Cedar Realty Trust (WHLRD) Q2 2021 Earnings Call Summary

1Key Financial Results and Metrics

Operating Funds from Operations (FFO): $8.5 million, or $0.61 per share.

Property Net Operating Income (NOI): $20.8 million.

Same-property NOI: Increased by 8.2% year-over-year, and 10.2% including redevelopment properties.

Leased Occupancy: 88.7%, a 0.9% increase from the prior quarter; same-property leased occupancy at 90.9%.

Rent Collection: 97% of billed rent collected during the quarter.

Leasing Activity: 40 leases executed totaling 209,100 square feet, with 15 new comparable leases executed (negative spread of 18.7%).

2Strategic Updates and Business Highlights

Asset Sales: Closed the sale of Camp Hill Mall for approximately $90 million at a 6.5% cap rate, indicating strong market demand for grocery-anchored centers.

Leasing Pipeline: Robust with expectations for increasing NOI and occupancy driven by a strong demand for space in grocery-anchored shopping centers.

Redevelopment Projects: Progress on major mixed-use and value-add redevelopment initiatives, including a joint venture with Goldman Sachs for the DGS office building in Washington, D.C.

Refinancing: Closed a $114 million non-recourse mortgage loan, significantly reducing debt and improving liquidity.

3Forward Guidance and Outlook

Management anticipates continued growth in NOI and occupancy, with expectations to reach low to mid-90% occupancy levels over the next year.

Positive outlook on leasing activity, with expectations for improved lease spreads as the market stabilizes.

Continued focus on maximizing shareholder value amid the disconnect between share price and underlying asset value.

4Bad News, Challenges, or Points of Concern

Negative Lease Spreads: New leases executed had a negative spread of 18.7%, primarily due to deals negotiated during the pandemic.

Occupancy Drag: Ongoing redevelopment projects may temporarily affect overall occupancy rates.

Market Risks: Potential impacts from new COVID-19 variants and economic uncertainties could affect leasing activity and tenant performance.

5Notable Q&A Insights

Leasing Momentum: Management expressed optimism about increasing leasing activity and potential improvements in lease spreads moving forward.

Board Dynamics: New board members are providing valuable insights and maintaining focus on addressing the disconnect between public and private market valuations.

Asset Sales Strategy: Management is considering further asset sales to exploit market conditions, emphasizing a disciplined approach to capital allocation.

Flexibility in Financing: The recent mortgage allows for asset substitution, providing flexibility for future sales or refinancing opportunities. Overall, Cedar Realty Trust reported a strong recovery from the pandemic's effects, with positive trends in leasing and property performance, while also navigating challenges related to lease spreads and occupancy levels.