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What changed in Wheeler Real Estate Investment Trust, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Wheeler Real Estate Investment Trust, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+171 added−153 removedSource: 10-K (2025-03-04) vs 10-K (2024-03-05)

Top changes in Wheeler Real Estate Investment Trust, Inc.'s 2024 10-K

171 paragraphs added · 153 removed · 116 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRetailers at our properties also face increasing competition from online retailers, outlet stores, discount shopping clubs, superstores, and other forms of sales and marketing of goods and services, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants. Climate Some of our properties could be subject to natural or other disasters.
Biggest changeThis competition may interfere with our ability to attract and retain tenants, leading to increased vacancy rates and/or reduced rents and adversely affect our ability to minimize operating expenses. Retailers at our properties also face competition from online retailers, outlet stores, discount shopping clubs, superstores, and other forms of sales and marketing of goods and services, such as direct mail.
The application of these laws to a specific property that we own depends on a variety of property-specific circumstances, 4 including the current and former uses of the property, the building materials used at the property and the physical layout of the property.
The application of these laws to a specific property that we own depends on a variety of property-specific circumstances, including the current and former uses of the property, the building materials used at the property and the physical layout of the property.
Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results of operations, and management does not believe they will for the fiscal year ending December 31, 2024.
Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results of operations, and management does not believe they will for the fiscal year ending December 31, 2025.
As a result, Cedar became a subsidiary of the REIT. Cedar's assets are held by, and its operations are conducted through, its operating partnership, Cedar Realty Trust Partnership, LP. The Company has elected to be taxed as a REIT under applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code").
Cedar's assets are held by, and its operations are conducted through, its operating partnership, Cedar Realty Trust Partnership, LP. The Company has elected to be taxed as a REIT under applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code").
Prior to the Cedar Acquisition (as defined below), substantially all of our assets were held by, and all of our operations were conducted through, our Operating Partnership. At December 31, 2023, the Company owned 99.13% of the Operating Partnership. On August 22, 2022, the Company completed a merger transaction with Cedar Realty Trust, Inc. ("Cedar" or "CDR").
Prior to the Cedar Acquisition (as defined below), substantially all of our assets were held by, and all of our operations were conducted through, our Operating Partnership. At December 31, 2024, the Company owned 99.82% of the Operating Partnership. On August 22, 2022, the Company completed a merger transaction with Cedar Realty Trust, Inc. ("Cedar" or "CDR").
The Company seeks to mitigate risk and optimize its capital structure through continuous focus on maintaining prudent leverage and lengthy average debt maturities, as well as access to a diverse selection of capital sources, including the secured and unsecured debt markets, unsecured lines of credit, and other sources. • Strategy for integrating acquisitions.
The Company seeks to mitigate risk and optimize its capital structure through continuous focus on maintaining prudent leverage and lengthy average debt maturities, as well as access to a diverse selection of capital sources, including the secured and unsecured debt markets, unsecured lines of credit, and other sources.
The properties are geographically located in the Mid-Atlantic, Southeast and Northeast, which markets represented approximately 45%, 40% and 15%, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2023. No tenant represents greater than approximately 6% of the Company’s annualized base rent or 7% of gross leasable square footage.
The properties are geographically located in the Mid-Atlantic, Southeast and Northeast, which markets represented approximately 44%, 43% and 13%, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2024. No tenant represents greater than approximately 6% of the Company’s annualized base rent or 7% of gross leasable square footage.
In addition to medical insurance support, the Company offers wellness programs, including free short- and long-term disability insurance, free basic life insurance policy with accidental death and dismemberment coverage, employee assistance programs that include emotional health support, gym memberships, 3 volunteer time off and tuition assistance.
Employees are offered flexibility to meet personal and family needs. In addition to medical insurance support, the Company offers wellness programs, including free short- and long-term disability insurance, free basic life insurance policy with accidental death and dismemberment coverage, employee assistance programs 3 that include emotional health support, gym memberships, volunteer time off and tuition assistance.
The top 10 tenants account for 23.4% or $17.7 million of annualized base rent and 26.2% or $2.1 million of gross leasable square footage at December 31, 2023. Human Capital Management As of December 31, 2023, we have 52 full-time employees. We seek to hire experienced leaders and team members and offer competitive wage and benefit programs.
The top 10 tenants account for 24.1% or $17.6 million of annualized base rent and 26.3% or 2.0 million of gross leasable square footage at December 31, 2024. Human Capital Management As of December 31, 2024, we have 56 full-time employees. We seek to hire experienced leaders and team members and offer competitive wage and benefit programs.
Tuition assistance includes assistance to learn a new language as the Company identifies opportunities to better serve a diverse tenant base. The Company takes steps to measure and improve upon its level of employee engagement and to create a diverse and inclusive workplace, all while creating value for our stakeholders.
Tuition assistance includes assistance to learn a new language as the Company identifies opportunities to better serve a diverse tenant base. The Company takes steps to measure and improve upon its level of employee engagement all while creating value for our stakeholders. The Company’s employees are expected to exhibit honest, ethical and respectful conduct in the workplace.
Management has extensive expertise in acquiring and managing under-performing properties and increasing operating income through more effective leasing strategies and expense management.
We employ intensive lease management strategies to optimize occupancy. Management has extensive expertise in acquiring and managing under-performing properties and increasing operating income through more effective leasing strategies and expense management.
The content of our website is not incorporated by reference into this Annual Report on Form 5 10-K or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only.
The content of our website is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only. Investors and others should note that we currently announce material information using SEC filings and press releases.
As of December 31, 2023, we own a portfolio consisting of seventy-nine properties, including seventy-five retail shopping centers, totaling 8,142,065 leasable square feet which is 93.7% leased (our "operating portfolio"), and four undeveloped land parcels totaling approximately 61 acres.
As of December 31, 2024, we own a portfolio consisting of seventy-five properties, including seventy-two retail shopping centers, totaling 7,660,979 leasable square feet which is 93.1% leased (our "Operating Portfolio"), and three undeveloped land parcels totaling approximately 11 acres.
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 losses.
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, requirements from any and all lenders and general industry practice; however, its insurance coverage may not be sufficient to fully cover losses. 5 Available Information We are subject to the information reporting requirements of the Exchange Act.
As a result of the merger, the Company acquired all of the outstanding shares of Cedar’s common stock (the "Cedar Acquisition"), which ceased to be publicly traded on the New York Stock Exchange ("NYSE"). Cedar’s outstanding 7.25% Series B Preferred Stock and 6.50% Series C Preferred Stock remain outstanding and continue to trade on the NYSE.
As a result of the merger, the Company acquired all of the outstanding shares of Cedar’s common stock (the "Cedar Acquisition"), which ceased to be publicly traded on the New York Stock Exchange ("NYSE").
The Company’s employees are expected to exhibit honest, ethical and respectful conduct in the workplace. Every year, the Company requires its employees to review and certify their compliance with the Company's various policies, including its Code of Business Conduct and Ethics. Business Objectives and Investment Strategy Our primary business objective is to maximize the value of our portfolio.
Every year, the Company requires its employees to review and certify their compliance with the Company's various policies, including its Code of Business Conduct and Ethics. Business Objectives and Investment Strategy Our primary business objective is to maximize the value of our portfolio. We intend to achieve this objective utilizing the following investment strategies: • Focus on necessity-based retail .
The majority of our tenants provide non-cyclical consumer goods and services that are less impacted by fluctuations in the economy. We believe these centers that provide essential goods and services such as groceries result in a stable, lower-risk portfolio of retail investment properties. • Focus on secondary and tertiary markets with strong demographics and demand .
We believe these centers that provide essential goods and services such as groceries result in a stable, lower-risk portfolio of retail investment properties. • Focus on secondary and tertiary markets with strong demographics and demand . Our properties are in markets that have strong demographics such as population density, population stability, consistent tenant sales trends and growth in household income.
We intend to achieve this objective utilizing the following investment strategies: • Focus on necessity-based retail . Own and operate retail properties that serve the essential day-to-day shopping needs of the surrounding communities. These necessity-based centers attract high levels of daily traffic resulting in cross-selling of goods and services from our tenants.
Own and operate retail properties that serve the essential day-to-day shopping needs of the surrounding communities. These necessity-based centers attract high levels of daily traffic resulting in cross-selling of goods and services from our tenants. The majority of our tenants provide non-cyclical consumer goods and services that are less impacted by fluctuations in the economy.
We aim to i dentify and pursue attractive investment opportunities in regions with low taxes and a pro-business environment. • Increase operating income through leasing strategies and expense management . We employ intensive lease management strategies to optimize occupancy.
We seek to identify new tenants and renew leases with existing tenants in these locations that support the need for necessity-based retail and limited new supply. We aim to i dentify and pursue attractive investment opportunities in regions with low taxes and a pro-business environment. • Increase operating income through leasing strategies and expense management .
In addition, we may acquire properties that are located in areas that are subject to natural disasters, such as earthquakes and droughts. Properties could also be affected by increases in the frequency or severity of tornadoes, hurricanes or other severe weather, whether such increases are caused by global climate changes or other factors.
Because of the geographic concentration of our properties, a single severe weather event or natural disaster could impact multiple of our properties. Properties could also be affected by increases in the frequency or severity of tornadoes, hurricanes or other severe weather, whether such increases are caused by global climate changes or other factors.
Removed
Employees are offered flexibility to meet personal and family needs, which was further expanded when the COVID-19 pandemic began.
Added
Cedar’s outstanding 7.25% Series B Preferred Stock ("Cedar Series B Preferred Stock") and 6.50% Series C Preferred Stock ("Cedar Series C Preferred Stock" and, together with the Cedar Series B Preferred Stock, the "Cedar Preferred Stock") remain outstanding and continue to trade on the NYSE. As a result, Cedar became a subsidiary of the Company.
Removed
Our properties are in markets that have strong demographics such as population density, population stability, consistent tenant sales trends and growth in household income. We seek to identify new tenants and renew leases with existing tenants in these locations that support the need for necessity-based retail and limited new supply.
Added
In addition, the Company has reduced and intends to continue to reduce the total outstanding preferred stock of the Company and that of Cedar through the following strategies: ◦ The Company has been and intends to continue to continue opportunistically exchanging shares of its Common Stock for its Series B Convertible Preferred Stock ("Series B Preferred Stock") and/or its Series D Preferred Stock with the holders thereof. ◦ The Company has been and intends to continue repurchasing the Cedar Preferred Stock as both series are currently trading at a discount to their liquidation value, presenting a strategic opportunity to buy back shares 4 at favorable prices.
Removed
This competition may interfere with our ability to attract and retain tenants, leading to increased vacancy rates and/or reduced rents and adversely affect our ability to minimize operating expenses.
Added
By reducing the number of shareholders eligible for dividend payments, we can offset the net operating income lost from the recent sales of certain properties. These strategies are intended to enhance the Company's financial stability, strengthen its balance sheet, optimize its capital allocation, and maximize shareholder value. • Strategy for integrating acquisitions.
Removed
Increases in the occurrence of natural disasters and severe weather patterns have led to a consistent increase in overall rates, deductibles and valuations from insurance carriers, which have resulted in increased costs of necessary insurance required to protect our assets. Available Information We are subject to the information reporting requirements of the Exchange Act.
