Maryland | 45-2681082 | |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |
2529 Virginia Beach Blvd., Suite 200 Virginia Beach. Virginia | 23452 | |
(Address of Principal Executive Offices) | (Zip Code) |
Large accelerated file | ¨ | þ | Accelerated filer | ||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | ¨ | Smaller reporting company |
Item 1. | |||
Item 1A. | |||
Item 1B. | |||
Item 2. | |||
Item 3. | |||
Item 4. | |||
Item 5. | |||
Item 6. | |||
Item 7. | |||
Item 7A. | |||
Item 8. | |||
Item 9. | |||
Item 9A. | |||
Item 9B. | |||
Item 10. | |||
Item 11. | |||
Item 12. | |||
Item 13. | |||
Item 14. | |||
Item 15. | |||
• | our business and investment strategy; |
• | our projected operating results; |
• | actions and initiatives of the U.S. government and changes to U.S. government policies and the execution and impact of these actions, initiatives and policies; |
• | the state of the U.S. economy generally and in specific geographic areas; |
• | economic trends and economic recoveries; |
• | our ability to obtain and maintain financing arrangements; |
• | financing and advance rates for our target assets; |
• | our expected leverage; |
• | availability of investment opportunities in real estate-related investments; |
• | changes in the values of our assets; |
• | our ability to make distributions to our stockholders in the future; |
• | our expected investments and investment decisions; |
• | changes in interest rates and the market value of our target assets; |
• | our ability to renew leases at amounts and terms comparable to existing lease arrangements; |
• | our ability to proceed with potential development opportunities for us and third-parties; |
• | effects of hedging instruments on our target assets; |
• | the degree to which our hedging strategies may or may not protect us from interest rate volatility; |
• | impact of and changes in governmental regulations, tax law and rates, accounting guidance and similar matters; |
• | our ability to maintain our qualification as a real estate investment trust (“REIT”); |
• | our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended (the "Investment Company Act"); |
• | availability of qualified personnel and management team; |
• | the ability of our operating partnership and each of our other partnerships and limited liability companies to be classified as partnerships or disregarded entities for federal income tax purposes; |
• | our ability to amend our charter to increase or decrease the aggregate number of authorized shares of stock, to authorize us to issue additional authorized but unissued shares of our preferred stock and to classify or reclassify unissued shares of our preferred stock; |
• | our understanding of our competition; |
• | market trends in our industry, interest rates, real estate values or the general economy; |
• | the imposition of federal taxes if we fail to qualify as a real estate investment trust (“REIT”) in any taxable year or forego an opportunity to ensure REIT status; |
• | uncertainties related to the national economy, the real estate industry in general and in our specific markets; |
• | legislative or regulatory changes, including changes to laws governing REITs; |
• | adverse economic or real estate developments in Virginia, Florida, Georgia, Alabama, South Carolina, North Carolina, Oklahoma, Kentucky, Tennessee, West Virginia and New Jersey; |
• | increases in interest rates and operating costs; |
• | inability to obtain necessary outside financing; |
• | litigation risks; |
• | lease-up risks; |
• | inability to obtain new tenants upon the expiration of existing leases; |
• | inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; and |
• | the need to fund tenant improvements or other capital expenditures out of operating cash flow. |
• | Focus on necessity-based retail. We intend to invest in retail properties that serve the essential day-to-day shopping needs of the surrounding communities. These necessity-based centers attract high levels of daily traffic resulting in cross-selling of goods and services from our tenants. The majority of our tenants provide non-cyclical consumer goods and services that are less impacted by fluctuations in the economy. According to the Food Marketing Institute, the average consumer in the US makes a trip to a grocery store 2.2 times per week. We believe targeting centers that provide essential goods and services such as groceries results in a stable, lower-risk portfolio of retail investment properties. |
• | Target secondary and tertiary markets with strong demographics and demand. We believe these markets have limited competition from institutional buyers and relatively low levels of new construction. In evaluating potential acquisitions, we focus on areas with strong demographics such as population density, population growth, tenant sales trends and growth in household income, and we seek to identify properties in locations where there is a need for necessity-based retail and limited new supply. We generally will seek to avoid markets where we believe potential yields have decreased as a result of acquisition activity from institutional buyers. |
• | Acquire properties that are the number one or number two centers in their respective markets. After we identify an attractive target market, we look to acquire the top center in that market. These centers will have anchor tenants with dominant market share, high sales per square feet, significant capital invested in their respective stores and limited proximity to competing centers. |
• | Increase operating income through leasing strategies and expense management. We employ intensive lease management strategies to optimize occupancy. Management has strong expertise in acquiring and managing under-performing properties and increasing operating income through more effective leasing strategies and expense management such as common area maintenance, or CAM reimbursement and experience utilizing exterior parking for build to suit outparcels or pad sales. Our leases generally require the tenant to reimburse us for a substantial portion of the expenses incurred in operating, maintaining, repairing, and managing the shopping center and the common areas, along with the associated insurance costs and real estate taxes. Operating expenses that qualify for CAM reimbursement include, but are not limited to, landscaping, parking field maintenance and repairs, building maintenance and repairs, utilities and their associated maintenance and repair within the shopping center. The amount that each tenant pays is determined on a pro-rata basis and our leases generally allow us to add an administrative fee of 15%. Some leases are structured such that there is a price per square foot cap on paying additional fees and charges. Additionally, in some cases the tenant is either fully or partially responsible for all maintenance of the property, thereby limiting our obligations towards maintaining the center and increasing our net income. We refer to this arrangement as a “triple net lease.” |
• | Selectively utilize our capital to improve retail properties. We intend to make capital investments where the return on such capital is accretive to our shareholders. We have significant expertise allocating capital to value-added improvements of retail properties to increase rents, extend long-term leases with anchor tenants and increasing occupancy. We will selectively allocate capital to revenue enhancing projects that we believe will improve the market position of a given property. |
• | Selectively utilize our development capabilities for third parties. We intend to invest capital in development and re-development opportunities where we believe the return on such capital is accretive to our shareholders. We believe our experience in development will benefit us by providing opportunities to either develop properties for us at higher cap rates that result in positive returns to our operations or to develop for third parties which will result in development fee income for us. While this objective is not always possible, we generally want a development project to be at least 50% pre-leased prior to commencement. |
• | Acquire properties that meet our strict underwriting guidelines and process. Initially, our underwriting process begins with a cursory review of the asset to determine if there is a fit with our acquisition criteria. The offering memorandum; seller’s financials; lease abstracts (anchor and small shop); rent roll; delinquency reports; assumable debt, if any; tenant sales reports; and the general physical structure of the asset are reviewed. By analyzing the trade |
• | the fact of the common directorship or interest is disclosed or known to our board of directors or a committee of our board, and our board or such committee authorizes, approves or ratifies the transaction or contract by the affirmative vote of a majority of disinterested directors, even if the disinterested directors constitute less than a quorum; |
• | the fact of the common directorship or interest is disclosed or known to our stockholders entitled to vote thereon, and the transaction or contract is authorized, approved or ratified by a majority of the votes cast by the stockholders entitled to vote other than the votes of shares owned of record or beneficially by the interested director or corporation, firm or other entity; or |
• | the transaction or contract is fair and reasonable to us at the time it is authorized, ratified or approved. |
Property | Location | Number of Tenants | Gross Leasable Area ("GLA") | Percentage Leased | Annualized Base Rent (1) | Annualized Base Rent per Leased Square Foot | ||||||||||||
Alex City Marketplace | Alexander City, AL | 17 | 147,791 | 87.1 | % | $ | 913,691 | $ | 7.10 | |||||||||
Amscot Building (2) | Tampa, FL | 1 | 2,500 | 100.0 | % | $ | 115,849 | $ | 46.34 | |||||||||
Beaver Ruin Village | Lilburn, GA | 27 | 74,048 | 84.4 | % | $ | 1,006,968 | $ | 16.12 | |||||||||
Beaver Ruin Village II | Lilburn, GA | 4 | 34,925 | 100.0 | % | $ | 407,176 | $ | 11.66 | |||||||||
Berkley (3) | Norfolk, VA | — | — | — | % | — | — | |||||||||||
Brook Run Shopping Center | Richmond, VA | 20 | 147,738 | 93.1 | % | $ | 1,547,303 | $ | 11.25 | |||||||||
Brook Run Properties (3) | Richmond, VA | — | — | — | % | — | — | |||||||||||
Bryan Station | Lexington, KY | 9 | 54,397 | 100.0 | % | $ | 553,004 | $ | 10.17 | |||||||||
Butler Square | Mauldin, SC | 16 | 82,400 | 100.0 | % | $ | 833,358 | $ | 10.11 | |||||||||
Cardinal Plaza | Henderson, NC | 7 | 50,000 | 84.0 | % | $ | 424,500 | $ | 10.11 | |||||||||
Carolina Place (3) | Onley, VA | — | — | — | % | — | — | |||||||||||
Chesapeake Square | Onley, VA | 9 | 99,848 | 74.8 | % | $ | 593,583 | $ | 7.95 | |||||||||
Clover Plaza | Clover, SC | 10 | 45,575 | 100.0 | % | $ | 354,771 | $ | 7.78 | |||||||||
Columbia Fire Station (3) | Columbia, SC | — | — | — | % | — | — | |||||||||||
Conyers Crossing | Conyers, GA | 14 | 170,475 | 100.0 | % | $ | 884,797 | $ | 5.19 | |||||||||
Courtland Commons (3) | Courtland, VA | — | — | — | % | — | — | |||||||||||
Crockett Square | Morristown, TN | 4 | 107,122 | 100.0 | % | $ | 886,635 | $ | 8.28 | |||||||||
Cypress Shopping Center | Boiling Springs, SC | 16 | 80,435 | 96.5 | % | $ | 804,020 | $ | 10.36 | |||||||||
Edenton Commons (3) | Edenton, NC | — | — | — | % | — | — | |||||||||||
Forrest Gallery | Tullahoma, TN | 27 | 214,450 | 94.3 | % | $ | 1,204,701 | $ | 5.96 | |||||||||
Fort Howard Shopping Center | Rincon, GA | 16 | 113,652 | 94.9 | % | $ | 941,329 | $ | 8.73 | |||||||||
Freeway Junction | Stockbridge, GA | 16 | 156,834 | 96.9 | % | $ | 1,035,044 | $ | 6.81 | |||||||||
Franklinton Square | Franklinton, NC | 11 | 65,366 | 86.1 | % | $ | 490,295 | $ | 8.71 | |||||||||
Graystone Crossing | Tega Cay, SC | 11 | 21,997 | 100.0 | % | $ | 513,256 | $ | 23.33 | |||||||||
Grove Park | Orangeburg, SC | 16 | 106,557 | 89.8 | % | $ | 685,081 | $ | 7.15 | |||||||||
Harbor Point (3) | Grove, OK | — | — | — | % | — | — | |||||||||||
Harrodsburg Marketplace | Harrodsburg, KY | 8 | 60,048 | 97.0 | % | $ | 438,556 | $ | 7.53 | |||||||||
Hilton Head (3) | Hilton Head, SC | — | — | — | % | — | — | |||||||||||
Jenks Plaza | Jenks, OK | 5 | 7,800 | 100.0 | % | $ | 148,629 | $ | 19.06 | |||||||||
LaGrange Marketplace | LaGrange, GA | 13 | 76,594 | 93.3 | % | $ | 388,385 | $ | 5.43 | |||||||||
Laskin Road (3) | Virginia Beach, VA | — | — | — | % | — | — | |||||||||||
Lumber River Village | Lumberton, NC | 12 | 66,781 | 100.0 | % | $ | 503,506 | $ | 7.54 | |||||||||
Monarch Bank | Virginia Beach, VA | 1 | 3,620 | 100.0 | % | $ | 250,538 | $ | 69.21 | |||||||||
Nashville Commons | Nashville, NC | 12 | 56,100 | 100.0 | % | $ | 564,435 | $ | 10.06 | |||||||||
Parkway Plaza | Brunswick, GA | 5 | 52,365 | 96.9 | % | $ | 533,398 | $ | 10.51 | |||||||||
Perimeter Square | Tulsa, OK | 8 | 58,277 | 95.7 | % | $ | 742,287 | $ | 13.31 | |||||||||
Pierpont Centre | Morgantown, WV | 20 | 122,259 | 100.0 | % | $ | 1,338,612 | $ | 10.95 | |||||||||
Port Crossing | Harrisonburg, VA | 8 | 65,365 | 92.4 | % | $ | 780,445 | $ | 12.92 |
Property | Location | Number of Tenants | Gross Leasable Area | Percentage Leased | Annualized Base Rent (1) | Annualized Base Rent per Leased Square Foot | ||||||||||||
Riversedge North (4) | Virginia Beach, VA | — | — | — | % | — | — | |||||||||||
Shoppes at TJ Maxx | Richmond, VA | 18 | 93,552 | 100.0 | % | $ | 1,117,655 | $ | 11.95 | |||||||||
South Square | Lancaster, SC | 5 | 44,350 | 89.9 | % | $ | 319,206 | $ | 8.01 | |||||||||
Starbucks/Verizon (2) | Virginia Beach, VA | 2 | 5,600 | 100.0 | % | $ | 185,695 | $ | 33.16 | |||||||||
St. George Plaza | St. George, SC | 5 | 59,279 | 72.3 | % | $ | 293,421 | $ | 6.85 | |||||||||
Sunshine Plaza | Lehigh Acres, FL | 21 | 111,189 | 96.7 | % | $ | 954,702 | $ | 8.88 | |||||||||
Surrey Plaza | Hawkinsville, GA | 5 | 42,680 | 100.0 | % | $ | 291,495 | $ | 6.83 | |||||||||
Tampa Festival | Tampa, FL | 20 | 137,987 | 97.7 | % | $ | 1,230,027 | $ | 9.13 | |||||||||
The Shoppes at Eagle Harbor | Carrollton, VA | 7 | 23,303 | 100.0 | % | $ | 447,844 | $ | 19.22 | |||||||||
Tulls Creek (3) | Moyock, NC | — | — | — | % | — | — | |||||||||||
Twin City Commons | Batesburg-Leesville, SC | 5 | 47,680 | 100.0 | % | $ | 450,310 | $ | 9.44 | |||||||||
Walnut Hill Plaza | Petersburg, VA | 11 | 87,239 | 85.2 | % | $ | 596,162 | $ | 8.02 | |||||||||
Waterway Plaza | Little River, SC | 9 | 49,750 | 97.6 | % | $ | 439,583 | $ | 9.05 | |||||||||
Westland Square | West Columbia, SC | 10 | 62,735 | 91.9 | % | $ | 486,698 | $ | 8.44 | |||||||||
Winslow Plaza | Sicklerville, NJ | 17 | 40,695 | 100.0 | % | $ | 594,202 | $ | 14.60 | |||||||||
Total Portfolio | 478 | 3,151,358 | 94.2 | % | $ | 27,291,152 | $ | 9.19 |
(1) | Annualized base rent per leased square foot excludes the impact of tenant concessions. |
(2) | We own the Amscot building and Starbucks/Verizon building, but we do not own the land underneath the buildings and instead lease the land pursuant to ground leases with parties that are affiliates of Jon Wheeler. As discussed in the financial statements in Item 15, these ground leases require us to make annual rental payments and contain escalation clauses and renewal options. |
(3) | This information is not available because the property is undeveloped. |
(4) | This property is our corporate headquarters that we 100% occupy. |
Amount of Debt Outstanding as of December 31, 2015 | Weighted Average Interest Rate | Maturity Date | Amortization Period (Mths) | Annual Debt Service | Balance at Maturity | ||||||||||||||
Shoppes at Eagle Harbor | $ | 3,634,085 | 4.34 | % | 3/11/2018 | 240 | $ | 301,200 | $ | 3,339,834 | |||||||||
Monarch Bank Building | 1,376,452 | 4.15 | % | 12/30/2017 | 240 | 113,676 | 1,275,249 | ||||||||||||
Perimeter Square | 4,166,406 | 6.38 | % | 6/11/2016 | 120 | 168,534 | 4,133,592 | ||||||||||||
Riversedge North | 962,281 | 6.00 | % | 1/16/2019 | 360 | 105,624 | 807,904 | ||||||||||||
Walnut Hill Plaza | 3,535,606 | 5.50 | % | 7/10/2017 | 240 | 291,276 | 3,389,011 | ||||||||||||
Twin City Commons | 3,225,473 | 4.86 | % | 1/6/2023 | 360 | 213,924 | 2,747,631 | ||||||||||||
Shoppes at TJ Maxx | 6,081,272 | 3.88 | % | 5/1/2020 | 300 | 406,560 | 5,294,355 | ||||||||||||
Bank Line of Credit | 6,873,750 | 2.79 | % | 5/29/2018 | N/A | 191,778 | 6,873,750 | ||||||||||||
Forrest Gallery | 8,926,712 | 5.40 | % | 9/6/2023 | 360 | 611,676 | 7,794,407 | ||||||||||||
Tampa Festival | 8,627,294 | 5.56 | % | 9/6/2023 | 360 | 609,568 | 7,483,025 | ||||||||||||
Starbucks/Verizon | 632,042 | 5.00 | % | 7/2/2019 | 120 | 52,596 | 553,571 | ||||||||||||
Winslow Plaza | 4,620,000 | 4.82 | % | 12/1/2025 | N/A | 222,684 | 4,620,000 | ||||||||||||
Cypress Shopping Center | 6,625,000 | 4.70 | % | 7/6/2024 | 240 | 311,375 | 5,700,455 | ||||||||||||
Harrodsburg Marketplace | 3,677,501 | 4.55 | % | 9/1/2024 | 240 | 229,344 | 3,058,982 | ||||||||||||
Port Crossing | 6,471,636 | 4.84 | % | 8/1/2024 | 240 | 417,456 | 5,423,413 | ||||||||||||
LaGrange Marketplace | 2,418,212 | 5.00 | % | 3/26/2020 | 120 | 165,756 | 2,234,334 | ||||||||||||
Freeway Junction | 8,150,000 | 4.60 | % | 9/6/2024 | 240 | 374,900 | 6,929,805 | ||||||||||||
Edenton Commons | 650,000 | 3.75 | % | 9/30/2016 | N/A | 653,047 | — | ||||||||||||
DF I-Moyock | 418,538 | 5.00 | % | 7/30/2019 | 60 | 127,980 | — | ||||||||||||
Graystone Crossing | 4,000,000 | 4.55 | % | 10/26/2024 | 240 | 244,632 | 3,419,266 | ||||||||||||
Bryan Station | 4,625,000 | 4.52 | % | 11/1/2024 | 240 | 209,050 | 3,968,506 | ||||||||||||
Crockett Square | 6,337,500 | 4.47 | % | 12/5/2024 | 240 | 283,286 | 4,486,317 | ||||||||||||
Harbor Point | 732,685 | 5.85 | % | 12/6/2016 | 240 | 132,288 | 698,688 | ||||||||||||
Pierpont Centre | 9,800,000 | 3.95 | % | 2/6/2025 | N/A | 387,100 | 8,902,005 | ||||||||||||
Alex City Marketplace | 5,750,000 | 3.90 | % | 4/6/2025 | N/A | 224,250 | 5,750,000 | ||||||||||||
Butler Square | 5,640,000 | 4.08 | % | 5/6/2025 | N/A | 230,112 | 5,640,000 | ||||||||||||
Brook Run Shopping Center | 10,950,000 | 3.90 | % | 6/6/2025 | N/A | 427,050 | 10,950,000 | ||||||||||||
Beaver Ruin Village I and II | 9,400,000 | 4.73 | % | 7/6/2025 | N/A | 444,620 | 9,400,000 | ||||||||||||
Columbia Fire Station | 450,053 | 8.00 | % | 12/31/2017 | N/A | 36,004 | 511,003 | ||||||||||||
Sunshine Shopping Plaza | 5,900,000 | 4.57 | % | 8/6/2025 | N/A | 269,630 | 5,900,000 | ||||||||||||
Barnett Portfolio | 8,770,000 | 4.30 | % | 9/6/2025 | N/A | 377,110 | 8,770,000 | ||||||||||||
Grove Park Shopping Center | 3,800,000 | 4.52 | % | 10/1/2025 | N/A | 171,760 | 3,800,000 | ||||||||||||
Parkway Plaza | 3,500,000 | 4.57 | % | 10/1/2025 | N/A | 159,950 | 3,500,000 | ||||||||||||
Conyers Crossing | 5,960,000 | 4.67 | % | 10/6/2025 | N/A | 278,332 | 5,960,000 |
Amount of Debt Outstanding as of December 31, 2015 | Weighted Average Interest Rate | Maturity Date | Amortization Period (Mths) | Annual Debt Service | Balance at Maturity | ||||||||||||||
Fort Howard Shopping Center | 7,100,000 | 4.57 | % | 10/6/2025 | N/A | 324,470 | 7,100,000 | ||||||||||||
Senior convertible notes | 3,000,000 | 9.00 | % | 12/15/2018 | N/A | 270,000 | 3,000,000 | ||||||||||||
Senior non-convertible notes | 2,160,000 | 9.00 | % | 1/31/2016 | N/A | 16,200 | 2,160,000 | ||||||||||||
South Carolina Food Lions Note | 12,375,000 | 5.25 | % | 1/6/2024 | 360 | 649,688 | 10,728,916 | ||||||||||||
$ | 191,322,498 |
Tenants | Total Gross Leaseable Area | Percent of Total Gross Leasable Area | Annualized Base Rent ($ in 000s) | Percent of Total Annualized Base Rent | Base Rent Per Leased Square Foot | |||||||||||
Bi-Lo/Winn Dixie | 392,898 | 12.47 | % | $ | 2,853 | 10.45 | % | $ | 7.26 | |||||||
Food Lion | 325,576 | 10.33 | % | 2,691 | 9.86 | % | 8.27 | |||||||||
Hobby Lobby | 114,298 | 3.63 | % | 675 | 2.47 | % | 5.91 | |||||||||
Kroger | 84,938 | 2.70 | % | 534 | 1.96 | % | 6.29 | |||||||||
Burlington Coat Factory | 83,552 | 2.65 | % | 176 | 0.64 | % | 2.11 | |||||||||
Family Dollar | 67,626 | 2.15 | % | 465 | 1.70 | % | 6.88 | |||||||||
Giant Food Stores, LLC | 58,473 | 1.86 | % | 380 | 1.39 | % | 6.50 | |||||||||
Goodwill | 56,343 | 1.79 | % | 433 | 1.59 | % | 7.69 | |||||||||
Dollar Tree | 51,974 | 1.65 | % | 441 | 1.62 | % | 8.49 | |||||||||
Goody's | 51,275 | 1.63 | % | 139 | 0.51 | % | 2.71 | |||||||||
1,286,953 | 40.86 | % | $ | 8,787 | 32.19 | % | $ | 6.83 |
Lease Expiration Year | Number of Expiring Leases | Total Expiring Gross Leaseable Area | Percent of Total Gross Leaseable Area | Expiring Base Rent (in 000s) | Percent of Total Base Rent | Expiring Base Rent Per Leased Square Foot | |||||||||||||
Available | — | 182,621 | 5.79 | % | $ | — | — | $ | — | ||||||||||
2016 | 71 | 188,045 | 5.97 | % | 2,244 | 8.22 | % | 11.93 | |||||||||||
2017 | 105 | 436,806 | 13.86 | % | 4,591 | 16.82 | % | 10.51 | |||||||||||
2018 | 97 | 588,498 | 18.67 | % | 5,025 | 18.41 | % | 8.54 | |||||||||||
2019 | 70 | 466,894 | 14.82 | % | 4,209 | 15.42 | % | 9.01 | |||||||||||
2020 | 72 | 572,140 | 18.16 | % | 5,071 | 18.58 | % | 8.86 | |||||||||||
2021 | 23 | 358,741 | 11.38 | % | 2,526 | 9.26 | % | 7.04 | |||||||||||
2022 | 10 | 67,484 | 2.14 | % | 880 | 3.22 | % | 13.04 | |||||||||||
2023 | 9 | 129,841 | 4.12 | % | 1,303 | 4.77 | % | 10.04 | |||||||||||
2024 | 12 | 100,228 | 3.18 | % | 844 | 3.09 | % | 8.42 | |||||||||||
2025 and thereafter | 9 | 60,060 | 1.91 | % | 598 | 2.21 | % | 9.94 | |||||||||||
3,151,358 | 100.00 | % | $ | 27,291 | 100.00 | % | $ | 9.19 |
Federal Tax Basis | Depreciation Rate | Method of Depreciation | Useful Life Claimed | |||||||
Shoppes at TJ Maxx | $ | 7,121,369 | 3.88 | % | Straight-Line | 5-39 Years | ||||
Walnut Hill Plaza | 3,606,700 | 3.17 | % | Straight-Line | 5-39 Years | |||||
Lumber River Village | 4,486,787 | 2.98 | % | Straight-Line | 5-39 Years | |||||
Perimeter Square | 5,191,021 | 3.25 | % | Straight-Line | 5-39 Years | |||||
The Shoppes at Eagle Harbor | 4,477,700 | 2.76 | % | Straight-Line | 5-39 Years | |||||
Riversedge North | 2,295,510 | 2.51 | % | Straight-Line | 5-39 Years | |||||
Monarch Bank | 1,986,363 | 2.90 | % | Straight-Line | 5-39 Years | |||||
Amscot Building | 492,828 | 2.77 | % | Straight-Line | 5-39 Years | |||||
Twin City Crossing | 3,045,189 | 3.20 | % | Straight-Line | 5-39 Years | |||||
Surrey Plaza | 1,856,515 | 4.07 | % | Straight-Line | 5-39 Years | |||||
Tampa Festival | 6,829,558 | 3.79 | % | Straight-Line | 5-39 Years | |||||
Forrest Gallery | 7,714,646 | 3.92 | % | Straight-Line | 5-39 Years | |||||
Starbucks/Verizon | 1,137,971 | 2.04 | % | Straight-Line | 5-39 Years | |||||
Jenks Plaza | 917,898 | 4.25 | % | Straight-Line | 5-39 Years | |||||
Winslow Plaza | 3,684,181 | 4.93 | % | Straight-Line | 5-39 Years | |||||
Clover Plaza | 1,222,554 | 2.89 | % | Straight-Line | 5-39 Years | |||||
St. George Plaza | 1,271,236 | 3.21 | % | Straight-Line | 5-39 Years | |||||
South Square | 1,911,330 | 2.62 | % | Straight-Line | 5-39 Years | |||||
Westland Square | 1,719,692 | 2.95 | % | Straight-Line | 5-39 Years | |||||
Waterway Plaza | 1,247,952 | 3.06 | % | Straight-Line | 5-39 Years | |||||
Cypress Shopping Center | 4,578,838 | 2.95 | % | Straight-Line | 5-39 Years | |||||
Harrodsburg Marketplace | 2,484,653 | 3.11 | % | Straight-Line | 5-39 Years | |||||
Port Crossing Shopping Center | 7,002,682 | 4.68 | % | Straight-Line | 5-39 Years | |||||
LaGrange Marketplace | 2,647,956 | 4.53 | % | Straight-Line | 5-39 Years | |||||
Freeway Junction | 6,754,803 | 3.89 | % | Straight-Line | 5-39 Years | |||||
Graystone Crossing | 2,856,365 | 2.86 | % | Straight-Line | 5-39 Years | |||||
Bryan Station | 2,756,142 | 3.32 | % | Straight-Line | 5-39 Years | |||||
Crockett Square | 6,844,567 | 3.66 | % | Straight-Line | 5-39 Years | |||||
Pierpont Centre | 9,253,152 | 3.64 | % | Straight-Line | 5-39 Years | |||||
Alex City Marketplace | 7,836,903 | 3.65 | % | Straight-Line | 5-39 Years | |||||
Butler Square | 6,411,277 | 2.89 | % | Straight-Line | 5-39 Years | |||||
Brook Run Shopping Center | 13,175,827 | 5.75 | % | Straight-Line | 5-39 Years | |||||
Brook Run Properties (1) | 8,856 | — | % | N/A | N/A | |||||
Laskin Road (1) | 185,018 | — | % | N/A | N/A | |||||
Beaver Ruin Village | 8,283,904 | 3.15 | % | Straight-Line | 5-39 Years | |||||
Beaver Ruin Village II | 2,814,398 | 2.90 | % | Straight-Line | 5-39 Years | |||||
Sunshine Shopping Plaza | 6,368,471 | 3.25 | % | Straight-Line | 5-39 Years | |||||
Cardinal Plaza | 2,475,266 | 3.48 | % | Straight-Line | 5-39 Years | |||||
Franklinton Square | 2,958,171 | 4.39 | % | Straight-Line | 5-39 Years | |||||
Nashville Commons | 3,503,161 | 3.76 | % | Straight-Line | 5-39 Years | |||||
Chesapeake Square | 4,111,707 | 4.86 | % | Straight-Line | 5-39 Years | |||||
Grove Park Shopping Center | 4,589,698 | 4.35 | % | Straight-Line | 5-39 Years | |||||
Parkway Plaza | 4,229,713 | 3.15 | % | Straight-Line | 5-39 Years |
Federal Tax Basis | Depreciation Rate | Method of Depreciation | Useful Life Claimed | |||||||
Conyers Crossing | 6,819,984 | 4.09 | % | Straight-Line | 5-39 Years | |||||
Fort Howard Shopping Center | 7,350,084 | 3.18 | % | Straight-Line | 5-39 Years | |||||
Columbia Fire House (1) | 278,557 | — | % | N/A | N/A | |||||
WHLR Macpherson, LLC (1) | 7,412 | — | % | N/A | N/A | |||||
LBP Blairmill, LLC (1) | 23,965 | — | % | N/A | N/A | |||||
LBP Milltown, LLC (1) | 100,364 | — | % | N/A | N/A | |||||
LBP Vauxhall, LLC (1) | 14,627 | — | % | N/A | N/A | |||||
Wheeler Real Estate, LLC | 53,541 | 10.68 | % | Straight-Line | 5-39 Years | |||||
Wheeler Interests, LLC | 8,734 | 29.48 | % | Straight-Line | 5-39 Years | |||||
Wheeler Real Estate Investment Trust, Inc. | 480,674 | 15.93 | % | Straight-Line | 5-39 Years | |||||
Wheeler REIT, LP (1) | 22,064 | — | % | N/A | N/A | |||||
$ | 189,508,534 |
Price per share of common stock: | |||||||||||||||||||
Quarter Ended | Mar. 31 | June 30 | Sept. 30 | Dec. 31 | Year | ||||||||||||||
Fiscal Year 2015 | |||||||||||||||||||
High | $ | 4.14 | $ | 2.45 | $ | 2.10 | $ | 2.03 | $ | 4.14 | |||||||||
Low | $ | 2.27 | $ | 1.98 | $ | 1.68 | $ | 1.60 | $ | 1.60 | |||||||||
Quarter Ended | |||||||||||||||||||
Fiscal Year 2014 | |||||||||||||||||||
High | $ | 4.86 | $ | 5.08 | $ | 5.16 | $ | 4.67 | $ | 5.16 | |||||||||
Low | $ | 4.14 | $ | 4.35 | $ | 4.45 | $ | 3.94 | $ | 3.94 |
Price per share of Series B preferred stock: | |||||||||||||||||||
Quarter Ended | Mar. 31 | June 30 | Sept. 30 | Dec. 31 | Year | ||||||||||||||
Fiscal Year 2015 | |||||||||||||||||||
