UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED For the quarterly period ended June 30, 20222023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER: 001-31817

CEDAR REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

Maryland

42-1241468

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

2529 Virginia Beach Blvd.

Virginia Beach, Virginia

23452

(Address of principal executive offices)

(Zip Code)

928 Carmans Road, Massapequa, New York 11758

(Address of principal executive offices)     (Zip Code)

(516) 767-6492

(Registrant's telephone number, including area code)code: (757) 627-9088

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Trading Symbol(s)

Common Stock, $0.06 par value

New York Stock Exchange

CDR

7-1/4%7.25% Series B Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value

CDRpB

New York Stock Exchange

CDRpB

6-1/2%6.50% Series C Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value

CDRpC

New York Stock Exchange

CDRpC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

AtAs of August 2, 2022,4, 2023, there were 13,555,30713,718,169 shares of Common Stock, $0.06 par value per share, outstanding.



CEDAR REALTY TRUST, INC.

INDEX

Forward-Looking Statements

3

Part I. Financial Information

Item 1.

Financial Statements (unaudited)

Condensed Consolidated Balance Sheets – June 30, 20222023 (unaudited) and December 31, 20212022

4

Condensed Consolidated Statements of Operations – Three and six months ended June 30, 2023 and 2022 and 2021(unaudited)

5

Condensed Consolidated Statements of Comprehensive (Loss) IncomeLoss – Three and six months ended June 30, 2023 and 2022 and 2021(unaudited)

6

Condensed Consolidated Statements of Equity – Six months ended June 30, 2023 and 2022 and 2021(unaudited)

7-87-9

Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2023 and 2022 and 2021(unaudited)

910

Notes to Condensed Consolidated Financial Statements – June 30, 2022(unaudited)

10-2111-18

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

22-3019-25

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

30-3125

Item 4.

Controls and Procedures

3125 - 26

Part II. Other Information

Item 1.

Legal Proceedings

32-3326

Item 1A.

Risk Factors

3326

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

3326

Item 3.

Defaults Upon Senior Securities

3326

Item 4.

Mine Safety Disclosures

3326

Item 5.

Other Information

3326

Item 6.

Exhibits

3326 - 27

Signatures

3428

2



Forward-Looking Statements

Certain statements made in this Current Report on Form 10-Q or incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Cedar Realty Trust, Inc. (the “Company”) to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may”, “will”, “should”, “estimates”, “projects”, “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import, or the negative thereof. Factors that could cause actual results, performance or achievements to differ materially from current expectations include, but are not limited to: (i) the possibility that any or all of the various conditions to the consummation of the Merger (as defined herein) may not be satisfied or waived; (ii) the ability of the parties to the Merger to obtain required financing in connection with the proposed Merger; (iii) the possibility that competing offers or acquisition proposals for the Company and/or its assets will be made; (iv) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement (as defined herein), including in circumstances which would require the Company to pay a termination fee or other expenses; (v)successfully integrate its business with Wheeler Real Estate Investment Trust, Inc.; (ii) the risk that shareholder litigation in connection with the Transactions (as defined herein) may result in significant costs of defense, indemnification and liability; (vi)(iii) the ability and willingness of the Company'sCompany’s tenants and other third parties to satisfy their obligations under their respective contractual arrangements with the Company; (vii)(iv) the loss or bankruptcy of the Company's tenants, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic; (viii)Company’s tenants; (v) the ability and willingness of the Company'sCompany’s tenants to renew their leases with the Company upon expiration,expiration; (vi) the Company'sCompany’s ability to re-lease its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations the Company may incur in connection with the replacement of an existing tenant; (vii) financing risks, such as the Company’s inability to obtain new financing or refinancing on favorable terms as the result of market volatility or instability and increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (viii) the impact of the Company's leverage on operating performance; (ix) risks related to the market for retail space generally, including reductions in consumer spending, variability in retailer demand for leased space, adverse impact of e-commerce, ongoing consolidation in the retail sector and changes in economic conditions and consumer confidence; (x) risks endemic to real estate and the real estate industry generally; (xi) competitive risks; (xii) risks related to the geographic concentration of the Company’s properties in the Northeast; (xiii) damage to the Company'sCompany’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xii) uninsured(xiv) the risk that the Company’s insurance coverage may not be sufficient to fully cover its losses; (xiii)(xv) the Company'sCompany’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; and (xiv)(xvi) information technology security breaches. For further discussion of factors that could materially affect the outcome of forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 20212022 and other documents that the Company files with the Securities and Exchange Commission from time to time.

Except for ongoing obligations to disclose material information as required by the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. All of the above factors are difficult to predict, contain uncertainties that may materially affect the Company’s actual results and may be beyond the Company’s control. New factors emerge from time to time, and it is not possible for the Company’s management to predict all such factors or to assess the effects of each factor on the Company’s business. Accordingly, there can be no assurance that the Company’s current expectations will be realized.

3



CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

Land

 

$

69,085,000

 

 

$

69,111,000

 

Buildings and improvements

 

 

295,106,000

 

 

 

294,999,000

 

 

 

 

364,191,000

 

 

 

364,110,000

 

Less accumulated depreciation

 

 

(161,961,000

)

 

 

(157,468,000

)

Real estate, net

 

 

202,230,000

 

 

 

206,642,000

 

 

 

 

 

 

 

 

Real estate held for sale

 

 

113,000

 

 

 

 

Cash and cash equivalents

 

 

1,291,000

 

 

 

3,899,000

 

Restricted cash

 

 

10,533,000

 

 

 

9,564,000

 

Receivables, net

 

 

5,067,000

 

 

 

6,135,000

 

Deferred costs and other assets, net

 

 

7,964,000

 

 

 

7,924,000

 

TOTAL ASSETS

 

$

227,198,000

 

 

$

234,164,000

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Loans payable, net

 

$

131,555,000

 

 

$

131,462,000

 

Accounts payable, accrued expenses, and other liabilities

 

 

8,450,000

 

 

 

10,094,000

 

Due to Wheeler Real Estate Investment Trust, Inc.

 

 

8,556,000

 

 

 

7,328,000

 

Below market lease intangibles, net

 

 

2,864,000

 

 

 

3,078,000

 

Total liabilities

 

 

151,425,000

 

 

 

151,962,000

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Preferred stock

 

 

159,541,000

 

 

 

159,541,000

 

Common stock ($0.06 par value, 150,000,000 shares authorized, 13,718,000 shares, issued and outstanding)

 

 

823,000

 

 

 

823,000

 

Additional paid-in capital

 

 

868,323,000

 

 

 

868,323,000

 

Cumulative distributions in excess of net income

 

 

(952,914,000

)

 

 

(946,485,000

)

Total equity

 

 

75,773,000

 

 

 

82,202,000

 

TOTAL LIABILITIES AND EQUITY

 

$

227,198,000

 

 

$

234,164,000

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

ASSETS

 

 

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

 

 

Land

 

$

68,865,000

 

 

$

68,865,000

 

Buildings and improvements

 

 

301,263,000

 

 

 

300,962,000

 

 

 

 

370,128,000

 

 

 

369,827,000

 

Less accumulated depreciation

 

 

(159,992,000

)

 

 

(155,250,000

)

Real estate, net

 

 

210,136,000

 

 

 

214,577,000

 

 

 

 

 

 

 

 

 

 

Real estate held for sale

 

 

719,312,000

 

 

 

757,037,000

 

Investment in unconsolidated joint venture

 

 

4,809,000

 

 

 

4,654,000

 

Cash and cash equivalents

 

 

1,042,000

 

 

 

3,039,000

 

Restricted cash

 

 

230,000

 

 

 

230,000

 

Receivables

 

 

13,098,000

 

 

 

13,580,000

 

Other assets and deferred charges, net

 

 

21,522,000

 

 

 

23,777,000

 

TOTAL ASSETS

 

$

970,149,000

 

 

$

1,016,894,000

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Mortgage loan payable - held for sale

 

$

156,356,000

 

 

$

156,821,000

 

Finance lease obligation - held for sale

 

 

5,300,000

 

 

 

5,314,000

 

Unsecured revolving credit facility

 

 

41,000,000

 

 

 

66,000,000

 

Unsecured term loans

 

 

299,092,000

 

 

 

298,903,000

 

Accounts payable and accrued liabilities

 

 

61,301,000

 

 

 

42,099,000

 

Unamortized intangible lease liabilities

 

 

5,040,000

 

 

 

5,367,000

 

Unamortized intangible lease liabilities - held for sale

 

 

2,238,000

 

 

 

2,422,000

 

Total liabilities

 

 

570,327,000

 

 

 

576,926,000

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Cedar Realty Trust, Inc. shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock

 

 

159,541,000

 

 

 

159,541,000

 

Common stock  ($0.06 par value, 150,000,000 shares authorized, 13,558,000 and 13,658,000 shares, issued and outstanding, respectively)

 

 

814,000

 

 

 

820,000

 

Treasury stock  (332,000 and 387,000 shares, respectively, at cost)

 

 

(10,760,000

)

 

 

(13,266,000

)

Additional paid-in capital

 

 

877,981,000

 

 

 

881,009,000

 

Cumulative distributions in excess of net income

 

 

(632,383,000

)

 

 

(582,464,000

)

Accumulated other comprehensive income (loss)

 

 

3,135,000

 

 

 

(8,258,000

)

Total Cedar Realty Trust, Inc. shareholders' equity

 

 

398,328,000

 

 

 

437,382,000

 

Noncontrolling interests:

 

 

 

 

 

 

 

 

Limited partners' OP Units

 

 

1,494,000

 

 

 

2,586,000

 

Total noncontrolling interests

 

 

1,494,000

 

 

 

2,586,000

 

Total equity

 

 

399,822,000

 

 

 

439,968,000

 

TOTAL LIABILITIES AND EQUITY

 

$

970,149,000

 

 

$

1,016,894,000

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements


4


CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

8,367,000

 

 

$

10,603,000

 

 

$

16,443,000

 

 

$

21,445,000

 

 

$

8,253,000

 

 

$

8,293,000

 

 

$

16,894,000

 

 

$

16,808,000

 

Other

 

 

136,000

 

 

 

241,000

 

 

 

338,000

 

 

 

334,000

 

Other revenues

 

 

31,000

 

 

 

137,000

 

 

 

313,000

 

 

 

338,000

 

Total revenues

 

 

8,503,000

 

 

 

10,844,000

 

 

 

16,781,000

 

 

 

21,779,000

 

 

 

8,284,000

 

 

 

8,430,000

 

 

 

17,207,000

 

 

 

17,146,000

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating, maintenance and management

 

 

2,019,000

 

 

 

1,842,000

 

 

 

3,816,000

 

 

 

4,160,000

 

 

 

1,729,000

 

 

 

1,945,000

 

 

 

4,140,000

 

 

 

4,181,000

 

Real estate and other property-related taxes

 

 

1,526,000

 

 

 

1,822,000

 

 

 

2,768,000

 

 

 

3,680,000

 

 

 

1,404,000

 

 

 

1,526,000

 

 

 

2,793,000

 

 

 

2,768,000

 

General and administrative

 

 

2,861,000

 

 

 

5,096,000

 

 

 

5,773,000

 

 

 

9,500,000

 

Corporate general and administrative

 

 

958,000

 

 

 

2,862,000

 

 

 

1,670,000

 

 

 

5,773,000

 

Depreciation and amortization

 

 

2,850,000

 

 

 

2,976,000

 

 

 

5,351,000

 

 

 

6,437,000

 

 

 

3,309,000

 

 

 

2,850,000

 

 

 

5,802,000

 

 

 

5,351,000

 

Total expenses

 

 

9,256,000

 

 

 

11,736,000

 

 

 

17,708,000

 

 

 

23,777,000

 

 

 

7,400,000

 

 

 

9,183,000

 

 

 

14,405,000

 

 

 

18,073,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sales

 

 

-

 

 

 

48,857,000

 

 

 

-

 

 

 

48,857,000

 

Transaction costs

 

 

(30,457,000

)

 

 

-

 

 

 

(34,192,000

)

 

 

-

 

 

 

 

 

 

(30,457,000

)

 

 

 

 

 

(34,192,000

)

Impairment (charges) reversal

 

 

(2,000

)

 

 

1,849,000

 

 

 

(199,000

)

 

 

1,849,000

 

Impairment charges

 

 

 

 

 

(2,000

)

 

 

 

 

 

(199,000

)

Total other

 

 

(30,459,000

)

 

 

50,706,000

 

 

 

(34,391,000

)

 

 

50,706,000

 

 

 

 

 

 

(30,459,000

)

 

 

 

 

 

(34,391,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING (LOSS) INCOME

 

 

(31,212,000

)

 

 

49,814,000

 

 

 

(35,318,000

)

 

 

48,708,000

 

OPERATING INCOME (LOSS)

 

 

884,000

 

 

 

(31,212,000

)

 

 

2,802,000

 

 

 

(35,318,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-OPERATING INCOME AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(3,130,000

)

 

 

(3,803,000

)

 

 

(5,837,000

)

 

 

(7,982,000

)

Interest expense, net

 

 

(1,951,000

)

 

 

(3,130,000

)

 

 

(3,855,000

)

 

 

(5,837,000

)

Total non-operating income and expenses

 

 

(3,130,000

)

 

 

(3,803,000

)

 

 

(5,837,000

)

 

 

(7,982,000

)

 

 

(1,951,000

)

 

 

(3,130,000

)

 

 

(3,855,000

)

 

 

(5,837,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME FROM CONTINUING OPERATIONS

 

 

(34,342,000

)

 

 

46,011,000

 

 

 

(41,155,000

)

 

 

40,726,000

 

NET LOSS FROM CONTINUING OPERATIONS

 

 

(1,067,000

)

 

 

(34,342,000

)

 

 

(1,053,000

)

 

 

(41,155,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DISCONTINUED OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

7,698,000

 

 

 

5,453,000

 

 

 

13,946,000

 

 

 

10,944,000

 

Income from discontinued operations

 

 

 

 

 

7,698,000

 

 

 

 

 

 

13,946,000

 

Impairment charges

 

 

(16,119,000

)

 

 

-

 

 

 

(16,630,000

)

 

 

-

 

 

 

 

 

 

(16,119,000

)

 

 

 

 

 

(16,630,000

)

Gain on sales

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,047,000

 

Total (loss) income from discontinued operations

 

 

(8,421,000

)

 

 

5,453,000

 

 

 

(2,684,000

)

 

 

11,991,000

 

Total loss from discontinued operations

 

 

 

 

 

(8,421,000

)

 

 

 

 

 

(2,684,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME

 

 

(42,763,000

)

 

 

51,464,000

 

 

 

(43,839,000

)

 

 

52,717,000

 

NET LOSS

 

 

(1,067,000

)

 

 

(42,763,000

)

 

 

(1,053,000

)

 

 

(43,839,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss (income) attributable to noncontrolling interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Minority interests in consolidated joint ventures

 

 

-

 

 

 

(122,000

)

 

 

-

 

 

 

(272,000

)

Net loss attributable to noncontrolling interests:

 

 

 

 

 

 

 

 

 

Limited partners' interest in Operating Partnership

 

 

176,000

 

 

 

(287,000

)

 

 

196,000

 

 

 

(278,000

)

 

 

 

 

 

176,000

 

 

 

 

 

 

196,000

 

Total net loss (income) attributable to noncontrolling interests

 

 

176,000

 

 

 

(409,000

)

 

 

196,000

 

 

 

(550,000

)

Total net loss attributable to noncontrolling interests

 

 

 

 

 

176,000

 

 

 

 

 

 

196,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.

 

 

(42,587,000

)

 

 

51,055,000

 

 

 

(43,643,000

)

 

 

52,167,000

 

NET LOSS ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.

 

 

(1,067,000

)

 

 

(42,587,000

)

 

 

(1,053,000

)

 

 

(43,643,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividends

 

 

(2,688,000

)

 

 

(2,688,000

)

 

 

(5,376,000

)

 

 

(5,376,000

)

 

 

(2,688,000

)

 

 

(2,688,000

)

 

 

(5,376,000

)

 

 

(5,376,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

$

(45,275,000

)

 

$

48,367,000

 

 

$

(49,019,000

)

 

$

46,791,000

 

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

$

(3,755,000

)

 

$

(45,275,000

)

 

$

(6,429,000

)

 

$

(49,019,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET (LOSS) INCOME PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS (BASIC AND DILUTED):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS (BASIC AND DILUTED):

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.78

)

 

$

3.11

 

 

$

(3.49

)

 

$

2.51

 

 

$

(0.27

)

 

$

(2.78

)

 

$

(0.47

)

 

$

(3.49

)

Discontinued operations

 

 

(0.63

)

 

 

0.41

 

 

 

(0.20

)

 

 

0.90

 

 

 

 

 

 

(0.63

)

 

 

 

 

 

(0.20

)

 

$

(3.41

)

 

$

3.52

 

 

$

(3.69

)

 

$

3.41

 

 

$

(0.27

)

 

$

(3.41

)

 

$

(0.47

)

 

$

(3.69

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic and diluted

 

 

13,288,000

 

 

 

13,197,000

 

 

 

13,287,000

 

 

 

13,171,000

 

 

 

13,718,000

 

 

 

13,288,000

 

 

 

13,718,000

 

 

 

13,287,000

 

See accompanying notes to condensed consolidated financial statements


5


CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMELOSS

(unaudited)

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(42,763,000

)

 

$

51,464,000

 

 

$

(43,839,000

)

 

$

52,717,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on change in fair value of cash flow hedges

 

 

3,114,000

 

 

 

1,019,000

 

 

 

11,452,000

 

 

 

5,216,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income

 

 

(39,649,000

)

 

 

52,483,000

 

 

 

(32,387,000

)

 

 

57,933,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss (income) attributable to noncontrolling interests

 

 

166,000

 

 

 

(419,000

)

 

 

137,000

 

 

 

(586,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income attributable to Cedar Realty Trust, Inc.

 

$

(39,483,000

)

 

$

52,064,000

 

 

$

(32,250,000

)

 

$

57,347,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(1,067,000

)

 

$

(42,763,000

)

 

$

(1,053,000

)

 

$

(43,839,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

3,114,000

 

 

 

 

 

 

11,452,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss

 

 

(1,067,000

)

 

 

(39,649,000

)

 

 

(1,053,000

)

 

 

(32,387,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss attributable to noncontrolling interests

 

 

 

 

 

166,000

 

 

 

 

 

 

137,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss attributable to Cedar Realty Trust, Inc.

 

$

(1,067,000

)

 

$

(39,483,000

)

 

$

(1,053,000

)

 

$

(32,250,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements

6



CEDAR REALTY TRUST, INC.

