NASDAQ: WHLR March 2017 Exhibit 99.1
SAFE HARBOR This presentation may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions it can give no assurance that expected results will be achieved, and actual results may differ materially from expectations. Specifically, the Company’s statements regarding: (i) the anticipated implementation of the Company’s growth, acquisition, leasing and disposition strategy; (ii) the future generation of value to the Company from the acquisition of service orientated retail properties in secondary and tertiary markets, and the ability of the Company to acquire service oriented retail properties, including the current pipeline of assets; (iii) the development and return on undeveloped properties; (iv) the ability to effectuate the reverse stock split; (v) the expected revenue from the Sea Turtle Marketplace re-development; and (vi) 2017 AFFO guidance anticipated dividend coverage are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. For additional factors that could cause the operations of the Company to differ materially from those listed in the forward-looking statements are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward‐looking statements to reflect events or circumstances that arise after the date hereof.
COMPANY OVERVIEW Wheeler is an internally-managed REIT focused on acquiring well-located, necessity-based retail properties In November 2012, the Company listed on the NASDAQ exchange with eight assets and a market cap of $15.8 million Targets grocery-anchored shopping centers in secondary and tertiary markets with strong demographics and low competition Acquires properties at attractive yields and significant discount to replacement cost Current portfolio of 74 properties with approximately 4.9 million square feet of Gross Leasable Area 64 shopping center/retail properties, 8 undeveloped land parcels, one redevelopment property and one self-occupied office building Approximately 90% of centers are anchored or shadow-anchored by a grocery store Dedicated management team with strong track record of acquiring and selling retail properties through multiple phases of the investment cycle Predecessor firm achieved an average IRR of approximately 28% on 11 dispositions Wheeler Real Estate Investment Trust Exchange: NASDAQ Ticker: WHLR Market Cap(1): $127.1 million Stock Price(1): $1.70 Common Shares and Operating partnership Units Outstanding: 74.78 million Annualized Dividend: $0. 21 As of 03/14/2017 Butler Square 1
Nine Directors – 7 Independent Directors and 2 Non-Independent Directors Representation from Westport Capital Partners as well as former, highly regarded REIT executives KEY INVESTMENT HIGHLIGHTS National and Regional merchants represent majority of Wheeler’s tenants Predominately grocery-anchored portfolio with diverse tenant base 74 properties across 12 states in the Mid-Atlantic, Northeast, Southeast and Southwest Wheeler properties serve the essential day-to-day shopping needs of the surrounding communities Majority of tenants provide non-cyclical consumer goods and services that are less impacted by fluctuations in the economy and E-commerce High Quality Existing Portfolio Full-year guidance for 2017 AFFO & Core FFO demonstrate full coverage of annualized $0.21 common dividend General and Administrative expense reduction from approximately $7 million in 2015 to $4.8 million per 2017 guidance Reverse stock split at a one-for-eight ratio, effective March 31, 2017 Quarterly dividend payments in lieu of monthly dividend payments align WHLR with peers Necessity-Based Retail Industry leading occupancy rate of approximately 94% for WHLR properties versus the shopping center industry average of 93.17%, as of December 31, 2016 Rent spread of 4.9% on 286,000 square feet of renewals for the year ended 2016 Active portfolio management with leasing services, property and asset management disciplines in-house Experienced management team with over 150 years of real estate experience Transformational Journey Complete Operational Excellence Board of Directors Predominantly fixed rate, long-term debt Well laddered debt maturity schedule Increased Key Bank line of credit to $75 million at a rate of 30-day LIBOR + 250 Strong Balance Sheet & Cash Flow 1 Source: ICSC http://quickstats.icsc.org/ViewSeries.aspx?id=12738 For a definition of AFFO and Core FFO, please see the Appendix 2 2
Wilkes Graham Chief Financial Officer Over 17 years experience in the real estate and financial services industries Previously served as Director of Research and as a Senior Sell-Side Equity Research Analyst at Compass Point Research & Trading, LLC As a Real Estate Analyst, he forecasted earnings and predicted the stock performance for over 30 publicly traded REITs, real estate operating companies and homebuilders and conducted due diligence on over 35 capital market transactions MBA, Kenan Flagler Business School, UNC (2012) Jon S. Wheeler Chairman and CEO Over 35 years of experience in the real estate industry focused solely on retail In 1999, founded Wheeler Interests, LLC (“Wheeler Interests”), a company which we consider our predecessor firm, and oversaw the acquisition and development of 60 shopping centers totaling 4 million square feet Has overseen the acquisition of over 70 properties in 12 states since going public in 2012 WHLR’s executive officers, together with the management teams of its service companies, have an aggregate of over 150 years of experience in the real estate industry. EXPERIENCED Management Team Dave Kelly Chief Investment Officer Over 25 years of experience in the real estate industry Previously served 13 years as Director of Real Estate for Supervalu, Inc., a Fortune 100 supermarket retailer Focused on site selection and acquisition for Supervalu from New England to the Carolinas completing transactions totaling over $500 million Andy Franklin SVP, Operations 18 years of experience in the commercial real estate industry Previously served as Acquisitions Officer for Phillips Edison & Company, specializing in asset and property management 2018 MBA Candidate, Fox School of Business, Temple University