High | $ | 24.96 | $ | 25.45 | $ | 24.56 | $ | 23.50 | $ | 25.45 | |||||||||
Low | $ | 18.75 | $ | 23.02 | $ | 22.05 | $ | 22.13 | $ | 18.75 | |||||||||
Quarter Ended | |||||||||||||||||||
Fiscal Year 2014 | |||||||||||||||||||
High | N/A | $ | 27.43 | $ | 25.55 | $ | 23.85 | $ | 27.43 | ||||||||||
Low | N/A | $ | 24.20 | $ | 23.20 | $ | 21.28 | $ | 21.28 |
Dividend Period | Record Date | Payment Date | Payment Amount per Share or Unit | ||||
January 1, 2015 - January 31, 2015 | 1/31/2015 | 2/28/2015 | $ | 0.035 | |||
February 1, 2015 - February 28, 2015 | 2/28/2015 | 3/31/2015 | $ | 0.035 | |||
March 1, 2015 - March 31, 2015 | 3/31/2015 | 4/30/2015 | $ | 0.0175 | |||
April 1, 2015 - April 30, 2015 | 4/30/2015 | 5/31/2015 | $ | 0.0175 | |||
May 1, 2015 - May 31, 2015 | 5/31/2015 | 6/30/2015 | $ | 0.0175 | |||
June 1, 2015 - June 30, 2015 | 6/30/2015 | 7/31/2015 | $ | 0.0175 | |||
July 1, 2015 - July 31, 2015 | 7/31/2015 | 8/31/2015 | $ | 0.0175 | |||
August 1, 2015 - August 31, 2015 | 8/31/2015 | 9/30/2015 | $ | 0.0175 | |||
September 1, 2015 - September 30, 2015 | 9/30/2015 | 10/31/2015 | $ | 0.0175 | |||
October 1, 2015 - October 31, 2015 | 10/31/2015 | 11/30/2015 | $ | 0.0175 | |||
November 1, 2015 - November 30, 2015 | 11/30/2015 | 12/31/2015 | $ | 0.0175 | |||
December 1, 2015 - December 31, 2015 | 12/31/2015 | 1/31/2016 | $ | 0.0175 |
Dividend Period | Record Date | Payment Date | Payment Amount per Share or Unit | ||||
January 1, 2014 - January 31, 2014 | 1/31/2014 | 2/28/2014 | $ | 0.035 | |||
February 1, 2014 - February 28, 2014 | 2/28/2014 | 3/31/2014 | $ | 0.035 | |||
March 1, 2014 - March 31, 2014 | 3/31/2014 | 4/30/2014 | $ | 0.035 | |||
April 1, 2014 - April 30, 2014 | 4/30/2014 | 5/31/2014 | $ | 0.035 | |||
May 1, 2014 - May 31, 2014 | 5/31/2014 | 6/30/2014 | $ | 0.035 | |||
June 1, 2014 - June 30, 2014 | 6/30/2014 | 7/31/2014 | $ | 0.035 | |||
July 1, 2014 - July 31, 2014 | 7/31/2014 | 8/31/2014 | $ | 0.035 | |||
August 1, 2014 - August 31, 2014 | 8/31/2014 | 9/30/2014 | $ | 0.035 | |||
September 1, 2014 - September 30, 2014 | 9/30/2014 | 10/31/2014 | $ | 0.035 | |||
October 1, 2014 - October 31, 2014 | 10/31/2014 | 11/30/2014 | $ | 0.035 | |||
November 1, 2014 - November 30, 2014 | 11/30/2014 | 12/31/2014 | $ | 0.035 | |||
December 1, 2014 - December 31, 2014 | 12/31/2014 | 1/31/2015 | $ | 0.035 |
Dividend Period | Record Date | Payment Date | Payment Amount per Share or Unit | ||||
January 1, 2015 - March 31, 2015 | 3/31/2015 | 4/15/2015 | $ | 56.25 | |||
April 1, 2015 - June 30, 2015 | 6/30/2015 | 7/15/2015 | $ | 56.25 | |||
July 1, 2015 - September 30, 2015 | 9/30/2015 | 10/15/2015 | $ | 56.25 | |||
October 1, 2015 - December 31, 2015 | 12/31/2014 | 1/15/2016 | $ | 56.25 |
Dividend Period | Record Date | Payment Date | Payment Amount per Share or Unit | ||||
April 29, 2014 - June 30, 2014 | 6/30/2014 | 7/15/2014 | $ | 38.75 | |||
July 1, 2014 - September 30, 2014 | 9/30/2014 | 10/15/2014 | $ | 56.25 | |||
October 1, 2014 - December 31, 2014 | 12/31/2014 | 1/15/2015 | $ | 56.25 |
Years Ended December 31, | Period Over Period Change | |||||||||||
2015 | 2014 | $ | % | |||||||||
Operating activities | (9,304,298 | ) | (4,441,020 | ) | $ | (4,863,278 | ) | 109.51 | % | |||
Investing activities | (52,932,252 | ) | (18,161,992 | ) | $ | (34,770,260 | ) | 191.45 | % | |||
Financing activities | 63,572,987 | 31,417,677 | $ | 32,155,310 | 102.35 | % |
December 31, | |||||||
2015 | 2014 | ||||||
Fixed-rate notes | $ | 182,466,706 | $ | 122,296,547 | |||
Fixed-rate notes, assets held for sale | 1,982,042 | 19,153,596 | |||||
Floating-rate line of credit | 6,873,750 | — | |||||
Total debt | $ | 191,322,498 | $ | 141,450,143 |
For the Years Ended December 31, | Period over Period Changes | |||||||||||||
2015 | 2014 | $/# | % | |||||||||||
PROPERTY DATA: | ||||||||||||||
Number of properties owned and leased (1) | 42 | 30 | 12 | 40.0 | % | |||||||||
Aggregate gross leasable area (1) | 3,151,358 | 1,904,146 | 1,247,212 | 65.5 | % | |||||||||
Ending occupancy rate (1) | 94.2 | % | 95.6 | % | — | (1.5 | )% | |||||||
FINANCIAL DATA: | ||||||||||||||
Rental revenues | $ | 20,553,870 | $ | 11,348,955 | $ | 9,204,915 | 81.11 | % | ||||||
Asset management fees | 588,990 | 296,290 | 292,700 | 98.79 | % | |||||||||
Commissions | 361,984 | 158,876 | 203,108 | 127.84 | % | |||||||||
Tenant reimbursements and other income | 6,229,361 | 3,069,972 | 3,159,389 | 102.91 | % | |||||||||
Total Revenue | 27,734,205 | $ | 14,874,093 | 12,860,112 | 86.46 | % | ||||||||
EXPENSES: | ||||||||||||||
Property operations | 8,351,456 | 4,123,439 | 4,228,017 | 102.54 | % | |||||||||
Non-REIT management and leasing services | 1,110,705 | — | 1,110,705 | — | % | |||||||||
Depreciation and amortization | 16,882,462 | 7,387,729 | 9,494,733 | 128.52 | % | |||||||||
Provision for credit losses | 243,029 | 60,841 | 182,188 | 299.45 | % | |||||||||
Corporate general & administrative | 13,480,089 | 9,447,010 | 4,033,079 | 42.69 | % | |||||||||
Total Operating Expenses | 40,067,741 | 21,019,019 | 19,048,722 | 90.63 | % | |||||||||
Operating Loss | (12,333,536 | ) | (6,144,926 | ) | (6,188,610 | ) | (100.71 | )% | ||||||
Interest expense | (9,043,761 | ) | (5,908,548 | ) | (3,135,213 | ) | (53.06 | )% | ||||||
Net Loss from Continuing Operations | (21,377,297 | ) | (12,053,474 | ) | (9,323,823 | ) | (77.35 | )% | ||||||
Discontinued Operations | ||||||||||||||
Income (loss) from operations | 499,781 | 307,659 | 192,122 | 62.45 | % | |||||||||
Gain on disposal of properties | 2,104,114 | — | 2,104,114 | — | % | |||||||||
Net Income from Discontinued Operations | 2,603,895 | 307,659 | 2,296,236 | 746.36 | % | |||||||||
Net Loss | (18,773,402 | ) | (11,745,815 | ) | (7,027,587 | ) | (59.83 | )% | ||||||
Net loss attributable to noncontrolling interests | (1,252,723 | ) | (1,195,560 | ) | (57,163 | ) | (4.78 | )% | ||||||
Net Loss Attributable to Wheeler REIT | $ | (17,520,679 | ) | $ | (10,550,255 | ) | $ | (6,970,424 | ) | (66.07 | )% |
• | Harps at Harbor Point |
• | Bixby Commons |
• | Jenks Reasors |
• | Starbucks/Verizon |
• | Outback Steakhouse and Ruby Tuesday ground leases at Pierpont Centre (acquired January 14, 2015) |
Year Ended December 31, | |||||||||||||||||||||||
Same Store | New Store | Total | |||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
Property revenues | $ | 12,783,846 | $ | 12,226,001 | $ | 13,999,385 | $ | 2,192,926 | $ | 26,783,231 | $ | 14,418,927 | |||||||||||
Property expenses | 3,919,921 | 3,595,182 | 4,431,535 | 528,257 | 8,351,456 | 4,123,439 | |||||||||||||||||
Property Net Operating Income | 8,863,925 | 8,630,819 | 9,567,850 | 1,664,669 | 18,431,775 | 10,295,488 | |||||||||||||||||
Asset Management and Commission Revenues | — | — | 950,974 | 455,166 | 950,974 | 455,166 | |||||||||||||||||
Non-REIT management and leasing services | — | — | 1,110,705 | — | 1,110,705 | — | |||||||||||||||||
Depreciation and amortization | 5,428,204 | 5,903,392 | 11,454,258 | 1,484,337 | 16,882,462 | 7,387,729 | |||||||||||||||||
Provision for credit losses | 151,997 | 41,624 | 91,032 | 19,217 | 243,029 | 60,841 | |||||||||||||||||
Corporate general & administrative | 11,316,307 | 5,235,451 | 2,163,782 | 4,211,559 | 13,480,089 | 9,447,010 | |||||||||||||||||
Total Other Operating Expenses | 16,896,508 | 11,180,467 | 14,819,777 | 5,715,113 | 31,716,285 | 16,895,580 | |||||||||||||||||
Interest expense | 5,001,840 | 5,112,038 | 4,041,921 | 796,510 | 9,043,761 | 5,908,548 | |||||||||||||||||
Net Loss from Continuing Operations | (13,034,423 | ) | (7,661,686 | ) | (8,342,874 | ) | (4,391,788 | ) | (21,377,297 | ) | (12,053,474 | ) | |||||||||||
Discontinued Operations | |||||||||||||||||||||||
Income (loss) from operations | 505,516 | 307,659 | (5,735 | ) | — | 499,781 | 307,659 | ||||||||||||||||
Gain on disposal of properties | 2,104,114 | — | — | — | 2,104,114 | — | |||||||||||||||||
Net Income (Loss) from Discontinued Operations | 2,609,630 | 307,659 | (5,735 | ) | — | 2,603,895 | 307,659 | ||||||||||||||||
Net Loss | $ | (10,424,793 | ) | $ | (7,354,027 | ) | $ | (8,348,609 | ) | $ | (4,391,788 | ) | $ | (18,773,402 | ) | $ | (11,745,815 | ) |
2015 | |||||
Acquisition costs | $ | 3,871,037 | |||
Capital related costs | 2,655,474 | ||||
Perimeter legal accrual | 133,282 | ||||
Commission expenses | 115,287 | ||||
Marketing/promotional | 177,630 | ||||
Professional fees | 230,434 | ||||
Employee recruitment | 66,500 | ||||
Other | 180,906 | ||||
$ | 7,430,550 |
Years Ended December 31, | ||||||||||||||||||||||||||||||
Same Stores | New Stores | Total | Period Over Period Changes | |||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | $ | % | |||||||||||||||||||||||
Net (loss) | $ | (10,424,793 | ) | $ | (7,354,027 | ) | $ | (8,348,609 | ) | $ | (4,391,788 | ) | $ | (18,773,402 | ) | $ | (11,745,815 | ) | $ | (7,027,587 | ) | (59.83 | )% | |||||||
Depreciation and amortization of real estate assets from continuing operations | 5,428,204 | 5,903,392 | 11,454,258 | 1,484,337 | 16,882,462 | 7,387,729 | 9,494,733 | 128.52 | % | |||||||||||||||||||||
Depreciation and amortization of real estate assets from discontinued operations | 510,818 | 832,761 | 69,073 | — | 579,891 | 832,761 | (252,870 | ) | (30.37 | )% | ||||||||||||||||||||
Depreciation of real estate assets | 5,939,022 | 6,736,153 | 11,523,331 | 1,484,337 | 17,462,353 | 8,220,490 | 9,241,863 | 112.42 | % | |||||||||||||||||||||
Gain on sale of discontinued operations | (2,104,114 | ) | — | — | — | (2,104,114 | ) | $ | — | (2,104,114 | ) | — | % | |||||||||||||||||
Total FFO | $ | (6,589,885 | ) | $ | (617,874 | ) | $ | 3,174,722 | $ | (2,907,451 | ) | $ | (3,415,163 | ) | $ | (3,525,325 | ) | $ | 110,162 | 3.12 | % |
Years Ended December 31, | |||||||
2015 | 2014 (1) | ||||||
Total FFO | $ | (3,415,163 | ) | $ | (3,525,325 | ) | |
Preferred stock dividends | (13,627,532 | ) | (2,718,257 | ) | |||
Preferred stock accretion adjustments | 8,925,221 | 379,584 | |||||
FFO available to common shareholders and common unitholders | (8,117,474 | ) | (5,863,998 | ) | |||
Acquisition costs | 3,871,037 | 3,787,900 | |||||
Capital related costs | 2,655,474 | — | |||||
Other non-recurring expenses | 770,757 | — | |||||
Share-based compensation | 547,000 | 456,988 | |||||
Straight-line rent | (270,873 | ) | (247,220 | ) | |||
Loan cost amortization | 1,300,901 | 787,228 | |||||
Above/below market lease amortization | 616,665 | 85,808 | |||||
Perimeter legal accrual | 133,282 | — | |||||
Tenant improvement reserves | (302,600 | ) | (194,400 | ) | |||
Recurring capital expenditures | (355,900 | ) | (239,200 | ) | |||
AFFO | $ | 848,269 | $ | (1,426,894 | ) |
For the Years Ended December 31, | Period over Period Changes | |||||||||||||
2014 | 2013 | $/# | % | |||||||||||
PROPERTY DATA: | ||||||||||||||
Number of properties owned and operated | 30 | 22 | 8 | 36.36 | % | |||||||||
Aggregate gross leasable area | 1,904,146 | 1,284,022 | 620,124 | 48.30 | % | |||||||||
Ending occupancy rate | 95.6 | % | 94.0 | % | — | 1.70 | % | |||||||
FINANCIAL DATA: | ||||||||||||||
Rental revenues | $ | 11,348,955 | $ | 6,078,172 | $ | 5,270,783 | 86.72 | % | ||||||
Asset management fees | 296,290 | — | 296,290 | — | % | |||||||||
Commissions | 158,876 | — | 158,876 | — | % | |||||||||
Tenant reimbursements and other income | 3,069,972 | 1,533,189 | 1,536,783 | 100.23 | % | |||||||||
Total Revenue | 14,874,093 | 7,611,361 | 7,262,732 | 95.42 | % | |||||||||
EXPENSES: | ||||||||||||||
Property operations | 4,123,439 | 1,658,405 | 2,465,034 | 148.64 | % | |||||||||
Non-REIT management and leasing services | — | — | — | — | % | |||||||||
Depreciation and amortization | 7,387,729 | 3,002,201 | 4,385,528 | 146.08 | % | |||||||||
Provision for credit losses | 60,841 | 106,828 | (45,987 | ) | (43.05 | )% | ||||||||
Corporate general & administrative | 9,447,010 | 4,594,539 | 4,852,471 | 105.61 | % | |||||||||
Total Operating Expenses | 21,019,019 | 9,361,973 | 11,657,046 | 124.51 | % | |||||||||
Operating Loss | (6,144,926 | ) | (1,750,612 | ) | (4,394,314 | ) | (251.02 | )% | ||||||
Interest expense | (5,908,548 | ) | (2,107,303 | ) | (3,801,245 | ) | (180.38 | )% | ||||||
Net Loss from Continuing Operations | (12,053,474 | ) | (3,857,915 | ) | (8,195,559 | ) | (212.43 | )% | ||||||
Net Income (Loss) from Discontinued Operations | 307,659 | (517,311 | ) | 824,970 | 159.47 | % | ||||||||
Net Loss | (11,745,815 | ) | (4,375,226 | ) | (7,370,589 | ) | (168.46 | )% | ||||||
Net loss attributable to noncontrolling interests | (1,195,560 | ) | (714,972 | ) | (480,588 | ) | (67.22 | )% | ||||||
Net Loss Attributable to Wheeler REIT | $ | (10,550,255 | ) | $ | (3,660,254 | ) | $ | (6,890,001 | ) | (188.24 | )% |
• | Bixby Commons (acquired June 11, 2013) |
• | Jenks Reasors (acquired September 25, 2013) |
• | Starbucks/Verizon (acquired October 21, 2013) |
Year Ended December 31, | |||||||||||||||||||||||
Same Store | New Store | Total | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Property revenues | $ | 6,030,215 | $ | 6,175,376 | $ | 8,388,712 | $ | 1,435,985 | $ | 14,418,927 | $ | 7,611,361 | |||||||||||
Property expenses | 1,343,057 | 1,264,790 | 2,780,382 | 393,615 | 4,123,439 | 1,658,405 | |||||||||||||||||
Property Net Operating Income | 4,687,158 | 4,910,586 | 5,608,330 | 1,042,370 | 10,295,488 | 5,952,956 | |||||||||||||||||
Asset Management and Commission Revenues | — | — | 455,166 | — | 455,166 | — | |||||||||||||||||
Depreciation and amortization | 1,849,776 | 2,498,477 | 5,537,953 | 503,724 | 7,387,729 | 3,002,201 | |||||||||||||||||
Provision for credit losses | (25,332 | ) | 106,828 | 86,173 | — | 60,841 | 106,828 | ||||||||||||||||
Corporate general & administrative | 5,049,414 | 3,122,880 | 4,397,596 | 1,471,659 | 9,447,010 | 4,594,539 | |||||||||||||||||
Total Other Operating Expenses | 6,873,858 | 5,728,185 | 10,021,722 | 1,975,383 | 16,895,580 | 7,703,568 | |||||||||||||||||
Interest expense | 3,027,354 | 1,733,680 | 2,881,194 | 373,623 | 5,908,548 | 2,107,303 | |||||||||||||||||
Net Loss from Continuing Operations | (5,214,054 | ) | (2,551,279 | ) | (6,839,420 | ) | (1,306,636 | ) | (12,053,474 | ) | (3,857,915 | ) | |||||||||||
Net Income (Loss) from Discontinued Operations | 32,884 | 24,688 | 274,775 | (541,999 | ) | 307,659 | (517,311 | ) | |||||||||||||||
Net Loss | $ | (5,181,170 | ) | $ | (2,526,591 | ) | $ | (6,564,645 | ) | $ | (1,848,635 | ) | $ | (11,745,815 | ) | $ | (4,375,226 | ) |
Years Ended December 31, | ||||||||||||||||||||||||||||||
Same Stores | New Stores | Total | Period Over Period Changes | |||||||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | $ | % | |||||||||||||||||||||||
Net income (loss) | $ | (5,181,170 | ) | $ | (2,526,591 | ) | $ | (6,564,645 | ) | $ | (1,848,635 | ) | $ | (11,745,815 | ) | $ | (4,375,226 | ) | $ | (7,370,589 | ) | (168.46 | )% | |||||||
Depreciation and amortization of real estate assets from continuing operations | 1,849,776 | 2,498,477 | 5,537,953 | 503,724 | 7,387,729 | 3,002,201 | 4,385,528 | 146.08 | % | |||||||||||||||||||||
Depreciation and amortization of real estate assets from discontinued operations | 123,236 | 185,104 | 709,525 | 279,652 | 832,761 | 464,756 | 368,005 | 79.18 | % | |||||||||||||||||||||
Depreciation of real estate assets | 1,973,012 | 2,683,581 | 6,247,478 | 783,376 | 8,220,490 | 3,466,957 | 4,753,533 | 137.11 | % | |||||||||||||||||||||
Total FFO | $ | (3,208,158 | ) | $ | 156,990 | $ | (317,167 | ) | $ | (1,065,259 | ) | $ | (3,525,325 | ) | $ | (908,269 | ) | $ | (2,617,056 | ) | (288.14 | )% |
Years Ended December 31, | |||||||
2014 | 2013 (1) | ||||||
Total FFO | $ | (3,525,325 | ) | $ | (908,269 | ) | |
Preferred stock dividends | (2,718,257 | ) | (141,418 | ) | |||
Preferred stock accretion adjustments | 379,584 | — | |||||
Total FFO available to common shareholders and common unitholders | (5,863,998 | ) | (1,049,687 | ) | |||
Acquisition costs | 3,787,900 | 2,179,000 | |||||
Share-based compensation | 456,988 | — | |||||
Straight-line rent | (247,220 | ) | (33,822 | ) | |||
Loan cost amortization | 787,228 | 185,103 | |||||
Above/below market lease amortization | 85,808 | (658,245 | ) | ||||
Perimeter legal accrual | — | 267,000 | |||||
Tenant improvement reserves | (194,400 | ) | (109,600 | ) | |||
Recurring capital expenditures | (239,200 | ) | (131,600 | ) | |||
AFFO | $ | (1,426,894 | ) | $ | 648,149 |
For the Years Ended December 31, | Period over Period Changes | |||||||||||||
2013 | 2012 | $/# | % | |||||||||||
PROPERTY DATA: | ||||||||||||||
Number of properties owned and operated | 22 | 11 | 11 | 100.00 | % | |||||||||
Aggregate gross leasable area | 1,284,022 | 470,350 | 813,672 | 172.99 | % | |||||||||
Ending occupancy rate | 94.0 | % | 94.3 | % | (0.3 | )% | (0.32 | )% | ||||||
FINANCIAL DATA: | ||||||||||||||
Rental revenues | $ | 6,078,172 | $ | 1,946,702 | $ | 4,131,470 | 212.23 | % | ||||||
Tenant reimbursements and other income | 1,533,189 | 470,298 | 1,062,891 | 226.00 | % | |||||||||
Total Revenue | 7,611,361 | 2,417,000 | 5,194,361 | 214.91 | % | |||||||||
EXPENSES: | ||||||||||||||
Property operations | 1,658,405 | 519,220 | 1,139,185 | 219.40 | % | |||||||||
Depreciation and amortization | 3,002,201 | 811,958 | 2,190,243 | 269.75 | % | |||||||||
Provision for credit losses | 106,828 | 25,000 | 81,828 | 327.31 | % | |||||||||
Corporate general & administrative | 4,594,539 | 1,305,337 | 3,289,202 | 251.98 | % | |||||||||
Total Operating Expenses | 9,361,973 | 2,661,515 | 6,700,458 | 251.75 | % | |||||||||
Operating Loss | (1,750,612 | ) | (244,515 | ) | (1,506,097 | ) | (615.95 | )% | ||||||
Interest expense | (2,107,303 | ) | (960,957 | ) | (1,146,346 | ) | (119.29 | )% | ||||||
Net Loss from Continuing Operations | (3,857,915 | ) | (1,205,472 | ) | (2,652,443 | ) | (220.03 | )% | ||||||
Net Loss from Discontinued Operations | (517,311 | ) | (185 | ) | (517,126 | ) | (279,527.57 | )% | ||||||
Net Loss | (4,375,226 | ) | (1,205,657 | ) | (3,169,569 | ) | (262.89 | )% | ||||||
Net loss attributable to noncontrolling interests | (714,972 | ) | (43,880 | ) | (671,092 | ) | (1,529.38 | )% | ||||||
Net Loss Attributable to Wheeler REIT | $ | (3,660,254 | ) | $ | (1,161,777 | ) | $ | (2,498,477 | ) | (215.06 | )% |
• | Harps at Harbor Point (acquired December 14, 2012) |
• | Bixby Commons (acquired June 11, 2013) |
• | Jenks Reasors (acquired September 25, 2013) |
• | Starbucks/Verizon (acquired October 21, 2013) |
Year Ended December 31, | |||||||||||||||||||||||
Same Store | New Store | Total | |||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||||
Property revenues | $ | 1,988,710 | $ | 2,008,460 | $ | 5,622,651 | $ | 408,540 | $ | 7,611,361 | $ | 2,417,000 | |||||||||||
Property expenses | 419,101 | 425,660 | 1,239,304 | 93,560 | 1,658,405 | 519,220 | |||||||||||||||||
Property Net Operating Income | 1,569,609 | 1,582,800 | 4,383,347 | 314,980 | 5,952,956 | 1,897,780 | |||||||||||||||||
Depreciation and amortization | 488,975 | 653,215 | 2,513,226 | 158,743 | 3,002,201 | 811,958 | |||||||||||||||||
Provision for credit losses | 3,526 | — | 103,302 | 25,000 | 106,828 | 25,000 | |||||||||||||||||
Corporate general & administrative | 2,599,248 | 1,267,517 | 1,995,291 | 37,820 | 4,594,539 | 1,305,337 | |||||||||||||||||
Total Other Operating Expenses | 3,091,749 | 1,920,732 | 4,611,819 | 221,563 | 7,703,568 | 2,142,295 | |||||||||||||||||
Interest expense | 733,600 | 805,068 | 1,373,703 | 155,889 | 2,107,303 | 960,957 | |||||||||||||||||
Net Loss from Continuing Operations | (2,255,740 | ) | (1,143,000 | ) | (1,602,175 | ) | (62,472 | ) | (3,857,915 | ) | (1,205,472 | ) | |||||||||||
Net Income (Loss) from Discontinued Operations | — | — | (517,311 | ) | (185 | ) | (517,311 | ) | (185 | ) | |||||||||||||
Net Loss | $ | (2,255,740 | ) | $ | (1,143,000 | ) | $ | (2,119,486 | ) | $ | (62,657 | ) | $ | (4,375,226 | ) | $ | (1,205,657 | ) |
Years Ended December 31, | ||||||||||||||||||||||||||||||
Same Stores | New Stores | Total | Period Over Period Changes | |||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | $ | % | |||||||||||||||||||||||
Net income (loss) | $ | (2,255,740 | ) | $ | (1,143,000 | ) | $ | (2,119,486 | ) | $ | (62,657 | ) | $ | (4,375,226 | ) | $ | (1,205,657 | ) | $ | (3,169,569 | ) | (262.89 | )% | |||||||
Depreciation and amortization of real estate assets from continuing operations | 488,975 | 653,215 | 2,513,226 | 158,743 | 3,002,201 | 811,958 | 2,190,243 | 269.75 | % | |||||||||||||||||||||
Depreciation and amortization of real estate assets from discontinued operations | — | — | 464,756 | 10,194 | 464,756 | 10,194 | 454,562 | 4,459.11 | % | |||||||||||||||||||||
Depreciation of real estate assets | 488,975 | 653,215 | 2,977,982 | 168,937 | 3,466,957 | 822,152 | 2,644,805 | 321.69 | % | |||||||||||||||||||||
Total FFO | $ | (1,766,765 | ) | $ | (489,785 | ) | $ | 858,496 | $ | 106,280 | $ | (908,269 | ) | $ | (383,505 | ) | $ | (524,764 | ) | (136.83 | )% |
Years Ended December 31, | |||||||
2013 | 2012 (1) | ||||||
Total FFO | $ | (908,269 | ) | $ | (383,505 | ) | |
Preferred stock dividends | (141,418 | ) | — | ||||
Total FFO available to common shareholders and common unitholders | (1,049,687 | ) | (383,505 | ) | |||
Acquisition costs | 2,179,000 | — | |||||
Straight-line rent | (33,822 | ) | (32,922 | ) | |||
Loan cost amortization | 185,103 | 52,817 | |||||
Above/below market lease amortization | (658,245 | ) | (41,256 | ) | |||
Perimeter legal accrual | 267,000 | — | |||||
Tenant improvement reserves | (109,600 | ) | — | ||||
Recurring capital expenditures | (131,600 | ) | — | ||||
AFFO | $ | 648,149 | $ | (404,866 | ) |
• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our Board of Directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
Name | Age | Position | |||
Jon S. Wheeler | 55 | Chairman, Chief Executive Officer and Director | |||
Wilkes J. Graham | 39 | Chief Financial Officer | |||
Steven M. Belote | 50 | Chief Operating Officer | |||
Robin Hanisch | 58 | Secretary | |||
Matthew T. Reddy | 33 | Chief Accounting Officer | |||
Jeffrey B. Parker | 46 | Director of Leasing | |||
Kurt R. Harrington (1) | 63 | Director | |||
David Kelly | 51 | Director | |||
William W. King (1) | 76 | Director | |||
Stewart J. Brown (1) | 68 | Director | |||
John McAuliffe (1) | 66 | Director | |||
Carl B. McGowan, Jr. (1) | 68 | Director | |||
Ann McKinney | 67 | Director | |||
Jeffrey Zwerdling (1) | 71 | Director |
• | the prospective nominee’s ability to dedicate sufficient time, energy, and attention to the diligent performance of his or her duties, including the prospective nominee’s service on other public company boards, as specifically set out in the Company’s Corporate Governance Guidelines; |
• | the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the Board; |
• | the extent to which the prospective nominee helps the Board reflect the diversity of the Company’s stockholders, employees, customers, guests and communities; and |
• | the willingness of the prospective nominee to meet any minimum equity interest holding guideline. |
• | our accounting and financial reporting processes; |
• | the integrity of our consolidated financial statements and financial reporting process; |
• | our systems of disclosure controls and procedures and internal control over financial reporting; |
• | our compliance with financial, legal and regulatory requirements; |
• | the evaluation of the qualifications, independence and performance of our independent registered public accounting firm; |
• | the performance of our internal audit function; and |
• | our overall risk profile. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our executive officers’ compensation, evaluating our executive officers’ performance in light of such goals and objectives and determining and approving the remuneration of our executive officers based on such evaluation; |
• | reviewing and approving the compensation, if any, of all of our other officers; |
• | reviewing our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
• | identifying and recommending to the full board of directors qualified candidates for election as directors and recommending nominees for election as directors at the annual meeting of stockholders; |
• | developing and recommending to the board of directors corporate governance guidelines and implementing and monitoring such guidelines; |
• | reviewing and making recommendations on matters involving the general operation of the board of directors, including board size and composition, and committee composition and structure; |
• | recommending to the board of directors nominees for each committee of the board of directors; |
• | annually facilitating the assessment of the board of directors’ performance as a whole and of the individual directors, as required by applicable law, regulations and the NASDAQ Capital Market corporate governance requirements; and |
• | overseeing the board of directors’ evaluation of management. |
• | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
• | full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications; |
• | compliance with laws, rules and regulations; |
• | prompt internal reporting of violations of the code to appropriate persons identified in the code; and |
• | accountability for adherence to the code of business conduct and ethics. |
• | the act or omission of the director or executive officer was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; |
• | the director or executive officer actually received an improper personal benefit in money, property or services; or |
• | with respect to any criminal action or proceeding, the director or executive officer had reasonable cause to believe his or her conduct was unlawful. |
• | if the proceeding was one brought by us or in our right and the director or executive officer is adjudged to be liable to us; |
• | if the director or executive officer is adjudged to be liable on the basis that personal benefit was improperly received in a proceeding charging improper personal benefit to the director or executive officer; or |
• | in any proceeding brought by the director or executive officer other than to enforce his or her rights under the indemnification agreement, and then only to the extent provided by the agreement, and except as may be expressly provided in our charter, our bylaws, a resolution of our board of directors or of our stockholders entitled to vote generally in the election of directors or an agreement approved by our board of directors. |
• | a written affirmation of the indemnitee’s good faith belief that he or she has met the standard of conduct necessary for indemnification; and |
