Wheeler Real Estate Investment Trust(WHLR) - 2025 Q1 - Quarterly Results

Cautionary Note on Forward-Looking Statements This section highlights that the document contains forward-looking statements, subject to risks and uncertainties that could cause actual results to differ materially, identifying various impacting factors - Forward-looking statements are identified by words like 'continue,' 'may,' 'approximately,' 'potentially,' or similar expressions[4] - Key risks include demand for retail space, economic conditions, tenant loss/bankruptcy, geographic concentration, consumer spending, capital availability, potential dilution from preferred stock/convertible notes, competition, regulatory changes, litigation, debt covenant compliance, financing risks, market volatility, e-commerce impact, reverse stock splits, natural events, insurance costs, and REIT qualification[4][5] Glossary of Terms This section defines key financial and real estate terms, including non-GAAP measures like AFFO, FFO, EBITDA, and Same-Property NOI, alongside operational terms such as ABR and GLA - Adjusted FFO (AFFO) is a non-GAAP measure that excludes items not indicative of operating portfolio results, such as legal settlements, non-cash share-based compensation, and acquisition costs, to provide better comparability[8] - Funds from Operations (FFO) is a non-GAAP measure defined by Nareit, representing net income excluding gains/losses from property sales and real estate-related depreciation/amortization, used to compare real estate operating performance[8] - Same-Property Net Operating Income (Same-Property NOI) is a non-GAAP measure reflecting property operating performance by subtracting property and related expenses from property revenues for properties owned during all periods presented[9] - Annualized Base Rent (ABR) is calculated as monthly base rent on occupied space multiplied by twelve months, excluding tenant concessions and rent abatements[8] Company Overview WHLR is a self-managed commercial real estate investment company focused on owning, leasing, and operating income-producing retail properties, primarily grocery-anchored centers, with CDR as a subsidiary - WHLR is a fully-integrated, self-managed commercial real estate investment company[10] - The company's primary focus is on owning, leasing, and operating income-producing retail properties, with a particular emphasis on grocery-anchored centers[10] - WHLR's common stock, Series B and D convertible preferred stock, and Convertible Notes trade publicly on Nasdaq under symbols WHLR, WHLRP, WHLRD, and WHLRL, respectively[10] - Cedar Realty Trust, Inc. (CDR) is a subsidiary of WHLR, with its preferred stock trading on the NYSE[11] Financial and Portfolio Overview This section provides a snapshot of WHLR's key financial and portfolio metrics as of March 31, 2025, reflecting the impact of recent reverse stock splits, highlighting net loss, FFO, AFFO, total assets, total debt, and portfolio performance indicators Key Financial Metrics | Financial Metric | Amount (March 31, 2025, in thousands) | | :-------------------------- | :------------------------------------ | | Net loss attributable to common stockholders | $ (6,852) | | Net loss per basic and diluted shares | $ (22.41) | | FFO available to common stockholders and OP unitholders | $ 2,223 | | FFO per common share | $ 7.27 | | AFFO | $ 404 | | AFFO per common share | $ 1.32 | | Investment Properties, net | $ 514,535 | | Cash and Cash Equivalents | $ 19,233 | | Total Assets | $ 624,755 | | Total Debt | $ 489,008 | | Debt to Total Assets | 78.27 % | | Debt to Gross Asset Value | 65.80 % | Portfolio Performance Metrics | Portfolio Metric | WHLR Portfolio | CDR Portfolio | | :----------------- | :------------- | :------------ | | GLA (in sq. ft.) | 5,264,133 | 2,253,544 | | Occupancy Rate | 93.3 % | 86.7 % | | Leased Rate | 94.2 % | 86.9 % | | Annualized Base Rent (in thousands) | $ 50,867 | $ 20,890 | | Total number of leases signed or renewed | 40 | 8 | | Total