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

Quarterly report pursuant to Section 13 or 15(d)

Real Estate

Real Estate

3 Months Ended

Mar. 31, 2021

Investment properties consist of the following (in thousands):


	March 31, 2021		December 31, 2020
	(unaudited)
Land and land improvements	$	96,758	$	97,117
Buildings and improvements	353,264		354,738
Investment properties at cost	450,022		451,855
Less accumulated depreciation	(61,253)		(59,191)
Investment properties, net	$	388,769	$	392,664

The Company’s depreciation expense on investment properties was $2.69 million and $2.94 million for the three months ended March 31, 2021 and 2020, 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 March 31, 2021, assets held for sale included Columbia Fire Station, Surrey Plaza and two outparcels at Rivergate Shopping Center, as the Company has committed to a plan to sell each property. At December 31, 2020, assets held for sale included Columbia Fire Station, Berkley Shopping Center, a .75 acre land parcel at Berkley (the "Berkley Land Parcel") and two outparcels at Rivergate Shopping Center.

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. No impairment expenses were recorded for the three months ended March 31, 2021. The Company recorded $600 thousand impairment expense for the three months ended March 31, 2020 resulting from reducing the carrying value of Columbia Fire Station.

As of March 31, 2021 and December 31, 2020, assets held for sale and associated liabilities consisted of the following (in thousands):


	March 31, 2021		December 31, 2020
	(unaudited)
Investment properties, net	$	10,547	$	12,593
Rents and other tenant receivables, net	32		132
Above market leases, net	153		153
Deferred costs and other assets, net	127		194
Total assets held for sale	$	10,859	$	13,072


	March 31, 2021		December 31, 2020
	(unaudited)
Loans payable	$	10,745	$	12,838
Below market leases, net	—		25
Accounts payable, accrued expenses and other liabilities	194		261
Total liabilities associated with assets held for sale	$	10,939	$	13,124

The following properties were sold during the three months ended March 31, 2021 and 2020:


Disposal Date	Property	Contract Price		Gain (loss)		Net Proceeds
		(in thousands, unaudited)
March 25, 2021	Berkley Shopping Center and Berkley Land Parcel (0.75 acres)	$	4,150	$	176	$	3,937
January 21, 2020	St. Matthews	1,775		(26)		1,665