Financial Performance Overview

In 2024, Wheeler Real Estate Investment Trust, Inc. (the “Company”) reported solid financial results, with revenues increasing 2.2% to $104.6 million compared to the prior year. This growth was driven by higher tenant reimbursements, base rent, and other income, partially offset by a decrease in market lease amortization.

Property operating expenses rose slightly by 0.7% to $35.1 million, primarily due to higher insurance costs and management fees, partially offset by lower ground rent expense. Depreciation and amortization decreased 11.2% as a result of the timing of the Cedar Acquisition and property sales in 2024. Corporate general and administrative expenses declined 6.5%, mainly from lower salaries, legal fees, and taxes.

The Company reported net income of $0.8 million in 2024, compared to $6.1 million in 2023. This decrease was primarily attributable to a $11.8 million non-cash loss from changes in the fair value of derivative liabilities, as well as a $5.1 million decrease in gains on preferred stock retirements. These were partially offset by a $3.3 million increase in net gains on property dispositions.

Leasing Activity and Occupancy

The Company’s leasing activity remained strong in 2024, with 170 lease renewals representing 969,150 square feet. Renewed leases saw a weighted average rate increase of 9.48% over prior rates. New leases for 230,953 square feet were signed at a weighted average rate of $14.45 per square foot, a 21.35% increase over prior rates.

The Company’s operating portfolio was 93.1% leased as of December 31, 2024, demonstrating the continued demand for its grocery-anchored and community shopping centers. The top ten tenants accounted for 24.13% of total annualized base rent, led by Food Lion, Kroger, and Dollar Tree.

Dispositions and Impairment

During 2024, the Company sold three properties and two land parcels for total net proceeds of $37.8 million, realizing a net gain of $5.6 million. These dispositions were part of the Company’s strategy to selectively sell non-core assets and recycle capital.

The Company also recorded a $1.2 million impairment charge on its Oregon Avenue property in Philadelphia, Pennsylvania due to declining operating performance.

Financing and Liquidity

The Company’s consolidated cash, cash equivalents, and restricted cash totaled $60.7 million as of December 31, 2024, up from $39.8 million a year earlier. Cash flow from operating activities increased 24.1% to $26.0 million, primarily due to lower capital structure costs, higher Same-Property NOI, and reduced corporate expenses.

Investing activities generated $15.5 million in net cash, a significant improvement from the $31.5 million used in 2023, driven by property sales proceeds and lower investment in the Stilwell Activist Investments, L.P.

Financing activities used $20.6 million in cash, compared to $5.5 million in the prior year. This increase was mainly due to $11.5 million in repurchases of noncontrolling interests in the Company’s Cedar subsidiary, $10.4 million in distributions paid on those noncontrolling interests, and $1.3 million in debt repurchases, partially offset by $9.1 million in net borrowings.

The Company’s total debt, excluding unamortized costs, was $499.5 million at the end of 2024, with a weighted average interest rate of 5.53% and a weighted average term of 7.5 years. The Company has $6.0 million of debt maturing in 2025 and believes it will be able to refinance these loans on reasonable terms.

Preferred Stock and Convertible Notes

The Company’s Series D Preferred Stock had an aggregate liquidation preference of $55.9 million and $32.8 million in accrued and unpaid dividends as of December 31, 2024. Holders of the Series D Preferred Stock continued to exercise their redemption rights, with the Company settling these redemptions through the issuance of common stock.

The Convertible Notes could have a dilutive effect on the common stock, as the conversion price has been adjusted downward due to the Series D Preferred Stock redemptions. The Company does not intend to use cash to fund the Series D Preferred Stock redemptions, which it believes will continue to result in substantial dilution of the common stock.

Outlook and Strategies

The Company plans to continue executing on several strategies to enhance its financial stability and optimize its capital allocation, including:

• Opportunistically repurchasing its Cedar Series B and Series C Preferred Stock at discounted prices
• Delivering vacant space, backfilling anchor spaces, and replacing defaulting tenants to increase lease revenue
• Selectively disposing of non-core assets and recycling capital
• Refinancing properties to maintain a conservative capital structure

The Company believes these initiatives, combined with its strong operating performance, will provide the necessary liquidity to meet its near-term obligations and support its long-term growth. However, the Company’s success in executing these strategies will be critical to its future liquidity and ability to grow without additional capital.

Overall, Wheeler Real Estate Investment Trust demonstrated resilience in 2024, navigating challenges in the retail real estate market through active portfolio management, disciplined capital allocation, and a focus on enhancing its financial position. The Company remains committed to its strategy of owning and operating high-quality, grocery-anchored shopping centers in its target markets.