and net loss[14](index=14&type=chunk) - Accumulated deficit increased from **$(251,580) thousand** at December 31, 2019, to **$(256,037) thousand** at March 31, 2020[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2020 and 2019 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change ($) | Change (%) | | :--------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Operating Activities | $3,223 | $2,697 | $526 | 19.50% | | Investing Activities | $1,339 | $3,318 | $(1,979) | -59.64% | | Financing Activities | $(2,915) | $(5,409) | $2,494 | 46.11% | | Increase in Cash, Cash Equivalents and Restricted Cash | $1,647 | $606 | $1,041 | 171.78% | | Cash, cash equivalents and restricted cash, end of period | $23,238 | $18,605 | $4,633 | 24.90% | - Net cash provided by operating activities increased by **19.50%** to **$3,223 thousand** in Q1 2020[17](index=17&type=chunk) - Net cash provided by investing activities decreased significantly by **59.64%** to **$1,339 thousand** in Q1 2020[17](index=17&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, real estate, debt, and equity - Wheeler REIT owned and operated **sixty centers**, one office building, and six undeveloped properties across multiple states as of March 31, 2020[19](index=19&type=chunk) - The company became an internally-managed REIT in October 2014, handling acquisitions, dispositions, leasing, property management, and other business operations internally[20](index=20&type=chunk) - The company is closely monitoring the impact of COVID-19, which has led to rent relief requests from tenants and forbearance on **8 loans**, deferring approximately **$928 thousand** in principal and interest payments[145](index=145&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) [1. Organization and Basis of Presentation and Consolidation](index=8&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation%20and%20Consolidation) Describes the company's corporate structure, its status as a Maryland corporation and general partner of Wheeler REIT, L.P., and its property portfolio - Wheeler Real Estate Investment Trust, Inc. is a Maryland corporation, serving as the general partner of Wheeler REIT, L.P., a Virginia limited partnership[19](index=19&type=chunk) - As of March 31, 2020, the Company owned and operated **60 centers**, one office building, and six undeveloped properties across **12 states**[19](index=19&type=chunk) - The Company became an internally-managed REIT in October 2014 through the acquisition of Wheeler Interests, LLC, Wheeler Real Estate, LLC, and WHLR Management, LLC[20](index=20&type=chunk) [2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting principles applied, including property valuation, revenue recognition, and the impact of recent accounting pronouncements - Investment properties are recorded at fair value upon acquisition and depreciated using the straight-line method over **5 to 40 years**[24](index=24&type=chunk)[28](index=28&type=chunk) - The Company accrues minimum rents on a straight-line basis and combines lease and nonlease components for revenue recognition[42](index=42&type=chunk)[43](index=43&type=chunk) Corporate General & Administrative Expenses (in thousands) | Item | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Professional fees | $1,026 | $599 | | Compensation and benefits | $407 | $676 | | Corporate administration | $331 | $305 | | Advertising costs for leasing activities | $31 | $49 | | Taxes and licenses | $18 | $62 | | Other | $59 | $123 | | **Total** | **$1,872** | **$1,814** | - Other expenses for Q1 2020 included **$585 thousand** in legal settlement costs and **$439 thousand** for reimbursement of 2019 proxy costs[58](index=58&type=chunk) - The Company adopted ASU 2018-13 (Fair Value Measurement) as of January 1, 2020, with no material impact, and is evaluating ASU 2016-13 (Credit Losses) and the Lease Modification Q&A related to COVID-19[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) [3. Real Estate](index=15&type=section&id=3.%20Real%20Estate) Details changes in investment properties, including net values, impairment charges, and assets held for sale, as of March 31, 2020 - Investment properties, net, decreased from **$416.22 million** at December 31, 2019, to **$406.82 million** at March 31, 2020[72](index=72&type=chunk) - An impairment charge of **$600 thousand** was recorded for assets held for sale (Columbia Fire Station) for the three months ended March 31, 2020[75](index=75&type=chunk) Assets Held for Sale and Associated Liabilities (in thousands) | Item | March 31, 2020 | December 31, 2019 | | :--------------------------------- | :------------- | :---------------- | | Total assets held for sale | $6,258 | $1,737 | | Total liabilities associated with assets held for sale | $4,049 | $2,026 | - The sale of St. Matthews on January 21, 2020, for **$1,775 thousand** resulted in a loss of **$26 thousand**[79](index=79&type=chunk) [4. Deferred Costs](index=16&type=section&id=4.%20Deferred%20Costs) Presents information on deferred costs and their amortization, including a schedule of future amortization for various cost categories - Total deferred costs and other assets, net, decreased from **$21.03 million** at December 31, 2019, to **$20.28 million** at March 31, 2020[81](index=81&type=chunk) - Intangible amortization expense totaled **$1.86 million** for Q1 2020, down from **$2.63 million** for Q1 2019[81](index=81&type=chunk) Future Amortization of Deferred Costs (in thousands, unaudited) | Period | Leases In Place, net | Ground Lease Sandwich Interest, net | Tenant Relationships, net | Lease Origination Costs, net | Legal & Marketing Costs, net | Total | | :----------------------------------- | :------------------- | :-------------------------------- | :------------------------ | :------------------------- | :------------------------- | :------ | | For the remaining nine months ending December 31, 2020 | $3,182 | $205 | $580 | $126 | $8 | $4,101 | | December 31, 2021 | $2,766 | $274 | $448 | $158 | $8 | $3,654 | | December 31, 2022 | $2,119 | $274 | $354 | $116 | $6 | $2,869 | | December 31, 2023 | $1,638 | $274 | $227 | $98 | $5 | $2,242 | | December 31, 2024 | $1,124 | $274 | $128 | $83 | $3 | $1,612 | | December 31, 2025 | $799 | $274 | $62 | $63 | — | $1,198 | | Thereafter | $1,943 | $571 | $92 | $327 | $1 | $2,934 | | **Total** | **$13,571** | **$2,146** | **$1,891** | **$971** | **$31** | **$18,610** | [5. Loans Payable](index=17&type=section&id=5.%20Loans%20Payable) Details the company's debt obligations, including changes in total loans payable, specific loan agreements, and the debt maturity schedule - Total loans payable, net, decreased from **$340.91 million** at December 31, 2019, to **$336.28 million** at March 31, 2020[84](index=84&type=chunk) - The KeyBank Credit Agreement had outstanding borrowings of **$9.30 million** at March 31, 2020, with the Company negotiating an extension to December 31, 2020, after not meeting the April 30, 2020, paydown requirement[89](index=89&type=chunk)[93](index=93&type=chunk) - The Company refinanced Shoppes at Myrtle Park for **$6.00 million** and Folly Road for **$7.35 million** in Q1 2020[90](index=90&type=chunk)[92](index=92&type=chunk) Debt Maturity Schedule (in thousands, unaudited) | Period | Total principal repayments and debt maturities | | :------------------------------------ | :--------------------------------------------- | | For the remaining nine months ended December 31, 2020 | $46,171 | | December 31, 2021 | $11,394 | | December 31, 2022 | $15,848 | | December 31, 2023 | $85,537 | | December 31, 2024 | $44,240 | | December 31, 2025 | $91,426 | | Thereafter | $49,854 | | **Total** | **$344,470** | - The Company plans to meet **$53.78 million** in debt maturities for the next 12 months through a combination of refinancings, dispositions, and operating cash[95](index=95&type=chunk)[201](index=201&type=chunk) [6. Rentals under Operating Leases](index=20&type=section&id=6.%20Rentals%20under%20Operating%20Leases) Provides a schedule of future minimum rents receivable under the company's operating leases Future Minimum Rents (in thousands, unaudited) | Period | Total minimum rents | | :------------------------------------ | :------------------ | | For the remaining nine months ended December 31, 2020 | $34,113 | | December 31, 2021 | $40,412 | | December 31, 2022 | $33,910 | | December 31, 2023 | $27,437 | | December 31, 2024 | $20,676 | | December 31, 2025 | $14,842 | | Thereafter | $36,634 | | **Total minimum rents** | **$208,024** | [7. Equity and Mezzanine Equity](index=20&type=section&id=7.