Consolidated Statement of EquityCONDENSED CONSOLIDATED STATEMENT OF EQUITY

Six months ended June 30, 2023

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

distributions

 

 

 

 

 

 

Preferred stock

 

 

Common stock

 

 

paid-in

 

 

in excess of

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

capital

 

 

net income

 

 

Equity

 

Balance, December 31, 2022

 

6,450,000

 

 

$

159,541,000

 

 

 

13,718,000

 

 

$

823,000

 

 

$

868,323,000

 

 

$

(946,485,000

)

 

$

82,202,000

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,000

 

 

 

14,000

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

(2,688,000

)

Balance, March 31, 2023

 

 

6,450,000

 

 

 

159,541,000

 

 

 

13,718,000

 

 

 

823,000

 

 

 

868,323,000

 

 

 

(949,159,000

)

 

 

79,528,000

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,067,000

)

 

 

(1,067,000

)

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

(2,688,000

)

Balance, June 30, 2023

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,718,000

 

 

$

823,000

 

 

$

868,323,000

 

 

$

(952,914,000

)

 

$

75,773,000

 

See accompanying notes to condensed consolidated financial statements

7


CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

Six months ended June 30, 2022

(unaudited)(unaudited)

 

 

Cedar Realty Trust, Inc. Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

Additional

 

 

distributions

 

 

other

 

 

 

 

 

 

Preferred stock

 

 

Common stock

 

 

stock,

 

 

paid-in

 

 

in excess of

 

 

comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

at cost

 

 

capital

 

 

net income

 

 

income

 

 

Total

 

Balance, December 31, 2021

 

6,450,000

 

 

$

159,541,000

 

 

 

13,658,000

 

 

$

820,000

 

 

$

(13,266,000

)

 

$

881,009,000

 

 

$

(582,464,000

)

 

$

(8,258,000

)

 

$

437,382,000

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,056,000

)

 

 

 

 

 

(1,056,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,289,000

 

 

 

8,289,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

(21,000

)

 

 

(1,000

)

 

 

2,459,000

 

 

 

(2,498,000

)

 

 

 

 

 

 

 

 

(40,000

)

Common stock sales, net of issuance expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

 

1,000

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(900,000

)

 

 

 

 

 

(900,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,000

)

 

 

 

 

 

 

 

 

(4,000

)

Balance, March 31, 2022

 

 

6,450,000

 

 

 

159,541,000

 

 

 

13,637,000

 

 

 

819,000

 

 

 

(10,807,000

)

 

 

878,508,000

 

 

 

(587,108,000

)

 

 

31,000

 

 

 

440,984,000

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,587,000

)

 

 

 

 

 

(42,587,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,104,000

 

 

 

3,104,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

(79,000

)

 

 

(5,000

)

 

 

47,000

 

 

 

245,000

 

 

 

 

 

 

 

 

 

287,000

 

Purchase of OP Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

(2,688,000

)

Acquisition of minority interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,000,000

)

 

 

 

 

 

 

 

 

(1,000,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

228,000

 

 

 

 

 

 

 

 

 

228,000

 

Balance, June 30, 2022

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,558,000

 

 

$

814,000

 

 

$

(10,760,000

)

 

$

877,981,000

 

 

$

(632,383,000

)

 

$

3,135,000

 

 

$

398,328,000

 

8

 

 

Cedar Realty Trust, Inc. Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

Additional

 

 

distributions

 

 

other

 

 

 

 

 

 

 

Preferred stock

 

 

Common stock

 

 

stock,

 

 

paid-in

 

 

in excess of

 

 

comprehensive

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

at cost

 

 

capital

 

 

net income

 

 

(income) loss

 

 

Total

 

Balance, December 31, 2021

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,658,000

 

 

$

820,000

 

 

$

(13,266,000

)

 

$

881,009,000

 

 

$

(582,464,000

)

 

$

(8,258,000

)

 

$

437,382,000

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,056,000

)

 

 

 

 

 

(1,056,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8,289,000

 

 

 

8,289,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

(21,000

)

 

 

(1,000

)

 

 

2,459,000

 

 

 

(2,498,000

)

 

 

 

 

 

 

 

 

(40,000

)

Common stock sales, net of issuance expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

 

1,000

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

��

 

 

 

 

 

 

 

(900,000

)

 

 

 

 

 

(900,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,000

)

 

 

 

 

 

 

 

 

(4,000

)

Balance, March 31, 2022

 

 

6,450,000

 

 

 

159,541,000

 

 

 

13,637,000

 

 

 

819,000

 

 

 

(10,807,000

)

 

 

878,508,000

 

 

 

(587,108,000

)

 

 

31,000

 

 

 

440,984,000

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(42,587,000

)

 

 

 

 

 

(42,587,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3,104,000

 

 

 

3,104,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

(79,000

)

 

 

(5,000

)

 

 

47,000

 

 

 

245,000

 

 

 

 

 

 

 

 

 

287,000

 

Purchase of OP Units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

(2,688,000

)

Acquisition of minority interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,000,000

)

 

 

 

 

 

 

 

 

(1,000,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

228,000

 

 

 

 

 

 

 

 

 

228,000

 

Balance, June 30, 2022

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,558,000

 

 

$

814,000

 

 

$

(10,760,000

)

 

$

877,981,000

 

 

$

(632,383,000

)

 

$

3,135,000

 

 

$

398,328,000

 


 

 

Noncontrolling Interests

 

 

 

 

 

 

 

Minority

 

 

Limited

 

 

 

 

 

 

 

 

 

 

 

interest in

 

 

partners'

 

 

 

 

 

 

 

 

 

 

 

consolidated

 

 

interest in

 

 

 

 

 

 

 

 

 

 

 

joint

 

 

Operating

 

 

 

 

 

 

Total

 

 

 

ventures

 

 

Partnership

 

 

Total

 

 

Equity

 

Balance, December 31, 2021

 

$

-

 

 

$

2,586,000

 

 

$

2,586,000

 

 

$

439,968,000

 

Net (loss)

 

 

-

 

 

 

(20,000

)

 

 

(20,000

)

 

 

(1,076,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

-

 

 

 

49,000

 

 

 

49,000

 

 

 

8,338,000

 

Share-based compensation, net

 

 

-

 

 

 

 

 

 

 

 

 

(40,000

)

Common stock sales, net of issuance expenses

 

 

-

 

 

 

 

 

 

 

 

 

1,000

 

Preferred stock dividends

 

 

-

 

 

 

 

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

-

 

 

 

(5,000

)

 

 

(5,000

)

 

 

(905,000

)

Reallocation adjustment of limited partners' interest

 

 

-

 

 

 

4,000

 

 

 

4,000

 

 

 

 

Balance, March 31, 2022

 

 

-

 

 

 

2,614,000

 

 

 

2,614,000

 

 

 

443,598,000

 

Net (loss)

 

 

-

 

 

 

(176,000

)

 

 

(176,000

)

 

 

(42,763,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

-

 

 

 

10,000

 

 

 

10,000

 

 

 

3,114,000

 

Share-based compensation, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

287,000

 

Purchase of OP Units

 

 

-

 

 

 

(726,000

)

 

 

(726,000

)

 

 

(726,000

)

Preferred stock dividends

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,688,000

)

Acquisition of minority interests

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,000,000

)

Reallocation adjustment of limited partners' interest

 

 

-

 

 

 

(228,000

)

 

 

(228,000

)

 

 

 

Balance, June 30, 2022

 

$

-

 

 

$

1,494,000

 

 

$

1,494,000

 

 

$

399,822,000

 

See accompanying notes to consolidated financial statements


CEDAR REALTY TRUST, INC.

Consolidated Statement of EquityCONDENSED CONSOLIDATED STATEMENT OF EQUITY

Six months ended June 30, 20212022

Continued

(unaudited)

 

Cedar Realty Trust, Inc. Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative

 

 

Accumulated

 

 

 

 

 

 

Noncontrolling Interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

Additional

 

 

distributions

 

 

other

 

 

 

 

 

 

Minority

 

Limited

 

 

 

 

 

 

Preferred stock

 

 

Common stock

 

 

stock,

 

 

paid-in

 

 

in excess of

 

 

comprehensive

 

 

 

 

 

 

interest in

 

partners'

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

at cost

 

 

capital

 

 

net income

 

 

income

 

 

Total

 

 

consolidated

 

interest in

 

 

 

 

 

Balance, December 31, 2020

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,530,000

 

 

$

812,000

 

 

$

(15,133,000

)

 

$

879,790,000

 

 

$

(522,696,000

)

 

$

(18,816,000

)

 

$

483,498,000

 

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,112,000

 

 

 

 

 

 

1,112,000

 

 

joint

 

Operating

 

 

 

Total

 

 

ventures

 

 

Partnership

 

 

Total

 

 

Equity

 

Balance, December 31, 2021

$

 

$

2,586,000

 

 

$

2,586,000

 

$

439,968,000

 

Net (loss)

 

 

 

 

 

(20,000

)

 

 

(20,000

)

 

 

(1,076,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,171,000

 

 

 

4,171,000

 

 

 

 

 

 

49,000

 

 

 

49,000

 

 

 

8,338,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

99,000

 

 

 

6,000

 

 

 

1,172,000

 

 

 

(397,000

)

 

 

 

 

 

 

 

 

781,000

 

 

 

 

 

 

 

 

 

 

 

 

(40,000

)

Common stock sales, net of issuance expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

 

 

 

 

1,000

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(899,000

)

 

 

 

 

 

(899,000

)

 

 

 

 

 

(5,000

)

 

 

(5,000

)

 

 

(905,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,000

 

 

 

 

 

 

 

 

 

19,000

 

 

 

 

 

 

4,000

 

 

 

4,000

 

 

 

 

Balance, March 31, 2021

 

 

6,450,000

 

 

 

159,541,000

 

 

 

13,629,000

 

 

 

818,000

 

 

 

(13,961,000

)

 

 

879,413,000

 

 

 

(525,171,000

)

 

 

(14,645,000

)

 

 

485,995,000

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

51,055,000

 

 

 

 

 

 

51,055,000

 

Unrealized (loss) on change in fair value of cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,009,000

 

 

 

1,009,000

 

Balance, March 31, 2022

 

 

 

 

 

2,614,000

 

 

 

2,614,000

 

 

 

443,598,000

 

Net (loss)

 

 

 

 

 

(176,000

)

 

 

(176,000

)

 

 

(42,763,000

)

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

10,000

 

 

 

10,000

 

 

 

3,114,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

(1,000

)

 

 

 

 

 

50,000

 

 

 

1,039,000

 

 

 

 

 

 

 

 

 

1,089,000

 

 

 

 

 

 

 

 

 

 

 

 

287,000

 

Common stock sales, net of issuance expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,000

 

 

 

 

 

 

 

 

 

1,000

 

Purchase of OP Units

 

 

 

 

 

(726,000

)

 

 

(726,000

)

 

 

(726,000

)

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

(2,688,000

)

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,188,000

)

 

 

 

 

 

(1,188,000

)

Redemption of OP units

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition of minority interests

 

 

 

 

 

 

 

 

 

 

 

(1,000,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

38,000

 

 

 

 

 

 

 

 

 

38,000

 

 

 

 

 

 

(228,000

)

 

 

(228,000

)

 

 

 

Balance, June 30, 2021

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,628,000

 

 

$

818,000

 

 

$

(13,911,000

)

 

$

880,491,000

 

 

$

(477,992,000

)

 

$

(13,636,000

)

 

$

535,311,000

 

Balance, June 30, 2022

 

$

 

 

$

1,494,000

 

 

$

1,494,000

 

 

$

399,822,000

 

 

 

Noncontrolling Interests

 

 

 

 

 

 

 

Minority

 

 

Limited

 

 

 

 

 

 

 

 

 

 

 

interest in

 

 

partners'

 

 

 

 

 

 

 

 

 

 

 

consolidated

 

 

interest in

 

 

 

 

 

 

 

 

 

 

 

joint

 

 

Operating

 

 

 

 

 

 

Total

 

 

 

ventures

 

 

Partnership

 

 

Total

 

 

Equity

 

Balance, December 31, 2020

 

$

1,053,000

 

 

$

2,907,000

 

 

$

3,960,000

 

 

$

487,458,000

 

Net income (loss)

 

 

150,000

 

 

 

(9,000

)

 

 

141,000

 

 

 

1,253,000

 

Unrealized gain on change in fair value of cash flow hedges

 

 

 

 

 

26,000

 

 

 

26,000

 

 

 

4,197,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

 

 

 

781,000

 

Common stock sales, net of issuance expenses

 

 

 

 

 

 

 

 

 

 

 

1,000

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

 

 

 

(5,000

)

 

 

(5,000

)

 

 

(904,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

(19,000

)

 

 

(19,000

)

 

 

 

Balance, March 31, 2021

 

 

1,203,000

 

 

 

2,900,000

 

 

 

4,103,000

 

 

 

490,098,000

 

Net (loss) income

 

 

122,000

 

 

 

287,000

 

 

 

409,000

 

 

 

51,464,000

 

Unrealized (loss) on change in fair value of cash flow hedges

 

 

 

 

 

10,000

 

 

 

10,000

 

 

 

1,019,000

 

Share-based compensation, net

 

 

 

 

 

 

 

 

 

 

 

1,089,000

 

Common stock sales, net of issuance expenses

 

 

 

 

 

 

 

 

 

 

 

1,000

 

Preferred stock dividends

 

 

 

 

 

 

 

 

 

 

 

(2,688,000

)

Distributions to common shareholders/noncontrolling interests

 

 

 

 

 

(5,000

)

 

 

(5,000

)

 

 

(1,193,000

)

Redemption of OP units

 

 

 

 

 

(8,000

)

 

 

(8,000

)

 

 

(8,000

)

Reallocation adjustment of limited partners' interest

 

 

 

 

 

(38,000

)

 

 

(38,000

)

 

 

 

Balance, June 30, 2021

 

$

1,325,000

 

 

$

3,146,000

 

 

$

4,471,000

 

 

$

539,782,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements

9



CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

 

Six months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

 

2021

 

 

2023

 

 

2022

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(43,839,000

)

 

$

52,717,000

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Gain on sales

 

 

 

 

 

(49,904,000

)

Impairment charges (reversal)

 

 

16,829,000

 

 

 

(1,849,000

)

Net loss

 

$

(1,053,000

)

 

$

(43,839,000

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

Impairment charges

 

 

 

 

 

16,829,000

 

Straight-line rents and expenses, net

 

 

(4,000

)

 

 

(305,000

)

 

 

(461,000

)

 

 

(4,000

)

Provision for doubtful accounts

 

 

840,000

 

 

 

502,000

 

Credit adjustments on operating lease receivables

 

 

(319,000

)

 

 

840,000

 

Depreciation and amortization

 

 

15,066,000

 

 

 

21,468,000

 

 

 

5,802,000

 

 

 

15,066,000

 

Amortization of intangible lease liabilities, net

 

 

(506,000

)

 

 

(539,000

)

Above (below) market lease amortization, net

 

 

(128,000

)

 

 

(506,000

)

Expense relating to share-based compensation, net

 

 

823,000

 

 

 

1,926,000

 

 

 

 

 

 

823,000

 

Amortization of deferred financing costs

 

 

440,000

 

 

 

748,000

 

 

 

179,000

 

 

 

440,000

 

Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:

 

 

 

 

 

 

 

 

 

 

 

 

 

Rents and other receivables

 

 

(1,006,000

)

 

 

(591,000

)

Prepaid expenses and other

 

 

3,659,000

 

 

 

1,276,000

 

Accounts payable and accrued liabilities

 

 

23,780,000

 

 

 

(645,000

)

Receivables, net

 

 

1,848,000

 

 

 

(1,006,000

)

Deferred costs and other assets, net

 

 

(675,000

)

 

 

3,659,000

 

Accounts payable, accrued expenses, and other liabilities

 

 

613,000

 

 

 

23,780,000

 

Net cash provided by operating activities

 

 

16,082,000

 

 

 

24,804,000

 

 

 

5,806,000

 

 

 

16,082,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenditures for real estate improvements

 

 

(16,932,000

)

 

 

(13,762,000

)

 

 

(2,069,000

)

 

 

(16,932,000

)

Net proceeds from sales of real estate

 

 

31,866,000

 

 

 

104,497,000

 

 

 

 

 

 

31,866,000

 

Contributions to unconsolidated joint venture

 

 

(155,000

)

 

 

(2,481,000

)

 

 

 

 

 

(155,000

)

Net cash provided by investing activities

 

 

14,779,000

 

 

 

88,254,000

 

Net cash (used in) provided by investing activities

 

 

(2,069,000

)

 

 

14,779,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Repayments under revolving credit facility

 

 

(29,000,000

)

 

 

(183,000,000

)

 

 

 

 

 

(29,000,000

)

Advances under revolving credit facility

 

 

4,000,000

 

 

 

20,000,000

 

 

 

 

 

 

4,000,000

 

Repayment of term note

 

 

 

 

 

(50,000,000

)

Termination payment related to interest rate swap

 

 

 

 

 

(503,000

)

Mortgage proceeds

 

 

 

 

 

114,000,000

 

Mortgage repayments

 

 

(571,000

)

 

 

(548,000

)

 

 

 

 

 

(571,000

)

Payments of debt financing costs

 

 

(6,000

)

 

 

(1,620,000

)

Payments of deferred financing costs

 

 

 

 

 

(6,000

)

Noncontrolling interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to limited partners

 

 

(5,000

)

 

 

(10,000

)

 

 

 

 

 

(5,000

)

Acquisition of joint venture minority interest share

 

 

(1,000,000

)

 

 

 

 

 

 

 

 

(1,000,000

)

Redemption of OP units

 

 

 

 

 

(8,000

)

Common stock sales less issuance expenses, net

 

 

 

 

 

2,000

 

Preferred stock dividends

 

 

(5,376,000

)

 

 

(5,376,000

)

 

 

(5,376,000

)

 

 

(5,376,000

)

Distributions to common shareholders

 

 

(900,000

)

 

 

(1,799,000

)

 

 

 

 

 

(900,000

)

Net cash used in financing activities

 

 

(32,858,000

)

 

 

(108,862,000

)

 

 

(5,376,000

)

 

 

(32,858,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (decrease) increase in cash, cash equivalents and restricted cash

 

 

(1,997,000

)

 

 

4,196,000

 

Net decrease in cash, cash equivalents and restricted cash

 

 

(1,639,000

)

 

 

(1,997,000

)

Cash, cash equivalents and restricted cash at beginning of period

 

 

3,269,000

 

 

 

1,637,000

 

 

 

13,463,000

 

 

 

3,269,000

 

Cash, cash equivalents and restricted cash at end of period

 

$

1,272,000

 

 

$

5,833,000

 

 

$

11,824,000

 

 

$

1,272,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation to consolidated balance sheets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

1,042,000

 

 

$

5,603,000

 

 

$

1,291,000

 

 

$

1,042,000

 

Restricted cash

 

 

230,000

 

 

 

230,000

 

 

 

10,533,000

 

 

 

230,000

 

Cash, cash equivalents and restricted cash

 

$

1,272,000

 

 

$

5,833,000

 

 

$

11,824,000

 

 

$

1,272,000

 

See accompanying notes to condensed consolidated financial statements

10



Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 20222023

(unaudited)

Note 1. Business and Organization

Cedar Realty Trust, Inc. (the “Company”) is a real estate investment trust (“REIT”) that focuses primarily on ownership, operationowning and redevelopment ofoperating income producing retail properties with a primary focus on grocery-anchored shopping centers primarily in high-density urban markets from Washington, D.C. to Boston.the Northeast. At June 30, 2022,2023, the Company owned and managed a portfolio of 1719 operating properties (excluding properties “held for sale”).properties.

