FORM |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||||||
☒ | Smaller reporting company | |||||||||||||||||||
Emerging growth company |
Page | ||||||||
PART I – FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | |||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II – OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
September 30, 2021 | December 31, 2020 | ||||||||||
(unaudited) | |||||||||||
ASSETS: | |||||||||||
Investment properties, net | $ | $ | |||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Rents and other tenant receivables, net | |||||||||||
Assets held for sale | |||||||||||
Above market lease intangibles, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Deferred costs and other assets, net | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES: | |||||||||||
Loans payable, net | $ | $ | |||||||||
Liabilities associated with assets held for sale | |||||||||||
Below market lease intangibles, net | |||||||||||
Derivative liabilities | |||||||||||
Operating lease liabilities | |||||||||||
Accounts payable, accrued expenses and other liabilities | |||||||||||
Total Liabilities | |||||||||||
Series D Cumulative Convertible Preferred Stock (no par value, | |||||||||||
EQUITY: | |||||||||||
Series A Preferred Stock (no par value, | |||||||||||
Series B Convertible Preferred Stock (no par value, | |||||||||||
Common Stock ($ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Total Stockholders’ Equity | |||||||||||
Noncontrolling interests | |||||||||||
Total Equity | |||||||||||
Total Liabilities and Equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
REVENUE: | |||||||||||||||||||||||
Rental revenues | $ | $ | $ | $ | |||||||||||||||||||
Other revenues | |||||||||||||||||||||||
Total Revenue | |||||||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||
Property operations | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Impairment of assets held for sale | |||||||||||||||||||||||
Corporate general & administrative | |||||||||||||||||||||||
Total Operating Expenses | |||||||||||||||||||||||
Gain (loss) on disposal of properties | ( | ||||||||||||||||||||||
Operating Income | |||||||||||||||||||||||
Interest income | |||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Net changes in fair value of derivative liabilities | |||||||||||||||||||||||
Other income | |||||||||||||||||||||||
Other expense | ( | ( | ( | ( | |||||||||||||||||||
Net Income (Loss) Before Income Taxes | ( | ( | |||||||||||||||||||||
Income tax expense | ( | ( | |||||||||||||||||||||
Net Income (Loss) | ( | ( | |||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||||||||||
Net Income (Loss) Attributable to Wheeler REIT | ( | ( | |||||||||||||||||||||
Preferred Stock dividends - undeclared | ( | ( | ( | ( | |||||||||||||||||||
Deemed contribution related to preferred stock redemption | |||||||||||||||||||||||
Net Loss Attributable to Wheeler REIT Common Stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Loss per share: | |||||||||||||||||||||||
Basic and Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average number of shares: | |||||||||||||||||||||||
Basic and Diluted | |||||||||||||||||||||||
Series A | Series B | Noncontrolling | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | Interests | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Units | Value | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series B Preferred Stock discount | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units to Common Stock | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution related to preferred stock redemption | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income | — | — | — | — | — | — | — | ( | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 (Unaudited) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series B Preferred Stock discount | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units to Common Stock | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution related to preferred stock redemption | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 (Unaudited) | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series B Preferred Stock discount | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnership units to Common Stock | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of Series B Preferred Stock to Common Stock | — | — | ( | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2021 (Unaudited) | $ | $ | $ | $ | $ | ( | $ | $ | $ |
Series A | Series B | Noncontrolling | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Preferred Stock | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders’ Equity | Interests | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Units | Value | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series B Preferred Stock discount | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss | — | — | — | — | — | — | — | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 (Unaudited) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series B Preferred Stock discount | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnerships units to Common Stock | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustments for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 (Unaudited) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Series B Preferred Stock discount | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of operating partnerships units to Common Stock | — | — | — | — | — | ( | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustments for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | ( | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deemed contribution related to preferred stock redemption | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 (Unaudited) | $ | $ | $ | $ | $ | ( | $ | $ | $ |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net Loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile consolidated net loss to net cash provided by operating activities: | |||||||||||
Depreciation | |||||||||||
Amortization | |||||||||||
Loan cost amortization | |||||||||||
Changes in fair value of derivative liabilities | ( | ||||||||||
Above (below) market lease amortization, net | ( | ||||||||||
Straight-line expense | |||||||||||
(Gain) loss on disposal of properties | ( | ||||||||||
Credit losses on operating lease receivables | |||||||||||
Impairment of assets held for sale | |||||||||||
Net changes in assets and liabilities: | |||||||||||
Rents and other tenant receivables, net | ( | ||||||||||
Unbilled rent | ( | ( | |||||||||
Deferred costs and other assets, net | ( | ( | |||||||||
Accounts payable, accrued expenses and other liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cash received from disposal of properties | |||||||||||
Net cash provided by investing activities | |||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Payments for deferred financing costs | ( | ( | |||||||||
Loan proceeds | |||||||||||
Loan principal payments | ( | ( | |||||||||
Paycheck Protection Program proceeds | |||||||||||
Preferred stock redemption | ( | ( | |||||||||
Loan prepayment penalty | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | |||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | |||||||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | $ | |||||||||
Supplemental Disclosures: | |||||||||||
Non-Cash Transactions: | |||||||||||
Paycheck Protection Program forgiveness | $ | $ | |||||||||
Initial fair value of warrants | $ | $ | |||||||||
Initial fair value of derivative liability at issuance of convertible notes | $ | $ | |||||||||
Conversion of common units to common stock | $ | $ | |||||||||
Conversion of Series B Preferred Stock to common stock | $ | $ | |||||||||
Accretion of Preferred Stock discounts | $ | $ | |||||||||
Deemed contribution related to Preferred Stock discount | $ | $ | |||||||||
Other Cash Transactions: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
The following table provides a reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Cash, cash equivalents, and restricted cash | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Minimum rent | $ | $ | $ | $ | |||||||||||||||||||
Tenant reimbursements - variable lease revenue | |||||||||||||||||||||||
Percentage rent - variable lease revenue | |||||||||||||||||||||||
Straight-line rents | |||||||||||||||||||||||
Lease termination fees | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total | |||||||||||||||||||||||
Credit losses on operating lease receivables | ( | ( | ( | ( | |||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Professional fees | $ | $ | $ | $ | |||||||||||||||||||
Corporate administration | |||||||||||||||||||||||
Compensation and benefits | |||||||||||||||||||||||
Advertising costs for leasing activities | |||||||||||||||||||||||
Other corporate general & administrative | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
September 30, 2021 | December 31, 2020 | ||||||||||
(unaudited) | |||||||||||
Land and land improvements | $ | $ | |||||||||
Buildings and improvements | |||||||||||
Investment properties at cost | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Investment properties, net | $ | $ |
September 30, 2021 | December 31, 2020 | |||||||||||||
(unaudited) | ||||||||||||||
Investment properties, net | $ | $ | ||||||||||||
Rents and other tenant receivables, net | ||||||||||||||
Above market leases, net | ||||||||||||||
Deferred costs and other assets, net | ||||||||||||||
Total assets held for sale | $ | $ |
September 30, 2021 | December 31, 2020 | |||||||||||||
(unaudited) | ||||||||||||||
Loans payable | $ | $ | ||||||||||||
Below market leases, net | ||||||||||||||
Accounts payable, accrued expenses and other liabilities | ||||||||||||||
Total liabilities associated with assets held for sale | $ | $ |
Disposal Date | Property | Contract Price | Gain (loss) | Net Proceeds | ||||||||||||||||||||||
(in thousands, unaudited) | ||||||||||||||||||||||||||
August 31, 2021 | Rivergate Shopping Center Out Parcel | $ | $ | $ | ||||||||||||||||||||||
July 9, 2021 | Tulls Creek Land Parcel (1.28 acres) | |||||||||||||||||||||||||
March 25, 2021 | Berkley Shopping Center and Berkley Land Parcel (0.75 acres) | |||||||||||||||||||||||||
January 21, 2020 | St. Matthews | ( |
September 30, 2021 | December 31, 2020 | ||||||||||
(unaudited) | |||||||||||
Leases in place, net | $ | $ | |||||||||
Ground lease sandwich interest, net | |||||||||||
Lease origination costs, net | |||||||||||
Tenant relationships, net | |||||||||||
Legal and marketing costs, net | |||||||||||
Other | |||||||||||
Total deferred costs and other assets, net | $ | $ |
Leases In Place, net | Ground Lease Sandwich Interest, net | Lease Origination Costs, net | Tenant Relationships, net | Legal & Marketing Costs, net | Total | ||||||||||||||||||||||||||||||
For the remaining three months ending December 31, 2021 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||||||||||||||
December 31, 2024 | |||||||||||||||||||||||||||||||||||
December 31, 2025 | |||||||||||||||||||||||||||||||||||
December 31, 2026 | |||||||||||||||||||||||||||||||||||
Thereafter | |||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Property/Description | Monthly Payment | Interest Rate | Maturity | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
Litchfield Market Village | $ | % | November 2022 | $ | $ | |||||||||||||||||||||||||||
Twin City Commons | $ | % | January 2023 | |||||||||||||||||||||||||||||
Walnut Hill Plaza | $ | % | March 2023 | |||||||||||||||||||||||||||||
New Market | $ | % | June 2023 | |||||||||||||||||||||||||||||
Benefit Street Note (3) | $ | % | June 2023 | |||||||||||||||||||||||||||||
Deutsche Bank Note (2) | $ | % | July 2023 | |||||||||||||||||||||||||||||
JANAF | $ | % | July 2023 | |||||||||||||||||||||||||||||
First National Bank (7) (8) | $ | LIBOR + | August 2023 | |||||||||||||||||||||||||||||
Lumber River (8) | $ | LIBOR + | September 2023 | |||||||||||||||||||||||||||||