• | a written undertaking to reimburse us if a court of competent jurisdiction determines that the director or executive officer is not entitled to indemnification. |
• | goals of the compensation program; |
• | role of our compensation committee; |
• | engagement and role(s) of an external compensation consultant and other advisors; |
• | involvement of management in compensation decisions; |
• | components of compensation, including equity, cash, incentive, fixed, short-, medium- and long-term compensation, and the interaction of these various components with one another; |
• | equity grant guidelines with regard to timing, type, vesting and other terms and conditions of equity grants; |
• | stock ownership guidelines and their role in aligning the interests of named executive officers with our stockholders; |
• | severance and change of control protections; |
• | perquisites, enhanced benefits and insurance; |
• | deferred compensation and other tax-efficient compensation programs; |
• | retirement and other savings programs; |
• | peer compensation, benchmarking and survey data; and |
• | risk mitigation and related protective and remedial measures. |
• | Base compensation of $475,000 annually. |
• | Reimbursement of reasonable expenses including but not limited to cell phone, mileage, toll and travel expenses, as well as travel expenses necessary to enhance Mr. Wheeler’s skills and visibility in the real estate industry. |
• | Various benefits equal to the benefits provided to similar situated employees. |
• | Mr. Belote’s base compensation is $265,000 annually. |
• | Reimbursement of reasonable expenses including but not limited to cell phone, mileage, toll and travel expenses, as well as travel expenses necessary to enhance Mr. Belote’s skills and visibility in the real estate industry. |
• | Various benefits equal to the benefits provided to similar situated employees, not to include healthcare. |
• | Base compensation of $125,000 annually. |
• | Reimbursement of reasonable expenses including but not limited to cell phone, mileage, toll and travel expenses, as well as travel expenses necessary to enhance Ms. Hanisch’s skills and visibility in the real estate industry. |
• | Various benefits equal to the benefits provided to similar situated employees, not to include healthcare. |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation (1) | Total ($) | ||||||||||||||
Jon S. Wheeler | 2015 | 493,269 | — | 26,259 | — | — | 18,000 | 537,528 | ||||||||||||||
Principal Executive Officer | 2014 | 298,077 | — | 10,000 | — | — | 11,923 | 320,000 | ||||||||||||||
2013 | 225,000 | — | — | — | — | — | 225,000 | |||||||||||||||
Steven M. Belote | 2015 | 275,192 | — | 25,980 | — | — | 11,222 | 312,394 | ||||||||||||||
Chief Financial Officer (2) | 2014 | 185,923 | — | 18,096 | — | — | — | 204,019 | ||||||||||||||
2013 | 144,000 | — | — | — | — | — | 144,000 | |||||||||||||||
David Kelly | 2015 | 181,731 | 269,375 | 19,603 | — | — | 13,867 | 484,576 | ||||||||||||||
Senior VP/Acquisitions | 2014 | 107,952 | — | 1,865 | — | — | — | 109,817 | ||||||||||||||
2013 | — | — | — | — | — | — | — |
Name | Fees Earned or Paid in Cash | Stock Awards | Total | |||||||
Stewart J. Brown (1) | $ | 6,250 | $ | — | 6,250 | |||||
Christopher J. Ettel (2) | 8,750 | 20,000 | 28,750 | |||||||
Kurt R. Harrington (3) | 7,500 | — | 7,500 | |||||||
Warren D. Harris (4) | 7,500 | 20,000 | 27,500 | |||||||
David Kelly | 15,000 | 20,000 | 35,000 | |||||||
William W. King | 15,000 | 20,000 | 35,000 | |||||||
John McAuliffe (5) | 1,250 | — | 1,250 | |||||||
Carl B. McGowan, Jr. | 15,000 | 20,000 | 35,000 | |||||||
Ann L. McKinney | 15,000 | 20,000 | 35,000 | |||||||
Jeffrey M. Zwerdling | 15,000 | 20,000 | 35,000 |
(1) | Began serving as a director during August 2015. |
(2) | Served as a director until August 2015. |
(3) | Began serving as a director during June 2015. |
(4) | Served as a director until June 2015. |
(5) | Began serving as a director in December 2015. |
Number of Shares and Common Units Beneficially Owned | Percentage of All Shares(1) | Percentage of All Shares and Common Units(2) | ||||||
Jon S. Wheeler | 2,712,441 | (3) | 4.09 | % | 3.81 | % | ||
Steven M. Belote | 21,181 | * | * | |||||
Robin Hanisch | 24,094 | (4) | * | * | ||||
Carl B. McGowan, Jr. | 15,571 | * | * | |||||
Ann L. McKinney | 50,866 | (5) | * | * | ||||
Christopher J. Ettel | 12,403 | * | * | |||||
David Kelly | 17,968 | * | * | |||||
William W. King | 13,171 | * | * | |||||
Jeff Zwerdling | 349,271 | (6) | * | * | ||||
Warren D. Harris | 9,415 | * | * | |||||
Kurt R. Harrington | 20,000 | * | * | |||||
All directors, director nominees and executive officers as a group (12 persons) | 3,246,381 | (7) | 4.90 | % | 4.56 | % |
* | Less than 1.0% |
(1) | Based upon 66,259,673 shares of common stock outstanding on March 8, 2016. In addition, amounts for individuals assume that all Series B convertible preferred stock held by the individual are converted into common stock and all warrants held by the person are exercised. |
(2) | Based upon 66,259,673 shares of our common stock and 4,863,019 common units, which units may be redeemed for cash or, at our option, exchanged for shares of our common stock outstanding on March 8, 2016, subject to certain lock-up agreements. |
(3) | Includes 761,723 shares of common stock and 1,950,718 common units, of which 660,000 and 1,585,865 common shares and common units, respectively, have been pledged as security. |
(4) | Includes 20,849 shares of common stock and 3,245 common units. |
(5) | Includes 26,840 shares of common stock and 24,026 common units. |
(6) | Includes 262,471 shares of common stock, 14,000 shares of Series B convertible preferred stock convertible into 70,000 shares of common stock and 16,800 warrants to purchase 16,800 shares of common stock. |
(7) | Includes 1,161,592 shares of common stock and 1,977,989 common units. |
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Our Outstanding Shares (1) | Percentage of Our Outstanding Shares and Common Units (2) | |||||
Bulldog Investors (3) Park 80 West - Plaza Two 250 Pehle Ave. Suite 708 Saddle Brook, NJ 07663 | 4,298,173 | 6.49 | % | 6.04 | % | |||
LDR Capital Management, LLC (4) 444 Madison Ave., 34th Floor New York, NY 10022 | 4,044,221 | 6.10 | % | 5.69 | % | |||
EJF Capital, LLC (5) 2107 Wilson Boulevard, Suite 410 Arlington, VA 22201 | 3,455,000 | 5.21 | % | 4.86 | % | |||
Corbin Capital Partners, L.P. (6) 590 Madison Avenue New York, NY 10022 | 3,374,225 | 5.09 | % | 4.74 | % | |||
Westport Capital Partners, LLC (7) 40 Danbury Road Wilton, CT 06897 | 6,250,000 | 9.43 | % | 8.79 | % | |||
Total of 5% or more shareholders as a group (4 entities) | 21,421,619 | 32.33 | % | 30.12 | % |
(1) | Based upon 66,259,673 shares of common stock outstanding on March 8, 2016. |
(2) | Based upon 66,259,673 shares of our common stock and 4,863,019 common units, which units may be redeemed for cash or, at our option, exchanged for shares of our common stock outstanding on March 8, 2016, subject to certain lock-up agreements. |
(3) | Based solely upon the Schedule 13D filed with the SEC by the beneficial owner on July 27, 2015 reporting beneficial ownership as of July 27, 2015. Bulldog Investors, LLC possesses sole voting and dispositive power over 2,353,574 shares and shared dispositive and voting power over 1,944,599 shares. |
(4) | Based solely upon the Schedule 13G filed with the SEC by the beneficial owner on February 12, 2016 reporting beneficial ownership as of December 31, 2015. LDR Capital Management possesses shared voting and dispositive power over 4,044,221 shares. In addition, based solely upon the Schedule 13G, Lawrence Raiman is the sole manager, President and Chief Executive Officer of LDR and therefore may be deemed to have beneficial ownership over the shares. |
(5) | Based solely upon the Schedule 13G filed with the SEC by the beneficial owner on February 12, 2016 reporting beneficial ownership as of December 31, 2015. EJF Capital, LLC possesses shared voting and dispositive power over 3,455,000 shares. In addition, based solely upon the Schedule 13G filed with the SEC, Emanuel Friedman may be deemed to have beneficial ownership over the shares. |
(6) | Based solely upon the Schedule 13G filed with the SEC by the beneficial owner on February 12, 2016 reporting beneficial ownership as of December 31, 2015. Corbin Capital Partners Group, L.P. possesses shared voting and dispositive power over 3,374,225 shares. In addition, based solely upon the Schedule 13G, Corbin Capital Partners, L.P. and Fort George Investments, LLC may be deemed to have beneficial ownership over the shares. |
(7) | Based solely upon the Schedule 13D filed with the SEC by the beneficial owner on June 15, 2015 reporting beneficial ownership as of June 15, 2015. Westport Capital Partners, LLC possesses shared voting and dispositive power over 6,250,000 shares. In addition, based solely upon the Schedule 13D, Russel Bernard, Sean Armstrong, Wm. Gregory Geiger, Jordan Socaransky and Marc Porosoff are members of the investment committee of Westport Capital Partners, LLC and may be deemed to have beneficial ownership over the shares. The 6,250,000 shares include 2,925,000 shares held by the record owner WCP Real Estate Fund IV, L.P. |
Name | Shares Issued | |||||
Jon S. Wheeler | 13,405 | |||||
David Kelly | 10,071 | |||||
Ann L. McKinney | 13,405 | |||||
Jeffrey Zwerdling | 9,302 | |||||
Warren D. Harris | 9,302 | |||||
Christopher J. Ettel | 9,302 | |||||
Carl B. McGowan, Jr. | 9,302 | |||||
William W. King | 9,302 | |||||
Steven M. Belote | 10,584 | |||||
Robin A. Hanisch | 13,405 | |||||
Matthew T. Reddy | 5,256 | |||||
Employees and consultants | 207,516 | |||||
320,152 |
December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Amounts paid to affiliates | $ | 209,277 | $ | 3,827,990 | $ | 1,412,126 | |||||
Amounts due to affiliates | $ | 481,298 | $ | 463,281 | $ | 174,683 | |||||
Rent and reimbursement income received from affiliates | $ | — | $ | 329,718 | $ | 288,969 | |||||
Rent and other tenant receivables due from affiliates | $ | — | $ | — | $ | 373,119 |
Portfolio Property | Transaction Cost (1) | Related Person | Dollar Value of Related Person's Interest (2) | |||||||
Port Crossing | $ | 9,311,422 | Jon S. Wheeler - Chairman & CEO | $ | 181,526 | |||||
Ann L. McKinney - Director | $ | 44,742 | ||||||||
LaGrange Marketplace | $ | 3,695,000 | Jon S. Wheeler - Chairman & CEO | $ | 128,032 | |||||
Development Fund Properties | $ | 4,446,918 | Jon S. Wheeler - Chairman & CEO | $ | 83,833 | |||||
(Tulls Creek, Edenton, Courtland & Berkley) | Ann L. McKinney - Director | $ | 13,971 | |||||||
Wheeler Operating Companies | $ | 6,750,000 | Jon S. Wheeler - Chairman & CEO | $ | 6,750,000 | |||||
Harbor Point | $ | 2,400,000 | Jon S. Wheeler - Chairman & CEO | $ | 5,433 | |||||
Brook Run Properties | $ | 300,000 | Jon S. Wheeler - Chairman & CEO | $ | 158,251 | |||||
Ann L. McKinney - Director | 37,004 | |||||||||
Brook Run Shopping Center | $ | 18,496,159 | Jon S. Wheeler - Chairman & CEO | $ | 34,084 | |||||
Ann L. McKinney - Director | 23,065 | |||||||||
Chesapeake Square | $ | 6,339,175 | Jon S. Wheeler - Chairman & CEO | $ | 21,231 | |||||
Ann L. McKinney - Director | 468 | |||||||||
Carolina Place | $ | 250,000 | Jon S. Wheeler - Chairman & CEO | $ | 13,802 | |||||
Ann L. McKinney - Director | 304 | |||||||||
(2) | Mr. Wheeler personally guaranteed some of the debt we assumed in these transactions. Upon our assumption of the debt at the closing of these transactions, Mr. Wheeler, in certain cases, was released from his guarantee and the Operating Partnership guaranteed the debt. The dollar value reflected does not reflect the release of Mr. Wheeler's personal guarantee. |
Fees Billed | 2015 | 2014 | |||||
Audit Fees * | $ | 207,296 | $ | 209,704 | |||
Audit Related Fees ** | 711,146 | 298,139 | |||||
Tax Fees *** | 147,935 | 100,170 | |||||
Total | $ | 1,066,377 | $ | 608,013 |
* | Audit fees included annual audits, quarterly reviews and property audits |
** | Audit related fees for services related to the REIT’s financing offering documents and associated filings |
*** | Tax fees relate primarily to tax advisory services related to REIT status |
a. | Schedule II- Valuation and Qualifying Accounts |
b. | Schedule III- Real Estate and Accumulated Depreciation |
WHEELER REAL ESTATE INVESTMENT TRUST, INC. | ||
By: | /s/ WILKES J. GRAHAM | |
Wilkes J. Graham | ||
Chief Financial Officer |
Signature | Title | Date | |
/S/ JON S. WHEELER | Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) | March 10, 2016 | |
Jon. S. Wheeler | |||
/S/ WILKES J. GRAHAM | Chief Financial Officer (Principal Financial and Accounting Officer) | March 10, 2016 | |
Wilkes J. Graham | |||
/S/ STEWART J. BROWN | Director | March 10, 2016 | |
Stewart J. Brown | |||
/S/ DAVID KELLY | Director | March 10, 2016 | |
David Kelly | |||
/S/ WILLIAM W. KING | Director | March 10, 2016 | |
William W. King | |||
/S/ KURT R. HARRINGTON | Director | March 10, 2016 | |
Kurt R. Harrington | |||
/S/ JOHN MCAULIFFE | Director | March 10, 2016 | |
John McAuliffe | |||
/S/ CARL B. MCGOWAN, JR. | Director | March 10, 2016 | |
Carl B. McGowan, Jr. | |||
/S/ ANN L. MCKINNEY | Director | March 10, 2016 | |
Ann L. McKinney | |||
/S/ JEFFREY ZWERDLING | Director | March 10, 2016 | |
Jeffrey Zwerdling |
December 31, | |||||||
2015 | 2014 | ||||||
ASSETS: | |||||||
Investment properties, net | $ | 238,764,631 | $ | 128,994,061 | |||
Cash and cash equivalents | 11,306,185 | 9,969,748 | |||||
Rents and other tenant receivables, net | 3,452,700 | 1,978,149 | |||||
Goodwill | 5,485,823 | 7,004,072 | |||||
Assets held for sale | 1,707,709 | 27,095,415 | |||||
Above market lease intangible, net | 6,517,529 | 4,488,900 | |||||
Deferred costs and other assets, net | 46,735,275 | 25,440,923 | |||||
Total Assets | $ | 313,969,852 | $ | 204,971,268 | |||
LIABILITIES: | |||||||
Loans payable | $ | 189,340,456 | $ | 122,296,547 | |||
Liabilities associated with assets held for sale | 2,007,554 | 19,283,423 | |||||
Below market lease intangible, net | 7,721,335 | 5,182,437 | |||||
Accounts payable, accrued expenses and other liabilities | 7,533,769 | 5,085,434 | |||||
Total Liabilities | 206,603,114 | 151,847,841 | |||||
Commitments and contingencies (Note 9) | — | — | |||||
EQUITY: | |||||||
Series A preferred stock (no par value, 4,500 shares authorized, 562 and 1,809 shares issued and outstanding, respectively) | 452,971 | 1,458,050 | |||||
Series B convertible preferred stock (no par value, 3,000,000 shares authorized, 729,119 and 1,648,900 shares issued and outstanding, respectively) | 17,085,147 | 37,620,254 | |||||
Common stock ($0.01 par value, 150,000,000 and 75,000,000 shares authorized, 66,259,673 and 7,512,979 shares issued and outstanding, respectively | 662,596 | 75,129 | |||||
Additional paid-in capital | 220,370,984 | 31,077,060 | |||||
Accumulated deficit | (140,306,846 | ) | (27,660,234 | ) | |||
Total Shareholders’ Equity | 98,264,852 | 42,570,259 | |||||
Noncontrolling interests | 9,101,886 | 10,553,168 | |||||
Total Equity | 107,366,738 | 53,123,427 | |||||
Total Liabilities and Equity | $ | 313,969,852 | $ | 204,971,268 |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
REVENUE: | |||||||||||
Rental revenues | $ | 20,553,870 | $ | 11,348,955 | $ | 6,078,172 | |||||
Asset management fees | 588,990 | 296,290 | — | ||||||||
Commissions | 361,984 | 158,876 | — | ||||||||
Tenant reimbursements and other income | 6,229,361 | 3,069,972 | 1,533,189 | ||||||||
Total Revenue | 27,734,205 | 14,874,093 | 7,611,361 | ||||||||
OPERATING EXPENSES: | |||||||||||
Property operations | 8,351,456 | 4,123,439 | 1,658,405 | ||||||||
Non-REIT management and leasing services | 1,110,705 | — | — | ||||||||
Depreciation and amortization | 16,882,462 | 7,387,729 | 3,002,201 | ||||||||
Provision for credit losses | 243,029 | 60,841 | 106,828 | ||||||||
Corporate general & administrative | 13,480,089 | 9,447,010 | 4,594,539 | ||||||||
Total Operating Expenses | 40,067,741 | 21,019,019 | 9,361,973 | ||||||||
Operating Loss | (12,333,536 | ) | (6,144,926 | ) | (1,750,612 | ) | |||||
Interest expense | (9,043,761 | ) | (5,908,548 | ) | (2,107,303 | ) | |||||
Net Loss from Continuing Operations | (21,377,297 | ) | (12,053,474 | ) | (3,857,915 | ) | |||||
Discontinued Operations | |||||||||||
Income (loss) from discontinued operations | 499,781 | 307,659 | (517,311 | ) | |||||||
Gain on disposal of properties | 2,104,114 | — | — | ||||||||
Net Income (Loss) from Discontinued Operations | 2,603,895 | 307,659 | (517,311 | ) | |||||||
Net Loss | (18,773,402 | ) | (11,745,815 | ) | (4,375,226 | ) | |||||
Less: Net loss attributable to noncontrolling interests | (1,252,723 | ) | (1,195,560 | ) | (714,972 | ) | |||||
Net Loss Attributable to Wheeler REIT | (17,520,679 | ) | (10,550,255 | ) | (3,660,254 | ) | |||||
Preferred stock dividends | (13,627,532 | ) | (2,718,257 | ) | (141,418 | ) | |||||
Deemed dividend related to beneficial conversion feature of preferred stock | (72,644,506 | ) | — | — | |||||||
Net Loss Attributable to Wheeler REIT Common Shareholders | $ | (103,792,717 | ) | $ | (13,268,512 | ) | $ | (3,801,672 | ) | ||
Loss per share from continuing operations (basic and diluted): | $ | (2.73 | ) | $ | (1.83 | ) | $ | (0.74 | ) | ||
Income (loss) per share from discontinued operations: | $ | 0.06 | $ | 0.03 | $ | (0.08 | ) | ||||
$ | (2.67 | ) | $ | (1.80 | ) | $ | (0.82 | ) | |||
Weighted-average number of shares: | |||||||||||
Basic and Diluted | 38,940,463 | 7,352,433 | 4,620,600 |
Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Shareholders’ | Noncontrolling Interests | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Shares | Value | Capital | Deficit | Equity | Units | Value | Equity | |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2012 | — | $ | — | — | $ | — | — | $ | — | 3,301,502 | $ | 33,015 | $ | 14,097,453 | $ | (5,443,099 | ) | $ | 8,687,369 | 1,858,068 | $ | 7,545,090 | $ | 16,232,459 | ||||||||||||||||||||||||||
Issuance of common stock, net of expenses | — | — | — | — | — | — | 3,162,500 | 31,625 | 11,830,573 | — | 11,862,198 | — | — | 11,862,198 | ||||||||||||||||||||||||||||||||||||
Reclass of preferred stock to equity, net of expenses of $556,064 | 4,500 | 3,943,936 | — | — | — | — | — | — | — | — | 3,943,936 | — | — | 3,943,936 | ||||||||||||||||||||||||||||||||||||
Conversion of preferred stock to common stock | (2,691 | ) | (2,485,886 | ) | — | — | — | — | 656,998 | 6,570 | 2,472,148 | — | (7,168 | ) | — | — | (7,168 | ) | ||||||||||||||||||||||||||||||||
Noncontrolling interest investments | — | — | — | — | — | — | — | — | — | — | — | 214,284 | 945,271 | 945,271 | ||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | (230,481 | ) | — | (230,481 | ) | — | 230,481 | — | ||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | — | — | (2,194,900 | ) | (2,194,900 | ) | — | (799,761 | ) | (2,994,661 | ) | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | (3,660,254 | ) | (3,660,254 | ) | — | (714,972 | ) | (4,375,226 | ) | |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2013 | 1,809 | 1,458,050 | — | — | — | — | 7,121,000 | 71,210 | 28,169,693 | (11,298,253 | ) | 18,400,700 | 2,072,352 | 7,206,109 | 25,606,809 | |||||||||||||||||||||||||||||||||||
Proceeds from issuance of Series B preferred stock, net of expenses | — | — | 1,649,000 | 37,242,941 | — | — | — | — | — | 37,242,941 | — | — | 37,242,941 | |||||||||||||||||||||||||||||||||||||
Accretion of Series B preferred stock discount | — | — | — | 379,584 | — | — | — | — | — | 379,584 | — | — | 379,584 | |||||||||||||||||||||||||||||||||||||
Conversion of Series B preferred stock to common stock | — | — | (100 | ) | (2,271 | ) | — | 500 | 5 | 2,266 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Conversion of Operating Partnership units to common stock | — | — | — | — | — | 285,645 | 2,856 | 1,325,287 | — | 1,328,143 | (285,645 | ) | (1,328,143 | ) | — | |||||||||||||||||||||||||||||||||||
Issuance of common stock under Share Incentive Plan | — | — | — | — | — | 105,834 | 1,058 | 455,930 | — | 456,988 | — | — | 456,988 | |||||||||||||||||||||||||||||||||||||
Noncontrolling interest investments | — | — | — | — | — | — | — | — | — | — | 1,780,916 | 7,990,234 | 7,990,234 | |||||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | 1,123,884 | — | 1,123,884 | — | (1,123,884 | ) | — | ||||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | — | (5,811,726 | ) | (5,811,726 | ) | — | (995,588 | ) | (6,807,314 | ) | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | (10,550,255 | ) | (10,550,255 | ) | — | (1,195,560 | ) | (11,745,815 | ) | |||||||||||||||||||||||||||||||||
Balance, December 31, 2014 | 1,809 | 1,458,050 | 1,648,900 | 37,620,254 | — | — | 7,512,979 | 75,129 | 31,077,060 | (27,660,234 | ) | 42,570,259 | 3,567,623 | 10,553,168 | 53,123,427 | |||||||||||||||||||||||||||||||||||
Series A Preferred Stock | Series B Preferred Stock | Series C Preferred Stock | Common Stock | Additional Paid-in | Accumulated | Total Shareholders’ | Noncontrolling Interests | Total | ||||||||||||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Shares | Value | Shares | Value | Capital | Deficit | Equity | Units | Value | Equity | |||||||||||||||||||||||||||||||||||||
Accretion of Series B preferred stock discount | — | — | — | 2,341,114 | — | — | — | — | — | — | 2,341,114 | — | — | 2,341,114 | ||||||||||||||||||||||||||||||||||||
Conversion of Series B preferred stock to common stock | — | — | (54,300 | ) | (1,239,196 | ) | — | — | 271,500 | 2,715 | 1,236,481 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Reclass of Series C preferred stock to equity | — | — | — | — | 93,000 | 86,415,894 | — | — | — | — | 86,415,894 | — | — | 86,415,894 | ||||||||||||||||||||||||||||||||||||
Accretion of Series C preferred stock | — | — | — | — | — | 6,584,106 | — | — | — | — | 6,584,106 | — | — | 6,584,106 | ||||||||||||||||||||||||||||||||||||
Conversion of Series C preferred stock to common stock | — | — | — | — | (93,000 | ) | (93,000,000 | ) | 46,500,000 | 465,000 | 92,535,000 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Conversion of Operating Partnership units to common stock | — | — | — | — | — | — | 213,040 | 2,130 | 480,399 | — | 482,529 | (213,040 | ) | (482,529 | ) | — | ||||||||||||||||||||||||||||||||||
Conversion of preferred stock to common stock through tender offer | (1,247 | ) | (1,005,079 | ) | (865,481 | ) | (21,637,025 | ) | — | — | 11,442,002 | 114,420 | 22,527,659 | — | (25 | ) | — | — | (25 | ) | ||||||||||||||||||||||||||||||
Issuance of common stock under Share Incentive Plan | — | — | — | — | — | — | 320,152 | 3,202 | 693,798 | — | 697,000 | 697,000 | ||||||||||||||||||||||||||||||||||||||
Noncontrolling interest investments | — | — | — | — | — | — | — | — | — | — | — | 700,709 | 1,574,551 | 1,574,551 | ||||||||||||||||||||||||||||||||||||
Discount on UPREIT shares | — | — | — | — | — | — | — | — | — | — | — | — | (1,181,250 | ) | (1,181,250 | ) | ||||||||||||||||||||||||||||||||||
Adjustment for noncontrolling interest in operating partnership | — | — | — | — | — | — | — | — | (823,919 | ) | — | (823,919 | ) | — | 823,919 | — | ||||||||||||||||||||||||||||||||||
Dividends and distributions | — | — | — | — | — | — | — | — | — | (22,481,427 | ) | (22,481,427 | ) | — | (933,250 | ) | (23,414,677 | ) | ||||||||||||||||||||||||||||||||
Deemed distribution | — | — | — | — | — | — | — | — | 72,644,506 | (72,644,506 | ) | — | — | — | — | |||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | — | (17,520,679 | ) | (17,520,679 | ) | — | (1,252,723 | ) | (18,773,402 | ) | ||||||||||||||||||||||||||||||||
Balance, December 31, 2015 | 562 | $ | 452,971 | 729,119 | $ | 17,085,147 | — | $ | — | 66,259,673 | $ | 662,596 | $ | 220,370,984 | $ | (140,306,846 | ) | $ | 98,264,852 | 4,055,292 | $ | 9,101,886 | $ | 107,366,738 |
For the Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net loss | $ | (18,773,402 | ) | $ | (11,745,815 | ) | $ | (4,375,226 | ) | ||
Adjustments to reconcile consolidated net loss to net cash used in operating activities | |||||||||||
Depreciation | 5,370,116 | 2,696,064 | 1,467,157 | ||||||||
Amortization | 11,512,346 | 4,691,665 | 1,535,044 | ||||||||
Loan cost amortization | 1,190,574 | 611,927 | 148,418 | ||||||||
Above (below) market lease amortization | 620,324 | 91,752 | (654,005 | ) | |||||||
Share-based compensation | 697,000 | 456,988 | — | ||||||||
Gain on disposal of properties | (2,104,114 | ) | — | — | |||||||
Provision for credit losses | 243,029 | 60,841 | 106,828 | ||||||||
Changes in assets and liabilities | |||||||||||
Rent and other tenant receivables, net | (1,449,996 | ) | 369,380 | (731,327 | ) | ||||||
Unbilled rent | (258,037 | ) | (234,066 | ) | (31,234 | ) | |||||
Deferred costs and other assets, net | (7,228,874 | ) | (1,880,416 | ) | (3,180,206 | ) | |||||
Accounts payable, accrued expenses and other liabilities | 78,967 | (384,109 | ) | 2,623,291 | |||||||
Net operating cash flows provided by discontinued operations | 797,769 | 824,769 | 639,690 | ||||||||
Net cash used in operating activities | (9,304,298 | ) | (4,441,020 | ) | (2,451,570 | ) | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Investment property acquisitions | (62,027,081 | ) | (17,640,587 | ) | (14,736,679 | ) | |||||
Capital expenditures | (531,258 | ) | (521,405 | ) | (707,089 | ) | |||||
Cash received from sale of properties | 8,711,699 | — | — | ||||||||
Net investing cash flows from discontinued operations | 914,388 | — | (7,138,386 | ) | |||||||
Net cash used in investing activities | (52,932,252 | ) | (18,161,992 | ) | (22,582,154 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Dividends and distributions paid | (14,192,289 | ) | (5,432,518 | ) | (2,886,574 | ) | |||||
Proceeds from sales of preferred stock, net of expenses | 83,415,894 | 37,242,941 | 3,943,936 | ||||||||
Conversion of preferred stock | (25 | ) | — | (7,168 | ) | ||||||
Proceeds from sales of common stock | — | — | 11,862,198 | ||||||||
Net payments to related parties | (9,547 | ) | (681,699 | ) | (380,243 | ) | |||||
Loan proceeds | 11,493,750 | 8,384,436 | 22,891,045 | ||||||||
Loan principal payments | (17,033,559 | ) | (8,036,354 | ) | (11,214,280 | ) | |||||
Net financing cash flows from discontinued operations | (101,237 | ) | (59,129 | ) | (73,299 | ) | |||||
Net cash from financing activities | 63,572,987 | 31,417,677 | 24,135,615 | ||||||||