Integrated Platform, Proven Success Wheeler has acquisition, leasing, property management, development and re-development services all in–house and maintains a scalable, manageable platform Over 50 associates between the Company’s headquarters in Virginia Beach and Charleston regional office Ability to scale platform as the Company grows results in improved profitability Create value through intensive leasing and property expense management Deep retailer relationships provide unique market knowledge Third-party property management and development fees create additional revenue stream Sea Turtle Marketplace Development expected to generate significant fee and interest income 146,842 square foot shopping center with prime location in Hilton Head, SC 81% pre-leased to national tenants including Stein Mart, Starbucks, and PetSmart Full-service grocery store will occupy 36,000 square feet and purchase just over two acres of land In September 2016, Wheeler contributed land and loaned $11 million to the development in return for a $12 million note that earns 12% interest Asset Management Acquisitions & Development Leasing & Business Dev. Corporate & Accounting Sea Turtle Marketplace, Hilton Head Island, SC
STABLE PORTFOLIO FOCUSED ON NECESSITY-BASED SHOPPING Predominantly Grocery-Anchored Portfolio3 Strong Grocer Rent to Sales4 68% of grocery store GLA with a rent/sales ratio below 3% Company believes necessity-based shopping centers are resistant to economic downturns. In our view, Necessity = Stability The average consumer in the US makes a trip to a grocery store 1.6 times per week1 From 2010-2015, US grocer sales increased 17.6%, demonstrating strength of the traditional grocery store2 Strong National and Regional Tenants 79% of Wheeler's GLA is occupied by national & regional tenants Source: (http://www.fmi.org/research-resources/supermarket-facts) Source: (http://www.statista.com/statistics/197626/annual-supermarket-and-other-grocery-store-sales-in-the-us-since-1992/) Based on percentage of gross leasable area with a grocery store included in the shopping center or as a shadow-anchor as of December 31, 2016. For the year 2015 based on from 28 grocers who report sales to us in our current portfolio.
Type GLA % of GLA % of Annualized Base Rent Grocery 554,073 11.29 12.11 Grocery 325,576 6.64 6.04 Grocery 136,343 2.78 3.04 Grocery 186,064 3.79 2.90 Grocery 179,175 3.65 2.77 Retail 114,298 2.33 1.51 Grocery 39,946 0.81 1.30 Grocery 54,838 1.12 1.28 Retail 75,291 1.53 1.23 Retail 59,533 1.21 1.05 Total 1,725,137 35.15% 33.23% TENANT OVERVIEW Top 10 tenants represent approximately 33% of the portfolio’s annualized base rent and 35% of total gross leasable area. Focus on tenants that create consistent consumer demand, offering items such as food, postal, dry-cleaning, health services and discount merchandise. Minimal exposure to E-Commerce industry. Addition of new grocers lowers exposure to any one tenant. As of 12/31/2016 Top 10 Tenants1 Diversified Merchandise Mix1
Majority of Wheeler’s anchor and junior anchor tenants focus on ‘necessity-based’ products or services that are less likely to be impacted by E-commerce business and fluctuations in the economy Reimbursements resulted in volatility in quarterly results, but average year-over-year Same Store NOI for the past two years is 5.1% for WHLR properties compared to an industry average of 3.5% From 2012-2013, Wheeler’s anchor and junior anchor tenants reported a 2.3% increase in sales per square foot In 2014, Wheeler’s anchor and junior anchor tenants reported a 4.1% increase in sales per square foot In 2015, Wheeler’s anchor and junior anchor tenants reported a 0.3% increase in sales per square foot PROVEN OPERATING RESULTS Source: Bloomberg
LEASE EXPIRATION SCHEDULE Approximately 76% of total leased square footage extends beyond two years Weighted average remaining lease term of 4.6 years Weighted average remaining lease term for anchor tenants is 5.31 years Annualized Base Rent increase of 4.89% per square foot year-over-year in 2016 Anchors defined here as leases comprising 20,000 square feet or more As of December 31, 2016 2
STRONG LEASING TRENDS Wheeler has maintained stable occupancy rates – average of 94.6% since the Company’s IPO For the three months ended December 31, 2016, approximately 137,572 square feet was renewed at an average weighted increase of 3.9% over prior rates As of December 31, 2016, average occupancy rate of a U.S. shopping center was measured at 93.17%1 Company believes there is upside potential in occupancy rates for the assets acquired since June 30, 2015* Historical Occupancy Rates* Source: ICSC http://quickstats.icsc.org/ViewSeries.aspx?id=12738 * Average occupancy of assets acquired since June 30, 2015 was 92.3% which resulted in a decrease in occupancy rates as compared to the sequential quarter and as compared to the prior year.