Tampa Festival | $ | % | September 2023 | |||||||||||||||||||||||||||||
Forrest Gallery | $ | % | September 2023 | |||||||||||||||||||||||||||||
South Carolina Food Lions Note (5) | $ | % | January 2024 | |||||||||||||||||||||||||||||
JANAF Bravo | $ | % | May 2024 | |||||||||||||||||||||||||||||
Cypress Shopping Center | $ | % | July 2024 | |||||||||||||||||||||||||||||
Port Crossing | $ | % | August 2024 | |||||||||||||||||||||||||||||
Freeway Junction | $ | % | September 2024 | |||||||||||||||||||||||||||||
Harrodsburg Marketplace | $ | % | September 2024 | |||||||||||||||||||||||||||||
Bryan Station | $ | % | November 2024 | |||||||||||||||||||||||||||||
Crockett Square | % | December 2024 | ||||||||||||||||||||||||||||||
Pierpont Centre | $ | % | February 2025 | |||||||||||||||||||||||||||||
Shoppes at Myrtle Park | $ | % | February 2025 | |||||||||||||||||||||||||||||
Folly Road | $ | % | March 2025 | |||||||||||||||||||||||||||||
Alex City Marketplace | % | April 2025 | ||||||||||||||||||||||||||||||
Butler Square | % | May 2025 | ||||||||||||||||||||||||||||||
Brook Run Shopping Center | % | June 2025 | ||||||||||||||||||||||||||||||
Beaver Ruin Village I and II | % | July 2025 | ||||||||||||||||||||||||||||||
Sunshine Shopping Plaza | % | August 2025 | ||||||||||||||||||||||||||||||
Barnett Portfolio (4) | % | September 2025 | ||||||||||||||||||||||||||||||
Fort Howard Shopping Center | % | October 2025 | ||||||||||||||||||||||||||||||
Conyers Crossing | % | October 2025 | ||||||||||||||||||||||||||||||
Grove Park Shopping Center | % | October 2025 | ||||||||||||||||||||||||||||||
Parkway Plaza | % | October 2025 | ||||||||||||||||||||||||||||||
Winslow Plaza | $ | % | December 2025 | |||||||||||||||||||||||||||||
JANAF BJ's | $ | % | January 2026 | |||||||||||||||||||||||||||||
Tuckernuck | $ | % | March 2026 | |||||||||||||||||||||||||||||
Wilmington Financing Agreement (6) | % | March 2026 | ||||||||||||||||||||||||||||||
Chesapeake Square | $ | % | August 2026 | |||||||||||||||||||||||||||||
Berkley/Sangaree/Tri-County | % | December 2026 | ||||||||||||||||||||||||||||||
Riverbridge | % | December 2026 | ||||||||||||||||||||||||||||||
Franklin Village | $ | % | January 2027 | |||||||||||||||||||||||||||||
Village of Martinsville | $ | % | July 2029 | |||||||||||||||||||||||||||||
Laburnum Square | % | September 2029 | ||||||||||||||||||||||||||||||
Rivergate | $ | % | September 2031 | |||||||||||||||||||||||||||||
Convertible Notes | % | December 2031 | ||||||||||||||||||||||||||||||
Columbia Fire Station | % | July 2021 | ||||||||||||||||||||||||||||||
Powerscourt Financing Agreement | % | March 2023 | ||||||||||||||||||||||||||||||
Total Principal Balance (1) | ||||||||||||||||||||||||||||||||
Unamortized debt issuance cost (1) (9) | ( | ( | ||||||||||||||||||||||||||||||
Total Loans Payable, including assets held for sale | ||||||||||||||||||||||||||||||||
Less loans payable on assets held for sale, net loan amortization costs | ||||||||||||||||||||||||||||||||
Total Loans Payable, net | $ | $ |
For the remaining three months ended December 31, 2021 | $ | ||||
December 31, 2022 | |||||
December 31, 2023 | |||||
December 31, 2024 | |||||
December 31, 2025 | |||||
December 31, 2026 | |||||
Thereafter | |||||
Total principal repayments and debt maturities | $ |
Range of exercise prices | $ | ||||
Common Stock price | $ | ||||
Weighted average contractual term to maturity (years) | |||||
Range of expected market volatility % | |||||
Range of risk-free interest rate | |||||
September 30, 2021 | |||||
(unaudited) | |||||
Balance December 31, 2020 | $ | ||||
Issuance of Wilmington Warrant | |||||
Changes in fair value | |||||
Balance March 31, 2021 | |||||
Changes in fair value | |||||
Balance June 30, 2021 | |||||
Changes in fair value | ( | ||||
Balance September 30, 2021 | $ |
For the remaining three months ended December 31, 2021 | $ | ||||
December 31, 2022 | |||||
December 31, 2023 | |||||
December 31, 2024 | |||||
December 31, 2025 | |||||
December 31, 2026 | |||||
Thereafter | |||||
Total minimum rents | $ |
Series D Preferred | |||||
(unaudited) | |||||
Balance December 31, 2020 | $ | ||||
Accretion of Preferred Stock discount | |||||
Undeclared dividends | |||||
Redemption of Preferred Stock | ( | ||||
Balance March 31, 2021 | |||||
Accretion of Preferred Stock discount | |||||
Undeclared dividends | |||||
Redemption of Preferred Stock | ( | ||||
Balance June 30, 2021 | |||||
Accretion of Preferred Stock discount | |||||
Undeclared dividends | |||||
Balance September 30, 2021 | $ |
Series D Preferred | |||||
(unaudited) | |||||
Balance December 31, 2019 | $ | ||||
Accretion of Preferred Stock discount | |||||
Undeclared dividends | |||||
Balance March 31, 2020 | |||||
Accretion of Preferred Stock discount | |||||
Undeclared dividends | |||||
Balance June 30, 2020 | |||||
Accretion of Preferred Stock discount | |||||
Undeclared dividends | |||||
Redemption of Preferred Stock | ( | ||||
Balance September 30, 2020 | $ |
September 30, 2021 | ||||||||||||||
Outstanding shares | Potential Dilutive Shares | |||||||||||||
(unaudited) | ||||||||||||||
Common units | ||||||||||||||
Series B Preferred Stock | ||||||||||||||
Series D Preferred Stock | ||||||||||||||
Warrants to purchase Common Stock | ||||||||||||||
Convertible Notes |
Series A Preferred | Series B Preferred | Series D Preferred | |||||||||||||||||||||||||||
Record Date/Arrears Date | Arrears | Per Share | Arrears | Per Share | Arrears | Per Share | |||||||||||||||||||||||
For the three months ended September 30, 2021 | $ | $ | $ | ||||||||||||||||||||||||||
For the nine months ended September 30, 2021 | $ | $ | $ | ||||||||||||||||||||||||||
For the three months ended September 30, 2020 | $ | $ | $ | ||||||||||||||||||||||||||
For the nine months ended September 30, 2020 | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | Expiration Year | |||||||||||||||||||||||||
Amscot | $ | $ | $ | $ | 2045 | ||||||||||||||||||||||||
Beaver Ruin Village | 2054 | ||||||||||||||||||||||||||||
Beaver Ruin Village II | 2056 | ||||||||||||||||||||||||||||
Moncks Corner | 2040 | ||||||||||||||||||||||||||||
Devine Street (1) | 2051 | ||||||||||||||||||||||||||||
JANAF (2) | 2069 | ||||||||||||||||||||||||||||
Riversedge office space Virginia Beach, VA | 2030 | ||||||||||||||||||||||||||||
Total rent expense | $ | $ | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | $ | $ | |||||||||||||||||||
For the remaining three months ended December 31, 2021 | $ | ||||
December 31, 2022 | |||||
December 31, 2023 | |||||
December 31, 2024 | |||||
December 31, 2025 | |||||
December 31, 2026 | |||||
Thereafter | |||||
Total minimum lease payments (1) | |||||
Discount | ( | ||||
Operating lease liabilities | $ |
Nine Months Ended September 30, | |||||||||||
2021 | 2020 | ||||||||||
(unaudited) | |||||||||||
Amounts paid to affiliates | $ | $ | |||||||||
Disposal Date | Property | Contract Price | Gain (loss) | Net Proceeds | ||||||||||||||||||||||
(in thousands, unaudited) | ||||||||||||||||||||||||||
August 31, 2021 | Rivergate Shopping Center Out Parcel - Macon, GA | $ | 3,700 | $ | 1,915 | $ | 3,451 | |||||||||||||||||||
July 9, 2021 | Tulls Creek Land Parcel (1.28 acres) - Moyock, NC | 250 | 52 | 222 | ||||||||||||||||||||||
March 25, 2021 | Berkley Shopping Center and Berkley Land Parcel (0.75 acres) - Norfolk, VA | 4,150 | 176 | 3,937 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
Renewals(1): | |||||||||||||||||||||||
Leases renewed with rate increase (sq feet) | 85,429 | 135,063 | 265,231 | 528,042 | |||||||||||||||||||
Leases renewed with rate decrease (sq feet) | 11,920 | 53,398 | 66,343 | 89,133 | |||||||||||||||||||
Leases renewed with no rate change (sq feet) | 28,140 | 182,039 | 88,493 | 246,245 | |||||||||||||||||||
Total leases renewed (sq feet) | 125,489 | 370,500 | 420,067 | 863,420 | |||||||||||||||||||
Leases renewed with rate increase (count) | 29 | 28 | 71 | 111 | |||||||||||||||||||
Leases renewed with rate decrease (count) | 1 | 6 | 10 | 17 | |||||||||||||||||||
Leases renewed with no rate change (count) | 6 | 20 | 21 | 38 | |||||||||||||||||||
Total leases renewed (count) | 36 | 54 | 102 | 166 | |||||||||||||||||||
Option exercised (count) | 8 | 8 | 16 | 17 | |||||||||||||||||||
Weighted average on rate increases (per sq foot) | $ | 0.94 | $ | 1.29 | $ | 0.80 | $ | 1.11 | |||||||||||||||
Weighted average on rate decreases (per sq foot) | $ | (2.34) | $ | (0.72) | $ | (2.23) | $ | (1.14) | |||||||||||||||
Weighted average rate on all renewals (per sq foot) | $ | 0.42 | $ | 0.37 | $ | 0.15 | $ | 0.56 | |||||||||||||||
Weighted average change over prior rates | 3.53 | % | 3.98 | % | 1.48 | % | 5.68 | % | |||||||||||||||
New Leases(1) (2): | |||||||||||||||||||||||
New leases (sq feet) | 91,163 | 93,253 | 317,622 | 202,655 | |||||||||||||||||||
New leases (count) | 25 | 18 | 62 | 48 | |||||||||||||||||||
Weighted average rate (per sq foot) | $ | 10.01 | $ | 8.58 | $ | 8.77 | $ | 9.89 | |||||||||||||||
Gross Leasable Area ("GLA") expiring during the next 3 months, including month-to-month leases | 0.69 | % | 3.69 | % | 0.69 | % | 3.69 | % |
Three Months Ended September 30, | Nine Months Ended September 30, | Three Months Ended Changes | Nine Months Ended Changes | ||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | Change | % Change | Change | % Change | ||||||||||||||||||||||||||||||||||||||||
PROPERTY DATA: | |||||||||||||||||||||||||||||||||||||||||||||||
Number of properties owned and leased at period end (1) | 59 | 60 | 59 | 60 | (1) | (1.67) | % | (1) | (1.67) | % | |||||||||||||||||||||||||||||||||||||
Aggregate gross leasable area at period end (1) | 5,500,233 | 5,563,629 | 5,500,233 | 5,563,629 | (63,396) | (1.14) | % | (63,396) | (1.14) | % | |||||||||||||||||||||||||||||||||||||
Ending leased rate at period end (1) | 92.2 | % | 88.3 | % | 92.2 | % | 88.3 | % | 3.9 | % | 4.42 | % | 3.9 | % | 4.42 | % | |||||||||||||||||||||||||||||||
FINANCIAL DATA: | |||||||||||||||||||||||||||||||||||||||||||||||
Rental revenues | $ | 15,000 | $ | 14,756 | $ | 44,946 | $ | 44,920 | $ | 244 | 1.65 | % | $ | 26 | 0.06 | % | |||||||||||||||||||||||||||||||
Other revenues | 508 | 208 | 780 | 787 | 300 | 144.23 | % | (7) | (0.89) | % | |||||||||||||||||||||||||||||||||||||
Total Revenue | 15,508 | 14,964 | 45,726 | 45,707 | 544 | 3.64 | % | 19 | 0.04 | % | |||||||||||||||||||||||||||||||||||||
OPERATING EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||
Property operations | 5,029 | 4,820 | 14,573 | 14,116 | 209 | 4.34 | % | 457 | 3.24 | % | |||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 3,678 | 4,215 | 11,033 | 13,460 | (537) | (12.74) | % | (2,427) | (18.03) | % | |||||||||||||||||||||||||||||||||||||
Impairment of assets held for sale | — | — | 2,200 | 600 | — | 100.00 | % | 1,600 | 266.67 | % | |||||||||||||||||||||||||||||||||||||
Corporate general & administrative | 1,756 | 1,080 | 4,945 | 4,567 | 676 | 62.59 | % | 378 | 8.28 | % | |||||||||||||||||||||||||||||||||||||
Total Operating Expenses | 10,463 | 10,115 | 32,751 | 32,743 | 348 | 3.44 | % | 8 | 0.02 | % | |||||||||||||||||||||||||||||||||||||
Gain (loss) on disposal of properties | 1,967 | — | 2,143 | (26) | 1,967 | 100.00 | % | 2,169 | 8,342.31 | % | |||||||||||||||||||||||||||||||||||||
Operating Income | 7,012 | 4,849 | 15,118 | 12,938 | 2,163 | 44.61 | % | 2,180 | 16.85 | % | |||||||||||||||||||||||||||||||||||||
Interest income | 9 | — | 9 | 1 | 9 | 100.00 | % | 8 | 800.00 | % | |||||||||||||||||||||||||||||||||||||
Interest expense | (5,637) | (4,114) | (19,813) | (12,787) | (1,523) | (37.02) | % | (7,026) | (54.95) | % | |||||||||||||||||||||||||||||||||||||
Net changes in fair value of derivative liabilities | 1,884 | — | 303 | — | 1,884 | 100.00 | % | 303 | 100.00 | % | |||||||||||||||||||||||||||||||||||||
Other income | — | — | 552 | — | — | — | % | 552 | 100.00 | % | |||||||||||||||||||||||||||||||||||||