%20Equity%20and%20Mezzanine%20Equity) Details the company's equity structure, including preferred stock characteristics, dividend arrears, and potential dilutive shares - Series D Preferred Stock has **3,600,636 shares** outstanding with a **$25.00** liquidation preference per share, accruing **8.75%** cumulative cash dividends, which increased to **10.75%** due to undeclared dividends since December 20, 2018[102](index=102&type=chunk)[103](index=103&type=chunk) - A Preferred Dividend Default occurred on April 15, 2020, granting preferred shareholders the right to elect two additional directors[104](index=104&type=chunk) - Total cumulative dividends in arrears for Series A, B, and D Preferred Stock amounted to **$20.47 million** as of March 31, 2020[111](index=111&type=chunk) Series D Preferred Stock Carrying Value (in thousands, unaudited) | Item | March 31, 2020 | March 31, 2019 | | :-------------------------- | :------------- | :------------- | | Balance December 31 | $87,225 | $76,955 | | Accretion of Preferred Stock discount | $148 | $148 | | Undeclared dividends | $2,419 | $2,419 | | **Balance March 31** | **$89,792** | **$79,522** | Potential Dilutive Shares (as of March 31, 2020) | Item | Outstanding shares | Potential Dilutive Shares | | :-------------------------- | :----------------- | :---------------------- | | Common units | 234,019 | 234,019 | | Series B Preferred Stock | 1,875,748 | 1,172,343 | | Series D Preferred Stock | 3,600,636 | 5,307,541 | [8. Leases Commitments](index=23&type=section&id=8.%20Leases%20Commitments) Outlines the company's lease commitments, including weighted average remaining lease term, ground lease payments, and future minimum lease payments - The weighted average remaining lease term for the Company's leases was **35 years** as of March 31, 2020[117](index=117&type=chunk) Ground Lease Payments (in thousands, unaudited) | Property | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Amscot | $6 | $6 | | Beaver Ruin Village | $14 | $14 | | Beaver Ruin Village II | $6 | $6 | | Moncks Corner | $30 | $30 | | Devine Street | $99 | $99 | | JANAF | $71 | $67 | | **Total ground leases** | **$226** | **$247** | Undiscounted Cash Flows for Future Minimum Lease Payments (in thousands, unaudited) | Period | Total minimum lease payments | | :------------------------------------ | :--------------------------- | | For the remaining nine months ended December 31, 2020 | $437 | | December 31, 2021 | $637 | | December 31, 2022 | $640 | | December 31, 2023 | $642 | | December 31, 2024 | $644 | | December 31, 2025 | $648 | | Thereafter | $22,460 | | **Total minimum lease payments** | **$26,108** | [9. Commitments and Contingencies](index=24&type=section&id=9.%20Commitments%20and%20Contingencies) Discusses various commitments and potential liabilities, including geographic concentration risks, legal settlements, and bankruptcy proceedings - The Company's portfolio is geographically concentrated in the Southeast (**61%**), Mid-Atlantic (**35%**), and Northeast (**4%**) based on annualized base rent, making it susceptible to regional economic conditions[123](index=123&type=chunk) - The lawsuit by JCP Investment Partnership LP was settled in February 2020, alleging a breach of an asset coverage ratio covenant[127](index=127&type=chunk) - A court found in favor of former CEO Jon Wheeler for improper employment termination without cause, awarding him **$475 thousand** for severance and benefits, which the Company accrued as **$485 thousand** in 'other expenses'[128](index=128&type=chunk) - In the BOKF, NA v. WD-I Associates, LLC bankruptcy case, the Company expects to receive approximately **$196 thousand** as an unsecured creditor from the **$18.75 million** sale of Sea Turtle Marketplace[131](index=131&type=chunk)[132](index=132&type=chunk) - The Company's future principal obligation under the Harbor Pointe Tax Increment Financing Agreement is no more than **$2.23 million** as of March 31, 2020[136](index=136&type=chunk) [10. Related Party Transactions](index=26&type=section&id=10.%20Related%20Party%20Transactions) Details transactions and agreements with related parties, including reimbursement for proxy solicitation expenses - The Company agreed to reimburse the Stilwell Group **$439 thousand** for proxy solicitation expenses incurred for the 2019 annual meeting, which was accrued as 'other expenses'[140](index=140&type=chunk) Related Party Activity (in thousands, unaudited) | Item | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Amounts paid to affiliates | $9 | $0 | | Amounts received from affiliates | $0 | $6 | [11. Subsequent Events](index=27&type=section&id=11.%20Subsequent%20Events) Reports significant events occurring after the balance sheet date, such as loan extensions, PPP loan receipt, COVID-19 impacts, and CEO termination - The Columbia Fire Station loan was extended to September 3, 2020, and a non-binding term sheet was entered to extend the Tuckernuck loan to August 1, 2020[141](index=141&type=chunk)[142](index=142&type=chunk) - The Company received a **$552 thousand** Paycheck Protection Program (PPP) loan on April 27, 2020, under the CARES Act, which may be forgivable[143](index=143&type=chunk)[144](index=144&type=chunk) - The COVID-19 pandemic has led to tenant rent relief requests and forbearance on **8 loans**, deferring approximately **$928 thousand** in principal and interest payments[145](index=145&type=chunk)[146](index=146&type=chunk)[148](index=148&type=chunk) - The Company terminated the employment of its CEO, David Kelly, on April 13, 2020, with potential legal proceedings in early stages[134](index=134&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and results for Q1 2020, focusing on COVID-19 impacts, dispositions, and liquidity - The discussion includes forward-looking statements subject to risks, particularly the ongoing impact of COVID-19 on the economy and retail market[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - The COVID-19 pandemic has severely impacted the U.S. retail market, leading to business closures and 'shelter-in-place' orders, with the company's portfolio being **89.2% leased** and **86%** of tenants open and operating[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - The company received payment for approximately **72%** of April contractual base rent, has **$6.70 million** in cash and **$16.54 million** in restricted cash, and secured forbearance on **8 loans** deferring **$928 thousand** in payments[165](index=165&type=chunk) - The company continued the suspension of preferred dividend distributions to preserve liquidity due to COVID-19 uncertainty[165](index=165&type=chunk) [Company Overview](index=30&type=section&id=Company%20Overview) Provides a brief overview of the company's property portfolio and operational scope as of March 31, 2020 - As of March 31, 2020, the Company owned and operated **60 retail shopping centers**, one office building, and six undeveloped properties across multiple states[156](index=156&type=chunk) [Recent Trends and Activities](index=30&type=section&id=Recent%20Trends%20and%20Activities) Highlights the impact of the COVID-19 pandemic on the retail market, the company's portfolio performance, and liquidity measures - The COVID-19 pandemic has caused significant economic disruption, severely impacting the U.S. retail market due to mandatory business closures and restrictions[159](index=159&type=chunk) - As of March 31, 2020, the Company's portfolio was **89.2% leased**, with **86%** of tenants open and operating, and **27%** of annualized base rent from grocers[160](index=160&type=chunk)[161](index=161&type=chunk) - The Company received payment for approximately **72%** of April contractual base rent, secured forbearance on **8 loans** deferring **$928 thousand**, and maintains **$6.70 million** in cash and **$16.54 million** in restricted cash[165](index=165&type=chunk) - The Company recorded a **$600 thousand** impairment charge for Columbia Fire Station, which is held for sale[165](index=165&type=chunk) Leasing Activity Statistics (Three Months Ended March 31, in sq feet and count) | Item | 2020 | 2019 | Change (%) | | :------------------------------------ | :----- | :----- | :--------- | | Leases renewed with rate increase (sq feet) | 137,599 | 90,858 | 51.44% | | Leases renewed with rate decrease (sq feet) | 