What changed in this filing

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Item 1. Business

2022-02-28 compared with 2021-03-18 · 28 added, 39 removed, 60 unchanged (53% of the section changed)

Wheeler Real Estate Investment Trust, Inc.

(the “Trust” or “REIT” or “Company”) is a Maryland corporation formed on June 23, 2011.

(the “Trust”, the “REIT”, the “Company”, "we", "our" or "us") is a Maryland corporation formed on June 23, 2011.

The Trust serves as the general partner of Wheeler REIT, L.P.

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Substantially, all of our assets are held by, and all of our operations are conducted through, our Operating Partnership.

At December 31, 2021, the Company owned 98.59% of the Operating Partnership.

The Company is a fully-integrated, self-managed commercial real estate investment company that owns, leases and operates income-producing retail properties with a primary focus on grocery-anchored centers.

For additional information on recent business developments, see Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K.

Our corporate office is located at 2529 Virginia Beach Boulevard, Virginia Beach, Virginia 23452.

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and may be contacted at 250 Royall Street, Canton, MA 02021 or their website, www.computershare.com.

Impact of COVID-19

The United States of America has been subject to significant economic disruption caused by the onset of the novel coronavirus ("COVID-19").

Nearly every industry has been impacted directly or indirectly, and the U.S.

retail market has come under severe pressure due to numerous factors, including preventative measures taken by local, state and federal authorities to alleviate the public health crisis such as mandatory business closures, quarantines, restrictions on travel and “shelter-in-place” or “stay-at-home” orders at the state and local levels.

While many of these restrictions were lifted or relaxed throughout the year there is uncertainty surrounding future restrictions.

The Company remained operational for the entire year.

Additional information regarding the impact of COVID-19 on our business can be found under the section titled "Impact of COVID-19" included within Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Annual Report on Form 10-K.

Our portfolio contains retail properties in secondary and tertiary markets, with a particular emphasis on grocery-anchored retail centers.

Our properties are in communities that have stable demographics and have historically exhibited favorable trends, such as strong population and income growth.

We generally lease our properties to national and regional retailers that offer consumer goods and generate regular consumer traffic.

We believe our tenants carry goods that are less impacted by fluctuations in the broader U.S.

We generally lease our properties to national and regional retailers that offer consumer goods and services and generate regular consumer traffic.

We believe our tenants carry goods and offer services that are less impacted by fluctuations in the broader U.S.

economy and consumers’ disposable income, generating more predictable property level cash flows.

The Company’s portfolio of properties is dependent upon regional and local economic conditions.

As of December 31, 2020, we own a portfolio consisting of sixty-six properties, including sixty retail shopping centers, totaling 5,561,766 total leasable square feet which is 88.9% leased (our "operating portfolio"), and six undeveloped land parcels totaling approximately 63 acres.

As of December 31, 2021, we own a portfolio consisting of sixty-two properties, including fifty-eight retail shopping centers, totaling 5,478,855 leasable square feet which is 94.2% leased (our "operating portfolio"), and four undeveloped land parcels totaling approximately 61 acres.

The properties are geographically located in the Southeast, Mid-Atlantic and Northeast, which markets represented approximately 62%, 34% and 4%, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2021.

No tenant represents greater than 6% of the Company’s annualized base rent or 7% of gross leasable square footage.

No tenant represents greater than approximately 10% of the Company’s annualized base rent or 10% of gross leasable square footage.

The top 10 tenants account for 29.06% or $14.01 million of annualized base rent and 33.96% or 1.86 million of gross leasable square footage at December 31, 2021.

Management Team and People

We have 35 full-time employees.

Our management team has experience and capabilities across the real estate sector with experience in all aspects of the commercial real estate industry, specifically in our target/existing markets.

Daniel Khoshaba, age 61, has served as Chief Executive Officer (the "CEO") since April 2020 and has served as a director since February 2020.

Khoshaba has over thirty years of experience as a real estate investor, developer and founder of companies in multiple industries including manufacturing, finance and real estate.

Prior to joining us, Mr.

Khoshaba co-founded City Sunstone Properties ("CSP") in 2012.

Between 2012 and 2016, CSP acquired retail strip malls, shopping centers, office complexes, and raw land for development.

The company’s portfolio primarily consisted of properties in sub-markets with strong demographics and high traffic counts.

Much of the portfolio was sold at multiples of CSP’s initial investment between 2016 and 2018.

Khoshaba co-founded KSA Capital Partners, a long/short equity hedge fund which became one of the top performing funds in the industry as noted by Barron’s magazine.

In 2013, Hedge Funds Review voted KSA the Best Long/Short equity hedge fund in the Americas.

Khoshaba earned a bachelor's degree from DePaul University and a MBA from the University of Chicago.

Andrew Franklin, age 40, is our Chief Operating Officer and has over twenty-two years of commercial real estate experience and joined the Company in 2014.

Franklin is responsible for overseeing the property management, lease administration and leasing divisions of our portfolio of commercial assets.

Prior to joining us, Mr.

Management Team and Human Capital

Andrew Franklin, age 41, served as Chief Executive Officer (the "CEO") since October 2021 and has over twenty-three years of commercial real estate experience.