Other expense | (185) | (15) | (185) | (1,039) | (170) | (1,133.33) | % | 854 | (82.19) | % | |||||||||||||||||||||||||||||||||||||
Net Income (Loss) Before Income Taxes | 3,083 | 720 | (4,016) | (887) | 2,363 | 328.19 | % | (3,129) | (352.76) | % | |||||||||||||||||||||||||||||||||||||
Income tax (expense) benefit | — | — | (2) | (2) | — | — | % | — | — | % | |||||||||||||||||||||||||||||||||||||
Net Income (Loss) | 3,083 | 720 | (4,018) | (889) | 2,363 | 328.19 | % | (3,129) | (351.97) | % | |||||||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 57 | 13 | 72 | 18 | 44 | 338.46 | % | 54 | 300.00 | % | |||||||||||||||||||||||||||||||||||||
Net Income (Loss) Attributable to Wheeler REIT | $ | 3,026 | $ | 707 | $ | (4,090) | $ | (907) | $ | 2,319 | 328.01 | % | $ | (3,183) | (350.94) | % |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Same Store | Non-same Store | Total | |||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||||||||||||||||
Net Income (Loss) | $ | 1,107 | $ | 745 | $ | 1,976 | $ | (25) | $ | 3,083 | $ | 720 | |||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Other expense | 185 | 15 | — | — | 185 | 15 | |||||||||||||||||||||||||||||
Net changes in fair value of derivative liabilities | (1,884) | — | — | — | (1,884) | — | |||||||||||||||||||||||||||||
Interest expense | 5,617 | 4,061 | 20 | 53 | 5,637 | 4,114 | |||||||||||||||||||||||||||||
Interest income | (9) | — | — | — | (9) | — | |||||||||||||||||||||||||||||
Gain on disposal of properties | — | — | (1,967) | — | (1,967) | — | |||||||||||||||||||||||||||||
Corporate general & administrative | 1,755 | 1,073 | 1 | 7 | 1,756 | 1,080 | |||||||||||||||||||||||||||||
Depreciation and amortization | 3,678 | 4,174 | — | 41 | 3,678 | 4,215 | |||||||||||||||||||||||||||||
Other non-property revenue | (6) | (13) | — | — | (6) | (13) | |||||||||||||||||||||||||||||
Property Net Operating Income | $ | 10,443 | $ | 10,055 | $ | 30 | $ | 76 | $ | 10,473 | $ | 10,131 | |||||||||||||||||||||||
Property revenues | $ | 15,453 | $ | 14,796 | $ | 49 | $ | 155 | $ | 15,502 | $ | 14,951 | |||||||||||||||||||||||
Property expenses | 5,010 | 4,741 | 19 | 79 | 5,029 | 4,820 | |||||||||||||||||||||||||||||
Property Net Operating Income | $ | 10,443 | $ | 10,055 | $ | 30 | $ | 76 | $ | 10,473 | $ | 10,131 |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
Same Store | Non-same Store | Total | |||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (5,556) | $ | (737) | $ | 1,538 | $ | (152) | $ | (4,018) | $ | (889) | |||||||||||||||||||||||
Adjustments: | |||||||||||||||||||||||||||||||||||
Income tax expense | 2 | 2 | — | — | 2 | 2 | |||||||||||||||||||||||||||||
Other expense | 185 | 1,039 | — | — | 185 | 1,039 | |||||||||||||||||||||||||||||
Other income | (552) | — | — | — | (552) | — | |||||||||||||||||||||||||||||
Net changes in fair value of derivative liabilities | (303) | — | — | — | (303) | — | |||||||||||||||||||||||||||||
Interest expense | 19,027 | 12,576 | 786 | 211 | 19,813 | 12,787 | |||||||||||||||||||||||||||||
Interest income | (9) | (1) | — | — | (9) | (1) | |||||||||||||||||||||||||||||
(Gain) loss on disposal of properties | — | — | (2,143) | 26 | (2,143) | 26 | |||||||||||||||||||||||||||||
Corporate general & administrative | 4,937 | 4,551 | 8 | 16 | 4,945 | 4,567 | |||||||||||||||||||||||||||||
Impairment of assets held for sale | 2,200 | 600 | — | — | 2,200 | 600 | |||||||||||||||||||||||||||||
Depreciation and amortization | 11,033 | 13,334 | — | 126 | 11,033 | 13,460 | |||||||||||||||||||||||||||||
Other non-property revenue | (28) | (256) | — | — | (28) | (256) | |||||||||||||||||||||||||||||
Property Net Operating Income | $ | 30,936 | $ | 31,108 | $ | 189 | $ | 227 | $ | 31,125 | $ | 31,335 | |||||||||||||||||||||||
Property revenues | $ | 45,405 | $ | 44,978 | $ | 293 | $ | 473 | $ | 45,698 | $ | 45,451 | |||||||||||||||||||||||
Property expenses | 14,469 | 13,870 | 104 | 246 | 14,573 | 14,116 | |||||||||||||||||||||||||||||
Property Net Operating Income | $ | 30,936 | $ | 31,108 | $ | 189 | $ | 227 | $ | 31,125 | $ | 31,335 |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
Same Store | Non-same Store | Total | Period Over Period Changes | ||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
Net Income (Loss) | $ | 1,107 | $ | 745 | $ | 1,976 | $ | (25) | $ | 3,083 | $ | 720 | $ | 2,363 | 328.19 | % | |||||||||||||||||||||||||||||||
Depreciation and amortization of real estate assets | 3,678 | 4,174 | — | 41 | 3,678 | 4,215 | (537) | (12.74) | % | ||||||||||||||||||||||||||||||||||||||
Gain on disposal of properties | — | — | (1,967) | — | (1,967) | — | (1,967) | (100.00) | % | ||||||||||||||||||||||||||||||||||||||
FFO | $ | 4,785 | $ | 4,919 | $ | 9 | $ | 16 | $ | 4,794 | $ | 4,935 | $ | (141) | (2.86) | % | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
Same Store | Non-same Store | Total | Period Over Period Changes | ||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2020 | $ | % | ||||||||||||||||||||||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income | $ | (5,556) | $ | (737) | $ | 1,538 | $ | (152) | $ | (4,018) | $ | (889) | $ | (3,129) | (351.97) | % | |||||||||||||||||||||||||||||||
Depreciation and amortization of real estate assets | 11,033 | 13,334 | — | 126 | 11,033 | 13,460 | (2,427) | (18.03) | % | ||||||||||||||||||||||||||||||||||||||
Impairment of assets held for sale | 2,200 | 600 | — | — | 2,200 | 600 | 1,600 | 266.67 | % | ||||||||||||||||||||||||||||||||||||||
(Gain) loss on disposal of properties | — | — | (2,143) | 26 | (2,143) | 26 | (2,169) | (8,342.31) | % | ||||||||||||||||||||||||||||||||||||||
FFO | $ | 7,677 | $ | 13,197 | $ | (605) | $ | — | $ | 7,072 | $ | 13,197 | $ | (6,125) | (46.41) | % | |||||||||||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||||
FFO | $ | 4,794 | $ | 4,935 | $ | 7,072 | $ | 13,197 | |||||||||||||||
Preferred Stock dividends - undeclared | (3,260) | (3,608) | (9,852) | (10,922) | |||||||||||||||||||
Preferred Stock redemption | — | — | 70 | 96 | |||||||||||||||||||
Preferred stock accretion adjustments | 145 | 168 | 454 | 509 | |||||||||||||||||||
FFO available to common stockholders and common unitholders | 1,679 | 1,495 | (2,256) | 2,880 | |||||||||||||||||||
Acquisition and development costs | — | — | — | 1 | |||||||||||||||||||
Capital related costs | 59 | 151 | 343 | 185 | |||||||||||||||||||
Other non-recurring and non-cash expense | 209 | 17 | 365 | 1,090 | |||||||||||||||||||
Net changes in fair value of derivative liabilities | (1,884) | — | (303) | — | |||||||||||||||||||
Straight-line rental revenue, net straight-line expense | (281) | (294) | (871) | (700) | |||||||||||||||||||
Loan cost amortization | 884 | 234 | 5,200 | 796 | |||||||||||||||||||
Above (below) market lease amortization | 23 | (70) | 28 | (443) | |||||||||||||||||||
Recurring capital expenditures and tenant improvement reserves | 1 | (278) | (550) | (835) | |||||||||||||||||||
AFFO | $ | 690 | $ | 1,255 | $ | 1,956 | $ | 2,974 |
Nine Months Ended September 30, | Period Over Period Change | ||||||||||||||||||||||
2021 | 2020 | $ | % | ||||||||||||||||||||
(in thousands, unaudited) | |||||||||||||||||||||||
Operating activities | $ | 14,513 | $ | 13,977 | $ | 536 | 3.83 | % | |||||||||||||||
Investing activities | $ | 3,819 | $ | 16 | $ | 3,803 | 23,768.75 | % | |||||||||||||||
Financing activities | $ | 10,800 | $ | (11,387) | $ | 22,187 | 194.84 | % |
September 30, 2021 | December 31, 2020 | ||||||||||
(unaudited) | |||||||||||
Fixed-rate notes (1) | $ | 377,597 | $ | 330,340 | |||||||
Adjustable-rate mortgages (1) | 2,168 | 23,576 | |||||||||
Total debt | $ | 379,765 | $ | 353,916 |
Exhibit | ||||||||
101.INS XBRL | Instance Document (Filed herewith). | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document (Filed herewith). | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (Filed herewith). | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase (Filed herewith). | |||||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase (Filed herewith). | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase (Filed herewith). |
WHEELER REAL ESTATE INVESTMENT TRUST, INC. | |||||||||||||||||
By: | /s/ CRYSTAL PLUM | ||||||||||||||||
CRYSTAL PLUM | |||||||||||||||||
Chief Financial Officer | |||||||||||||||||
Date: | November 9, 2021 |
1. | I have reviewed this quarterly report on Form 10-Q of Wheeler Real Estate Investment Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ M. ANDREW FRANKLIN | ||
M. Andrew Franklin Chief Executive Officer and President |
1. | I have reviewed this quarterly report on Form 10-Q of Wheeler Real Estate Investment Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ CRYSTAL PLUM | ||
Crystal Plum Chief Financial Officer |
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
November 9, 2021 | |||||
/s/ M. ANDREW FRANKLIN | |||||
M. Andrew Franklin | |||||
Chief Executive Officer and President | |||||
/s/ CRYSTAL PLUM | |||||
Crystal Plum | |||||
Chief Financial Officer |
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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REVENUE: | ||||
Rental revenues | $ 15,000 | $ 14,756 | $ 44,946 | $ 44,920 |
Other revenues | 508 | 208 | 780 | 787 |
Total Revenue | 15,508 | 14,964 | 45,726 | 45,707 |
OPERATING EXPENSES: | ||||
Property operations | 5,029 | 4,820 | 14,573 | 14,116 |
Depreciation and amortization | 3,678 | 4,215 | 11,033 | 13,460 |
Impairment of assets held for sale | 0 | 0 | 2,200 | 600 |
Corporate general & administrative | 1,756 | 1,080 | 4,945 | 4,567 |
Total Operating Expenses | 10,463 | 10,115 | 32,751 | 32,743 |
Gain (loss) on disposal of properties | 1,967 | 0 | 2,143 | (26) |
Operating Income | 7,012 | 4,849 | 15,118 | 12,938 |
Interest income | 9 | 0 | 9 | 1 |
Interest expense | (5,637) | (4,114) | (19,813) | (12,787) |
Net changes in fair value of derivative liabilities | 1,884 | 0 | 303 | 0 |
Other income | 0 | 0 | 552 | 0 |
Other expense | (185) | (15) | (185) | (1,039) |
Net Income (Loss) Before Income Taxes | 3,083 | 720 | (4,016) | (887) |
Income tax expense | 0 | 0 | (2) | (2) |
Net Income (Loss) | 3,083 | 720 | (4,018) | (889) |
Less: Net income attributable to noncontrolling interests | 57 | 13 | 72 | 18 |
Net Income (Loss) Attributable to Wheeler REIT | 3,026 | 707 | (4,090) | (907) |
Preferred Stock dividends - undeclared | (3,260) | (3,608) | (9,852) | (10,922) |
Deemed contribution related to preferred stock redemption | 0 | 726 | 5,040 | 726 |
Net Loss Attributable to Wheeler REIT Common Stockholders | $ (234) | $ (2,175) | $ (8,902) | $ (11,103) |
Loss per share: | ||||
Basic (in dollars per share) | $ (0.02) | $ (0.22) | $ (0.92) | $ (1.14) |
Diluted (in dollars per share) | $ (0.02) | $ (0.22) | $ (0.92) | $ (1.14) |
Weighted-average number of shares: | ||||
Basic (in shares) | 9,713,125 | 9,699,461 | 9,708,588 | 9,696,554 |
Diluted (in shares) | 9,713,125 | 9,699,461 | 9,708,588 | 9,696,554 |
Organization and Basis of Presentation and Consolidation |
9 Months Ended |