26,980 | 27,656 | -2.44% | | Leases renewed with no rate change (sq feet) | 20,578 | 2,400 | 757.42% | | Total leases renewed (sq feet) | 185,157 | 120,914 | 53.13% | | Total leases renewed (count) | 41 | 28 | 46.43% | | New leases (sq feet) | 27,622 | 31,200 | -11.47% | | New leases (count) | 14 | 8 | 75.00% | | Weighted average change over prior rates | 8.60% | 0.63% | 1265.08% | [Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019](index=34&type=section&id=Three%20Months%20Ended%20March%2031,%202020%20Compared%20to%20the%20Three%20Months%20Ended%20March%2031,%202019) Compares the company's financial performance for the first quarter of 2020 against the same period in 2019, analyzing key operational metrics Property Data Comparison | Item | March 31, 2020 | March 31, 2019 | Change | % Change | | :------------------------------------ | :------------- | :------------- | :----- | :------- | | Number of properties owned and leased | 60 | 62 | (2) | (3.23)% | | Aggregate gross leasable area | 5,564,882 | 5,675,581 | (110,699) | (1.95)% | | Ending leased rate | 89.2% | 89.1% | 0.1% | 0.11% | [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Analyzes changes in total revenue, operating expenses, and net loss, highlighting factors such as property sales, impairment charges, and legal costs - Total revenue decreased by **2.63%** to **$15.57 million** in Q1 2020, primarily due to a **$355 thousand** decrease from sold properties[175](index=175&type=chunk) - Total operating expenses decreased by **3.11%** to **$11.99 million**, mainly due to a **$1.02 million** decrease in depreciation and amortization, partially offset by a **$600 thousand** impairment charge on assets held for sale[176](index=176&type=chunk) - Corporate general and administrative expenses increased by **3.20%** to **$1.87 million**, driven by higher litigation and corporate counsel costs, partially offset by lower compensation and benefits[177](index=177&type=chunk)[183](index=183&type=chunk) - A **$1.87 million** decrease in gain on disposal of properties was recorded, from a gain of **$1.84 million** in Q1 2019 to a loss of **$26 thousand** in Q1 2020, due to the sale of St. Matthews[178](index=178&type=chunk) - Interest expense decreased by **8.20%** to **$4.40 million**, attributed to a **$15.46 million** reduction in loans payable and lower loan cost amortization[179](index=179&type=chunk) - Other expenses totaled **$1.02 million** in Q1 2020, including **$585 thousand** in legal settlement costs and **$439 thousand** for proxy solicitation expense reimbursement[180](index=180&type=chunk) - Accumulated undeclared preferred dividends totaled **$20.47 million** as of March 31, 2020, with **$3.49 million** attributable to Q1 2020[181](index=181&type=chunk) [Same Store and Non-same Store Operating Income](index=35&type=section&id=Same%20Store%20and%20Non-same%20Store%20Operating%20Income) Examines the performance of same-store and non-same-store properties, detailing changes in net operating income and related expenses - Total property net operating income (NOI) decreased by **3.43%** to **$10.83 million** in Q1 2020[189](index=189&type=chunk) - Same store property revenues remained relatively flat at **$15.54 million** in Q1 2020[186](index=186&type=chunk) - Same store property expenses increased by **1.73%** to **$4.71 million**, primarily due to increased repairs, maintenance, and utilities[187](index=187&type=chunk) NOI Reconciliation (in thousands, unaudited) | Item | Same Store 2020 | Same Store 2019 | Non-same Store 2020 | Non-same Store 2019 | Total 2020 | Total 2019 | | :------------------------------------ | :-------------- | :-------------- | :------------------ | :------------------ | :--------- | :--------- | | Net (Loss) Income | $(1,844) | $(1,213) | $(33) | $1,868 | $(1,877) | $655 | | Property Net Operating Income | $10,835 | $10,948 | $(6) | $266 | $10,829 | $11,214 | [Funds from Operations (FFO)](index=36&type=section&id=Funds%20from%20Operations%20(FFO)) Presents the calculation and analysis of Funds from Operations, highlighting a significant decrease in Q1 2020 compared to Q1 2019 - FFO decreased by **23.40%** to **$3.55 million** in Q1 2020 from **$4.63 million** in Q1 2019[192](index=192&type=chunk) - Same store FFO decreased by **$987 thousand**, primarily due to increased other expenses, decreased property NOI, and increased corporate G&A, partially offset by decreased interest expense[192](index=192&type=chunk)[193](index=193&type=chunk) FFO Calculation (in thousands, unaudited) | Item | 2020 | 2019 | Change ($) | Change (%) | | :------------------------------------ | :----- | :----- | :--------- | :--------- | | Net (Loss) Income | $(1,877) | $655 | $(2,532) | (386.56)% | | Depreciation and amortization of real estate assets | $4,799 | $5,816 | $(1,017) | (17.49)% | | Impairment of assets held for sale | $600 | $0 | $600 | 100.00% | | Loss (gain) on disposal of properties | $26 | $(1,839) | $1,865 | 101.41% | | **FFO** | **$3,548** | **$4,632** | **$(1,084)** | **(23.40)%** | [Adjusted FFO (AFFO)](index=38&type=section&id=Adjusted%20FFO%20(AFFO)) Details the calculation of Adjusted Funds from Operations, showing a decrease in Q1 2020 and identifying non-recurring expenses - AFFO decreased by **20.77%** to **$843 thousand** in Q1 2020 from **$1,064 thousand** in Q1 2019[194](index=194&type=chunk) - Other nonrecurring and non-cash expenses in Q1 2020 included **$585 thousand** in legal settlement costs and **$439 thousand** for proxy solicitation expenses[194](index=194&type=chunk) AFFO Calculation (in thousands, unaudited) | Item | 2020 | 2019 | | :------------------------------------ | :----- | :----- | | FFO | $3,548 | $4,632 | | Preferred Stock dividends - undeclared | $(3,657) | $(3,657) | | Preferred stock accretion adjustments | $170 | $170 | | FFO available to common shareholders and common unitholders | $61 | $1,145 | | Acquisition and development costs | $1 | $4 | | Capital related costs | $4 | $74 | | Other non-recurring and non-cash expenses | $1,024 | $24 | | Share-based compensation | — | $90 | | Straight-line rental revenue, net straight-line expense | $(5) | $(155) | | Loan cost amortization | $310 | $392 | | Above (below) market lease amortization | $(273) | $(226) | | Recurring capital expenditures and tenant improvement reserves | $(279) | $(284) | | **AFFO** | **$843** | **$1,064** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the company's cash position, debt structure, and strategies for managing liquidity and meeting future debt maturities - Consolidated cash, cash equivalents, and restricted cash totaled **$23.24 million** at March 31, 2020, an increase from **$21.59 million** at December 31, 2019[196](index=196&type=chunk) Cash Flow Activities (in thousands, unaudited) | Activity | 2020 | 2019 | Change ($) | Change (%) | | :-------------------- | :----- | :----- | :--------- | :--------- | | Operating activities | $3,223 | $2,697 | $526 | 19.50% | | Investing activities | $1,339 | $3,318 | $(1,979) | (59.64)% | | Financing activities | $(2,915) | $(5,409) | $2,494 | 46.11% | Debt Balances (in thousands, unaudited) | Item | March 31, 2020 | December 31, 2019 | | :------------------------------------ | :------------- | :---------------- | | Fixed-rate notes | $307,207 | $305,017 | | Adjustable-rate mortgages | $23,948 | $24,163 | | Fixed rate mortgages, assets held for sale | $4,015 | $0 | | Floating-rate line of credit | $9,300 | $17,879 | | **Total debt** | **$344,470** | **$347,059** | - The Company has **$53.78 million** in debt maturities and principal payments due in the twelve months ended March 31, 2021, including **$9.30 million** on the KeyBank Credit Agreement[201](index=201&type=chunk) - Liquidity needs will be met through cash from operations, refinancing, dispositions, and short-term loan extensions, with the Board suspending preferred dividend payments to provide approximately **$3.49 million** of additional funds per quarter[201](index=201&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) [Off-Balance Sheet Arrangements](index=40&type=section&id=Off-Balance%20Sheet%20Arrangements) Discloses the company's off-balance sheet obligations, specifically the principal obligation under the Harbor Pointe Tax Increment Revenue Note - The Company's future principal obligation under the Harbor Pointe Tax Increment Revenue Note is no more than **$2.23 million** as of March 31, 