sq. ft. leases signed or renewed | 267,691 | 74,390 | Financial and Operating Results This section details WHLR's financial and operating performance for the three months ended March 31, 2025, highlighting key changes in leasing activity, property operations, financial metrics, capital markets, dispositions, and balance sheet items compared to the prior year period 2025 First Quarter Highlights The first quarter of 2025 saw a net loss per share of $(22.41), an improvement from $(2,459.16) in the prior year, with positive FFO and AFFO per share, mixed portfolio occupancy, increased rent spreads, decreased Same-Property NOI, and reduced total revenue and operating expenses, alongside capital market activities, property dispositions, and debt reductions First Quarter Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change | | :------------------------------------------------ | :------ | :------ | :----- | | Net loss attributable to common stockholders (per share) | $(22.41) | $(2,459.16) | Improved | | FFO (in millions) | $2.2 | $(4.1) | Improved | | FFO per share | $7.27 | $(941.66) | Improved | | AFFO per share | $1.32 | $46.90 | Decreased | - The Company's real estate portfolio was 91.3% occupied (up 10 bps from 91.2%) and 92.0% leased (down 150 bps from 93.5%), with 31 properties 100% leased[20] - WHLR executed 32 lease renewals (199,189 sq ft) with a weighted average increase of 14.2% over in-place rental rates, and signed 8 new leases (68,502 sq ft) with a new rent spread of 38.1%[20] - CDR executed 8 lease renewals (74,390 sq ft) with an 8.3% increase over in-place rental rates, but signed no new leases[20] - Same-Property NOI decreased by 2.2% or $0.3 million, primarily due to a $0.6 million increase in property expense, partially offset by a $0.2 million increase in property revenue[20] - Total revenue decreased by 5.9% or $1.5 million to $24.4 million, mainly due to property sales in 2024 and 2025[20] - Total operating expenses decreased by 2.7% or $0.5 million to $17.9 million, primarily due to lower depreciation, real estate taxes, and repairs/maintenance from property sales[20] - The Company effected one-for-four and one-for-five reverse stock splits on January 27, 2025, and March 26, 2025, respectively[26] - Issued 218,282 shares of Common Stock in exchange for 138,174 shares of Series D Preferred Stock and 138,174 shares of Series B Preferred Stock[26] - Recognized a non-operating loss of $2.3 million in net changes in fair value of derivative liabilities[26] - Cedar extended its tender offer for Cedar Series B Preferred Stock, purchasing 592,372 shares for approximately $10.5 million[26] - Cedar repurchased and retired 1,301,159 shares of Cedar Series C Preferred Stock for $21.2 million, resulting in $8.5 million deemed distributions[26] Property Dispositions (March 2025) | Property Sold (March 2025) | Sale Price (in millions) | Gain/(Loss) (in millions) | Net Proceeds (in millions) | | :------------------------- | :----------------------- | :------------------------ | :------------------------- | | Oregon Avenue | $3.0 | $0.1 | $2.8 | | South Lake | $1.9 | $(1.0) | $1.6 | | Webster Commons | $14.5 | $6.6 | $13.9 | Balance Sheet Changes | Balance Sheet Item | March 31, 2025 (in millions) | Dec 31, 2024 (in millions) | Change (in millions) | | :----------------- | :--------------------------- | :------------------------- | :------------------- | | Cash and cash equivalents | $19.2 | $43.0 | $(23.8) | | Restricted cash | $27.8 | $17.8 | $10.0 | | Debt | $489.0 | $499.5 | $(10.5) | | Real estate, net | $514.5 | $534.9 | $(20.4) | - The Company's weighted average interest rate on property level debt was 5.44% (term 7.3 years), and on all debt was 5.54% (term 7.3 years)[26] - Total cumulative dividends in arrears for WHLR's Series D Preferred Stock were $29.6 million or $15.57 per share as of March 31, 2025[32] - The Company processed redemptions of 193,951 shares of Series D Preferred Stock, issuing 305,626 shares of Common Stock for