WHLR PORTFOLIO SUPPLY/DEMAND PROFILE IN LINE WITH INDUSTRY WLHR’s assets are located in lower population-density markets and have the 2nd lowest number of competing grocers within a 3-mile radius among all publicly traded shopping center REITs Lower density markets insulates our assets from e-commerce, and the lack of competing grocers supports WHLR’s strategy of bringing institutional capital to secondary and tertiary markets Source: Maptitude, Company documents
ACQUISITION STRATEGY Well located properties in secondary and tertiary markets High unlevered returns (expected cap rates of ~9%) Focus on dominant multi-tenant grocery-anchored centers with necessity-based inline tenants National & regional tenants High traffic count and ease of access Sale of non-core assets Ancillary & Specialty Income Opportunity to improve revenue through active lease and expense management Utilizing exterior parking for build-to-suit outparcels or pad sales Maximizing Common Area Maintenance (“CAM”) reimbursement income available from existing leases Company utilizes strict underwriting guidelines and unique due diligence processes to identify key issues and uncover hidden opportunities with large potential upside
STABILITY IN RETAIL AND GROCERY SECTORS Shopping Center Sales, South Region1 Shopping Center Sales, Northeast Region2 Source: (http://quickstats.icsc.org/ViewSeries.aspx?id=6888) South Region includes: AL, AR,DE,DC,FL,GA, KY,LA,MD,MS,NC,OK,SC,TN,TX,VA,WV Source: (http://quickstats.icsc.org/ViewSeries.aspx?id=6886) Northeast Region includes: CT,ME,MA,NH,NJ,NY,PA,RI Source: (http://quickstats.icsc.org/ViewSeries.aspx?id=6883) U.S. Shopping Center Sales3 Retail Sales by Sector- In Billions (Dec. 2016)
ACQUISITION HIGHLIGHTS Village of Martinsville Location Martinsville, VA Square Feet 297,950 Purchase Price $23.53 million Anchor Kroger ROE 15.7% New Market Crossing Location Mt. Airy, NC Square Feet 116,976 Purchase Price $9.0 million Anchor Lowes Foods ROE 16.7%
ACQUISITION HIGHLIGHTS Rivergate Shopping Center Location Macon, GA Square Feet 205,810 Purchase Price $37.25 million Anchor Publix ROE 12.68% Riverbridge Location Carrollton, GA Square Feet 91,188 Purchase Price $7.0 million Anchor Ingles ROE 11.13%
DISPOSITIONS SCHEDULE In 3Q15, Wheeler listed 8 free-standing assets for sale as part of its capital recycling program Since then, 6 assets have sold demonstrating cap rate compression in the secondary and tertiary markets while 2 were de-listed due to loan maturities A seventh property is now under contract expected to close in 1Q17 Wheeler will continue to evaluate its portfolio for specialty and ancillary income opportunities and the sale of non-core assets Outparcel development to close in 1Q16 Conyers Crossing, Conyers, GA Square Footage Purchase Price Purchase NOI Purchase Cap Purchase Sale Sale NOI Sale Cap Status Property Name Location Closed Reasors - Jenks Jenks, OK 81,000 $ 11,400,000 $ 912,000 8.00% $ 12,160,000 $ 912,000 7.50% Reasors - Bixby Bixby, OK 74,889 $ 10,600,000 $ 768,500 7.25% $ 10,978,571 $ 768,500 7.00% Harps Grove, OK 31,500 $ 4,555,400 $ 364,432 8.00% $ 5,206,171 $ 364,432 7.00% Starbucks/Verizon Virginia Beach, VA 5,600 $ 1,394,400 $ 101,094 7.25% $ 2,127,500 $ 129,778 6.10% Ruby Tuesday/Outback Steakhouse Morgantown, WV 11,097 $ 1,265,058 $ 108,921 8.61% $ 2,285,000 $ 132,987 5.82% Total Closed 204,086 $ 29,214,858 $ 2,254,947 7.72% $ 32,757,242 $ 2,307,696 7.04% Under Contract *Chipotle Conyers, GA 2,500 $ 1,000,000 $ 75,000 7.50% $ 1,577,000 $ 75,000 4.76% Total Closed & Under Contract 206,586 $ 30,214,858 $ 2,329,947 7.71% $ 34,334,242 $ 2,382,696 6.94% *Chipotle is a ground lease of 0.5020 acres.