2020[209](index=209&type=chunk)[210](index=210&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) Refers to Note 2 for details on recently adopted and evaluated accounting standards and their impact - Details on recent accounting pronouncements and their anticipated impact are provided in Note 2 of the condensed consolidated financial statements[212](index=212&type=chunk) [Critical Accounting Policies](index=40&type=section&id=Critical%20Accounting%20Policies) Confirms that there have been no significant changes to the company's critical accounting policies during the reporting period - There have been no significant changes to critical accounting policies during the three months ended March 31, 2020[213](index=213&type=chunk) [Available Information](index=40&type=section&id=Available%20Information) Provides information on where to access the company's public filings and corporate governance documents - The Company's website (www.whlr.us) provides free access to its SEC filings and corporate governance documents[214](index=214&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) States that the company has no quantitative and qualitative disclosures about market risk to report - The company has no quantitative and qualitative disclosures about market risk to report[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of March 31, 2020[216](index=216&type=chunk) - No changes in internal control over financial reporting occurred during the period[217](index=217&type=chunk) [PART II – OTHER INFORMATION](index=42&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) Details ongoing and settled legal proceedings, including a shareholder lawsuit, CEO termination judgment, bankruptcy case, and defamation claims - The lawsuit by JCP Investment Partnership LP, alleging a breach of an asset coverage ratio covenant, was settled and dismissed without prejudice in February 2020[219](index=219&type=chunk) - A court found in favor of former CEO Jon Wheeler for improper employment termination without cause, awarding him **$475 thousand** for severance and benefits, which the Company accrued as **$485 thousand** in 'other expenses'[220](index=220&type=chunk) - In the BOKF, NA v. WD-I Associates, LLC bankruptcy case, the Company expects to receive approximately **$196 thousand** as an unsecured creditor from the **$18.75 million** sale of Sea Turtle Marketplace[221](index=221&type=chunk)[222](index=222&type=chunk) - Former CEO Jon Wheeler filed claims for defamation against the Company and former CEO David Kelly, with a trial set for June 10, 2020[223](index=223&type=chunk) - The Company terminated CEO David Kelly on April 13, 2020, with potential legal proceedings in early stages[134](index=134&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) States that as a smaller reporting company, specific risk factor disclosures are not required under this item - The company is a smaller reporting company and is not required to provide risk factor information under this item[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=43&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Indicates no applicable disclosures regarding unregistered sales of equity securities and use of proceeds - No information to report under this item[226](index=226&type=chunk)[229](index=229&type=chunk) [Item 3. Defaults Upon Senior Securities](index=43&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) States that there are no defaults upon senior securities to report - No defaults upon senior securities[226](index=226&type=chunk) [Item 4. Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) States that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[227](index=227&type=chunk) [Item 5. Other Information](index=43&type=section&id=Item%205.%20Other%20Information) Indicates that there is no other information to report - No other information to report[228](index=228&type=chunk) [Item 6. Exhibits](index=44&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with the Form 10-Q, including securities descriptions, employment agreements, credit amendments, and certifications - The exhibit list includes Description of Securities, Employment Agreement with Crystal Plum, Second Amendment to KeyBank Credit Agreement, Equity Interests Pledge and Security Agreement, Certifications of CEO and CFO (Sections 302 and 906), and XBRL Instance Document and Taxonomy Extensions[230](index=230&type=chunk) [Signatures](index=45&type=section&id=Signatures) [SIGNATURE](index=45&type=section&id=SIGNATURE) The report is duly signed by Crystal Plum, Chief Financial Officer, on behalf of Wheeler REIT on May 12, 2020 - The report was signed by Crystal Plum, Chief Financial Officer, on May 12, 2020[234](index=234&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K þ ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission file number 001-35713 WHEELER REAL ESTATE INVESTMENT TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) (State or Other Juri ...

Financial Performance - Net loss attributable to common shareholders for the fourth quarter of 2019 was $(12.7) million, or $(0.15) per diluted share[9] - NAREIT-defined FFO for the fourth quarter of 2019 was $11.0 million, or $0.12 per diluted share[10] - Operating FFO for the fourth quarter of 2019 was $9.7 million, or $0.11 per diluted share[10] - NAREIT-defined FFO for the full year 2019 was $42.1 million, or $0.46 per diluted share[11] - Operating FFO for the full year 2019 was $40.8 million, or $0.45 per diluted share[11] Portfolio and Leasing Activity - Same-property NOI increased 0.1% for the fourth quarter of 2019 and 0.3% for the full year 2019[8, 13] - The company signed 41 new and renewal leases for 297,100 square feet in the fourth quarter of 2019[8] - The company signed 162 new and renewal leases for 1,742,100 square feet for the full year 2019[8] - Comparable cash-basis lease spreads were 1.7% for the fourth quarter of 2019 and 2.1% for the full year 2019[8] - The company's total portfolio and same-property portfolio were 93.2% leased at year-end[8, 13] Balance Sheet and Debt - The company had $95.6 million available under its revolving credit facility as of December 31, 2019[15] - Net debt to EBITDAre was 8.7 times as of December 31, 2019[15] - The company has no debt maturities until early 2021[15] 2020 Guidance - The company's initial 2020 guidance includes a net loss attributable to common shareholders per diluted share of ($0.12) – ($0.10)[18] - NAREIT-defined FFO per diluted share is guided at $0.48 – $0.50 for 2020[18] - Operating FFO per diluted share is guided at $0.49 – $0.51 for 2020[18] - Dispositions of approximately $15 million to $25 million are expected primarily in the second half of 2020[18]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35713 WHEELER REAL ESTATE INVESTMENT TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) Ma ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35713 WHEELER REAL ESTATE INVESTMENT TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) Marylan ...

Financial Performance - Net income attributable to common shareholders for the second quarter of 2019 was $27 million, or $003 per diluted share[9] - NAREIT-defined FFO for the second quarter of 2019 was $102 million, or $011 per diluted share[10] - The company updates its previously-announced 2019 guidance for net income attributable to common shareholders per diluted share to $002 - $003[18] - The company updates its previously-announced 2019 guidance for NAREIT-defined FFO per diluted share to $043 - $044[18] Portfolio and Leasing Activities - The company signed 37 new and renewal leases for 452400 square feet in the second quarter of 2019[8] - On a comparable space basis, the company leased 448000 square feet at a negative lease spread of 25% on a cash basis in the second quarter of 2019[11] - The company's total portfolio, excluding properties held for sale, was 915% leased as of June 30, 2019[13] Acquisitions and Dispositions - The company acquired Girard Plaza for $85 million on June 19, 2019[14] - The company sold Fort Washington Center for $90 million on June 26, 2019, resulting in a gain on sale of $28 million[14] Balance Sheet - As of June 30, 2019, the company had $1174 million available under its revolving credit facility[15] - As of June 30, 2019, the company reported net debt to EBITDAre of 83 times[15]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35713 WHEELER REAL ESTATE INVESTMENT TRUST, INC. (Exact Name of Registrant as Specified in Its Charter) (State ...