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 1,336,437 | 8,814,665 | (898,109 | ) | |||||||
CASH AND CASH EQUIVALENTS, beginning of period | 9,969,748 | 1,155,083 | 2,053,192 | ||||||||
CASH AND CASH EQUIVALENTS, end of period | $ | 11,306,185 | $ | 9,969,748 | $ | 1,155,083 | |||||
Supplemental Disclosures: | |||||||||||
Other Cash Transactions: | |||||||||||
Cash paid for interest | $ | 8,310,322 | $ | 5,711,110 | $ | 2,459,743 | |||||
Non-cash Transactions: | |||||||||||
Debt incurred for acquisitions | $ | 77,002,464 | $ | 46,678,328 | $ | 51,216,465 | |||||
Noncontrolling interests resulting from the issuance of common units | $ | 1,574,551 | $ | 7,990,234 | $ | 945,271 | |||||
Conversion of senior convertible debt into Series C preferred stock | $ | 3,000,000 | $ | — | $ | — | |||||
Accretion of preferred stock discounts | $ | 8,925,220 | $ | 379,584 | $ | — | |||||
Deemed dividend for beneficial conversion feature | $ | 72,644,506 | $ | — | $ | — |
December 31, | |||||||
2015 | 2014 | ||||||
Lease origination costs, net | $ | 1,376,652 | $ | 1,773,279 | |||
Leases in place, net | 19,091,917 | 10,522,597 | |||||
Financing costs, net | 4,711,375 | 3,202,542 | |||||
Property escrows | 6,764,375 | 4,242,499 | |||||
Deposits on acquisitions | 2,012,996 | 623,350 | |||||
Legal and marketing costs, net | 129,325 | 198,169 | |||||
Tenant relationships | 12,060,172 | 4,485,699 | |||||
Other | 588,463 | 392,788 | |||||
Total Deferred Costs and Other Assets, net | $ | 46,735,275 | $ | 25,440,923 |
For the Years Ended December 31, | Lease Origination Costs | Leases In Place | Financing Costs | Legal & Marketing Costs | Tenant Relationships | ||||||||||||||
2016 | $ | 347,611 | $ | 5,835,379 | $ | 883,081 | $ | 22,470 | $ | 4,285,878 | |||||||||
2017 | 300,046 | 4,518,001 | 742,708 | 25,588 | 3,040,631 | ||||||||||||||
2018 | 211,662 | 3,037,481 | 540,985 | 19,870 | 1,937,225 | ||||||||||||||
2019 | 142,442 | 2,086,746 | 452,442 | 16,330 | 1,270,616 | ||||||||||||||
2020 | 98,913 | 1,248,990 | 442,323 | 12,181 | 695,003 | ||||||||||||||
Thereafter | 275,978 | 2,365,320 | 1,649,836 | 32,886 | 830,819 | ||||||||||||||
$ | 1,376,652 | $ | 19,091,917 | $ | 4,711,375 | $ | 129,325 | $ | 12,060,172 |
December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Acquisition costs | $ | 3,871,037 | $ | 3,787,907 | $ | 2,179,023 | ||||||
Professional fees | 1,596,870 | 2,247,052 | 894,950 | |||||||||
Salaries and compensation | 3,428,998 | 1,326,434 | — | |||||||||
Corporate administration | 1,198,480 | 1,218,033 | 1,188,456 | |||||||||
Equity, debt & refinancing costs | 2,655,474 | — | — | |||||||||
Travel | 445,732 | 540,991 | 262,046 | |||||||||
Advertising | 218,180 | 176,950 | 45,833 | |||||||||
Taxes and licenses | 65,318 | 149,643 | 24,231 | |||||||||
Total | $ | 13,480,089 | $ | 9,447,010 | $ | 4,594,539 |
December 31, | |||||||
2015 | 2014 | ||||||
Land | $ | 50,777,143 | $ | 32,171,097 | |||
Land held for development | 12,353,963 | 6,846,918 | |||||
Buildings and improvements | 188,338,469 | 97,423,211 | |||||
Investment properties at cost | 251,469,575 | 136,441,226 | |||||
Less accumulated depreciation and amortization | (12,704,944 | ) | (7,447,165 | ) | |||
Investment properties, net | $ | 238,764,631 | $ | 128,994,061 |
Subtotal | Food Lions | Total Acquisitions | |||||||||
Fair value of assets acquired and liabilities assumed: | |||||||||||
Investment property (a) | $ | 48,576,763 | $ | 10,910,964 | $ | 59,487,727 | |||||
Lease intangibles and other assets (b) | 6,720,126 | 4,392,812 | 11,112,938 | ||||||||
Above market leases (c) | 674,184 | 704,710 | 1,378,894 | ||||||||
Below market leases (c) | (876,736 | ) | (161,950 | ) | (1,038,686 | ) | |||||
Fair value of net assets acquired | $ | 55,094,337 | $ | 15,846,536 | $ | 70,940,873 | |||||
Purchase consideration: | |||||||||||
Consideration paid with cash and debt | $ | 54,149,066 | $ | 15,846,536 | $ | 69,995,602 | |||||
Consideration paid with common units | 945,271 | — | 945,271 | ||||||||
Total consideration (d) | $ | 55,094,337 | $ | 15,846,536 | $ | 70,940,873 |
Total Acquisitions | |||
Fair value of assets acquired and liabilities assumed: | |||
Investment property (a) | $ | 53,081,904 | |
Tenant and other receivables and other assets (b) | 306,814 | ||
Lease intangibles and other assets (b) | 10,188,493 | ||
Goodwill (b) | 5,485,823 | ||
Accounts payable, accrued expenses and other liabilities (c) | (623,167 | ) | |
Above market leases (d) | 3,973,846 | ||
Below market leases (d) | (1,991,645 | ) | |
Fair value of net assets acquired | $ | 70,422,068 | |
Purchase consideration: | |||
Consideration paid with cash and debt | $ | 63,616,509 | |
Consideration paid with common units | 6,805,559 | ||
Total consideration (e) | $ | 70,422,068 |
Total Acquisitions | ||||||
Preliminary fair value of assets acquired and liabilities assumed: | ||||||
Investment property (a) | $ | 114,211,725 | ||||
Lease intangibles and other assets (b) | 26,827,214 | |||||
Above market leases (b) | 4,166,440 | |||||
Below market leases (b) | (4,021,671 | ) | ||||
Preliminary fair value of net assets acquired | $ | 141,183,708 | ||||
Purchase consideration: | ||||||
Consideration paid with cash and debt | $ | 138,115,158 | ||||
Consideration paid with common units | 3,068,550 | |||||
Total consideration (c) | $ | 141,183,708 |
a. | Represents the preliminary fair value of the investment property acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using the following approaches: |
iii. | the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates. |
b. | Represents the preliminary fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, leases in place, above/below market leases and legal and marketing fees associated with replacing existing leases. The income approach was used to determine the preliminary fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts. |
c. | Represents the components of purchase consideration paid. Consideration paid with common units includes units issued for acquisitions and those amounts currently due for acquisitions that, per the original contract, are to be settled by issuing common units subsequent to December 31, 2015. |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Rental revenue | $ | 26,600,904 | $ | 26,412,478 | $ | 26,125,877 | |||||
Net loss | $ | (15,781,969 | ) | $ | (14,654,944 | ) | $ | (15,111,728 | ) | ||
Net loss attributable to Wheeler REIT | $ | (12,699,185 | ) | $ | (12,653,283 | ) | $ | (11,066,293 | ) | ||
Net loss attributable to Wheeler REIT common shareholders | $ | (98,971,223 | ) | $ | (15,371,540 | ) | $ | (11,207,711 | ) | ||
Basic loss per share | $ | (2.54 | ) | $ | (2.09 | ) | $ | (2.43 | ) | ||
Diluted loss per share | $ | (2.54 | ) | $ | (2.09 | ) | $ | (2.43 | ) |
Beginning balance, January 1, 2015 | $ | 7,004,072 | |
Fair value discount on common units issued for acquisition | (1,181,250 | ) | |
Allocation to finite-lived intangibles | (336,999 | ) | |
Ending balance, December 31, 2015 | $ | 5,485,823 |
December 31, | ||||||||
2015 | 2014 | |||||||
Investment properties, net | $ | 1,284,888 | $ | 23,256,925 | ||||
Rents and other tenant receivables, net | 38,945 | 7,317 | ||||||
Above market lease intangible, net | 2,616 | — | ||||||
Deferred costs and other assets, net | 381,260 | 3,831,173 | ||||||
Total assets held for sale | $ | 1,707,709 | $ | 27,095,415 |
December 31, | ||||||||
2015 | 2014 | |||||||
Loans payable | $ | 1,982,042 | $ | 19,153,596 | ||||
Below market lease intangible, net | 14,758 | 84,636 | ||||||
Accounts payable, accrued expenses and other liabilities | 10,754 | 45,191 | ||||||
Total liabilities associated with assets held for sale | $ | 2,007,554 | $ | 19,283,423 |
Years Ended December 31, | ||||||||||||||||
2015 | 2014 | 2013 | ||||||||||||||
Revenues | $ | 2,042,722 | $ | 2,285,159 | $ | 1,096,131 | ||||||||||
Expenses | 827,860 | 1,072,622 | 1,222,935 | |||||||||||||
Operating income (loss) | 1,214,862 | 1,212,537 | (126,804 | ) | ||||||||||||
Interest expense | (715,081 | ) | (904,878 | ) | (390,507 | ) | ||||||||||
Income (loss) from discontinued operations before gain on disposals | 499,781 | 307,659 | (517,311 | ) | ||||||||||||
Gain on disposal of properties | 2,104,114 | — | — | |||||||||||||
Income (loss) from discontinued operations | $ | 2,603,895 | $ | 307,659 | $ | (517,311 | ) |
Monthly | Interest | December 31, | ||||||||||||||
Property/Description | Payment | Rate | Maturity | 2015 | 2014 | |||||||||||
Shoppes at Eagle Harbor | $ | 25,100 | 4.34 | % | March 2018 | $ | 3,634,085 | $ | 3,773,319 | |||||||
Lumber River Plaza | $ | 18,414 | 5.65 | % | May 2015 | — | 2,894,862 | |||||||||
Monarch Bank Building | $ | 9,473 | 4.15 | % | December 2017 | 1,376,452 | 1,430,961 | |||||||||
Perimeter Square | $ | 28,089 | 6.38 | % | June 2016 | 4,166,406 | 4,294,216 | |||||||||
Riversedge North | $ | 8,802 | 6.00 | % | January 2019 | 962,281 | 1,007,856 | |||||||||
Walnut Hill Plaza | $ | 24,273 | 5.50 | % | July 2017 | 3,535,606 | 3,626,945 | |||||||||
Twin City Commons | $ | 17,827 | 4.86 | % | January 2023 | 3,225,473 | 3,279,076 | |||||||||
Shoppes at TJ Maxx | $ | 33,880 | 3.88 | % | May 2020 | 6,081,272 | 6,248,349 | |||||||||
Bank Line of Credit | Interest only | 4.25 | % | September 2016 | — | 2,074,432 | ||||||||||
Bank Line of Credit | Interest only | 2.79 | % | May 2018 | 6,873,750 | — | ||||||||||
Forrest Gallery | $ | 50,973 | 5.40 | % | September 2023 | 8,926,712 | 9,045,880 | |||||||||
Tampa Festival | $ | 50,797 | 5.56 | % | September 2023 | 8,627,294 | 8,746,860 | |||||||||
Winslow Plaza | Interest only | 5.22 | % | December 2015 | — | 5,000,000 | ||||||||||
Winslow Plaza | Interest only | 4.82 | % | December 2025 | 4,620,000 | — | ||||||||||
Cypress Shopping Center | Interest only | 4.70 | % | July 2024 | 6,625,000 | 6,625,000 | ||||||||||
Harrodsburg Marketplace | $ | 19,112 | 4.55 | % | September 2024 | 3,677,501 | 3,735,739 | |||||||||
Port Crossing | $ | 34,788 | 4.84 | % | August 2024 | 6,471,636 | 6,568,918 | |||||||||
LaGrange Marketplace | $ | 13,813 | 5.00 | % | March 2020 | 2,418,212 | 2,463,909 | |||||||||
Freeway Junction | Interest only | 4.60 | % | September 2024 | 8,150,000 | 8,150,000 | ||||||||||
DF I-Courtland | $ | 1,411 | 6.50 | % | January 2019 | — | 115,728 | |||||||||
DF I-Edenton | $ | 250,000 | 3.75 | % | September 2016 | 650,000 | 1,650,000 | |||||||||
DF I-Moyock | $ | 10,665 | 5.00 | % | July 2019 | 418,538 | 522,430 | |||||||||
Graystone Crossing | $ | 20,386 | 4.55 | % | October 2024 | 4,000,000 | 4,000,000 | |||||||||
Bryan Station | Interest only | 4.52 | % | November 2024 | 4,625,000 | 4,625,000 | ||||||||||
Crockett Square | Interest only | 4.47 | % | December 2024 | 6,337,500 | 6,337,500 | ||||||||||
Harbor Point | $ | 11,024 | 5.85 | % | December 2016 | 732,685 | 1,544,567 | |||||||||
Pierpont Centre | Interest only | 3.95 | % | February 2025 | 8,450,000 | — | ||||||||||
Alex City Marketplace | Interest only | 3.90 | % | April 2025 | 5,750,000 | — | ||||||||||
Butler Square | Interest only | 4.08 | % | May 2025 | 5,640,000 | — | ||||||||||
Brook Run Shopping Center | Interest only | 3.90 | % | June 2025 | 10,950,000 | — | ||||||||||
Beaver Ruin Village I and II | Interest only | 4.73 | % | July 2025 | 9,400,000 | — | ||||||||||
Columbia Fire Station | Interest only | 8.00 | % | December 2017 | 450,053 | — | ||||||||||
Sunshine Shopping Plaza | Interest only | 4.57 | % | August 2025 | 5,900,000 | — | ||||||||||
Barnett Portfolio | Interest only | 4.30 | % | September 2025 | 8,770,000 | — | ||||||||||
Grove Park Shopping Center | Interest only | 4.52 | % | October 2025 | 3,800,000 | — | ||||||||||
Parkway Plaza | Interest only | 4.57 | % | October 2025 | 3,500,000 | — | ||||||||||
Conyers Crossing | Interest only | 4.67 | % | October 2025 | 5,960,000 | — | ||||||||||
Fort Howard Shopping Center | Interest only | 4.57 | % | October 2025 | 7,100,000 | — | ||||||||||
Senior convertible notes | Interest only | 9.00 | % | December 2018 | 3,000,000 | 6,000,000 | ||||||||||
Senior non-convertible notes | Interest only | 9.00 | % | December 2015 | — | 4,000,000 | ||||||||||
Senior non-convertible notes | Interest only | 9.00 | % | January 2016 | 2,160,000 | 2,160,000 | ||||||||||
South Carolina Food Lions Note | Interest only | 5.25 | % | January 2024 | 12,375,000 | 12,375,000 | ||||||||||
Total Loans Payable | $ | 189,340,456 | $ | 122,296,547 |
For the Years Ended December 31, | |||
2016 | $ | 9,065,387 | |
2017 | 7,035,351 | ||
2018 | 14,936,672 | ||
2019 | 2,505,641 | ||
2020 | 9,175,072 | ||
Thereafter | 146,622,333 | ||
Total principal maturities | $ | 189,340,456 |
For the Years Ended December 31, | |||
2016 | $ | 26,230,245 | |
2017 | 23,246,692 | ||
2018 | 17,746,813 | ||
2019 | 13,430,529 | ||
2020 | 8,839,220 | ||
Thereafter | 14,894,519 | ||
$ | 104,388,018 |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Common unit and common shareholders | $ | 9,787,145 | $ | 4,089,057 | 2,853,243 | ||||||
Preferred shareholders | $ | 13,627,532 | $ | 2,718,257 | 141,418 |
For the Years Ended December 31, | |||
2016 | $ | 171,208 | |
2017 | 175,104 | ||
2018 | 178,095 | ||
2019 | 145,384 | ||
2020 | 77,611 | ||
Thereafter | 2,961,793 | ||
$ | 3,709,195 |
December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Amounts paid to affiliates | $ | 209,277 | $ | 3,827,990 | $ | 1,412,126 | |||||
Amounts due to affiliates | $ | 481,298 | $ | 463,281 | $ | 174,683 | |||||
Rent and reimbursement income received from affiliates | $ | — | $ | 329,718 | $ | 288,969 | |||||
Rent and other tenant receivables due from affiliates | $ | — | $ | — | $ | 373,119 |
Description | Balance at Beginning of Year | Charged to Costs and Expense | Deductions from Reserves | Balance at End of Year | |||||||||||
Allowance for doubtful accounts: | |||||||||||||||
Year Ended December 31, 2015 | $ | 186,517 | $ | 243,029 | $ | (18,152 | ) | $ | 411,394 | ||||||
Year Ended December 31, 2014 | 182,078 | 60,841 | (56,402 | ) | 186,517 |
Initial Cost | Costs Capitalized Subsequent to Acquisition | Gross Amount at which Carried at End of Period | |||||||||||||||||||||||||
Property Name | Land | Building and Improvements | Improvements (net) | Carrying Costs | Land | Building and Improvements | Total | ||||||||||||||||||||
Amscot Building | $ | — | $ | 461,700 | $ | 31,128 | $ | — | $ | — | $ | 492,828 | $ | 492,828 | |||||||||||||
Lumber River Village | 800,413 | 4,486,787 | 142,398 | — | 942,811 | 4,486,787 | 5,429,598 | ||||||||||||||||||||
Monarch Bank | 496,591 | 1,908,659 | 77,704 | — | 496,591 | 1,986,363 | 2,482,954 | ||||||||||||||||||||
Perimeter Square | 1,566,431 | 5,081,193 | 109,828 | — | 1,566,431 | 5,191,021 | 6,757,452 | ||||||||||||||||||||
Riversedge North | 909,898 | 2,207,571 | 630,888 | — | 909,898 | 2,838,459 | 3,748,357 | ||||||||||||||||||||
Surrey Plaza | 380,731 | 1,856,515 | — | — | 380,731 | 1,856,515 | 2,237,246 | ||||||||||||||||||||
The Shoppes at TJ Maxx | 2,115,119 | 6,719,386 | 401,983 | — | 2,115,119 | 7,121,369 | 9,236,488 | ||||||||||||||||||||
The Shoppes at Eagle Harbor | 785,040 | 4,219,464 | 258,236 | — | 785,040 | 4,477,700 | 5,262,740 | ||||||||||||||||||||
Twin City Commons | 800,272 | 3,040,956 | 4,233 | — | 800,272 | 3,045,189 | 3,845,461 | ||||||||||||||||||||
Walnut Hill Plaza | 733,748 | 2,413,832 | 1,192,868 | — | 733,748 | 3,606,700 | 4,340,448 | ||||||||||||||||||||
Tampa Festival | 4,653,354 | 6,691,097 | 180,073 | — | 4,694,966 | 6,829,558 | 11,524,524 | ||||||||||||||||||||
Forrest Gallery | 3,015,372 | 7,454,580 | 260,066 | — | 3,015,372 | 7,714,646 | 10,730,018 | ||||||||||||||||||||
Starbucks/Verizon | — | 1,137,971 | — | — | — | 1,137,971 | 1,137,971 | ||||||||||||||||||||
Jenks Plaza | 498,260 | 917,898 | — | — | 498,260 | 917,898 | 1,416,158 | ||||||||||||||||||||
Winslow Plaza | 1,324,983 | 3,684,181 | — | — | 1,324,983 | 3,684,181 | 5,009,164 | ||||||||||||||||||||
Clover Plaza | 356,338 | 1,196,704 | 25,850 | — | 356,338 | 1,222,554 | 1,578,892 | ||||||||||||||||||||
St. George Plaza | 705,645 | 1,264,212 | 7,024 | — | 705,645 | 1,271,236 | 1,976,881 | ||||||||||||||||||||
South Square | 352,587 | 1,911,330 | — | — | 352,587 | 1,911,330 | 2,263,917 | ||||||||||||||||||||
Westland Square | 886,829 | 1,709,665 | 10,027 | — | 886,829 | 1,719,692 | 2,606,521 | ||||||||||||||||||||
Waterway Plaza | 1,279,700 | 1,247,952 | — | — | 1,279,700 | 1,247,952 | 2,527,652 | ||||||||||||||||||||
Cypress Shopping Center | 2,063,671 | 4,578,838 | — | — | 2,063,671 | 4,578,838 | 6,642,509 | ||||||||||||||||||||
Harrodsbsurg Marketplace | 1,431,484 | 2,484,653 | — | — | 1,431,484 | 2,484,653 | 3,916,137 | ||||||||||||||||||||
Port Crossing Shopping Center | 791,933 | 6,920,539 | 82,143 | — | 791,933 | 7,002,682 | 7,794,615 | ||||||||||||||||||||
LaGrange Marketplace | 390,180 | 2,647,956 | — | — | 390,180 | 2,647,956 | 3,038,136 | ||||||||||||||||||||
DF I-Courtland | 893,852 | — | — | — | 893,852 | — | 893,852 | ||||||||||||||||||||
Edenton Commons | 2,395,000 | — | — | — | 2,395,000 | — | 2,395,000 | ||||||||||||||||||||
DF I-Moyock | 908,066 | — | — | — | 908,066 | — | 908,066 | ||||||||||||||||||||
Freeway Junction | 1,521,133 | 6,754,803 | — | — | 1,521,133 | 6,754,803 | 8,275,936 | ||||||||||||||||||||
Graystone Crossing | 922,439 | 2,856,365 | — | — | 922,439 | 2,856,365 | 3,778,804 | ||||||||||||||||||||
Bryan Station | 1,658,454 | 2,756,142 | — | — | 1,658,454 | 2,756,142 | 4,414,596 | ||||||||||||||||||||
Crockett Square | 1,546,482 | 6,833,967 | 10,600 | — | 1,546,482 | 6,844,567 | 8,391,049 | ||||||||||||||||||||
Harbor Point | 2,400,000 | — | 18,671 | — | 2,418,671 | — | 2,418,671 | ||||||||||||||||||||
DF I-Berkley | 250,000 | — | — | — | 250,000 | — | 250,000 | ||||||||||||||||||||
Laskin Road | 1,644,000 | — | 185,018 | — | 1,644,000 | 185,018 | 1,829,018 | ||||||||||||||||||||
Pierpont Centre | 675,317 | 9,253,152 | — | — | 675,317 | 9,253,152 | 9,928,469 | ||||||||||||||||||||
Brook Run Properties | 300,000 | — | 8,856 | — | 300,000 | 8,856 | 308,856 | ||||||||||||||||||||
Alex City Marketplace | 453,746 | 7,836,903 | — | — | 453,746 | 7,836,903 | 8,290,649 | ||||||||||||||||||||
Butler Square | 1,023,990 | 6,400,682 | 10,595 | — | 1,023,990 | 6,411,277 | 7,435,267 | ||||||||||||||||||||
Brook Run Shopping Center | 2,208,501 | 12,918,517 | 257,310 | — | 2,208,501 | 13,175,827 | 15,384,328 | ||||||||||||||||||||
Beaver Ruin Village | 2,604,155 | 8,283,904 | — | — | 2,604,155 | 8,283,904 | 10,888,059 |
Initial Cost | Costs Capitalized Subsequent to Acquisition | Gross Amount at which Carried at End of Period | |||||||||||||||||||||||||
Property Name | Land | Building and Improvements | Improvements (net) | Carrying Costs | Land | Building and Improvements | Total | ||||||||||||||||||||
Beaver Ruin Village II | 1,153,127 | 2,809,398 | 5,000 | — | 1,153,127 | 2,814,398 | 3,967,525 | ||||||||||||||||||||
Columbia Fire Station | 2,304,937 | — | 278,557 | — | 2,304,937 | 278,557 | 2,583,494 | ||||||||||||||||||||
Chesapeake Square | 894,835 | 4,111,707 | — | — | 894,835 | 4,111,707 | 5,006,542 | ||||||||||||||||||||
Sunshine Plaza | 1,182,887 | 6,368,471 | — | — | 1,182,887 | 6,368,471 | 7,551,358 | ||||||||||||||||||||
Carolina Place | 250,000 | — | — | — | 250,000 | — | 250,000 | ||||||||||||||||||||
Hilton Head Land | 989,437 | — | 22,064 | — | 989,437 | 22,064 | 1,011,501 | ||||||||||||||||||||
Barnett Portfolio | 3,107,136 | 8,912,082 | 33,139 | — | 3,115,759 | 8,936,598 | 12,052,357 | ||||||||||||||||||||
Grove Park | 722,150 | 4,589,698 | — | — | 722,150 | 4,589,698 | 5,311,848 | ||||||||||||||||||||
Parkway Plaza | 772,030 | 4,229,713 | — | — | 772,030 | 4,229,713 | 5,001,743 | ||||||||||||||||||||
Fort Howard Square | 1,889,590 | 7,350,084 | — | — | 1,889,590 | 7,350,084 | 9,239,674 | ||||||||||||||||||||
Conyers Crossing | 2,101,459 | 6,819,984 | — | — | 2,101,459 | 6,819,984 | 8,921,443 | ||||||||||||||||||||
LBP Blairmill | — | — | 23,965 | — | — | 23,965 | 23,965 | ||||||||||||||||||||
LBP Milltown | — | — | 100,364 | — | — | 100,364 | 100,364 | ||||||||||||||||||||
LBP Vauxhall | — | — | 14,627 | — | — | 14,627 | 14,627 | ||||||||||||||||||||
McPherson | — | — | 7,412 | — | — | 7,412 | 7,412 | ||||||||||||||||||||
Totals | $ | 63,111,302 | $ | 185,329,211 | $ | 4,390,627 | $ | — | $ | 63,322,606 | $ | 189,508,534 | $ | 252,831,140 |
Property Name | Encumbrances | Accumulated Depreciation | Date of Construction | Date Acquired | Depreciation Life | |||||||
Amscot Building | (1 | ) | $ | 175,484 | 5/15/2004 | 5-40 years | ||||||
Lumber River Village | (2 | ) | 479,208 | 11/16/2012 | 5-40 years | |||||||
Monarch Bank | (3 | ) | 1,017,788 | 12/28/2007 | 5-40 years | |||||||
Perimeter Square | (4 | ) | 567,540 | 11/16/2012 | 5-40 years | |||||||
Riversedge North | (5 | ) | 979,751 | 4/17/2008 | 12/21/2012 | 5-40 years | ||||||
Surrey Plaza | (1 | ) | 236,687 | 12/21/2012 | 5-40 years | |||||||
The Shoppes at TJ Maxx | (6 | ) | 770,204 | 11/16/2012 | 5-40 years | |||||||
The Shoppes at Eagle Harbor | (7 | ) | 872,484 | 9/9/2008 | 11/16/2012 | 5-40 years | ||||||
Twin City Commons | (8 | ) | 300,898 | 12/18/2012 | 5-40 years | |||||||
Walnut Hill Plaza | (9 | ) | 1,429,149 | 12/14/2007 | 5-40 years | |||||||
Tampa Festival | (10 | ) | 595,417 | 8/26/2013 | 5-40 years | |||||||
Starbucks/Verizon | (12 | ) | 69,875 | 10/27/2013 | 5-40 years | |||||||
Forrest Gallery | (11 | ) | 707,750 | 8/29/2013 | 5-40 years | |||||||
Jenks Plaza | (1 | ) | 126,327 | 12/17/2013 | 5-40 years | |||||||
Winslow Plaza | (13 | ) | 367,769 | 12/19/2013 | 5-40 years | |||||||
Clover Plaza | (14 | ) | 72,413 | 12/23/2013 | 5-40 years | |||||||
St. George Plaza | (15 | ) | 82,948 | 12/23/2013 | 5-40 years | |||||||
South Square | (16 | ) | 102,698 | 12/23/2013 | 5-40 years | |||||||
Westland Square | (17 | ) | 106,561 | 12/23/2013 | 5-40 years | |||||||
Waterway Plaza | (18 | ) | 79,194 | 12/23/2013 | 5-40 years | |||||||
Cypress Shopping Center | (19 | ) | 203,174 | 7/1/2014 | 5-40 years | |||||||
Harrodsburg Marketplace | (20 | ) | 115,580 | 7/1/2014 | 5-40 years | |||||||
Port Crossing Shopping Center | (21 | ) | 476,697 | 7/3/2014 | 5-40 years | |||||||
LaGrange Marketplace | (22 | ) | 166,640 | 7/25/2014 | 5-40 years | |||||||
DF I-Courtland (undeveloped land) | — | 8/15/2014 | N/A | |||||||||
Edenton Commons (undeveloped land) | (23 | ) | — | 8/15/2014 | N/A | |||||||
DF I-Moyock (undeveloped land) | (24 | ) | — | 8/15/2014 | N/A | |||||||
Freeway Junction | (25 | ) | 342,019 | 9/4/2014 | 5-40 years | |||||||
Graystone Crossing | (26 | ) | 102,520 | 9/26/2014 | 5-40 years | |||||||
Bryan Station | (27 | ) | 114,424 | 10/2/2014 | 5-40 years | |||||||
Crockett Square | (28 | ) | 291,990 | 11/5/2014 | 5-40 years | |||||||
Harbor Point (undeveloped land) | (29 | ) | — | 11/21/2014 | N/A | |||||||
DF I-Berkley (undeveloped land) | — | 12/1/2014 | N/A | |||||||||
Laskin Road (undeveloped land) | — | 1/9/2015 | N/A | |||||||||
Pierpont Centre | (30 | ) | 321,596 | 1/14/2015 | 5-40 years | |||||||
Brook Run Properties (undeveloped land) | — | 3/27/2015 | N/A | |||||||||
Alex City Marketplace | (31 | ) | 214,524 | 4/1/2015 | 5-40 years | |||||||
Butler Square | (32 | ) | 139,192 | 4/15/2015 | 5-40 years | |||||||
Brook Run Shopping Center | (33 | ) | 441,728 | 6/2/2015 | 5-40 years | |||||||
Beaver Ruin Village | (34 | ) | 130,329 | 7/1/2015 | 5-40 years | |||||||
Beaver Ruin Village II | (34 | ) | 40,850 | 7/1/2015 | 5-40 years | |||||||
Columbia Fire Station (undeveloped land) | (35 | ) | — | 7/1/2015 | N/A | |||||||
Chesapeake Square | (2 | ) | 98,924 | 7/10/2015 | 5-40 years | |||||||
Sunshine Plaza | (36 | ) | 86,227 | 7/21/2015 | 5-40 years | |||||||
Carolina Place (undeveloped land) | — | 7/24/2015 | N/A |
Property Name | Encumbrances | Accumulated Depreciation | Date of Construction | Date Acquired | Depreciation Life | |||||||
Hilton Head Land (undeveloped land) | — | 8/14/2015 | N/A | |||||||||
Barnett Portfolio | (37 | ) | 115,889 | 8/21/2015 | 5-40 years | |||||||
Grove Park | (38 | ) | 66,605 | 9/9/2015 | 5-40 years | |||||||
Parkway Plaza | (39 | ) | 44,390 | 9/15/2015 | 5-40 years | |||||||
Fort Howard Square | (40 | ) | 58,416 | 9/30/2015 | 5-40 years | |||||||
Conyers Crossing | (41 | ) | 69,763 | 9/30/2015 | 5-40 years | |||||||
Totals | $ | 12,781,622 |
2015 | 2014 | ||||||
Balance at beginning of period | $ | 160,627,402 | $ | 106,832,033 | |||
Additions during the period: | |||||||
Acquisitions | 113,950,630 | 53,081,905 | |||||
Improvements | 1,301,313 | 713,464 | |||||
Disposals | $ | (23,048,205 | ) | $ | — | ||
Balance at end of period | $ | 252,831,140 | $ | 160,627,402 |
(1) | These properties secure a $3.00 million bank line of credit which did not have a balance at December 31, 2015. |
(2) | This property secures a $6.87 million line of credit. |
(3) | This property secures a $1.38 million mortgage note. |
(4) | This property secures a $4.17 million mortgage note. |
(5) | This property secures a $962,000 mortgage note. |
(6) | This property secures a $6.08 million mortgage note. |
(7) | This property secures a $3.63 million mortgage note. |
(8) | This property secures a $3.23 million mortgage note. |
(9) | This property secures a $3.54 million mortgage note. |
(10) | This property secures a $8.63 million mortgage note. |
(11) | This property secures a $8.93 million mortgage note. |
(12) | This property secures a $632,000 mortgage note. |
(13) | This property secures a $4.62 million mortgage note. |
(14) | This property secures a $2.10 million mortgage note. |
(15) | This property secures a $2.65 million mortgage note. |
(16) | This property secures a $2.16 million mortgage note. |
(17) | This property secures a $2.76 million mortgage note. |
(18) | This property secures a $2.70 million mortgage note. |
(19) | This property secures a $6.63 million mortgage note. |
(20) | This property secures a $3.68 million mortgage note. |
(21) | This property secures a $6.47 million mortgage note. |
(22) | This property secures a $2.42 million mortgage note. |
(23) | This property secures a $650,000 mortgage note. |
(24) | This property secures a $419,000 mortgage note. |
(25) | This property secures a $8.15 million mortgage note. |
(26) | This property secures a $4.00 million mortgage note. |
(27) | This property secures a $4.63 million mortgage note. |
(28) | This property secures a $6.34 million mortgage note. |
(29) | This property secures a $733,000 mortgage note. |
(30) | This property secures a $9.80 million mortgage note. |
(31) | This property secures a $5.75 million mortgage note. |