Franklin joined the Company in 2014 and held the position of interim CEO since July 2021 and prior to this role was the Company's Chief Operating Officer.

Prior to joining the Company, Mr.

Franklin was a partner with Broad Reach Retail Partners, LLC where he ran the day-to-day operations, managed the leasing team as well as oversaw the asset, property and construction management of the portfolio with assets totaling $50 million.

Franklin is a graduate of the University of Maryland, with a Bachelor of Science degree in Finance.

Crystal Plum, age 39, has served as Chief Financial Officer since February 2020 and first joined the Company in 2016.

Crystal Plum, age 40, served as Chief Financial Officer (the "CFO") since February 2020 and first joined the Company in 2016.

Prior to her appointment as CFO, Ms.

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Prior to that time, she served as Manager at Dixon Hughes Goodman LLP from September 2014 to August 2016 and as Supervisor at Dixon Hughes Goodman LLP from 2008 to September 2014.

Plum has experience reviewing and performing audits, reviews, compilations and tax engagements for a diverse group of clients, as well as banking experience.

Plum has experience reviewing and performing audits, reviews, compilations and tax engagements for a diverse group of clients, as

well as banking experience.

Plum is a Certified Public Accountant and has a Bachelor of Science degree in Accounting and Finance from Old Dominion University.

As of December 31, 2021, we have 36 full-time employees.

Our management team has experience and capabilities across the real estate sector with experience in all aspects of the commercial real estate industry, specifically in our target/existing markets.

Employees are offered flexibility to meet personal and family needs, which was further expanded when the COVID-19 pandemic began.

In addition to exceptional medical insurance support, the Company offers wellness programs including free short and long term disability insurance, free employee assistance programs that includes emotional health support, free gym memberships, volunteer time off and tuition assistance.

Business Objectives and Investment Strategy

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The majority of our tenants provide non-cyclical consumer goods and services that are less impacted by fluctuations in the economy.

We believe these centers that provide essential goods and services such as groceries results in a stable, lower-risk portfolio of retail investment properties.

We believe these centers that provide essential goods and services such as groceries and electric vehicle charging stations result in a stable, lower-risk portfolio of retail investment properties.

• Focus on secondary and tertiary markets with strong demographics and demand .

Our properties are in markets that have strong demographics such as population density, population growth, tenant sales trends and growth in household income.

Our properties are in markets that have strong demographics such as population density, population growth, stable tenant sales trends and growth in household income.

We seek to identify new tenants and renew leases with existing tenants in these locations that support the need for necessity-based retail and limited new supply.

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• Selectively utilize our capital to improve retail properties.

We intend to make capital investments where the return on

such capital is accretive to our stockholders.

We intend to make capital investments where the return on such capital is accretive to our stockholders.

We allocate capital to value-added improvements of retail properties to increase rents, extend long-term leases with anchor tenants and increase occupancy.

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In addition, we intend to monetize assets to redeploy the capital to further deleverage and strengthen the balance sheet.

In 2020, we sold 2 properties for a total of $4.51 million net proceeds which were used to reduce outstanding indebtedness.

Additional properties have been slated for disposition based upon management’s periodic review of our portfolio, and the determination by our Board of Directors.

In 2021, we sold two land parcels, two properties and an out parcel for a total of $11.51 million net proceeds which were used to reduce outstanding indebtedness.

Additional properties may be slated for disposition based upon management’s periodic review of our portfolio, and the determination by our Board of Directors.

Governmental Regulations Affecting Our Properties

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Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws has had a material adverse effect on our financial condition or results of operations, and management does not believe they will in the future.

In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental contamination at properties we currently own or have owned in the past.

In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental

contamination at properties we currently own or have owned in the past.

However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future.

We have no current plans for substantial capital expenditures with respect to compliance with environmental, health, safety and similar laws and we carry environmental insurance which covers a number of environmental risks for most of our properties.

We have no current plans for substantial capital expenditures with respect to compliance with environmental, health, safety and similar laws and we carry environmental insurance that covers a number of environmental risks for most of our properties.

Numerous commercial developers and real estate companies compete with us with respect to the leasing of properties.

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Additionally, we make available free of charge through our website http://www.whlr.us our most recent Annual Report on Form 10-K, including our audited consolidated financial statements, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials to the Securities and Exchange Commission (the “SEC”).

In addition, we have posted the Charters of our Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, as well as our Code of Business Conduct and Ethics for Employees, Officers, Agents and Representatives, Code of Business Conduct and Ethics for Members of the Board of Directors, Corporate Governance Principles, including guidelines on director independence, and Insider Trading Policy, all under separate headings.

In addition, we have posted the Charters of our Audit Committee, Compensation Committee, and Governance and Nominating Committee, as well as our Code of Business Conduct and Ethics for Employees, Officers, Agents and Representatives, Code of Business Conduct and Ethics for Members of the Board of Directors, Corporate Governance Principles, including guidelines on director independence, and Insider Trading Policy, all under separate headings.

The content of our website is not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our website is intended to be inactive textual references only.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business