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Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation and Consolidation | Organization and Basis of Presentation and Consolidation Wheeler Real Estate Investment Trust, Inc. (the "Trust", the "REIT", or "Company") is a Maryland corporation formed on June 23, 2011. The Trust serves as the general partner of Wheeler REIT, L.P. (the “Operating Partnership”), which was formed as a Virginia limited partnership on April 5, 2012. As of September 30, 2021, the Trust, through the Operating Partnership, owned and operated fifty-nine centers and four undeveloped properties in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Oklahoma, Tennessee, Kentucky, New Jersey, Pennsylvania and West Virginia. Accordingly, the use of the word “Company” refers to the Trust and its consolidated subsidiaries, except where the context otherwise requires. At September 30, 2021, the Company owned 98.57% of the Operating Partnership. The Trust through the Operating Partnership owns Wheeler Interests (“WI”) and Wheeler Real Estate, LLC (“WRE”) (collectively the “Operating Companies”). The Operating Companies are Taxable REIT Subsidiaries (“TRS”) to accommodate serving the Non-REIT Properties since applicable REIT regulations consider the income derived from these services to be “bad” income subject to taxation. The regulations allow for costs incurred by the Company commensurate with the services performed for the Non-REIT Properties to be allocated to a TRS. The condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (the “Form 10-Q”) are unaudited and the results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for future periods or the year. However, amounts presented in the condensed consolidated balance sheet as of December 31, 2020 are derived from the Company’s audited consolidated financial statements as of that date, but do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. The Company prepared the accompanying condensed consolidated financial statements in accordance with GAAP for interim financial statements. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods presented, and all such adjustments are of a normal recurring nature. All material balances and transactions between the consolidated entities of the Company have been eliminated. These condensed consolidated financial statements should be read in conjunction with the Company's 2020 Annual Report filed on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”).
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Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Tenant Receivables and Unbilled Rent Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of September 30, 2021 and December 31, 2020, the Company’s allowance for uncollectible tenant receivables totaled $597 thousand and $994 thousand, respectively. Paycheck Protection Program The Company received proceeds of $552 thousand (the "PPP funds") pursuant to the Paycheck Protection Program (the "PPP") under the Coronavirus Aid, Relief and Economic Security (“CARES”) Act. The PPP funds were received in the form of a promissory note, dated April 24, 2020 (the “Promissory Note”), between the Company and KeyBank as the lender that matures on April 24, 2022 bearing interest at a fixed rate of 1% per annum, payable monthly commencing seven months from the date of the note. Under the terms of the PPP, the principal may be forgiven if the proceeds are used for qualifying expenses as described in the CARES Act, such as payroll costs, mortgage interest, rent and utilities. The full amount of the Promissory Note was forgiven in January 2021 and is included in "other income" on the condensed consolidated statements of operations as non-operating activity. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants and convertible notes, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. The assumptions used in these fair value estimates are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Revenue Recognition Lease Contract Revenue The Company has two classes of underlying assets relating to rental revenue activity, retail and office space. The Company retains substantially all of the risks and benefits of ownership of these underlying assets and accounts for these leases as operating leases. The Company combines lease and nonlease components in lease contracts, which includes combining base rent and tenant reimbursement revenue. The Company accrues minimum rents on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. At September 30, 2021 and December 31, 2020, there were $5.62 million and $4.48 million, respectively, in unbilled rent which is included in "rents and other tenant receivables, net." The below table disaggregates the Company’s revenue by type of service for the three and nine months ended September 30, 2021 and 2020 (in thousands, unaudited):
Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported periods. The Company’s actual results could differ from these estimates. Corporate General and Administrative Expense A detail for the "corporate general & administrative" line item from the condensed consolidated statements of operations is presented below (in thousands, unaudited):
Other Expense Other expense represents costs which are non-operating in nature. Other expenses were $185 thousand for the three and nine months ended September 30, 2021, and consist of legal settlement costs. Other expenses were $15 thousand and $1.04 million for the three and nine months ended September 30, 2020, respectively, and consist of legal settlement costs and reimbursement of 2019 proxy costs. Noncontrolling Interests Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the condensed consolidated balance sheets but separate from the Company’s equity. On the condensed consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. Condensed consolidated statements of equity include beginning balances, activity for the period and ending balances for stockholders' equity, noncontrolling interests and total equity. The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are exchanged for the Company’s $0.01 par value per share common stock (“Common Stock”). In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital. Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entities Own Equity (Subtopic 815-40).” This ASU simplifies accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separating embedded conversion features from convertible instruments. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The guidance is effective for fiscal years beginning after December 15, 2021. We adopted this guidance effective January 1, 2021 under the modified retrospective adoption approach. There was no effect to the opening balance of retained earnings at the date of adoption. The comparative information has not been restated and continues to be presented according to accounting standards in effect for those periods. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This update enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, such as accounts receivable and loans. The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes. The guidance would be effective for interim and annual reporting periods beginning after December 15, 2022, per FASB's issuance of ASU 2019-10, "Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates". The Company is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows.
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Real Estate |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate | Real Estate Investment properties consist of the following (in thousands):
The Company’s depreciation expense on investment properties was $2.80 million and $8.19 million for the three and nine months ended September 30, 2021, respectively. The Company’s depreciation expense on investment properties was $2.79 million and $8.59 million for the three and nine months ended September 30, 2020, respectively. A significant portion of the Company’s land, buildings and improvements serve as collateral for its mortgage loans. Accordingly, restrictions exist as to the encumbered properties’ transferability, use and other common rights typically associated with property ownership. Assets Held for Sale and Dispositions At September 30, 2021, assets held for sale included Columbia Fire Station and Surrey Plaza, as the Company has committed to a plan to sell each property. At December 31, 2020, assets held for sale included Columbia Fire Station, Berkley Shopping Center, a .75 acre land parcel at Berkley (the "Berkley Land Parcel") and two outparcels at Rivergate Shopping Center. Impairment expenses on assets held for sale are a result of reducing the carrying value for the amount that exceeded the property's fair value less estimated selling costs. The valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 inputs. Impairment expense was $0 and $2.20 million for the three and nine months ended September 30, 2021, respectively, and $0 and $600 thousand for the three and nine months ended September 30, 2020, respectively, resulting from reducing the carrying value of Columbia Fire Station. As of September 30, 2021 and December 31, 2020, assets held for sale and associated liabilities consisted of the following (in thousands):
The following properties were sold during the nine months ended September 30, 2021 and 2020:
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs and Other Assets, Net | Deferred Costs and Other Assets, Net Deferred costs and other assets, net of accumulated amortization are as follows (in thousands):
As of September 30, 2021 and December 31, 2020, the Company’s intangible accumulated amortization totaled $61.93 million and $60.33 million, respectively. During the three and nine months ended September 30, 2021, the Company’s intangible amortization expense totaled $874 thousand and $2.84 million, respectively. During the three and nine months ended September 30, 2020, the Company’s intangible amortization expense totaled $1.43 million and $4.87 million, respectively. Future amortization of leases in place, ground lease sandwich interest, lease origination costs, tenant relationships, and legal and marketing costs is as follows (in thousands, unaudited):
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Loans Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Payable | Loans Payable The Company’s loans payable consist of the following (in thousands, except monthly payment):
(2) Collateralized by LaGrange Marketplace, Ridgeland and Georgetown. (3) Collateralized by Ladson Crossing, Lake Greenwood Crossing and South Park. (4) Collateralized by Cardinal Plaza, Franklinton Square, and Nashville Commons. (5) Collateralized by Clover Plaza, South Square, St. George, Waterway Plaza and Westland Square. (6) Collateralized by Darien Shopping Center, Devine Street, Lake Murray, Moncks Corner and South Lake. (7) Collateralized by Surrey Plaza and Amscot Building. (8) Certain loans bear interest at a variable interest rate equal to LIBOR or another index rate, subject to a floor, in each case plus or minus a specified margin. (9) Includes $6.30 million of unamortized debt issuance costs related to the Convertible Notes at issuance, of which $5.39 million relates to the embedded derivative, see Note 6. Rights Offering and Convertible Notes On August 13, 2021, the Company's rights offering (the “Rights Offering”) for the purchase of up to $30.00 million in aggregate principal amount of the Company’s 7.00% senior subordinated convertible notes due 2031 (the “Convertible Notes”) expired. Pursuant to the Rights Offering, the Company distributed to holders of its common stock, as of 5:00 p.m. New York City time on June 1, 2021 (the “Record Date”), non-transferable subscription rights to purchase Convertible Notes. Each holder of the Company’s common stock as of the Record Date received one right for each eight shares of the Company’s common stock owned, and each right entitled a holder to purchase $25.00 principal amount of Convertible Notes. The Rights Offering was made pursuant to an effective registration statement filed with the U.S. Securities and Exchange Commission. The aggregate principal amount of Convertible Notes issued in the Rights Offering was $30.00 million. The Rights Offering was backstopped by Magnetar Structured Credit Fund, LP, Magnetar Longhorn Fund LP, Magnetar Lake Credit Fund LLC, Purpose Alternative Credit Fund – F LLC, Purposes Alternative Credit Fund – T LLC, and AY2 Capital LLC (each individually, a “Backstop Party” and, collectively, the “Backstop Parties”) in the amount of $2.19 million in aggregate principal. On August 13, 2021, the Company, as Issuer, and Wilmington Savings Fund Society, FSB., as Trustee, entered into an Indenture governing the terms of the Convertible Notes (the “Indenture”). The Convertible Notes bear interest at a rate of 7.00% per annum. Interest on the Convertible Notes will be payable semi-annually in arrears on June 30 and December 31 of each