TWO-YEAR TRANSFORMATION COMPLETED Following its $93 Million “re-IPO” in March 2015, Wheeler has made great strides in its two year journey towards covering its $0.21 annual dividend with Adjusted Funds From Operations, or AFFO Through strategic cost-containment initiatives that included reducing third-party services, creating efficiencies internally and the adherence to both, general and administrative overhead has been significantly reduced Following the internalization of its management structure in October 2014, which brought all general & administrative (“G&A”) overhead expense in-house, WHLR lost $0.33/share on an annualized basis in 1Q15 Reported pro forma 4Q16 results of $0.21 annualized, a 98% increase from 4Q15
STRENGTH IN INCOME METRICS Butler Square Adjusted EBITDA / Interest Expense1,2 Adjusted EBITDA / Fixed Charges1,2 AFFO before Pref. Dividends / Pref. Dividends1,2 Annualized AFFO per Share1 For a definition of AFFO, Adjusted EBITDA and other Non-GAAP measures and a reconciliation to GAAP measures, please see the Appendix For a detailed calculation of the ratios shown above, please see the Appendix
2017 AFFO GUIDANCE 2017 Detail NOI – Existing Portfolio $41.4 - $42.0M 92-93% NOI margin on $44M of in-place rents Third Party Fees, Net $2.1M Property management fees, leasing commissions, and development fees, net of taxes Interest Income $1.0M Cash interest income from loan to Sea Turtle Marketplace redevelopment Global General & Administrative Expenses $4.8M Includes G&A for both REIT owned and Non-REIT owned businesses Interest Expense $13.8M Approximately 4.3-4.4% weighted average interest rate on $315M total debt Preferred Dividend Payments $9.2M 562 Series A shares, $1,000 par @ 9%; 1,871,244 Series B shares, $25 par @ 9%; 2,237,000 Series D Shares, $25 par @ 8.75% Capex & TI Reserve $1M $0.20/sf CapEx Reserve across 4.9M sq. feet, TI funded with cash Adjusted Funds From Operations (AFFO)1 $15.7 - $16.2M Total Shares & OP Units 9.3M Adjusted to reflect split-adjusted totals AFFO/Share $1.68 - $1.73 Represents AFFO guidance for the year 2017 and uses split-adjusted shares for calculation 2017 guidance does not assume any material changes in interest rates or any additional acquisitions or capital raises. Guidance is based on current plans and assumptions and subject to risks and uncertainties more fully described in the Company’s reports filed with the Securities and Exchange Commission. The Company cannot assure you that these results will be achieved.
Appendix
PROPERTY OVERVIEW (as of 12/31/2016) Property Location Number of Tenants Gross Leasable Square Feet Total SF Leased Percentage Leased Annualized Base Rent (1) Annualized Base Rent per Leased Sq. Foot Alex City Marketplace Alexander City, AL 18 147,791 146,591 99.2 % $1,081,763 $7.38 Amscot Building (2) Tampa, FL 1 2,500 2,500 100.0 % 115,849 46.34 Beaver Ruin Village Lilburn, GA 27 74,048 63,214 85.4 % 1,046,318 16.55 Beaver Ruin Village II Lilburn, GA 4 34,925 34,925 100.0 % 407,976 11.75 Berkley (3) Norfolk, VA — — — — % — — Brook Run Properties (3) Richmond, VA --- --- --- --- % --- --- Brook Run Shopping Center Richmond, VA 18 147,738 133,927 90.7 % 1,496,685 11.18 Berkley Shopping Center Norfolk, VA 11 47945 45,140 94.2 % 358,414 7.94 Bryan Station Lexington, KY 8 54,397 50,397 92.7 % 507,008 10.06 Butler Square Mauldin, SC 16 82,400 82,400 100.0 % 789,180 9.50 Cardinal Plaza Henderson, NC 6 50,000 455000 91.0 % 430,250 9.46 Carolina Place (3) Onley, VA — — — — % — — Chesapeake Square Onley, VA 12 99,848 81,614 81.7 % 688,193 8.43 Clover Plaza Clover, SC 9 45,575 45,575 100.0 % 348,512 7.65 Courtland Commons (3) Courtland, VA — — — — % — — Columbia Fire Station (5) Columbia, SC — — — — % — — Conyers Crossing Conyers, GA 14 170,475 169,425 99.4 % 966,678 5.71 Crockett Square Morristown, TN 3 107,122 99,122 92.5 % 812,322 8.20 Cypress Shopping Center Boiling Springs, SC 17 80,435 79,035 98.3 % 844,116 10.68 Darien Shopping Center Darien, GA 1 