Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR)
(“Wheeler” or the “Company”) announced today that the Company has
entered into definitive purchase agreements with accredited
investors in a private placement transaction that resulted in gross
proceeds of $90 million. In addition, the Company has received a
letter of intent with a respected national lender for a $45 million
revolving line of credit to further fund the Company’s growth
initiatives.
Jon S. Wheeler, the Company’s Chairman and Chief Executive
Officer, commented, “We are very pleased with the successful
completion of this financing. The added capital provides the
Company with an opportunity to strengthen its balance sheet and
further execute our business model while strategically acquiring
‘necessity-based’ properties from a robust pipeline of grocery
anchored shopping centers. The new line of credit will also provide
the Company with additional financial flexibility during this truly
transformational time. With the completion of this financing, we
believe that we will see significant development and growth which
are designed to increase shareholder value over the long term.”
Under the terms of the transaction, Wheeler issued 90,000 shares
of Series C Mandatorily Convertible Preferred Stock (“Series C
Preferred Stock”) at a purchase price of $1,000 per share. Wheeler
also issued an additional 3,000 shares of Series C Preferred Stock
in exchange for the cancelation of $3.0 million of existing
convertible debt. The Series C Preferred Stock will pay a dividend
that mirrors the price and distribution of the Company’s common
stock. The Series C Preferred Stock will automatically convert into
common stock, following and subject to shareholder approval. Common
shareholders will vote on the conversion of the Series C Preferred
Stock at the Company’s next annual shareholder meeting, which is
set to occur on or about June 4, 2015. The Series C Preferred Stock
will have a conversion price of $2.00 per share, and the Company
has agreed to file a registration statement for the converted
shares. If, by June 19, 2015, the Series C Preferred Stock remains
outstanding, the dividend yield on the Series C Preferred Stock
will increase to 15.0% annually. The Series C Preferred Stock will
rank senior to all common stock and on parity with the Company’s
Series A Preferred Stock and Series B Preferred Stock.
The Company expects to utilize net proceeds from the offering
and sale of the Series C Preferred Stock to fund future
acquisitions and for general working capital. Below is a list of
properties that Wheeler currently has under contract or has signed
letters of intent to acquire.
Property
Location
GroceryAnchor
NumberofTenants
GrossLeasableArea
%Leased
PurchasePrice(in
$000s)
Pro formaBase Rent(in
$000s)
ProFormaNOI(in
$000s)
EstimatedCap Rate
Alex City Alexander City, AL Winn-Dixie 18 147,791 98.1% $10,250
$1,007 921 9.0% Beaver Ruin1 Lilburn, GA Kroger 29 74,038 91.5%
$12,350 $1,094 994 8.1% Butler Square Mauldin, SC Bi-Lo 16 82,400
92.9% $9,400 $830 780 8.3% Patton Square Woodruff, SC Bi-Lo 11
91,910 100.0% $7,850 $690 634 8.1% Washington Square2 Washington,
NC Piggly Wiggly 42 261,566 97.9% $20,000 $1,818 1,642 8.2% Brook
Run Richmond, VA Martins 19 147,738 92.0% $18,788 $1,651 1,503 8.0%
Chesapeake Square Onley, VA Food Lion 12 99,848 82.0%
$6,340 $698 629 9.9%
Total Pipeline/
Weighted Average 905,291 94.5%
$84,978 $7,788 7,103
8.4%
1) Kroger is the shadow-anchor
2) Food Lion has executed a lease to replace Piggly Wiggly in
2017 or possibly earlier, increasing NOI $275k to a total of
$1,916,592, effectively increasing estimated acquisition cap rate
to 9.6% and total weighted average cap rate of the pipeline to 8.7%
once Food Lion is in-place
The Company is currently contemplating a transaction during 2015
by which it may attempt to redeem or exchange WHLR Common Stock for
the outstanding shares of the Company’s Series A Preferred Stock,
Series B Preferred Stock and non-convertible notes. The exact terms
of this transaction have yet to be determined.
Compass Point Research & Trading, LLC acted as the lead
placement agent and Maxim Group LLC acted as co-managing placement
agent for the financing.
Dividend Adjustment
Concurrent with the completion of the transaction, the Company’s
new business model includes adjusting the monthly common stock
dividend from $0.035 per share to approximately $0.0175 per share
commencing with the distribution of the April 2015 dividend. All
shareholders of record as of March 31, 2015 will receive the
revised rate for the expected monthly cash dividend of $0.0175 per
share on or about April 30, 2015. The dividend rate on the Series A
Preferred Stock and Series B Preferred Stock will not change.
The adjusted common stock dividend rate will result in an
annualized yield on market price, as of the date of this
announcement, of approximately 6.4%. The Company believes that the
reduction in the common stock dividend will provide the REIT with
additional financial flexibility while continuing to reward
shareholders with a yield above industry standards. The Company
expects the new common stock dividend rate will remain in effect
until further notice.
About Wheeler Real Estate Investment
Trust, Inc.
Headquartered in Virginia Beach, VA, Wheeler Real Estate
Investment Trust, Inc. is a fully-integrated, self-managed
commercial real estate investment company focused on acquiring and
managing income-producing retail properties with a primary focus on
grocery-anchored centers. The Company’s strategy is to
opportunistically acquire and reinvigorate well-located,
potentially dominant retail properties in secondary and tertiary
markets that generate attractive risk-adjusted returns. Wheeler’s
portfolio contains strategically selected properties, primarily
leased by nationally and regionally recognized retailers of
consumer goods and are located in the Northeast, Mid-Atlantic,
Southeast and Southwest regions of the United States.
Additional information about Wheeler Real Estate Investment
Trust, Inc. can be found at the Company’s corporate website:
www.whlr.us.
Forward-Looking
Statement
This press release includes forward-looking statements regarding
the financing plans of the Company, including statements related to
Wheeler's offering of Series C Preferred Stock, the revolving line
of credit, the exchange offer and dividends. Any statement
describing the Company’s expectations, financial or other
projections are ongoing forward-looking statements. Specifically,
statements herein relating to the Company’s (a) contemplated and
other potential future property acquisitions; (b) anticipated
financial performance; (c) ability to successfully negotiate an
exchange of its existing Series A Preferred Stock, Series B
Preferred Stock and existing convertible debt on the terms
referenced herein or at all; and (d) anticipated future dividend
rates are forward-looking statements. Such statements are subject
to certain risks and uncertainties. Wheeler’s forward-looking
statements also involve assumptions that, if they never materialize
or prove correct, could cause results to differ materially from
those expressed or implied by such forward-looking statements.
These forward-looking statements are not historical facts but are
the intent, belief or current expectations of management based on
its knowledge and understanding of the business and industry. As a
result, investors are cautioned not to rely on these
forward-looking statements. These and other risks concerning
Wheeler are described in additional detail in the Company’s annual
report on Form 10-K for the year ended December 31, 2013 and
subsequent filings, which are on file with the U.S. Securities and
Exchange Commission. Copies of these and other documents are
available from the Company. For additional factors that could cause
the operations of the Company to differ materially from those
indicated in the forward-looking statements, please refer to the
Company's filings with the SEC which are available for review at
www.sec.gov. The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof.
Wheeler Real Estate Investment Trust
Inc.Robin HanischCorporate Secretary(757)
627-9088robin@whlr.usorLaura NguyenDirector of Marketing(757)
627-9088lnguyen@whlr.usorINVESTOR RELATIONS:The Equity Group Inc.Terry
DownsAssociate(212)836-9615tdowns@equityny.comorAdam PriorSenior
Vice-President(212)836-9606aprior@equityny.com
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