Cedar Realty Trust Partnership, L.P. (the “Operating Partnership”) is the entity through which the Company conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets. At June 30, 2022,2023, the Company owned a 99.6% general and limited partnership100.0% interest in, and was the sole general partner of, the Operating Partnership. The limited partners’ interest in the Operating Partnership (0.4% at June 30, 2022)and is represented by partnership units in the Operating Partnership (“OP Units”). The carrying amounta wholly-owned subsidiary of such interest is adjusted at the end of each reporting period to an amount equal to the limited partners’ ownership percentage of the Operating Partnership’s net equity. The 49,000 OP Units outstanding at June 30, 2022 are economically equivalent to shares of the Company’s common stock. The holders of OP Units have the right to exchange their OP Units for the same number of shares of the Company’s common stock or, at the Company’s option, for cash. Unless specifically noted otherwise, all references to OP Units exclude limited partnership units held by the Company.WHLR (as defined herein).

As used herein, the “Company” refers to Cedar Realty Trust, Inc. and its subsidiaries on a consolidated basis, including the Operating Partnership or, where the context so requires, Cedar Realty Trust, Inc. only.

Transaction AgreementsAsset Sale and Merger

On March 2, 2022, the Company announced that following its previously announced review of strategic alternatives, it had entered into definitive agreements for the sale of the Company and its assets in a series of related all-cash transactions. Specifically, on March 2, 2022, the Company and certain of its subsidiaries entered into an asset purchase and sale agreement (the “Asset Purchase Agreement”) with DRA Fund X-B LLC and KPR Centers LLC (together with their respective designees, the “Grocery-Anchored Purchasers”) entered into an asset purchase andfor the sale agreement (the “Asset Purchase Agreement”), pursuant to which the Grocery-Anchored Purchasers will acquireof a portfolio of 33 grocery-anchored shopping centers from the Company for a cash purchase price of $840.0 million (the “Grocery-Anchored Portfolio Sale”). The Asset Purchase Agreement provides that to the extent specified redevelopment assets (Riverview Plaza, East River Park and Senator Square, which have been classified as “real estate held for sale” as of March 31, 2022) of the Company are not sold by the Company to third parties prior to the closing of the Grocery-Anchored Portfolio Sale, these assets will be acquired by the Grocery-Anchored Purchasers for an additional cash purchase price of up to $80.5 million. In addition, on March 2, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Wheeler Real Estate Investment Trust, Inc. (“Wheeler”WHLR”) and certain of its affiliates pursuant to which, following closing of the Grocery-Anchored Portfolio Sale, Wheeler will acquireWHLR acquired the balance of the Company’s shopping center assets by way of an all-cash merger transaction that values the remaining portfolio at $291.3 million.  Following completion of the transactions contemplated by the Merger Agreement, the Company will survive as a wholly-owned subsidiary of Wheeler. The Company’s currently outstanding 7.25% Series B Preferred Stock and 6.50% Series C Preferred Stock will remain outstanding as shares of preferred stock in the surviving company following the transactions and are expected to remain listed on the New York Stock Exchange.(the “Merger”).

The transactions contemplated by the Asset Purchase Agreement and the Merger Agreement are collectively referred to as the “Transactions”. The Transactions were unanimously approved by the Company’s former Board of Directors (the “Board”) and were approved by the Company’s common stockholders at a special meeting of stockholders held on May 27, 2022, and are estimated to generate total net proceeds, after all transaction expenses, of approximately $29.00 per share in cash, which will be distributed to shareholders upon completion of the Merger. The Merger is expected to close in August 2022, subject to satisfaction of customary closing conditions.2022.

On July 7, 2022, the Company and certain of its subsidiaries completed the Grocery-Anchored Portfolio Sale and the East River Park and Senator Square redevelopment asset sales for total gross proceeds of approximately $879$879 million, including the assumed debt. There were no material relationships among the Company, the Grocery-Anchored Purchasers, or any of their respective affiliates. On August 22, 2022, the Company completed the Merger. Each outstanding share of common stock of the Company and outstanding common unit of the Operating Partnership held by persons other than the Company immediately prior to the Merger were canceled and converted into the right to receive a cash payment of $9.48 per share or unit. As a result of the Merger, WHLR acquired all of the outstanding shares of the Company's common stock, which ceased to be publicly traded on the New York Stock Exchange (“NYSE”). The Company's outstanding 7.25% Series B Preferred Stock and 6.50% Series C Preferred Stock remain outstanding and continue to trade on the NYSE. In addition, prior to consummation of the Merger, the Company's Board of Directors declared a special dividend on shares of the Company's outstanding common stock and OP Units of $19.52 per share, payable to holders of record of the Company's common stock and OP Units at the close of business on August 19, 2022.

In connection with the transactions discussed above,Transactions, the Company incurred transaction costs of $34.2 million for the six months ended June 30, 2022, included in the accompanying condensed consolidated statement of operations, of which $23.6 million relates to future employee severance payments.operations.

10


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

Note 2. Summary of Significant Accounting Policies

Principles of Consolidation/Basis of Preparation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and include all of the information and disclosures required by U.S. Generally Accepted Accounting Principles (“GAAP”) for interim reporting. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statement disclosures. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring accruals) have been included. The financial statements are prepared on the accrual basis in accordance with GAAP, which requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial

11


Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2023

(unaudited)

statements. Actual results could differ from these estimates. The unaudited condensed consolidated financial statements in this Form 10-Q should be read in conjunction with the audited consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.2022.

The unaudited condensed consolidated financial statements include the accounts and operations of the Company, the Operating Partnership, its subsidiaries, and certain joint venture partnerships in which it participates.participated. The Company consolidates all variable interest entities for which it is the primary beneficiary. Certain prior year amounts in the condensed consolidated financial statements and notes thereto have been reclassified to conform to current year presentation.

Supplemental Condensed Consolidated Statements of Cash Flows Information

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

Supplemental disclosure of cash activities:

 

 

 

 

 

 

Cash paid for interest

 

$

3,585,000

 

 

$

9,419,000

 

Supplemental disclosure of non-cash activities:

 

 

 

 

 

 

Capitalization of interest and financing costs

 

 

 

 

 

1,035,000

 

Buildings and improvements included in accounts payable, accrued expenses, and other liabilities

 

 

(1,028,000

)

 

 

3,764,000

 

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

Supplemental disclosure of cash activities:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

9,419,000

 

 

$

10,547,000

 

Supplemental disclosure of non-cash activities:

 

 

 

 

 

 

 

 

Capitalization of interest and financing costs

 

 

1,035,000

 

 

 

1,555,000

 

Buildings and improvements included in accounts payable and accrued liabilities

 

 

3,764,000

 

 

 

1,224,000

 

Recently Issued and Adopted Accounting Pronouncements

In April 2020,Accounting standards that have been recently issued or proposed by the FASB issuedFinancial Accounting Standards Board or other standard-setting bodies are not currently applicable to the Company or are not expected to have a question-and-answer document (the “Lease Modification Q&A”) focusedsignificant impact on the applicationCompany’s financial position, results of lease accounting guidance to lease concessions provided as a result of a novel strain of coronavirus (“COVID-19”). Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rightsoperations and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under ASC 842. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). Both lessees and lessors may make this election. The Company is evaluating its election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.cash flows.

During the three and six months ended June 30, 2022, the Company provided lease concessions to certain tenants in response to the impact of COVID-19, in the form of rent deferrals.  The Company has made an election to account for such lease concessions consistent with how those concessions would be accounted for under ASC 842 if enforceable rights and obligations for those concessions had already existed in the leases.  This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in our rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than total payments required by the original lease.

Substantially all of the Company’s concessions to date provide for a deferral of payments with no substantive changes to the consideration in the original lease. These deferrals affect the timing, but not the amount, of the lease payments.  The Company is accounting for these deferrals as if no changes to the lease were made. Under this accounting, the Company increases its receivables

11


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

as tenant payments accrue and continues to recognize rental income. Through June 30, 2022, the Company has entered into lease modifications that deferred approximately $3.5 million, of which $2.4 million relates to deferrals that the Company continued to recognize rental income. In addition, through June 30, 2022, the Company has entered into agreements that waived approximately $2.4 million of rent. As of June 30, 2022, less than $0.1 million of the $3.5 million deferred lease modifications remain outstanding.

Note 3. Real Estate

Investment in Unconsolidated Joint Venture

On May 5, 2021,A significant portion of the Company formed a joint venture with Goldman Sachs Urban Investment GroupCompany's land, buildings and Asland Capital Partners (the “Joint Venture”)improvements serve as collateral for the construction of an approximately 258,000 square foot six-story commercial building in Washington, D.C. consisting of approximately 240,000 square feet of office space which is 100% leasedCompany's term loans. Accordingly, restrictions exist as to the Washington, D.C., Department of General Services (“DGS”) for its headquartersencumbered properties' transferability, use and approximately 18,000 square feet of street-level retail. The term of the leaseother common rights typically associated with DGS is for 20 years and 10 months, to commence upon substantial completion and delivery to the DGS. This building is planned as the first phase of Northeast Heights, a redevelopment of 2 existing shopping centers, East River Park and Senator Square, into a mixed-use residential, office and retail property. Further, the Joint Venture has secured construction financing from JP Morgan not to exceed $105 million. The construction loan initially bears interest at LIBOR plus 200 basis points and has an initial term of three years with two, one-year extension options subject to customary conditions. The Company has a 10% interest in the joint venture and is a co-general partner along with Asland Capital Partners. The Company has contributed approximately $4.8 million of capital to the Joint Venture as of June 30, 2022. The Company sold approximately $8.0 million of development costs to the Joint Venture as part of its formation on May 5, 2021.

The Joint Venture currently estimates that the space will be delivered during the end of the fourth quarter 2022. Upon completion of the building, DGS will be obligated to pay initial annual net rent of approximately $5.4 million per year, subject to a 2.5% annual escalator on each anniversary of rent commencement, plus certain operating costs, property taxes and amortization of tenant improvements together totaling approximately an additional $8.1 million per year, for an aggregate total annual rent of approximately $13.5 million. The lease provides for a free rent period of 10 months immediately following rent commencement. The Lease also provides DGS with a tenant credit of approximately $6.8 million to be applied, at DGS’s election, against either annual rent or any other tenant payment obligations including tenant improvement costs, in excess of the tenant improvement allowance. Pursuant to the lease, the Joint Venture will contribute up to $155 per rentable square foot toward the cost of tenant improvements, to be amortized over 240 months. In addition, the lease provides that the Joint Venture will contribute $9.38 per rentable square foot in additional tenant improvement allowance between the 10th and 12th lease years, upon DGS’s timely election. The obligations of DGS under the Lease are subject to annual budget appropriation.ownership.

Acquisitions

On June 28, 2022, the Company acquired the 40% minority ownership percentage in the Crossroads joint venture for $1.0 million. Crossroads was included in the Grocery-Anchored Portfolio Sale that occurred on July 7, 2022.

Dispositions

The following table shows the property disposition during the six months ended June 30, 2022:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date

 

Sales

 

 

 

 

 

Disposition

 

Location

 

GLA

 

 

Sold

 

Price

 

 

Impairment

 

Riverview Plaza

 

Philadelphia, PA

 

 

108,902

 

 

5/16/2022

 

$

34,000,000

 

 

$

(199,000

)

The impairment is included in operating (loss) income in the accompanying consolidated statement of operations.

Real Estate Held for Sale

As of June 30, 2022, Carll’s2023, an outparcel building adjacent to Carll's Corner, located in Bridgeton, New Jersey the 33 grocery-anchored shopping centers and 2 redevelopment properties havehas been classified as “real estate held for sale” onin the accompanying condensed consolidated balance sheet.

Real estate held for sale consists of the following:

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Real estate held for sale

 

$

113,000

 

 

$

 

Receivables, net

 

 

 

 

 

 

Deferred costs and other assets, net

 

 

 

 

 

 

Total real estate held for sale

 

$

113,000

 

 

$

 

12


Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2022

(unaudited)

2023

(unaudited)

Discontinued Operations

On July 7, 2022, the Company and certain of its subsidiaries completed the Grocery-Anchored Portfolio Sale and the East River Park and Senator Square redevelopment asset sales for total gross proceeds of approximately $879$879 million, including the assumed debt. The Grocery-Anchored Portfolio Sale representsrepresented a strategic shift and will havehad a material effect on the Company’s operations and financial results, and, therefore, the Company has determined that it iswas deemed a discontinued operation. Accordingly, the portfolio of 33 grocery-anchored shopping centers have beenwere classified as held for sale and the results of their operations have beenwere classified as discontinued operations for all periods presented herein. With the reclass to held for sale, there were additional impairments of $16.1 million recorded during the second quarter ofin 2022.The following is a summary of incomeloss from discontinued operations:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

21,546,000

 

 

$

21,277,000

 

 

$

43,677,000

 

 

$

43,771,000

 

Other

 

 

102,000

 

 

 

99,000

 

 

 

157,000

 

 

 

221,000

 

Total revenues

 

 

21,648,000

 

 

 

21,376,000

 

 

 

43,834,000

 

 

 

43,992,000

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating, maintenance and management

 

 

5,108,000

 

 

 

4,454,000

 

 

 

10,441,000

 

 

 

9,916,000

 

Real estate and other property-related taxes

 

 

3,278,000

 

 

 

3,229,000

 

 

 

6,534,000

 

 

 

6,491,000

 

General and administrative

 

 

91,000

 

 

 

(223,000

)

 

 

151,000

 

 

 

(99,000

)

Depreciation and amortization

 

 

3,964,000

 

 

 

7,281,000

 

 

 

9,726,000

 

 

 

15,031,000

 

Total expenses

 

 

12,441,000

 

 

 

14,741,000

 

 

 

26,852,000

 

 

 

31,339,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

9,207,000

 

 

 

6,635,000

 

 

 

16,982,000

 

 

 

12,653,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-OPERATING INCOME AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,509,000

)

 

 

(1,182,000

)

 

 

(3,036,000

)

 

 

(1,709,000

)

Total non-operating income and expenses

 

 

(1,509,000

)

 

 

(1,182,000

)

 

 

(3,036,000

)

 

 

(1,709,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM DISCONTINUED OPERATIONS

 

 

7,698,000

 

 

 

5,453,000

 

 

 

13,946,000

 

 

 

10,944,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges

 

 

(16,119,000

)

 

 

-

 

 

 

(16,630,000

)

 

 

-

 

Gain on sales

 

 

-

 

 

 

-

 

 

 

-

 

 

 

1,047,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL (LOSS) INCOME FROM DISCONTINUED OPERATIONS

 

$

(8,421,000

)

 

$

5,453,000

 

 

$

(2,684,000

)

 

$

11,991,000

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

 

 

$

20,824,000

 

 

$

 

 

$

42,472,000

 

Other revenues

 

 

 

 

 

102,000

 

 

 

 

 

 

157,000

 

Total revenues

 

 

 

 

 

20,926,000

 

 

 

 

 

 

42,629,000

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Operating, maintenance and management

 

 

 

 

 

4,386,000

 

 

 

 

 

 

9,236,000

 

Real estate and other property-related taxes

 

 

 

 

 

3,278,000

 

 

 

 

 

 

6,534,000

 

Corporate general and administrative

 

 

 

 

 

91,000

 

 

 

 

 

 

151,000

 

Depreciation and amortization

 

 

 

 

 

3,964,000

 

 

 

 

 

 

9,726,000

 

Total expenses

 

 

 

 

 

11,719,000

 

 

 

 

 

 

25,647,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

 

 

 

 

9,207,000

 

 

 

 

 

 

16,982,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-OPERATING INCOME AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

 

 

 

(1,509,000

)

 

 

 

 

 

(3,036,000

)

Total non-operating income and expenses

 

 

 

 

 

(1,509,000

)

 

 

 

 

 

(3,036,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME FROM DISCONTINUED OPERATIONS

 

 

 

 

 

7,698,000

 

 

 

 

 

 

13,946,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment charges

 

 

 

 

 

(16,119,000

)

 

 

 

 

 

(16,630,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LOSS FROM DISCONTINUED OPERATIONS

 

$

 

 

$

(8,421,000

)

 

$

 

 

$

(2,684,000

)

Net cash provided by operations from discontinued operations was $25.4$0.0 million and $25.3$25.4 million for the six months ended June 30, 20222023 and 2021,2022, respectively. Net cash used in investing activities from discontinued operations was $16.0$0.0 million and $9.7$16.0 million for the six months ended June 30, 2023 and 2022, and 2021, respectively.

Note 4. Fair Value Measurements

The carrying amounts of cash and cash equivalents, restricted cash, rents and other receivables, certain other assets, and accounts payable, accrued expenses, and accruedother liabilities and variable-rate debt approximate their fair value due to their terms and/or short-term nature. The fair value of the Company’s investments and liabilities related to deferred compensation were determined to be Level 1 within the valuation hierarchy, and were based on independent values provided by financial institutions.

The fair value of the Company’s fixed rate mortgage loansecured term loans was estimated using available market information and discounted cash flow analyses based on borrowing rates the Company believes it could obtain with a similar term and maturities. As of June 30, 20222023 and December 31, 2021,2022, the fair value of the Company’s fixed rate mortgage loan payable, which was determined to be Level 3 within the valuation hierarchy, was $146.4 million and $159.0 million, respectively; the carrying value of such loan was $156.4 million and $156.8 million, respectively. As of June 30, 2022 and December 31, 2021, respectively, the aggregate fair values of the Company’s unsecured revolving credit facility andsecured term loans, approximated the carrying values. In addition, the fair values of the Company’s

13


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

mortgage note receivable and finance lease obligation, which were determined to be Level 3 within the valuation hierarchy, approximated theirwas $131.1 million and $131.8 million, respectively, and the carrying values as of June 30, 2022 and December 31, 2021, respectively.

The valuations of the liabilities for the Company’s interest rate swaps, which are measured on a recurring basis, were determined to be Level 2 within the valuation hierarchy, and were based on independent values provided by financial institutions. Such valuations were determined using widely accepted valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. The analyses reflect the contractual terms of the swaps, including the period to maturity, and user-observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded that, as of June 30, 2022, the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreementssuch loans, was $131.6 million and as a result, that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”.$131.5 million, respectively.

Nonfinancial assets and liabilities measured at fair value in the condensed consolidated financial statements consist of real estate held for sale, which, if applicable, are measured on a nonrecurring basis, and have been determined to be (1) Level 2 within the valuation hierarchy, where applicable, based on the respective contracts of sale, adjusted for closing costs and expenses, or (2) Level 3 within the valuation hierarchy, where applicable, based on estimated sales prices, adjusted for closing costs and expenses, determined by discounted cash flow analyses, income capitalization analyses or a sales comparison approach if no contracts had been concluded. The discounted cash flow and income capitalization analyses include all estimated cash inflows and outflows over a specific holding period and, where applicable, any estimated debt premiums. These cash flows were composed of unobservable inputs which included forecasted rental

13


Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2023

(unaudited)

revenues and expenses based upon existing in-place leases, market conditions and expectations for growth. Capitalization rates and discount rates utilized in these analyses were based upon observable rates that the Company believed to be within a reasonable range of current market rates for the respective properties. The sales comparison approach is utilized for certain land values and includes comparable sales that were completed in the selected market areas. The comparable sales utilized in these analyses were based upon observable per acre rates that the Company believes to be within a reasonable range of current market rates for the respective properties.