26,001 26,001 100.0 % 208,008 8.00 Devine Street Columbia, SC 2 ` 38,464 38,464 100.0 % 549,668 14.29 Edenton Commons (3) Edenton, NC — — — — % — — Folly Road Charleston, SC 5 47,794 47,794 100.0 % 720,863 15.08 Forrest Gallery Tullahoma, TN 27 214,450 178,436 83.2 % 1,138,754 6.38 Fort Howard Shopping Center Rincon, GA 17 113,652 109,152 96.0 % 971,889 8.90 Freeway Junction Stockbridge, GA 15 156,834 150,874 96.2 % 1,096,623 7.27 Franklinton Square Franklinton, NC 13 65,366 59,300 90.7 % 537,182 9.06 Georgetown Georgetown, SC 2 29,572 29,572 100.0 % 267,215 9.07 Graystone Crossing Tega Cay, SC 11 21,997 21,997 100.0 % 524,558 23.85 Grove Park Grove, OK 15 106,557 93,579 87.8 % 669,417 7.07 Harbor Point (3) Grove, OK — — — — % — — Harrodsburg Marketplace Harrodsburg, KY 9 60,048 60,048 100.0 % 441,940 7.36 Hilton Head (2) Hilton Head, SC — — — — % — — Jenks Plaza Jenks, OK 5 7,800 7,800 100.0 % 151,779 19.46 Ladson Crossing Ladson, SC 14 52,607 50,207 95.4 % 731,085 14.56 LaGrange Marketplace LaGrange, GA 13 76,594 73,594 96.1 % 411,085 5.59 Lake Greenwood Crossing Greenwood, SC 6 47,546 41,546 87.4 % 408,841 9.84 Lake Murray Lexington, SC 5 39,218 39,218 100.0 % 349,510 8.91 Laskin Road (3) Virginia Beach, VA — — — — % — — Litchfield Market Village Pawleys Island, SC 18 86,740 72,763 83.9 % 1,063,340 14.61 Lumber River Village Lumberton, NC 11 66,781 66,781 100.0 % 511,006 7.65
PROPERTY OVERVIEW CONTINUED (as of 12/31/2016) Property Location Number of tenants Gross Leasable Square Feet Total SF Leased Percentage Leased Annualized Base Rent (1) Annualized Base Rent per Leased SF Litchfield Market Village Pawleys Island, SC 18 86,740 72,763 83.9 % $ 1,063,340 $ 14.61 Lumber River Village Lumberton, NC 11 66,781 66,781 100.0 % 511,006 7.65 Monarch Bank Virginia Beach, VA 1 3,620 3,620 100.0 % 265,796 73.42 Moncks Corner Moncks Corner, SC 1 26,800 26,800 100.0 % 324,390 12.10 Nashville Commons Nashville, NC 12 56,100 56,050 99.9 % 575,977 10.28 New Market Crossing Mt. Airy, NC 11 116,976 104,468 89.3 % 931,517 8.92 Parkway Plaza Brunswick, GA 5 52,365 50,765 96.9 % 536,069 10.56 Perimeter Square Tulsa, OK 7 58,277 55,440 95.1 % 733,601 13.23 Pierpont Centre Morgantown, WV 20 122,259 122,259 100.0 % 1,450,993 11.87 Port Crossing Harrisonburg, VA 9 65,365 64,000 97.9 % 799,589 12.49 Ridgeland Ridgeland, SC 1 20,029 20,029 100.0 % 140,203 7.00 Riverbridge Shopping Center Carrollton, GA 11 91,188 89,788 98.5 % 660,038 7.35 Riversedge North (4) Virginia Beach, VA — — — — % — — Rivergate Shopping Center Macon, GA 32 205,810 200,177 97.3 % 2,936,715 14.67 Sangaree Plaza Summerville, SC 9 66,948 66,948 100.0 % 577,360 8.62 Shoppes at Myrtle Park Bluffton, SC 11 56,380 55,376 98.2 % 913,674 16.50 Shoppes at TJ Maxx Richmond, VA 18 93,624 93,624 100.0 % 1,128,459 12.05 South Lake Lexington, SC 10 44,318 44,318 100.0 % 419,349 9.46 South Park Mullins, SC 2 60,734 43,218 71.2 % 491,245 11.37 South Square Lancaster, SC 5 44,350 39,850 89.9 % 321,742 8.07 St. George Plaza St. George, SC 4 59,279 41,328 69.7 % 273,186 6.61 St. Matthews St. Matthews, SC 5 29,015 25,314 87.2 % 307,382 12.14 Sunshine Plaza Lehigh Acres, FL 22 111,189 109,186 98.2 % 999,936 9.16 Surrey Plaza Hawkinsville, GA 5 42,680 42,680 100.0 % 292,995 6.86 Tampa Festival Tampa, FL 20 137,987 135,387 98.1 % 1,224,605 9.05 The Shoppes at Eagle Harbor Carrollton, VA 7 23,303 23,303 100.0 % 456,539 19.59 Tri-County Plaza Royston, GA 7 67,577 61,177 90.5 % 445,450 7.28 Tulls Creek (3) Moyock, NC — — — — % — — Twin City Commons Batesburg-Leesville, SC 5 47,680 47,680 100.0 % 453,763 9.52 Village of Martinsville Martinsville, VA 18 297,950 286,431 96.1 % 2,230,040 7.79 Walnut Hill Plaza Petersburg, VA 10 87,239 61,417 70.4 % 501,891 8.17 Waterway Plaza Little River, SC 10 49,750 49,750 100.0 % 477,718 9.60 Westland Square West Columbia, SC 9 62,735 48,290 77.0 % 443,336 9.18 Winslow Plaza Sicklerville, NJ 14 40,695 35,400 87.0 % 523,908 14.80 Total Portfolio 705 4,906,511 4,611,642 