```markdown Part I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) The Company is a self-managed REIT focused on owning and operating grocery-anchored retail properties, with a portfolio of 71 properties and an 89.4% occupancy rate as of December 31, 2018 - The Company shifted its focus in 2018 to owning, leasing, and operating income-producing retail properties, with a primary emphasis on **grocery-anchored centers**, following the JANAF acquisition[16](index=16&type=chunk) Portfolio Overview (as of December 31, 2018) | Metric | Value | | :-------------------------------- | :-------------------------------- | | Total Properties | 71 | | Retail Shopping Centers | 64 | | Office Property | 1 | | Undeveloped Land Parcels | 6 | | Total Leasable Square Feet | 5,716,471 | | Occupancy Rate | 89.4% | | Annualized Base Rent Concentration (Southeast) | 76% | | Annualized Base Rent Concentration (Mid-Atlantic) | 19% | | Annualized Base Rent Concentration (Northeast) | 4% | | Annualized Base Rent Concentration (Midwest) | 1% | - The Company's primary objective is to provide attractive risk-adjusted returns by increasing cash flows, focusing on **necessity-based retail** in secondary and tertiary markets, and recycling capital to deleverage the balance sheet[23](index=23&type=chunk) Overview Portfolio Management Team and People Business Objectives and Investment Strategy Policies With Respect to Certain Activities Investment Policies Financings and Leverage Policy Lending Policies Equity Capital Policies Change in Investment and Financing Objectives and Policies Conflict of Interest Policies Interested Director and Officer Transactions Policies With Respect To Other Activities Governmental Regulations Affecting Our Properties Competition Reporting Policies [Item 1A. Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The Company faces diverse risks from business operations, real estate industry factors, organizational structure, and REIT compliance, potentially impacting financial performance - The Company's total indebtedness was approximately **$369.61 million** as of December 31, 2018, exposing it to default risks and potential cash flow insufficiency[59](index=59&type=chunk)[60](index=60&type=chunk) - The Company's reliance on **anchor stores and major tenants** in its retail shopping centers creates significant risk, as their loss could reduce occupancy, rental income, and property value[62](index=62&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - Failure to qualify as a REIT would lead to significant adverse tax consequences, including corporate income tax and increased state/local taxes, reducing funds for distribution and impairing capital raising[152](index=152&type=chunk)[153](index=153&type=chunk) Risks Related to Our Business and Operations Risks Related to the Real Estate Industry Risks Related to Our Organization Structure Risks Related to Our Status as a REIT [Item 1B. Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The Company reports no unresolved staff comments from the SEC - There are no unresolved staff comments[165](index=165&type=chunk) [Item 2. Properties](index=36&type=section&id=Item%202.%20Properties) The Company's portfolio includes 71 properties, primarily retail, totaling 5.7 million square feet with 89.1% occupancy, concentrated in the Southeast Portfolio Summary (as of December 31, 2018) | Metric | Value | | :-------------------------------- | :-------------------------------- | | Total Properties | 71 | | Income-Producing Properties | 64 | | Total Gross Leasable Square Feet | 5,716,471 | | Occupancy Rate | 89.1% | | States with Properties | 12 | | Top 10 Tenants (% of Annualized Base Rent) | 24.59% | | Top 10 Tenants (% of Gross Leasable Square Footage) | 29.32% | Major Tenants (as of December 31, 2018) | Tenant | Annualized Base Rent | % of Total Annualized Base Rent | | :------------------- | :----------------------------- | :------------------------------ | | BI-LO | 2,717 | 5.52% | | Food Lion | 2,651 | 5.38% | | Piggly Wiggly | 1,474 | 2.99% | | Kroger | 1,324 | 2.69% | | Winn Dixie | 863 | 1.75% | | Hobby Lobby | 675 | 1.37% | | Dollar Tree | 660 | 1.34% | | BJ's Wholesale Club | 594 | 1.21% | | Harris Teeter | 578 | 1.17% | | TJ Maxx | 574 | 1.17% | | **Total Top 10** | **12,110** | **24.59%** | Lease Expirations (as of December 31, 2018) | Period | % of Total Expiring Square Footage | % of Total Annualized Base Rent | | :-------------------- | :------------------------------- | :------------------------------ | | Available | 10.89% | —% | | Month-to-Month | 0.59% | 0.88% | | 2019 | 6.49% | 9.43% | | **Total (Month-to-Month + 2019)** | **7.08%** | **10.31%** | Our Portfolio Major Tenants Lease Expirations Property Management and Leasing Strategy [Item 3. Legal Proceedings](index=39&type=section&id=Item%203.%20Legal%20Proceedings) The Company faces three significant lawsuits, including two from its former CEO and one regarding Series D Preferred Stock asset coverage, with unpredictable outcomes - Former CEO Jon S. Wheeler filed two lawsuits in May and September 2018, alleging breaches of his employment agreement, retaliatory termination, defamation, and tortious interference[183](index=183&type=chunk)[186](index=186&type=chunk) - JCP Investment Partnership, LP filed a lawsuit in June 2018, alleging the Company failed to maintain the designated asset coverage ratio for Series D Preferred Stock, requiring redemption[185](index=185&type=chunk) [Item 4. Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[188](index=188&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities](index=40&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Shareholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The Company's common stock trades on NASDAQ, with 176 holders, and dividends for common and preferred stock were suspended in late 2018 and early 2019 - The Company's Common Stock is traded on the **NASDAQ Capital Market** under the symbol "WHLR"[190](index=190&type=chunk) - As of February 27, 2019, there were **176 holders of record** of the Company's common stock[191](index=191&type=chunk) - The Board of Directors suspended Common Stock dividends in March 2018 and Series A, B, and D Preferred dividends for Q4 2018 and Q1 2019[192](index=192&type=chunk) Common Stock and Operating Partnership Unit Dividend Payments (2017) | Dividend Period | Record Date | Payment Date | Payment Amount per Share or Unit ($) | | :----------------------------------- | :---------- | :----------- | :----------------------------------- | | January 1, 2017 - January 31, 2017 | 1/31/2017 | 2/28/2017 | 0.1400 | | February 1, 2017 - February 28, 2017 | 2/28/2017 | 3/31/2017 | 0.1400 | | March 1, 2017 - March 31, 2017 | 3/31/2017 | 4/28/2017 | 0.1400 | | April 1, 2017 - June 30, 2017 | 6/30/2017 | 7/15/2017 | 0.3400 | | July 1, 2017 - September 30, 2017 | 9/29/2017 | 10/15/2017 | 0.3400 | | October 1, 2017 - December 31, 2017 | 12/28/2017 | 1/15/2018 | 0.3400 | Market Information Approximate Number of Holders of Our Common Stock Dividend Policy Dividend Payments Unregistered Sale of Securities [Item 6. Selected Financial Data](index=41&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable for the report - Selected Financial Data is not applicable[196](index=196&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews the Company's financial condition and operational results, including key 2018 events, liquidity, and comparative performance - The Company acquired **JANAF**, a retail shopping center, for **$85.65 million** on January 18, 2018, financed by cash, restricted cash, debt assumption, and common stock issuance[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - In 2018, the Company committed to selling seven undeveloped land parcels, reclassifying them as discontinued operations and recognizing a **$3.94 million impairment loss**[205](index=205&type=chunk)[206](index=206&type=chunk) Key Financial Data (in thousands) | Metric | 2018 | 2017 | Change ($) | Change (%) | | :------------------------------------------ | :----- | :----- | :--------- | :--------- | | Total Revenue | $65,709 | $58,535 | $7,174 | 12.26% | | Total Operating Expenses | $61,779 | $57,993 | $3,786 | 6.53% | | Operating Income | $6,393 | $1,563 | $4,830 | 309.02% | | Net Loss Attributable to Wheeler REIT | $(16,500) | $(12,094) | $(4,406) | (36.43)% | | Funds from Operations (FFO) | $16,246 | $10,930 | $5,316 | 48.64% | | Adjusted Funds from Operations (AFFO) | $7,083 | $12,261 | $(5,178) | (42.23)% | - The Company recorded a **$5.49 million goodwill impairment charge** in Q4 2018 due to a significant decline in common stock market capitalization below net asset book value[210](index=210&type=chunk) Company Overview Recent Trends and Activities JANAF Acquisition Dispositions Assets Held for Sale Revere Term Loan KeyBank Credit Agreement Goodwill Sea Turtle Development and Related Receivables New Leases, Leasing Renewals and Expirations Anchor Lease Modifications and Early Terminations Critical Accounting Policies Revenue Recognition Rents and Other Tenant Receivables Acquired Properties and Lease Intangibles Impairment of Long-Lived Assets Goodwill Notes Receivable Liquidity and Capital Resources Operating Activities Investing Activities Financing Activities Future