approximately $7.8 million, realizing a gain of $3.8 million on retirements[32] - Subsequent to March 31, 2025, the Company processed additional Series D Preferred Stock redemptions, accepted Cedar Series B Preferred Stock tenders, entered into a $10.0 million bridge loan, agreed to issue Common Stock for preferred stock exchanges, and completed the sale of Amscot Building for $0.6 million[32][34] Financial Summary This section presents detailed consolidated financial statements, including balance sheets and statements of operations, along with reconciliations of non-GAAP financial measures such as Same-Property NOI, FFO, AFFO, and EBITDA, providing a comprehensive view of the company's financial position and performance Consolidated Balance Sheets The consolidated balance sheets provide a snapshot of the company's assets, liabilities, and equity as of March 31, 2025, compared to December 31, 2024, showing key changes including a decrease in real estate, net, and cash, while restricted cash increased Consolidated Balance Sheet Summary | Balance Sheet Item | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :--------------------------- | :---------------------------- | :------------------------------- | :-------------------- | | Real estate, net | $514,535 | $534,925 | $(20,390) | | Cash and cash equivalents | $19,233 | $42,964 | $(23,731) | | Restricted cash | $27,787 | $17,752 | $10,035 | | Assets held for sale | $5,838 | — | $5,838 | | Total Assets | $624,755 | $653,702 | $(28,947) | | Loans payable, net | $472,794 | $482,609 | $(9,815) | | Series D Preferred Stock redemptions | $1,586 | $4,074 | $(2,488) | | Total Liabilities | $526,637 | $537,048 | $(10,411) | | Total Equity | $22,453 | $32,029 | $(9,576) | Consolidated Statements of Operations The consolidated statements of operations present the company's revenues, expenses, and net income (loss) for the three months ended March 31, 2025, compared to the same period in 2024, showing a significant improvement to net income driven by gains on property disposal and Preferred Stock retirements Consolidated Statements of Operations Summary | Income Statement Item | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :------------------------------ | :--------------------- | :--------------------- | :-------------------- | | Total Revenue | $24,354 | $25,872 | $(1,518) | | Total Operating Expenses | $17,900 | $18,394 | $(494) | | Gain on disposal of properties, net | $5,688 | — | $5,688 | | Operating Income | $12,142 | $7,478 | $4,664 | | Interest expense | $(8,093) | $(7,405) | $(688) | | Net Income (Loss) | $5,400 | $(6,006) | $11,406 | | Net Loss Attributable to Common Shareholders | $(6,852) | $(10,749) | $3,897 | | Basic and Diluted Loss per share | $(22.41) | $(2,459.16) | Improved | Reconciliation of Non-GAAP Measures This section reconciles GAAP net income to non-GAAP measures such as Same-Property NOI, FFO, AFFO, and EBITDA, providing alternative perspectives on the company's operating performance, particularly relevant for REITs Same-Property NOI Reconciliation | Same-Property NOI | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :--------------------- | :--------------------- | :-------------------- | | Operating Income | $12,142 | $7,478 | $4,664 | | Same-Property Net Operating Income | $14,302 | $14,631 | $(329) | FFO and AFFO Reconciliation | FFO and AFFO | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------------- | :--------------------- | :--------------------- | :-------------------- | | Net Income (Loss) | $5,400 | $(6,006) | $11,406 | | FFO | $5,943 | $592 | $5,351 | | FFO available to common stockholders and common unitholders | $2,223 | $(4,116) | $6,339 | | AFFO | $404 | $205 | $199 | | FFO per Common Share | $7.27 | $(941.66) | Improved | | AFFO per Common Share | $1.32 | $46.90 | Decreased | EBITDA Reconciliation | EBITDA | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Change (in thousands) | | :--------------- | :--------------------- | :--------------------- | :-------------------- | | Net