The following tables show the hierarchy for those assets measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021, respectively:

 

 

June 30, 2022

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Investments related to deferred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

compensation liabilities (a)

 

$

698,000

 

 

$

 

 

$

 

 

$

698,000

 

Interest rate swaps assets (a)

 

$

 

 

$

3,176,000

 

 

$

 

 

$

3,176,000

 

Deferred compensation liabilities (b)

 

$

713,000

 

 

$

 

 

$

 

 

$

713,000

 

Interest rate swaps liability (b)

 

$

 

 

$

20,000

 

 

$

 

 

$

20,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

Description

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Investments related to deferred

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

compensation liabilities (a)

 

$

955,000

 

 

$

 

 

$

 

 

$

955,000

 

Deferred compensation liabilities (b)

 

$

982,000

 

 

$

 

 

$

 

 

$

982,000

 

Interest rate swaps liability (b)

 

$

 

 

$

8,232,000

 

 

$

 

 

$

8,232,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Included in other assets and deferred charges, net, in the accompanying consolidated balance sheets.

 

(b) Included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.

 

As of June 30, 2022, real estate held for sale on the consolidated balance sheet consisted of NaN retail properties, totaling $719.3 million, which were determined to be Level 2 assets under the hierarchy, for which the carrying value was below its fair value.

14


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

Note 5. Mortgage Loans Payable and Unsecured Credit Facility

Debt and finance lease obligations are composed of the following at June 30, 2022:

 

 

 

 

June 30, 2022

 

 

 

 

 

 

 

 

 

Contractual

 

 

 

Maturity

 

Balance

 

 

interest rates

 

Description

 

dates

 

outstanding

 

 

weighted-average

 

Fixed-rate mortgage and finance lease obligation- held for sale

 

 

 

 

 

 

 

 

 

 

Franklin Village

 

Jun 2026

 

$

44,018,000

 

 

3.9%

 

Shops at Suffolk Downs (a)

 

Jun 2031

 

 

15,600,000

 

 

3.5%

 

Trexlertown Plaza (a)

 

Jun 2031

 

 

36,100,000

 

 

3.5%

 

The Point (a)

 

Jun 2031

 

 

29,700,000

 

 

3.5%

 

Christina Crossing (a)

 

Jun 2031

 

 

17,000,000

 

 

3.5%

 

Lawndale Plaza (a)

 

Jun 2031

 

 

15,600,000

 

 

3.5%

 

Senator Square finance lease obligation

 

Sep 2050

 

 

5,578,000

 

 

5.3%

 

 

 

 

 

 

163,596,000

 

 

3.6%

 

Unsecured credit facilities:

 

 

 

 

 

 

 

 

 

 

Variable-rate:

 

 

 

 

 

 

 

 

 

 

Revolving credit facility (b)

 

Aug 2024

 

 

41,000,000

 

 

3.1%

 

Fixed-rate (c):

 

 

 

 

 

 

 

 

 

 

Term loan

 

Apr 2023

 

 

100,000,000

 

 

3.3%

 

Term loan

 

Sep 2024

 

 

75,000,000

 

 

3.8%

 

Term loan

 

Jul 2025

 

 

75,000,000

 

 

4.7%

 

Term loan

 

Aug 2026

 

 

50,000,000

 

 

3.3%

 

 

 

 

 

 

504,596,000

 

 

3.7%

 

Unamortized issuance costs

 

 

 

 

(2,848,000

)

 

 

 

 

 

 

 

 

$

501,748,000

 

 

 

 

 

(a)

The mortgages for these properties are cross-collateralized.

(b)

The revolving credit facility is subject to 2 one-year extensions at the Company’s option.

(c)

The interest rates on these term loans consist of the London Interbank Offered Rate (“LIBOR”) plus a credit spread based on the Company’s leverage ratio, for which the Company has interest rate swap agreements which convert the LIBOR rates to fixed rates. Accordingly, these term loans are presented as fixed-rate debt. 

Unsecured Revolving Credit Facility2023 and Term Loanscollateralized by 12 properties:

On August 30, 2021, the Company amended its existing $300 million unsecured credit facility and $50 million term loan. After the amendment, the new unsecured revolving credit facility is $185 million with an expiration in 

 

 

 

 

June 30, 2023

 

 

 

 

 

 

 

Contractual

 

 

Maturity

 

Balance

 

 

interest rates

Description

 

dates

 

outstanding

 

 

weighted average

Fixed-rate:

 

 

 

 

 

 

 

Term loan

 

Nov 2032

 

$

110,000,000

 

 

5.3%

Term loan

 

Jan 2033

 

 

25,000,000

 

 

6.4%

 

 

 

 

 

135,000,000

 

 

5.5%

Unamortized issuance costs

 

 

 

 

(3,445,000

)

 

 

 

 

 

 

$

131,555,000

 

 

 

August 2024Derivative Financial Instruments. The new unsecured revolving credit facility may be extended, at the Company’s option for 2 additional one-year periods, subject to customary conditions. Interest on the borrowings under the new unsecured revolving credit facility component can range from LIBOR plus 135 bps to 195 bps (150 bps at June 30, 2022), based on the Company’s leverage ratio. The Company extended its $50 million term loan four years with an expiration in August 2026.

The Company’s unsecured credit facility and term loans contain financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facilities could result in the acceleration of the related debt and exercise of other lender remedies. Although the credit facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income for the trailing twelve months, as defined in the agreements. As of June 30, 2022, the Company had $41.0 million outstanding under its revolving credit facility. The unsecured credit facility and term notesinterest rate swaps were paid off on July 11, 2022, in connection withterminated as part of the Grocery-Anchored Portfolio Sale.

15


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

Mortgage Loans Payable

On May 5, 2021, the Company closed a non-recourse mortgage for $114.0 million. The mortgage matures June 1, 2031, bears interest at a fixed-rate of 3.49% and requires payment of interest only for the first five years followed by payments of principal and interest based on thirty-year amortization for the remainder of the term. The loan is secured by five shopping centers consisting of Lawndale Plaza, The Shops at Suffolk Downs, Christina Crossing, Trexlertown Plaza, and The Point.  These properties had no pre-existing debt and the proceeds from this new loan were used to reduce amounts outstanding under the Company’s revolving credit facility. The mortgage loans payable were assumed by the Grocery-Anchored Purchasers.

Derivative Financial Instruments

The fair values of the interest rate swaps applicable to the unsecured term loans discussed above are included in accounts payable and accrued liabilities on the consolidated balance sheet at June 30, 2022. Charges and/or credits relating to the changes in the fair value of the interest rate swaps arewere made to accumulated other comprehensive income (loss),loss, limited partners’ interest, or operations (included in interest expense), as applicable. Over time, the unrealized gains and losses recorded in accumulated other comprehensive loss will bewere reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affectaffected earnings.

The following is a summary of the derivative financial instruments held by the Company at June 30, 2022 and December 31, 2021:

June 30, 2022

Designation/

 

 

 

 

 

 

 

Fair

 

 

Maturity

 

Balance sheet

Cash flow

 

Derivative

 

Count

 

 

value

 

 

dates

 

location

Qualifying

 

Interest rate swaps

 

 

4

 

 

$

3,176,000

 

 

2023-2025

 

Other assets and deferred charges, net

Qualifying

 

Interest rate swaps

 

 

1

 

 

$

20,000

 

 

2023-2025

 

Accounts payable and accrued liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

Designation/

 

 

 

 

 

 

 

Fair

 

 

Maturity

 

Balance sheet

Cash flow

 

Derivative

 

Count

 

 

value

 

 

dates

 

location

Qualifying

 

Interest rate swaps

 

 

5

 

 

$

8,232,000

 

 

2023-2025

 

Accounts payable and accrued liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The notional values of the interest rate swaps held by the Company at June 30, 2022 and December 31, 2021 were $300.0 million in each period. The interest rate swaps were terminated as part of the Grocery-Anchored Portfolio Sale for a $3.4 million benefit.

The following presents the effect of the Company’s derivative financial instrumentsqualifying interest rate swaps on the condensed consolidated statements of operations and the consolidated statements of equity for the three and six months ended June 30, 20222023 and 2021, respectively:2022:

 

 

(Loss) recognized in other

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

 

 

 

 

 

 

 

reclassified into earnings (effective portion)

 

 

 

 

 

 

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

Classification

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Continuing Operations

 

$

 

 

$

(958,000

)

 

$

 

 

$

(2,320,000

)

 

 

 

 

Gain (loss) recognized in other

 

 

 

 

 

comprehensive (loss) income

 

 

 

 

 

(effective portion)

 

Designation/

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

Cash flow

 

Derivative

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Qualifying

 

Interest rate swaps

 

$

2,156,000

 

 

$

(637,000

)

 

$

9,132,000

 

 

$

1,756,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) recognized in other

 

 

 

 

 

comprehensive (loss) income

 

 

 

 

 

reclassified into earnings (effective portion)

 

 

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

Classification

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

Continuing Operations

 

$

(958,000

)

 

$

(1,656,000

)

 

$

(2,320,000

)

 

$

(3,460,000

)

16


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

As of June 30, 2022 the Company believes it has no significant risk associated with non-performance of the financial institutions which are the counterparties to its derivative contracts.  

Note 6. Commitments and Contingencies

The Company is a party to certain legal actions arising in the normal course of business. Management does not expect there to be adverse consequences from these actions that would be material to the Company’s consolidated financial statements.Lease Commitments

The Company is the lessee under several ground lease and itsagreements. The executive office lease agreement.agreement was terminated in 2022. As of June 30, 2022,2023, the Company’s weighted average remaining lease term is approximately 49.348.3 years and the weighted average discount rate used to calculate the Company’s lease liability is approximately 8.6%8.6%. Rent expense under the Company’s ground lease and executive office lease agreements was approximately $0.1$0.1 million and $0.3$0.1 million for the three months ended June 30, 20222023 and 2021,2022, respectively. Rent expense under the Company’s ground lease and executive office lease agreements was approximately $0.2$0.1 million and $0.7$0.2 million for the six months ended June 30, 2023 and 2022, and 2021, respectively.

Litigation

As a result of COVID-19, theThe Company has received numerous rent relief requests, most oftenis involved in various legal proceedings in the formordinary course of rent deferrals.its business, including, but not limited to commercial disputes. The Company has evaluated,believes that such litigation, claims and continues to evaluate, each tenant rent relief request on an individual basis, consideringadministrative proceedings will not have a number of factors. Through June 30, 2022, the Company deferred approximately $3.5 million and waived approximately $2.4 million of rental income, respectively. To date, the weighted average payback period for the remaining deferred rent receivable is approximately 10 months, beginning at various times from July 2020 through June 2021.material adverse

As described in Note 1, on March 2, 2022, the Company entered into definitive agreements for the Transactions, which contemplate sale of the Company and all of its assets in a series of related all-cash transactions.  On April 5, 2022, a purported stockholder of the Company filed a complaint against the Company and the Board in the United States District Court for the Eastern District of New York, entitled Stein v. 14


Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-1944. On April 6, 2022, another purported stockholder

Notes to Condensed Consolidated Financial Statements

June 30, 2023

(unaudited)

impact on its financial position or its results of operations. The Company records a liability when it considers the Company filed a complaint against the Companyloss probable and the Boardamount can be reasonably estimated. In addition, the below legal proceedings are in the United States District Court for the Eastern District of New York, entitled Wang v. Cedar Realty Trust, Inc. et. al.process:, Civil Action No. 22-cv-1975. On April 18, 2022, another purported stockholder of the Company filed a complaint against the Company and the Board in the United States District Court for the Eastern District of New York, entitled Whitfield v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-02204. Also on April 18, 2022, a purported stockholder filed a complaint against the Company and the Board in the United States District Court for the Eastern District of Pennsylvania, entitled Waterman v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-01489. On April 22, 2022, a purported stockholder filed a complaint against the Company and the Board in the United States District Court for the Eastern District of Pennsylvania, entitled Thornburgh v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-02304. In each action, the complaint alleges violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) in connection with the proposed Transactions. The complaints generally allege that the preliminary proxy statement on Schedule 14A filed by the Company with the SEC on April 5, 2022 omits material information regarding financial projections, the financial analysis conducted by JLL Securities in connection with its fairness opinion, conflicts of interest on behalf of JLL Securities and BofA Securities, and the terms of BofA Securities’ engagement. The complaints seek, among other things, an injunction preventing the consummation of the Transactions, or, in the event the Transactions are consummated, to recover damages resulting from defendants’ alleged violations of the Exchange Act.

On April 8, 2022, several purported holders of the Company’s outstanding preferred stock filed a putative class action complaint against the Company, the Board of Directors prior to the Merger, and WheelerWHLR in Montgomery County Circuit Court, Maryland entitled Sydney, et al. v. Cedar Realty Trust, Inc., et al., (Case No. C-15-CV-22-00152)C-15-CV-22-001527). The complaint alleges on behalf of a putative class of holders of the Company’s preferred stock, among other things, against the Company and the Board, claims for breach of contract with respect to the articles supplementary governing the terms of the Company’s preferred stock, breach of fiduciary duty, and tortious interference and aiding and abetting breach of fiduciary duty against Wheeler. The complaint seeks, among other things, a declaration that holders of the Company’s preferred stock are entitled to a liquidation preference as set forth in the articles supplementary governing the terms of the Company’s preferred stock, compensatory damages, and an injunction enjoining the merger with Wheeler, and an injunction enjoining the distribution to the Company’s common shareholders of the proceeds of any of the Transactions pending a determination of the merits of plaintiffs’ claims.

On May 6, 2022, plaintiffs in the Sydney action filed an amended complaint. The amended complaint alleges on behalf of a putative class of holders of the Company’s preferred stock, among other things, against the Company and the Board, claims for breach

17


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

of contract with respect to the articles supplementary governing the terms of the Company’s preferred stock and breach of fiduciary duty, and, against Wheeler, tortious interference and aiding and abetting breach of fiduciary duty. The Sydney amended complaint seeks, among other things, (i) a declaration that holders of the Company’s preferred stock are entitled to exercise either their liquidation rights or conversion rights as set forth in the articles supplementary, (ii) compensatory damages, (iii) an injunction enjoining the distribution to the Company’s common shareholders of the proceeds of the Grocery-Anchored Portfolio Sale, and (iv) an injunction enjoining the Merger. On May 6, 2022, the plaintiffsPlaintiffs in Sydney filed a motion for a preliminary injunction to temporarily enjoin, until the final resolution of the litigation (i) the distribution of the gross proceeds from the Grocery-Anchored Portfolio Sale to the common stockholders, (ii) the closing of the Merger, and (iii) the imposition of a constructive trust over the gross proceeds from both the Grocery Anchored Portfolio Sale and the Merger.injunction. Also on May, 6, 2022, a purported holder of the Company’s outstanding preferred stock filed a separate putative class action complaint against the Company and the Board of Directors prior to the Merger in the United States District Court for the District of Maryland, entitled Kim v. Cedar Realty Trust, Inc., et al., Civil Action No. 22-cv-01103. The complaint alleges on behalf of a putative class of holders of the Company’s preferred stock, among other things, claims for declaratory and injunctive relief with respect to the articles supplementary governing the terms of the Company’s preferred stock and breach of fiduciary duty. On May 11, 2022, the Company, the former Board of Directors of the Company and WheelerWHLR removed the Sydney action to the United States District Court for the District of Maryland, Case No. 8:22-cv-01142-GLR. On May 16, 2022, the court ordered that a hearing on the Sydney plaintiffs’Plaintiffs’ motion for preliminary injunction will be held on June 22, 2022. On June 2, 2022, the plaintiffsPlaintiffs in Kim also filed a motion for a preliminary injunction (i) to require that the Company provide preferred shareholders with a vote to approve the Grocery-Anchored Portfolio Sale and the Merger, and (ii) requiring Cedar disclose to preferred shareholders that the Grocery-Anchored Portfolio Sale and Merger entitled the preferred stockholders to exercise their change of control conversion right.injunction. The court agreed to consolidateconsolidated the Kim plaintiffs’ motionmotions for preliminary injunction with the Sydney plaintiffs’ motion for preliminary injunction, and to hear arguments on both motions at the hearing on June 22, 2022.injunction.

On June 23, 2022, following a hearing, on both the Sydney and Kim motions for preliminary injunction, the court issued an order denying both motions for preliminary injunction, holding that the plaintiffsPlaintiffs in both cases were unlikely to succeed on the merits of any of their contractual or fiduciary duty claims, and that plaintiffsPlaintiffs had not established that they would suffer irreparable harm if the injunction was denied.

By order dated July 11, 2022, the Courtcourt consolidated this case with another class action brought by a preferred stockholderthe Sydney and Kim cases and set an August 24, 2022 deadline for the plaintiffsPlaintiffs in both cases to file a consolidated amended complaint. Plaintiffs filed their amended complaint on August 24, 2022. The amended complaint alleges on behalf of a putative class of holders of the Company's preferred stock, among other things, claims for breach of contract against the Company and the former Board of Directors with respect to the articles supplementary governing the terms of the Company's preferred stock, breach of fiduciary duty against the former Board of Directors, and tortious interference and aiding and abetting breach of fiduciary duty against WHLR. On October 7, 2022, Defendants moved to dismiss the amended complaint. Plaintiffs opposed the motion to dismiss and filed a motion to certify a question of law to Maryland’s Supreme Court. On August 1, 2023, the court issued a decision and order granting Defendants’ motions to dismiss, without leave to amend, and denying Plaintiffs’ motion to certify a question of law to the Maryland Supreme Court. The decision becomes final unless Plaintiffs seek reconsideration within 14 days or file an appeal within 30 days.

On July 11, 2022, a purported holder of the Company's outstanding preferred stock filed a complaint against the Company and the Board of Directors prior to the Merger in the United States District Court for the Eastern District of New York, entitled High Income Securities Fund v. Cedar Realty Trust, Inc., et al., No. 2:22-cv-4031. The complaint alleged that the Defendants violated Section 10(b) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions, and that the former Board of Directors are control persons under Section 20(a) of the Exchange Act. On August 12, 2022, Defendants requested permission to file a motion to dismiss, and Plaintiff responded opposing Defendants’ request on September 7, 2022. The court granted Defendants’ request to file a motion to dismiss on October 25, 2022. Defendants served their motion to dismiss on December 23, 2022, which Plaintiff opposed on January 27, 2023. Defendants filed a reply brief on the motion to dismiss on February 17, 2023. At this juncture, the outcome of the litigation is uncertain.

On October 14, 2022, a purported holder of the Company's outstanding preferred stock filed a putative class action against the Company, the Board of Directors prior to the Merger, and WHLR in Nassau County Supreme Court, New York entitled Krasner v. Cedar Realty Trust, Inc., et al., (Case No. 613985/2022). The complaint alleges on behalf of a putative class of holders of the Company's preferred stock, among other things, claims for breach of contract against the Company and the former Board of Directors with respect to the articles supplementary governing the terms of the Company's preferred stock, breach of fiduciary duty against the former Board of Directors, and tortious interference and aiding and abetting breach of fiduciary duty against WHLR. The complaint seeks, among other relief, an award of monetary damages, attorneys' fees, and expert fees. Defendants removed the case to a federal court. On April 24, 2023, the federal court granted Plaintiff’s motion to remand the case to the Nassau County Supreme Court. Defendants have sought leave from the appellate court for permission to appeal the remand decision. Defendants have filed motions in the Nassau County action to dismiss or stay the case based both on the pendency of the lawsuit in Maryland in which the same claims were asserted by other preferred stockholders and on the merits. Plaintiff has opposed the motions. The court has set a hearing on the motions for August 23, 2023. At this juncture, the outcome of the litigation is uncertain.