Liquidity Needs Off-Balance Sheet Arrangements Recent Accounting Pronouncements Year Ended December 31, 2018 Compared to the Year Ended December 31, 2017 Results of Operations Total Revenue Total Operating Expenses Gain on Disposal of Properties Interest Income Interest Expense Discontinued Operations Same Store and New Store Operating Income Funds from Operations Year Ended December 31, 2017 Compared to the Year Ended December 31, 2016 Results of Operations Total Revenue Total Operating Expenses Gain on Disposal of Properties - Operations Interest Income Interest Expense Discontinued Operations Same Store and New Store Operating Income Funds from Operations [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable for the report - Quantitative and Qualitative Disclosures About Market Risk are not applicable[297](index=297&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=62&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The Company's audited consolidated financial statements and supplementary data are incorporated by reference, starting on page 80 - The financial statements and supplementary data are incorporated by reference, beginning on **page 80** of this Annual Report on Form 10-K[298](index=298&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=62&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The Company reports no changes or disagreements with its accountants on financial disclosure - There are no changes in and disagreements with accountants on accounting and financial disclosure[299](index=299&type=chunk) [Item 9A. Controls and Procedures](index=62&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2018 - The Company's disclosure controls and procedures were evaluated and deemed **effective** as of December 31, 2018[300](index=300&type=chunk) - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2018, using the COSO framework (2013), concluding it was **effective**[303](index=303&type=chunk) - There were no material changes in the Company's internal control over financial reporting for the three months ended December 31, 2018[306](index=306&type=chunk) Disclosure Controls and Procedures Management's Annual Report on Internal Control Over Financial Reporting Changes in Internal Control Over Financial Reporting [Item 9B. Other Information](index=63&type=section&id=Item%209B.%20Other%20Information) This item is not applicable for the report - Other Information is not applicable[307](index=307&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=63&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The Board of Directors, comprising eight members with a majority independent, oversees risk management through five committees and maintains a Code of Business Conduct - The Board of Directors consists of **eight members**, with **seven identified as independent** directors[309](index=309&type=chunk)[310](index=310&type=chunk)[324](index=324&type=chunk) - The Board administers risk oversight directly and through its **five standing committees**: Audit, Nominating and Corporate Governance, Compensation, Investment, and Finance[325](index=325&type=chunk) - The Company adopted a **Code of Business Conduct and Ethics** applicable to all directors, officers, and employees, available on its Investor Relations website[344](index=344&type=chunk) Our Directors and Executive Officers Biographical Summaries of Directors and Executive Officers Corporate Governance Profile Role of the Board in Risk Oversight Selection of Nominees for the Board Determinations of Director Independence Board Meetings During Fiscal 2018 Board Committees Audit Committee Nominating and Corporate Governance Committee Compensation Committee Investment Committee Finance Committee Compliance with Section 16(a) of Reporting Requirements Code of Ethics [Item 11. Executive Compensation](index=70&type=section&id=Item%2011.%20Executive%20Compensation) The Compensation Committee oversees executive compensation, including three-year employment agreements for key officers and long-term incentive plans for equity awards - The Compensation Committee oversees executive compensation, entering into three-year employment agreements with the **CEO, CFO, and COO** in February 2018[345](index=345&type=chunk)[346](index=346&type=chunk) Executive Base Compensation (2018) | Executive | Base Compensation (per annum) | | :-------------------- | :---------------------------- | | David Kelly (CEO) | $400,000 | | Matthew Reddy (CFO) | $250,000 | | M. Andrew Franklin (COO) | $250,000 | Summary Compensation Table (2018, in thousands) | Name and Principal Position | Salary ($) | All Other Compensation ($) | Total ($) | | :-------------------------- | :--------- | :------------------------- | :-------- | | David Kelly, CEO | 388,462 | 14,179 | 402,641 | | Jon S. Wheeler, Former CEO | 47,500 | 2,495 | 49,995 | | Andrew Franklin, COO | 244,231 | 17,334 | 261,565 | | Matthew Reddy, CFO | 246,731 | 17,027 | 263,758 | - Non-employee directors receive **$40,000 per year** plus stock grants, with additional retainers, and in 2018, received the majority of compensation in stock grants[383](index=383&type=chunk) Role of Compensation Committee Employment Agreements With The Company's Executive Officers Employment Agreement of David Kelly Employment Agreement of Matthew Reddy Employment Agreement of M. Andrew Franklin Stock Plans 2015 Long-Term Incentive Plan 2016 Long-Term Incentive Plan Security Authorized For Issuance Under Equity Compensation Plan Grants of Plan Based Awards in 2018 Outstanding Equity Awards at Fiscal-Year End Compensation Tables Summary Compensation Table Director Compensation [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters](index=76&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Shareholder%20Matters) This section details beneficial ownership of common stock and units, with directors and officers holding 10.2% and major shareholders 48.0% Beneficial Ownership of Directors, Executive Officers, and 5% Owners (as of February 27, 2019) | Category | Number of Shares Beneficially Owned | Percentage of All Shares | | :------------------------------------------------ | :---------------------------------- | :----------------------- | | All directors, director nominees and executive officers as a group (10 persons) | 990,902 | 10.2% | | Stilwell Value Partners VII, L.P. | 919,540 | 9.5% | | Richard S. Strong | 683,724 | 7.1% | | Westport Capital Partners, LLC | 857,864 | 8.9% | | FMR, LLC | 1,092,673 | 11.3% | | NS Advisors, LLC | 555,143 | 5.7% | | Eidelman Virant Capital, Inc. | 537,187 | 5.5% | | **Total of 5% or more shareholders as a group** | **4,646,131** | **48.0%** | - As of February 27, 2019, there were **9,692,082 shares of Common Stock outstanding**[7](index=7&type=chunk)[389](index=389&type=chunk) Securities Authorized for Issuance Under Equity Compensation Plans Security Ownership of Certain Beneficial Owners and Management [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=79&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) This section details related party transactions, including Operating Partnership agreements, executive employment, indemnification, and significant dealings with Sea Turtle Development - Limited partners of the Operating Partnership, including the former Chairman and CEO, have the right to redeem common units for cash or common stock after **12 months**[397](index=397&type=chunk) Related Party Activity (in thousands) | Metric | 2018 | 2017 | | :----------------------------- | :----- | :----- | | Amounts paid to affiliates | $15 | $48 | | Amounts received from affiliates | $116 | $2,517 | | Notes receivable | $5,000 | $6,739 | - The Company recognized **$1.74 million (2018)** and **$5.26 million (2017) impairment charges** on notes receivable from Sea Turtle Development, placing them on nonaccrual status in 2018 and not recognizing **$1.44 million** in interest income[401](index=401&type=chunk) - A tax protection agreement obligates the Operating Partnership to reimburse the former CEO for tax liabilities from certain taxable income or gain until **November 10, 2023**[404](index=404&type=chunk) Partnership Agreement Employment Agreements Indemnification of Officers and Directors Other Related Party Transactions [Item 14. Principal Accounting Fees and Services](index=81&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Cherry Bekaert LLP is the Company's independent auditor, with total fees of $553 thousand in 2018, pre-approved by the Audit Committee - **Cherry Bekaert LLP** has been appointed as the independent registered public accounting firm for 2018, serving the Company since 2012[406](index=406&type=chunk) Fees Paid to Independent Registered Public Accounting Firm (in thousands) | Types of Fee | 2018 | 2017 | | :----------------------- | :----- | :----- | | Audit Fees | $341 | $335 | | Audit Related Fees | $50 | $15 | | Tax Fees | $159 | $134 | | All Other Fees | $3 | $0 | | **Total** | **$553** | **$484** | - All audit and non-audit services by Cherry Bekaert LLP are **pre-approved** by the Company's Audit Committee[409](index=409&type=chunk) Audit Committee Pre-Approval Policies [Item 15. Exhibits and Financial Statement Schedules](index=81&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements and supplementary