Added
This competition could contribute to lease defaults and insolvency of tenants. Climate Some of our properties could be subject to natural or other disasters. In addition, we may acquire properties that are located in areas that are subject to natural disasters, such as earthquakes and droughts.
Removed
Investors and others should note that we currently announce material information using SEC filings and press releases.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough members of our senior management do not have direct cybersecurity expertise obtained through certifications, their experience managing the Company, which includes consulting and coordinating as necessary with a third party information technology expert referred to below, enables them to effectively assess and manage material risks from cybersecurity threats. 6 The Company retained an information technology expert third party company to assist in managing relevant risks.
Biggest changeAlthough members of our senior management do not have direct cybersecurity expertise obtained through certifications, their experience managing the Company, which includes consulting and coordinating as necessary with a third party information technology expert referred to below, enables them to effectively assess and manage material risks from cybersecurity threats.
In particular, the Company outsources its information technology function and monitoring to a third party provider whereby it benefits from a professionally managed network monitoring, management, maintenance, detection and response system and a 24/7 security operations center with both onsite and remote support services.
The Company retained an information technology expert third party company to assist in managing relevant risks. In particular, the Company outsources its information technology function and monitoring to a third party provider whereby it benefits from a professionally managed network monitoring, management, maintenance, detection and response system and a 24/7 security operations center with both onsite and remote support services.
A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful cybersecurity attack could disrupt and otherwise adversely affect our business operations. Assessment, identification and management of cybersecurity related risks are integrated into our overall risk management process.
A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful cybersecurity attack could disrupt and otherwise adversely affect our business operations.
Added
The Company does not believe that it has experienced any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company and its business strategy, results of operations and/or financial condition. 6 Assessment, identification and management of cybersecurity related risks are integrated into our overall risk management process.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeGeorge, SC 9 59,174 100.0 % 100.0 % 59,174 466 7.87 Sunshine Plaza Lehigh Acres, FL 23 111,189 100.0 % 100.0 % 111,189 1,113 10.01 Surrey Plaza Hawkinsville, GA 4 42,680 100.0 % 100.0 % 42,680 258 6.05 Tampa Festival Tampa, FL 21 141,580 100.0 % 74.9 % 105,980 1,029 9.71 Tri-County Plaza Royston, GA 7 67,577 90.7 % 90.7 % 61,277 434 7.08 Tuckernuck Richmond, VA 16 93,391 96.9 % 96.9 % 90,462 1,057 11.69 Twin City Commons Batesburg-Leesville, SC 5 47,680 100.0 % 100.0 % 47,680 490 10.27 Village of Martinsville Martinsville, VA 22 288,254 100.0 % 100.0 % 288,254 2,441 8.47 Waterway Plaza Little River, SC 10 49,750 100.0 % 100.0 % 49,750 505 10.15 Westland Square West Columbia, SC 12 62,735 100.0 % 100.0 % 62,735 533 8.50 Winslow Plaza Sicklerville, NJ 18 40,695 100.0 % 100.0 % 40,695 663 16.30 WHLR TOTAL 779 5,309,936 95.9 % 93.6 % 4,970,984 $ 49,819 $ 10.02 CDR Brickyard Plaza Berlin, CT 10 227,598 97.8 % 97.8 % 222,598 $ 2,024 $ 9.09 Carll's Corner Bridgeton, NJ 5 116,532 19.4 % 19.4 % 22,554 267 11.84 Coliseum Marketplace Hampton, VA 9 106,648 94.9 % 94.9 % 101,198 1,217 12.03 Fairview Commons New Cumberland, PA 11 50,119 87.7 % 87.7 % 43,969 512 11.63 Fieldstone Marketplace New Bedford, MA 10 193,970 75.5 % 71.7 % 139,139 1,655 11.90 Gold Star Plaza Shenandoah, PA 7 71,720 100.0 % 100.0 % 71,720 642 8.95 Golden Triangle Lancaster, PA 19 202,790 98.4 % 98.4 % 199,605 2,619 13.12 Hamburg Square Hamburg, PA 7 102,058 100.0 % 100.0 % 102,058 689 6.75 Kings Plaza New Bedford, MA 17 168,243 98.5 % 98.5 % 165,743 1,444 8.71 Oakland Commons Bristol, CT 2 90,100 100.0 % 100.0 % 90,100 574 6.37 Oregon Avenue (5) Philadelphia, PA — — — % — % — — — Patuxent Crossing California, MD 27 264,068 81.6 % 81.6 % 215,589 2,646 12.27 Pine Grove Plaza Brown Mills, NJ 13 79,306 77.6 % 77.6 % 61,526 742 12.05 South Philadelphia Philadelphia, PA 10 221,511 88.1 % 68.3 % 151,388 1,432 9.46 Southington Center Southington, CT 11 155,842 100.0 % 100.0 % 155,842 1,288 8.27 Timpany Plaza Gardner, MA 14 182,799 81.8 % 63.3 % 115,735 1,121 9.68 Trexler Mall Trexlertown, PA 22 342,541 99.7 % 98.9 % 338,788 3,710 10.95 Washington Center Shoppes Sewell, NJ 29 157,300 97.5 % 95.9 % 150,800 1,895 12.56 Webster Commons Webster, MA 9 98,984 100.0 % 100.0 % 98,984 1,278 12.91 CDR TOTAL 232 2,832,129 89.6 % 86.4 % 2,447,336 $ 25,755 $ 10.52 COMBINED TOTAL 1,011 8,142,065 93.7 % 91.1 % 7,418,320 $ 75,574 $ 10.19 (1) Reflects leases executed through December 31, 2023 that commence subsequent to the end of the current reporting period.
Biggest changeGeorge, SC 9 59,174 100.0 % 100.0 % 59,174 470 7.95 Sunshine Plaza Lehigh Acres, FL 22 111,189 100.0 % 98.7 % 109,689 1,127 10.27 Surrey Plaza Hawkinsville, GA 3 42,680 82.0 % 82.0 % 35,000 222 6.35 Tampa Festival Tampa, FL 22 141,580 100.0 % 100.0 % 141,580 1,334 9.42 Tri-County Plaza Royston, GA 8 67,577 96.0 % 96.0 % 64,877 464 7.16 Tuckernuck Richmond, VA 18 93,391 100.0 % 100.0 % 93,391 1,129 12.09 Twin City Commons Batesburg-Leesville, SC 5 47,680 100.0 % 100.0 % 47,680 491 10.30 Village of Martinsville Martinsville, VA 22 288,254 100.0 % 100.0 % 288,254 2,449 8.50 Waterway Plaza Little River, SC 10 49,750 100.0 % 100.0 % 49,750 498 10.02 Westland Square West Columbia, SC 11 62,735 85.1 % 85.1 % 53,360 483 9.05 Winslow Plaza Sicklerville, NJ 18 40,695 100.0 % 100.0 % 40,695 693 17.03 WHLR TOTAL 771 5,308,451 94.9 % 94.8 % 5,035,012 $ 51,411 $ 10.21 CDR Brickyard Plaza Berlin, CT 11 227,598 100.0 % 100.0 % 227,598 $ 2,100 $ 9.23 Carll's Corner Bridgeton, NJ 7 116,532 36.9 % 36.9 % 43,012 450 10.46 Coliseum Marketplace Hampton, VA 9 106,648 94.9 % 94.9 % 101,198 833 8.24 Fairview Commons New Cumberland, PA 11 50,485 87.8 % 87.8 % 44,335 511 11.53 Fieldstone Marketplace New Bedford, MA 12 193,836 79.4 % 53.5 % 103,664 1,053 10.15 Gold Star Plaza Shenandoah, PA 6 71,720 97.8 % 97.8 % 70,120 643 9.17 Golden Triangle Lancaster, PA 18 202,790 89.2 % 89.2 % 180,940 2,706 14.96 Hamburg Square Hamburg, PA 7 102,058 100.0 % 100.0 % 102,058 703 6.89 Oregon Avenue (2) Philadelphia, PA — — — % — % — — — Patuxent Crossing California, MD 26 264,068 82.3 % 82.0 % 216,467 2,542 11.74 Pine Grove Plaza Brown Mills, NJ 16 79,306 86.4 % 86.4 % 68,506 839 12.25 Southington Center Southington, CT 8 155,842 92.1 % 91.0 % 141,870 1,031 7.27 Timpany Plaza Gardner, MA 18 182,820 82.8 % 82.8 % 151,460 1,600 10.56 Trexler Mall Trexlertown, PA 23 342,541 98.7 % 98.7 % 337,944 3,820 11.31 Washington Center Shoppes Sewell, NJ 29 157,300 96.1 % 96.1 % 151,150 1,921 12.71 Webster Commons Webster, MA 9 98,984 100.0 % 100.0 % 98,984 1,285 12.98 CDR TOTAL 210 2,352,528 88.9 % 86.7 % 2,039,306 $ 22,037 $ 10.81 COMBINED TOTAL 981 7,660,979 93.1 % 92.3 % 7,074,318 $ 73,448 $ 10.38 (1) Monthly base rent on occupied space as of the end of the current reporting period multiplied by twelve months, excluding the impact of tenant concessions and rent abatements.
On-site 10 functions such as maintenance, landscaping, sweeping, plumbing and electrical are subcontracted out at each location and, to the extent permitted by their respective leases, the cost of these functions is passed on to the tenants.
On-site functions such as maintenance, landscaping, sweeping, plumbing and electrical are subcontracted out at each location and, to the extent permitted by their respective leases, the cost of these functions is passed on to the tenants.
Item 2. Properties. Real Estate Portfolio The following table presents an overview of our properties, based on information as of December 31, 2023. Property Location Number of Tenants (1) Total Leasable Square Feet Percentage Leased (1) Percentage Occupied Total SF Occupied Annualized Base Rent (in 000's) (2) Annualized Base Rent per Occupied Sq.
Item 2. Properties. Real Estate Portfolio The following tables present an overview of our properties and undeveloped land as of December 31, 2024. Property Location Number of Tenants Total Leasable Square Feet Percentage Leased Percentage Occupied Total SF Occupied Annualized Base Rent (in 000's) (1) Annualized Base Rent per Occupied Sq.