15


Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2023

(unaudited)

Note 7. Shareholders’ Equity

Preferred Stock

The Company is authorized to issue up to 12,500,000 shares of preferred stock. The following tables summarize details about the Company’s preferred stock:

 

 

Series B

 

 

Series C

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Preferred Stock

 

 

 

 

 

 

 

Par value

 

$

0.01

 

 

$

0.01

 

 

 

 

 

 

 

Liquidation value

 

$

25.00

 

 

$

25.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2023

 

 

December 31, 2022

 

 

 

Series B

 

 

Series C

 

 

Series B

 

 

Series C

 

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

Shares authorized

 

 

6,050,000

 

 

 

6,450,000

 

 

 

6,050,000

 

 

 

6,450,000

 

Shares issued and outstanding

 

 

1,450,000

 

 

 

5,000,000

 

 

 

1,450,000

 

 

 

5,000,000

 

Balance

 

$

34,767,000

 

 

$

124,774,000

 

 

$

34,767,000

 

 

$

124,774,000

 

Dividends

 

 

Series B

 

 

Series C

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock

 

 

Preferred Stock

 

 

 

 

 

 

 

 

 

Par value

 

$

0.01

 

 

$

0.01

 

 

 

 

 

 

 

 

 

Liquidation value

 

$

25.00

 

 

$

25.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

 

December 31, 2021

 

 

 

Series B

 

 

Series C

 

 

Series B

 

 

Series C

 

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

 

Preferred Stock

 

Shares authorized

 

 

1,450,000

 

 

 

6,450,000

 

 

 

1,450,000

 

 

 

6,450,000

 

Shares issued and outstanding

 

 

1,450,000

 

 

 

5,000,000

 

 

 

1,450,000

 

 

 

5,000,000

 

Balance

 

$

34,767,000

 

 

$

124,774,000

 

 

$

34,767,000

 

 

$

124,774,000

 

18


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

Dividends

The following table provides a summary of dividends declared and paid per share:

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Common stock

 

$

-

 

 

$

0.066

 

 

$

0.066

 

 

$

0.132

 

 

$

 

 

$

 

 

$

 

 

$

0.066

 

7.25% Series B Preferred Stock

 

$

0.453

 

 

$

0.453

 

 

$

0.906

 

 

$

0.906

 

6.50% Series C Preferred Stock

 

$

0.406

 

 

$

0.406

 

 

$

0.813

 

 

$

0.813

 

7.25% Series B Preferred Stock

 

$

0.453

 

 

$

0.453

 

 

$

0.906

 

 

$

0.906

 

6.50% Series C Preferred Stock

 

$

0.406

 

 

$

0.406

 

 

$

0.813

 

 

$

0.813

 

On July 19, 2022,20, 2023, the Company’s Board of Directors declared dividends of $0.453125$0.453125 and $0.406250$0.406250 per share with respect to the Company’s Series B Preferred Stock and Series C Preferred Stock, respectively. The distributions are payable on August 22, 202221, 2023 to shareholders of record of the Series B Preferred Stock and Series C Preferred Stock, as applicable, on August 12, 2022.10, 2023.

Note 8. Revenues

Rental revenues for the three and six months ended June 30, 2023 and 2022, and 2021, respectively, compriseare comprised of the following:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Base rents

 

$

5,878,000

 

 

$

7,686,000

 

 

$

11,796,000

 

 

$

15,493,000

 

Expense recoveries

 

 

2,201,000

 

 

 

2,476,000

 

 

 

4,143,000

 

 

 

5,094,000

 

Percentage rent

 

 

146,000

 

 

 

122,000

 

 

 

269,000

 

 

 

363,000

 

Straight-line rents

 

 

(19,000

)

 

 

159,000

 

 

 

(87,000

)

 

 

171,000

 

Amortization of intangible lease liabilities, net

 

 

161,000

 

 

 

160,000

 

 

 

322,000

 

 

 

324,000

 

Total rents

 

$

8,367,000

 

 

$

10,603,000

 

 

$

16,443,000

 

 

$

21,445,000

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Base rents

 

$

5,951,000

 

 

$

6,197,000

 

 

$

11,786,000

 

 

$

12,482,000

 

Expense recoveries - variable lease revenue

 

 

1,654,000

 

 

 

2,258,000

 

 

 

3,915,000

 

 

 

4,255,000

 

Percentage rent - variable lease revenue

 

 

117,000

 

 

 

143,000

 

 

 

285,000

 

 

 

266,000

 

Straight-line rents

 

 

271,000

 

 

 

(35,000

)

 

 

461,000

 

 

 

(45,000

)

Above (below) market lease amortization, net

 

 

105,000

 

 

 

161,000

 

 

 

128,000

 

 

 

322,000

 

 

 

 

8,098,000

 

 

 

8,724,000

 

 

 

16,575,000

 

 

 

17,280,000

 

Credit adjustments on operating lease receivables

 

 

155,000

 

 

 

(431,000

)

 

 

319,000

 

 

 

(472,000

)

Total rental revenues

 

$

8,253,000

 

 

$

8,293,000

 

 

$

16,894,000

 

 

$

16,808,000

 

The Company reviews the collectability of charges under its tenant operating leases on a regular basis, taking into consideration changes in factors such as the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area where the property is located. During 2022 and 2021, the Company’s assessment has specifically included the impact of the COVID-19 pandemic, which represents a material risk to collectability. In the event that collectability with respect to any tenant changes, the Company recognizes an adjustment to rental income. The Company’s review of collectability of charges under its operating leases includes any accrued rental revenues related to the straight-line method of reporting rental revenue. The Company identified various tenants where collection was no longer considered probable. The determination to record revenue on a cash basis and write off any outstanding straight-line receivable from these various tenants reduced net income $0.0 million and $0.0 million for the three and six months ended June 30, 2022, respectively. In addition, during the three and six months ended June 30, 2022, respectively, $0.4 million and $0.8 million of billed charges, consisting of rent and tenant reimbursements, were unpaid, and based on the Company’s determination to record revenue on a cash basis for these tenants, these amounts were not recorded as revenue for the three and six months ended June 30, 2022.

1916


Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 20222023

(unaudited)

Note 9. Share-Based Compensation

The following tables set forth certain share-based compensation information for the three and six months ended June 30, 2023 and 2022, respectively:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Expense relating to share/unit grants

 

$

 

 

$

293,000

 

 

$

 

 

$

877,000

 

Amounts capitalized

 

 

 

 

 

(12,000

)

 

 

 

 

 

(54,000

)

Total charged to operations

 

$

 

$

281,000

 

 

$

 

 

$

823,000

 

On August 22, 2022, due to a change in control of the Company in connection with the Transactions, all share-based compensation outstanding at that time fully vested, including the Company’s then-President and 2021, respectively:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Expense relating to share/unit grants

 

$

293,000

 

 

$

1,092,000

 

 

$

877,000

 

 

$

2,021,000

 

Amounts capitalized

 

 

(12,000

)

 

 

(46,000

)

 

 

(54,000

)

 

 

(95,000

)

Total charged to operations

 

$

281,000

 

 

$

1,046,000

 

 

$

823,000

 

 

$

1,926,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

grant date value

 

 

 

 

 

 

 

 

 

Unvested shares/units, December 31, 2021

 

 

492,000

 

 

$

23.47

 

 

 

 

 

 

 

 

 

Restricted share grants

 

 

7,000

 

 

 

26.31

 

 

 

 

 

 

 

 

 

Vested during period

 

 

(33,000

)

 

 

24.34

 

 

 

 

 

 

 

 

 

Forfeitures/cancellations

 

 

(82,000

)

 

 

28.29

 

 

 

 

 

 

 

 

 

Unvested shares/units, June 30, 2022

 

 

384,000

 

 

$

22.42

 

 

 

 

 

 

 

 

 

During the six months endedCEO's restricted stock units. At June 30, 20222023, there were 7,000 restrictedno shares issued, with a weighted average grant date fair value of $26.31 per share.

President and CEO Employment Contract

On June 15, 2018, the Company’s President and CEO was granted a market performance-based equity award of 227,272 restricted stock units (“RSUs”) and 227,272 dividend equivalent rights (“DERs”) of the Company. Each RSU represents a contingent right to receive one common share if certain market performance criteria are achieved. Each DER accrues and will be deemed to be reinvested into the Company’s common stockavailable for which payment will only be made for the portion of the market performance-based equity award that are earned and vest. During the three years ending June 15, 2021 (the “Interim Performance Period”), a maximum of 113,636 shares were earned. Any portion of the market performance-based equity award that was not earned as of the end of the Interim Performance Period will be carried forward for calculation for the five years ending June 15, 2023 (the “Full Performance Period”). The percentage of the market performance-based equity award to be earned will be determined based on the Company’s annual return on an investment in the Company’s common stock (“TSR”) over the Interim Performance Period and/or over the Full Performance Period as follows: if average annual TSR (1) is below 4%, the percentage of grant earned would be 0%, (2) equals 4%, the percentage of grant earned would be 33.3%, (3) equals 6.5%, the percentage of grant earned would be 66.7%, and (4) equals 10% or above, the percentage of grant earned would be 100%. Linear interpolation shall be applied to determine the percentage of the market performance-based equity award that is earned where the average annual TSR over the performance period falls between the percentages set forth above.  Based on market performance for the Interim Performance Period, it was determined the Company’s President and CEO earned 113,636 shares. Accordingly, on July 20, 2021, the Company issued 113,636 common sharesgrants pursuant to the CEO and paid him $0.3 million for the related DERs.

The DERs will accrue and will be deemed to be reinvested into the Company’s common stock and payment with respect to the dividend equivalent rights will be deferred until the end of the Interim Performance Period, or the Full Performance Period, as the case may be, to coincide2017 Plan since this plan was terminated in connection with the vesting, if any, of the market performance-based equity award. Payment will only be made for the portion of the market performance-based equity award that is earned and vests.Merger.

20


Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

June 30, 2022

(unaudited)

Note 10. Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to the Company’s common shareholders by the weighted average number of common shares outstanding for the period including participating securities (restricted shares that have non-forfeitable rights to receive dividends issued pursuant to the Company’s share-based compensation program are considered participating securities). Unvested restricted shares that are participating securities are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the common shareholders. For the three and six months ended June 30, 2022,2023, the Company had 0.30.0 million of weighted average unvested restricted shares outstanding that were participating securities. For the three and six months ended June 30, 2021,2022, the Company had 0.50.3 million of weighted average unvested restricted shares outstanding that were participating securities. The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the three and six months ended June 30, 20222023 and 2021:2022:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net loss from continuing operations

 

$

(1,067,000

)

 

$

(34,342,000

)

 

$

(1,053,000

)

 

$

(41,155,000

)

Preferred stock dividends

 

 

(2,688,000

)

 

 

(2,688,000

)

 

 

(5,376,000

)

 

 

(5,376,000

)

Net loss attributable to noncontrolling interests

 

 

 

 

 

143,000

 

 

 

 

 

 

185,000

 

Net loss allocated to unvested shares

 

 

 

 

 

(18,000

)

 

 

 

 

 

(41,000

)

Loss from continuing operations, net of noncontrolling interest, attributable to vested common shares

 

 

(3,755,000

)

 

 

(36,905,000

)

 

 

(6,429,000

)

 

 

(46,387,000

)

Loss from discontinued operations, net of noncontrolling interests, attributable to vested common shares

 

 

 

 

 

(8,388,000

)

 

 

 

 

 

(2,673,000

)

Net loss attributable to vested common shares

 

$

(3,755,000

)

 

$

(45,293,000

)

 

$

(6,429,000

)

 

$

(49,060,000

)

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of vested common shares outstanding, basic and diluted

 

 

13,718,000

 

 

 

13,288,000

 

 

 

13,718,000

 

 

 

13,287,000

 

Net loss per common share attributable to common shareholders (basic and diluted):

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.27

)

 

$

(2.78

)

 

$

(0.47

)

 

$

(3.49

)

Discontinued operations

 

 

 

 

 

(0.63

)

 

 

 

 

 

(0.20

)

 

 

$

(0.27

)

 

$

(3.41

)

 

$

(0.47

)

 

$

(3.69

)

17

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income from continuing operations

 

$

(34,342,000

)

 

$

46,011,000

 

 

$

(41,155,000

)

 

$

40,726,000

 

Preferred stock dividends

 

 

(2,688,000

)

 

 

(2,688,000

)

 

 

(5,376,000

)

 

 

(5,376,000

)

Net loss (income) attributable to noncontrolling interests

 

 

143,000

 

 

 

(377,000

)

 

 

185,000

 

 

 

(480,000

)

Net earnings allocated to unvested shares

 

 

(18,000

)

 

 

(1,878,000

)

 

 

(41,000

)

 

 

(1,850,000

)

(Loss) income from continuing operations, net of noncontrolling interest, attributable to vested common shares

 

 

(36,905,000

)

 

 

41,068,000

 

 

 

(46,387,000

)

 

 

33,020,000

 

Income from discontinued operations, net of noncontrolling interests, attributable to vested common shares

 

 

(8,388,000

)

 

 

5,421,000

 

 

 

(2,673,000

)

 

 

11,921,000

 

Net (loss) income attributable to vested common shares

 

$

(45,293,000

)

 

$

46,489,000

 

 

$

(49,060,000

)

 

$

44,941,000

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of vested common shares outstanding, basic and diluted

 

 

13,288,000

 

 

 

13,197,000

 

 

 

13,287,000

 

 

 

13,171,000

 

Net (loss) income per common share attributable to common shareholders (basic and diluted):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.78

)

 

$

3.11

 

 

$

(3.49

)

 

$

2.51

 

Discontinued operations

 

 

(0.63

)

 

 

0.41

 

 

 

(0.20

)

 

 

0.90

 

 

 

$

(3.41

)

 

$

3.52

 

 

$

(3.69

)

 

$

3.41

 


Cedar Realty Trust, Inc.

Notes to Condensed Consolidated Financial Statements

June 30, 2023

(unaudited)

Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. For the three and six months ended June 30, 2022, and 2021, 0no restricted stock units (“RSU’s”) would have been issuable under the Company’s Presidentthen-President and CEO market performance-based equity award had the measurement period ended on June 30, 2022, and 2021, respectively, and therefore this market performance-based equity award had no impact in calculationcalculating diluted EPS.EPS for this period. For the three and six months ended June 30, 2023, there were no market performance-based equity awards issued or outstanding. Net loss (income) attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and the related OP Units have been excluded from the denominator for the purpose of calculating diluted EPS as there would have been no dilutive effect had such amounts been included. The weighted average number of OP Units outstanding were 65,000was 0 for the three and six months ended June 30, 2023 and 65,000 and 73,000 for the three and six months ended June 30, 2022, respectively,respectively.

Note 11. Related Party Transactions

With the completion of the Company's merger with WHLR, the Company became a wholly-owned subsidiary of WHLR. WHLR performs property management and 81,000leasing services for the Company. During the three and six months ended June 30, 2021.2023, the Company paid WHLR $0.0 million and $0.4 million, respectively, for these services. The Operating Partnership and WHLR’s operating partnership, Wheeler REIT, L.P., are party to a cost sharing and reimbursement agreement, pursuant to which the parties agreed to share costs and expenses associated with certain employees, certain facilities and property, and certain arrangements with third parties (the “Cost Sharing Agreement”). The related party amounts due to WHLR as of June 30, 2023 and December 31, 2022 are comprised of:

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

2022 financings and real estate taxes

 

$

7,166,000

 

 

$

7,166,000

 

Management fees

 

 

533,000

 

 

 

110,000

 

Leasing commissions

 

 

418,000

 

 

 

85,000

 

Cost Sharing Agreement allocations (a)

 

 

322,000

 

 

 

 

Other

 

 

117,000

 

 

 

(33,000

)

Total

 

$

8,556,000

 

 

$

7,328,000

 

(a)
Includes allocations for executive compensation and directors' liability insurance. In 2022, WHLR did not make any allocations to the Company for these services due to certain limitations set forth in the Cost Sharing Agreement.

Note 11.12. Subsequent Events

In determining subsequent events, management reviewed all activity fromOn July 1, 2022 through11, 2023, the date of filing this Quarterly Report on Form 10-Q. Other than those events disclosedCompany sold an outparcel building adjacent to Carll's Corner, located in this report, there were no other events or transactions that occurred that would require adjustment to, or disclosure in, the Company’s consolidated financial statements.Bridgeton, New Jersey for $3.0 million.

18



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company’s condensed consolidated financial statements and related notes thereto included elsewhere in this report.

Executive Summary

The Company is a fully-integrated real estate investment trust that focuses primarily on ownership, operationowning and redevelopment ofoperating income producing retail properties with a primary focus on grocery-anchored shopping centers primarily in high-density urban markets from Washington, D.C. to Boston.the Northeast. At June 30, 2023, the Company owned a portfolio of 19 operating properties. Upon completion of the Merger in 2022, the Company owned and managedbecame a portfoliowholly-owned subsidiary of 17 operating properties (excluding properties “held for sale”) totaling 2.6 million square feet of gross leasable area (“GLA”). The portfolio was 86.1% leased and 86.3% occupied at June 30, 2022.WHLR.

The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to leases. The Company’s operating results therefore depend on the ability of its tenants to make the payments required by the terms of their leases. The Company primarily focuses its investment activities on grocery-anchored shopping centers. The Company believes that, because of the need of consumers to purchase food and other staple goods and services generally available at such centers, its type of “necessities-based” properties should provide relatively stable revenue flows even during difficult economic times.

Significant Circumstances and Transactions

Transaction Agreements

On March 2, 2022, the Company announced that following its previously announced review of strategic alternatives, it had entered into definitive agreements for the sale of the Company and its assets in a series of related all-cash transactions.  Specifically, on March 2, 2022, the Company and certain of its subsidiaries, DRA Fund X-B LLC and KPR Centers LLC (together with their respective designees, the “Grocery-Anchored Purchasers”) entered into an asset purchase and sale agreement (the “Asset Purchase Agreement”), pursuant to which the Grocery-Anchored Purchasers will acquire a portfolio of 33 grocery-anchored shopping centers from the Company for a cash purchase price of $840.0 million (the “Grocery-Anchored Portfolio Sale”). The Asset Purchase Agreement provides that to the extent specified redevelopment assets (Riverview Plaza, East River Park and Senator Square, which have been classified as “real estate held for sale” as of March 31, 2022) of the Company are not sold by the Company to third parties prior to the closing of the Grocery-Anchored Portfolio Sale, these assets will be acquired by the Grocery-Anchored Purchasers for an additional cash purchase price of up to $80.5 million. In addition, on March 2, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) with Wheeler Real Estate Investment Trust, Inc. (“Wheeler”) and certain of its affiliates pursuant to which, following closing of the Grocery-Anchored Portfolio Sale, Wheeler will acquire the balance of the Company’s shopping center assets by way of an all-cash merger transaction that values the remaining portfolio at $291.3 million (the “Merger”).  Following completion of the transactions contemplated by the Merger Agreement, the Company will survive as a wholly-owned subsidiary of Wheeler. The Company’s currently outstanding 7.25% Series B Preferred Stock and 6.50% Series C Preferred Stock will remain outstanding as shares of preferred stock in the surviving company following the transactions and are expected to remain listed on the New York Stock Exchange.