94.0 % $ 44,568,047 $ 9.66 (1) Annualized base rent per leased square foot excludes the impact of tenant concessions. (2) We own the Amscot Building, but we do not own the land underneath the buildings and instead lease the land pursuant to ground leases with parties that are affiliates of Jon Wheeler. These ground leases require us to make annual rental payments and contain escalation and renewal options. (3) This information is not available because the property is undeveloped. (4) This property is our corporate headquarters that we 100% occupy. (5) This information is not available because the property is a redevelopment property
NON-GAAP MEASURES Funds from Operations (FFO): an alternative measure of a REIT's operating performance, specifically as it relates to results of operations and liquidity. FFO is a measurement that is not in accordance with accounting principles generally accepted in the United States (GAAP). Wheeler computes FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002). As defined by NAREIT, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate related depreciation and amortization (excluding amortization of loan origination costs) and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including Wheeler, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate the business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. 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. Core FFO: Management defines Core FFO as FFO adjusted for acquisition costs, capital-related costs, stock based-compensation, loan cost amortization, and one time-charges. Adjusted FFO (AFFO): Management defines AFFO as Core FFO adjusted for straight-line rental income, above/below market lease income, accrued (non-cash) interest income, and a $0.20/sf reserve for capital expenditures and tenant improvements. Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): another widely-recognized non-GAAP financial measure that the Company believes, when considered with financial statements prepared in accordance with GAAP, is useful to investors and lenders in understanding financial performance and providing a relevant basis for comparison among other companies, including REITs. While EBITDA should not be considered as a substitute for net income attributable to the Company’s common shareholders, net operating income, cash flow from operating activities, or other income or cash flow data prepared in accordance with GAAP, the Company believes that EBITDA may provide additional information with respect to the Company’s performance or ability to meet its future debt service requirements, capital expenditures and working capital requirements. The Company computes EBITDA by excluding interest expense, net loss attributable to non-controlling interests, and depreciation and amortization, from income from continuing operations. The Company also presents Adjusted EBITDA which excludes items affecting the comparability of the periods presented, including, but not limited to, costs associated with acquisitions and capital-related activities. Net Operating Income (NOI): 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). 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, 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. The Company uses NOI to evaluate its operating performance since NOI allows the Company to evaluate the impact that certain factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. NOI should not be viewed as a measure of the Company's overall financial performance since it does not reflect general and administrative expenses, depreciation and amortization, involuntary conversion, interest expense, interest income, provision for income taxes, gain or loss on sale or disposition of assets, and the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties. Other REITs may use different methodologies for calculating NOI, and, accordingly, the Company's NOI may not be comparable to that of other REITs.