Foot WHLR Alex City Marketplace Alexander City, AL 19 151,843 100.0 % 100.0 % 151,843 $ 1,278 $ 8.42 Amscot Building Tampa, FL 1 2,500 100.0 % 100.0 % 2,500 83 33.00 Beaver Ruin Village Lilburn, GA 29 74,038 96.8 % 94.8 % 70,148 1,290 18.39 Beaver Ruin Village II Lilburn, GA 4 34,925 100.0 % 100.0 % 34,925 492 14.08 Brook Run Shopping Center Richmond, VA 19 147,738 94.2 % 87.2 % 128,810 1,133 8.80 Brook Run Properties (3) Richmond, VA — — — % — % — — — Bryan Station Lexington, KY 9 54,277 94.5 % 94.5 % 51,275 613 11.95 Cardinal Plaza Henderson, NC 9 50,000 100.0 % 100.0 % 50,000 508 10.16 Chesapeake Square Onley, VA 14 108,982 92.1 % 92.1 % 100,406 779 7.76 Clover Plaza Clover, SC 10 45,575 100.0 % 100.0 % 45,575 384 8.42 Courtland Commons (3) Courtland, VA — — — % — % — — — Conyers Crossing Conyers, GA 14 170,475 100.0 % 100.0 % 170,475 1,006 5.90 Crockett Square Morristown, TN 4 107,122 100.0 % 100.0 % 107,122 978 9.13 Cypress Shopping Center Boiling Springs, SC 18 80,435 59.9 % 59.9 % 48,175 622 12.90 Darien Shopping Center Darien, GA 1 26,001 100.0 % 100.0 % 26,001 140 5.38 Devine Street Columbia, SC 1 38,464 89.1 % 89.1 % 34,264 180 5.25 Edenton Commons (3) Edenton, NC — — — % — % — — — Folly Road Charleston, SC 5 47,794 100.0 % 100.0 % 47,794 735 15.39 Forrest Gallery Tullahoma, TN 26 214,451 89.5 % 89.5 % 191,859 1,445 7.53 Fort Howard Shopping Center Rincon, GA 20 113,652 100.0 % 100.0 % 113,652 1,283 11.29 Freeway Junction Stockbridge, GA 18 156,834 98.2 % 98.2 % 154,034 1,351 8.77 Franklin Village Kittanning, PA 24 151,821 93.3 % 93.3 % 141,573 1,359 9.60 Franklinton Square Franklinton, NC 15 65,366 100.0 % 100.0 % 65,366 599 9.17 Georgetown Georgetown, SC 2 29,572 100.0 % 100.0 % 29,572 267 9.04 Grove Park Shopping Center Orangeburg, SC 14 93,265 100.0 % 100.0 % 93,265 764 8.19 Harbor Point (3) Grove, OK — — — % — % — — — Harrodsburg Marketplace Harrodsburg, KY 8 60,048 91.0 % 91.0 % 54,648 465 8.51 JANAF (4) Norfolk, VA 118 798,086 94.3 % 89.9 % 717,171 8,993 12.54 Laburnum Square Richmond, VA 20 109,405 99.1 % 99.1 % 108,445 1,011 9.33 Ladson Crossing Ladson, SC 16 52,607 100.0 % 100.0 % 52,607 566 10.75 LaGrange Marketplace LaGrange, GA 13 76,594 91.8 % 91.8 % 70,300 435 6.19 Lake Greenwood Crossing Greenwood, SC 8 43,618 100.0 % 100.0 % 43,618 410 9.41 Lake Murray Lexington, SC 4 39,218 100.0 % 15.3 % 6,000 96 15.98 Litchfield Market Village Pawleys Island, SC 25 86,740 98.5 % 98.5 % 85,477 1,085 12.70 Lumber River Village Lumberton, NC 11 66,781 100.0 % 100.0 % 66,781 501 7.51 Moncks Corner Moncks Corner, SC 1 26,800 100.0 % 100.0 % 26,800 330 12.31 Nashville Commons Nashville, NC 12 56,100 100.0 % 100.0 % 56,100 665 11.86 New Market Crossing Mt.
Foot WHLR Alex City Marketplace Alexander City, AL 20 151,843 100.0 % 100.0 % 151,843 $ 1,330 $ 8.76 Amscot Building Tampa, FL 1 2,500 100.0 % 100.0 % 2,500 83 33.00 Beaver Ruin Village Lilburn, GA 28 74,038 92.5 % 92.5 % 68,448 1,287 18.80 Beaver Ruin Village II Lilburn, GA 4 34,925 100.0 % 100.0 % 34,925 497 14.22 Brook Run Shopping Center Richmond, VA 17 147,738 91.5 % 91.5 % 135,110 1,187 8.79 Bryan Station Lexington, KY 9 54,277 94.5 % 94.5 % 51,275 612 11.94 Cardinal Plaza Henderson, NC 10 50,000 100.0 % 100.0 % 50,000 519 10.39 Chesapeake Square Onley, VA 13 108,982 90.9 % 90.9 % 99,006 768 7.75 Clover Plaza Clover, SC 10 45,575 100.0 % 100.0 % 45,575 386 8.47 Conyers Crossing Conyers, GA 14 170,475 100.0 % 100.0 % 170,475 1,023 6.00 Crockett Square Morristown, TN 4 107,122 100.0 % 100.0 % 107,122 978 9.13 Cypress Shopping Center Boiling Springs, SC 19 80,435 100.0 % 100.0 % 80,435 807 10.04 Darien Shopping Center Darien, GA 1 26,001 100.0 % 100.0 % 26,001 140 5.38 Devine Street Columbia, SC 1 38,464 89.1 % 89.1 % 34,264 180 5.25 Folly Road Charleston, SC 5 47,794 100.0 % 100.0 % 47,794 737 15.43 Forrest Gallery Tullahoma, TN 28 214,451 91.2 % 91.2 % 195,642 1,499 7.66 Fort Howard Shopping Center Rincon, GA 20 113,652 100.0 % 100.0 % 113,652 1,312 11.55 Freeway Junction Stockbridge, GA 17 156,834 97.6 % 97.6 % 152,984 1,356 8.86 Franklin Village Kittanning, PA 24 151,821 93.9 % 93.9 % 142,493 1,383 9.70 Franklinton Square Franklinton, NC 13 65,366 93.0 % 93.0 % 60,800 589 9.69 Georgetown Georgetown, SC 2 29,572 100.0 % 100.0 % 29,572 267 9.04 Grove Park Shopping Center Orangeburg, SC 13 93,265 94.2 % 94.2 % 87,851 722 8.22 Harrodsburg Marketplace Harrodsburg, KY 8 60,048 91.0 % 91.0 % 54,648 466 8.53 JANAF Norfolk, VA 111 796,624 86.4 % 86.4 % 688,033 9,042 13.14 Laburnum Square Richmond, VA 20 109,405 98.2 % 98.2 % 107,405 1,031 9.60 Ladson Crossing Ladson, SC 15 52,607 97.7 % 97.7 % 51,407 563 10.95 LaGrange Marketplace LaGrange, GA 13 76,594 92.2 % 92.2 % 70,600 463 6.56 Lake Greenwood Crossing Greenwood, SC 8 43,618 100.0 % 100.0 % 43,618 414 9.50 Lake Murray Lexington, SC 5 39,218 100.0 % 100.0 % 39,218 364 9.28 Litchfield Market Village Pawleys Island, SC 25 86,717 100.0 % 98.6 % 85,517 1,124 13.15 Lumber River Village Lumberton, NC 11 66,781 100.0 % 100.0 % 66,781 519 7.77 Moncks Corner Moncks Corner, SC 1 26,800 100.0 % 100.0 % 26,800 330 12.31 Nashville Commons Nashville, NC 12 56,100 100.0 % 100.0 % 56,100 675 12.03 New Market Crossing Mt.
Foot Port Crossing Harrisonburg, VA 8 65,365 100.0 % 100.0 % 65,365 $ 865 $ 13.23 Ridgeland Ridgeland, SC 1 20,029 100.0 % 100.0 % 20,029 140 7.00 Riverbridge Shopping Center Carrollton, GA 10 91,188 96.9 % 95.4 % 86,975 721 8.29 Rivergate Shopping Center Macon, GA 24 193,960 87.5 % 85.8 % 166,362 2,338 14.05 Sangaree Plaza Summerville, SC 10 66,948 100.0 % 100.0 % 66,948 716 10.70 Shoppes at Myrtle Park Bluffton, SC 14 56,609 99.3 % 99.3 % 56,189 687 12.23 South Lake Lexington, SC 11 44,318 100.0 % 100.0 % 44,318 259 5.84 South Park Mullins, SC 3 60,734 84.9 % 84.9 % 51,543 365 7.08 South Square Lancaster, SC 6 44,350 81.0 % 81.0 % 35,900 305 8.49 St.
Airy, NC 13 117,076 100.0 % 100.0 % 117,076 1,052 8.99 Parkway Plaza Brunswick, GA 5 52,365 84.8 % 84.8 % 44,385 483 10.88 Pierpont Centre Morgantown, WV 15 111,162 98.5 % 98.5 % 109,437 1,099 10.05 Port Crossing Harrisonburg, VA 8 65,365 100.0 % 100.0 % 65,365 866 13.25 Ridgeland Ridgeland, SC 1 20,029 100.0 % 100.0 % 20,029 140 7.00 Riverbridge Shopping Center Carrollton, GA 11 91,188 96.9 % 96.9 % 88,375 756 8.56 Rivergate Shopping Center Macon, GA 24 193,960 87.5 % 86.5 % 167,816 2,602 15.50 Sangaree Plaza Summerville, SC 10 66,948 100.0 % 100.0 % 66,948 739 11.05 Shoppes at Myrtle Park Bluffton, SC 13 56,609 97.5 % 97.5 % 55,185 674 12.20 South Lake Lexington, SC 11 44,318 100.0 % 100.0 % 44,318 275 6.21 South Park Mullins, SC 4 60,734 96.9 % 96.9 % 58,834 401 6.82 South Square Lancaster, SC 6 44,350 81.0 % 81.0 % 35,900 311 8.65 8 Property Location Number of Tenants Total Leasable Square Feet Percentage Leased Percentage Occupied Total SF Occupied Annualized Base Rent (in 000's) (1) Annualized Base Rent per Occupied Sq.
Lease Expiration Period Number of Expiring Leases Total Expiring Square Footage % of Total Expiring Square Footage % of Total Occupied Square Footage Expiring Expiring Annualized Base Rent (in 000s) % of Total Annualized Base Rent Expiring Base Rent Per Occupied Square Foot Available — 723,745 8.89 % — % $ — — % $ — Month-to-Month 16 75,333 0.93 % 1.02 % 620 0.82 % 8.23 2024 145 570,852 7.01 % 7.70 % 6,634 8.78 % 11.62 2025 159 904,927 11.11 % 12.20 % 9,635 12.75 % 10.65 2026 170 910,565 11.18 % 12.27 % 9,962 13.18 % 10.94 2027 139 691,220 8.49 % 9.32 % 8,711 11.53 % 12.60 2028 143 1,345,729 16.53 % 18.14 % 12,592 16.66 % 9.36 2029 74 745,647 9.16 % 10.05 % 6,970 9.22 % 9.35 2030 43 636,575 7.82 % 8.58 % 4,884 6.46 % 7.67 2031 32 441,000 5.42 % 5.94 % 4,288 5.67 % 9.72 2032 32 390,668 4.80 % 5.27 % 3,442 4.55 % 8.81 Thereafter 58 705,804 8.66 % 9.51 % 7,836 10.38 % 11.10 Total 1,011 8,142,065 100.00 % 100.00 % $ 75,574 100.00 % $ 10.19 Property Management and Leasing Strategy We self-administer our property management and substantially all of our leasing activities and operating and administrative functions (including leasing, legal, acquisitions, development, data processing, finance and accounting).