The transactions contemplated by the Asset Purchase Agreement and the Merger Agreement are collectively referred to as the “Transactions”. The Transactions were unanimously approved by the Company’s Board of Directors (the “Board”) and were approved by the Company’s common stockholders at a special meeting of stockholders held on May 27, 2022, and are estimated to generate total net proceeds, after all transaction expenses, of approximately $29.00 per share in cash, which will be distributed to shareholders upon completion of the Merger. The Merger is expected to close in August 2022, subject to satisfaction of customary closing conditions.

On July 7, 2022, the Company and certain of its subsidiaries completed the Grocery-Anchored Portfolio Sale and East River Park and Senator Square sales for total gross proceeds of approximately $879 million, including the assumed debt. There were no material relationships among the Company, the Grocery-Anchored Purchasers, or any of their respective affiliates. In connection with the transactions discussed above, the Company incurred transaction costs of $34.2 million for the six months ended June 30, 2022, included in the accompanying consolidated statement of operations, of which $23.6 million relates to future employee severance payments.

COVID-19 Pandemic

As a result of COVID-19, the Company has received numerous rent relief requests, most often in the form of rent deferrals. The Company has entered into lease modifications that deferred approximately $3.5 million and waived approximately $2.4 million of


rental income through June 30, 2022, respectively. To date, the weighted average payback period of deferred rent is approximately 10 months, beginning at various times from July 2020 through June 2021.

Real Estate

On October 14, 2021, the Company acquired the 60% minority ownership percentage in the San Souci Plaza joint venture. On June 28, 2022, the Company acquired the 40% minority ownership percentage in the Crossroads joint venture.

As of June 30, 2022, Carll’s Corner, located in Bridgeton, New Jersey, the 33 grocery-anchored shopping centers and two redevelopment properties have been classified as “real estate held for sale” on the accompanying consolidated balance sheet.

Investment in Unconsolidated Joint Venture

On May 5, 2021, the Company formed a joint venture with Goldman Sachs Urban Investment Group and Asland Capital Partners (the “Joint Venture”) for the construction of an approximately 258,000 square foot six-story commercial building in Washington, D.C. consisting of approximately 240,000 square feet of office space which is 100% leased to the Washington, D.C., Department of General Services (“DGS”) for its headquarters and approximately 18,000 square feet of street-level retail. The term of the lease with DGS is for 20 years and 10 months, to commence upon substantial completion and delivery to the DGS. This building is planned as the first phase of Northeast Heights, a redevelopment of two existing shopping centers, East River Park and Senator Square, into a mixed-use residential, office and retail property. Further, the Joint Venture has secured construction financing from JP Morgan not to exceed $105 million. The construction loan initially bears interest at LIBOR plus 200 basis points and has an initial term of three years with two, one-year extension options subject to customary conditions. The Company has a 10% interest in the joint venture and is a co-general partner along with Asland Capital Partners. The Company has contributed approximately $4.8 million of capital to the Joint Venture as of June 30, 2022. The Company has sold approximately $8.0 million of development costs to the Joint Venture as part of its formation on May 5, 2021.

The Joint Venture currently estimates that the space will be delivered during the end of the fourth quarter 2022. Upon completion of the building, DGS will be obligated to pay initial annual net rent of approximately $5.4 million per year, subject to a 2.5% annual escalator on each anniversary of rent commencement, plus certain operating costs, property taxes and amortization of tenant improvements together totaling approximately an additional $8.1 million per year, for an aggregate total annual rent of approximately $13.5 million. The lease provides for a free rent period of 10 months immediately following rent commencement. The lease also provides DGS with a tenant credit of approximately $6.8 million to be applied, at DGS’s election, against either annual rent or any other tenant payment obligations including tenant improvement costs, in excess of the tenant improvement allowance. Pursuant to the lease, the Joint Venture will contribute up to $155 per rentable square foot toward the cost of tenant improvements, to be amortized over 240 months. In addition, the lease provides that the Joint Venture will contribute $9.38 per rentable square foot in additional tenant improvement allowance between the 10th and 12th lease years, upon DGS’s timely election. The obligations of DGS under the lease are subject to annual budget appropriation.

Unsecured Revolving Credit Facility and Term Loans

On August 30, 2021, the Company amended its existing $300 million unsecured credit facility and $50 million term loan. After the amendment, the new unsecured revolving credit facility is $185 million with an expiration in August 2024. The new unsecured revolving credit facility may be extended, at the Company’s option for two additional one-year periods, subject to customary conditions. Interest on the borrowings under the new unsecured revolving credit facility component can range from LIBOR plus 135 bps to 195 bps (150 bps at June 30, 2022), based on the Company’s leverage ratio. The Company extended its $50 million term loan four years with an expiration in August 2026. The unsecured credit facility and term notes were paid off on July 11, 2022, in connection with the Grocery-Anchored Portfolio Sale.

Mortgage Loans Payable

On May 5, 2021, the Company closed a non-recourse mortgage for $114.0 million. The mortgage matures June 1, 2031, bears interest at a fixed-rate of 3.49% and requires payment of interest only for the first five years followed by payments of principal and interest based on thirty-year amortization for the remainder of the term. The loan is secured by five shopping centers consisting of Lawndale Plaza, The Shops at Suffolk Downs, Christina Crossing, Trexlertown Plaza, and The Point. These properties had no pre-existing debt and the proceeds from this new loan were used to reduce amounts outstanding under the Company’s revolving credit facility. The mortgage loans payable were assumed by the Grocery-Anchored Purchasers.


Critical Accounting Policies

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition and the allowance for doubtful accounts receivable, real estate investments and purchase accounting allocations related thereto, and asset impairment, and derivatives used to hedge interest-rate risks.impairment. Management’s estimates are based both on information that is currently available and on various other assumptions management believes to be reasonable under the circumstances. Actual results could differ from those estimates and those estimates could be different under varying assumptions or conditions.

The Company believes there have been no material changes to the items disclosed as its critical accounting policies under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.2022. See Note 2, – “SummarySummary of Significant Accounting Policies”Policies, for recently-adopted accounting pronouncements.

19


Results of Operations

Comparison of three months ended June 30, 2023 to June 30, 2022

 

 

Three months ended June 30,

 

 

Change

 

 

2023

 

 

2022

 

 

Dollars

 

 

Percent

Revenues

 

$

8,284,000

 

 

$

8,430,000

 

 

$

(146,000

)

 

-1.7%

Property operating expenses

 

 

(3,133,000

)

 

 

(3,471,000

)

 

 

338,000

 

 

-9.7%

Property operating income

 

 

5,151,000

 

 

 

4,959,000

 

 

 

192,000

 

 

 

Corporate general and administrative

 

 

(958,000

)

 

 

(2,862,000

)

 

 

1,904,000

 

 

-66.5%

Depreciation and amortization

 

 

(3,309,000

)

 

 

(2,850,000

)

 

 

(459,000

)

 

16.1%

Impairment charges

 

 

 

 

 

(2,000

)

 

 

2,000

 

 

n/a

Transaction costs

 

 

 

 

 

(30,457,000

)

 

 

30,457,000

 

 

n/a

Interest expense, net

 

 

(1,951,000

)

 

 

(3,130,000

)

 

 

1,179,000

 

 

-37.7%

Income (loss) from continuing operations

 

 

(1,067,000

)

 

 

(34,342,000

)

 

 

33,275,000

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

7,698,000

 

 

 

(7,698,000

)

 

-100.0%

Impairment charges

 

 

 

 

 

(16,119,000

)

 

 

16,119,000

 

 

n/a

Net income (loss)

 

 

(1,067,000

)

 

 

(42,763,000

)

 

 

41,696,000

 

 

 

Net loss attributable to noncontrolling interests

 

 

 

 

 

176,000

 

 

 

(176,000

)

 

n/a

Net income (loss) attributable to Cedar Realty Trust, Inc.

 

$

(1,067,000

)

 

$

(42,587,000

)

 

$

41,520,000

 

 

 

to June 30, 2021

 

 

 

 

 

 

 

 

 

 

Change

 

 

 

2022

 

 

2021

 

 

Dollars

 

 

Percent

 

Revenues

 

$

8,503,000

 

 

$

10,844,000

 

 

$

(2,341,000

)

 

-21.6%

 

Property operating expenses

 

 

(3,545,000

)

 

 

(3,664,000

)

 

 

119,000

 

 

-3.2%

 

Property operating income

 

 

4,958,000

 

 

 

7,180,000

 

 

 

(2,222,000

)

 

 

 

 

General and administrative

 

 

(2,861,000

)

 

 

(5,096,000

)

 

 

2,235,000

 

 

-43.9%

 

Depreciation and amortization

 

 

(2,850,000

)

 

 

(2,976,000

)

 

 

126,000

 

 

-4.2%

 

Gain on sales

 

 

 

 

 

48,857,000

 

 

 

(48,857,000

)

 

n/a

 

Impairment (charges) reversal

 

 

(2,000

)

 

 

1,849,000

 

 

 

(1,851,000

)

 

n/a

 

Transaction costs

 

 

(30,457,000

)

 

 

 

 

 

(30,457,000

)

 

n/a

 

Interest expense

 

 

(3,130,000

)

 

 

(3,803,000

)

 

 

673,000

 

 

-17.7%

 

(Loss) income from continuing operations

 

 

(34,342,000

)

 

 

46,011,000

 

 

 

(80,353,000

)

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

7,698,000

 

 

 

5,453,000

 

 

 

2,245,000

 

 

41.2%

 

Impairment charges

 

 

(16,119,000

)

 

 

 

 

 

(16,119,000

)

 

n/a

 

Net (loss) income

 

 

(42,763,000

)

 

 

51,464,000

 

 

 

(94,227,000

)

 

 

 

 

Net loss (income) attributable to noncontrolling interests

 

 

176,000

 

 

 

(409,000

)

 

 

585,000

 

 

n/a

 

Net (loss) income attributable to Cedar Realty Trust, Inc.

 

$

(42,587,000

)

 

$

51,055,000

 

 

$

(93,642,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues were lower as a result of (1) a decrease of $2.1$0.4 million in rental revenues, and expense recoveries and other income attributable to properties that were sold or held for sale in 2022 and 2021 not deemed to be discontinued operations, partially off-setoffset by (2) an increase of $0.3$0.2 million in rental revenues and expense recoveries attributable to same center properties.

Property operating expenses were lower as a result of (1) a decrease of $0.4$0.2 million in property operating expenses attributable to properties that were sold or held for sale duringin 2022 and 2021 not deemed to be discontinued operations partially off-set byand (2) an increasea decrease of $0.3$0.1 million in property operating expenses attributable to same center properties.

GeneralCorporate general and administrativecosts were lower primarily as a result of (1) a decrease of $1.6$1.3 million in payroll related costs predominantly related to the previously announced dual-track strategic alternatives process and (2) a decrease in legalother corporate general and administrative costs of $0.8 million, both which are predominantly related to the completion of the Grocery-Anchored Portfolio Sale and the Merger, partially offset by (3) an increase of $0.2 million in professional fees of $0.6 million.fees.

Depreciation and amortization expenses were lowerhigher primarily as a result of a decreasean increase of $0.2$0.5 million attributable to properties that were sold or held for salesame center properties.

Impairment charges in 2022 and 2021 not deemed to be discontinued operations.

Gain on sales in 2021 relates to the sale of the Camp Hill Shopping Center, located in Camp Hill, Pennsylvania.

Impairment charges in 2022 relatesrelate to Riverview Plaza, located in Philadelphia, Pennsylvania. Impairment reversal in 2021 relates to The Commons Plaza, located in Dubois, Pennsylvania.


Transaction costs in 2022 relate to costs incurred related to the previously announced dual-track strategic alternatives process.Grocery-Anchored Portfolio Sale and the Merger.

Interest expense, net was lower as a result of (1) a decrease in the overall weighted average principal balance which resulted in a decrease in interest expense of $1.0$2.0 million, (2) a decrease in amortization expense of deferred financing costs $0.2of $0.1 million, partially off-setoffset by (3) a decrease in capitalized interest of $0.3 million and (4) an increase in the overall weighted average interest rate which resulted in an increase in interest expense of $0.1 million and (4) a decrease in capitalized interest of $0.4$0.6 million.

Discontinued operations for 2022 and 2021 includeincludes the results of operations and impairments for properties treated as discontinued operations.operations, which include the Grocery-Anchored Portfolio Sale, and the East River Park and Senator Park redevelopments.

20


Comparison of six months ended June 30, 2023 to June 30, 2022

 

 

Six months ended June 30,

 

 

Change

 

 

2023

 

 

2022

 

 

Dollars

 

 

Percent

Revenues

 

$

17,207,000

 

 

$

17,146,000

 

 

$

61,000

 

 

0.4%

Property operating expenses

 

 

(6,933,000

)

 

 

(6,949,000

)

 

 

16,000

 

 

-0.2%

Property operating income

 

 

10,274,000

 

 

 

10,197,000

 

 

 

77,000

 

 

 

Corporate general and administrative

 

 

(1,670,000

)

 

 

(5,773,000

)

 

 

4,103,000

 

 

-71.1%

Depreciation and amortization

 

 

(5,802,000

)

 

 

(5,351,000

)

 

 

(451,000

)

 

8.4%

Impairment charges

 

 

 

 

 

(199,000

)

 

 

199,000

 

 

n/a

Transaction costs

 

 

 

 

 

(34,192,000

)

 

 

34,192,000

 

 

n/a

Interest expense, net

 

 

(3,855,000

)

 

 

(5,837,000

)

 

 

1,982,000

 

 

-34.0%

Loss from continuing operations

 

 

(1,053,000

)

 

 

(41,155,000

)

 

 

40,102,000

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

 

 

 

13,946,000

 

 

 

(13,946,000

)

 

-100.0%

Impairment charges

 

 

 

 

 

(16,630,000

)

 

 

16,630,000

 

 

n/a

Net income (loss)

 

 

(1,053,000

)

 

 

(43,839,000

)

 

 

42,786,000

 

 

 

Net income attributable to noncontrolling interests

 

 

 

 

 

196,000

 

 

 

(196,000

)

 

n/a

Net income (loss) attributable to Cedar Realty Trust, Inc.

 

$

(1,053,000

)

 

$

(43,643,000

)

 

$

42,590,000

 

 

 

to June 30, 2021

 

 

 

 

 

 

 

 

 

 

Change

 

 

 

2022

 

 

2021

 

 

Dollars

 

 

Percent

 

Revenues

 

$

16,781,000

 

 

$

21,779,000

 

 

$

(4,998,000

)

 

-22.9%

 

Property operating expenses

 

 

(6,584,000

)

 

 

(7,840,000

)

 

 

1,256,000

 

 

-16.0%

 

Property operating income

 

 

10,197,000

 

 

 

13,939,000

 

 

 

(3,742,000

)

 

 

 

 

General and administrative

 

 

(5,773,000

)

 

 

(9,500,000

)

 

 

3,727,000

 

 

-39.2%

 

Depreciation and amortization

 

 

(5,351,000

)

 

 

(6,437,000

)

 

 

1,086,000

 

 

-16.9%

 

Gain on sales

 

 

 

 

 

48,857,000

 

 

 

(48,857,000

)

 

n/a

 

Impairment (charges) reversal

 

 

(199,000

)

 

 

1,849,000

 

 

 

(2,048,000

)

 

n/a

 

Transaction costs

 

 

(34,192,000

)

 

 

 

 

 

(34,192,000

)

 

n/a

 

Interest expense

 

 

(5,837,000

)

 

 

(7,982,000

)

 

 

2,145,000

 

 

-26.9%

 

(Loss) income from continuing operations

 

 

(41,155,000

)

 

 

40,726,000

 

 

 

(81,881,000

)

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

 

13,946,000

 

 

 

10,944,000

 

 

 

3,002,000

 

 

27.4%

 

Impairment charges

 

 

(16,630,000

)

 

 

 

 

 

(16,630,000

)

 

n/a

 

Gain on sales

 

 

 

 

 

1,047,000

 

 

 

(1,047,000

)

 

n/a

 

Net (loss) income

 

 

(43,839,000

)

 

 

52,717,000

 

 

 

(96,556,000

)

 

 

 

 

Net loss (income) attributable to noncontrolling interests

 

 

196,000

 

 

 

(550,000

)

 

 

746,000

 

 

n/a

 

Net (loss) income attributable to Cedar Realty Trust, Inc.

 

$

(43,643,000

)

 

$

52,167,000

 

 

$

(95,810,000

)

 

 

 

 

Revenues were lowerhigher as a result of (1) an increase of $1.0 million in rental revenues and expense recoveries attributable to same center properties, partially offset by (2) a decrease of $4.5$0.9 million in rental revenues and expense recoveries attributable to properties that were sold or held for sale in 2022 and 2021 not deemed to be discontinued operations and (2) a decrease of $0.4 million in rental revenues and expense recoveries attributable to same center properties.operations.

Property operating expenses were lower as a result of (1) a decrease of $1.3$0.6 million in property operating expenses attributable to properties that were sold or held for sale duringin 2022 and 2021 not deemed to be discontinued operations.operations, partially offset by (2) an increase of $0.6 million in property operating expenses attributable to same center properties.

GeneralCorporate general and administrativecosts were lower primarily as a result of (1) a decrease of $3.0$2.6 million in payroll related costs predominantly related to the previously announced dual-track strategic alternatives process and (2) a decrease in legal feesother corporate general and administrative costs of $0.6 million.$1.7 million, both which are predominantly related to the completion of the Grocery-Anchored Portfolio Sale and the Merger, partially offset by (3) an increase of $0.2 million in professional fees.

Depreciation and amortization expenses were lowerhigher primarily as a result of (1) a decreasean increase of $0.7 million attributable to properties that were sold or held for sale in 2022 and 2021 not deemed to be discontinued operations and (2) a decrease of $0.3$0.5 million attributable to same center properties.

Gain on salesImpairment charges in 2021 relates to the sale of the Camp Hill Shopping Center, located in Camp Hill, Pennsylvania.

Impairment charges in 2022 relatesrelate to Riverview Plaza, located in Philadelphia, Pennsylvania. Impairment reversal in 2021 relates to The Commons Plaza, located in Dubois, Pennsylvania.

Transaction costs in 2022 relate to costs incurred related to the previously announced dual-track strategic alternatives process.Grocery-Anchored Portfolio Sale and the Merger.

Interest expense, net was lower as a result of (1) a decrease in the overall weighted average principal balance which resulted in a decrease in interest expense of $2.5$4.1 million, (2) a decrease in amortization expense of deferred financing costs $0.4of $0.2 million, partially


off-set offset by (3) a decrease in capitalized interest of $1.0 million and (4) an increase in the overall weighted average interest rate which resulted in an increase in interest expense of $0.3 million and (4) a decrease in capitalized interest of $0.5$1.3 million.

Discontinued operations for 2022 and 2021 includeincludes the results of operations impairments and gain on salesimpairments for properties treated as discontinued operations.operations, which include the Grocery-Anchored Portfolio Sale, and the East River Park and Senator Park redevelopments.

21


Same-Property Net Operating Income

Same-property net operating income (“same-property NOI”) is a widely-used non-GAAP financial measure for REITs that the Company believes, when considered with financial statements prepared in accordance with GAAP, is useful to investors as it provides an indication of the recurring cash generated by the Company’s properties by excluding certain non-cash revenues and expenses, as well as other infrequent items such as lease termination income which tends to fluctuate more than rents from year to year. Properties are included in same-property NOI if they are owned and operated for the entirety of both periods being compared, except for properties undergoing significant redevelopment and expansion until such properties have stabilized, and properties classified as held for sale. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from same-property NOI.