Strong lending relationships with nationally recognized banks Expanded revolving credit facility with KeyBank National Association to approximately $75 million in 4Q16 Provision allowing for expansion to $100 million through syndication with other lenders Senior non-convertible debt paid in full as of January 2016 Weighted average interest rate of 4.34% WHLR’s Debt Profile from Continuing Operations Debt / Maturity profile FROM CONTINUING OPERATIONS Total Outstanding Debt: $315 million 1) Maturity of $75 million Key Bank Facility
CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended December 31, Years Ended December 31, 2016 2015 2016 2015 TOTAL REVENUES $ 12,027,833 $ 9,233,600 $ 44,160,408 $ 27,615,458 OPERATING EXPENSES: Property operations 3,399,475 2,832,261 11,898,190 8,351,456 Non-REIT management and leasing services 215,488 175,647 1,567,128 1,174,833 Depreciation and amortization 5,330,609 5,160,298 20,636,940 16,882,462 Provision for credit losses 228,614 28,713 424,925 243,029 Corporate general & administrative 3,633,901 2,800,761 9,924,361 13,415,961 Total Operating Expenses 12,808,087 10,997,680 44,451,544 40,067,741 Operating Loss (780,254 ) (1,764,080 ) (291,136 ) (12,452,283 ) Interest income 390,559 5,009 691,937 118,747 Interest expense (3,554,669 ) (2,593,300 ) (13,356,111 ) (9,043,761 ) Net Loss from Continuing Operations Before Income Taxes (3,944,364 ) (4,352,371 ) (12,955,310 ) (21,377,297 ) Income tax expense (107,464 ) — (107,464 ) — Net Loss from Continuing Operations (4,051,828 ) (4,352,371 ) (13,062,774 ) (21,377,297 ) Discontinued Operations Income from discontinued operations 20,996 151,698 136,459 499,781 Gain on disposal of properties (535 ) 2,104,114 688,289 2,104,114 Net Income from Discontinued Operations 20,461 2,255,812 824,748 2,603,895 Net Loss (4,031,367 ) (2,096,559 ) (12,238,026 ) (18,773,402 ) Less: Net income (loss) attributable to noncontrolling interests (267,777 ) 78,571 (1,035,456 ) (1,252,723 ) Net Loss Attributable to Wheeler REIT (3,763,590 ) (2,175,130 ) (11,202,570 ) (17,520,679 ) Preferred stock dividends (2,449,759 ) (511,300 ) (4,713,169 ) (13,627,532 ) Deemed dividend related to beneficial conversion feature of preferred stock — — — (72,644,506 ) Net Loss Attributable to Wheeler REIT Common Shareholders $ (6,213,349 ) $ (2,686,430 ) $ (15,915,739 ) $ (103,792,717 ) Loss per share from continuing operations (basic and diluted) $ (0.09 ) $ (0.07 ) $ (0.25 ) $ (2.73 ) Income per share from discontinued operations — 0.03 0.01 0.06 $ (0.09 ) $ (0.04 ) $ (0.24 ) $ (2.67 ) Weighted-average number of shares: Basic and Diluted 67,981,896 66,189,261 67,362,991 38,940,463
Balance sheet summary December 31, 2016 2015 ASSETS: Investment properties, net $ 388,880,290 $ 238,764,631 Cash and cash equivalents 4,863,372 10,477,576 Restricted cash 9,652,178 7,592,984 Rents and other tenant receivables, net 3,983,949 2,970,380 Related party receivable 1,456,131 482,320 Notes receivable 12,000,000 — Goodwill 5,485,823 5,485,823 Assets held for sale 365,880 1,692,473 Above market lease intangible, net 12,962,169 6,517,529 Deferred costs and other assets, net 49,396,543 35,259,526 Total Assets $ 489,046,335 $ 309,243,242 LIABILITIES: Loans payable, net $ 305,972,679 $ 184,629,082 Liabilities associated with assets held for sale 1,350,000 1,992,318 Below market lease intangible, net 12,680,405 7,721,335 Accounts payable, accrued expenses and other liabilities 11,320,614 7,533,769 Total Liabilities 331,323,698 201,876,504 Commitments and contingencies — — Series D Cumulative Convertible Preferred Stock (no par value, 4,000,000 and 0 shares authorized, 2,237,000 and 0 shares issued and outstanding, respectively; $55.93 million aggregate liquidation preference) 52,530,051 — EQUITY: Series A Preferred Stock (no par value, 4,500 shares authorized, 562 shares issued and outstanding) 452,971 452,971 Series B Convertible Preferred Stock (no par value, 5,000,000 and 3,000,000 shares authorized, 