Lease Expiration Period Number of Expiring Leases Total Expiring Square Footage % of Total Expiring Square Footage % of Total Occupied Square Footage Expiring Expiring Annualized Base Rent (in 000s) % of Total Annualized Base Rent Expiring Base Rent Per Occupied Square Foot Available — 586,661 7.66 % — % $ — — % $ — Month-to-Month 10 50,092 0.65 % 0.71 % 414 0.56 % 8.26 2025 119 522,410 6.82 % 7.38 % 5,338 7.27 % 10.22 2026 165 850,573 11.10 % 12.02 % 9,371 12.76 % 11.02 2027 171 697,499 9.10 % 9.86 % 9,103 12.39 % 13.05 2028 137 1,115,267 14.56 % 15.77 % 10,482 14.27 % 9.40 2029 148 965,879 12.61 % 13.65 % 10,671 14.53 % 11.05 2030 74 969,764 12.66 % 13.71 % 8,357 11.38 % 8.62 2031 39 496,453 6.48 % 7.02 % 5,018 6.83 % 10.11 2032 33 415,702 5.43 % 5.88 % 3,592 4.89 % 8.64 2033 20 250,321 3.27 % 3.54 % 2,791 3.80 % 11.15 Thereafter 65 740,358 9.66 % 10.46 % 8,311 11.32 % 11.23 Total 981 7,660,979 100.00 % 100.00 % $ 73,448 100.00 % $ 10.38 Property Management and Leasing Strategy 10 We self-administer our property management and substantially all of our leasing activities and operating and administrative functions (including leasing, legal, acquisitions, development, data processing, finance and accounting).
Tenants Category Annualized Base Rent ($ in 000s) % of Total Annualized Base Rent Total Occupied Square Feet Percent Total Leasable Square Foot Annualized Base Rent Per Occupied Square Foot Food Lion Grocery $ 4,476 5.92 % 549,000 6.74 % $ 8.15 Dollar Tree (1) Discount Retailer 2,214 2.93 % 255,000 3.13 % 8.68 Kroger Co (2) Grocery 2,097 2.77 % 239,000 2.94 % 8.77 TJX Companies (3) Discount Retailer 1,703 2.25 % 195,000 2.39 % 8.73 Planet Fitness Gym 1,497 1.98 % 140,000 1.72 % 10.69 Piggly Wiggly Grocery 1,363 1.80 % 170,000 2.09 % 8.02 Lowes Foods (4) Grocery 1,223 1.62 % 130,000 1.60 % 9.41 Big Lots Discount Retailer 1,100 1.46 % 171,000 2.10 % 6.43 Kohl's Discount Retailer 1,031 1.36 % 147,000 1.81 % 7.01 Winn Dixie Grocery 984 1.30 % 134,000 1.65 % 7.34 $ 17,688 23.39 % 2,130,000 26.17 % $ 8.30 (1) Line item comprises 18 Dollar Tree stores and 7 Family Dollar stores.
Tenants Category Annualized Base Rent ($ in 000s) % of Total Annualized Base Rent Total Occupied Square Feet Percent Total Leasable Square Feet Annualized Base Rent Per Occupied Square Foot Food Lion Grocery $ 4,280 5.86 % 520,000 6.79 % $ 8.23 Kroger Co (1) Grocery 2,097 2.87 % 239,000 3.12 % 8.77 Dollar Tree (2) Discount Retailer 2,070 2.83 % 255,000 3.33 % 8.12 Planet Fitness Gym 1,949 2.67 % 205,000 2.68 % 9.51 TJX Companies (3) Discount Retailer 1,721 2.35 % 195,000 2.55 % 8.83 Piggly Wiggly Grocery 1,363 1.87 % 170,000 2.22 % 8.02 Lowes Foods (4) Grocery 1,223 1.67 % 130,000 1.70 % 9.41 Aldi (5) Grocery 1,072 1.47 % 106,000 1.38 % 10.11 Kohl's Discount Retailer 1,049 1.44 % 147,000 1.92 % 7.14 Lehigh Valley Health Medical 803 1.10 % 43,000 0.56 % 18.67 $ 17,627 24.13 % 2,010,000 26.25 % $ 8.77 (1) Kroger 4 / Harris Teeter 1 / 3 fuel stations (2) Dollar Tree 18 / Family Dollar 7 (3) Marshall's 4 / HomeGoods 2 / TJ Maxx 1 (4) Lowes Foods 1 / KJ's Market 2 (5) Aldi 3 / Winn Dixie 1 Lease Expirations The following table sets forth information with respect to the lease expirations of our properties as of December 31, 2024.
(4) Square footage is net of the Company's on-premise management office and net of building square footage whereby the Company only leases the land. (5) Includes property where a redevelopment opportunity exists. 9 Major Tenants The following table sets forth information regarding the ten largest tenants in our operating portfolio based on annualized base rent as of December 31, 2023.
George, SC 2.51 South Philadelphia parcels CDR Philadelphia, PA 4.47 Webster Commons CDR Webster, MA 0.55 9 Major Tenants The following table sets forth information regarding the ten largest tenants in our Operating Portfolio based on annualized base rent as of December 31, 2024.
Removed
Airy, NC 13 117,076 100.0 % 100.0 % 117,076 1,045 8.93 Parkway Plaza Brunswick, GA 5 52,365 84.8 % 84.8 % 44,385 480 10.81 Pierpont Centre Morgantown, WV 15 111,162 98.5 % 98.5 % 109,437 1,063 9.71 8 Property Location Number of Tenants (1) Total Leasable Square Feet Percentage Leased (1) Percentage Occupied Total SF Occupied Annualized Base Rent (in 000's) (2) Annualized Base Rent per Occupied Sq.
Added
(2) Includes property where a redevelopment opportunity exists. Undeveloped Land Company Location Parcel Size (in acres) Brook Run Properties WHLR Richmond, VA 2.00 Courtland Commons WHLR Courtland, VA 1.04 St. George Land WHLR St.
Removed
(2) Annualized based rent per occupied square foot; assumes base rent as of the end of the current reporting period; excludes the impact of tenant concessions and rent abatements. (3) This information is not available because the property is undeveloped.
Removed
(2) Line item comprises 4 Kroger stores, 1 Harris Teeter store and 3 fuel stations. (3) Line item comprises 4 Marshall's stores, 2 HomeGoods stores and 1 TJ Maxx store. (4) Line item comprises 1 Lowes Foods store and 2 KJ's Market stores.
Removed
Lease Expirations The following table sets forth information with respect to the lease expirations of our properties as of December 31, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+7 added−0 removed2 unchanged
Biggest changeCommencing September 21, 2023, the Series D Preferred Stock holders are entitled to cumulative cash dividends at an annual dividend rate of 12.75% increased by 2% of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 16%, including the 2% default rate.
Biggest changeCommencing September 21, 2023, the Series D Preferred Stock holders were entitled to cumulative cash dividends of 12.75%. At September 21, 2024, the annual dividend rate increased by 2% of the liquidation preference per annum to 14.75%. See Note 10, Equity and Mezzanine Equity, to the accompanying audited consolidated financial statements.
As the Company has failed to pay cash dividends on the outstanding Series D Preferred Stock, the annual dividend rate on the Series D Preferred Stock has increased to 10.75%; commencing on the first day after the first missed quarterly payment, January 1, 2019 and will continue until such time as the Company has paid all accumulated and unpaid dividends on the Series D Preferred Stock in full.
As the Company has failed to pay cash dividends on the outstanding Series D Preferred Stock, the annual dividend rate on the Series D Preferred Stock increased to 10.75% commencing on the first day after the first missed quarterly payment, January 1, 2019, and will continue until such time as the Company has paid all accumulated and unpaid dividends on the Series D Preferred Stock in full.
The Board of Directors also suspended the quarterly dividends on shares of our Series A Preferred Stock ("Series A Preferred"), Series B Convertible Preferred Stock ("Series B Preferred") and Series D Cumulative Convertible Preferred Stock ("Series D Preferred Stock"), beginning with the three months ended December 31, 2018.
The Board of Directors also suspended the quarterly dividends on shares of our Series A Preferred Stock ("Series A Preferred Stock") (together with Series B Preferred Stock and Series D Preferred Stock, the "Preferred Stock"), Series B Preferred Stock and Series D Preferred Stock, beginning with the three months ended December 31, 2018.
See Note 10, Equity and Mezzanine Equity, to the accompanying audited consolidated financial statements. 11 As a result of the dividend suspension on the Series D Preferred Stock, our Charter provides that no dividends may be declared or paid on the Common Stock or on our other outstanding preferred until all accumulated accrued and unpaid dividends on the Series D Preferred Stock have been paid in full.
As a result of the dividend suspension on the Series D Preferred Stock, our Charter provides that no dividends may be declared or paid on the Common Stock or on our other outstanding preferred until all accumulated accrued and unpaid dividends on the Series D Preferred Stock have been paid in full.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock is traded on Nasdaq under the symbol “WHLR.” Approximate Number of Holders of Our Common Stock As of March 4, 2024 there were 147 holders of record of our Common Stock.
All of the foregoing issuances of Common Stock were made to accredited investors. 11 Market Information Our Common Stock is traded on Nasdaq under the symbol “WHLR.” Approximate Number of Holders of Our Common Stock As of February 28, 2025 there were 14 holders of record of our Common Stock.
Added
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Added
Unregistered Sales of Equity Securities On October 8, 2024, the Company agreed to issue 11,000 shares of its Common Stock to an unaffiliated holder of the Company’s securities in exchange for 22,000 shares of the Company’s Series D Preferred Stock and 22,000 shares of the Company's Series B Preferred Stock from the investor (the “2024 Preferred Stock Exchange”).
Added
The settlement of the 2024 Preferred Stock Exchange occurred on the same day. The Company did not receive any cash proceeds as a result of the 2024 Preferred Stock Exchange, and the shares of the preferred stock exchanged have been retired and cancelled.
Added
The Company issued the Common Stock under the 2024 Preferred Stock Exchange in reliance upon the exemption from the registration requirements of the Securities Act contained in Section 3(a)(9) of the Securities Act on the basis that the issuance of Common Stock constituted an exchange with an existing holder of the Company’s securities, and no commission or other remuneration was paid or given directly or indirectly for soliciting such transaction.
Added
In 2024, the Company issued an aggregate of 4,368 shares of Common Stock to satisfy conversion requests by certain holders of the Convertible Notes.
Added
The Company issued the Common Stock in the Convertible Note conversions in reliance upon the exemption from the registration requirements of the Securities Act contained in Section 3(a)(9) of the Securities Act on the basis that each issuance of Common Stock to the Convertible Note holders constituted an exchange with an existing holder of the Company’s securities, and no commission or other remuneration was paid or given directly or indirectly for soliciting such transaction.
Added
The Company did not receive any cash proceeds as a result of any Convertible Note conversion, and the Convertible Notes that were converted have been retired and cancelled.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

80 edited+42 added−28 removed34 unchanged
Biggest changeFor the Years Ended December 31, Changes 2023 2022 Dollars Percent Revenues $ 102,325 $ 76,645 $ 25,680 33.5 % Property operating expense 34,870 25,731 9,139 35.5 % Property operating income 67,455 50,914 16,541 Depreciation and amortization (28,502) (19,540) (8,962) 45.9 % Impairment of assets held for sale — (760) 760 n/a Corporate general & administrative (11,750) (8,620) (3,130) 36.3 % Gain on disposal of properties 2,204 2,604 (400) (15.4) % Interest income 484 65 419 644.6 % Gain on investment securities, net 685 — 685 n/a Interest expense (32,314) (30,107) (2,207) (7.3) % Net changes in fair value of derivative liabilities 3,458 (2,335) 5,793 248.1 % Gain on preferred stock redemptions 9,893 — 9,893 n/a Other expense (5,482) (691) (4,791) (693.3) % Income tax expense (48) — (48) n/a Net Income (Loss) 6,083 (8,470) 14,553 Less: Net income attributable to noncontrolling interests 10,770 3,984 6,786 170.3 % Net Loss Attributable to Wheeler REIT $ (4,687) $ (12,454) $ 7,767 Revenues were higher primarily as a result of (1) an increase in rental revenues of $25.1 million, which is primarily due to a $21.1 million increase in property revenues from the Cedar Acquisition, partially offset by 2022 property sales, (2) an increase of $2.8 million in market lease amortization and (3) an increase of $1.1 million in same-property revenues.