schedules, including the auditor's report, balance sheets, and cash flow statements - The financial statements include the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Operations, Equity, Cash Flows, and Notes[410](index=410&type=chunk) - Financial statement schedules include **Schedule II-Valuation and Qualifying Accounts** and **Schedule III-Real Estate and Accumulated Depreciation**[411](index=411&type=chunk) [Notes to Consolidated Financial Statements](index=92&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, explaining accounting policies and financial details [1. Organization and Basis of Presentation and Consolidation](index=92&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation%20and%20Consolidation) The Company, a Maryland REIT, operates 71 properties with 89.11% occupancy, shifting focus to owning and operating its portfolio post-JANAF acquisition - The Company, a Maryland corporation formed in 2011, operates as the general partner of Wheeler REIT, L.P[436](index=436&type=chunk) - As of December 31, 2018, the Company owned **64 centers, one office, and six undeveloped properties** across 12 states, with **5.7 million square feet** and **89.11% occupancy**[436](index=436&type=chunk) - Subsequent to the 2018 JANAF acquisition, the Company shifted its focus to owning and operating its current portfolio, moving away from acquisitions and managing[437](index=437&type=chunk) - The Company became an internally-managed REIT in 2014, converting WRE and Wheeler Development, LLC to **Taxable REIT Subsidiaries (TRSs)** for non-REIT property services[438](index=438&type=chunk)[439](index=439&type=chunk)[440](index=440&type=chunk) [2. Summary of Significant Accounting Policies](index=93&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines key accounting policies, including property valuation, asset impairment, revenue recognition, and the impact of recent accounting pronouncements - The Company records investment properties at fair value, depreciates buildings over **5 to 40 years**, and reviews for impairment annually when estimated undiscounted future operating income is less than carrying value[443](index=443&type=chunk)[447](index=447&type=chunk) - Assets held for sale are reported at the lower of carrying value or fair value less costs to sell, with a **$3.94 million impairment charge** recognized in 2018 for undeveloped land parcels[449](index=449&type=chunk) - Goodwill is tested annually for impairment, with a **$5.49 million impairment** recorded in 2018 due to market capitalization falling below net asset book value[459](index=459&type=chunk)[460](index=460&type=chunk) Total Revenue by Type (in thousands) | Revenue Type | 2018 | 2017 | 2016 | | :--------------------- | :----- | :----- | :----- | | Minimum rent | $50,698 | $43,957 | $32,876 | | Tenant reimbursements | $12,595 | $11,032 | $8,649 | | Lease termination fees | $1,271 | $560 | $26 | | Percentage rent | $254 | $199 | $289 | | Asset management fees | $189 | $927 | $855 | | Commissions | $140 | $899 | $964 | | Development income | $0 | $537 | $244 | | Other | $562 | $424 | $257 | | **Total** | **$65,709** | **$58,535** | **$44,160** | - The Company adopted **ASC Topic 606** on January 1, 2018, for non-lease revenue, while real estate lease contracts remain under Topic 605[466](index=466&type=chunk)[493](index=493&type=chunk) - **ASU 2016-02, "Leases (Topic 842),"** effective January 1, 2019, is expected to significantly impact the balance sheet by requiring recognition of right-of-use assets and lease obligations for operating leases[494](index=494&type=chunk)[497](index=497&type=chunk) Investment Properties Assets Held For Sale and Discontinued Operations Conditional Asset Retirement Obligation Cash and Cash Equivalents and Restricted Cash Tenant Receivables and Unbilled Rent Notes Receivable Goodwill Above and Below Market Lease Intangibles, net Deferred Costs and Other Assets, net Revenue Recognition Adoption of ASC Topic 606, "Revenue from Contracts with Customers" Lease Contract Revenue Asset Management Fees Commissions Development Income Income Taxes Taxable REIT Subsidiary Cost Allocation Financial Instruments Use of Estimates Advertising Costs Corporate General and Administrative Expense Other Operating Expense Noncontrolling Interests Recent Accounting Pronouncements [3. Real Estate](index=103&type=section&id=3.%20Real%20Estate) Net investment properties increased to $433.14 million in 2018 due to the JANAF acquisition, despite impairment losses and property dispositions Investment Properties, Net (in thousands) | Category | December 31, 2018 | December 31, 2017 | | :-------------------------- | :------------------ | :------------------ | | Land and land improvements | $98,846 | $91,108 | | Buildings and improvements | $374,485 | $312,831 | | Investment properties at cost | $473,331 | $406,244 | | Less accumulated depreciation | $(40,189) | $(31,045) | | **Investment properties, net** | **$433,142** | **$375,199** | - The JANAF retail shopping center was acquired on January 18, 2018, for **$85.65 million**, including **$58.87 million in assumed debt** and **$1.13 million in common stock**[510](index=510&type=chunk)[512](index=512&type=chunk) - In 2018, the Company recognized a **$3.94 million impairment charge** on undeveloped land parcels classified as held for sale and discontinued operations, reflecting a strategic shift[515](index=515&type=chunk)[516](index=516&type=chunk)[522](index=522&type=chunk) Property Dispositions (2018, in thousands) | Property | Contract Price | Gain | Net Proceeds | | :------------------------------------- | :------------- | :--- | :----------- | | Monarch Bank Building | $1,750 | $151 | $299 | | Shoppes at Eagle Harbor | $5,705 | $1,270 | $2,071 | | Laskin Road Land Parcel (1.5 acres) | $2,858 | $903 | $2,747 | | Chipotle Ground Lease at Conyers Crossing | $1,270 | $1,042 | $1,160 | JANAF Acquisition Assets Held for Sale Dispositions Impairment of Investment Properties and Assets Held for Sale [4. Notes Receivable](index=105&type=section&id=4.%20Notes%20Receivable) Notes receivable from Sea Turtle Development totaled $12.00 million, with $1.74 million impairment in 2018, reducing carrying value to $5.00 million - The Company loaned **$11.00 million** for Sea Turtle Development and **$1.00 million** for a land sale in 2016, secured by a second deed of trust and bearing **12% annual interest**[523](index=523&type=chunk)[525](index=525&type=chunk) - Impairment charges of **$1.74 million (2018)** and **$5.26 million (2017)** were recognized on notes receivable, reducing carrying value to **$5.00 million** as of December 31, 2018[526](index=526&type=chunk) - The notes receivable were placed on nonaccrual status in 2018, resulting in **$1.44 million of unrecognized interest income** for the year[526](index=526&type=chunk) [5. Goodwill](index=106&type=section&id=5.%20Goodwill) Goodwill, initially $7.00 million, incurred a $5.49 million impairment charge in 2018 due to market capitalization decline - Goodwill, initially **$7.00 million** from the 2014 acquisition of Operating Companies, is not amortized and is tested annually for impairment[528](index=528&type=chunk) - The Company early adopted **ASU 2017-04** in December 2018, recording a **$5.49 million impairment charge** as the reporting unit's fair value fell below its carrying value[529](index=529&type=chunk) [6. Discontinued Operations](index=106&type=section&id=6.%20Discontinued%20Operations) Discontinued operations resulted in a $3.04 million net loss in 2018, primarily due to a $3.94 million land impairment charge Net (Loss) Income from Discontinued Operations (in thousands) | Metric | 2018 | 2017 | 2016 | | :------------------------------------------ | :------- | :----- | :----- | | Revenues | $0 | $26 | $284 | | Expenses | $0 | $1 | $79 | | Impairment of land | $3,938 | $0 | $0 | | Operating (loss) income | $(3,938) | $25 | $205 | | Interest expense | $0 | $9 | $69 | | (Loss) income from discontinued operations before gain on disposals | $(3,938) | $16 | $136 | | Gain on disposal of properties | $903 | $1,502 | $688 | | **(Loss) income from discontinued operations** | **$(3,035)** | **$1,518** | **$824** | - The **$3.94 million impairment of land** in 2018 was based on carrying value exceeding fair value less estimated selling costs for undeveloped land parcels[534](index=534&type=chunk) [7. Loans Payable](index=108&type=section&id=7.