WHLR — Wheeler Real Estate Investment Trust, Inc.

WHLR Q2 2021 Earnings Call Summary

1. Key Financial Results and Metrics:

• Operating Funds from Operations (FFO) for Q2 2021 were $8.5 million, equating to $0.61 per share.
• Property Net Operating Income (NOI) reached $20.8 million.
• Same-property NOI increased by 8.2% year-over-year, and by 10.2% including redevelopment properties.
• Leased occupancy stood at 88.7%, up 0.9% from the previous quarter, with same-property leased occupancy at 90.9%.

2. Strategic Updates and Business Highlights:

• Cedar Realty Trust sold the Camp Hill Mall for approximately $90 million at a 6.5% cap rate, indicating strong demand for grocery-anchored retail assets.
• The company has a robust leasing pipeline, with 40 leases executed totaling 209,100 square feet, and a notable increase in leasing activity as retailers expand post-pandemic.
• A joint venture with Goldman Sachs and Asland for the DGS office building in Washington, DC, marks a significant step in their redevelopment strategy.
• The company closed a $114 million refinancing deal and disposed of two shopping centers, enhancing its balance sheet.

3. Forward Guidance and Outlook:

• Management anticipates continued growth in NOI and occupancy, supported by a strong leasing pipeline and demand for grocery-anchored centers.
• The company aims to reach low to mid-90% occupancy levels in the coming quarters, driven by ongoing leasing efforts and redevelopment activities.
• There is a focus on exploiting the disconnect between public share prices and private market valuations, potentially leading to further asset sales.

4. Bad News, Challenges, or Points of Concern:

• New lease spreads were negative at -18.7% due to deals negotiated during the pandemic, though management expects improvements moving forward.
• The overall occupancy is still impacted by redevelopment activities, particularly in the Northeast Heights project, which may introduce temporary vacancies.
• The company faces risks associated with potential new COVID-19 variants that could affect retail operations and leasing momentum.

5. Notable Q&A Insights:

• Management expressed optimism about leasing momentum continuing, with expectations for improved lease spreads as the market stabilizes.
• Questions regarding the flexibility of the new mortgage financing indicated that while there are substitution rights for assets, management is cautious about selling individual properties from the collateralized pool.
• The board's recent changes have been positively received, with new members contributing valuable insights into strategic discussions, particularly around capital allocation and market positioning.

Overall, Cedar Realty Trust is navigating a recovery phase post-COVID with a strong focus on grocery-anchored retail, strategic asset management, and enhancing shareholder value amidst market challenges.