year, commencing on December 31, 2021. The Convertible Notes are subordinate and junior in right of payment to the Company’s obligations to the holders of senior indebtedness, and that in the case of any insolvency, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation or winding-up of or relating to the Company as a whole, whether voluntary or involuntary, all obligations to holders of senior indebtedness shall be entitled to be paid in full before any payment shall be made on account of the principal or interest on the Convertible Notes. Interest on the Convertible Notes will be payable, at the Company’s election: (a) in cash; (b) in shares of Series B Preferred Stock; (c) in shares of Series D Cumulative Convertible Preferred Stock; or (d) in any combination of (a), (b), and/or (c). For purposes of determining the value of Series B Preferred Stock and Series D Cumulative Convertible Preferred Stock paid as interest on the Convertible Notes, each share of Series B Preferred Stock and Series D Cumulative Convertible Preferred Stock shall be deemed to have a value equal to the product of (x) the average of the VWAPs (as defined in the Indenture) for the Series B Preferred Stock or the Series D Preferred Stock, as the case may be, for the 15 consecutive trading days ending on the third business day immediately preceding the relevant interest payment date, and (y) 0.55. After January 1, 2024, the Company may redeem the Convertible Notes at any time (in whole or in part) at the Company’s option at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest as of the redemption date (the “Redemption Price”). The Redemption Price may be paid: (a) in cash; (b) in shares of Common Stock; or (c) in any combination of (a) and (b). During the three and nine months ended September 30, 2021, the interest expense related to the Convertible Notes totaled $286 thousand. Powerscourt Financing Agreement On March 12, 2021, the Company paid in full the $25.00 million Powerscourt Financing Agreement. The Powerscourt Warrant Agreement and the Powerscourt Registration Rights Agreement remain. Pursuant to that certain financing agreement dated December 22, 2020, by and among the Company, certain subsidiaries of the Company from time to time party thereto, as guarantors, the lenders from time to time party thereto, and Powerscourt Investments XXII, LP, as administrative agent and collateral agent (the “Powerscourt Financing Agreement”), the Company issued Powerscourt Investments XXII, LP, a warrant (the “Powerscourt Warrant”) to purchase 496,415 shares of Common Stock for $3.12 per share (the “Powerscourt Warrant Agreement”). The Powerscourt Warrant is exercisable at the option of its holder in whole or in part into shares of Common Stock from time to time on or after December 22, 2020 (the “Effective Date”) and before the date that is the 36-month anniversary of the Effective Date. In connection with the Powerscourt Financing Agreement, the Company entered into a registration rights agreement with the holders from time to time of the Powerscourt Warrant, dated as of December 22, 2020 (the “Powerscourt Registration Rights Agreement”), accordingly, the Company registered the resale of the common stock underlying the Powerscourt Warrant on a Form S-11 Registration Statement which became effective on May 25, 2021. Wilmington Financing Agreement On March 12, 2021, the Company entered into a financing agreement (the "Wilmington Financing Agreement") as borrower, certain subsidiaries of the Company from time to time party thereto, as guarantors (together with the Company, the “Loan Parties”), the lenders from time to time party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent. The Wilmington Financing Agreement provides for a term loan in the aggregate principal amount of $35.00 million. The proceeds of the Wilmington Financing Agreement are intended for the following: (i) to payoff the Company’s indebtedness on the Powerscourt Financing Agreement, (ii) to fund the redemption of certain shares of the Company’s 8.75% Series D Preferred and (iii) to pay fees and expenses in connection with the transactions contemplated by the Wilmington Financing Agreement. The Wilmington Financing Agreement is at a rate of 8.00% and matures in March 2026 with quarterly interest only payments beginning on April 15, 2021. Any payment or repayment of principal will be made with a premium equal to 5% of the amount repaid or prepaid. The obligations of the Company under the Wilmington Financing Agreement are secured by liens on certain assets of the Company and certain of the Company’s subsidiaries, including mortgages on the properties within the Company’s portfolio. The Wilmington Financing Agreement also contains covenants that restrict, among other things the ability of the Company and its subsidiaries to create liens, incur indebtedness, make certain investments, merge or consolidate, dispose of assets, pay certain dividends and make certain other restricted payments or certain equity issuances, change the nature of their businesses, enter into certain transactions with affiliates and change their governing documents. Pursuant to the Wilmington Financing Agreement, the Company issued to the holders from time to time party thereto a warrant (the “Wilmington Warrant”) to purchase in the aggregate, 1,061,719 shares of Common Stock in three tranches: warrants to purchase an aggregate of 510,204 shares at an exercise price of $3.430 per share ("Tranche A"); warrants to purchase an aggregate of 424,242 shares at an exercise price of $4.125 per share ("Tranche B"); and warrants to purchase an aggregate of 127,273 shares at an exercise price of $6.875 per share ("Tranche C") (the “Wilmington Warrant Agreement”). The Wilmington Warrant is exercisable at the option of its holder in whole or in part into shares of Common Stock from time to time on or after March 12, 2021 (the “Effective Date”) and before the maturity date of the Wilmington Financing Agreement. In connection with the Wilmington Financing Agreement, the Company entered into a registration rights agreement with the holders from time to time of the Wilmington Warrants, dated as of March 12, 2021 (the “Wilmington Registration Rights Agreement”), accordingly, the Company registered the resale of the common stock underlying the Wilmington Warrant on a Form S-11 Registration Statement which became effective on May 25, 2021. Columbia Fire Station Forbearance Agreement and Payoff On January 21, 2021, the Company entered into a Forbearance Agreement (the "Forbearance Agreement") with Pinnacle Bank at an interest rate of 14% and made a $500 thousand principal payment. The Forbearance Agreement, among other provisions, extends the maturity date of the Columbia Fire Station Loan to July 21, 2021 and waives all defaults and late fees existing prior to the Forbearance Agreement. On July 21, 2021, the principal balance on the Columbia Fire Station Loan was paid in full. Tuckernuck Refinance On February 2, 2021, the Company refinanced the Tuckernuck Loan for $5.15 million at a rate of 5.00%. The loan matures on March 1, 2026 with monthly principal and interest payments of $32 thousand. Berkley/Sangaree/Tri-County Paydown On March 25, 2021, the Company made a $3.22 million principal payment on the Berkley/Sangaree/Tri-County loan with the sale of the Berkley Shopping Center, as detailed in Note 3, and paid $687 thousand in defeasance. JANAF Bravo Refinance On May 5, 2021, the Company refinanced the JANAF Bravo Loan for $6.00 million at a rate of 5.00%. The loan matures on May 5, 2024 with monthly principal and interest payments of $35 thousand. Rivergate Extension On May 28, 2021, the Company entered into an agreement with Synovus Bank to extend the maturity date from April 21, 2021 to October 20, 2021 with monthly principal payments of $60 thousand plus accrued and unpaid interest. The Rivergate Loan will bear interest at the Synovus Bank's prime rate less 0.25% with a floor of 3.00%. On August 31, 2021 a $3.54 million principal payment was made in conjunction with the outparcel sale. On September 30, 2021, the Company refinanced the Rivergate Loan for $18.50 million at a rate of 4.25%. The loan matures on September 30, 2031 with monthly principal and interest payments of $100 thousand through September 2026 at which time monthly principal and interest payments begin based on a 20-year amortization and an interest rate change to 5 year U.S. Treasury Rate plus 2.70% with a floor of 4.25%. First National Bank Extension On September 22, 2021, the Company entered into the Fourth Amendment to extend the $875 thousand First National Bank Loan to August 15, 2023 with monthly principal and interest payments of $25 thousand. The First National Bank Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25%. Lumber River Extension On September 22, 2021, the Company entered into the Fifth Amendment to extend the $1.31 million Lumber River Loan to September 10, 2023 with monthly principal and interest payments of $11 thousand. The Lumber River Loan will bear interest at LIBOR plus 350 basis points with a minimum interest rate set at 4.25%. Debt Maturities The Company’s scheduled principal repayments on indebtedness as of September 30, 2021, including assets held for sale, are as follows (in thousands, unaudited):
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Derivative Liabilities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Liabilities | Derivative Liabilities Fair Value of Warrants The Company utilized the Monte Carlo simulation model to calculate the fair value of the Powerscourt Warrant and Wilmington Warrant (collectively, the "Warrant Agreements"). Significant observable and unobservable inputs include stock price, conversion price, risk-free rate, term, likelihood of an event of contractual conversion and expected volatility. The Monte Carlo simulation is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. The Warrant Agreements contain terms and features that give rise to derivative liability classification. The Company presents the Warrant Agreements' fair value as a liability included on the condensed consolidated balance sheets, under "derivative liabilities". In determining the initial fair value of the Wilmington Warrant, the Company used the following inputs in its Monte Carlo model; exercise price of each of the three tranches within the Wilmington Warrant Agreement as described in Note 5 on this Form 10-Q, Common Stock price $3.75, contractual term to maturity 5.0 years, expected Common Stock volatility 54.72% and risk-free interest rate 0.91%. In measuring the warrant liability at September 30, 2021, the Company used the following inputs in its Monte Carlo Model:
The following table sets forth a summary of the changes in fair value of the Company's warrant liabilities (in thousands):
Fair Value of Conversion Features Related to Convertible Notes The Company identified certain embedded derivatives related to the conversion features of the Convertible Notes. In accordance with ASC 815-40, the embedded conversion options contained within the Convertible Notes were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through each reporting date. The Company utilized a multinomial lattice model to calculate the fair value of the embedded derivatives. Significant observable and unobservable inputs include, conversion price, stock price, dividend rate, expected volatility, risk-free rate and term. The multinomial lattice model is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators. In determining the initial fair value of the convertible notes, the Company used the following inputs in its multinomial lattice model; initial conversion price within the Convertible Notes was $6.25, Common Stock price of $2.94, dividend rate of 0%, expected Common Stock volatility 50.00%, risk-free interest rate 1.53% and contractual term to maturity was 10.3 years. The embedded derivative liabilities were assigned a value of $5.39 million.
