Wheeler Real Estate Investment Trust, Inc.
(NASDAQ:WHLR) (“Wheeler” or the “Company”), 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, today announces an
update on the Company’s management transition and strategic
initiatives.
On behalf of the Company, President and Chief
Executive Officer, David Kelly has made the following
statement:
“Over the past seven days, the Company has taken
a number of steps designed to enhance shareholder value. This
statement is a direct and transparent communication on our progress
thus far.
BACKGROUNDOn January 29, 2018,
the Board of Directors terminated Jon Wheeler as Chief Executive
Officer and President. Concurrently, the Board named me Chief
Executive Officer and President and subsequently, Matt Reddy was
named Chief Financial Officer, replacing Wilkes Graham. Over
the past week, Matt and I have worked with Andy Franklin, the
Company’s Senior Vice President of Operations, as well as the
entire management team to extensively review the Company and its
present operations and financial position.
We have found through a comprehensive review
that the Company’s existing portfolio and organizational structure
confirms our pre-existing belief that our real estate portfolio is
solid and performing well. Further, our talented associates are
committed and focused on the job at hand – effectively managing and
leasing our properties at the highest level. In fact, it has
been business as usual at the property level amidst transitions in
the executive suite. I would like to take this opportunity to thank
all of our valued associates for their commitment to the Company
and their continued dedication.
NEXT STEPSStrategic
Alternatives: As a result of these recent events,
the Board of Directors has begun the process of selecting an
independent third-party advisor to assist the Company in
identifying and pursuing various options designed to maximize
shareholder value. I, and the rest of the management team,
wholeheartedly support and invite this process.
Expense Savings: As the
Board runs this process, we have identified additional
opportunities to materially reduce operating expenses in addition
to the obvious G&A expenses we should save based on recent
events. We expect to implement some of these reductions by the end
of February and expect these reductions to include, among other
things, closing our Charleston office in South Carolina. Our
associates in that office will either be relocated to our home
office in Virginia Beach or will continue to service the region by
working remotely. We do not expect this closure to impact the high
level of service we provide to our properties in this region.
Balance Sheet: Of course,
our balance sheet is of paramount concern to all of you, and as
such, the Company will immediately place 7 parcels of non-income
producing land in Virginia and North Carolina on the market for
sale. Simultaneously, our team is working to identify additional
stabilized real estate assets for disposition, which we feel will
demonstrate the value creation our asset management and leasing
teams have realized since acquisition. The Company expects to
utilize the proceeds from these sales to pay off the associated
property debt and reduce the Company’s existing liabilities.
We continue the process of refinancing several
assets encumbered through our KeyBank line of credit. We
appreciate the strong relationship we have with KeyBank, as
demonstrated by the recent two-year extension of the credit
facility. The extended facility includes: (i) a borrower
option to extend for a third year, (ii) a $2 million increase in
the line of credit, and (iii) an accordion feature that could raise
the limit to $150 million over time. We have committed to
refinancing $16 million off this line on or before July 1,
2018.
In addition, we continue to work to refinance our
$6.9 million of debt with Revere that matures in April 2018. We are
confident we will be successful in retiring that debt on or before
the maturity date.
Operations: As for the
health of our tenants, we believe that our portfolio has a strong
tenant mix. However, recently Southeastern Grocers (SEG) has been
contemplating business decisions that would affect our
company. We have been in proactive and substantive
discussions with SEG with the goal of ensuring our portfolio’s
stability. While we are not at liberty to discuss all of the
details surrounding these discussions, we are encouraged by our
progress and plan to be able to share more details with you in the
near future.
Finally, we are anticipating releasing our fourth
quarter and year-end results for 2017 and an update on our progress
within the next month. The exact dates have not been
determined, but we will provide ample notice once a definitive date
has been established.
In closing, I want to thank our investors for
their candid and thoughtful recommendations. We value this
input as we are ever conscious that we work for the shareholders,
and regaining your trust is the primary driver in our efforts to
return value to our investors.”
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. Wheeler’s portfolio contains
well-located, potentially dominant retail properties in secondary
and tertiary markets that generate attractive risk-adjusted
returns, with a particular emphasis on grocery-anchored retail
centers.
Additional information about Wheeler Real Estate
Investment Trust, Inc. can be found at the Company’s corporate
website: www.whlr.us.
Forward-Looking Statements
This press release may contain “forward-looking”
statements as defined in the Private Securities Litigation Reform
Act of 1995. When the Company uses words such as “may,” “will,”
“intend,” “should,” “believe,” “expect,” “anticipate,” “project,”
“estimate” or similar expressions that do not relate solely to
historical matters, it is making forward-looking statements. The
Company’s expected results may not be achieved, and actual results
may differ materially from expectations. Specifically, the
Company’s statements regarding: (i) the Company’s ability to
identify and engage a third-party advisor tasked to enhance
shareholder value, (ii) the ability of the third-party advisor and
the Company to identify and pursue various options designed to
maximize shareholder value; (iii) the outcome of the Board’s review
of the Company’s dividend policy; (iv) the Company’s ability to
reduce operating costs, including general and administrative
expenses; (v) the timing of any reduction in operating costs,
including general and administrative expenses; (vi) the anticipated
closing of the Company’s Charleston, South Carolina office and the
lack of impact of service to properties located in its area; (vii)
the Company’s ability to sell non-income producing land and to
reduce its debt with proceeds from the sales; (viii) the Company’s
ability to implement a disposition strategy for stabilized assets
to create shareholder value; (ix) the Company’s ability to
refinance assets covered by the KeyBank line; (x) the Company’s
ability to refinance $16 million of the KeyBank line of credit on
or before July 1, 2018; (xi) the Company’s ability to refinance
$6.9 million of debt with Revere; (xii) the Company’s ability to
successfully negotiate with Southeastern Grocers and (xiii) the
timing of the Company’s anticipated release of fourth quarter and
fiscal 2017 financial results are forward-looking statements.
Forward-looking statements are not guarantees of future performance
and are subject to risks, uncertainties and other factors, some of
which are beyond the Company’s control, are difficult to predict
and could cause actual results to differ materially from those
expressed or forecasted in the forward-looking statements.
For these reasons, among others, investors are cautioned not to
place undue reliance upon any forward-looking statements in this
press release. Additional factors that could cause the
Company’s actual results to differ materially from those expressed
or forecasted in forward-looking statements are discussed in the
Company's filings with the U.S. Securities and Exchange Commission,
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.
CONTACT: Wheeler Real Estate Investment
Trust, Inc.David KellyPresident and CEO(757)
627-9088dkelly@whlr.us
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