(32) | This property secures a $5.64 million mortgage note. |
(33) | This property secures a $10.95 million mortgage note. |
(34) | This property secures a $9.40 million mortgage note. |
(35) | This property secures a $450,000 mortgage note. |
(36) | This property secures a $5.90 million mortgage note. |
(37) | This property secures a $8.77 million mortgage note. |
(38) | This property secures a $3.80 million mortgage note. |
(39) | This property secures a $3.50 million mortgage note. |
(40) | This property secures a $7.10 million mortgage note. |
(41) | This property secures a $5.96 million mortgage note. |
Exhibit | ||
3.1 | Articles of Amendment and Restatement of the Registrant. (1) | |
3.2 | Amended and Restated Bylaws of Registrant (2) | |
4.1 | Form of Certificate of Common Stock of Registrant (2) | |
4.2 | Form of Certificate of Series B Convertible Preferred Stock of Registrant (3) | |
4.3 | Form of Warrant Certificate of Registrant (3) | |
4.4 | Form of Warrant Agreement for December 2013/January 2014 Private Placement Offering (4) | |
4.5 | Form of Promissory Note for December 2013/January Private Placement Offering (4) | |
4.6 | Form of Convertible Note for December 2013/January 2014 Private Placement Offering (4) | |
10.1 | Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. (5) | |
10.2 | Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series C Mandatorily Convertible Preferred Units, as amended. (6) | |
10.3 | Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series B Mandatorily Convertible Preferred Units. (6) | |
10.4 | Amendment to the Amended and Restated Agreement of Limited Partnership of Wheeler REIT, L.P. Designation of Series A Mandatorily Convertible Preferred Units. (6) | |
10.5 | Wheeler Real Estate Investment Trust, Inc. 2015 Long-Term Incentive Plan (7) | |
10.6 | Employment Agreement with Jon S. Wheeler (8) | |
10.7 | Employment Agreement with Steven M. Belote (8) | |
10.8 | Employment Agreement with Robin A. Hanisch (8) | |
10.9 | Subordination Agreement (5) | |
10.10 | Warrant Agreement by and among the Registrant, Computershare, Inc. and Computershare Trust Company, N.A. (3) | |
10.11 | Membership Interest Contribution Agreement dated October 24, 2014, by and among Jon S. Wheeler and Wheeler REIT, L.P. (8) | |
10.12 | Tax Protection Agreement dated October 24, 2014, by and among Jon S. Wheeler, Wheeler REIT, L.P., and Wheeler Real Estate Investment Trust, Inc. (8) | |
10.13 | Termination Agreement dated October 24, 2014, by and among Wheeler Real Estate Investment Trust, Inc., Wheeler REIT, L.P., and WHLR Management, LLC. (8) | |
10.14 | Purchase and Sale Agreement dated November 30, 2015, by and among WHLR-ACD Acquisition Company, LLC and certain seller, for the purchase of the AC Portfolio. (9) | |
10.15 | Form of Securities Purchase Agreement, dated March 19, 2015, between Wheeler Real Estate Investment Trust, Inc. and each of the Investors. (10) | |
10.16 | Form of Registration Rights Agreement, dated March 19, 2015, between Wheeler Real Estate Investment Trust, Inc. and each of the Investors. (10) | |
10.17 | Shareholders Rights Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Westport Capital Partners LLC as agent on behalf of certain investor. (10) | |
10.18 | Board Observer Rights Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and MFP Investors, LLC. (10) | |
10.19 | Letter Agreement, dated March 19, 2015, by and between Wheeler Real Estate Investment Trust, Inc. and Jon S. Wheeler. (10) | |
10.20 | Credit Agreement, dated May 29, 2015, between Wheeler REIT, L.P. and KeyBank National Association. (11) | |
21.1 | Subsidiaries of Registrant (12) | |
23.1 | Consent of Cherry Bekaert LLP (12) | |
31.1 | Certification of the Chief Executive Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (12) | |
31.2 | Certification of the Chief Financial Officer of Wheeler Real Estate Investment Trust, Inc. pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (12) | |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (12) | |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (12) | |
99.1 | Code of Ethics (2) | |
101.INS | XBRL Instance Document (12) | |
101.SCH | XBRL Taxonomy Extension Schema Document (12) | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase (12) | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase (12) | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase (12) | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase (12) |
(1) | Filed as an exhibit to the Registrant's report on Form 8-K, filed on June 5, 2015 and hereby incorporated by reference. |
(2) | Filed as an exhibit to the Registrant's Registration Statement on Form S-11 (Registration No. 333-177262) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference. |
(3) | Filed as an exhibit to the Registrant's Registration Statement on Form S-11 (Registration No. 333-194831) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference. |
(4) | Filed as an exhibit to the Registrant's Report on Form 8-K, filed on December 18, 2013 and hereby incorporated by reference. |
(5) | Filed as an exhibit to the Registrant's Registration Statement on Form S-11 (Registration No. 333-198245) previously filed pursuant to the Securities Act of 1933 and hereby incorporated by reference. |
(6) | Filed as an exhibit to the Registrant's Report on Form 8-K, filed on April 15, 2015 and hereby incorporated by reference. |
(7) | Filed as an exhibit to the Registrant's Report on Form 8-K, filed on June 8, 2015 and hereby incorporated by reference. |
(8) | Filed as an exhibit to the Registrant's report on Form 8-K, filed on October 30, 2014 and hereby incorporated by reference. |
(9) | Filed as an exhibit to the Registrant's Report on Form 8-K, filed on December 2, 2015 and hereby incorporated by reference. |
(10) | Filed as an exhibit to the Registrant's Report on Form 8-K, filed on March 19, 2015 and hereby incorporated by reference. |
(11) | Filed as an exhibit to the Registrant's Report on Form 8-K, filed on June 2, 2015 and hereby incorporate by reference. |
(12) | Filed herewith. |
1. | I have reviewed this annual report on Form 10-K of Wheeler Real Estate Investment Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Jon S. Wheeler |
Jon S. Wheeler |
Chairman and Chief Executive Officer |
1. | I have reviewed this annual report on Form 10-K of Wheeler Real Estate Investment Trust, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Wilkes J. Graham |
Wilkes J. Graham |
Chief Financial Officer |
/s/ Jon S. Wheeler |
Jon S. Wheeler |
Chairman and Chief Executive Officer |
/s/ Wilkes J. Graham |
Wilkes J. Graham |
Chief Financial Officer |
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Mar. 08, 2016 |
Jun. 30, 2015 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | Wheeler Real Estate Investment Trust, Inc. | ||
Entity Central Index Key | 0001527541 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 66,259,673 | ||
Entity Public Float | $ 108,315,321 |
Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Common stock, Par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, Shares authorized | 150,000,000 | 75,000,000 |
Common stock, Shares issued | 66,259,673 | 7,512,979 |
Common Stock, Shares, Outstanding | 66,259,673 | 7,512,979 |
Series A Preferred Stock [Member] | ||
Preferred stock, No par value | $ 0 | $ 0 |
Preferred stock, Shares authorized | 4,500 | 4,500 |
Preferred stock issued (in shares) | 1,809 | 1,809 |
Preferred Stock, Shares Outstanding | 562 | 1,809 |
Series B Preferred Stock [Member] | ||
Preferred stock, No par value | $ 0.00 | $ 0.00 |
Preferred stock, Shares authorized | 3,000,000 | 3,000,000 |
Preferred stock issued (in shares) | 1,648,900 | 1,648,900 |
Preferred Stock, Shares Outstanding | 729,119 | 1,648,900 |
Consolidated Statements of Equity (Parenthetical) |
12 Months Ended |
---|---|
Dec. 31, 2014
USD ($)
| |
Statement of Stockholders' Equity [Abstract] | |
Reclass of preferred stock to equity, offering expenses | $ 556,064 |
Organization and Basis of Presentation and Consolidation |
12 Months Ended |
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Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation and Consolidation | Organization and Basis of Presentation and Consolidation Wheeler Real Estate Investment Trust, Inc. (the “Trust” or “REIT”) is a Maryland corporation formed on June 23, 2011. The Trust serves as the general partner of Wheeler REIT, L.P. (the “Operating Partnership”) which was formed as a Virginia limited partnership on April 5, 2012. As of December 31, 2015, the Trust, through the Operating Partnership, owned and operated forty-two centers, one office and ten undeveloped properties in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Oklahoma, Tennessee, Kentucky, West Virginia and New Jersey. Accordingly, the use of the word “Company” refers to the Trust and its consolidated subsidiaries, except where the context otherwise requires. The Company includes the Trust, the Operating Partnership, the entities included in the REIT formation and the entities acquired since November 2012 (See Note 3 “Investment Properties”). The Company prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or GAAP. All material balances and transactions between the consolidated entities of the Company have been eliminated. The Company was formed with the principal objective of acquiring, financing, developing, leasing, owning and managing income producing, strip centers, neighborhood, grocery-anchored, community and free-standing retail properties. Its strategy is to acquire high quality, well-located, dominant retail properties that generate attractive risk-adjusted returns. The Company targets competitively protected properties in communities that have stable demographics and have historically exhibited favorable trends, such as strong population and income growth. The Company considers competitively protected properties to be located in the most prominent shopping districts in their respective markets, ideally situated at major “Main and Main” intersections. The Company generally leases its properties to national and regional supermarket chains and selects retailers that offer necessity and value oriented items and generate regular consumer traffic. The Company’s tenants carry goods that are less impacted by fluctuations in the broader U.S. economy and consumers’ disposable income, which it believes generates more predictable property-level cash flows. The Company’s portfolio had total net rentable space of approximately 3,151,000 square feet and an occupancy level of approximately 94.2% at December 31, 2015. The Company’s portfolio is comprised of thirty-nine retail shopping centers, three free-standing retail properties, one office building and ten undeveloped land parcels. Fourteen of these properties are located in Virginia, three are located in Florida, six are located in North Carolina, twelve are located in South Carolina, eight are located in Georgia, two are located in Kentucky, two are located in Tennessee, one is located in New Jersey, one is located in Alabama, one is located in West Virginia and three are located in Oklahoma. On October 24, 2014, the Trust, through the Operating Partnership, acquired (i) Wheeler Interests, LLC (“WI”), an acquisition and asset management firm, (ii) Wheeler Real Estate, LLC (“WRE”), a real estate leasing, management and administration firm and (iii) WHLR Management, LLC (“WM” and collectively with WI and WRE the “Operating Companies”), a real estate business operations firm, from Jon S. Wheeler, the Company's Chairman and CEO, resulting in the Company becoming an internally-managed REIT. Accordingly, the responsibility for identifying targeted real estate investments, the handling of the disposition of real estate investments our board of directors chooses to sell, administering our day-to-day business operations, including but not limited to, leasing, property management, payroll and accounting functions, acquisitions, asset management and administration are now handled internally. Prior to being acquired by the Company, the Operating Companies served as the external manager for the Company and its properties (the “REIT Properties”) and performed property management and leasing functions for certain related and non-related third parties (the “Non-REIT Properties”). The Company will continue to perform these services for the Non-REIT Properties through the Operating Companies, primarily through WRE. Accordingly, the Company converted WRE to a Taxable REIT Subsidiary (“TRS”) to accommodate serving the Non-REIT Properties since applicable REIT regulations consider the income derived from these services to be “bad” income subject to taxation. The regulations allow for costs incurred by the Company commensurate with the services performed for the Non-REIT Properties to be allocated to a TRS. During January 2014, the Company acquired Wheeler Development, LLC (“WD”) and converted it to a TRS. The Company began performing development activities for both REIT Properties and Non-REIT Properties during 2015. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Investment Properties The Company records investment properties and related intangibles at cost or fair value upon acquisition less accumulated depreciation and amortization. Investment properties include both acquired and constructed assets. Improvements and major repairs and maintenance are capitalized when the repair and maintenance substantially extends the useful life, increases capacity or improves the efficiency of the asset. All other repair and maintenance costs are expensed as incurred. The Company capitalizes interest on projects during periods of construction until the projects reach the completion point that corresponds with their intended purpose. The Company allocates the purchase price of acquisitions to the various components of the asset based upon the fair value of each component which may be derived from various observable or unobservable inputs and assumptions. Also, the Company may utilize third party valuation specialists. These components typically include buildings, land and any intangible assets related to out-of-market leases, tenant relationships and in-place leases the Company determines to exist. The Company determines fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in the analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases, tenant relationships and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt. The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 5 to 40 years. The Company reviews depreciable lives of investment properties periodically and makes adjustments to reflect a shorter economic life, when necessary. Tenant allowances, tenant inducements and tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Amounts allocated to buildings are depreciated over the estimated remaining life of the acquired building or related improvements. The Company amortizes amounts allocated to tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. The Company also estimates the value of other acquired intangible assets, if any, and amortizes them over the remaining life of the underlying related intangibles. The Company reviews investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, but at least annually. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. The Company measures any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization, plus its residual value, is less than the carrying value of the property. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. The Company may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. The Company did not record any impairment adjustments to its properties during the years ended December 31, 2015, 2014 and 2013. Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be with the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did not record any conditional asset retirement obligation liabilities during the years ended December 31, 2015, 2014 and 2013. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of 90 days or less or easily converted into known amounts of cash to be cash and cash equivalents without a significant cost to the Company. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents consist primarily of bank operating accounts and money markets. Financial instruments that potentially subject the Company to concentrations of credit risk include its cash and cash equivalents and its trade accounts receivable. The Company places its cash and cash equivalents with institutions of high credit quality. The Company places its cash and cash equivalents on deposit with financial institutions in the United States. Beginning December 31, 2010, through December 31, 2013, all noninterest-bearing transaction accounts were fully insured by the Federal Deposit Insurance Company (“FDIC”), regardless of the balance of the account, at all FDIC-insured institutions. However, this provision expired on December 31, 2013 and beginning January 1, 2014 noninterest-bearing deposits now receive the same $250,000 insurance coverage provided to a depositor’s other deposit accounts held at an FDIC-insured institution. As of December 31, 2015 and 2014, the Company had cash balances of $6.99 million and $8.25 million, respectively, that exceeded the FDIC coverage, but management believes that the risk of loss is minimal. Tenant Receivables and Unbilled Rent Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2015 and 2014, the Company’s allowance for uncollectible accounts totaled $411,394 and $186,517, respectively. During the years ended December 31, 2015, 2014 and 2013, the Company recorded provisions for credit losses in the amount of $243,029, $60,841 and $106,828, respectively, related to tenant receivables that were specifically identified as potentially uncollectible based on the an assessment of the tenant’s credit-worthiness. During the years ended December 31, 2015, 2014 and 2013, the Company did not realize any recoveries related to tenant receivables previously charged off. Deferred Costs and Other Assets The Company’s deferred costs and other assets consist primarily of leasing commissions, fees incurred to obtain long-term financing, capitalized legal and marketing costs and tenant relationship intangibles associated with acquisitions, and various property escrow accounts for real estate taxes, insurance and tenant improvements and replacements. The Company records amortization of financing costs over the terms of the respective loans or agreements. The Company’s lease origination costs consist primarily of the portion of property acquisitions allocated to lease originations and commissions paid in connection with lease originations. The Company generally records amortization of lease origination costs on a straight-line basis over the terms of the related leases. Details of these deferred costs, net of amortization and other assets are as follows:
Amortization of lease origination costs, in place leases, legal and marketing costs and tenant relationships represent a component of depreciation and amortization expense. The Company reports amortization of financing costs, amortization of premiums and accretion of discounts as part of interest expense. Future amortization of lease origination costs, leases in place, financing costs, legal and marketing costs and tenant relationships is as follows:
Revenue Recognition The Company retains substantially all of the risks and benefits of ownership of the investment properties and accounts for its leases as operating leases. The Company accrues minimum rents on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Additionally, certain of the lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. During the years ended December 31, 2015, 2014 and 2013, the Company recognized percentage rents of $162,608, $90,437 and $15,472, respectively. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). The Company includes these reimbursements, along with other revenue derived from late fees and seasonal events, under the Consolidated Statements of Operations caption "Tenant reimbursements and other income." This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. The Company accrues reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives escrow payments for these reimbursements from substantially all its tenants throughout the year. The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year. These differences were not material for the years ended December 31, 2015, 2014 and 2013. The Company recognizes lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets. The Company did not recognize any lease termination fees during the years ended December 31, 2015, 2014 and 2013. Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90% of its taxable income to stockholders and meet certain other asset and income tests, as well as other requirements. The Company made no provision for federal income taxes for the REIT in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify. If the Company loses its REIT status it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to reasonable cause and certain other conditions were satisfied. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes and has determined that the Company had no uncertain income tax positions that could have a significant effect on the financial statements for the years ended December 31, 2015, 2014 and 2013. As the REIT was formed in November 2012, it is subject to examination by the Internal Revenue Service and state tax authorities from the date of formation. Taxable REIT Subsidiary Cost Allocation The Company’s overall philosophy regarding cost allocation centers around the premise that WHLR exists to acquire, lease and manage properties for the benefit of its investors. Accordingly, a majority of the Company’s operations occur at the property level. Each property must carry its own weight by absorbing the costs associated with generating its revenues. Additionally, leases generally allow the Company to pass through to the tenant most of the costs involved in operating the property, including, but not limited to, the direct costs associated with owning and maintaining the property (landscaping, repairs and maintenance, taxes, insurance, etc.), property management and certain administrative costs. Service vendors bill the majority of the direct costs of operating the properties directly to the REIT Properties and Non-REIT Properties and each property pays them accordingly. The Non-REIT Properties pay WRE property management and/or asset management fees of 3% and 2% of collected revenues, respectively. The Non-REIT Properties also pay WRE leasing commissions based on the total contractual revenues to be generated under the new/renewed lease agreement (6% for new leases and 3% for renewals). Compensation and benefits paid to employees of the Company represent the largest component of costs incurred to acquire, manage, lease and administer the properties. The Company believes that every employee position exists to either directly or indirectly to perform these functions. Therefore, the Company allocates compensation and benefits to the various functions of the Company based on an estimate of how each employee spends their time. The Company allocates actual costs attributed to property management costs to the TRS on a pro rata basis based on total property revenues generated by the Non-REIT Properties. The Company allocates actual leasing costs to the TRS on a pro rata basis based on total leasing commissions generated by the Non-REIT Properties. Currently, the TRS does not acquire properties for third parties so the Company does not allocate acquisition related costs to the TRS. Financial Instruments The carrying amount of financial instruments included in assets and liabilities approximates fair market value due to their immediate or short-term maturity. Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. Advertising Costs The Company expenses advertising and promotion costs as incurred. The Company incurred advertising and promotion costs of $218,180, $176,950 and $45,833 for the years ended December 31, 2015, 2014 and 2013, respectively. Assets Held For Sale The Company records assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. Corporate General and Administrative Expense A detail for the "Corporate general & administrative" line item from the consolidated statements of operations is presented below:
Noncontrolling Interests Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. Consolidated statements of changes in equity include beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are exchanged for the Company’s Common Stock. In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital. Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08"). This ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under this ASU, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the Company's operations and financial results. Examples include a disposal of a major geographical area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 was effective prospectively for reporting periods beginning on or after December 15, 2014. The Company adopted ASU 2014-08 on January 1, 2015 and used its guidance in determining the effect of discontinued operations as disclosed in Note 5. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard will be effective for the Company in the first quarter of the year ending December 31, 2018 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently evaluating the impact of adoption of the new standard on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40)." This ASU defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and provides guidance on required financial statement footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. The Company will adopt the ASU in 2016. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." This new guidance requires the presentation of unamortized debt issuance costs to be shown in the liabilities section of the consolidated balance sheets as a reduction of the principal amount of the associated debt, rather than as an asset. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a retrospective approach by restating prior period comparative consolidated balance sheets. In August 2015, the FASB issued ASU No. 2015-15, "Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements", which clarifies that absent authoritative guidance in ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the staff of the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company does not expect the adoption of ASU 2015-03 to materially impact its financial position or results of operations. In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments". This new guidance requires that the acquirer recognizes adjustments to preliminary acquisition values and account for the cumulative effect of any required adjustments in the period in which they are determined. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a prospective approach for adjustments that occur after the effective date. The Company does not expect the adoption of ASU 2015-16 to materially impact its financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 is intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU will require organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet the new ASU will require both types of leases (i.e. operating and capital) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The capital lease will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. The operating lease will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a lease asset for all of those leases. The leasing standard will be effective for calendar year-end public companies beginning after December 15, 2018. Public companies will be required to adopt the new leasing standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption will be permitted for all companies and organizations upon issuance of the standard. For calendar year-end public companies, this means an adoption date of January 1, 2019 and retrospective application to previously issued annual and interim financial statements for 2018 and 2017. Lessees with a large portfolio of leases are likely to see a significant increase in balance sheet assets and liabilities. See Note 9 for the Company’s current lease commitments. The Company is currently evaluating the impact of ASU 2016-02 on its financial statements. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows. Reclassifications Certain reclassifications have been made to prior period amounts to make their presentation comparable with the current period. These reclassifications had no impact on net income. |
Investment Properties |
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Investment Properties | Investment Properties Investment properties consist of the following:
The Company’s depreciation expense on investment properties was $5,370,116, $2,696,064 and $1,467,157 for the years ended December 31, 2015, 2014 and 2013, respectively. A significant portion of the Company’s land, buildings and improvements serve as collateral for its mortgage loans payable portfolio. Accordingly, restrictions exist as to each property’s transferability, use and other common rights typically associated with property ownership. Property Acquisitions 2013 Acquisitions On June 11, 2013, the Company completed its acquisition of a 75,000 square foot, 100% leased free-standing grocery store located in the Bixby Commons Shopping Center in Bixby, Oklahoma (“Bixby Commons”) for a purchase price of approximately $10.6 million. The property is stabilized by a 20-year, triple-net lease expiring in 2032 with Associated Wholesale Grocers, Inc., (“Associated”), a retailer-owned cooperative serving over 1,900 retail member stores with a complete assortment of grocery and general merchandise items. Associated subleases the property to Reasor’s Foods under a similar lease arrangement. On August 26, 2013, the Company completed its acquisition of Tampa Festival Shopping Center, a 137,987 square foot grocery-anchored shopping center located in Tampa, Florida (“Tampa Festival”) for a purchase price of approximately $11.85 million. The property was 100% leased as of the acquisition date and is anchored by a Winn Dixie grocery store which occupies approximately 32% of the total rentable square feet of the center through a 20-year lease expiring in June 2018 with four five-year options available. On August 29, 2013, the Company completed its acquisition of Forrest Gallery Shopping Center, a 214,451 square foot shopping center located in Tullahoma, Tennessee (“Forrest Gallery”) for a purchase price of approximately $11.50 million. The property was 91% leased as of the acquisition date and is anchored by a 48,780 square foot Kroger grocery store under a 20 year lease that is currently in its second five year option which expires in January 2018 with four five-year options remaining. On September 25, 2013, the Company completed its acquisition of Reasor’s Jenks Shopping Center, an 81,000 square foot shopping center located in Jenks, Oklahoma (“Jenks Reasors”) for a purchase price of approximately $11.4 million. The property is 100% leased by a Reasor’s Foods grocery store under a 20 year, triple-net operating lease expiring in 2033. On October 21, 2013, the Company completed the acquisition of the Starbucks/Verizon building located in the Fairfield Shopping Center in Virginia Beach, Virginia for a purchase price of approximately $1.39 million. The property is a 5,600 square foot 100% leased free-standing building that was significantly renovated during 2012 to accommodate a Starbucks coffeehouse and a Verizon Wireless store. The Starbucks coffeehouse occupies approximately 2,165 square feet of the building under a 10 year lease expiring in 2023 with three renewal options available. The Verizon Wireless store occupies approximately 3,435 square feet of the building under a 10 year lease expiring in 2022 with three renewal options available. The property is subject to a 10 year ground lease with Fairfield Shopping Center, a related party, expiring in 2022. The Company acquired the property from a related party by issuing 169,613 common units in the Operating Partnership to the limited partners and the assumption of outstanding debt. On December 17, 2013, the Company completed its acquisition of Jenks Plaza from a related party, a 7,800 square foot shopping center located in Jenks, Oklahoma (“Jenks Plaza”) for a purchase price of approximately $1.75 million. The property was 100% leased as of the acquisition date by 5 primarily retail and restaurant tenants, under leases expiring through October 2017. On December 19, 2013, the Company completed its acquisition of Winslow Plaza, a 40,695 square foot shopping center located in Sicklerville, New Jersey (“Winslow Plaza”) for a purchase price of approximately $6.61 million. The property was 91.2% leased as of the acquisition date by 15 primarily retail and restaurant tenants, and is anchored by King’s Liquors, which is leased through August 2017. On December 23, 2013, the Company completed its acquisition of Clover Plaza, St. George Square, South Square, Waterway Plaza and Westland Square (collectively the “Food Lions”) from a related party for an aggregate purchase price of approximately $15.85 million. Collectively, the Food Lions total 261,689 square feet in leaseable space, and were 89.5% leased as of the acquisition date by 34 primarily retail and restaurant tenants, and each center is anchored by a Food Lion grocery store. For the year ended December 31, 2013, the Company incurred approximately $2,179,023 in acquisition costs for these acquisitions. These costs are included on the consolidated statement of operations under the caption “Corporate general & administrative.” The following summarizes the consideration paid and the fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
a. Represents the fair value of the net investment properties acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using following approaches: i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, “go dark” analyses and residual calculations incorporating the land values; and iii. the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, in place leases, legal and marketing fees and tenant relationships associated with replacing existing leases. The income approach was used to determine the fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts. c. Represents the fair value of above/below market leases. The income approach was used to determine the fair value of above/below market leases using market rental rates for similar properties. d. Represents the components of purchase consideration paid. 2014 Acquisitions Cypress Shopping Center On July 1, 2014, the Company completed its acquisition of Cypress Shopping Center, an 80,435 square foot grocery-anchored shopping center located in Boiling Springs, South Carolina (“Cypress”) for a contract price of $8.30 million, paid through a combination of cash and debt. Cypress was 92% leased as of the acquisition date and its major tenants include Bi-Lo and Dollar General. Harrodsburg Marketplace On July 1, 2014, the Company completed its acquisition of Harrodsburg Marketplace, a 60,048 square foot grocery-anchored shopping center located in Harrodsburg, Kentucky ("Harrodsburg") for a contract price of $5.00 million, paid through a combination of cash and debt. Harrodsburg was 97% leased as of the acquisition date and its major tenants include Kroger and Arby's. Port Crossing Shopping Center On July 3, 2014, the Company completed the acquisition of Port Crossing Shopping Center, a 65,365 square foot grocery-anchored shopping center located in Harrisonburg, Virginia ("Port Crossing") for a contract price of $9.31 million. Port Crossing was 92% leased as of the acquisition date and is anchored by a Food Lion grocery store. The Company acquired the property from a related party through a combination of cash, the issuance of 157,429 common units in the Operating Partnership and the assumption of outstanding debt. LaGrange Marketplace On July 25, 2014, the Company completed the acquisition of LaGrange Marketplace, a 76,594 square foot grocery-anchored shopping center located in LaGrange, Georgia ("LaGrange") for a contract price of $3.70 million. LaGrange was 93% leased as of the acquisition date and is anchored by a Food Depot grocery store. The Company acquired the property from a related party through a combination of cash, the issuance of 105,843 common units in the Operating Partnership and the assumption of outstanding debt. DF I-Courtland On August 15, 2014, the Company completed its acquisition of DF I-Courtland, LLC ("DF I-Courtland") from a related party, consisting of a 1.01 acre parcel of undeveloped real estate located in Courtland, Virginia, for a contract price of $893,900. The Company believes that this parcel can accommodate a 8,400 square foot facility. There are currently no development plans for DF I-Courtland, but management believes that it could support a retail facility that would be complementary to the Company's existing portfolio. DF I-Moyock On August 15, 2014, the Company completed its acquisition of DF I-Moyock, LLC ("DF I-Moyock") from a related party, consisting of a 1.28 acre parcel of undeveloped real estate located in Moyock, North Carolina, for a contract price of $908,100. The Company believes that this parcel can accommodate a 9,000 square foot facility. There are currently no development plans for DF I-Moyock, but management believes that it could support a retail facility that would be complementary to the Company's existing portfolio. Edenton Commons On August 15, 2014, the Company completed its acquisition of Edenton Commons ("Edenton Commons") from a related party, consisting of a 53.82 acre parcel of undeveloped real estate located in Edenton, North Carolina, for a contract price of $2.40 million. The Company believes that this parcel can accommodate a 225,000 square foot facility. There are currently no development plans for Edenton Commons, but management believes that it could support a retail facility that would be complementary to the Company's existing portfolio. Freeway Junction On September 4, 2014, the Company completed the acquisition of Freeway Junction, a 156,834 square foot shopping center located in Stockbridge, Georgia ("Freeway Junction") for a contract price of $10.45 million, paid through a combination of cash and debt. Freeway Junction was 98% leased as of the acquisition date and is anchored by Northern Tool, Ollie's Bargain Outlet, Goodwill and Farmer's Furniture. Graystone Crossing On September 26, 2014, the Company completed the acquisition of Graystone Crossing, a 21,997 square foot shopping center located in Tega Cay, South Carolina ("Graystone Crossing") for a contract price of $5.4 million, paid through a combination of cash and debt. Graystone Crossing was 100% leased as of the acquisition date and is anchored by T-Mobile, Tropical Smoothie Cafe, and Edible Arrangements. Bryan Station On October 2, 2014, the Company completed its acquisition of Bryan Station, an 54,397 square foot retail center located in Lexington, Kentucky (“Bryan Station”) for a contract price of $6.10 million, paid through a combination of cash and debt. Bryan Station was 100% leased as of the acquisition date and its major tenants include Planet Fitness and Shoe Carnival. Contribution of Operating Companies' Membership Interests On October 24, 2014, the Operating Partnership entered into a Membership Interest Contribution Agreement ("Contribution Agreement") with Jon S. Wheeler, ("Mr. Wheeler"), the Company's Chairman and CEO, for the contribution of Mr. Wheeler's membership interests in WI, WRE and WM. These entities were wholly owned by Mr. Wheeler at the time of the Contribution Agreement. The purpose of the Contribution Agreement was to internalize the management of the Trust. Pursuant to the terms of the Contribution Agreement, Mr. Wheeler received 1,516,853 common units of the Operating Partnership worth $6.75 million at the time of issuance. Crockett Square On November 5, 2014, the Company completed its acquisition of Crockett Square, a 107,122 square foot retail center located in Morristown, Tennessee ("Crockett Square") for a contract price of $9.75 million, paid through a combination of cash and debt. Crockett Square was 100% leased as of the acquisition date and its major tenants include Hobby Lobby, Dollar Tree, Pier 1 Imports and Ross Dress for Less. Harbor Point On November 21, 2014, the Company completed its acquisition of Harbor Point Associates, LLC ("Harbor Point") from a related party, consisting of a 7.2 acre parcel of undeveloped real estate located in Grove, Oklahoma, for a contract price of $2.4 million. The Company believes that this parcel can accommodate a 45,700 square foot facility. There are currently no development plans for Harbor Point, but management believes that it could support a retail facility that would be complementary to the Company's existing portfolio. DF I-Berkley On December 1, 2014, the Company completed its acquisition of DF I-Berkley, LLC ("DF I-Berkley") from a related party, a parcel of approximate 1.0 acre of undeveloped real estate located in Norfolk, Virginia, for a contract price of $250,000. The Company believes that this parcel can accommodate a 6,500 square foot facility. There are currently no development plans for DF I-Berkley, but management believes that it could support a retail facility that would be complementary to the Company's existing portfolio. For the year ended December 31, 2014, the Company incurred approximately $3,787,907 in acquisition costs for these acquisitions. These costs are included on the consolidated statements of operations under the caption “Corporate general & administrative.” The following summarizes the consideration paid and the fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
a. Represents the fair value of the net investment properties acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using following approaches: i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, “go dark” analyses and residual calculations incorporating the land values; and iii. the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, in place leases and legal and marketing fees associated with replacing existing leases. The income approach was used to determine the fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts. Any remaining value which could not be allocated to identifiable intangibles was allocated to goodwill. Goodwill recognized from the acquisition represents, among other things, the future economic benefits arising from expected synergies and is consistent with the Company's stated intentions to become an internally managed REIT. The acquired goodwill is fully deductible for income tax purposes. c. Represents the fair value of accounts payable, accrued expenses and other liabilities. It was determined that carrying value approximated fair value for all amounts in these categories. d. Represents the fair value of above/below market leases. The income approach was used to determine the fair value of above/below market leases using market rental rates for similar properties. e. Represents the components of purchase consideration paid. 2015 Acquisitions Laskin Road Land On January 9, 2015, the Company completed its acquisition of 1.5 acres of undeveloped land located on Laskin Road in Virginia Beach, Virginia ("Laskin Road") for a contract price of $1.6 million. The Company acquired Laskin Road for future development opportunities. The Company paid cash of $150,000 with the balance of the contract price to be paid in common units on the earlier of the one year anniversary of the acquisition or the completion of any development activities. The number of units issued was to be determined using the 10-day moving average of the Company's common stock price immediately prior to issuance. On January 19, 2016, 807,727 common units were issued by the Operating Partnership to satisfy this liability. Pierpont Centre On January 14, 2015, the Company completed its acquisition of Pierpont Centre, a 122,259 square foot shopping center located in Morgantown, West Virginia ("Pierpont Centre") for a contract price of $13.9 million, paid through a combination of cash and debt. Pierpont Centre was 100% leased as of the acquisition date and its major tenants include GNC, Hallmark, Michael's, Ruby Tuesday and Outback Steakhouse. Brook Run Properties On March 27, 2015, the Company completed its acquisition of Brook Run Properties, LLC ("Brook Run Properties") from a related party, consisting of a 2.0 acre parcel of undeveloped real estate located adjacent to the Brook Run Shopping Center in Richmond, Virginia, for a contract price of $300,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center. Alex City Marketplace On April 1, 2015, the Company completed its acquisition of Alex City Marketplace, a 147,791 square foot shopping center located in Alexander City, Alabama ("Alex City Marketplace") for a contract price of $10.3 million, paid through a combination of cash and debt. Alex City Marketplace was 86% leased as of the the acquisition date and its major tenants include Winn Dixie and Goody's. Butler Square On April 15, 2015, the Company completed its acquisition of Butler Square, a 82,400 square foot shopping center located in Mauldin, South Carolina ("Butler Square") for a contract price of $9.4 million, paid through a combination of cash and debt. Butler Square was 100% leased as of the acquisition date and its major tenants include Bi-Lo and Dollar Tree. Brook Run Shopping Center On June 2, 2015, the Company completed its acquisition of Brook Run Shopping Center, a 147,738 square foot shopping center located in Richmond, Virginia ("Brook Run") for a contract price of $18.5 million. Brook Run was 92% leased as of the acquisition date and its major tenants include Martin's Food Store and CVS. The Company acquired Brook Run from a related party through a combination of cash, the issuance of 574,743 common units in the Operating Partnership and debt. Beaver Ruin Village On July 1, 2015, the Company completed its acquisition of Beaver Ruin Village, a 74,048 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village") for a contract price of $12.4 million, paid through a combination of cash and debt. Beaver Ruin Village was 91% leased as of the acquisition date and its major tenants include Chase Bank, Firehouse Subs and State Farm Insurance. Beaver Ruin Village II On July 1, 2015, the Company completed its acquisition of Beaver Ruin Village II, a 34,925 square foot shopping center located in Lilburn, Georgia ("Beaver Ruin Village II") for a contract price of $4.4 million, paid through a combination of cash and debt. Beaver Ruin Village II was 100% leased as of the acquisition date and its major tenants include AutoZone and Metro PCS. Columbia Fire Station On July 1, 2015, the Company completed its acquisition of Columbia Fire Station, consisting of two vacant buildings on a 1.0 acre land parcel located in Columbia, South Carolina ("Columbia Fire Station") for a contract price of $2.4 million, paid through a combination of cash and debt. The Company plans to redevelop this property for retail use. Chesapeake Square On July 10, 2015, the Company completed its acquisition of Chesapeake Square, a 99,848 square foot shopping center located in Onley, Virginia ("Chesapeake Square") for a contract price of $6.3 million. Chesapeake Square was 76% leased as of the acquisition date and is anchored by a Food Lion grocery store. The Company acquired Chesapeake Square from a related party through a combination of cash and the issuance of 125,966 common units in the Operating Partnership. Sunshine Plaza On July 21, 2015, the Company completed its acquisition of Sunshine Plaza, a 111,189 square foot shopping center located in Lehigh Acres, Florida ("Sunshine Plaza") for a contract price of $10.4 million. Sunshine Plaza was 96% leased as of the acquisition date and is anchored by a Winn-Dixie grocery store. The Company acquired Sunshine Plaza through a combination of cash and debt. Carolina Place On July 24, 2015, the Company completed its acquisition of Carolina Place from a related party, consisting of a 2.14 acre parcel of land adjacent to Chesapeake Square for a contract price of $250,000 in cash. The Company acquired the property for potential development and to compliment the adjacent shopping center. Hilton Head Land On August 14, 2015, the Company completed its acquisition of 10.39 acres located in Hilton Head, South Carolina ("Hilton Head Land") for a contract price of $1.0 million paid in cash. The Company acquired the property for potential development and to compliment an adjacent redevelopment project. Barnett Portfolio On August 21, 2015, the Company completed its acquisition of Cardinal Plaza, located in Henderson, North Carolina, Franklinton Square, located in Franklinton, North Carolina and Nashville Commons, located in Nashville, North Carolina (collectively known as the "Barnett Portfolio") for a contract price of $15.3 million. The Barnett Porfolio properties total 171,466 square feet, were 91% leased as of the acquisition date and all are anchored by Food Lion grocery stores. The Company acquired the Barnett Portfolio through a combination of cash and debt. Grove Park On September 9, 2015, the Company completed its acquisition of Grove Park Shopping Center, a 106,557 square foot shopping center located in Orangeburg, South Carolina ("Grove Park") for a contract price of $6.6 million. Grove Park was 90% leased as of the acquisition date and is anchored by a Bi-Lo grocery store. The Company acquired Grove Park through a combination of cash and debt. Parkway Plaza On September 15, 2015, the Company completed its acquisition of Parkway Plaza Shopping Center, a 52,365 square foot shopping center and 2.1 acres of adjacent undeveloped land located in Brunswick, Georgia ("Parkway Plaza") for a contract price of $6.1 million Parkway Plaza was 97% leased as of the acquisition date and is anchored by a Winn Dixie grocery store. The Company acquired Parkway Plaza through a combination of cash and debt. Fort Howard Square On September 30, 2015, the Company completed its acquisition of Fort Howard Square Shopping Center, a 113,652 square foot shopping center located in Rincon, Georgia ("Fort Howard Square") for a contract price of $11.5 million. Fort Howard Square was 95% leased as of the acquisition date and is anchored by nationally recognized tenants Goodwill and Dollar Tree. The Company acquired Fort Howard Square through a combination of cash and debt. Conyers Crossing On September 30, 2015, the Company completed its acquisition of Conyers Crossing Shopping Center, a 170,475 square foot shopping center located in Conyers, Georgia ("Conyers Crossing") for a contract price of $10.8 million. Conyers Crossing was 99% leased as of the acquisition date and is anchored by nationally recognized tenants Hobby Lobby and Burlington Coat Factory. The Company acquired Conyers Crossing through a combination of cash and debt. The following summarizes the consideration paid and the fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, "go dark" analyses and residual calculations incorporating the land values; and
For the year ended December 31, 2015, the Company incurred $3,871,037 in acquisition expenses. These costs are included on the unaudited condensed consolidated statement of operations under the caption "Corporate general & administrative." Please see the corporate general & administrative table in Note 2 for acquisition expenses for all periods presented. Unaudited pro forma consolidated financial information is presented below for all 2013, 2014 and 2015 acquisitions, excluding Bixby Commons, Starbucks/Verizon, Jenks Reasors, DF I-Courtland, Edenton Commons, DF-I Moyock, Harbor Point, DF I-Berkley, Laskin Road, Brook Run Properties, Columbia Fire Station, Carolina Place, and Hilton Head Land. The unaudited pro forma information presented below illustrates the Company’s pro forma financial results assuming the acquisitions had been consummated as of the beginning of the earliest period presented. The pro forma results include adjustments for depreciation and amortization associated with acquired tangible and intangible assets, straight-line rent adjustments and interest expense related to debt incurred. Unaudited pro forma financial information has not been presented for Bixby Commons, Starbucks/Verizon, Jenks Reasors, DF I-Courtland, Edenton Commons, DF-I Moyock, Harbor Point, DF I-Berkley, Laskin Road, Brook Run Properties, Columbia Fire Station, Carolina Place, and Hilton Head Land as the Company’s management has determined that their inclusion would not be meaningful due to limited or no unrelated third party operating history.