Biggest changeYears Ended December 31, Changes 2024 2023 Dollars Percent Revenues $ 104,574 $ 102,325 $ 2,249 2.2 % Property operating expense 35,100 34,870 230 0.7 % Property operating income 69,474 67,455 2,019 Depreciation and amortization (25,316) (28,502) 3,186 (11.2) % Impairment charges (1,195) — (1,195) n/a Corporate general & administrative (10,982) (11,750) 768 (6.5) % Gain on disposal of properties, net 5,550 2,204 3,346 151.8 % Interest income 460 484 (24) (5.0) % Gain on investment securities, net 840 685 155 22.6 % Interest expense (32,602) (32,314) (288) 0.9 % Net changes in fair value of derivative liabilities (8,332) 3,458 (11,790) (340.9) % Loss on conversion of Convertible Notes (412) — (412) n/a Gain on Preferred Stock retirements 4,772 9,893 (5,121) (51.8) % Other expense (1,489) (5,482) 3,993 (72.8) % Income tax expense (1) (48) 47 (97.9) % Net Income 767 6,083 (5,316) Revenues were higher primarily as a result of (1) an increase in tenant reimbursements of $2.7 million, (2) an increase in base rent of $0.7 million and (3) an increase in other income of $0.2 million, partially offset by (4) a decrease in market lease amortization of $1.4 million.
Joseph Stilwell, a member of our Board of Directors, is the managing member and owner of Stilwell Value LLC, which is the general partner of each of the Investors. On December 5, 2023, the Company entered into an Excepted Holder Agreement with the Investors with respect to such limits.
Joseph Stilwell, a member of our Board of Directors, is the managing member and owner of Stilwell Value LLC, which is the general partner of each of the Stilwell Investors. On December 5, 2023, the Company entered into an Excepted Holder Agreement with the Stilwell Investors with respect to such limits.
The Capital Stock Excepted Holder Limit provides that the Investors are exempted from the Charter’s aggregate stock ownership limit of not more than 9.8% in value of the aggregate of the outstanding shares of all classes of the Company's capital stock (as calculated under the definitions of “Aggregate Stock Ownership Limit” and “Beneficial Ownership” in the Charter) and are instead subject to the percentage limit established by the Board of Directors.
The Capital Stock Excepted Holder Limit provides that the Stilwell Investors are exempted from the Charter’s aggregate stock ownership limit of not more than 9.8% in value of the aggregate of the outstanding shares of all classes of the Company's capital stock (as calculated under the definitions of “Aggregate Stock Ownership Limit” and “Beneficial Ownership” in the Charter) and are instead subject to the percentage limit established by the Board of Directors.
The Common Stock Excepted Holder Limit provides that the Investors are exempted from the Charter’s common stock ownership limit of not more than 9.8% in value of the aggregate of the outstanding shares of the Company's Common Stock (as calculated under the definitions of “Common Stock Ownership Limit” and “Beneficial Ownership” in the Charter) and is instead subject to the percentage limit established by the Board of Directors.
The Common Stock Excepted Holder Limit provides that the Stilwell Investors are exempted from the Charter’s common stock ownership limit of not more than 9.8% in value of the aggregate of the outstanding shares of the Company's Common Stock (as calculated under the definitions of “Common Stock Ownership Limit” and “Beneficial Ownership” in the Charter) and is instead subject to the percentage limit established by the Board of Directors.
While we anticipate being able to refinance all the loans at reasonable market terms upon maturity, our inability to do so may materially impact our financial position and results of operations. See Note 6 to the accompanying audited consolidated financial statements for additional mortgage indebtedness details.
While we anticipate being able to refinance all the loans at reasonable market terms upon maturity, our inability to do so may materially impact our 20 financial position and results of operations. See Note 6 to the accompanying audited consolidated financial statements for additional mortgage indebtedness details.
On February 5, 2024, the Board of Directors agreed to increase the prior Excepted Holder Limits to permit this additional ownership and, accordingly, the Company entered into an amendment to the Excepted Holder Agreement with the Investors under which the Company increased the Capital Stock Excepted Holder Limit granted to Investors under the Excepted Holder Agreement to 60% and the Common Stock Excepted Holder Limit to 90%.
On February 5, 2024, the Board of Directors agreed to increase the prior Excepted Holder Limits to permit this additional ownership and, accordingly, the Company entered into an amendment to the Excepted Holder Agreement with the Stilwell Investors under which the Company increased the Capital Stock Excepted Holder Limit granted to Stilwell Investors under the Excepted Holder Agreement to 60% and the Common Stock Excepted Holder Limit to 90%.
Critical Accounting Estimates The following discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included in this Form 10-K, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").
Critical Accounting Estimates and Policies The following discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included in this Form 10-K, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP").
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. 17 Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.
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. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks.
Following the transfer of Common Stock to the Investors in consideration of the February 2024 Series D Preferred Stock redemptions made by the Investors, the Investors would have beneficially owned or constructively owned an amount of capital stock in excess of the Prior Excepted Holder Limits.
Following the transfer of Common Stock to the Stilwell Investors in consideration of the February 2024 Series D Preferred Stock redemptions made by the Stilwell Investors, the Stilwell Investors would have beneficially owned or constructively owned an amount of capital stock in excess of the Prior Excepted Holder Limits.
The preparation of these consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
The preparation of these consolidated financial statements 17 requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.
Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. Recent Trends and Activities There have been several significant events in 2023 that have impacted our Company. These events are summarized below.
Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. Recent Trends and Activities There have been several significant events in 2024 that have impacted our Company. These events are summarized below.
We estimate fair value using unobservable data such as operating income, estimated capitalization rates or multiples, leasing prospects and local market information. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs.
We estimate fair value using unobservable data such as operating income, estimated capitalization rates or multiples, 18 leasing prospects and local market information. These valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 and 3 inputs.
In consideration of the grant of these Excepted Holder Limits, the Investors concurrently entered into a one-year letter agreement with the Company whereby each Investor agreed that it will not exercise its right to convert the Convertible Notes into shares of Common Stock to the extent that such conversion would result in such Investor, whether on its own or as part of a “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), becoming the direct or indirect “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of common equity of the Company representing 50% or more of the total voting power of all outstanding shares of common equity of the Company that is entitled to vote generally in the election of directors.
In consideration of the grant of these Excepted Holder Limits, the Stilwell Investors concurrently entered into a one-year letter agreement (the "Stilwell Letter Agreement") with the Company whereby each Stilwell Investor agreed that it will not exercise its right to convert the Convertible Notes into shares of Common Stock to the extent that such conversion would result in such Stilwell Investor, whether on its own or as part of a “group” within the meaning of Section 13(d) of the Exchange Act of 1934, becoming the direct or indirect “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act, of common equity of the Company representing 50% or more of the total voting power of all outstanding shares of common equity of the Company that is entitled to vote generally in the election of directors.
The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns.
The Company uses Same-Property NOI to evaluate its operating performance since Same-Property NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns.
As the Series D Preferred Holders’ continue to exercise their redemption rights on a monthly basis, the Company will continue to pay the aggregate redemption price in shares of our Common Stock.
As the holders of the Series D Preferred Stock continue to exercise their redemption rights on a monthly basis, the Company will continue to pay the aggregate redemption price in shares of our Common Stock.
Other non-recurring expenses of $2.1 million for the year ended December 31, 2023, were primarily a result of $1.8 million in loan defeasance payments and $0.3 million costs to demolish decommissioned space not included in the Company's gross leasable area.
Other non-recurring expenses were $0.4 million for the year ended December 31, 2024, a result of loan defeasance payments. Other non-recurring expenses were $2.1 million for the year ended December 31, 2023, a result of $1.8 million in loan defeasance payments and $0.3 million costs to demolish decommissioned space not included in the Company's gross leasable area.
Excepted Holder Limits On December 4, 2023, the Board of Directors, under the terms of the Charter, created a Capital Stock Excepted Holder Limit of 55% and a Common Stock Excepted Holder Limit of 86% for each of SAI, Stilwell Activist Fund, L.P., Stilwell Value Partners VII, L.P., and Stilwell Associates, L.P. (collectively, the “Investors”).
Excepted Holder Limits On December 4, 2023, the Board of Directors, under the terms of the Charter, created a Capital Stock Excepted Holder Limit of 55% and a Common Stock Excepted Holder Limit of 86% for each of SAI, Stilwell Activist Fund, L.P., Stilwell Value Partners VII, L.P., and Stilwell Associates, L.P. (collectively, the “Stilwell Investors”).
In 2023, this event became certain and in accordance with Accounting Standards Codification ("ASC") 480, the Series D Preferred Stock was revalued at the redemption price which includes undeclared dividends, representing liquidation value. The adjustment to liquidation value was recognized in accumulated deficit as an adjustment to redemption value.
In 2023, this event became certain and in accordance with ASC 480, the Series D Preferred Stock was revalued at the redemption price which includes undeclared dividends, representing liquidation value. The adjustment to liquidation value was recognized in accumulated deficit as an adjustment to redemption value.
Twenty-one of these properties are located in South Carolina, twelve in Georgia, ten in Virginia, eight in Pennsylvania, six in North Carolina, four in Massachusetts, four in New Jersey, three in Florida, three in Connecticut, two in Kentucky, two in Tennessee, one in Alabama, one in Maryland, one in West Virginia, and one in Oklahoma.
Twenty-one of these properties are located in South Carolina, twelve in Georgia, ten in Virginia, eight in Pennsylvania, five in North Carolina, four in New Jersey, three in Massachusetts, three in Florida, two in Connecticut, two in Kentucky, two in Tennessee, one in Alabama, one in Maryland, and one in West Virginia.
The Capital Stock Excepted Holder Limit and Common Stock Excepted Holder Limit will automatically terminate upon reduction of the Investors’ capital stock and Common Stock ownership below 9.8%, respectively.
The Capital Stock Excepted Holder Limit and 15 Common Stock Excepted Holder Limit will automatically terminate upon reduction of the Stilwell Investors’ capital stock and Common Stock ownership below 9.8%, respectively.
In addition, the Company has $3.1 million outstanding construction commitments at December 31, 2023. In addition to liquidity required to fund debt payments and construction commitments, we may incur some level of capital expenditures during the year for our existing properties that cannot be passed on to our tenants.
In addition, the Company has $1.2 million outstanding construction commitments at December 31, 2024. In addition to liquidity required to fund debt payments and construction commitments, we may incur some level of capital expenditures during the year for our existing properties that cannot be passed on to our tenants.
