Wheeler Real Estate Investment Trust, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Real Estate

Real Estate

12 Months Ended

Dec. 31, 2020

Investment properties consist of the following (in thousands):


	December 31,
	2020		2019
Land and land improvements	$	97,117	$	100,599
Buildings and improvements	354,738		366,082
Investment properties at cost	451,855		466,681
Less accumulated depreciation	(59,191)		(50,466)
Investment properties, net	$	392,664	$	416,215

The Company’s depreciation expense on investment properties was $11.32 million and $12.02 million for the years ended December 31, 2020 and 2019, respectively.

A significant portion of the Company’s land, buildings and improvements serve as collateral for its mortgage loans. Accordingly, restrictions exist as to the encumbered property's transferability, use and other common rights typically associated with property ownership.

Assets Held for Sale and Dispositions

At December 31, 2020, assets held for sale included Columbia Fire Station, Berkley Shopping Center, a .75 acre land parcel at Berkley and two outparcels at Rivergate Shopping Center, as the Company has committed to a plan to sell each property. At December 31, 2019, assets held for sale included St. Matthews.

Impairment expenses on assets held for sale are a result of reducing the carrying value for the amount that exceeded the property's fair value less estimated selling costs. The valuation assumptions are based on the three-level valuation hierarchy for fair value measurement and represent Level 2 inputs. The impairment expenses during the years ended December 31, 2020 and 2019 are as follows (in thousands):


	Years Ended December 31,
	2020		2019

Columbia Fire Station	$	600	$	—
St. Matthews	—		451
Perimeter Square	—		1,147
Total	$	600	$	1,598

As of December 31, 2020 and 2019, assets held for sale and associated liabilities consisted of the following (in thousands):


	December 31,
	2020		2019
Investment properties, net	$	12,593	$	1,651
Rents and other tenant receivables, net	132		77
Above market leases, net	153		—
Deferred costs and other assets, net	194		9
Total assets held for sale	$	13,072	$	1,737


	December 31,
	2020		2019
Loans payable	$	12,838	$	1,974
Below market leases, net	25		—
Accounts payable, accrued expenses and other liabilities	261		52
Total liabilities associated with assets held for sale	$	13,124	$	2,026

The following properties were sold during the years ending December 31, 2020 and 2019:


Disposal	Property	Contract Price		Gain (Loss)		Net Proceeds
				(in thousands)
December 31, 2020	Riversedge North	$	3,000	$	49	$	2,843
January 21, 2020	St. Matthews	1,775		(26)		1,665
July 12, 2019	Perimeter Square	7,200		(95)		—
March 18, 2019	Graystone Crossing	6,000		1,433		1,744
February 7, 2019	Harbor Pointe Land Parcel (1.28 acres)	550		—		19
January 11, 2019	Jenks Plaza	2,200		387		1,840

In May 2019, an approximate 10,000 square foot outparcel at the JANAF property was demolished resulting in a $331 thousand write-off to make way for a new approximate 20,000 square foot building constructed by a new grocer tenant, Aldi.

JANAF Executive Building

In April 2019, the Company absorbed an approximate 25,000 square foot outparcel at JANAF as a result of an unlawful detainer with a delinquent tenant, Mariner Investments, LTD.