UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER: 001-31817

CEDAR REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland	42-1241468
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

44 South Bayles Avenue, Port Washington, New York 11050-3765

(Address of principal executive offices)     (Zip Code)

(516) 767-6492

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered	Trading Symbol(s)
Common Stock, $0.06 par value	New York Stock Exchange	CDR
7-1/4% Series B Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value	New York Stock Exchange	CDRpB
6-1/2% Series C Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value	New York Stock Exchange	CDRpC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

At July 31, 2019, there were 89,022,042 shares of Common Stock, $0.06 par value, outstanding.

1

CEDAR REALTY TRUST, INC.

INDEX

Forward-Looking Statements		3
Part I. Financial Information
Item 1.	Financial Statements (unaudited)
	Consolidated Balance Sheets – June 30, 2019 and December 31, 2018	4
	Consolidated Statements of Operations– Three and six months ended June 30, 2019 and 2018	5
	Consolidated Statements of Comprehensive (Loss) Income – Three and six months ended June 30, 2019 and 2018	6
	Consolidated Statements of Equity– Six months ended June 30, 2019 and 2018	7-10
	Consolidated Statements of Cash Flows– Six months ended June 30, 2019 and 2018	11
	Notes to Consolidated Financial Statements – June 30, 2019	12-21
Item 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations	22-29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
Part II. Other Information
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	30
Signatures		31

2

Forward-Looking Statements

Certain statements made in this Form 10-Q or incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may”, “will”, “should”, “estimates”, “projects”, “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import, or the negative thereof. Factors which could cause actual results to differ materially from current expectations include, but are not limited to:  adverse general economic conditions in the United States and uncertainty in the credit and retail markets; financing risks, such as the inability to obtain new financing or refinancing on favorable terms as the result of market volatility or instability; risks related to the market for retail space generally, including reductions in consumer spending, variability in retailer demand for leased space, tenant bankruptcies, adverse impact of internet sales demand, ongoing consolidation in the retail sector and changes in economic conditions and consumer confidence; risks endemic to real estate and the real estate industry generally; the impact of the Company’s level of indebtedness on operating performance; inability of tenants to meet their rent and other lease obligations; adverse impact of new technology and e-commerce developments on the Company’s tenants; competitive risk; risks related to the geographic concentration of the Company’s properties in the Washington, D.C. to Boston corridor; the effects of natural and other disasters; the inability of the Company to realize anticipated returns from its redevelopment activities; and the risk factors discussed under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

Except for ongoing obligations to disclose material information as required by the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. All of the above factors are difficult to predict, contain uncertainties that may materially affect the Company’s actual results and may be beyond the Company’s control.  New factors emerge from time to time, and it is not possible for the Company’s management to predict all such factors or to assess the effects of each factor on the Company’s business. Accordingly, there can be no assurance that the Company’s current expectations will be realized.

3

CEDAR REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited)

	June 30,			December 31,
	2019			2018
ASSETS
Real estate:
Land	$	296,554,000		$	295,734,000
Buildings and improvements		1,222,918,000			1,212,948,000
		1,519,472,000			1,508,682,000
Less accumulated depreciation		(375,708,000	)		(361,969,000	)
Real estate, net		1,143,764,000			1,146,713,000
Real estate held for sale		7,244,000			11,592,000
Cash and cash equivalents		2,081,000			1,977,000
Receivables		21,535,000			21,977,000
Other assets and deferred charges, net		41,705,000			40,642,000
TOTAL ASSETS	$	1,216,329,000		$	1,222,901,000
LIABILITIES AND EQUITY
Mortgage loan payable	$	46,848,000		$	47,315,000
Capital lease obligation		5,375,000			5,387,000
Unsecured revolving credit facility		99,000,000			100,000,000
Unsecured term loans		472,486,000			472,132,000
Accounts payable and accrued liabilities		47,031,000			26,142,000
Unamortized intangible lease liabilities		12,182,000			13,209,000
Total liabilities		682,922,000			664,185,000
Commitments and contingencies		-			-
Equity:
Cedar Realty Trust, Inc. shareholders' equity:
Preferred stock		159,541,000			159,541,000
Common stock  ($.06 par value, 150,000,000 shares authorized, 89,025,000 and 90,436,000 shares, issued and outstanding, respectively)		5,341,000			5,426,000
Treasury stock  (3,085,000 and 2,971,000 shares, respectively, at cost)		(16,470,000	)		(16,572,000	)
Additional paid-in capital		870,582,000			875,565,000
Cumulative distributions in excess of net income		(482,258,000	)		(475,726,000	)
Accumulated other comprehensive (loss) income		(6,761,000	)		7,191,000
Total Cedar Realty Trust, Inc. shareholders' equity		529,975,000			555,425,000
Noncontrolling interests:
Minority interests in consolidated joint ventures		137,000			(112,000	)
Limited partners'  OP Units		3,295,000			3,403,000
Total noncontrolling interests		3,432,000			3,291,000
Total equity		533,407,000			558,716,000
TOTAL LIABILITIES AND EQUITY	$	1,216,329,000		$	1,222,901,000

