Wheeler Real Estate Investment Trust(WHLR) - 2023 Q4 - Annual Report

Property Portfolio - As of December 31, 2023, the company owns a portfolio of 79 properties, including 75 retail shopping centers, totaling 8,142,065 leasable square feet, which is 93.7% leased[24] - The company's properties are geographically located in the Mid-Atlantic (45%), Southeast (40%), and Northeast (15%) regions, representing the total annualized base rent[24] - Total leasable square feet across the portfolio is 8,142,065, with a combined occupancy rate of 91.1%[48] - The overall percentage leased across the portfolio is 93.7%, indicating strong demand for the properties[48] - The company has a total of 1,011 tenants across its properties, reflecting a diverse tenant mix[48] - The company is actively managing its properties to maintain high occupancy rates and optimize rental income[49] - The company targets high-quality retail properties in stable demographic communities, focusing on grocery-anchored and necessity-based retail[205] Financial Performance - Revenues increased by 33.5% to $102.3 million in 2023, driven by a $25.1 million increase in rental revenues, largely from the Cedar Acquisition[134] - Net income for 2023 was $6.1 million, a significant improvement from a net loss of $8.5 million in 2022[134] - Total revenue for 2023 was $102.325 million, a 33.5% increase from $76.645 million in 2022[195] - Operating income rose to $29.407 million in 2023, compared to $24.598 million in 2022, reflecting a 19.5% increase[195] - The company reported a net loss attributable to common stockholders of $29.237 million in 2023, compared to a loss of $21.510 million in 2022[195] - Basic and diluted loss per share improved to $(4.57) in 2023 from $(22.04) in 2022[195] Debt and Financing - The total debt as of December 31, 2023, was $495.6 million, with a weighted average interest rate of 5.42% and a term of 8.2 years[117] - The Series D Preferred Stock had an aggregate liquidation preference of approximately $64.8 million, with accrued and unpaid dividends totaling approximately $32.3 million, leading to a total liquidation value of $97.1 million[130] - The company entered into a term loan agreement for $61.1 million at a fixed rate of 6.194%, with interest-only payments due monthly through June 2025[81] - The company entered into a loan agreement for $11.6 million at a fixed rate of 7.27%, with $9.1 million received at closing and $2.5 million contingent on lease-related conditions[83][84] Acquisition and Merger - The company completed a merger with Cedar Realty Trust, Inc. on August 22, 2022, acquiring all outstanding shares of Cedar's common stock[20] - The Company completed the acquisition of Cedar Realty Trust on August 22, 2022, paying $9.48 per common share in an all-cash merger transaction[207][208] - Acquisition-related costs incurred by the Company for the merger amounted to $5.51 million, primarily consisting of professional and legal fees[209] - The Cedar Acquisition generated property revenues of $33.2 million and property expenses of $13.1 million in 2023, compared to $11.0 million and $5.0 million in 2022, respectively[147] Tenant and Lease Management - The company focuses on necessity-based retail, aiming to attract high levels of daily traffic and providing essential goods and services[29] - The company employs intensive lease management strategies to optimize occupancy and increase operating income through effective leasing strategies and expense management[29] - The company renewed a total of 1,008,046 square feet of leases in 2023, with a weighted average rate increase of 6.54% over prior rates[100] - New leases signed in 2023 totaled 435,099 square feet, with a weighted average rate of $12.42 per square foot[100] - Major tenants contribute significantly to the annualized base rent, with the top ten tenants being a key focus for revenue generation[50] Insurance and Environmental Matters - The company carries comprehensive insurance covering all properties in its portfolio, including liability, property, and business interruption insurance[34] - The company has not incurred any material costs or liabilities due to environmental contamination at properties currently owned or previously owned[30] Cash Flow and Liquidity - Cash flows from operating activities decreased by 31.9% to $20.9 million in 2023, primarily due to a $12.5 million decrease in net changes in operating assets and liabilities[112] - Cash flows used in investing activities decreased by 76.4% to $31.5 million in 2023, primarily due to reduced costs associated with the Cedar Acquisition[113] - Consolidated cash, cash equivalents, and restricted cash totaled $39.8 million as of December 31, 2023, down from $55.9 million in 2022, representing a decrease of 28.8%[111] Stockholder and Dividend Information - The company suspended dividend payments on its Common Stock and Series D Preferred Stock since December 31, 2018, with the annual dividend rate on Series D increasing to 12.75% as of September 21, 2023[64] - As of December 31, 2023, the total cumulative dividends in arrears for Series D Preferred Stock amounted to $32.3 million, equating to $12.48 per share[98] Operational Challenges and Adjustments - Same-Property Net Operating Income (NOI) decreased by 0.9% to $41.0 million in 2023 from $41.4 million in 2022, impacted by a $1.4 million increase in property operating expenses[146] - Other expenses for 2023 were $5.5 million, significantly higher than $0.7 million in 2022, primarily due to capital structure transaction costs[142] - Inflationary pressures are being mitigated through lease provisions that require tenants to reimburse for inflation-sensitive costs, although prolonged inflation could adversely impact the business[151] Equity and Stock Information - The company has 1,500 performance awards assuming maximum payout, with 15,381 securities remaining available for future issuance under equity compensation plans[173] - The total stockholders' deficit increased to $21.3 million in 2023 from $15.2 million in 2022[193] - The total equity decreased to $44.8 million in 2023 from $51.0 million in 2022[193]