1,871,244 and 729,119 shares issued and outstanding, respectively; $46.78 million and $18.23 million aggregate liquidation preference, respectively) 40,732,621 17,085,147 Common Stock ($0.01 par value, 150,000,000 and 150,000,000 shares authorized, 68,030,549 and 66,259,673 shares issued and outstanding, respectively) 680,305 662,596 Additional paid-in capital 223,344,937 220,370,984 Accumulated deficit (170,377,414 ) (140,306,846 ) Total Shareholders’ Equity 94,833,420 98,264,852 Noncontrolling interests 10,359,166 9,101,886 Total Equity 105,192,586 107,366,738 Total Liabilities and Equity $ 489,046,335 $ 309,243,242
FFO and AFFO FFO and AFFO Three Months Ended December 31, Years Ended December 31, 2016 2015 (4) 2016 2015 (4) Net loss $ (4,031,367 ) $ (2,096,559 ) $ (12,238,026 ) $ (18,773,402 ) Depreciation of real estate assets from continuing operations 5,330,609 5,160,297 20,636,940 16,882,462 Depreciation of real estate assets from discontinued operations — — — 579,891 Depreciation of real estate assets 5,330,609 5,160,297 20,636,940 17,462,353 Loss (gain) on sale of discontinued operations 535 (2,104,114 ) (688,289 ) (2,104,114 ) Total FFO 1,299,777 959,624 7,710,625 (3,415,163 ) Preferred stock dividends (2,449,759 ) (511,300 ) (4,713,169 ) (13,627,532 ) Preferred stock accretion adjustments 161,178 88,525 416,598 8,925,221 FFO available to common shareholders and common unitholders (988,804 ) 536,849 3,414,054 (8,117,474 ) Acquisition costs 1,114,440 703,659 2,028,742 3,871,037 Capital related costs 203,015 207,584 513,562 2,655,474 Other non-recurring and non-cash expenses (2) 157,361 203,944 663,618 770,757 Share-based compensation 872,660 191,000 1,454,410 547,000 Straight-line rent (162,822 ) (68,843 ) (385,965 ) (270,873 ) Loan cost amortization 661,235 252,190 2,125,582 1,300,901 Above (below) market lease amortization (39,838 ) 53,678 29,371 616,665 Perimeter legal accrual — 5,478 — 133,282 Accrued interest income (120,987 ) — (415,025 ) — Recurring capital expenditures and tenant improvement reserves (245,326 ) (221,400 ) (759,900 ) (658,500 ) AFFO $ 1,450,934 $ 1,864,139 $ 8,668,449 $ 848,269 Weighted Average Common Shares 67,981,896 66,189,261 67,362,991 38,940,463 Weighted Average Common Units 5,946,188 4,058,398 5,513,296 3,863,339 Total Common Shares and Units 73,928,084 70,247,659 72,876,287 42,803,802 FFO per Common Share and Common Units $ (0.01 ) $ 0.01 $ 0.05 $ (0.19 ) AFFO per Common Share and Common Units $ 0.02 $ 0.03 $ 0.12 $ 0.02 Pro forma AFFO per Common Share and Common Units (3) $ 0.05 $ 0.21
CAPITAL STRUCTURE September 30, 2016 December 31, 2016 Debt Outstanding ($000) Outstanding ($000) Security Senior Convertible Debt (9% Coupon, Dec-18 Maturity)2 $1,400 $1,400 Key Bank Line of Credit (3.01% @ 9/30/16, 3.24% @ 12/31/16, May-18 Maturity) $46,127 $74,077 Vantage South Line of Credit (4.25%, Sept-17 Maturity) $3,000 $3,000 Revere High Yield Fund (8.00%, April-17 Maturity, 1-yr ext. w/ $450k pay down) $7,450 $7,450 Property Debt (4.65%/4.54% Weighted Average Coupon, Various Maturities) $181,924 $229,121 Total Debt $239,901 $315,048 September 30, 2016 December 31,2016 Shares Outstanding Amount ($000) Shares Outstanding Amount ($000) Security Series A 9% Preferred ($1,000 / share) 562 $562 562 $562 Series B 9% Preferred ($25 / share, $5.00 conversion price)3 1,871,244 $40,381 1,871,244 $41,448 Series D 8.75% Preferred ($1,000/ share, $2.12 conversion price) 1,600,000 $40,800 2,237,000 $52,570 Common Stock / OP Units 73,692,395 $128,962 74,126,183 $126,015 Market Value of Equity $210,705 $220,595 Total Capitalization $450,606 $535,643 648,425 warrants were issued in connection with the Senior Non-Convertible Debt, each with a $4.75 exercise price and expiration in Jan-19 20,069 shares remained convertible at 12/31/16 1,987,500 warrants were issued in connection with the Series B Preferred Stock, each with a $5.50 exercise price and expiration in Apr-19
NASDAQ: WHLR Think Retail. Think Wheeler.®