See accompanying notes to consolidated financial statements

4

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
REVENUES
Rental revenues	$	35,309,000		$	37,218,000		$	71,901,000		$	74,665,000
Other		351,000			4,132,000			642,000			4,253,000
Total revenues		35,660,000			41,350,000			72,543,000			78,918,000
EXPENSES
Operating, maintenance and management		6,162,000			5,994,000			14,129,000			13,788,000
Real estate and other property-related taxes		5,087,000			5,056,000			10,297,000			10,135,000
General and administrative		5,418,000			4,276,000			10,216,000			8,770,000
Depreciation and amortization		10,346,000			10,541,000			20,475,000			20,595,000
Total expenses		27,013,000			25,867,000			55,117,000			53,288,000
OTHER
Gain on sales		2,841,000			-			2,942,000			-
Impairment charges		-			-			-			(21,396,000	)
Total other		2,841,000			-			2,942,000			(21,396,000	)
OPERATING INCOME		11,488,000			15,483,000			20,368,000			4,234,000
NON-OPERATING INCOME AND EXPENSES
Interest expense		(5,944,000	)		(5,546,000	)		(11,835,000	)		(10,917,000	)
Total non-operating income and expenses		(5,944,000	)		(5,546,000	)		(11,835,000	)		(10,917,000	)
NET INCOME (LOSS)		5,544,000			9,937,000			8,533,000			(6,683,000	)
Net (income) loss attributable to noncontrolling interests:
Minority interests in consolidated joint ventures		(144,000	)		(133,000	)		(249,000	)		(268,000	)
Limited partners' interest in Operating Partnership		(17,000	)		(27,000	)		(19,000	)		60,000
Total net (income) attributable to noncontrolling interests		(161,000	)		(160,000	)		(268,000	)		(208,000	)
NET INCOME (LOSS) ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.		5,383,000			9,777,000			8,265,000			(6,891,000	)
Preferred stock dividends		(2,688,000	)		(2,688,000	)		(5,376,000	)		(5,487,000	)
Preferred stock redemption costs		-			-			-			(3,507,000	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	2,695,000		$	7,089,000		$	2,889,000		$	(15,885,000	)
NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Basic	$	0.03		$	0.08		$	0.03		$	(0.19	)
Diluted	$	0.03		$	0.08		$	0.03		$	(0.19	)
Weighted average number of common shares:
Basic		86,260,000			88,011,000			86,420,000			87,817,000
Diluted		86,260,000			88,166,000			86,420,000			87,817,000

See accompanying notes to consolidated financial statements

5

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Net income (loss)	$	5,544,000		$	9,937,000		$	8,533,000		$	(6,683,000	)
Other comprehensive income - unrealized (loss) gain on change in fair value of cash flow hedges		(8,596,000	)		1,937,000			(14,038,000	)		7,827,000
Comprehensive (loss) income		(3,052,000	)		11,874,000			(5,505,000	)		1,144,000
Comprehensive (income) attributable to noncontrolling interests		(108,000	)		(167,000	)		(182,000	)		(237,000	)
Comprehensive (loss) income attributable to Cedar Realty Trust, Inc.	$	(3,160,000	)	$	11,707,000		$	(5,687,000	)	$	907,000

See accompanying notes to consolidated financial statements

6

CEDAR REALTY TRUST, INC.