The primary liquidity needs of the Company, in addition to the funding of our ongoing operations, at December 31, 2023 are $7.2 million in principal and regularly scheduled payments due in the year ended December 31, 2024 as described in Note 6 to the accompanying audited consolidated financial statements.
The primary liquidity needs of the Company, in addition to the funding of our ongoing operations, at December 31, 2024 are $6.0 million in principal and regularly scheduled payments due in the year ended December 31, 2025 as described in Note 6 to the accompanying audited consolidated financial statements.
Because NOI excludes general and administrative expenses, depreciation and amortization, interest expense, interest income, provision for income taxes, gain or loss on sale or capital expenditures and leasing costs and impairment charges, it provides a performance measure, that when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from net income.
Because Same-Property NOI excludes general and administrative expenses, depreciation and amortization, gain or loss on sale or capital expenditures and leasing costs and impairment charges, it provides a performance measure, that when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from operating income.
Related Party Transactions Management and Leasing Services for Cedar The Company performs property management and leasing services for Cedar, a subsidiary of the Company. During the years ended December 31, 2023 and 2022, Cedar paid the Company $2.1 million and $1.0 million, respectively, for these services.
Related Party Transactions Management and Leasing Services for Cedar The Company performs property management and leasing services for Cedar, a subsidiary of the Company. During the years ended December 31, 2024 and 2023, Cedar paid the Company $1.4 million and $2.1 million, respectively, for these services.
The Company does not believe it is in its interests to liquidate assets or incur indebtedness to fund cash redemptions of the Series D Preferred Stock and, accordingly, it has no intention of doing so. Therefore, the Company intends to continue to settle redemptions of Series D Preferred Stock in Common Stock.
The Company does not believe it is in its interests to liquidate assets or incur indebtedness to fund cash redemptions of the Series D Preferred Stock and, accordingly, it has no intention of doing so.
The Company’s portfolio had total gross rentable space of approximately 8,142,000 square feet and a leased level of approximately 93.7% at December 31, 2023. In August 2022, the Company acquired Cedar, and as a result of such transaction acquired 19 shopping centers (the majority of which are grocery-anchored), which increased the Company’s presence in the Northeast.
The Company’s portfolio had total gross rentable space of approximately 7,661,000 square feet and a leased level of approximately 93.1% at December 31, 2024. 12 In August 2022, the Company acquired Cedar, and as a result of such transaction acquired its then 19 shopping centers (the majority of which are grocery-anchored), which increased the Company’s presence in the Northeast.
We compute FFO in accordance with standards established by the Board of Governors of Nareit in its March 1995 White Paper (as amended in November 1999, April 2002 and December 2018).
We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts ("Nareit") in its March 1995 White Paper (as amended in November 1999, April 2002 and December 2018).
To meet these future liquidity needs, the Company: • had $18.4 million in cash and cash equivalents at December 31, 2023; • had $21.4 million held in lender reserves for the purpose of tenant improvements, lease commissions, real estate taxes and insurance at December 31, 2023; and • intends to use cash generated from operations during the year ended December 31, 2024.
To meet these future liquidity needs, the Company: • had $43.0 million in cash and cash equivalents at December 31, 2024; • had $17.8 million held in lender reserves for the purpose of tenant improvements, lease commissions, real estate taxes and insurance at December 31, 2024; and • intends to use cash generated from operations during the year ended December 31, 2025.
In addition, depending on the prices at which the ongoing monthly redemptions of Series D Preferred Stock occur, the conversion price for the Convertible Notes could be repeatedly adjusted downwards which would in turn cause significant pressure on the value of the Company’s Common Stock.
In addition, depending on the prices at which the ongoing monthly redemptions of Series D Preferred Stock occur, the conversion price for the Convertible Notes could be repeatedly adjusted downwards, which has caused, and could continue to cause, significant downward pressure on the value of the Company’s Common Stock.
Nasdaq Notices On June 26, 2023, the listing qualifications staff (the "Staff") of Nasdaq notified the Company that based on the Common Stock’s bid price closing below $1.00 per share for 30 consecutive business days, the Company no longer complied with Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule") and that it had 180 calendar days to regain compliance.
Nasdaq Notices On December 7, 2023, the listing qualifications staff (the "Staff") of Nasdaq notified the Company that based on the Common Stock’s bid price closing below $1.00 per share for 30 consecutive business days, the Company no longer complied with Nasdaq Listing Rule 5550(a)(2) (the "Bid Price Rule") and that Company had a 180-day compliance period.
In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.
In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO.
We have determined that this acquisition is not a variable interest entity, as defined under the consolidation topic of the Financial Accounting Standards Board (the "FASB"), Accounting Standards Codification, or ASC, and we evaluated such entity under the voting model and concluded we should consolidate the entity.
The consolidated financial statements included in this Form 10-K include Cedar. We have determined that this acquisition is not a variable interest entity, as defined under the consolidation topic of the Financial Accounting Standards Board (the "FASB"), Accounting Standards Codification ("ASC") and we evaluated such entity under the voting model and concluded we should consolidate the entity.
Liquidity and Capital Resources At December 31, 2023, our consolidated cash, cash equivalents and restricted cash totaled $39.8 million compared to consolidated cash, cash equivalents and restricted cash of $55.9 million at December 31, 2022.
Liquidity and Capital Resources At December 31, 2024, our consolidated cash, cash equivalents and restricted cash totaled $60.7 million compared to consolidated cash, cash equivalents and restricted cash of $39.8 million at December 31, 2023.
Interest expense on the Convertible Notes consists of the following (in thousands, except for shares): For the years ended December 31, Series B Preferred number of shares (1) Series D Preferred Stock number of shares (1) Convertible Note interest at 7% coupon Fair value adjustment Interest expense 2023 — 306,380 $ 2,259 $ 1,649 $ 3,908 2022 1,511,541 — $ 2,310 $ 1,429 $ 3,739 (1) Shares issued as interest payment on Convertible Notes.
Interest expense on the Convertible Notes consists of the following (in thousands, except for shares): Years ended December 31, Series B Preferred Stock number of shares (1) Series D Preferred Stock number of shares (1) Convertible Note interest at 7% coupon Fair value adjustment Interest expense 2024 — 187,410 $ 2,163 $ 1,970 $ 4,133 2023 — 306,380 $ 2,259 $ 1,649 $ 3,908 (1) Shares issued as interest payment on Convertible Notes.
Financing Activities Our cash flows used in financing activities were $5.5 million during the year ended December 31, 2023, compared to cash flows from financing activities of $118.2 million for the comparable period in 2022.
Financing Activities Our cash flows used in financing activities were $20.6 million during the year ended December 31, 2024, compared to cash flows used in financing activities of $5.5 million for the comparable period in 2023.
The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results. 16 Revenue Recognition Principal components of our total revenues include base and percentage rents and tenant reimbursements.
The following accounting estimates are considered critical because they are particularly dependent on management’s judgment about matters that have a significant level of uncertainty at the time the accounting estimates are made, and changes to those estimates could have a material impact on our financial condition or operating results.
As a result of these transactions the Company recognized a $1.6 million loss for the year ended December 31, 2023 which represents the fair value of the purchase over principal pay down. The loss is included in "other expense" on the consolidated statements of operations.
As a result of that transaction, the Company recognized a $0.7 million 13 loss for the year ended December 31, 2024, which represents the fair value of the purchase over principal pay down. The loss is included in "other expense" on the consolidated statements of operations.
All gains and losses, realized and unrealized, and fees are recorded through "gains (losses) on investment securities, net" on the consolidated statements of operations. As of December 31, 2023, the fair value of the Company’s SAI investment was $10.7 million, which includes $10.0 million from subscriptions and $0.2 million in fees.
All gains and losses, realized and unrealized, and fees are recorded through "gains (losses) on investment securities, net" on the consolidated statements of operations. As of December 31, 2024, the fair value of the Company’s SAI investment was $12.0 million, w hich includes $10.0 million fr om 2023 subscriptions and $0.5 million from the 2024 subscription.
Our portfolio is comprised of seventy-five retail shopping centers and four undeveloped land parcels.
Our portfolio is comprised of seventy-five properties, including seventy-two retail shopping centers and three undeveloped land parcels.
The Company believes that NOI is a useful measure of the Company's property operating performance. The Company defines NOI as property revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes).
Same-Property Net Operating Income Same-property net operating income ("Same-Property NOI") is a widely-used non-GAAP financial measure for REITs. The Company believes that Same-Property NOI is a useful measure of the Company's property operating performance. The Company defines Same-Property NOI as property revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes).
Series D Preferred Stock 20 As of December 31, 2023, the outstanding Series D Preferred Stock had an aggregate liquidation preference of approximately $64.8 million, with aggregate accrued and unpaid dividends in the amount of approximately $32.3 million, for a total liquidation value of $97.1 million.
Series D Preferred Stock As of December 31, 2024, the outstanding Series D Preferred Stock had an aggregate liquidation preference of approximately $55.9 million, with aggregate accrued and unpaid dividends in the amount of approximately $32.8 million, for a total liquidation value of $88.7 million.
Material Cash Requirements, Contractual Obligations and Commitments Our expected material cash requirements for the year ended December 31, 2024 and thereafter are comprised of (i) contractually obligated expenditures; (ii) other essential expenditures; and (iii) opportunistic expenditures.
Material Cash Requirements, Contractual Obligations and Commitments Our expected material cash requirements for the year ended December 31, 2024 and thereafter are comprised of (i) contractually obligated expenditures; (ii) other essential expenditures; (iii) other investments; and (iv) the repurchase of noncontrolling interests, including through the December 2024 Cedar Tender Offer.
The Company combines lease and nonlease components in lease contracts, which includes combining base rent and tenant reimbursement revenue. We accrue minimum (base) rent 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.
We accrue minimum (base) rent 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.
Our debt balances, excluding unamortized debt issuance costs, consisted of the following (in thousands) : December 31, 2023 2022 Fixed-rate notes $ 495,572 $ 482,447 Total debt $ 495,572 $ 482,447 The weighted average interest rate and term of our fixed-rate debt are 5.42% and 8.2 years, respectively, at December 31, 2023.
Our debt balances, excluding unamortized debt issuance costs, consisted of the following (in thousands) : December 31, 2024 2023 Fixed-rate notes $ 499,531 $ 495,572 Total debt $ 499,531 $ 495,572 The weighted average interest rate and term of our fixed-rate debt were 5.53% and 7.5 years, respectively, at December 31, 2024.
Convertible Notes The Company’s Convertible Notes bear interest at a rate of 7.00% per annum. Interest on the Convertible Notes is payable semi-annually in arrears on June 30 and December 31 of each year.
Interest on the Convertible Notes is payable semi-annually in arrears on June 30 and December 31 of each year.
As of February 5, 2024, the Conversion Price for the Convertible Notes was approximately $0.12 per share of the Company’s Common Stock (approximately 209.84 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted).
As of December 31, 2024, the Conversion Price for the Convertible Notes was approximately $16.88 per share of the Company’s Common Stock (approximately 1.48 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted).
These items include, but are not limited to, legal settlements, non-cash share-based compensation expense, non-cash amortization on loans and acquisition costs. Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets.
Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets.
Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions.
Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.