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Rentals under Operating Leases |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Rentals under Operating Leases | Rentals under Operating Leases Future minimum rents to be received under noncancelable tenant operating leases, excluding rents on assets held for sale properties, for the remaining three months ending December 31, 2021 and each of the next five years and thereafter, excluding tenant reimbursements and percentage rent based on tenant sales volume, as of September 30, 2021 are as follows (in thousands, unaudited):
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Equity and Mezzanine Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Mezzanine Equity | Equity and Mezzanine Equity Series A Preferred Stock At September 30, 2021 and December 31, 2020, the Company had 562 shares without par value of Series A Preferred Stock (“Series A Preferred”) issued and outstanding, 4,500 shares authorized and a $1,000 liquidation preference per share, or $562 thousand in aggregate. The Series A Preferred accrues cumulative dividends at a rate of 9% per annum, which is paid or accumulated quarterly. The Company has the right to redeem the 562 shares of Series A Preferred, on a pro rata basis, at any time at a price equal to 103% of the purchase price for the Series A Preferred plus any accrued but unpaid dividends. Series B Preferred Stock At September 30, 2021 and December 31, 2020, the Company had 1,872,448 and 1,875,748 shares, issued and outstanding, respectively and 5,000,000 authorized shares of Series B Convertible Preferred Stock, without par value (“Series B Preferred”) with a $25.00 liquidation preference per share, or $46.81 million and $46.90 million in aggregate, respectively. The Series B Preferred bears interest at a rate of 9% per annum. The Series B Preferred has no redemption rights. However, the Series B Preferred is subject to a mandatory conversion once the 20-trading day volume-weighted average closing price of our Common Stock, exceeds $58 per share; once this weighted average closing price is met, each share of our Series B Preferred will automatically convert into shares of our Common Stock at a conversion price equal to $40.00 per share of Common Stock. In addition, holders of our Series B Preferred also have the option, at any time, to convert shares of our Series B Preferred into shares of our Common Stock at a conversion price of $40.00 per share of Common Stock. Upon any voluntary or involuntary liquidation, dissolution or winding up of our company, the holders of shares of our Series B Preferred shall be entitled to be paid out of our assets a liquidation preference of $25.00 per share, plus an amount equal to all accumulated, accrued and unpaid dividends to and including the date of payment. The Series B Preferred has no maturity date and will remain outstanding indefinitely unless subject to a mandatory or voluntary conversion as described above. Series D Preferred Stock - Redeemable Preferred Stock and Tender Offer At September 30, 2021 and December 31, 2020, the Company had 3,038,683 and 3,529,293 issued, respectively, and 6,000,000 and 4,000,000 authorized shares, respectively, of Series D Cumulative Convertible Preferred Stock, without par value ("Series D Preferred") with a $25.00 liquidation preference per share, and a liquidation value of $100.09 million and $109.13 million in aggregate, respectively. Until September 21, 2023, the holders of the Series D Preferred are entitled to receive cumulative cash dividends at a rate of 8.75% per annum of the $25.00 liquidation preference per share (equivalent to the fixed annual amount of $2.1875 per share) (the “Initial Rate”). Commencing September 21, 2023, the holders will be entitled to cumulative cash dividends at an annual dividend rate of the Initial Rate increased by 2% of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14%. Dividends are payable quarterly in arrears on or before January 15th, April 15th, July 15th and October 15th of each year. On or after September 21, 2021, the Company may, at its option, redeem the Series D Preferred, for cash at a redemption price of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date. The holder of the Series D Preferred may convert such shares at any time into shares of the Company’s Common Stock at an initial conversion rate of $16.96 per share of Common Stock. On September 21, 2023, the holders of the Series D Preferred may, at their option, elect to cause the Company to redeem any or all of their shares at a redemption price of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date, payable in cash or in shares of Common Stock, or any combination thereof, at the Company's option. Dividends on the Series D Preferred cumulate from the end of the most recent dividend period for which dividends have been paid. Dividends on the Series D Preferred cumulate whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our Board of Directors or declared by us. Dividends on the Series D Preferred do not bear interest. If the Company fails to pay any dividend within three (3) business days after the payment date for such dividend, the then-current dividend rate increases following the payment date by an additional 2.0% of the $25.00 stated liquidation preference per share, or $0.50 per annum, until we pay the dividend, subject to our ability to cure the failure. On December 20, 2018, the Company suspended the Series D Preferred dividend. As such, the Series D Preferred shares began accumulating dividends at 10.75% beginning January 1, 2019 and will continue to accumulate dividends at this rate until all accumulated dividends have been paid. Holders of shares of the Series D Preferred have no voting rights. Pursuant to the Company’s Articles Supplementary, if dividends on the Series D Preferred are in arrears for six or more consecutive quarterly periods (a “Preferred Dividend Default”), the number of directors on our Board of Directors will automatically be increased by two, and holders of shares of the Series D Preferred and the holders of Series A Preferred and Series B Preferred (the Series A Preferred and Series B Preferred together, being the “Parity Preferred Stock”), shall be entitled to vote for the election of two additional directors (the “Series D Preferred Directors”). A Preferred Dividend Default occurred on April 15, 2020. The election of such directors will take place upon the written request of the holders of record of at least 20% of the Series D Preferred and Parity Preferred Stock. The Board of Directors is not permitted to fill the vacancies on the Board of Directors as a result of the failure of the holders of 20% of the Series D Preferred and Parity Preferred Stock to deliver such written request for the election of the Series D Preferred Directors. The Series D Preferred Directors may serve on our Board of Directors, until all unpaid dividends on such Series D Preferred and Parity Preferred Stock, if any, have been paid or declared and a sum sufficient for the payment thereof set apart for payment. On March 12, 2021, through a “modified Dutch auction” tender offer the Company accepted for purchase 387,097 shares of Series D Preferred at a purchase price of $15.50 per share, for an aggregate cost of $6.00 million, excluding fees and expenses relating to the tender offer. On May 15, 2021, through a “modified Dutch auction” tender offer the Company accepted for purchase 103,513 shares of Series D Preferred at a purchase price of $18.00 per share, for an aggregate cost of $1.86 million, excluding fees and expenses relating to the tender offer. The changes in the carrying value of the Series D Preferred for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands, unaudited):
Earnings per share Basic earnings per share for the Company’s common stockholders is calculated by dividing income (loss) from continuing operations, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the Company’s weighted-average shares of Common Stock outstanding during the period. Diluted earnings per share is computed by dividing the net income (loss) attributable to common stockholders, excluding amounts attributable to preferred stockholders and the net income (loss) attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares. As of September 30, 2021, the below shares are able to be converted to Common Stock. The common units, Series B Preferred, Series D Preferred, warrants and Convertible Notes have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive.
Dividends The following table summarizes the preferred stock dividends (unaudited, in thousands except for per share amounts):
There were no dividends declared to holders of Common Stock during the three and nine months ended September 30, 2021 and 2020. The total cumulative dividends in arrears for Series A Preferred (per share $270.00), Series B Preferred (per share $6.75) and Series D Preferred (per share $7.94) as of September 30, 2021 is $36.91 million. Cancellation of Stock Appreciation Rights Agreement Effective July 5, 2021, Daniel Khoshaba resigned as the President and Chief Executive Officer of the Company and as a member of the Board of Directors and as a member of the Executive Committee of our Board of Directors. Upon Mr. Khoshaba’s cessation of employment with the Company, all of his rights under that certain Stock Appreciation Rights Agreement, dated August 4, 2020, by and between Mr. Khoshaba and the Company (the “SAR Agreement”), were forfeited for no consideration.
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Lease Commitments |
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Lease Commitments | Lease CommitmentsThe Company has ground leases and leases its corporate headquarters; both are accounted for as operating leases. Most leases include one or more options to renew, with renewal terms that can extend the lease term from 5 to 50 years. As of September 30, 2021 and 2020, the weighted average remaining lease term of our leases is 31 and 34 years, respectively. The following properties are subject to leases which require the Company to make the following fixed annual rental payments and variable lease payments and include escalation clauses and renewal options as follows (in thousands, unaudited):
(1) Lease options are exercised through 2035 with options which are reasonably certain to be exercised through 2051. (2) Includes $33 thousand and $96 thousand in variable percentage rent, during the three and nine months ended September 30, 2021, respectively. Includes $34 thousand and $103 thousand in variable percentage rent, during the three and nine months ended September 30, 2020, respectively. Supplemental information related to leases is as follows (in thousands, unaudited):
Undiscounted cash flows of our scheduled obligations for future minimum lease payments due under the operating leases, including applicable automatic extension options and options reasonably certain of being exercised, as of September 30, 2021 and a reconciliation of those cash flows to the operating lease liabilities at September 30, 2021 are as follows (in thousands, unaudited):
(1) Operating lease payments include $7.54 million related to options to extend lease terms that are reasonably certain of being exercised.
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Insurance The Company carries comprehensive liability, fire, extended coverage, business interruption and rental loss insurance covering all of the properties in its portfolio under a blanket insurance policy, in addition to other coverages, such as trademark and pollution coverage that may be appropriate for certain of its properties. Additionally, the Company carries a directors’, officers’, entity and employment practices liability insurance policy that covers such claims made against the Company and its directors and officers. The Company believes the policy specifications and insured limits are appropriate and adequate for its properties given the relative risk of loss, the cost of the coverage and industry practice; however, its insurance coverage may not be sufficient to fully cover its losses. Concentration of Credit Risk The Company is subject to risks incidental to the ownership and operation of commercial real estate. These risks include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants and customers, changes in tax laws, interest rates, the availability of financing and potential liability under environmental and other laws. The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in the Southeast, Mid-Atlantic and Northeast, which markets represent approximately 62%, 34% and 4% respectively, of the total annualized base rent of the properties in its portfolio as of September 30, 2021. The Company’s geographic concentration may cause it to be more susceptible to adverse developments in those markets than if it owned a more geographically diverse portfolio. Additionally, the Company’s retail shopping center properties depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants. Regulatory and Environmental As the owner of the buildings on our properties, the Company could face liability for the presence of hazardous materials (e.g., asbestos or lead) or other adverse conditions (e.g., poor indoor air quality) in its buildings. Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines for such noncompliance. Also, the Company could be liable to third parties (e.g., occupants of the buildings) for damages related to exposure to hazardous materials or adverse conditions in its buildings, and the Company could incur material expenses with respect to abatement or remediation of hazardous materials or other adverse conditions in its buildings. In addition, some of the Company’s tenants routinely handle and use hazardous or regulated substances and wastes as part of their operations at our properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject the Company or its tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to the Company, and changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise materially and adversely affect the Company’s operations. The Company is not aware of any material contingent liabilities, regulatory matters or environmental matters that may exist. Litigation The Company is involved in various legal proceedings arising in the ordinary course of its business, including, but not limited to commercial disputes. The Company believes that such litigation, claims and administrative proceedings will not have a material adverse impact on its financial position or its results of operations. The Company records a liability when it considers the loss probable and the amount can be reasonably estimated. In addition, the below are in process. David Kelly v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for the City of Virginia Beach, Virginia. Former CEO David Kelly filed suit on May 28, 2020, alleging that his employment was improperly terminated and that he is owed severance pay and related benefits pursuant to his employment agreement. He claims breach of his employment contract against the company. Mr. Kelly seeks damages of $400 thousand, plus unpaid bonuses and benefits, pre- and post-judgment interest, attorneys’ fees, and costs. The Company is defending the action on the grounds that Mr. Kelly’s employment was properly terminated for cause. Trial is set for March 2022. At this juncture, the outcome of the matter cannot be predicted. JCP Investment Partnership LP, et al v. Wheeler Real Estate Investment Trust, Inc., United States District Court for the District of Maryland. On March 22, 2021, JCP Investment Partnership, LP, a Texas limited partnership and stockholder of the Company, JCP Investment Partners, LP, a Texas limited partnership and stockholder of the Company, JCP Investment Holdings, LLC, a Texas limited liability company and stockholder of the Company, and JCP Investment Management, LLC, a Texas limited liability company and stockholder of the Company (collectively, the “JCP Plaintiffs”), filed suit against the Company and certain current and former directors and former officers of the Company (the “Individual Defendants”), in the United States District Court for the District of Maryland. The complaint alleges that the Company amended provisions of its Articles Supplementary in 2018 governing the issuance of the Company’s Series D Preferred Stock in violation of Maryland corporate law and without obtaining the consent of preferred stockholders and, therefore, the court should declare the Company’s said amendment invalid, enjoin further purportedly