Income (Loss) | $5,400 | $(6,006) | $11,406 | | EBITDA | $19,010 | $7,084 | $11,926 | | Adjusted EBITDA | $11,787 | $12,484 | $(697) | Debt Summary This section provides a detailed breakdown of the company's debt obligations, including property-specific loans, convertible notes, and term loans, along with their interest rates and maturity dates, presenting total interest expense and a schedule of principal repayments Debt Summary Metrics | Debt Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------- | :---------------------------- | :------------------------------- | :-------------------- | | Total Principal Balance | $489,008 | $499,531 | $(10,523) | | Unamortized deferred financing cost | $(16,214) | $(16,922) | $708 | | Total Loans Payable, net | $472,794 | $482,609 | $(9,815) | Interest Expense Breakdown | Interest Expense | Q1 2025 (in thousands) | Q1 2024 (in thousands) | Dollar Change (in thousands) | Percent Change | | :------------------------- | :--------------------- | :--------------------- | :--------------------------- | :------------- | | Property debt interest - excluding Cedar debt | $4,324 | $4,201 | $123 | 2.9 % | | Convertible Notes interest | $540 | $543 | $(3) | (0.6)% | | Loan prepayment premium | $541 | — | $541 | — % | | Amortization of deferred financing costs | $708 | $628 | $80 | 12.7 % | | Property debt interest - Cedar | $1,980 | $2,033 | $(53) | (2.6)% | | Total Interest Expense | $8,093 | $7,405 | $688 | 9.3 % | Scheduled Debt Repayments and Maturities | Scheduled Principal Repayments and Maturities | Amount (in thousands) | % Total Principal Payments and Maturities | | :-------------------------------------------- | :-------------------- | :---------------------------------------- | | For the remaining nine months ending Dec 31, 2025 | $5,594 | 1.1 % | | December 31, 2026 | $6,450 | 1.3 % | | December 31, 2027 | $2,876 | 0.6 % | | December 31, 2028 | $16,671 | 3.4 % | | December 31, 2029 | $25,035 | 5.1 % | | December 31, 2030 | $6,067 | 1.2 % | | Thereafter | $426,315 | 87.3 % | | Total principal repayments and debt maturities | $489,008 | 100.0 % | Portfolio Summary This section offers a comprehensive overview of the company's real estate portfolio, detailing individual property characteristics, geographic distribution, and the composition of its top tenants, including a detailed schedule of lease expirations Property Summary The property summary provides detailed information for each property in the WHLR and CDR portfolios, including location, number of tenants, total leasable square feet, percentage leased, percentage occupied, total occupied square feet, annualized base rent, and annualized base rent per occupied square foot, along with undeveloped land parcels and geographic distribution Combined Portfolio Overview | Portfolio | Number of Properties | Number of Tenants | Total Leasable Square Feet | Percentage Leased | Percentage Occupied | Total SF Occupied | Annualized Base Rent (in thousands) | Annualized Base Rent per Occupied Sq. Foot | | :-------- | :------------------- | :---------------- | :------------------------- | :---------------- | :------------------ | :---------------- | :---------------------------------- | :--------------------------------------- | | WHLR | 55 | 752 | 5,264,133 | 94.2 % | 93.3 % | 4,910,528 | $50,867 | $10.36 | | CDR | 14 | 201 | 2,253,544 | 86.9 % | 86.7 % | 1,953,271 | $20,890 | $10.69 | | COMBINED | 69 | 953 | 7,517,677 | 92.0 % | 91.3 % | 6,863,799 | $71,757 | $10.45 | Geographic Distribution by State | State | Properties | Tenants | % Total ABR | | :------------- | :----------- | :-------- | :---------- | | Virginia | 8 | 215 | 24.5% | | Georgia | 12 | 147 | 14.6% | | South Carolina | 20 | 171 | 14.1% | | Pennsylvania | 6 | 86 | 13.4% | | New Jersey | 4 | 69 | 5.3% | | North Carolina | 5 | 58 | 4.7% | | Connecticut | 2 | 20 | 4.4% | | Massachusetts | 2 | 30 | 4.1% | | Florida | 3 | 45 | 3.5% | | Tennessee | 2 | 32 | 3.5% | | Maryland | 