The most directly comparable GAAP financial measure is consolidated operating income. Same-property NOI should not be considered as an alternative to consolidated operating income prepared in accordance with GAAP or as a measure of liquidity. Further, same-property NOI is a measure for which there is no standard industry definition and, as such, it is not consistently defined or reported on among the Company’s peers, and thus may not provide an adequate basis for comparison among REITs.

The following table reconciles same-property NOI to the Company’s consolidated operating income:income (loss):

 

For the three months ended June 30,

 

 

For the six months ended June 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

For the three months ended June 30,

 

 

For the six months ended June 30,

 

Operating (loss) income

 

$

(31,212,000

)

 

$

49,814,000

 

 

$

(35,318,000

)

 

$

48,708,000

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating income (loss)

 

$

884,000

 

 

$

(31,212,000

)

 

$

2,802,000

 

 

$

(35,318,000

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

2,861,000

 

 

 

5,096,000

 

 

 

5,773,000

 

 

 

9,500,000

 

Gain on sales

 

 

 

 

 

(48,857,000

)

 

 

 

 

 

(48,857,000

)

Corporate general and administrative

 

 

958,000

 

 

 

2,862,000

 

 

 

1,670,000

 

 

 

5,773,000

 

Transaction costs

 

 

30,457,000

 

 

 

 

 

 

34,192,000

 

 

 

 

 

 

 

 

 

30,457,000

 

 

 

 

 

 

34,192,000

 

Impairment charges (reversal)

 

 

2,000

 

 

 

(1,849,000

)

 

 

199,000

 

 

 

(1,849,000

)

Impairment charges

 

 

 

 

 

2,000

 

 

 

 

 

 

199,000

 

Depreciation and amortization

 

 

2,850,000

 

 

 

2,976,000

 

 

 

5,351,000

 

 

 

6,437,000

 

 

 

3,309,000

 

 

 

2,850,000

 

 

 

5,802,000

 

 

 

5,351,000

 

Straight-line rents

 

 

19,000

 

 

 

(159,000

)

 

 

87,000

 

 

 

(171,000

)

 

 

(271,000

)

 

 

35,000

 

 

 

(461,000

)

 

 

45,000

 

Amortization of intangible lease liabilities

 

 

(161,000

)

 

 

(160,000

)

 

 

(322,000

)

 

 

(324,000

)

Other adjustments

 

 

29,000

 

 

 

(36,000

)

 

 

(6,000

)

 

 

(71,000

)

Above (below) market lease amortization, net

 

 

(105,000

)

 

 

(161,000

)

 

 

(128,000

)

 

 

(322,000

)

Other non-property revenue

 

 

(76,000

)

 

 

(109,000

)

 

 

(121,000

)

 

 

(308,000

)

NOI related to properties not defined as same-property

 

 

(233,000

)

 

 

(2,045,000

)

 

 

(733,000

)

 

 

(4,162,000

)

 

 

133,000

 

 

 

(106,000

)

 

 

(71,000

)

 

 

(449,000

)

Same-property NOI

 

$

4,612,000

 

 

$

4,780,000

 

 

$

9,223,000

 

 

$

9,211,000

 

 

$

4,832,000

 

 

$

4,618,000

 

 

$

9,493,000

 

 

$

9,163,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of same properties

 

 

17

 

 

 

17

 

 

 

17

 

 

 

17

 

 

 

19

 

 

 

19

 

 

 

19

 

 

 

19

 

Same-property occupancy, end of period

 

 

86.1

%

 

 

86.8

%

 

 

86.1

%

 

 

86.8

%

 

 

84.5

%

 

 

83.1

%

 

 

84.5

%

 

 

83.1

%

Same-property leased, end of period

 

 

86.3

%

 

 

86.9

%

 

 

86.3

%

 

 

86.9

%

 

 

87.7

%

 

 

83.3

%

 

 

87.7

%

 

 

83.3

%

Same-property average base rent, end of period

 

$

10.49

 

 

$

10.52

 

 

$

10.49

 

 

$

10.52

 

 

$

10.50

 

 

$

10.53

 

 

$

10.50

 

 

$

10.53

 

Same-property NOI for the comparable three and six monthmonths ended June 30, 2023 increased 4.6% and 3.6%, respectively, compared to the same periods decreased 3.5% and increased 0.1%, respectively.in the prior year.

22



Leasing Activity

The following is a summary of the Company’s retail leasing activity during the three and six months ended June 30, 2022:2023 for the 19-property portfolio:

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30, 2023

 

 

June 30, 2023

 

Renewals (a):

 

 

 

 

 

 

Leases renewed with rate increase (sq feet)

 

 

13,580

 

 

 

69,751

 

Leases renewed with rate decrease (sq feet)

 

 

 

 

 

 

Leases renewed with no rate change (sq feet)

 

 

5,643

 

 

 

7,643

 

Total leases renewed (sq feet)

 

 

19,223

 

 

 

77,394

 

 

 

 

 

 

 

 

Leases renewed with rate increase (count)

 

 

3

 

 

 

8

 

Leases renewed with rate decrease (count)

 

 

 

 

 

 

Leases renewed with no rate change (count)

 

 

2

 

 

 

3

 

Total leases renewed (count)

 

 

5

 

 

 

11

 

 

 

 

 

 

 

 

Option exercised (count)

 

 

1

 

 

 

3

 

 

 

 

 

 

 

 

Weighted average on rate increases (per sq foot)

 

$

1.41

 

 

$

0.61

 

Weighted average on rate decreases (per sq foot)

 

$

 

 

$

 

Weighted average on all renewals (per sq foot)

 

$

1.00

 

 

$

0.55

 

 

 

 

 

 

 

 

Weighted average change over prior rates

 

 

6.55

%

 

 

4.82

%

 

 

 

 

 

 

 

New Leases (a) (b):

 

 

 

 

 

 

New leases (sq feet)

 

 

26,265

 

 

 

68,665

 

New leases (count)

 

 

3

 

 

 

6

 

Weighted average rate (per sq foot)

 

$

13.69

 

 

$

13.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tenant

 

 

 

 

Leases

 

 

 

 

 

 

New rent

 

 

Prior rent

 

 

Cash basis

 

 

improvements

 

 

 

 

signed

 

 

GLA

 

 

per sq.ft.

 

 

per sq.ft.

 

 

% change

 

 

per sq.ft.

 

 

Renewals

 

 

46

 

 

 

260,300

 

 

 

14.82

 

 

 

14.33

 

 

 

3.4

%

 

 

0.16

 

 

New Leases - Comparable

 

 

17

 

 

 

86,200

 

 

 

21.33

 

 

 

14.59

 

 

 

46.2

%

 

 

88.66

 

(a)

New Leases - Non-Comparable (b)

 

 

5

 

 

 

53,300

 

 

 

13.03

 

 

n/a

 

 

n/a

 

 

 

61.14

 

(a)

Total (c)

 

 

68

 

 

 

399,800

 

 

 

15.99

 

 

n/a

 

 

n/a

 

 

 

27.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)
Lease data presented is based on average rate per square foot over the renewed or new lease term.
(b)
The Company does not include ground leases entered into for the purposes of new lease sq feet and weighted average rate (per sq foot) on new leases.

(a)

Includes both tenant allowance and landlord work. Excludes first generation space.

(b)

Includes leases signed at first generation and expansion space.

(c)

Legal fees and leasing commissions averaged a combined total of $4.19 per square foot.

Liquidity and Capital Resources

The Company funds operating expenses and other short-term liquidity requirements, including debt service and loan maturities, tenant improvements, and leasing commissions, preferred and common dividend distributions and distributions to minority interest partners, if made, primarily from its operations. The Company may also use its revolving credit facility for these purposes. The Company expects to fund long-term liquidity requirements for property acquisitions, redevelopment costs, capital improvements,operations and maturing debt initially with its revolving credit facility, and ultimately through a combination of issuing and/or assuming additional debt, the sale of equity securities, the issuance of additional OP Units, and/or the sale of properties. Although the Company believes it has access to secured and unsecured financing, there can be no assurance that the Company will have access to financing for development projects, financing for additional construction projects, or proceeds from refinancing of existing debt.

On August 30, 2021, the Company amended its existing $300$10.5 million unsecured credit facility and $50 million term loan. After the amendment, the new unsecured revolving credit facility is $185 million with an expiration in August 2024. The new unsecured revolving credit facility may be extended, at the Company’s option for two additional one-year periods, subject to customary conditions. Interest on the borrowings under the new unsecured revolving credit facility component can range from LIBOR plus 135 bps to 195 bps (150 bps at June 30, 2022), based on the Company’s leverage ratio. Interest on borrowings under the unsecured credit facility is based on the Company’s leverage ratio. The Company extended its $50 million term loan four years with an expiration in August 2026.

The Company’s unsecured credit facility and term loans contain financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facilities could result in the acceleration of the related debt and exercise of other lender remedies. Although the credit facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income for the trailing twelve months,restricted cash as defined in the agreements.  As of June 30, 2022, the2023. The Company had $41.0 million outstanding under its revolving credit facility. The unsecured credit facility and term notes were paid off on July 11, 2022, in connection with the Grocery-Anchored Portfolio Sale.

On May 5, 2021, the Company closed a non-recourse mortgage for $114.0 million. The mortgage matures June 1, 2031, bears interest at a fixed-rate of 3.49% and requires payment of interest onlydoes not have any scheduled debt maturities for the first five years followed by payments of principal and interest based on thirty-year amortization for the remainder of the term. The loan is secured by five shopping centers consisting of Lawndale Plaza, The Shops at Suffolk Downs, Christina Crossing, Trexlertown Plaza, and The Point.  These properties had no pre-existing debt and the proceeds from this new loan were used to reduce amounts outstanding under the Company’s revolving credit facility. The mortgage loans payable were assumed by the Grocery-Anchored Purchasers.



Debt and finance lease obligations are composed of the following attwelve months ending June 30, 2022:

 

 

 

 

June 30, 2022

 

 

 

 

 

 

 

 

 

Contractual

 

 

 

Maturity

 

Balance

 

 

interest rates

 

Description

 

dates

 

outstanding

 

 

weighted-average

 

Fixed-rate mortgage and finance lease obligation- held for sale

 

 

 

 

 

 

 

 

 

 

Franklin Village

 

Jun 2026

 

$

44,018,000

 

 

3.9%

 

Shops at Suffolk Downs (a)

 

Jun 2031

 

 

15,600,000

 

 

3.5%

 

Trexlertown Plaza (a)

 

Jun 2031

 

 

36,100,000

 

 

3.5%

 

The Point (a)

 

Jun 2031

 

 

29,700,000

 

 

3.5%

 

Christina Crossing (a)

 

Jun 2031

 

 

17,000,000

 

 

3.5%

 

Lawndale Plaza (a)

 

Jun 2031

 

 

15,600,000

 

 

3.5%

 

Senator Square finance lease obligation

 

Sep 2050

 

 

5,578,000

 

 

5.3%

 

 

 

 

 

 

163,596,000

 

 

3.6%

 

Unsecured credit facilities:

 

 

 

 

 

 

 

 

 

 

Variable-rate:

 

 

 

 

 

 

 

 

 

 

Revolving credit facility (b)

 

Aug 2024

 

 

41,000,000

 

 

3.1%

 

Fixed-rate (c):

 

 

 

 

 

 

 

 

 

 

Term loan

 

Apr 2023

 

 

100,000,000

 

 

3.3%

 

Term loan

 

Sep 2024

 

 

75,000,000

 

 

3.8%

 

Term loan

 

Jul 2025

 

 

75,000,000

 

 

4.7%

 

Term loan

 

Aug 2026

 

 

50,000,000

 

 

3.3%

 

 

 

 

 

 

504,596,000

 

 

3.7%

 

Unamortized issuance costs

 

 

 

 

(2,848,000

)

 

 

 

 

 

 

 

 

$

501,748,000

 

 

 

 

 

(a)2024. The mortgagesCompany is working to increase revenue by improving occupancy which includes backfilling vacant anchor spaces and replacing defaulted tenants. Tenant improvements and leasing commissions for these properties are cross-collateralized.efforts will be partially funded by restricted cash, strategic disposition of assets and financing of properties.

(b)   The revolving credit facility is subject to two one-year extensions at the Company’s option.

(c) The interest rates on these term loans consist of LIBOR plus a credit spread based on the Company’s leverage ratio, for which the Company has interest rate swap agreements which convert the LIBOR rates to fixed rates. Accordingly, these term loans are presented as fixed-rate debt.   

The following table details the Company’s debt and finance lease obligation maturities at June 30, 2022:

 

 

Mortgage Loan

 

 

Finance Lease

 

 

Revolving

 

 

Term

 

 

 

 

 

Year

 

Payable

 

 

Obligation

 

 

Credit Facility

 

 

Loans

 

 

Total

 

2022

 

$

563,000

 

 

$

19,000

 

 

$

-

 

 

$

-

 

 

$

582,000

 

2023

 

 

1,160,000

 

 

 

39,000

 

 

 

-

 

 

 

100,000,000

 

 

 

101,199,000

 

2024

 

 

1,206,000

 

 

 

41,000

 

 

 

41,000,000

 

(a)

 

75,000,000

 

 

 

117,247,000

 

2025

 

 

1,253,000

 

 

 

44,000

 

 

 

-

 

 

 

75,000,000

 

 

 

76,297,000

 

2026

 

 

40,922,000

 

 

 

48,000

 

 

 

-

 

 

 

50,000,000

 

 

 

90,970,000

 

Thereafter

 

 

112,914,000

 

 

 

5,387,000

 

 

 

-

 

 

 

-

 

 

 

118,301,000

 

 

 

$

158,018,000

 

 

$

5,578,000

 

 

$

41,000,000

 

 

$

300,000,000

 

 

$

504,596,000

 

(a)

The revolving credit facility is subject to two one-year extensions at the Company’s option.

In order to continue qualifying as a REIT, the Company is required to distribute at least 90% of its “REIT taxable income”, as defined in the Internal Revenue Code of 1986, as amended (the “Code”). The Company paid common and preferred stock dividends during 2021 and through the first quarter of 2022 and has continued to declare and pay preferred stock dividends through the second quarter of 2022.2023 and has continued to declare preferred stock dividends through the third quarter of 2023. Future dividend declarations will continue to be at the discretion of the Board of Directors, and will depend on the cash flow and financial condition of the Company, capital requirements, annual distribution requirements under the REIT provisions of the Code, and such other factors as the Board of Directors may deem relevant. Additionally, the Board of Directors may reduce, as it did with the May 2020 common stock dividend of $0.01 per common share, or suspend payment of dividends to retain cash and reduce debt obligations and/or to fund redevelopments and other capital needs. The Company intends to continue to operate its business in a manner that will allow it to qualify as a REIT for U.S. federal income tax requirements.


23


Net Cash Flows

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

Cash flows provided by (used in):

 

 

 

 

 

 

Operating activities

 

$

5,806,000

 

 

$

16,082,000

 

Investing activities

 

$

(2,069,000

)

 

$

14,779,000

 

Financing activities

 

$

(5,376,000

)

 

$

(32,858,000

)

 

 

For the six months ended June 30,

 

 

 

 

2022

 

 

2021

 

 

Cash flows provided by (used in):

 

 

 

 

 

 

 

 

 

Operating activities

 

$

16,082,000

 

 

$

24,804,000

 

 

Investing activities

 

$

14,779,000

 

 

$

88,254,000

 

 

Financing activities

 

$

(32,858,000

)

 

$

(108,862,000

)

 

Operating Activities

Net cash (used in) provided by operating activities, before net changes in operating assets and liabilities, was $4.0 million for the six months ended June 30, 2023 and $(10.4) million for the six months ended June 30, 2022 and $24.8 million for the six months ended June 30, 2021.2022. The decreaseincrease was primarily a result of property dispositionsthe completion of the Grocery-Anchored Portfolio Sale and completion of the Company's merger with WHLR in 2021 and the accrued transaction costs related to the previously announced dual-track strategic alternatives process.2022.

Investing Activities

Net cash flows used in(used in) provided by investing activities were primarily the result of the Company’sCompany's property disposition activities and expenditures for property improvements andimprovements. During the six months ended June 30, 2023, the Company incurred $(2.1) million of expenditures for property disposition activities.improvements. During the six months ended June 30, 2022, the Company incurred expenditures of $16.9$(16.9) million for property improvements, $0.2$(0.2) million relating to contributions to the Company’sCompany's unconsolidated joint venture and received $31.9 million in proceeds due from the sale of Riverview Plaza.

Financing Activities

During the six months ended June 30, 2021,2023, the Company received $104.5had $(5.4) million in proceeds from the sale of properties, which was partially offset by $138 million for property improvements and $2.5 million in contributions to an unconsolidated joint venture.

Financing Activities

preferred stock distributions. During the six months ended June 30, 2022, the Company had $6.3net repayments of $(25.0) million under the revolving credit facility, $(6.3) million of preferred and common stock distributions, and $0.6 million of mortgage repayments, which were partially offset by net repayments of ($25.0) million under the revolving credit facility and the purchase of a minority interest in a joint venture for ($1.0) million. During the six months ended June 30, 2021, the Company had  net payments of $163.0$(1.0) million under the revolving credit facility, a $50.0 million of term note pay-off, $7.2 million of preferred and common stock distributions, $0.5$(0.6) million of mortgage repayments, and $1.6 million of debt financing costs, $0.5 million of termination payments related to a swap liability, which were partially offset by net property specific mortgage note payables of $114.0 millionrepayments..

Funds From Operations

Funds From Operations (“FFO”) is a widely recognized supplemental non-GAAP measure utilized to evaluate the financial performance of a REIT. The Company presents FFO in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“Nareit”). Nareit generally defines FFO as net income (determined in accordance with GAAP), excluding gains (losses) from sales of real estate properties, impairment write-downs on real estate properties directly attributable to decreases in the value of depreciable real estate, plus real estate related depreciation and amortization, and adjustments for partnerships and joint ventures to reflect FFO on the same basis. The Company considers FFO to be an appropriate measure of its financial performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than other depreciable assets.

The Company also considers Operating Funds From Operations (“Operating FFO”) to be an additional meaningful financial measure of financial performance because it excludes items the Company does not believe are indicative of its core operating performance, such as non-capitalized acquisition pursuit costs, amounts relating to early extinguishment of debt and preferred stock redemption costs, management transition costs and certain redevelopment costs. The Company believes Operating FFO further assists investors in comparing the Company’s performance across reporting periods on a consistent basis by excluding such items.

FFO and Operating FFO should be reviewed with net income attributable to common shareholders, the most directly comparable GAAP financial measure, when trying to understand the Company’s operating performance. FFO and Operating FFO do not represent cash generated from operating activities and should not be considered as an alternative to net income attributable to common shareholders or to cash flow from operating activities. The Company’s computations of FFO and Operating FFO may differ from the computations utilized by other REITs and, accordingly, may not be comparable to such REITs.