A reconciliation of net income (loss) to FFO available for common shareholders and AFFO (in thousands): Years Ended December 31, 2023 2022 Net income (loss) $ 6,083 $ (8,470) Depreciation and amortization of real estate assets 28,502 19,540 Impairment of assets held for sale — 760 Gain on disposal of properties (2,204) (2,604) FFO 32,381 9,226 Preferred stock dividends - undeclared (9,262) (9,056) Dividends on noncontrolling interests preferred stock (10,752) (3,913) Preferred stock accretion adjustments 460 584 FFO available to common stockholders and common unitholders 12,827 (3,159) Other non-recurring and non-cash expenses 2,051 3,092 Gain on investment securities, net (685) — Net changes in fair value of derivative liabilities (3,458) 2,335 Gain on preferred stock redemptions (9,893) — Straight-line rental revenue, net straight-line expense (1,380) (768) Deferred financing cost amortization 2,860 6,098 Paid-in-kind interest 3,908 3,739 Above (below) market lease amortization, net (4,849) (2,079) Recurring capital expenditures tenant improvement reserves (1,628) (1,354) AFFO $ (247) $ 7,904 Other non-recurring and non-cash expenses are costs of the Company that we believe will not be incurred on a go-forward basis.
However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs. 25 A reconciliation of net income to FFO available for common shareholders and AFFO (in thousands): Years Ended December 31, 2024 2023 Net income $ 767 $ 6,083 Depreciation and amortization of real estate assets 25,316 28,502 Impairment charges 1,195 — Gain on disposal of properties, net (5,550) (2,204) FFO 21,728 32,381 Preferred stock dividends - undeclared (8,267) (9,262) Dividends on noncontrolling interests preferred stock (10,295) (10,752) Preferred stock accretion adjustments 87 460 FFO available to common stockholders and common unitholders 3,253 12,827 Other non-recurring and non-cash expenses 368 2,051 Gain on investment securities, net (840) (685) Net changes in fair value of derivative liabilities 8,332 (3,458) Loss on conversion of Convertible Notes 412 — Gain on Preferred Stock retirements (4,772) (9,893) Straight-line rental revenue, net straight-line expense (1,402) (1,380) Deferred financing cost amortization 2,673 2,860 Paid-in-kind interest 4,133 3,908 Above (below) market lease amortization, net (3,434) (4,849) Recurring capital expenditures tenant improvement reserves (1,532) (1,628) AFFO $ 7,191 $ (247) Other non-recurring and non-cash expenses are costs of the Company that we believe will not be incurred on a go-forward basis.
The weighted average interest rate and term of our fixed-rate debt was 4.99% and 7.4 years, respectively, at December 31, 2022. We have $7.2 million of debt maturing during the year ending December 31, 2024.
The weighted average interest rate and term of our fixed-rate debt were 5.42% and 8.2 years, respectively, at December 31, 2023. We have $6.0 million of debt maturing during the year ending December 31, 2025.
Below is a comparison of the components which make up interest expense (in thousands): December 31, Changes 2023 2022 Dollars % Change Property debt interest - excluding Cedar debt $ 16,153 $ 14,717 $ 1,436 9.8 % Convertible Notes interest (1) 3,908 3,739 169 4.5 % Defeasance paid 1,758 2,614 (856) (32.7) % Amortization of deferred financing costs 2,860 6,098 (3,238) (53.1) % Property debt interest - Cedar 7,635 2,939 4,696 159.8 % Total Interest Expense $ 32,314 $ 30,107 $ 2,207 7.3 % (1) Includes the fair value adjustment for the paid-in-kind interest.
Below is a comparison of the components which make up interest expense (in thousands): 23 December 31, Changes 2024 2023 Dollars Percent Property debt interest - excluding Cedar debt $ 17,118 $ 16,153 $ 965 6.0 % Convertible Notes interest (1) 4,133 3,908 225 5.8 % Defeasance paid 368 1,758 (1,390) (79.1) % Amortization of deferred financing costs 2,673 2,860 (187) (6.5) % Property debt interest - Cedar 8,310 7,635 675 8.8 % Total Interest Expense $ 32,602 $ 32,314 $ 288 0.9 % (1) Includes the fair value adjustment for the paid-in-kind interest.
Financing activities during the year ended December 31, 2023 primarily consists of: 18 Cash inflows: • $16.4 million 2023 loan refinancing activities, net, including the Timpany Plaza Loan Agreement; Cash outflows: • $10.8 million for distributions paid on noncontrolling interests; • $4.4 million payments for deferred financing costs; • $1.8 million defeasance payments; • $3.1 million repurchase of debt securities; and • $1.8 million scheduled loan principal payments on debt.
Cash outflows: • $10.8 million for distributions paid on noncontrolling interests; • $4.4 million payments for deferred financing costs; • $1.8 million defeasance payments; • $3.1 million repurchase of debt securities; and • $1.8 million scheduled loan principal payments on debt.
Related party amounts due to the Company from Cedar were $8.1 million and $7.3 million as of December 31, 2023 and 2022, respectively, and have been eliminated for consolidation purposes.
Related party amounts due to the Company from Cedar for financing and real estate taxes, management fees, leasing commissions and Cost Sharing Agreement (as defined below) allocations were $9.5 million and $8.1 million as of December 31, 2024 and 2023, respectively, and have been eliminated for consolidation purposes.
Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results. 23 We believe the computation of FFO in accordance with Nareit's definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance.
We believe the computation of FFO in accordance with Nareit's definition includes certain items that are not indicative of the results provided by our Operating Portfolio and affect the comparability of our period-over-period performance. These items include, but are not limited to, legal settlements, non-cash amortization on loans and acquisition costs.
Our success in executing on our strategy will dictate our liquidity needs going forward. If we are unable to execute in these areas, our ability to grow may be limited without additional capital.
The Company intends to continue to operate its business in a manner that will allow it to qualify as a REIT for U.S. federal income tax purposes. Our success in executing on our strategy will dictate our liquidity needs going forward. If we are unable to execute in these areas, our ability to grow may be limited without additional capital.
(2) The Company does not include ground leases entered into for the purposes of new lease sq feet and weighted average rate (per sq foot) on new leases.
(2) The Company does not include ground leases entered into for the purposes of new lease square feet and weighted average rate (per square foot) on new leases. Big Lots Chapter 11 Bankruptcy On September 9, 2024, Big Lots, Inc. and its affiliates (collectively, "Big Lots"), filed for protection under chapter 11 of the U.S.
However, s ignificant inflation rate increases over 24 a prolonged period of time may have a material adverse impact on the Company’s business. Conversely, deflation could lead to downward pressure on rents and other sources of income. Interest rate increases could result in higher incremental borrowing costs for the Company and our tenants.
Conversely, deflation could lead to downward pressure on rents and other sources of income. Fluctuations in interest rates could significantly impact our Operating Portfolio and overall financial performance. Interest rate increases could result in higher incremental borrowing costs for the Company and our tenants.
On September 1, 2023 and November 30, 2023, the Company subscribed for additional investments each in the amount of $3.5 million for limited partnership interests in SAI. The Company’s SAI investment is accounted for under the equity method and measured at net asset value as a practical expedient and has not been classified within the fair value hierarchy.
Investment in Stilwell Activist Investments, L.P The Company’s investments with the Stilwell Activist Investments, L.P., a Delaware limited partnership (“SAI”) are accounted for under the equity method and measured at net asset value as a practical expedient and has not been classified within the fair value hierarchy.
Year Ended December 31, 2023 2022 (in thousands ) Operating Income $ 29,407 $ 24,598 Adjustments: Gain on disposal of properties (2,204) (2,604) Corporate general & administrative 11,750 8,620 Impairment of assets held for sale — 760 Depreciation and amortization 28,502 19,540 Straight-line rents (1,370) (800) Above (below) market lease amortization, net (4,849) (2,079) Other non-property revenue (135) (23) NOI related to properties not defined as same-property (20,061) (6,607) Same-Property Net Operating Income $ 41,040 $ 41,405 Total same-property NOI was $41.0 million and $41.4 million for the years ended December 31, 2023 and 2022, respectively, representing a decrease of 0.9%.
Years Ended December 31, 2024 2023 (in thousands ) Operating Income $ 37,531 $ 29,407 Add (deduct): Gain on disposal of properties, net (5,550) (2,204) Corporate general & administrative 10,982 11,750 Impairment charges 1,195 — Depreciation and amortization 25,316 28,502 Straight-line rents (1,334) (1,370) Above (below) market lease amortization, net (3,434) (4,849) Other non-property revenue (1,043) (137) NOI related to properties not defined as same-property (1,957) (2,285) Same-Property Net Operating Income $ 61,706 $ 58,814 Total same-property NOI was $61.7 million and $58.8 million for the years ended December 31, 2024 and 2023, respectively, representing an increase of 4.9% due to a 3.4% increase in property revenue, partially offset by a 0.7% increase in property operating expenses.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 Results of Operations The following table presents a comparison of the consolidated statements of operations for the years ended December 31, 2023 and 2022, respectively (in thousands).
Recent Accounting Pronouncements See Note 2 to the accompanying audited consolidated financial statements beginning on page 47 of this Annual Report on Form 10-K. 22 Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 Results of Operations The following table presents a comparison of the consolidated statements of operations for the years ended December 31, 2024 and 2023, respectively (in thousands).
New Leases and Leasing Renewals The following table presents selected lease activity statistics for our properties: 15 Years Ended December 31, 2023 2022 Renewals (1) : Leases renewed with rate increase (sq feet) 712,873 676,814 Leases renewed with rate decrease (sq feet) — 62,771 Leases renewed with no rate change (sq feet) 295,173 284,461 Total leases renewed (sq feet) 1,008,046 1,024,046 Leases renewed with rate increase (count) 116 104 Leases renewed with rate decrease (count) — 11 Leases renewed with no rate change (count) 20 28 Total leases renewed (count) 136 143 Options exercised (count) 31 18 Weighted average on rate increases (per sq foot) $ 0.86 $ 1.29 Weighted average on rate decreases (per sq foot) $ — $ (1.17) Weighted average rate (per sq foot) $ 0.61 $ 0.78 Weighted average change over prior rates 6.54 % 8.29 % New Leases (1) (2) : New leases (sq feet) 435,099 374,149 New leases (count) 70 79 Weighted average rate (per sq foot) $ 12.42 $ 11.27 (1) Lease data presented is based on average rate per square foot over the renewed or new lease term.
The total cumulative dividends in arrears for Series D Preferred Stock is $32.8 million as of December 31, 2024 ($14.67 per share). 16 New Leases and Leasing Renewals The following table presents selected lease activity statistics for our properties: Years Ended December 31, 2024 2023 Renewals (1) : Leases renewed with rate increase (sq feet) 768,286 712,873 Leases renewed with rate decrease (sq feet) 43,360 — Leases renewed with no rate change (sq feet) 157,504 295,173 Total leases renewed (sq feet) 969,150 1,008,046 Leases renewed with rate increase (count) 156 116 Leases renewed with rate decrease (count) 3 — Leases renewed with no rate change (count) 11 20 Total leases renewed (count) 170 136 Options exercised (count) 34 31 Weighted average on rate increases (per sq foot) $ 1.36 $ 0.86 Weighted average on rate decreases (per sq foot) $ (0.86) $ — Weighted average rate (per sq foot) $ 1.04 $ 0.61 Weighted average change over prior rates 9.48 % 6.54 % New Leases (1) (2) : New leases (sq feet) 230,953 406,649 New leases (count) 55 68 Weighted average rate (per sq foot) $ 14.45 $ 12.43 Weighted average change of new leases over prior rates 21.35 % 14.68 % (1) Lease data presented is based on average rate per square foot over the renewed or new lease term.