1 | 27 | 2.9% | | Alabama | 1 | 20 | 1.9% | | West Virginia | 1 | 15 | 1.6% | | Kentucky | 2 | 17 | 1.5% | | Total | 69 | 953 | 100% | Top Ten Tenants & Lease Expiration This section identifies the top ten tenants by their contribution to Annualized Base Rent (ABR) and provides a detailed lease expiration schedule, breaking down expiring leases by year, square footage, and associated ABR, differentiating between anchor and non-anchor leases and those with or without renewal options Top Ten Tenants by ABR | Tenants | Category | Annualized Base Rent (in thousands) | % of Total Annualized Base Rent | | :---------------- | :---------------- | :---------------------------------- | :------------------------------ | | Food Lion | Grocery | $4,434 | 6.18 % | | Kroger Co | Grocery | $2,127 | 2.96 % | | Dollar Tree | Discount Retailer | $1,899 | 2.65 % | | Planet Fitness | Gym | $1,692 | 2.36 % | | Piggly Wiggly | Grocery | $1,363 | 1.90 % | | Lowes Foods | Grocery | $1,223 | 1.70 % | | TJX Companies | Discount Retailer | $1,216 | 1.69 % | | Aldi | Grocery | $1,072 | 1.49 % | | Kohl's | Discount Retailer | $1,049 | 1.46 % | | Lehigh Valley Health | Health | $803 | 1.12 % | | Total Top Ten | | $16,878 | 23.51 % | Lease Expiration Schedule | Lease Expiration Period | Number of Expiring Leases | Total Expiring Square Footage | % of Total Expiring Square Footage | Expiring Annualized Base Rent (in thousands) | % of Total Annualized Base Rent | | :---------------------- | :------------------------ | :---------------------------- | :--------------------------------- | :------------------------------------------- | :------------------------------ | | Available | — | 653,878 | 8.70 % | $— | — % | | MTM | 7 | 43,617 | 0.58 % | $339 | 0.47 % | | 2025 | 82 | 317,838 | 4.23 % | $3,235 | 4.51 % | | 2026 | 157 | 787,218 | 10.47 % | $8,677 | 12.09 % | | 2027 | 165 | 689,215 | 9.17 % | $8,452 | 11.78 % | | 2028 | 138 | 1,021,034 | 13.58 % | $9,750 | 13.59 % | | 2029 | 145 | 927,471 | 12.34 % | $10,497 | 14.63 % | | 2030 | 93 | 1,054,328 | 14.02 % | $9,297 | 12.96 % | | 2031 | 42 | 476,872 | 6.34 % | $4,919 | 6.85 % | | 2032 | 33 | 438,850 | 5.84 % | $3,962 | 5.52 % | | 2033 | 20 | 250,321 | 3.33 % | $2,794 | 3.89 % | | 2034 & thereafter | 71 | 857,035 | 11.40 % | $9,835 | 13.71 % | | Total | 953 | 7,517,677 | 100.00 % | $71,757 | 100.00 % | - For anchor leases, 45.0% of expiring GLA at March 31, 2025, is subject to renewal options[20] Leasing Summary This section summarizes the leasing activities for both WHLR and its subsidiary CDR for the three months ended March 31, 2025, compared to the same period in 2024, detailing the number and square footage of renewed and new leases, along with the weighted average changes in rental rates WHLR Leasing Activity Summary | WHLR Leasing Activity | Q1 2025 (sq feet) | Q1 2024 (sq feet) | Change (sq feet) | | :-------------------- | :---------------- | :---------------- | :--------------- | | Total leases renewed (sq feet) | 199,189 | 94,915 | +104,274 | | Total leases renewed (count) | 32 | 28 | +4 | | Weighted average rate on all renewals (per sq foot) | $1.40 | $0.85 | +$0.55 | | Weighted average change over prior rates | 14.24 % | 7.62 % | +6.62 % | | New leases (sq feet) | 68,502 | 22,349 | +46,153 | | New leases (count) | 8 | 10 | -2 | | Weighted average rate (per sq foot) | $12.56 | $11.87 | +$0.69 | | New Rent Spread | 38.07 % | 19.14 % | +18.93 % | CDR Leasing Activity Summary | CDR Leasing Activity | Q1 2025 (sq feet) | Q1 2024 (sq feet) | Change (sq feet) | | :------------------- | :---------------- | :---------------- | :--------------- | | Total leases renewed (sq feet) | 74,390 | 32,267 | +42,123 | | Total leases renewed (count) | 8 | 3 | +5 | | Weighted average rate on all renewals (per sq foot) | $0.88 | $0.61 | +$0.27 | | Weighted average change over prior rates | 8.28 % | 3.07 % | +5.21 % | | New leases (sq feet) | — | 15,705 | -15,705 | | New leases (count) | — | 4 | -4 | | New Rent Spread | — % | (12.46)% | +12.46 % |