24


A reconciliation of net (loss) incomeloss attributable to common shareholders to FFO and Operating FFO for the three and six months ended June 30, 20222023 and 20212022 is as follows:

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss attributable to common shareholders

 

$

(3,755,000

)

 

$

(45,275,000

)

 

$

(6,429,000

)

 

$

(49,019,000

)

Real estate depreciation and amortization

 

 

3,309,000

 

 

 

6,809,000

 

 

 

5,802,000

 

 

 

15,066,000

 

Limited partners' interest

 

 

 

 

 

(176,000

)

 

 

 

 

 

(196,000

)

Impairment charges

 

 

 

 

 

16,121,000

 

 

 

 

 

 

16,829,000

 

FFO applicable to diluted common shares

 

 

(446,000

)

 

 

(22,521,000

)

 

 

(627,000

)

 

 

(17,320,000

)

Transaction costs (a)

 

 

 

 

 

30,457,000

 

 

 

 

 

 

34,192,000

 

Operating FFO applicable to diluted common shares

 

$

(446,000

)

 

$

7,936,000

 

 

$

(627,000

)

 

$

16,872,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per diluted common share

 

$

(0.03

)

 

$

(1.64

)

 

$

(0.05

)

 

$

(1.25

)

Operating FFO per diluted common share

 

$

(0.03

)

 

$

0.58

 

 

$

(0.05

)

 

$

1.22

 

Weighted average number of diluted common shares (b):

 

 

 

 

 

 

 

 

 

 

 

 

Common shares and equivalents

 

 

13,718,000

 

 

 

13,703,000

 

 

 

13,718,000

 

 

 

13,728,000

 

OP Units

 

 

 

 

 

65,000

 

 

 

 

 

 

73,000

 

 

 

 

13,718,000

 

 

 

13,768,000

 

 

 

13,718,000

 

 

 

13,801,000

 

 

 

Three months ended June 30,

 

 

Six months ended June 30,

 

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Net (loss) income attributable to common shareholders

 

$

(45,275,000

)

 

$

48,367,000

 

 

$

(49,019,000

)

 

$

46,791,000

 

 

Real estate depreciation and amortization

 

 

6,809,000

 

 

 

10,227,000

 

 

 

15,066,000

 

 

 

21,420,000

 

 

Limited partners' interest

 

 

(176,000

)

 

 

287,000

 

 

 

(196,000

)

 

 

278,000

 

 

Gain on sales

 

 

 

 

 

(48,857,000

)

 

 

 

 

 

(49,904,000

)

 

Impairment charges (reversal)

 

 

16,121,000

 

 

 

(1,849,000

)

 

 

16,829,000

 

 

 

(1,849,000

)

 

Consolidated minority interests:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of income

 

 

 

 

 

122,000

 

 

 

 

 

 

272,000

 

 

Share of FFO

 

 

 

 

 

(88,000

)

 

 

 

 

 

(201,000

)

 

FFO applicable to diluted common shares

 

 

(22,521,000

)

 

 

8,209,000

 

 

 

(17,320,000

)

 

 

16,807,000

 

 

Transaction costs (a)

 

 

30,457,000

 

 

 

 

 

 

34,192,000

 

 

 

 

 

Redevelopment costs (b)

 

 

-

 

 

 

230,000

 

 

 

-

 

 

 

230,000

 

 

Financing costs (c)

 

 

-

 

 

 

44,000

 

 

 

-

 

 

 

44,000

 

 

Operating FFO applicable to diluted common shares

 

$

7,936,000

 

 

$

8,483,000

 

 

$

16,872,000

 

 

$

17,081,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO per diluted common share

 

$

(1.64

)

 

$

0.59

 

 

$

(1.25

)

 

$

1.21

 

 

Operating FFO per diluted common share

 

$

0.58

 

 

$

0.61

 

 

$

1.22

 

 

$

1.23

 

 

Weighted average number of diluted common shares (d):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common shares and equivalents

 

 

13,703,000

 

 

 

13,855,000

 

 

 

13,728,000

 

 

 

13,845,000

 

 

OP Units

 

 

65,000

 

 

 

81,000

 

 

 

73,000

 

 

 

81,000

 

 

 

 

 

13,768,000

 

 

 

13,936,000

 

 

 

13,801,000

 

 

 

13,926,000

 

 

(a)
Includes costs incurred in connection with the previously announced dual-track strategic alternatives process.
(b)
The weighted average number of diluted common shares used to compute FFO and Operating FFO applicable to diluted common shares includes OP Units, unvested restricted stock units and unvested restricted shares/units that are excluded from the computation of diluted EPS.

(a)Inflation

Includes costs incurred in connection with the previously announced dual-track strategic alternatives process.

(b)

Includes redevelopment project costs expensed pursuant to GAAP such as certain demolition and lease termination costs.

(c)

Represents acceleration of amortization and financing costs related to term note paid-off prior to maturity.

(d)

The weighted average number of diluted common shares used to compute FFO and Operating FFO applicable to diluted common shares includes OP Units, unvested restricted stock units and unvested restricted shares/units that are excluded from the computation of diluted EPS.

Inflation

Prior to 2021, inflation was relatively low and did not have a significant detrimental impact on the Company’s results of operations. If inflation rates continue to increase, substantially all of the Company’s tenant leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes, insurance and many of the operating expenses it incurs. SignificantHowever, significant inflation rate increases over a prolonged period of time may have a material adverse impact on the Company’s business. Conversely, deflation could lead to downward pressure on rents and other sources of income.

Interest rate increases could result in higher incremental borrowing costs for the Company and our tenants. The duration of the Company's indebtedness and our relatively low exposure to floating rate debt have mitigated the direct impact of inflation and interest rate increases, the degree and pace of these changes have had and may continue to have impacts on our business.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

One of the principal market risks facing the Company is the risk of interest rate changes, primarily through its variable-rate revolving credit facility and term loans.changes. The Company’s objectives with respect to interest rate risk are to limit the impact of interest rate changes on operations and cash flows, and to lower its overall borrowing costs. To achieve these objectives, the Company may borrow at either fixed rates or at variable rates and enter into derivative financial instruments, such as interest rate swaps, to mitigate its interest rate risk. The Company does not enter into derivative or interest rate transactions for speculative purposes. The Company is not directly subject to foreign currency risk.

The Company has entered into forward interest rate swap agreements which convert the LIBOR rates to fixed rates for certain unsecured term loans. At June 30, 2022, the Company had $0.2 million included in accounts payable and accrued liabilities and $3.2 million in other assets and deferred charges, net on the consolidated balance sheet relating to the fair value of the interest rate swaps applicable to certain unsecured term loans. The interest rate swaps were terminated as part of the Grocery-Anchored Portfolio Sale.


At June 30, 2022, long-term debt consisted of a fixed-rate mortgage loan payable, a finance lease obligation, unsecured term loans, and the Company’s unsecured variable-rate credit facility. Excluding unamortized premiums and debt issuance costs, the average interest rate on the $463.6 million of fixed-rate debt outstanding was 3.7%, with maturities at various dates through 2050. The average interest rate on the $41.0 million of variable-rate debt outstanding, which consists of the unsecured revolving credit facility, was 3.1%. With respect to the $41.0 million of variable-rate debt, if contractual interest rates either increase or decrease by 100 bps, the Company’s interest cost would increase or decrease respectively by approximately $0.4 million per annum.

With respect to the Company’s fixed rate mortgage notes and unsecuredfixed-rate term loans, changes in interest rates generally do not affect the Company’s interest expense as these notesloans are at fixed rates for an extended terms.term. Because the Company presently intends to hold its existing fixed-rate debt either to maturity or until the sale of the associated property, these fixed-rate notesloans pose an interest rate risk to the Company’s results of operations and its working capital position only upon the refinancing of that indebtedness. The Company’s possible risk is from increases in long-term interest rates that may occur as this may increase the cost of refinancing maturing fixed-rate debt. In addition, the Company may incur prepayment penalties or defeasance costs when prepaying or defeasing debt.The unsecured credit facility and term notes were paid off on July 11, 2022, in connection with the Grocery-Anchored Portfolio Sale. The mortgage loans payable were assumed by the Grocery-Anchored Purchasers.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, designed to ensure that information required to be disclosed in its filings under the Exchange Act is reported within the time periods

25


specified in the rules and regulations of the Securities and Exchange Commission (“SEC”). In this regard, the Company has formed a Disclosure Committee currently comprising several of the Company’s executive officers as well as certain other employees with knowledge of information that may be considered in the SEC reporting process. The Disclosure Committee has responsibility for the development and assessment of the financial and non-financial information to be included in the reports filed with the SEC, and assists the Company’s Chief Executive Officer and Chief Financial Officer in connection with their certifications contained in the Company’s SEC filings. The Disclosure Committee meets regularly and reports to the Audit Committee on a quarterly or more frequent basis. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated itsthe Company's disclosure controls and procedures as of June 30, 2022,2023, and have concluded that such disclosure controls and procedures are effective.

DuringChanges in Internal Control Over Financial Reporting

There has been no change in the Company's internal control over financial reporting that occurred during the three months ended June 30, 2022, there have been no changes in the Company’s internal controls over financial reporting or in other factors2023 that havehas materially affected, or areis reasonably likely to materially affect, thesethe Company's internal controlscontrol over financial reporting. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well-designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.



Part IIII. Other Information Information

As described above, on March 2, 2022, the Company entered into definitive agreements for the Transactions, which contemplate sale of the Company and all of its assets in a series of related all-cash transactions.  On April 5, 2022, a purported stockholder of the Company filed a complaint against the Company and the Board in the United States District Court for the Eastern District of New York, entitled Stein v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-1944. On April 6, 2022, another purported stockholder of the Company filed a complaint against the Company and the Board in the United States District Court for the Eastern District of New York, entitled Wang v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-1975. On April 18, 2022, another purported stockholder of the Company filed a complaint against the Company and the Board in the United States District Court for the Eastern District of New York, entitled Whitfield v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-02204. Also on April 18, 2022, a purported stockholder filed a complaint against the Company and the Board in the United States District Court for the Eastern District of Pennsylvania, entitled Waterman v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-01489. On April 22, 2022, a purported stockholder filed a complaint against the Company and the Board in the United States District Court for the Eastern District of Pennsylvania, entitled Thornburgh v. Cedar Realty Trust, Inc. et. al., Civil Action No. 22-cv-02304. In each action, the complaint alleges violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) in connection with the proposed Transactions. The complaints generally allege that the preliminary proxy statement on Schedule 14A filed by the Company with the SEC on April 5, 2022 omits material information regarding financial projections, the financial analysis conducted by JLL Securities in connection with its fairness opinion, conflicts of interest on behalf of JLL Securities and BofA Securities, and the terms of BofA Securities’ engagement. The complaints seek, among other things, an injunction preventing the consummation of the Transactions, or, in the event the Transactions are consummated, to recover damages resulting from defendants’ alleged violations of the Exchange Act.

On April 8, 2022, several purported holders of the Company’s outstanding preferred stock filed a putative class action complaint against the Company, the Board, and Wheeler in Montgomery County Circuit Court, Maryland entitled Sydney, et al. v. Cedar Realty Trust, Inc., et al., (Case No. C-15-CV-22-00152). The complaint alleges on behalf of a putative class of holders of the Company’s preferred stock, among other things, against the Company and the Board, claims for breach of contract with respect to the articles supplementary governing the terms of the Company’s preferred stock, breach of fiduciary duty, and tortious interference and aiding and abetting breach of fiduciary duty against Wheeler. The complaint seeks, among other things, a declaration that holders of the Company’s preferred stock are entitled to a liquidation preference as set forth in the articles supplementary governing the terms of the Company’s preferred stock, compensatory damages, and an injunction enjoining the merger with Wheeler, and an injunction enjoining the distribution to the Company’s common shareholders of the proceeds of any of the Transactions pending a determination of the merits of plaintiffs’ claims.

On MaySee Note 6, 2022, plaintiffsCommitments and Contingencies, to our condensed consolidated financial statements included in the Sydney action filed an amended complaint. The amended complaint alleges on behalf of a putative class of holders of the Company’s preferred stock, among other things, against the Company and the Board, claims for breach of contract with respect to the articles supplementary governing the terms of the Company’s preferred stock and breach of fiduciary duty, and, against Wheeler, tortious interference and aiding and abetting breach of fiduciary duty. The Sydney amended complaint seeks, among other things, (i) a declaration that holders of the Company’s preferred stock are entitled to exercise either their liquidation rights or conversion rights as set forth in the articles supplementary, (ii) compensatory damages, (iii) an injunction enjoining the distribution to the Company’s common shareholders of the proceeds of the Grocery-Anchored Portfolio Sale, and (iv) an injunction enjoining the Merger. On May 6, 2022, the plaintiffs in Sydney filed a motion for a preliminary injunction to temporarily enjoin, until the final resolution of the litigation (i) the distribution of the gross proceeds from the Grocery-Anchored Portfolio Sale to the common stockholders, (ii) the closing of the Merger, and (iii) the imposition of a constructive trust over the gross proceeds from both the Grocery Anchored Portfolio Sale and the Merger. Also on May, 6, 2022, a purported holder of the Company’s outstanding preferred stock filed a putative class action complaint against the Company and the Board in the United States District Court for the District of Maryland, entitled Kim v. Cedar Realty Trust, Inc., et al., Civil Action No. 22-cv-01103. The complaint alleges on behalf of a putative class of holders of the Company’s preferred stock, among other things, claims for declaratory and injunctive relief with respect to the articles supplementary governing the terms of the Company’s preferred stock and breach of fiduciary duty. On May 11, 2022, the Company, the Board of Directors of the Company and Wheeler removed the Sydney action to the United States District Court for the District of Maryland, Case No. 8:22-cv-01142-GLR. On May 16, 2022, the court ordered that a hearing on the Sydney plaintiffs’ motion for preliminary injunction will be held on June 22, 2022. On June 2, 2022, the plaintiffs in Kim filed a motion for a preliminary injunction (i) to require that the Company provide preferred shareholders with a vote to approve the Grocery-Anchored Portfolio Sale and the Merger, and (ii) requiring Cedar disclose to preferred shareholders that the Grocery-Anchored Portfolio Sale and Merger entitled the preferred stockholders to exercise their change of control conversion right. The court agreed to consolidate the Kim plaintiffs’ motion for preliminary injunction with the Sydney plaintiffs’ motion for preliminary injunction, and to hear arguments on both motions at the hearing on June 22, 2022.


On June 23, 2022, following a hearing on both the Sydney and Kim motions for preliminary injunction, the court issued an order denying both motions for preliminary injunction, holding that the plaintiffs in both cases were unlikely to succeed on the merits of any of their contractual or fiduciary duty claims, and that plaintiffs had not established that they would suffer irreparable harm if the injunction was denied. By order dated July 11, 2022, the Court consolidated this case with another class action brought by a preferred stockholder and set August 24, 2022 for the plaintiffs in both cases to file a consolidated amended complaint.Form 10-Q.

The Company is not otherwise presently involved in any litigation, nor, to its knowledge, is any litigation threatened against the Company or its subsidiaries, which is either not covered by the Company’s liability insurance, or, in management’s opinion, would result in a material adverse effect on the Company’s financial position or results of operations.

Item 1A. Risk Factors

Item 1A.

Risk Factors

There were no material changes to the Risk Factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

Other Information

None.

Item 6. Exhibits

Exhibit 2.1.a

Exhibits

Asset Purchase Agreement, dated as of March 2, 2022, by and among Cedar Realty Trust, Inc., DRA Fund X-B LLC, and KPR Centers LLC, incorporated by reference to Exhibit 2.1 of the Registrant’s Form 8-K filed on March 3, 2022.*

Exhibit 2.1.b

First Amendment to Asset Purchase and Sale Agreement, dated as of April 1, 2022, by and among the Seller Parties signature thereto, Cedar Realty Trust, Inc., DRA Fund X-B LLC and KPR Centers LLC, incorporated by reference to Exhibit 2.12.1.b of the Registrant’s Annual Report on Form 10-K filed on March 2, 2023.

Exhibit 2.1.c

Second Amendment to Asset Purchase and Sale Agreement, dated as of April 29, 2022, by and among the Seller Parties signature thereto, Cedar Realty Trust, Inc., DRA Fund X-B LLC and KPR Centers LLC,

26


incorporated by reference to Exhibit 2.1.c of the Registrant’s Annual Report on Form 10-K filed on March 2, 2023.

Exhibit 2.1.d

Third Amendment to Asset Purchase and Sale Agreement, dated as of July 7, 2022, by and among the Seller Parties signature thereto, Cedar Realty Trust, Inc., DRA Fund X-B LLC and KPR Centers LLC incorporated by reference to Exhibit 2.1.d of the Registrant’s Annual Report on Form 10-K filed on March 2, 2023.

Exhibit 2.2.a

Agreement and Plan of Merger, dated as of March 2, 2022, by and among Wheeler Real Estate Investment Trust, Inc., Wheeler Merger Sub, Inc., WHLR OP Merger Sub LLC, Cedar Realty Trust, Inc., and Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 2.2 of the Registrant’s Form 8-K filed on March 3, 2022.*

Exhibit 2.2.b

First Amendment to Merger Agreement, dated as of April 19, 2022, by and among Wheeler Real Estate Investment Trust, Inc., Wheeler Merger Sub, Inc., WHLR OP Merger Sub LLC, Cedar Realty Trust, Inc., and Cedar Realty Trust Partnership, L.P. (incorporated, incorporated by reference to Annex B of the Company’sRegistrant’s Definitive Proxy Statement on Schedule 14A filed on April 21, 2022)2022.

Exhibit 2.2.c

Exhibit 10.1

SeparationSecond Amendment to Merger Agreement, and Release,entered into as of August 9, 2022, by and between Robin McBride Zeigleramong Wheeler Real Estate Investment Trust, Inc., WHLR Merger Sub, Inc., WHLR OP Merger Sub LLC, Cedar Realty Trust, Inc., and Cedar Realty Trust Inc.Partnership, L.P., dated as of May 6, 2022 (incorporatedincorporated by reference to Exhibit 10.12.1 of the Registrant's Current Report on Form 8-K filed on August 12, 2022.

Exhibit 3.1.a

Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form 10-K for the year ended December 31, 2013 filed on February 25, 2014.

Exhibit 3.1.b

Articles Supplementary to Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.2 of the Registrant’s Form 8-A filed on August 18, 2017.

Exhibit 3.1.c

Articles Supplementary to Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on August 22, 2017.

Exhibit 3.1.d

Articles Supplementary to Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on December 15, 2017.

Exhibit 3.1.e

Articles of Amendment to the Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed on May 7, 2018.

Exhibit 3.1.f

Articles of Amendment to the Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of Form 8-K filed on May 12, 2022)November 27, 2020.

Exhibit 101.INS

Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because iXBRLtags are embedded within the Inline XBRL document.

Exhibit 101.SCH

Inline XBRL Taxonomy Extension Schema Document

Exhibit 101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Exhibit 101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Exhibit 101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Exhibit 104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


* Schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby agrees to furnish a copy of any omitted exhibit to the SEC upon request by the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CEDAR REALTY TRUST, INC.

By:

/s/ BRUCE J. SCHANZERM. ANDREW FRANKLIN

By:

/s/ JENNIFER BITTERMANCRYSTAL PLUM

Bruce J. SchanzerM. Andrew Franklin

Jennifer BittermanCrystal Plum

President and Chief Executive Officer and President

(Principal Executive Officer)

Executive Vice President, Chief Financial Officer

(Principal Financial Officer and Treasurer

(Principal FinancialAccounting Officer)

August 4, 20228, 2023

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