unauthorized amendments, and either compel the Company to redeem the JCP Plaintiffs' stock or enter judgment for monetary damages the JCP Plaintiffs purportedly sustained based on the Company’s alleged breach of its contractual duties to redeem the JCP Plaintiffs’ Series D Preferred Stock. The complaint also alleges certain violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder, and alleges that the Individual Defendants violated Section 20(a) of the Exchange Act. The JCP Plaintiffs are each purportedly a holder of the Company’s Series D Preferred Stock. The complaint seeks damages, interest, attorneys’ fees, other costs and expenses, and such other relief as the court may deem just and equitable. The Company has filed an answer to the complaint denying any liability. The Individual Defendants filed a motion to dismiss the complaint, which has not yet been ruled on. At this early juncture, the outcome of the litigation is uncertain. Jon Wheeler v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for the City of Virginia Beach, Virginia. Former CEO, Jon Wheeler, alleged that his employment was improperly terminated and that he was owed severance and bonus payments pursuant to his Employment Agreement. In 2020, The Court found in favor of Jon Wheeler on his claim that his employment was terminated without cause. The Court denied Mr. Wheeler’s claims for a bonus and that his termination of employment was wrongful as a violation of public policy. The Court awarded the Company $5 thousand on its counterclaim. At a hearing on September 4, 2020 on Jon Wheeler’s motion for the award of attorneys’ fees, costs, and pre-judgment interest, the Court awarded Mr. Wheeler the requested costs, but awarded no attorneys’ fees and no pre-judgment interest. In total, Mr. Wheeler was awarded $520 thousand. In October 2020, the Company settled with Mr. Wheeler for $500 thousand. Mr. Wheeler preserved his right to appeal the Court’s denial of an award of attorneys’ fees of $375 thousand and pre-judgment interest of $63 thousand. Mr. Wheeler timely filed a Notice of Appeal, and he timely filed his Petition for Appeal on December 1, 2020. The Company timely filed its Brief in Opposition to the Petition for Appeal on December 22, 2020. On May 13, 2021, a three-justice writ panel of the Virginia Supreme Court allowed Mr. Wheeler's counsel the opportunity to present arguments as to why Mr. Wheeler’s petition should be granted and the appeal allowed to proceed before the full Virginia Supreme Court. On June 16, 2021, the Supreme Court granted Mr. Wheeler an appeal on his first assignment of error (i.e., the Circuit Court’s refusal to award Mr. Wheeler any attorneys’ fees) but denied the appeal as to Mr. Wheeler’s claim for prejudgment interest. The parties settled in the amount of $185 thousand on July 28, 2021. Steamboat Capital Partners Master Fund, LP and Steamboat Capital Partners II, LP v. Wheeler Real Estate Investment Trust, Inc., Steamboat Capital Partners Master Fund, LP and Steamboat Capital Partners II, LP v. Wheeler Real Estate Investment Trust, Inc., Circuit Court for Baltimore County, Maryland. On October 25, 2021, Steamboat Capital Partners Master Fund, LP, a Cayman Islands exempted limited partnership and stockholder of the Company, and Steamboat Capital Partners II, LP, a Delaware limited partnership and stockholder of the Company, filed suit against the Company in the Circuit Court for Baltimore County, Maryland. The complaint alleges that the Company’s distribution of rights to the Company’s common stockholders, and notes pursuant to the rights, when accrued Series B Preferred Stock dividends and Series D Preferred Stock dividends have not been fully paid, breached the provisions of the Company’s governing documents and violated the rights of the holders of the Series B Preferred Stock and Series D Preferred Stock and, in the case of the notes distributed, Maryland law. The complaint seeks, as a result, to require the Company to pay all dividends accrued, as of the date of the distribution of rights, on the Series B Preferred Stock and Series D Preferred Stock, and to prohibit the Company from paying interest on the notes distributed to the Company’s common stockholders upon exercise of the rights until all accrued dividends on the Series B Preferred Stock and Series D Preferred Stock are paid. The complaint also seeks a declaration that the distribution of rights to the Company’s common stockholders, and notes pursuant to the rights, when accrued Series B Preferred Stock dividends and Series D Preferred Stock dividends had not been fully paid, breached the provisions of the Company’s governing documents and, in the case of the notes distributed, Maryland law. In addition, as a result of the common stockholders approving the amendments to the Company’s Articles Supplementary to remove the rights of the Series B Preferred Stock to cumulative dividends, the complaint seeks to enjoin such amendment from applying retroactively. At this juncture, the outcome of the matter cannot be predicted. Harbor Pointe Tax Increment Financing On September 1, 2011, the Grove Economic Development Authority issued the Grove Economic Development Authority Tax Increment Revenue Note, Taxable Series 2011 in the amount of $2.42 million, bearing a variable interest rate of 2.29%, not to exceed 14% and payable in 50 semi-annual installments. The proceeds of the bonds were to provide funding for the construction of public infrastructure and other site improvements and to be repaid by incremental additional property taxes generated by development. Harbor Pointe Associates, LLC, then owned by an affiliate of former CEO, Jon Wheeler, entered into an Economic Development Agreement with the Grove Economic Development Authority for this infrastructure development and in the event the ad valorem taxes were insufficient to cover annual debt service, Harbor Pointe Associates, LLC would reimburse the Grove Economic Development Authority (the “Harbor Pointe Agreement”). In 2014, Harbor Pointe Associates, LLC was acquired by the Company. The total debt service shortfall over the life of the bond is uncertain as it is based on ad valorem taxes, assessed property values, property tax rates, LIBOR and future potential development ranging until 2036. The Company’s future total principal obligation under the Harbor Pointe Agreement will be no more than $2.15 million, the principal amount of the bonds, as of September 30, 2021. In addition, the Company may have an interest obligation on the note based on the principal balance and LIBOR rates in effect at future payment dates. During the three and nine months ended September 30, 2021, the Company funded $0 and $44 thousand, respectively, in debt service shortfalls. During the three and nine months ended September 30, 2020, the Company did not fund any debt service shortfalls. No amounts have been accrued for this as of September 30, 2021 as a reasonable estimate of future debt service shortfalls cannot be determined based on variables noted above.
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Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions The following summarizes related party activity for the nine months ended September 30, 2021 and 2020. The amounts disclosed below reflect the activity between the Company and its affiliates (in thousands).
Reimbursement of Proxy Solicitation Expenses The Company agreed to reimburse the Stilwell Value Partners VII, L.P., Stilwell Activist Fund, L.P., Stilwell Activist Investments, L.P., Stilwell Value LLC and Joseph Stilwell (collectively, the “Stilwell Group”), for expenses it incurred in connection with the 2019 Stilwell Solicitation. During the nine months ended September 30, 2021 and 2020, the Company reimbursed the Stilwell Group $369 thousand and $50 thousand, respectively, for these costs. As of September 30, 2021, the Company had reimbursed the Stilwell Group in full for expenses it incurred in connection with the 2019 Stilwell Solicitation.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Convertible Notes - Accordion Right On October 12, 2021, the Backstop Parties and their assignee elected to exercise their “accordion right” in full and purchased from the Company $3.00 million in aggregate principal amount of the Company’s Convertible Notes. Special Meeting of Common Stockholders On November 3, 2021, common stockholders of the Company voted to amend the Company’s Articles Supplementary to remove the cumulative dividend rights of the Series A Preferred and Series B Preferred.
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Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Tenant Receivables and Unbilled Rent | Tenant Receivables and Unbilled RentTenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants and convertible notes, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statement of operations. The assumptions used in these fair value estimates are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
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Lease Contract Revenue | Lease Contract Revenue The Company has two classes of underlying assets relating to rental revenue activity, retail and office space. The Company retains substantially all of the risks and benefits of ownership of these underlying assets and accounts for these leases as operating leases. The Company combines lease and nonlease components in lease contracts, which includes combining base rent and tenant reimbursement revenue. The Company accrues minimum rents on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. At September 30, 2021 and December 31, 2020, there were $5.62 million and $4.48 million, respectively, in unbilled rent which is included in "rents and other tenant receivables, net."
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Use of Estimates | Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported periods. The Company’s actual results could differ from these estimates.
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Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the condensed consolidated balance sheets but separate from the Company’s equity. On the condensed consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. Condensed consolidated statements of equity include beginning balances, activity for the period and ending balances for stockholders' equity, noncontrolling interests and total equity. The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are exchanged for the Company’s $0.01 par value per share common stock (“Common Stock”). In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital.
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Recently Adopted Accounting Standards and Recent Accounting Pronouncements | Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entities Own Equity (Subtopic 815-40).” This ASU simplifies accounting for convertible instruments by eliminating two of the three models in ASC 470-20 that require separating embedded conversion features from convertible instruments. In addition, ASU 2020-06 requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. The guidance is effective for fiscal years beginning after December 15, 2021. We adopted this guidance effective January 1, 2021 under the modified retrospective adoption approach. There was no effect to the opening balance of retained earnings at the date of adoption. The comparative information has not been restated and continues to be presented according to accounting standards in effect for those periods. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments." This update enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, such as accounts receivable and loans. The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes. The guidance would be effective for interim and annual reporting periods beginning after December 15, 2022, per FASB's issuance of ASU 2019-10, "Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates". The Company is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of Company's revenue | The below table disaggregates the Company’s revenue by type of service for the three and nine months ended September 30, 2021 and 2020 (in thousands, unaudited):
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Schedule of corporate general and administrative expenses | A detail for the "corporate general & administrative" line item from the condensed consolidated statements of operations is presented below (in thousands, unaudited):
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Real Estate (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of investment properties | Investment properties consist of the following (in thousands):
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Schedule of dispositions | As of September 30, 2021 and December 31, 2020, assets held for sale and associated liabilities consisted of the following (in thousands):
The following properties were sold during the nine months ended September 30, 2021 and 2020:
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Deferred Costs and Other Assets, Net (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of details of deferred costs, net of amortization and other assets | Deferred costs and other assets, net of accumulated amortization are as follows (in thousands):
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Schedule of future amortization of lease origination costs, financing costs and in place leases | Future amortization of leases in place, ground lease sandwich interest, lease origination costs, tenant relationships, and legal and marketing costs is as follows (in thousands, unaudited):
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Loans Payable (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of loans payable | The Company’s loans payable consist of the following (in thousands, except monthly payment):
(2) Collateralized by LaGrange Marketplace, Ridgeland and Georgetown. (3) Collateralized by Ladson Crossing, Lake Greenwood Crossing and South Park. (4) Collateralized by Cardinal Plaza, Franklinton Square, and Nashville Commons. (5) Collateralized by Clover Plaza, South Square, St. George, Waterway Plaza and Westland Square. (6) Collateralized by Darien Shopping Center, Devine Street, Lake Murray, Moncks Corner and South Lake. (7) Collateralized by Surrey Plaza and Amscot Building. (8) Certain loans bear interest at a variable interest rate equal to LIBOR or another index rate, subject to a floor, in each case plus or minus a specified margin. (9) Includes $6.30 million of unamortized debt issuance costs related to the Convertible Notes at issuance, of which $5.39 million relates to the embedded derivative, see Note 6.
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Schedule of Company's scheduled principal repayments on indebtedness | The Company’s scheduled principal repayments on indebtedness as of September 30, 2021, including assets held for sale, are as follows (in thousands, unaudited):
|
Derivative Liabilities (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement Inputs and Valuation Techniques | In measuring the warrant liability at September 30, 2021, the Company used the following inputs in its Monte Carlo Model:
|
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Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation | The following table sets forth a summary of the changes in fair value of the Company's warrant liabilities (in thousands):
|
Rentals under Operating Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum rentals to be received under noncancelable tenant operating leases | Future minimum rents to be received under noncancelable tenant operating leases, excluding rents on assets held for sale properties, for the remaining three months ending December 31, 2021 and each of the next five years and thereafter, excluding tenant reimbursements and percentage rent based on tenant sales volume, as of September 30, 2021 are as follows (in thousands, unaudited):
|
Equity and Mezzanine Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in carrying value of Series D Preferred | The changes in the carrying value of the Series D Preferred for the three and nine months ended September 30, 2021 and 2020 are as follows (in thousands, unaudited):
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Schedule of potentially dilutive shares | As of September 30, 2021, the below shares are able to be converted to Common Stock. The common units, Series B Preferred, Series D Preferred, warrants and Convertible Notes have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive.