As such, the redemption of these Series D Preferred Stock is considered certain at December 31, 2023 and the liquidation value associated with these shares of $0.4 million is presented as a liability. Dispositions At December 31, 2023 and 2022, there were no assets held for sale.
At December 31, 2024, the Company had received requests to redeem 102,487 shares of Series D Preferred Stock with respect to the January 2025 Holder Redemption Date. As such, the redemption of these Series D Preferred Stock is considered certain at December 31, 2024 and the liquidation value associated with these shares of $4.1 million is presented as a liability.
Financing activities during the year ended December 31, 2022 primarily consisted of: Cash inflows: • $19.3 million 2022 loan refinancing activities, net; and • $130.0 million loan related to the Cedar Acquisition; Cash outflows: • $12.7 million payments for deferred financing costs; • $4.4 million scheduled loan principal payments on debt; • $5.6 million loan principal payment related to the sale of Butler Square; • $3.1 million loan principal payment related to the sale of Walnut Hill Plaza; • $2.7 million for distributions paid on noncontrolling interests; and • $2.6 million defeasance payments.
Cash outflows: • $11.5 million repurchase of noncontrolling interests; • $10.4 million for distributions paid on noncontrolling interests; • $1.6 million payments for deferred financing costs; • $5.2 million payment on Cedar Revolving Credit Agreement; • $1.4 million scheduled loan principal payments on debt; • $1.3 million repurchase of debt securities; • $0.4 million payment on Cedar term loan, 10 properties related to the sale of Brickyard Plaza land parcel; and • $0.4 million defeasance payments.
As of December 5, 2023, the Conversion Price (as defined below) for the Convertible Notes was approximately $0.21 per share of the Company’s Common Stock (approximately 116.46 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted).
Accordingly, under Section 14.02 (Optional Conversion) of the indenture governing the Convertible Notes (the "Indenture"), the Conversion Price was further adjusted, as of February 5, 2025, to approximately $3.88 per share of the Company’s Common Stock (approximately 6.44 shares of Common Stock for each $25.00 of principal amount of the Convertible Notes being converted).
Commencing in July 2028, until the maturity date of June 10, 2033, monthly principal and interest payments will be $0.3 million. Loan proceeds were used to refinance loans on 8 properties, including $0.7 million in defeasance.
Commencing on August 10, 2029, until the maturity date of July 10, 2034, monthly principal and interest payments will be made based on a 30-year amortization schedule calculated based on the principal amount outstanding at that time. The Term Loan Agreement, 5 Properties' proceeds were used to refinance four loans, including paying $0.4 million in defeasance.
Preferred Dividends Commencing September 21, 2023, the Series D Preferred Stock holders were entitled to cumulative cash dividends at an annual dividend rate of 12.75% increased by 2% of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 16%, including the 2% default rate.
Preferred Dividends At September 21, 2024, the annual dividend rate increased by 2% of the liquidation preference per annum to 14.75%, including the default rate.
We believe that the issuance of Common Stock to settle redemptions in Common Stock will continue to result in a substantial dilution of the outstanding Common Stock. Recent Accounting Pronouncements See Note 2 to the accompanying audited consolidated financial statements beginning on page 35 of this Annual Report on Form 10-K.
We believe that the issuance of Common Stock to settle redemptions in Common Stock will continue to result in a substantial dilution of the outstanding Common Stock.
Timpany Plaza Loan Agreement On September 12, 2023, the Company entered into a loan agreement (the "Timpany Plaza Loan Agreement") for $11.6 million at a fixed rate of 7.27% with interest-only payments due monthly for the first twelve months.
Term Loan, Five Properties On June 28, 2024, the Company entered into a term loan agreement (the "Term Loan Agreement, 5 Properties") with Guggenheim Real Estate, LLC, for $25.5 million at a fixed rate of 6.80% with interest-only payments due monthly.
Net changes in the fair value of derivative liabilities increased, which represents a non-cash adjustment from a change in the fair value that includes adjustments in valuation assumptions. See Note 7 to the accompanying audited consolidated financial statements for additional details. Gain on preferred stock redemptions is a result of the redemptions of Series D Preferred Stock.
See Note 7 to the accompanying audited consolidated financial statements for additional details. Gain on Preferred Stock retirements is a result of the fair market value of the Common Stock issued on redemptions and exchanges of the Company's Preferred Stock, in comparison to the Preferred Stock's book value.
Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes, insurance and many of the operating expenses it incurs. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates.
Inflation, Deflation and Economic Condition Considerations Substantially all of the Company’s leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes, insurance and many of the operating expenses it incurs.
Cash flows from operating activities, investing activities and financing activities for the years ended December 31, 2023 and 2022 are as follows (in thousands): Years Ended December 31, Year Over Year Change 2023 2022 $ % Operating activities $ 20,934 $ 30,758 $ (9,824) (31.9) % Investing activities $ (31,521) $ (133,512) $ 101,991 76.4 % Financing activities $ (5,471) $ 118,200 $ (123,671) (104.6) % Operating Activities Our cash flows from operating activities were $20.9 million and $30.8 million during the years ended December 31, 2023 and 2022, respectively, representing a decrease of 31.9% or $9.8 million primarily due to (1) a $12.5 million decrease in net changes in operating assets and liabilities due to timing of receipts and payments, (2) an $11.1 increase in corporate administrative expenses, interest expense and other expenses, offset by (3) a $13.5 million increase in net operating income ("NOI") not attributable to same properties a result of the Cedar Acquisition.
Cash flows from operating activities, investing activities and financing activities were as follows (in thousands): Years Ended December 31, Year Over Year Change 2024 2023 $ % Operating activities $ 25,988 $ 20,934 $ 5,054 24.1 % Investing activities $ 15,480 $ (31,521) $ 47,001 149.1 % Financing activities $ (20,559) $ (5,471) $ (15,088) (275.8) % Operating Activities Net cash provided by operating activities, before net changes in operating assets and liabilities, was $29.4 million and $22.4 million for 2024 and 2023, respectively, primarily due to (1) a $4.0 million decrease in capital structure costs, (2) a $2.9 million increase in Same-Property NOI and (3) a $0.8 million decrease in corporate administrative expenses, partially offset by (4) a $0.5 million increase in cash paid for interest.
The duration of the Company's indebtedness and our relatively low exposure to floating rate debt have mitigated the direct impact of inflation and interest rate increases. The degree and pace of these changes have had and may continue to have impacts on our business.
The duration of the Company's indebtedness and our relatively low exposure to floating rate debt have mitigated the direct impact of inflation and interest rate increases. In a low or stable interest rate environment, we may benefit from lower borrowing costs, enabling strategic investments, acquisitions, or capital returns to shareholders.
Accordingly, during the year ended December 31, 2023, the Company issued 52,788,687 shares of Common Stock in settlement of an aggregate redemption price of approximately $32.7 million. At December 31, 2023, the Company had received requests to redeem 9,843 shares of Series D Preferred Stock with respect to the January 2024 Holder Redemption Date.
During the year ended December 31, 2024, the Company processed redemptions for an aggregate of 519,822 shares of Series D Preferred Stock from the holders thereof. Accordingly, the Company issued 294,083 shares of its Common Stock in settlement of an aggregate redemption price of approximately $20.4 million.
Other REITs may use different methodologies for calculating NOI, and accordingly, the Company's NOI may not be comparable to that of other REITs. The following table is a reconciliation of same-property NOI from operating income (the most directly comparable GAAP financial measure). Same-property NOI consists only of those properties owned during the entirety of all periods presented.
The following table is a reconciliation of same-property NOI from operating income (the most directly comparable GAAP financial measure).
Investing Activities Our cash flows used in investing activities were $31.5 million during the year ended December 31, 2023, compared to cash flows used in investing activities of $133.5 million during the year ended December 31, 2022, representing a decrease of 76.4% primarily due to (1) $135.5 million costs due to the Cedar Acquisition, described in Note 3 included in the accompanying audited consolidated financial statements, partially offset by (2) $11.5 million increase in capital expenditures, (3) $10.0 million subscription in SAI, (4) $4.2 million in 2023 acquisitions and (5) $7.8 million decrease in cash received from disposal of properties.
Investing Activities 19 Our cash flows from investing activities increased $47.0 million, primarily due to (1) the proceeds from the sale of three properties and two land parcels compared to one outparcel sale in 2023, (2) the investment subscription with SAI of $0.5 million as compared to $10.0 million in 2023 and (3) the 2023 acquisitions of two land parcels, partially offset by (4) the increase in capital expenditures of $2.5 million.
Corporate general and administrative expenses were higher primarily as a result of (1) an increase of $1.2 million in professional fees primarily a result of the Cedar Acquisition, (2) an increase of $1.1 million in compensation and benefits primarily driven by hiring more employees due to the Cedar Acquisition and payroll related costs, and (3) an increase of $0.7 million in corporate administration costs primarily a result of the Cedar Acquisition.
Corporate general and administrative expenses were lower primarily as a result of (1) a decrease in salaries of $0.5 million, (2) a decrease in legal fees of $0.4 million and (3) a decrease in taxes of $0.1 million, partially offset by (4) an increase in corporate administration of $0.2 million. Interest expense increased 0.9%.
During the year ended December 31, 2023, the Company has realized a gain of $9.9 million in the aggregate due to the closing price of the Common Stock on the last VWAP date differing from the VWAP used to calculate the shares issued in each redemption round. Other expense represents expenses which are non-operating in nature.
During the years ended December 31, 2024 and 2023, the Company realized a gain of $4.8 million and $9.9 million in the aggregate, respectively, as a result of the fair market value of the Common Stock issued in these transactions being less than the book value of the Preferred Stock retired. Other expense represents expenses which are non-operating in nature.
See Same-Property Net Operating Income for further details about the changes within operating revenue. 21 Property Operating expenses were higher primarily as a result of (1) an increase of $7.6 million in property operating expenses from the Cedar Acquisition, partially offset by 2022 property sales and (2) an increase of $1.5 million in same-property expenses.
Property operating expenses were higher primarily as a result of (1) an increase in insurance of $0.3 million and (2) an increase in management fees of $0.1 million, partially offset by (3) a decrease of $0.2 million in ground rent expense, a result of the 2023 acquisition of a land parcel located on the Company's property.
Impairment was lower primarily as a result of the Harbor Point Land Parcel (defined below) held for sale in 2022. Depreciation and amortization were higher primarily as a result of the Cedar Acquisition.
Depreciation and amortization were lower primarily as a result of the purchase price allocation of lease intangibles due to the timing of the Cedar Acquisition and properties sold in 2024.
See Note 4 to the accompanying audited consolidated financial statements for additional details. 14 The Company’s initial subscription in SAI was approved by the disinterested directors of the Company, and, after the formation of the Related Person Transactions Committee, the further subscriptions in SAI were approved by that Committee.
See Note 4 to the accompanying audited consolidated financial statements for additional details.

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