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Goodwill (Notes) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Text Block] | Goodwill As part of the acquisition of the Operating Companies on October 24, 2014, the Company recorded preliminary goodwill of $7,004,072. In June 2015, the Company finalized its valuation of the Operating Companies. In accordance with the valuation, the Company has recorded a fair value discount to the $6,750,000 in common units issued for the acquisition of the Operating Companies due to the one year restriction on their conversion into shares of common stock, and reallocated a portion of goodwill to finite-lived intangibles as follows:
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Assets Held for Sale and Discontinued Operations (Notes) |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Assets Held for Sale and Discontinued Operations In August 2015, the Company’s management and Board of Directors committed to a plan to sell Bixby Commons, Jenks Reasors, Harps at Harbor Point, Starbucks/Verizon and the ground leases for Ruby Tuesday’s and Outback Steakhouse at Pierpont Centre (the “Freestanding Properties”) as part of the Company’s continuous evaluation of strategic alternatives. Accordingly, the Freestanding Properties have been classified as held for sale and the results of their operations have been classified as discontinued operations for all periods presented. Management expects that the sale of the Freestanding Properties will occur within one year and the Company will receive no residual cash flows once the Freestanding Properties are disposed. On October 19, 2015, the Company completed its sale of Jenks Reasors for a contract price of approximately $12.2 million, resulting in a gain of approximately $820,000. On October 20, 2015, the Company completed its sale of Harps at Harbor Point for a contract price of approximately $5.0 million, resulting in a gain of approximately $642,000. On October 27, 2015, the Company completed its sale of Bixby Commons for a contract price of approximately $11.0 million, resulting in a gain of approximately $642,000. As of December 31, 2015 and 2014, assets held for sale consisted of the following:
As of December 31, 2015 and 2014, liabilities associated with assets held for sale consisted of the following:
The consolidated statements of operations reflect reclassifications of revenue, property operating expenses, corporate general and administrative expenses and interest expense from continuing operations to income from discontinued operations for all periods presented. All interest expense disclosed below is directly related to the debt incurred to acquire the Freestanding Properties. The following is a summary of the income from discontinued operations for the years ended December 31, 2015, 2014 and 2013:
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Loans Payable |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Payable | Loans Payable The Company’s loans payable related to continuing operations consist of the following:
2013 Financing Activity On March 11, 2013, the Company entered into a promissory note for $4.0 million to refinance the Shoppes at Eagle Harbor loan that matured in February 2013. The new loan matures on March 11, 2018 and requires monthly principal and interest payments based on a 20-year amortization and a 4.34% fixed interest rate. The Riversedge North loan matured on April 16, 2013, and was extended until January 2014. On January 16, 2014, the loan was renewed until January 16, 2019. The loan requires monthly principal and interest payments based on a 15 year amortization with a fixed interest rate of 6.00%. On April 19, 2013, we entered in a promissory note for $6.5 million to refinance the Shoppes at TJ Maxx loan that matured. The new loan matures on May 1, 2020 and requires monthly principal and interest payments based on a 25-year amortization and a 3.88% fixed interest rate. On June 3, 2013, the Company entered into a promissory note with Monarch Bank for a $2,000,000 line of credit. The line of credit matured on May 12, 2014, provided for an interest rate of 4.5% per annum and was guaranteed by a Deed of Trust and Assignment of Rents on real property. This line of credit was paid off on September 16, 2014. On December 16, 2013, the Company completed a $10.0 million private placement transaction with eight accredited investors (the “Buyers”). Pursuant to the securities purchase agreement, dated as of December 16, 2013 (the “December 2013 Securities Purchase Agreement”), the Company sold convertible and nonconvertible 9% senior notes and warrants to purchase shares of its common stock totaling $10.0 million dollars. The Company completed the financings in two concurrent tranches. The first tranche consisted of $6.0 million in convertible senior notes due December 15, 2018. During the first two years, the convertible notes will only be available for conversion upon the completion of a secondary offering of common stock in excess of $20 million at a conversion rate of the lesser of 95% of the secondary offering’s per share price or $5.50. After two years, holders of the convertible notes can convert at their discretion at a conversion rate of the lesser of 90% of the market price of the Company’s stock or $5.50. The maximum number of shares of stock issuable upon conversion of the convertible notes is 1,417,079 shares. The second tranche consisted of $4.0 million in nonconvertible senior notes due December 15, 2015. In addition to the non-convertible notes, the Company issued 421,053 warrants with an exercise price of $4.75. 2014 Financing Activity On January 31, 2014, the Company completed a second closing (“Second Closing”) consisting of the private placement of $2.16 million of non-convertible senior notes and warrants to purchase shares of the Company’s common stock. The non-convertible senior notes have an interest rate of 9.00% per annum (payable monthly) and mature on January 31, 2016. The warrants issued permit the purchase of an aggregate of 227,372 shares of the Company’s common stock, have an exercise price of $4.75 per share, expire on January 31, 2019 and, along with the warrants issued in the first closing on December 16, 2013, were not exercisable unless the Company obtained shareholder approval for this transaction and the issuance of the common stock underlying the warrants. The Company's shareholders approved the transaction and the issuance of the common stock underlying the warrants at its annual meeting in June 2014. In connection with the private placement transaction, the Company and the Buyers entered into a Registration Rights Agreement, dated as of December 16, 2013 (the “December 2013 Registration Rights Agreement”). Pursuant to the December 2013 Registration Rights Agreement, the Company agreed to file and maintain a registration statement with the Securities and Exchange Commission for the resale of the shares of common stock underlying the convertible notes and the warrants. Interest on the convertible and nonconvertible senior notes of 9% per annum will be payable monthly. On July 2, 2014, the Company entered into a promissory note for $660,000 to refinance the Starbucks/Verizon loan. The new loan matures on July 2, 2019 and requires monthly principal and interest payments of $4,383 based on a 20 year amortization and a 5.00% fixed interest rate. The Walnut Hill loan matured on April 11, 2014, and was subsequently extended until July 31, 2014. On July 31, 2014, the Company entered into a promissory note for $3,650,000 to refinance the note that matured. The new loan matures on July 30, 2017 and requires monthly principal and interest payments of $24,273 based on a 20 year amortization and a 5.50% fixed interest rate. On September 16, 2014, the Company entered into a promissory note for a $3,000,000 line of credit. The line of credit matures on September 16, 2016, provides for an interest rate of 4.25% per annum and is guaranteed by a Deed of Trust and Assignment of Rents on real property. Concurrently with this transaction, the Company paid off its $2,000,000 line of credit with Monarch Bank. 2015 Financing Activity On May 1, 2015, the Lumber River Plaza note was paid in full from cash on hand. On May 29, 2015, the Operating Partnership entered into a credit agreement (the "Credit Agreeement") with KeyBank National Association ("KeyBank"). Outstanding borrowings accrue monthly interest which is paid at a rate of the one-month London Interbank Offer Rate ("LIBOR") plus a margin ranging from 1.75% to 2.50% depending on the Company's consolidated leverage ratio. As of December 31, 2015, the Company has pledged Lumber River and Chesapeake Square as collateral towards the Credit Agreement with outstanding borrowings of $6,873,750 at an interest rate of 2.79%. The available borrowing capacity of approximately $38.1 million as of December 31, 2015 is available for the Company as long as such amounts are fully collateralized. The amounts available to the Company under the Credit Agreement that have not been borrowed accrue fees which are paid at a rate of 0.30% on a monthly basis. The Credit Agreement contains certain financial covenants that the Company must meet, including minimum leverage, fixed charge coverage and debt service coverage ratios as well as a minimum tangible net worth requirement. The Company was in compliance with the financial covenants as of December 31, 2015. The Credit Agreement also contains certain events of default that if they occur may cause KeyBank to terminate the Credit Agreement and declare amounts owed to become immediately payable. As of December 31, 2015, the Company has not incurred an event of default. On November 24, 2015, the Company entered into a promissory note for $4,620,000 to refinance the Winslow Plaza loan. The new loan matures on December 1, 2025 with principal due at maturity and bears interest at 4.82%. Certain of the Company’s loans payable have covenants with which the Company is required to comply. As of December 31, 2015, the Company believes it is in compliance with all applicable covenants. On January 29, 2016, the Company paid off $2.16 million in senior subordinated debt from cash on hand. Debt Maturity The Company’s scheduled principal repayments on indebtedness as of December 31, 2015 are as follows:
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Rentals under Operating Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Rentals under Operating Leases | Rentals under Operating Leases Future minimum rentals to be received under noncancelable tenant operating leases for each of the next five years and thereafter, excluding CAM and percentage rent based on tenant sales volume, as of December 31, 2015 are as follows:
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Equity |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity The Company has authority to issue 155,000,000 shares of stock, consisting of 150,000,000 shares of $0.01 par value Common Stock (“Common Stock”) and 5,000,000 shares of no par value Preferred Stock (“Preferred Stock”). The Company increased the number of shares of Common Stock authorized from 15,000,000 to 75,000,000 during June 2013, and from 75,000,000 to 150,000,000 during June 2015. Substantially all of our business is conducted through the Company’s Operating Partnership. The Trust is the sole general partner of the Operating Partnership and owned a 90.79% interest in the Operating Partnership as of December 31, 2015. Limited partners in the Operating Partnership have the right to redeem their common units for cash or, at our option, common shares at a ratio of one common unit for one common share. Distributions to common unit holders are paid at the same rate per unit as dividends per share to the Trust’s common shareholders. As of December 31, 2015 and 2014, there were 44,018,768 and 16,548,873, respectively, of common units outstanding with the Trust owning 39,963,476 and 12,981,250, respectively, of these common units. June 2013 Private Placement On June 10, 2013, the Company completed a $4.5 million private placement transaction with 21 accredited investors (the “Buyers”). Pursuant to the Securities Purchase Agreement, dated as of June 10, 2013 (the “June 2013 Securities Purchase Agreement”), the Company issued an aggregate of 4,500 shares of Series A Preferred Stock, no par value, $1,000 liquidation preference per share ("Series A Preferred") to the Buyers. The Series A Preferred accrues cumulative dividends at a rate of 9% per annum, which is paid quarterly. In accordance with the June 2013 Securities Purchase Agreement, 2,691 shares of Series A Preferred converted automatically into 656,998 shares of the Company’s Common Stock upon the August 26, 2013 completion of the Company’s secondary offering (“Secondary Offering”) at a price equal to $4.085 per share, or 95% of the $4.30 per share price at which the Common Stock was sold in the Offering (the “Primary Conversion”). The Company has the right to redeem the remaining 562 shares of Series A Preferred, on a pro rata basis, at any time at a price equal to 103% of the purchase price for the Series A Preferred plus any accrued but unpaid dividends. Since the Series A Preferred features certain redemption rights that were considered by the Company to be outside of the Company’s control and subject to the occurrence of uncertain future events, the initial Series A Preferred amount of $4,157,000 was previously presented as a liability in the Company’s consolidated balance sheet. Upon completion of the Primary Conversion, the remaining Series A Preferred was reclassified to the shareholders’ equity section of the Company’s consolidated balance sheet, since the Series A Preferred no longer possessed the redemption features previously considered outside the Company’s control. In connection with the investment, the Company and the Buyers entered into a Registration Rights Agreement, dated as of June 10, 2013 (the “June 2013 Registration Rights Agreement”). Pursuant to the June 2013 Registration Rights Agreement, the Company agreed to file and maintain a registration statement with the Securities and Exchange Commission for the resale of the Common Stock underlying the Series A Preferred acquired by the Buyers. The 656,998 shares were registered on September 23, 2013. August 2013 Secondary Offering On August 26, 2013, the Company completed the Secondary Offering in which 3,162,500 shares of the Company’s Common Stock were issued, including 412,500 in over-allotment shares issued on September 13, 2013. Net proceeds from the Secondary Offering totaled $12,720,275, excluding the impact of certain legal, accounting and other professional fees. The Company used a portion of these proceeds to fund the acquisitions discussed in Note 3 and for general corporate purposes. December 2013 Private Placement In association with the December 2013 Securities Purchase Agreement, the Company issued 421,053 warrants to acquire the Company's Common Stock with an exercise price of $4.75. The Company has determined that the warrants qualify for equity treatment under applicable GAAP. See Note 6 for details on the debt associated with these warrants. 2014 Series B Preferred Stock Offerings On April 29, 2014, the Company completed its Series B Convertible Preferred Stock Offering (“Series B Offering”), in which 144,000 units were issued, consisting of 720,000 shares of Series B Convertible Preferred Stock,no par value, $1,000 liquidation preference per share (the "Series B Preferred") and warrants to purchase 864,000 of the Company’s Common Stock. On May 21, 2014, the Company's underwriters exercised their over-allotment option, in which 21,600 units were issued, consisting of 108,000 additional shares of Series B Preferred, and an additional 129,600 warrants. The Series B Preferred bears interest at a rate of 9% per annum and has a conversion price of $5.00 per share of Common Stock. The Series B Preferred will automatically convert into shares of the Company’s Common Stock if the 20-day volume weighted adjusted closing price of the Company's Common Stock exceeds $7.25 per share on the NASDAQ Capital Market. Each warrant permits investors to purchase one share of Common Stock at an exercise price of $5.50 per share, subject to adjustment. Net proceeds from the Series B Offering totaled $18,671,378, which included the impact of the underwriters' selling commissions and legal, accounting and other professional fees. Proceeds from the Series B Offering were used for acquisitions and for general corporate purposes. On September 17, 2014, the Company completed a follow-on Series B Preferred Offering ("Follow-on Offering"), in which 144,000 units were issued, consisting of 720,000 shares of Series B Preferred and warrants to purchase 864,000 shares of the Company's Common Stock. On September 23, 2014, the Company's underwriters exercised their over-allotment option, in which 20,200 units were issued, consisting of 101,000 additional shares of Series B Preferred, and an additional 129,000 warrants. Net proceeds from the Follow-on Offering totaled $18,571,563, which included the impact of the underwriters' selling commissions and legal, accounting and other professional fees. Proceeds from the Follow-on Offering were used for acquisitions and for general corporate purposes. On April 24, 2014, in contemplation of the Series B Offering, the Company increased the number of preferred shares authorized from 500,000 to 5,000,000, and authorized 1,000,000 shares of Series B Preferred for the Offering. On August 19, 2014, the number of Series B Preferred authorized was increased from 1,000,000 to 3,000,000 in contemplation of the Follow-on Offering. Series C Preferred Stock Offering On March 19, 2015, the Company entered into securities purchase agreements dated as of March 19, 2015 (the “Securities Purchase Agreements”), with certain accredited investors (the “Investors”), pursuant to which, among other things, the Company sold an aggregate of 93,000 shares of Series C Mandatorily Convertible Cumulative Perpetual Preferred Stock, liquidation value $1,000 per share (the “Series C Preferred Stock”), in a private placement (the “Private Placement”) to the Investors in exchange for aggregate consideration of $93,000,000, consisting of $90,000,000 in cash and the exchange of $3,000,000 in senior convertible debt. Each share of Series C Preferred Stock was sold to the Investors at an offering price of $1,000 per share. Net proceeds from the Private Placement totaled $83,415,894, which included the impact of the underwriters' selling commissions and legal, accounting and other professional fees. The Company is using the net offering proceeds to acquire properties and for general working capital. From March 19, 2015 until June 11, 2015, the holders of Series C Preferred Stock were entitled to receive, when, and if authorized by the Company’s Board of Directors and declared by the Company out of legally available funds, a dividend, on an as converted basis, that mirrors any dividend payable on shares of Common Stock and also were entitled to share in any other distribution made on the Common Stock on an as converted basis (other than dividends or other distributions payable in Common Stock). Any dividends or other distributions on the Series C Preferred Stock during this time period were to be paid, on an as converted basis, pro rata from the date of issuance. The Series C Preferred Stock was automatically converted into shares of Common Stock on June 11, 2015, which was the fifth business day following the June 4, 2015 approval by the requisite holders of the Common Stock of the conversion of the Series C Preferred Stock into Common Stock and the issuance of Common Stock upon such conversion. Each share of Series C Preferred Stock converted into 500 shares of Common Stock at the conversion price of $2.00 per share. The conversion of the Series C Preferred stock into Common Stock at this rate was considered to be a beneficial conversion feature, resulting in a deemed distribution of $59,520,000, which is included in the consolidated statement of equity and also in the consolidated statement of cash flows as a non-cash transaction. Series A and Series B Preferred Stock Exchange Offer On June 15, 2015, the Company entered into an exchange offer (the “Exchange Offer”) to holders of its Series A Preferred and Series B Preferred. The Exchange Offer permitted tendering shareholders to exchange their shares of Series A Preferred or Series B Preferred for an aggregate of up to 20,853,250 of newly issued shares of the Company’s common stock. Each share of Series A Preferred was exchangeable for 500 shares of Common Stock, and each share of the Series B Preferred Stock was exchangeable for 12.5 shares of Common Stock. On July 20, 2015, the Company completed the Exchange Offer, under which 1,247 shares of Series A Preferred and 865,481 shares of Series B Preferred were tendered for 11,442,002 newly issued shares of the Company's Common Stock. The Company paid cash in lieu of any fractional shares of Common Stock upon the exchange of the Series A Preferred and Series B Preferred. The Exchange Offer was considered to be a beneficial conversion feature, resulting in a deemed distribution of $13,124,506, which is included in the consolidated statement of equity and also in the consolidated statement of cash flows as a non-cash transaction. 2015 Long-Term Incentive Plan On June 4, 2015, the Company's shareholders approved the 2015 Long-Term Incentive Plan (the "2015 Incentive Plan"). The 2015 Incentive Plan allows for issuance of up to 1,000,000 shares of the Company's Common Stock to employees, directors, officers and consultants for services rendered to the Company. The 2015 Incentive Plan replaced the 2012 Stock Incentive Plan ("Stock Incentive Plan"). Equity Issuances under Stock Incentive Plan and 2015 Incentive Plan During the year ended December 31, 2015, the Company issued 320,152 shares to employees, directors, officers and consultants for services rendered to the Company. 77,260 of these shares were issued under the Stock Incentive Plan, and 242,892 of these shares were issues under the 2015 Incentive Plan. The market value of these shares at the time of issuance was approximately $697,000. As of December 31, 2015, there are 757,108 shares available for issuance under the Company’s 2015 Incentive Plan. During the year ended December 31, 2014, the Company issued 105,834 shares to employees, directors, officers and consultants under the Stock Incentive Plan for services rendered to the Company. The market value of these shares at the time of issuance was approximately $456,988. No shares were issued for services rendered to the Company during the year ended December 31, 2013. Earnings per share Basic earnings per share for the Company’s common shareholders is calculated by dividing income from continuing operations, excluding amounts attributable to preferred stockholders and the net loss attributable to noncontrolling interests, by the Company’s weighted-average number of common shares of Common Stock outstanding during the period. Diluted earnings per share is computed by dividing the net income attributable to common shareholders, excluding amounts attributable to preferred shareholders and the net loss attributable to noncontrolling interests, by the weighted-average number of common shares including any dilutive shares. As of December 31, 2015, 2014 and 2013, 3,354,883, 1,787,798 and 1,858,068, respectively, of the Operating Partnership’s common units outstanding to noncontrolling interests were eligible to be converted into shares of Common Stock on a one-to-one basis. Additionally, as of December 31, 2015 and 2014, 729,119 and 1,648,900 shares of Series B Preferred, respectively, and $3,000,000 and $6,000,000 of senior convertible debt, respectively, are eligible to be converted into 5,062,674 and 9,661,579 shares, respectively, of the Company's Common Stock. Also, warrants to purchase 2,635,025 shares of the Company's Common Stock were outstanding at December 31, 2015 and 2014. The common units, convertible preferred stock, senior convertible debt and warrants have been excluded from the Company’s diluted earnings per share calculation because their inclusion would be antidilutive. Dividends Dividends were made to holders of common units, common shares and preferred shares as follows:
On December 15, 2015, the Company declared a $0.0175 per share dividend to common share and common unit holders of record as of December 31, 2015 to be paid on January 31, 2016. Accordingly, the Company has accrued $1,230,512 as of December 31, 2015 for this dividend. During the three months ended December 31, 2015, the Company declared a quarterly dividend to Series A Preferred and Series B Preferred shareholders of $422,774 to shareholders of record as of December 31, 2015 to be paid on January 15, 2016. Accordingly, the Company has accrued $422,774 as of December 31, 2015 for this dividend. |
Commitments and Contingencies |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Lease Commitments As of December 31, 2015, the Amscot property is subject to a ground lease which terminates in 2045. The ground lease requires the Company to make a fixed annual rental payment and includes escalation clauses and renewal options. The Company incurred ground lease expense included in other expense of $18,049, $17,701 and $7,156 during the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the Beaver Ruin Village property is subject to a ground lease which terminates in 2054. The ground lease requires the Company to make a fixed annual rental payment and includes escalation clauses and renewal options. The Company incurred ground lease expense included in other expense of $22,856, $0 and $0 during the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the Beaver Ruin Village II property is subject to a ground lease which terminates in 2056. The ground lease requires the Company to make a fixed annual rental payment and includes escalation clauses and renewal options. The Company incurred ground lease expense included in other expense of $8,926, $0 and $0 during the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the Company leases office space in Charleston, South Carolina, subject to a lease that terminates in 2019. The lease requires the Company to make a fixed annual rental payment and includes escalation clauses and renewal options. The Company incurred lease expense included in other expense of $117,997, $30,349 and $0 during the years ended December 31, 2015, 2014 and 2013, respectively. Future minimum lease payments due under the operating leases, including applicable automatic extension options, are as follows (unaudited):
Insurance The Company carries comprehensive liability, fire, extended coverage, business interruption and rental loss insurance covering all of the properties in its portfolio under a blanket insurance policy, in addition to other coverages, such as trademark and pollution coverage that may be appropriate for certain of its properties. Additionally, the Company carries a directors’, officers’, entity and employment practices liability insurance policy that covers such claims made against the Company and its directors and officers. The Company believes the policy specifications and insured limits are appropriate and adequate for its properties given the relative risk of loss, the cost of the coverage and industry practice; however, its insurance coverage may not be sufficient to fully cover its losses. Concentration of Credit Risk The Company is subject to risks incidental to the ownership and operation of commercial real estate. These risks include, among others, the risks normally associated with changes in the general economic climate, trends in the retail industry, creditworthiness of tenants, competition for tenants and customers, changes in tax laws, interest rates, the availability of financing and potential liability under environmental and other laws. The Company’s portfolio of properties is dependent upon regional and local economic conditions and is geographically concentrated in the Northeast, Mid-Atlantic, Southeast and Southwest, which markets represented approximately 2%, 23%, 72% and 3%, respectively, of the total annualized base rent of the properties in its portfolio as of December 31, 2015. The Company’s geographic concentration may cause it to be more susceptible to adverse developments in those markets than if it owned a more geographically diverse portfolio. Additionally, the Company’s retail shopping center properties depend on anchor stores or major tenants to attract shoppers and could be adversely affected by the loss of, or a store closure by, one or more of these tenants. Regulatory and Environmental As the owner of the buildings on our properties, the Company could face liability for the presence of hazardous materials (e.g., asbestos or lead) or other adverse conditions (e.g., poor indoor air quality) in its buildings. Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if the Company does not comply with such laws, it could face fines for such noncompliance. Also, the Company could be liable to third parties (e.g., occupants of the buildings) for damages related to exposure to hazardous materials or adverse conditions in its buildings, and the Company could incur material expenses with respect to abatement or remediation of hazardous materials or other adverse conditions in its buildings. In addition, some of the Company’s tenants routinely handle and use hazardous or regulated substances and wastes as part of their operations at our properties, which are subject to regulation. Such environmental and health and safety laws and regulations could subject the Company or its tenants to liability resulting from these activities. Environmental liabilities could affect a tenant’s ability to make rental payments to the Company, and changes in laws could increase the potential liability for noncompliance. This may result in significant unanticipated expenditures or may otherwise materially and adversely affect the Company’s operations. The Company is not aware of any material contingent liabilities, regulatory matters or environmental matters that may exist. Litigation The Company is involved in various legal proceedings arising in the ordinary course of its business, including, but not limited to commercial disputes. The Company believes that such litigation, claims and administrative proceedings will not have a material adverse impact on its financial position or its results of operations. The Company records a liability when it considers the loss probable and the amount can be reasonably estimated. On July 10, 2008, one of the Company’s subsidiaries, Perimeter Associates, LLC (“Perimeter”), sued a tenant for breach of contract, guaranty of the contract and fraud related to an executed lease. In response, on August 22, 2008, the defendant filed a counterclaim against Perimeter for breach of contract, unjust enrichment and fraud. On April 8, 2013, the court found in favor of the defendant and assessed damages against Perimeter in the amount of $13,300. On or about May 8, 2013, Perimeter appealed the judgment of the lower court to the Oklahoma Supreme Court. Subsequent to the initial judgment, the defendant’s attorney applied to the court to be reimbursed for approximately $368,000 in legal fees incurred by the defendant during litigation. On July 9, 2013, the lower court awarded the defendant approximately $267,000 of the defendant’s legal fees. Perimeter amended its appeal with the Oklahoma Supreme Court to include the issue of the award of legal fees. On July 24, 2015, the Oklahoma Court of Civil Appeals affirmed the judgment against Perimeter, resulting in a total award of approximately $352,000 which includes interest and other fees. Perimeter then appealed the judgment to the Oklahoma Supreme Court, which on November 16, 2015 affirmed the judgment against Perimeter, resulting in a final judgment of $415,000, which was paid by Perimeter in December 2015. On May 22, 2013, WHLR-HPA-1, LLC, (“Harp’s”), a subsidiary of the Operating Partnership that owns the Trust’s Harps at Harbor Point (“Harp’s Food Store”) and Harbor Point properties, filed suit against Crossland Heavy Contractors (“Crossland”) for equitable relief to divide a mechanic and materialmen’s lien (“Lien”) of approximately $856,000 filed on three properties which includes the Harp’s Food Store property and two adjacent properties owned by affiliates of the Trust. Crossland subsequently filed a counterclaim adding the Trust, among others, as a defendant to the case. The Lien related to cost overruns incurred by Crossland during the construction and development process that occurred prior to the Trust acquiring the Harp’s Food Store property. On October 22, 2013, the parties reached a settlement whereby it was agreed that the Lien would be paid in full by November 22, 2013. Since the Lien related to construction and development costs incurred prior to the Trust acquiring the property, the affiliated parties that developed the property intended to fully satisfy the Lien, resulting in no liability to the Trust. However, since there was no evidence that the affiliated parties had finalized their funding sources to satisfy the Lien, management concluded that the appropriate treatment was to accrue the $856,000 in the September 30, 2013 financial statements. On January 31, 2014, Crossland removed the lien as the affiliates of the Trust fulfilled their obligation to pay the Lien. Accordingly, the accrual was reversed as of December 31, 2013 since the Lien was satisfied without liability to the Trust and the 2013 financial statements had not been issued when the Lien was released. |
Related Party Transactions |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | Related Party Transactions Prior to the October 24, 2014 acquisition, the Operating Companies and their affiliated companies provided administrative services to the Company, including management, administrative, accounting, marketing, development and design services. Pursuant to the terms of the Company’s administrative services agreement with WM, responsibilities included administering the Company’s day-to-day business operations, identifying and acquiring targeted real estate investments, overseeing the management of the investments, and handling the disposition of the real estate investments. The Company benefits from Mr. Wheeler's affiliates that specialize in other real estate investment activities, including (i) Wheeler Capital, LLC, a capital investment firm specializing in venture capital, financing, and small business loans, (ii) Site Applications, LLC, a full service facility company, equipped to handle all levels of building maintenance, (iii) Wheeler Construction, LLC, a construction management company and (iv) TESR, LLC, a tenant relations company, serving as a liaison between property management, lease administration and leasing and working to provide information on the health and fiscal viability of each tenant. Prior to being acquired in October 2014, WI leased the Company’s Riversedge property under a 10-year operating lease expiring in November 2017, with four five year renewal options available. The lease required monthly base rent payments of $24,000 and provided for annual increases throughout the term of the lease and subsequent option periods. Additionally, WI reimbursed the Company for a portion of the property’s operating expenses and real estate taxes. The following summarizes related party activity as of and for the years ended December 31, 2015 and 2014. The amounts disclosed below reflect the activity between the Company, Mr. Wheeler's affiliates and the Operating Companies through the date of acquisition. All amounts subsequent to the acquisition date have been eliminated in consolidation.