Consolidated Statement of Equity

Six months ended June 30, 2019

(unaudited)

	Cedar Realty Trust, Inc. Shareholders
																	Cumulative			Accumulated
											Treasury			Additional			distributions			other
	Preferred stock				Common stock						stock,			paid-in			in excess of			comprehensive
	Shares		Amount		Shares			Amount			at cost			capital			net income			income			Total
Balance, December 31, 2018		6,450,000	$	159,541,000		90,436,000		$	5,426,000		$	(16,572,000	)	$	875,565,000		$	(475,726,000	)	$	7,191,000		$	555,425,000
Prior period adjustment - adoption of lease accounting standard		—		—		—			—			—			—			(515,000	)		—			(515,000	)
Balance, December 31, 2018, restated		6,450,000		159,541,000		90,436,000			5,426,000			(16,572,000	)		875,565,000			(476,241,000	)		7,191,000			554,910,000
Net income		—		—		—			—			—			—			2,882,000			—			2,882,000
Unrealized (loss) on change in fair value of cash flow hedges		—		—		—			—			—			—			—			(5,409,000	)		(5,409,000	)
Share-based compensation, net		—		—		650,000			39,000			22,000			692,000			—			—			753,000
Common stock sales, net of issuance expenses		—		—		1,000			—			—			5,000			—			—			5,000
Common stock repurchases		—		—		(2,050,000	)		(123,000	)		—			(6,721,000	)		—			—			(6,844,000	)
Preferred stock dividends		—		—		—			—			—			—			(2,688,000	)		—			(2,688,000	)
Distributions to common shareholders/noncontrolling interests		—		—		—			—			—			—			(4,455,000	)		—			(4,455,000	)
Reallocation adjustment of limited partners' interest		—		—		—			—			—			(12,000	)		—			—			(12,000	)
Balance, March 31, 2019		6,450,000	$	159,541,000		89,037,000		$	5,342,000		$	(16,550,000	)	$	869,529,000		$	(480,502,000	)	$	1,782,000		$	539,142,000
Net income		—		—		—			—			—			—			5,383,000			—			5,383,000
Unrealized (loss) on change in fair value of cash flow hedges		—		—		—			—			—			—			—			(8,543,000	)		(8,543,000	)
Share-based compensation, net		—		—		(13,000	)		(1,000	)		80,000			1,053,000			—			—			1,132,000
Common stock sales, net of issuance expenses		—		—		1,000			—			—			3,000			—			—			3,000
Common stock repurchases		—		—		—			—			—			—			—			—			—
Preferred stock dividends		—		—		—			—			—			—			(2,688,000	)		—			(2,688,000	)
Distributions to common shareholders/noncontrolling interests		—		—		—			—			—			—			(4,451,000	)		—			(4,451,000	)
Reallocation adjustment of limited partners' interest		—		—		—			—			—			(3,000	)		—			—			(3,000	)
Balance, June 30, 2019		6,450,000	$	159,541,000		89,025,000		$	5,341,000		$	(16,470,000	)	$	870,582,000		$	(482,258,000	)	$	(6,761,000	)	$	529,975,000

7

CEDAR REALTY TRUST, INC.

Consolidated Statement of Equity

Six months ended June 30, 2019

Continued

(unaudited)

	Noncontrolling Interests
	Minority			Limited
	interest in			partners'
	consolidated			interest in
	joint			Operating						Total
	ventures			Partnership			Total			Equity
Balance, December 31, 2018	$	(112,000	)	$	3,403,000		$	3,291,000		$	558,716,000
Prior period adjustment - adoption of lease accounting standard		—			—			—			(515,000	)
Balance, December 31, 2018, restated		(112,000	)		3,403,000			3,291,000			558,201,000
Net income		105,000			2,000			107,000			2,989,000
Unrealized (loss) on change in fair value of cash flow hedges		—			(33,000	)		(33,000	)		(5,442,000	)
Share-based compensation, net		—			—			—			753,000
Common stock sales, net of issuance expenses