%20Loans%20Payable) Total loans payable increased to $369.61 million in 2018, with $88.04 million maturing in 2019, and the Company faced Revere Term Loan covenant non-compliance Total Debt Balances (in thousands) | Debt Type | December 31, 2018 | December 31, 2017 | | :------------------------ | :------------------ | :------------------ | | Fixed-rate notes | $286,611 | $215,493 | | Adjustable-rate mortgages | $26,503 | $29,506 | | Fixed-rate notes, assets held for sale | $4,396 | $747 | | Floating-rate line of credit | $52,102 | $68,032 | | **Total debt** | **$369,612** | **$313,778** | - The Company has **$88.04 million of debt maturing** in 2019, including **$52.10 million** on the KeyBank Line of Credit[234](index=234&type=chunk)[235](index=235&type=chunk)[589](index=589&type=chunk) - As of December 31, 2018, the Company was not in compliance with the **interest coverage ratio** on the Revere Term Loan, but intends to pay it in full by April 1, 2019[587](index=587&type=chunk)[589](index=589&type=chunk) - The KeyBank Line of Credit was reduced to **$52.10 million** at December 31, 2018, but resulted in a **$3.83 million overadvance**, with repayment extended to at least March 31, 2019[208](index=208&type=chunk)[209](index=209&type=chunk)[546](index=546&type=chunk)[548](index=548&type=chunk)[549](index=549&type=chunk) KeyBank Credit Agreement Revere Term Loan Agreement Revere Warrant Agreement Senior Convertible Notes Amendment Perimeter Square Refinance and Construction Loan Rivergate Folly Road Refinance Columbia Fire Station Construction Loan Walnut Hill Plaza Amendment First National Bank Line of Credit Renewal Monarch Bank Building Columbia Fire Station JANAF JANAF - BJ's JANAF - Bravo Shoppes at Eagle Harbor Renewal and Payoff New Market Refinance Lumber River Renewal Deutsche Bank Benefit Street Refinance Riversedge Refinance Loan Covenants Debt Maturity [8. Rentals under Operating Leases](index=116&type=section&id=8.%20Rentals%20under%20Operating%20Leases) Future minimum rents from noncancelable tenant operating leases totaled $205.56 million as of December 31, 2018, with $46.19 million due in 2019 Future Minimum Lease Payments (in thousands) | For the Years Ended December 31, | Amount ($) | | :------------------------------- | :--------- | | 2019 | $46,186 | | 2020 | $38,758 | | 2021 | $30,541 | | 2022 | $24,218 | | 2023 | $18,715 | | Thereafter | $47,141 | | **Total minimum rents** | **$205,559** | [9. Equity and Mezzanine Equity](index=116&type=section&id=9.%20Equity%20and%20Mezzanine%20Equity) A 2017 reverse stock split reduced common shares; preferred stock dividends were suspended for Q4 2018 and Q1 2019, resulting in $3.04 million arrears - A **one-for-eight reverse stock split** on March 31, 2017, reduced outstanding common shares from **68.7 million to 8.59 million**[593](index=593&type=chunk)[594](index=594&type=chunk) - As of December 31, 2018, the Trust owned **98.33%** of the outstanding common units of its Operating Partnership[595](index=595&type=chunk) Preferred Stock Overview (as of December 31, 2018) | Preferred Stock Type | Shares Outstanding | Liquidation Preference per Share | Aggregate Liquidation Preference | | :------------------- | :----------------- | :------------------------------- | :------------------------------- | | Series A Preferred | 562 | $1,000.00 | $562,000 | | Series B Preferred | 1,875,748 | $25.00 | $46,900,000 | | Series D Preferred | 3,600,636 | $25.00 | $91,980,000 | - Dividends on Series A, B, and D Preferred Stock were suspended for Q4 2018 and Q1 2019, resulting in **$3.04 million in arrears** as of December 31, 2018[615](index=615&type=chunk)[617](index=617&type=chunk) - The Series D Preferred Stock requires an **asset coverage ratio of at least 200%**, with failure to cure a shortfall within 30 days triggering preferred share redemption[605](index=605&type=chunk) Common Stock One-for-Eight Reverse Stock Split Series A Preferred Stock Series B Preferred Stock Series D Preferred Stock- Redeemable Preferred Stock Earnings per share Dividends 2015 Long-Term Incentive Plan 2016 Long-Term Incentive Plan [10. Commitments and Contingencies](index=121&type=section&id=10.%20Commitments%20and%20Contingencies) The Company faces lease commitments, credit risk concentration, regulatory compliance, ongoing litigation, and potential off-balance sheet obligations Future Minimum Lease Payments (in thousands) | For the Years Ended December 31, | Amount ($) | | :------------------------------- | :--------- | | 2019 | $644 | | 2020 | $583 | | 2021 | $635 | | 2022 | $638 | | 2023 | $640 | | Thereafter | $16,063 | | **Total minimum lease payments** | **$19,203** | - The Company's portfolio is geographically concentrated in the **Southeast (76% of annualized base rent)** and **Mid-Atlantic (19%)**, increasing regional economic risks[628](index=628&type=chunk) - The Company is involved in **three significant legal proceedings**: two lawsuits by its former CEO and one by JCP Investment Partnership regarding Series D Preferred asset coverage ratio[631](index=631&type=chunk)[632](index=632&type=chunk)[633](index=633&type=chunk) - A potential off-balance sheet obligation exists for the Harbor Pointe Tax Increment Revenue Note, with a maximum principal obligation of **$2.28 million** as of December 31, 2018[636](index=636&type=chunk)[637](index=637&type=chunk) Lease Commitments Insurance Concentration of Credit Risk Regulatory and Environmental Litigation Harbor Pointe Tax Increment Financing [11. Related Party Transactions](index=123&type=section&id=11.%20Related%20Party%20Transactions) Related party transactions with Sea Turtle Development involved $12.00 million in notes receivable, incurring significant impairment charges and management agreement termination Related Party Activity (in thousands) | Metric | 2018 | 2017 | 2016 | | :----------------------------- | :----- | :----- | :----- | | Amounts paid to affiliates | $15 | $48 | $125 | | Amounts received from affiliates | $116 | $2,517 | $1,347 | | Amounts due from affiliates | $0 | $0 | $1,456 | | Notes receivable | $5,000 | $6,739 | $12,000 | - The Company recognized **$1.74 million (2018)** and **$5.26 million (2017) impairment charges** on notes receivable from Sea Turtle Development, placing them on nonaccrual status in 2018 and not recognizing **$1.44 million** in interest income[639](index=639&type=chunk) - Management agreements with Sea Turtle Development were terminated in **February 2018**[639](index=639&type=chunk) - The total allowance on related party receivables was **$2.20 million** at December 31, 2018, and **$2.36 million** at December 31, 2017[640](index=640&type=chunk) [12. Subsequent Events](index=124&type=section&id=12.%20Subsequent%20Events) Post-2018, the Company sold properties, extended loans, and suspended Q1 2019 preferred stock dividends - On January 11, 2019, the Company sold Jenks Plaza for **$2.20 million**, using **$323 thousand** to pay down the Revere Term Loan and **$1.51 million** for the First National Bank Line of Credit[646](index=646&type=chunk) - The Revere Term Loan maturity date was extended to **April 1, 2019**, with an additional **$20 thousand "Exit Fee"**[648](index=648&type=chunk) - On February 7, 2019, the Company sold a 1.28-acre parcel at Harbor Pointe for **$550 thousand**, paying off its mortgage and **$30 thousand** on the Revere Term Loan[649](index=649&type=chunk) - On February 27, 2019, the Board of Directors suspended the **Q1 2019 dividends** on Series A, B, and D Preferred shares[650](index=650&type=chunk) Jenks Plaza Perimeter Square Refinance and Construction Loan Revere Term Loan Extension Harbor Pointe Sale Suspension of Dividends [Schedules](index=126&type=section&id=Schedules) This section presents supplementary financial schedules, including valuation and qualifying accounts and detailed real estate information [Schedule II-Valuation and Qualifying Accounts](index=126&type=section&id=Schedule%20II-Valuation%20and%20Qualifying%20Accounts) This schedule details changes in the allowance for doubtful accounts, which increased to $3.47 million by December 31, 2018 Allowance for Doubtful Accounts (in thousands) | Description | Balance at Beginning of Year | Charged to Costs and Expense | Deductions from Reserves | Balance at End of Year | | :-------------------------- | :------------------------- | :--------------------------- | :----------------------- | :--------------------- | | Year Ended December 31, 2018 | $3,069 | $434 | $(32) | $3,471 | | Year Ended December 31, 2017 | $691 | $2,821 | $(443) | $3,069 | [Schedule III-Real Estate and Accumulated Depreciation](index=127&type=section&id=Schedule%20III-Real%20Estate%20and%20Accumulated%20Depreciation) This schedule provides a detailed breakdown of the Company's real estate portfolio, showing gross real estate at $482.10 million in 2018 Investment Properties at Cost (in thousands) | Metric | 2018 | 2017 | | :-------------------------------- | :------- | :------- | | Balance at beginning of period | $415,379 | $409,585 | | Additions during the period: Acquisitions | $75,123 | $0 | | Additions during the period: Improvements | $5,567 | $7,367 | | Impairments | $(3,938) | $0 | | Disposals | $(10,028) | $(1,573) | | **Balance at end of period** | **$482,103** | **$415,379** | - The total accumulated depreciation for the Company's properties was **$40.70 million** as of December 31, 2018[659](index=659&type=chunk) [Item 16. Form 10-K Summary](index=134&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable for the report - Form 10-K Summary is not applicable[664](index=664&type=chunk) ```

WHEELER REAL ESTATE INVESTMENT TRUST Supplemental Operating and Financial Data for the three months and year ended December 31, 2018 Table of Contents Page Company Overview 3 Financial and Portfolio Overview 4 Financial Summary Consolidated Balance Sheets 5 Consolidated Statements of Operations 6 Reconciliation of Non-GAAP Measures 7 Debt Summary 10 Portfolio Summary Property Summary 12 Top Ten Tenants by Annualized Base Rent 14 Leasing Summary 15 Definitions 18 Forward-Looking Statements This document cont ...