The Company, through the Operating Partnership, is performing development services for Pineland Associates, LLC and several of its affiliated parties (“Pineland”), all of which are related parties of the Company, for the redevelopment of Pineland Station Shopping Center in Hilton Head, South Carolina. Pineland is responsible for development fees on the hard construction costs and reimbursing the Company for any costs advanced towards the project. As of December 31, 2015, the Company had advanced approximately $1.46 million towards the project. This amount is included in the "Deferred costs and other assets" line item on the consolidated balance sheet. |
Schedule II-Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule II-Valuation and Qualifying Accounts |
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Schedule III-Real Estate and Accumulated Depreciation |
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SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule III-Real Estate and Accumulated Depreciation | Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation December 31, 2015
Wheeler Real Estate Investment Trust, Inc. and Subsidiaries Schedule III-Real Estate and Accumulated Depreciation
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Accounting Policies [Abstract] | |
Assets Held For Sale | Assets Held For Sale The Company records assets as held for sale when management has committed to a plan to sell the assets, actively seeks a buyer for the assets, and the consummation of the sale is considered probable and is expected within one year. |
Investment Properties | Investment Properties The Company records investment properties and related intangibles at cost or fair value upon acquisition less accumulated depreciation and amortization. Investment properties include both acquired and constructed assets. Improvements and major repairs and maintenance are capitalized when the repair and maintenance substantially extends the useful life, increases capacity or improves the efficiency of the asset. All other repair and maintenance costs are expensed as incurred. The Company capitalizes interest on projects during periods of construction until the projects reach the completion point that corresponds with their intended purpose. The Company allocates the purchase price of acquisitions to the various components of the asset based upon the fair value of each component which may be derived from various observable or unobservable inputs and assumptions. Also, the Company may utilize third party valuation specialists. These components typically include buildings, land and any intangible assets related to out-of-market leases, tenant relationships and in-place leases the Company determines to exist. The Company determines fair value based on estimated cash flow projections that utilize appropriate discount and capitalization rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends and specific market and economic conditions that may affect the property. Factors considered by management in the analysis of determining the as-if-vacant property value include an estimate of carrying costs during the expected lease-up periods considering market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and estimates of lost rentals at market rates during the expected lease-up periods, tenant demand and other economic conditions. Management also estimates costs to execute similar leases including leasing commissions, tenant improvements, legal and other related expenses. Intangibles related to out-of-market leases, tenant relationships and in-place lease value are recorded as acquired lease intangibles and are amortized as an adjustment to rental revenue or amortization expense, as appropriate, over the remaining terms of the underlying leases. Premiums or discounts on acquired out-of-market debt are amortized to interest expense over the remaining term of such debt. The Company records depreciation on buildings and improvements utilizing the straight-line method over the estimated useful life of the asset, generally 5 to 40 years. The Company reviews depreciable lives of investment properties periodically and makes adjustments to reflect a shorter economic life, when necessary. Tenant allowances, tenant inducements and tenant improvements are amortized utilizing the straight-line method over the term of the related lease or occupancy term of the tenant, if shorter. Amounts allocated to buildings are depreciated over the estimated remaining life of the acquired building or related improvements. The Company amortizes amounts allocated to tenant improvements, in-place lease assets and other lease-related intangibles over the remaining life of the underlying leases. The Company also estimates the value of other acquired intangible assets, if any, and amortizes them over the remaining life of the underlying related intangibles. The Company reviews investment properties for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of investment properties may not be recoverable, but at least annually. These circumstances include, but are not limited to, declines in the property’s cash flows, occupancy and fair market value. The Company measures any impairment of investment property when the estimated undiscounted operating income before depreciation and amortization, plus its residual value, is less than the carrying value of the property. To the extent impairment has occurred, the Company charges to income the excess of the carrying value of the property over its estimated fair value. The Company estimates fair value using unobservable data such as operating income, estimated capitalization rates, or multiples, leasing prospects and local market information. The Company may decide to sell properties that are held for use and the sale prices of these properties may differ from their carrying values. The Company did not record any impairment adjustments to its properties during the years ended December 31, 2015, 2014 and 2013. |
Conditional Asset Retirement Obligation | Conditional Asset Retirement Obligation A conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement depends on a future event that may or may not be with the Company’s control. Currently, the Company does not have any conditional asset retirement obligations. However, any such obligations identified in the future would result in the Company recording a liability if the fair value of the obligation can be reasonably estimated. Environmental studies conducted at the time the Company acquired its properties did not reveal any material environmental liabilities, and the Company is unaware of any subsequent environmental matters that would have created a material liability. The Company believes that its properties are currently in material compliance with applicable environmental, as well as non-environmental, statutory and regulatory requirements. The Company did not record any conditional asset retirement obligation liabilities during the years ended December 31, 2015, 2014 and 2013. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of 90 days or less or easily converted into known amounts of cash to be cash and cash equivalents without a significant cost to the Company. Cash equivalents are carried at cost, which approximates fair value. Cash equivalents consist primarily of bank operating accounts and money markets. Financial instruments that potentially subject the Company to concentrations of credit risk include its cash and cash equivalents and its trade accounts receivable. The Company places its cash and cash equivalents with institutions of high credit quality. The Company places its cash and cash equivalents on deposit with financial institutions in the United States. Beginning December 31, 2010, through December 31, 2013, all noninterest-bearing transaction accounts were fully insured by the Federal Deposit Insurance Company (“FDIC”), regardless of the balance of the account, at all FDIC-insured institutions. However, this provision expired on December 31, 2013 and beginning January 1, 2014 noninterest-bearing deposits now receive the same $250,000 insurance coverage provided to a depositor’s other deposit accounts held at an FDIC-insured institution. |
Tenant Receivables and Unbilled Rent | Tenant Receivables and Unbilled Rent Tenant receivables include base rents, tenant reimbursements and receivables attributable to recording rents on a straight-line basis. The Company determines an allowance for the uncollectible portion of accrued rents and accounts receivable based upon customer credit-worthiness (including expected recovery of a claim with respect to any tenants in bankruptcy), historical bad debt levels, and current economic trends. The Company considers a receivable past due once it becomes delinquent per the terms of the lease. The Company’s standard lease form considers a rent charge past due after five days. A past due receivable triggers certain events such as notices, fees and other allowable and required actions per the lease. As of December 31, 2015 and 2014, the Company’s allowance for uncollectible accounts totaled $411,394 and $186,517, respectively. During the years ended December 31, 2015, 2014 and 2013, the Company recorded provisions for credit losses in the amount of $243,029, $60,841 and $106,828, respectively, related to tenant receivables that were specifically identified as potentially uncollectible based on the an assessment of the tenant’s credit-worthiness. During the years ended December 31, 2015, 2014 and 2013, the Company did not realize any recoveries related to tenant receivables previously charged off. |
Deferred Costs and Other Assets | Deferred Costs and Other Assets The Company’s deferred costs and other assets consist primarily of leasing commissions, fees incurred to obtain long-term financing, capitalized legal and marketing costs and tenant relationship intangibles associated with acquisitions, and various property escrow accounts for real estate taxes, insurance and tenant improvements and replacements. The Company records amortization of financing costs over the terms of the respective loans or agreements. The Company’s lease origination costs consist primarily of the portion of property acquisitions allocated to lease originations and commissions paid in connection with lease originations. |
Revenue Recognition | Revenue Recognition The Company retains substantially all of the risks and benefits of ownership of the investment properties and accounts for its leases as operating leases. The Company accrues minimum rents on a straight-line basis over the terms of the respective leases which results in an unbilled rent asset or deferred rent liability being recorded on the balance sheet. Additionally, certain of the lease agreements contain provisions that grant additional rents based on tenants’ sales volumes (contingent or percentage rent). Percentage rents are recognized when the tenants achieve the specified targets as defined in their lease agreements. During the years ended December 31, 2015, 2014 and 2013, the Company recognized percentage rents of $162,608, $90,437 and $15,472, respectively. The Company’s leases generally require the tenant to reimburse the Company for a substantial portion of its expenses incurred in operating, maintaining, repairing, insuring and managing the shopping center and common areas (collectively defined as Common Area Maintenance or “CAM” expenses). The Company includes these reimbursements, along with other revenue derived from late fees and seasonal events, under the Consolidated Statements of Operations caption "Tenant reimbursements and other income." This significantly reduces the Company’s exposure to increases in costs and operating expenses resulting from inflation or other outside factors. The Company accrues reimbursements from tenants for recoverable portions of all these expenses as revenue in the period the applicable expenditures are incurred. The Company calculates the tenant’s share of operating costs by multiplying the total amount of the operating costs by a fraction, the numerator of which is the total number of square feet being leased by the tenant, and the denominator of which is the average total square footage of all leasable buildings at the property. The Company also receives escrow payments for these reimbursements from substantially all its tenants throughout the year. The Company recognizes differences between estimated recoveries and the final billed amounts in the subsequent year. These differences were not material for the years ended December 31, 2015, 2014 and 2013. The Company recognizes lease termination fees in the period that the lease is terminated and collection of the fees is reasonably assured. Upon early lease termination, the Company provides for losses related to unrecovered intangibles and other assets. The Company did not recognize any lease termination fees during the years ended December 31, 2015, 2014 and 2013. |
Income Taxes | Income Taxes The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code and applicable Treasury regulations relating to REIT qualification. In order to maintain this REIT status, the regulations require the Company to distribute at least 90% of its taxable income to stockholders and meet certain other asset and income tests, as well as other requirements. The Company made no provision for federal income taxes for the REIT in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT, it will be subject to tax at regular corporate rates for the years in which it fails to qualify. If the Company loses its REIT status it could not elect to be taxed as a REIT for five years unless the Company’s failure to qualify was due to reasonable cause and certain other conditions were satisfied. Management has evaluated the effect of the guidance provided by GAAP on Accounting for Uncertainty of Income Taxes and has determined that the Company had no uncertain income tax positions that could have a significant effect on the financial statements for the years ended December 31, 2015, 2014 and 2013. As the REIT was formed in November 2012, it is subject to examination by the Internal Revenue Service and state tax authorities from the date of formation. |
Taxable REIT Subsidiary Cost Allocation | Taxable REIT Subsidiary Cost Allocation The Company’s overall philosophy regarding cost allocation centers around the premise that WHLR exists to acquire, lease and manage properties for the benefit of its investors. Accordingly, a majority of the Company’s operations occur at the property level. Each property must carry its own weight by absorbing the costs associated with generating its revenues. Additionally, leases generally allow the Company to pass through to the tenant most of the costs involved in operating the property, including, but not limited to, the direct costs associated with owning and maintaining the property (landscaping, repairs and maintenance, taxes, insurance, etc.), property management and certain administrative costs. Service vendors bill the majority of the direct costs of operating the properties directly to the REIT Properties and Non-REIT Properties and each property pays them accordingly. The Non-REIT Properties pay WRE property management and/or asset management fees of 3% and 2% of collected revenues, respectively. The Non-REIT Properties also pay WRE leasing commissions based on the total contractual revenues to be generated under the new/renewed lease agreement (6% for new leases and 3% for renewals). Compensation and benefits paid to employees of the Company represent the largest component of costs incurred to acquire, manage, lease and administer the properties. The Company believes that every employee position exists to either directly or indirectly to perform these functions. Therefore, the Company allocates compensation and benefits to the various functions of the Company based on an estimate of how each employee spends their time. The Company allocates actual costs attributed to property management costs to the TRS on a pro rata basis based on total property revenues generated by the Non-REIT Properties. The Company allocates actual leasing costs to the TRS on a pro rata basis based on total leasing commissions generated by the Non-REIT Properties. Currently, the TRS does not acquire properties for third parties so the Company does not allocate acquisition related costs to the TRS. |
Financial Instruments | Financial Instruments The carrying amount of financial instruments included in assets and liabilities approximates fair market value due to their immediate or short-term maturity. |
Use of Estimates | Use of Estimates The Company has made estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and revenues and expenses during the reported period. The Company’s actual results could differ from these estimates. |
Advertising Costs | Advertising Costs The Company expenses advertising and promotion costs as incurred. |
Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests is the portion of equity in the Operating Partnership not attributable to the Trust. The ownership interests not held by the parent are considered noncontrolling interests. Accordingly, noncontrolling interests have been reported in equity on the consolidated balance sheets but separate from the Company’s equity. On the consolidated statements of operations, the subsidiaries are reported at the consolidated amount, including both the amount attributable to the Company and noncontrolling interests. Consolidated statements of changes in equity include beginning balances, activity for the period and ending balances for shareholders’ equity, noncontrolling interests and total equity. The noncontrolling interest of the Operating Partnership common unit holders is calculated by multiplying the noncontrolling interest ownership percentage at the balance sheet date by the Operating Partnership’s net assets (total assets less total liabilities). The noncontrolling interest percentage is calculated at any point in time by dividing the number of units not owned by the Company by the total number of units outstanding. The noncontrolling interest ownership percentage will change as additional units are issued or as units are exchanged for the Company’s Common Stock. In accordance with GAAP, any changes in the value from period to period are charged to additional paid-in capital. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-08, "Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity" ("ASU 2014-08"). This ASU changes the criteria for reporting discontinued operations while enhancing disclosures in this area. Under this ASU, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the Company's operations and financial results. Examples include a disposal of a major geographical area, a major line of business, or a major equity method investment. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. The adoption of ASU 2014-08 was effective prospectively for reporting periods beginning on or after December 15, 2014. The Company adopted ASU 2014-08 on January 1, 2015 and used its guidance in determining the effect of discontinued operations as disclosed in Note 5. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” which supersedes the revenue recognition requirements of Accounting Standards Codification (“ASC”) Topic 605, “Revenue Recognition” and most industry-specific guidance on revenue recognition throughout the ASC. The new standard is principles based and provides a five step model to determine when and how revenue is recognized. The core principle of the new standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new standard will be effective for the Company in the first quarter of the year ending December 31, 2018 and can be applied either retrospectively to all periods presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted. The Company is currently evaluating the impact of adoption of the new standard on its consolidated financial statements. In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements - Going Concern (Subtopic 205-40)." This ASU defines management's responsibility to evaluate whether there is substantial doubt about an organization's ability to continue as a going concern and provides guidance on required financial statement footnote disclosures. This ASU is effective for annual periods ending after December 15, 2016. The Company will adopt the ASU in 2016. In April 2015, the FASB issued ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." This new guidance requires the presentation of unamortized debt issuance costs to be shown in the liabilities section of the consolidated balance sheets as a reduction of the principal amount of the associated debt, rather than as an asset. ASU 2015-03 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a retrospective approach by restating prior period comparative consolidated balance sheets. In August 2015, the FASB issued ASU No. 2015-15, "Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements", which clarifies that absent authoritative guidance in ASU 2015-03 for debt issuance costs related to line-of-credit arrangements, the staff of the SEC would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company does not expect the adoption of ASU 2015-03 to materially impact its financial position or results of operations. In September 2015, the FASB issued ASU 2015-16, "Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments". This new guidance requires that the acquirer recognizes adjustments to preliminary acquisition values and account for the cumulative effect of any required adjustments in the period in which they are determined. ASU 2015-16 is effective for fiscal years beginning after December 15, 2015 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a prospective approach for adjustments that occur after the effective date. The Company does not expect the adoption of ASU 2015-16 to materially impact its financial position or results of operations. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." ASU 2016-02 is intended to improve financial reporting about leasing transactions. The ASU affects all companies and other organizations that lease assets such as real estate, airplanes, and manufacturing equipment. The ASU will require organizations that lease assets referred to as “Lessees” to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. An organization is to provide disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from leases. These disclosures include qualitative and quantitative requirements concerning additional information about the amounts recorded in the financial statements. Under the new guidance, a lessee will be required to recognize assets and liabilities for leases with lease terms of more than 12 months. Consistent with current GAAP, the recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP which requires only capital leases to be recognized on the balance sheet the new ASU will require both types of leases (i.e. operating and capital) to be recognized on the balance sheet. The FASB lessee accounting model will continue to account for both types of leases. The capital lease will be accounted for in substantially the same manner as capital leases are accounted for under existing GAAP. The operating lease will be accounted for in a manner similar to operating leases under existing GAAP, except that lessees will recognize a lease liability and a lease asset for all of those leases. The leasing standard will be effective for calendar year-end public companies beginning after December 15, 2018. Public companies will be required to adopt the new leasing standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption will be permitted for all companies and organizations upon issuance of the standard. For calendar year-end public companies, this means an adoption date of January 1, 2019 and retrospective application to previously issued annual and interim financial statements for 2018 and 2017. Lessees with a large portfolio of leases are likely to see a significant increase in balance sheet assets and liabilities. See Note 9 for the Company’s current lease commitments. The Company is currently evaluating the impact of ASU 2016-02 on its financial statements. Other accounting standards that have been issued or proposed by the FASB or other standard-setting bodies are not currently applicable to the Company or are not expected to have a significant impact on the Company’s financial position, results of operations and cash flows. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to make their presentation comparable with the current period. These reclassifications had no impact on net income. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Deferred Costs, Net of Amortization and Other Assets | Details of these deferred costs, net of amortization and other assets are as follows:
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Future Amortization of Lease Origination Costs, Financing Costs and in Place Leases | Future amortization of lease origination costs, leases in place, financing costs, legal and marketing costs and tenant relationships is as follows:
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Corporate General And Administrative Expense | A detail for the "Corporate general & administrative" line item from the consolidated statements of operations is presented below:
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Investment Properties (Tables) |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Properties | Investment properties consist of the following:
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Summary of Consideration Paid and Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following summarizes the consideration paid and the fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
a. Represents the fair value of the net investment properties acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using following approaches: i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, “go dark” analyses and residual calculations incorporating the land values; and iii. the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, in place leases and legal and marketing fees associated with replacing existing leases. The income approach was used to determine the fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts. Any remaining value which could not be allocated to identifiable intangibles was allocated to goodwill. Goodwill recognized from the acquisition represents, among other things, the future economic benefits arising from expected synergies and is consistent with the Company's stated intentions to become an internally managed REIT. The acquired goodwill is fully deductible for income tax purposes. c. Represents the fair value of accounts payable, accrued expenses and other liabilities. It was determined that carrying value approximated fair value for all amounts in these categories. d. Represents the fair value of above/below market leases. The income approach was used to determine the fair value of above/below market leases using market rental rates for similar properties. e. Represents the components of purchase consideration paid. The following summarizes the consideration paid and the fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
a. Represents the fair value of the net investment properties acquired which includes land, buildings, site improvements and tenant improvements. The fair value was determined using following approaches: i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, “go dark” analyses and residual calculations incorporating the land values; and iii. the cost approach valuation methodology for site and tenant improvements, including replacement costs and prevailing quoted market rates. b. Represents the fair value of lease intangibles and other assets. Lease intangibles include leasing commissions, in place leases, legal and marketing fees and tenant relationships associated with replacing existing leases. The income approach was used to determine the fair value of these intangible assets which included estimated market rates and expenses. It was determined that carrying value approximated fair value for other asset amounts. c. Represents the fair value of above/below market leases. The income approach was used to determine the fair value of above/below market leases using market rental rates for similar properties. d. Represents the components of purchase consideration paid. The following summarizes the consideration paid and the fair values of assets acquired and liabilities assumed in conjunction with the acquisitions described above, along with a description of the methods used to determine fair value. In determining fair values, the Company considered many factors including, but not limited to, cash flows, market cap rates, location, occupancy rates, appraisals, other acquisitions and management’s knowledge of the current acquisition market for similar properties.
i. the market approach valuation methodology for land by considering similar transactions in the markets; ii. a combination of the cost approach and income approach valuation methodologies for buildings, including replacement cost evaluations, "go dark" analyses and residual calculations incorporating the land values; and
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Pro Forma Condensed Consolidated and Combined Financial Information | Unaudited pro forma consolidated financial information is presented below for all 2013, 2014 and 2015 acquisitions, excluding Bixby Commons, Starbucks/Verizon, Jenks Reasors, DF I-Courtland, Edenton Commons, DF-I Moyock, Harbor Point, DF I-Berkley, Laskin Road, Brook Run Properties, Columbia Fire Station, Carolina Place, and Hilton Head Land. The unaudited pro forma information presented below illustrates the Company’s pro forma financial results assuming the acquisitions had been consummated as of the beginning of the earliest period presented. The pro forma results include adjustments for depreciation and amortization associated with acquired tangible and intangible assets, straight-line rent adjustments and interest expense related to debt incurred. Unaudited pro forma financial information has not been presented for Bixby Commons, Starbucks/Verizon, Jenks Reasors, DF I-Courtland, Edenton Commons, DF-I Moyock, Harbor Point, DF I-Berkley, Laskin Road, Brook Run Properties, Columbia Fire Station, Carolina Place, and Hilton Head Land as the Company’s management has determined that their inclusion would not be meaningful due to limited or no unrelated third party operating history.
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Goodwill (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||
Goodwill [Line Items] | |||||||||||||||||||||||||
Schedule of Goodwill [Table Text Block] | As part of the acquisition of the Operating Companies on October 24, 2014, the Company recorded preliminary goodwill of $7,004,072. In June 2015, the Company finalized its valuation of the Operating Companies. In accordance with the valuation, the Company has recorded a fair value discount to the $6,750,000 in common units issued for the acquisition of the Operating Companies due to the one year restriction on their conversion into shares of common stock, and reallocated a portion of goodwill to finite-lived intangibles as follows:
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Assets Held for Sale and Discontinued Operations (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations [Table Text Block] | The following is a summary of the income from discontinued operations for the years ended December 31, 2015, 2014 and 2013:
In August 2015, the Company’s management and Board of Directors committed to a plan to sell Bixby Commons, Jenks Reasors, Harps at Harbor Point, Starbucks/Verizon and the ground leases for Ruby Tuesday’s and Outback Steakhouse at Pierpont Centre (the “Freestanding Properties”) as part of the Company’s continuous evaluation of strategic alternatives. Accordingly, the Freestanding Properties have been classified as held for sale and the results of their operations have been classified as discontinued operations for all periods presented. Management expects that the sale of the Freestanding Properties will occur within one year and the Company will receive no residual cash flows once the Freestanding Properties are disposed. On October 19, 2015, the Company completed its sale of Jenks Reasors for a contract price of approximately $12.2 million, resulting in a gain of approximately $820,000. On October 20, 2015, the Company completed its sale of Harps at Harbor Point for a contract price of approximately $5.0 million, resulting in a gain of approximately $642,000. On October 27, 2015, the Company completed its sale of Bixby Commons for a contract price of approximately $11.0 million, resulting in a gain of approximately $642,000. As of December 31, 2015 and 2014, assets held for sale consisted of the following:
As of December 31, 2015 and 2014, liabilities associated with assets held for sale consisted of the following:
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Loans Payable (Tables) |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Loans Payable | The Company’s loans payable related to continuing operations consist of the following:
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Summary of Company's Scheduled Principal Repayments on Indebtedness | The Company’s scheduled principal repayments on indebtedness as of December 31, 2015 are as follows:
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Rentals under Operating Leases (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Future Minimum Rentals to be Received under Noncancelable Tenant Operating Leases | Future minimum rentals to be received under noncancelable tenant operating leases for each of the next five years and thereafter, excluding CAM and percentage rent based on tenant sales volume, as of December 31, 2015 are as follows:
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Equity Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends Declared | Dividends were made to holders of common units, common shares and preferred shares as follows:
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Commitments and Contingencies (Tables) |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Future Minimum Lease Payments Due under Ground Lease | Future minimum lease payments due under the operating leases, including applicable automatic extension options, are as follows (unaudited):
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Related Party Transactions (Tables) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Related Party Activity | The following summarizes related party activity as of and for the years ended December 31, 2015 and 2014. The amounts disclosed below reflect the activity between the Company, Mr. Wheeler's affiliates and the Operating Companies through the date of acquisition. All amounts subsequent to the acquisition date have been eliminated in consolidation.
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Summary of Significant Accounting Policies - Details of Deferred Costs, Net of Amortization and Other Assets (Detail) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
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Deferred Costs And Other Assets [Line Items] | ||
Lease origination costs, net | $ 1,376,652 | $ 1,773,279 |
Financing costs, net | 4,711,375 | 3,202,542 |
Property escrows | 6,764,375 | 4,242,499 |
Deposits on acquisitions | 2,012,996 | 623,350 |
Tenant relationships | 12,060,172 | 4,485,699 |
Other | 588,463 | 392,788 |
Total Deferred Costs and Other Assets, net | 46,735,275 | 25,440,923 |
Leases In Place [Member] | ||
Deferred Costs And Other Assets [Line Items] | ||
Total Deferred Costs and Other Assets, net | 19,091,917 | 10,522,597 |
Legal & Marketing Costs [Member] | ||
Deferred Costs And Other Assets [Line Items] | ||
Total Deferred Costs and Other Assets, net | $ 129,325 | $ 198,169 |
Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Schedule of SG&A (Details) - USD ($) |
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Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Accounting Policies [Abstract] | |||
Acquisition costs | $ 3,871,037 | $ 3,787,907 | $ 2,179,023 |
Professional fees | 1,596,870 | 2,247,052 | 894,950 |
Salaries and compensation | 3,428,998 | 1,326,434 | 0 |
Corporate administration | 1,198,480 | 1,218,033 | 1,188,456 |
Equity, debt & refinancing costs | 2,655,474 | 0 | 0 |
Travel | 445,732 | 540,991 | 262,046 |
Advertising | 218,180 | 176,950 | 45,833 |
Taxes and licenses | 65,318 | 149,643 | 24,231 |
Total | $ 13,480,089 | $ 9,447,010 | $ 4,594,539 |
Investment Properties - Investment Properties (Detail) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Real Estate Properties [Line Items] | ||
Investment properties at cost | $ 251,469,575 | $ 136,441,226 |
Land held for development | 12,353,963 | 6,846,918 |
Less accumulated depreciation and amortization | (12,704,944) | (7,447,165) |
Investment properties, net | 238,764,631 | 128,994,061 |
Land [Member] | ||
Real Estate Properties [Line Items] | ||
Investment properties at cost | 50,777,143 | 32,171,097 |
Buildings and Improvements [Member] | ||
Real Estate Properties [Line Items] | ||
Investment properties at cost | $ 188,338,469 | $ 97,423,211 |
Investment Properties - Summary of Consideration Paid and Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) |
12 Months Ended | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Investment property | $ 114,211,725 | [1] | $ 53,081,904 | [1] | $ 59,487,727 | [2] | |||||||||||||||||||
Tenant and other receivables and other assets | [3] | 306,814 | |||||||||||||||||||||||
Lease intangibles and other assets | [3] | 26,827,214 | 10,188,493 | ||||||||||||||||||||||
Goodwill | [3] | 5,485,823 | |||||||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | [4] | (623,167) | |||||||||||||||||||||||
Below market leases | (4,021,671) | [5] | (1,991,645) | [5] | (1,038,686) | [6] | |||||||||||||||||||
Fair value of net assets acquired | 141,183,708 | 70,422,068 | 70,940,873 | ||||||||||||||||||||||
Consideration paid with cash and debt | 138,115,158 | 63,616,509 | 69,995,602 | ||||||||||||||||||||||
Consideration paid with common units | 3,068,550 | 6,805,559 | 945,271 | ||||||||||||||||||||||
Total consideration | 141,183,708 | [7] | 70,422,068 | [7] | 70,940,873 | [8] | |||||||||||||||||||
Acquisitions 2013 [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Investment property | [2] | 48,576,763 | |||||||||||||||||||||||
Below market leases | [6] | (876,736) | |||||||||||||||||||||||
Fair value of net assets acquired | 55,094,337 | ||||||||||||||||||||||||
Consideration paid with cash and debt | 54,149,066 | ||||||||||||||||||||||||
Consideration paid with common units | 945,271 | ||||||||||||||||||||||||
Total consideration | [8] | 55,094,337 | |||||||||||||||||||||||
Food Lions [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Investment property | [2] | 10,910,964 | |||||||||||||||||||||||
Below market leases | [6] | (161,950) | |||||||||||||||||||||||
Fair value of net assets acquired | 15,846,536 | ||||||||||||||||||||||||
Consideration paid with cash and debt | 15,846,536 | ||||||||||||||||||||||||
Consideration paid with common units | 0 | ||||||||||||||||||||||||
Total consideration | [8] | 15,846,536 | |||||||||||||||||||||||
Lease Intangibles and Other Assets [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [9] | 11,112,938 | |||||||||||||||||||||||
Lease Intangibles and Other Assets [Member] | Acquisitions 2013 [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [9] | 6,720,126 | |||||||||||||||||||||||
Lease Intangibles and Other Assets [Member] | Food Lions [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [9] | 4,392,812 | |||||||||||||||||||||||
Above Market Leases [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [6] | 1,378,894 | |||||||||||||||||||||||
Above Market Leases [Member] | Acquisitions 2013 [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [6] | 674,184 | |||||||||||||||||||||||
Above Market Leases [Member] | Food Lions [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [6] | $ 704,710 | |||||||||||||||||||||||
Above Market Leases [Member] | |||||||||||||||||||||||||
Business Acquisition [Line Items] | |||||||||||||||||||||||||
Lease intangibles and other assets | [5] | $ 4,166,440 | $ 3,973,846 | ||||||||||||||||||||||
|
Investment Properties - Unaudited Pro forma Financial Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Real Estate [Abstract] | |||
Rental revenue | $ 26,600,904 | $ 26,412,478 | $ 26,125,877 |
Net loss | (15,781,969) | (14,654,944) | (15,111,728) |
Net loss attributable to Wheeler REIT | (12,699,185) | (12,653,283) | (11,066,293) |
Net loss attributable to Wheeler REIT common shareholders | $ (98,971,223) | $ (15,371,540) | $ (11,207,711) |
Basic loss per share | $ (2.54) | $ (2.09) | $ (2.43) |
Diluted loss per share | $ (2.54) | $ (2.09) | $ (2.43) |
Goodwill (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Oct. 24, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Goodwill [Line Items] | ||||
Goodwill, beginning balance, January 1, 2015 | $ 7,004,072 | |||
Fair value discount on common units issued for acquisition | (1,181,250) | |||
Goodwill allocated to finite-lived intangibles | (336,999) | |||
Goodwill, ending balance, December 31, 2015 | 5,485,823 | $ 7,004,072 | ||
Common units issued for the acquisition of the Operating Companies | $ 3,068,550 | $ 6,805,559 | $ 945,271 | |
Operating Companies [Member] | ||||
Goodwill [Line Items] | ||||
Common units issued for the acquisition of the Operating Companies | $ 6,750,000 |
Loans Payable - Summary of Company's Scheduled Principal Repayments on Indebtedness (Detail) - USD ($) |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Debt Disclosure [Abstract] | ||
2015 | $ 9,065,387 | |
2016 | 7,035,351 | |
2017 | 14,936,672 | |
2018 | 2,505,641 | |
2019 | 9,175,072 | |
Thereafter | 146,622,333 | |
Total principal maturities | $ 189,340,456 | $ 122,296,547 |
Rentals under Operating Leases - Future Minimum Rentals to be Received under Noncancelable Tenant Operating Leases (Detail) |
Dec. 31, 2015
USD ($)
|
---|---|
Leases [Abstract] | |
2016 | $ 26,230,245 |
2017 | 23,246,692 |
2018 | 17,746,813 |
2019 | 13,430,529 |
2020 | 8,839,220 |
Thereafter | 14,894,519 |
Total | $ 104,388,018 |
Commitments and Contingencies - Future Minimum Lease Payments Due under Ground Lease (Detail) |
Dec. 31, 2015
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2016 | $ 171,208 |
2017 | 175,104 |
2018 | 178,095 |
2019 | 145,384 |
2020 | 77,611 |
Thereafter | 2,961,793 |
Total | $ 3,709,195 |
Related Party Transactions - Additional Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
Option
| |
Wheeler Interests [Member] | |
Related Party Transaction [Line Items] | |
Property provided under the lease | 10 years |
Lease expiration date | 2017-11 |
Rent payment | $ 24,000 |
Number of renewal options available | Option | 4 |
Lease renewal period | 5 years |
Pineland Shopping Center [Member] | |
Related Party Transaction [Line Items] | |
Advance amount outstanding at year-end | $ 1,460,000 |
Related Party Transactions - Summary of Related Party Activity (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Wheeler Interests and Affiliates [Member] | |||
Related Party Transaction [Line Items] | |||
Amounts paid to Wheeler Interests and its affiliates | $ 209,277 | $ 3,827,990 | $ 1,412,126 |
Amounts due to Wheeler Interests and its affiliates | 481,298 | 463,281 | 174,683 |
Wheeler Interests [Member] | |||
Related Party Transaction [Line Items] | |||
Rent and reimbursement income received from Wheeler Interests | 0 | 329,718 | 288,969 |
Rent and other tenant receivables due from Wheeler Interests | $ 0 | $ 0 | $ 373,119 |
Schedule II - Valuation and Qualifying Accounts (Detail) - Allowance for Doubtful Accounts [Member] - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Balance at Beginning of Year | $ 186,517 | $ 182,078 |
Charged to Costs and Expense | 243,029 | 60,841 |
Deductions from Reserves | (18,152) | (56,402) |
Balance at End of Year | $ 411,394 | $ 186,517 |
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