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Schedule of summary of preferred stock dividends | The following table summarizes the preferred stock dividends (unaudited, in thousands except for per share amounts):
|
Lease Commitments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Ground Lease Payments and Supplemental Information Related to Leases | The following properties are subject to leases which require the Company to make the following fixed annual rental payments and variable lease payments and include escalation clauses and renewal options as follows (in thousands, unaudited):
(1) Lease options are exercised through 2035 with options which are reasonably certain to be exercised through 2051. (2) Includes $33 thousand and $96 thousand in variable percentage rent, during the three and nine months ended September 30, 2021, respectively. Includes $34 thousand and $103 thousand in variable percentage rent, during the three and nine months ended September 30, 2020, respectively. Supplemental information related to leases is as follows (in thousands, unaudited):
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Schedule of Undiscounted Cash Flows of Scheduled Obligations for Under Operating Leases | Undiscounted cash flows of our scheduled obligations for future minimum lease payments due under the operating leases, including applicable automatic extension options and options reasonably certain of being exercised, as of September 30, 2021 and a reconciliation of those cash flows to the operating lease liabilities at September 30, 2021 are as follows (in thousands, unaudited):
|
Related Party Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party activity | The following summarizes related party activity for the nine months ended September 30, 2021 and 2020. The amounts disclosed below reflect the activity between the Company and its affiliates (in thousands).
|
Organization and Basis of Presentation and Consolidation (Details) |
Sep. 30, 2021
property
Property
|
---|---|
Accounting Policies [Abstract] | |
Number of real estate properties | property | 59 |
Number of undeveloped land parcels | Property | 4 |
Percentage of ownership interests in operating partnership | 98.57% |
Summary of Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2021
USD ($)
$ / shares
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
asset_class
$ / shares
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
$ / shares
|
Apr. 24, 2020
USD ($)
|
|
Property, Plant and Equipment [Line Items] | ||||||
Past due rent charge term | 5 days | |||||
Allowance for uncollectible accounts | $ 597 | $ 597 | $ 994 | |||
Number of underlying asset classes | asset_class | 2 | |||||
Other expenses | $ 185 | $ 15 | $ 185 | $ 1,040 | ||
Common stock, par value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Rent and other tenant receivables | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Recoveries related to tenant receivables | $ 5,620 | $ 5,620 | $ 4,480 | |||
KeyBank | ||||||
Property, Plant and Equipment [Line Items] | ||||||
PPP funds | $ 552 | |||||
Interest Rate | 1.00% |
Summary of Significant Accounting Policies - Disaggregation of Revenues (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Disaggregation of Revenue [Line Items] | ||||
Rent | $ 11,487 | $ 11,515 | $ 34,149 | $ 35,179 |
Non-lease revenues | 508 | 208 | 780 | 787 |
Total | 15,640 | 15,421 | 45,894 | 46,749 |
Credit losses on operating lease receivables | (132) | (457) | (168) | (1,042) |
Total Revenue | 15,508 | 14,964 | 45,726 | 45,707 |
Tenant reimbursements - variable lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Variable lease revenue | 3,178 | 3,274 | 9,604 | 9,703 |
Percentage rent - variable lease revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Variable lease revenue | 177 | 85 | 463 | 242 |
Straight-line rents | ||||
Disaggregation of Revenue [Line Items] | ||||
Rent | 290 | 339 | 898 | 838 |
Lease termination fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-lease revenues | 10 | 100 | 139 | 174 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Non-lease revenues | $ 498 | $ 108 | $ 641 | $ 613 |
Summary of Significant Accounting Policies - Corporate General and Administrative Expenses ("CG&A") (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Accounting Policies [Abstract] | ||||
Professional fees | $ 717 | $ 241 | $ 2,133 | $ 2,186 |
Corporate administration | 542 | 309 | 1,314 | 934 |
Compensation and benefits | 325 | 321 | 900 | 1,103 |
Advertising costs for leasing activities | 36 | 32 | 77 | 84 |
Other corporate general & administrative | 136 | 177 | 521 | 260 |
Total | $ 1,756 | $ 1,080 | $ 4,945 | $ 4,567 |
Real Estate - Investment Properties (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Real Estate [Line Items] | ||
Investment properties at cost | $ 454,359 | $ 451,855 |
Less accumulated depreciation | (66,792) | (59,191) |
Investment properties, net | 387,567 | 392,664 |
Land and land improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | 96,877 | 97,117 |
Buildings and improvements | ||
Real Estate [Line Items] | ||
Investment properties at cost | $ 357,482 | $ 354,738 |
Real Estate - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2020
a
outparcel
|
|
Business Acquisition [Line Items] | |||||
Depreciation expense | $ 2,800 | $ 2,790 | $ 8,193 | $ 8,589 | |
Number of outparcels | outparcel | 2 | ||||
Impairment of assets held for sale | 0 | 0 | 2,200 | 600 | |
Columbia Fire Station | |||||
Business Acquisition [Line Items] | |||||
Impairment of assets held for sale | $ 0 | $ 0 | $ 2,200 | $ 600 | |
Berkley Shopping Center | |||||
Business Acquisition [Line Items] | |||||
Area of land | a | 0.75 |
Real Estate - Assets Held for Sale (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Assets | ||
Total assets held for sale | $ 6,022 | $ 13,072 |
Liabilities | ||
Loans payable | 963 | 13,124 |
Held-for-sale, Not Discontinued Operations | ||
Assets | ||
Investment properties, net | 5,837 | 12,593 |
Rents and other tenant receivables, net | 35 | 132 |
Above market leases, net | 0 | 153 |
Deferred costs and other assets, net | 150 | 194 |
Total assets held for sale | 6,022 | 13,072 |
Liabilities | ||
Loans payable | 854 | 12,838 |
Below market leases, net | 0 | 25 |
Accounts payable, accrued expenses and other liabilities | 109 | 261 |
Total liabilities associated with assets held for sale | $ 963 | $ 13,124 |
Deferred Costs and Other Assets, Net - Deferred Costs and Other Assets, Net (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Deferred costs and other assets, net | $ 13,434 | $ 15,430 |
Lease origination costs, net | 1,454 | 1,334 |
Tenant relationships, net | 953 | 1,308 |
Other | 1,133 | 592 |
Leases in place, net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Deferred costs and other assets, net | 8,143 | 10,233 |
Ground lease sandwich interest, net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Deferred costs and other assets, net | 1,735 | 1,941 |
Legal and marketing costs, net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Deferred costs and other assets, net | $ 16 | $ 22 |
Deferred Costs and Other Assets, Net - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||
Finite-lived intangible assets, accumulated amortization | $ 61,930 | $ 61,930 | $ 60,330 | ||
Amortization of intangible assets | $ 874 | $ 1,430 | $ 2,840 | $ 4,870 |
Loans Payable - Summary of Company's Scheduled Principal Repayments on Indebtedness (Details) $ in Thousands |
Sep. 30, 2021
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
For the remaining three months ended December 31, 2021 | $ 1,503 |
December 31, 2022 | 13,567 |
December 31, 2023 | 89,288 |
December 31, 2024 | 50,490 |
December 31, 2025 | 92,016 |
December 31, 2026 | 58,531 |
Thereafter | 74,370 |
Total principal repayments and debt maturities | $ 379,765 |
Derivative Liabilities - Changes in Fair Value of Warrant Liabilities (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
|
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | |||
Beginning balance | $ 4,193 | $ 2,959 | $ 594 |
Issuance of Wilmington Warrant | 2,018 | ||
Changes in fair value | (1,884) | 1,234 | 347 |
Ending balance | $ 2,309 | $ 4,193 | $ 2,959 |
Rentals under Operating Leases (Details) $ in Thousands |
Sep. 30, 2021
USD ($)
|
---|---|
Leases [Abstract] | |
For the remaining three months ended December 31, 2021 | $ 11,595 |
December 31, 2022 | 45,550 |
December 31, 2023 | 40,637 |
December 31, 2024 | 33,000 |
December 31, 2025 | 26,175 |
December 31, 2026 | 17,833 |
Thereafter | 41,501 |
Total minimum rents | $ 216,291 |
Equity and Mezzanine Equity - Changes in Carrying Value of Series D Preferred (Details) - Series D Preferred - USD ($) $ in Thousands |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||
Beginning Balance | $ 86,606 | $ 87,321 | $ 95,563 | $ 92,360 | $ 89,792 | $ 87,225 |
Accretion of Preferred Stock discount | 124 | 125 | 140 | 147 | 149 | 148 |
Undeclared dividends | 2,042 | 2,042 | 2,111 | 2,372 | 2,419 | 2,419 |
Redemption of Preferred Stock | (2,882) | (10,493) | (1,833) | |||
Ending Balance | $ 88,772 | $ 86,606 | $ 87,321 | $ 93,046 | $ 92,360 | $ 89,792 |
Equity and Mezzanine Equity - Summary of Preferred Stock Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Dividends Payable [Line Items] | ||||
Arrears | $ 36,910 | |||
Series A Preferred | ||||
Dividends Payable [Line Items] | ||||
Arrears | $ 12 | $ 13 | $ 38 | $ 39 |
Per Share (in dollars per share) | $ 22.50 | $ 22.50 | $ 67.50 | $ 67.50 |
Series B Preferred | ||||
Dividends Payable [Line Items] | ||||
Arrears | $ 1,053 | $ 1,056 | $ 3,163 | $ 3,166 |
Per Share (in dollars per share) | $ 0.56 | $ 0.56 | $ 1.69 | $ 1.69 |
Series D Preferred | ||||
Dividends Payable [Line Items] | ||||
Arrears | $ 2,042 | $ 2,372 | $ 6,195 | $ 7,210 |
Per Share (in dollars per share) | $ 0.67 | $ 0.67 | $ 2.01 | $ 2.01 |
Lease Commitments - Narrative (Details) |
Sep. 30, 2021 |
Sep. 30, 2020 |
---|---|---|
Lessee, Lease, Description [Line Items] | ||
Weighted-average remaining lease term | 31 years | 34 years |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 5 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease term | 50 years |
Lease Commitments - Payments for Ground Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | $ 268 | $ 226 | $ 800 | $ 679 |
Amscot | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | 7 | 6 | 19 | 19 |
Beaver Ruin Village | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | 14 | 14 | 41 | 41 |
Beaver Ruin Village II | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | 6 | 6 | 17 | 17 |
Moncks Corner | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | 30 | 30 | 91 | 91 |
Devine Street | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | 99 | 99 | 297 | 297 |
JANAF | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | 70 | 71 | 208 | 214 |
Ground leases variable percentage rent | 33 | 34 | 96 | 103 |
Riversedge office space Virginia Beach, VA | ||||
Lessor, Lease, Description [Line Items] | ||||
Total rent expense | $ 42 | $ 0 | $ 127 | $ 0 |
Lease Commitments - Supplemental Information Related to Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Leases [Abstract] | ||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 225 | $ 146 | $ 676 | $ 437 |
Lease Commitments - Undiscounted Cash Flows of Scheduled Obligations Under Operating Leases (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Leases [Abstract] | ||
For the remaining three months ended December 31, 2021 | $ 226 | |
December 31, 2022 | 905 | |
December 31, 2023 | 907 | |
December 31, 2024 | 909 | |
December 31, 2025 | 913 | |
December 31, 2026 | 943 | |
Thereafter | 22,843 | |
Total minimum lease payments | 27,646 | |
Discount | (14,565) | |
Operating lease liabilities | 13,081 | $ 13,200 |
Operating lease options to extend | $ 7,540 |
Related Party Transactions - Summary of Related Party Activity (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Wheeler Interests and Affiliates | ||
Related Party Transaction [Line Items] | ||
Amounts paid to affiliates | $ 392 | $ 75 |
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Stilwell Group | ||
Related Party Transaction [Line Items] | ||
Amounts paid to affiliates | $ 369 | $ 50 |
Subsequent Events (Details) - Convertible Debt - 7.00% Senior Subordinated Convertible Notes Due 2031 - USD ($) $ in Thousands |
Oct. 12, 2021 |
Aug. 13, 2021 |
---|---|---|
Subsequent Event [Line Items] | ||
Debt issued | $ 30,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Debt issued | $ 3,000 |
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