Wheeler Real Estate Investment Trust, Inc. · NASDAQ:WHLR
Wheeler Real Estate Investment Trust — Investor Presentation (September 2017)
34 slides from Wheeler Real Estate Investment Trust's investor presentation, Sep 13, 2017
Slide 1: September 2017
NASDAQ: WHLR September 2017 Exhibit 99.1
Slide 2: Safe Harbor
SAFE HARBOR This presentation may contain “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. When the Company uses words such as “may,” “will,” “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do no
Slide 3: Corporate Profile
CORPORATE PROFILE Headquartered in Virginia Beach, VA, Wheeler Real Estate Investment Trust, Inc. is a fully-integrated, self-managed commercial real estate investment company focused on acquiring and managing income-producing retail properties with a primary focus on grocery-anchored centers. Wheel
Slide 4: Company Overview
COMPANY OVERVIEW Wheeler is an internally-managed REIT focused on acquiring well-located, necessity-based retail properties In November 2012, the Company listed on the NASDAQ with eight assets and a market cap of $15.8 million Targets grocery-anchored shopping centers in secondary and tertiary marke
Slide 5: Key Investment Highlights
Nine directors – 7 independent directors and 2 non-independent directors Representation from institutional shareholders as well as former, REIT executives Newly formed Operating Committee for operational review, strategic planning, and streamlined interaction with management KEY INVESTMENT HIGHLIGHT
Slide 6: Management Team
Wilkes Graham Chief Financial Officer Over 18 years experience in the real estate and financial services industries Previously served as Director of Research and as a Senior Sell-Side Equity Research Analyst at Compass Point Research & Trading, LLC As a Real Estate Analyst, he forecasted earnings an
Slide 7: Integrated Platform
Integrated Platform Wheeler restructured its organization in October 2014 bringing acquisition, leasing, property management, development and re-development services in–house Over 50 associates between the Company’s headquarters in Virginia Beach and Charleston regional office Ability to scale platf
Slide 8: Tenant Overview
Type GLA % of GLA % of Annualized Base Rent Tenant Bond Rating (S&P / Moody’s) (2) Grocery 554,073 11.30 12.24 CCC+ / B3 Grocery 325,576 6.64 6.10 BBB / Baa2 Grocery 136,343 2.78 3.07 NR (3) Grocery 186,064 3.80 2.97 BBB / Baa1 (2) Grocery 179,175 3.65 2.80 NR Retail 114,298 2.33 1.55 NR (3) Grocery
Slide 9: Development Pipeline: Sea Turtle Marketplace
DEVELOPMENT PIPELINE CREATES ADDITIONAL REVENUE OPPORTUNITIES Sea Turtle Marketplace Development expected to generate significant fee and interest income 146,842 square foot shopping center with prime, in-fill and high barrier to entry location in Hilton Head, SC In September 2016, Wheeler contribut
Slide 10: Development Pipeline: Columbia Firehouse
DEVELOPMENT PIPELINE CREATES ADDITIONAL REVENUE OPPORTUNITIES Columbia Firehouse, Columbia, SC $7M Redevelopment opportunity purchased in 2015 Expected cash on cash return of 12% Desirable retail location in the “Vista” of South Carolina directly across from the State Capitol and within walking dist
Slide 11: Outparcel Development Pipeline: Village of Martinsville
OUTPARCEL DEVELOPMENT PIPELINE CREATES ADDITIONAL REVENUE OPPORTUNITIES Village of Martinsville Location Martinsville, VA Square Feet 297,950 Purchase Price $23.53 million Anchor Kroger ROE 15.7% Occupancy 96.1% Former mall re-developed in 2012 to open-air retail center Kroger lease term through 202
Slide 12: Earnings Trajectory Continues to Improve Through Scaled Operations
EARNINGS TRAJECTORY CONTINUES TO IMPROVE THROUGH SCALED OPERATIONS General and administrative expenses have been significantly reduced through strategic cost-containment initiatives Efforts included reducing third-party services as well as creating internal efficiencies Operating Committee of Indepe
Slide 13: Stable Portfolio Focused on Necessity-Based Shopping
STABLE PORTFOLIO FOCUSED ON NECESSITY-BASED SHOPPING Predominantly Grocery-Anchored Portfolio3 Strong Grocer Rent to Sales4 59% of grocery store GLA with a rent/sales ratio below 3% Company believes necessity-based shopping centers are more able to adapt to potential shifts in the retail landscape a
Slide 14: Perimeter Square
PERIMETER SQUARE Location Tulsa, OK Square Feet 58,277 Anchor Aspire Fitness 2016 % Leased 95.1% ABR $733,601 ABR/SF $13.23 Status as of Full Rent Commencement of Aspire Fitness Lease % Leased 85.2% ABR $679,361 ABR/SF $13.68 OPERATIONAL EXPERTISE 26,000 square foot anchor tenant, formerly Career Po
Slide 15: Strategic Plan for Anchor Tenant Backfills
STRATEGIC PLAN FOR ANCHOR TENANT BACKFILLS Current portfolio has three anchor vacancies, all announced 2Q17 Closure of Martin’s at Brook Run Shopping Center announced post merger of Ahold & Delhaize Store closed in August 2017 and lease term runs through August 2020 Southeastern Grocers reduced its
Slide 16: Adapting to Change Provides Opportunity
ADAPTING TO CHANGE PROVIDES OPPORTUNITY 94% of retail sales still take place at the store level In 2015, 65% of grocers offered some kind of online ordering1 28% of WHLR grocers offer online services Point of sale still at physical store Retailers and retail locations are adapting to new consumer sh
Slide 17: Proven Operating Results
Majority of Wheeler’s anchor and junior anchor tenants focus on ‘necessity-based’ products or services that, Wheeler believes, are less likely to be impacted by e-commerce business and fluctuations in the economy Same Store NOI for previous eight quarters is 4.07% for WHLR properties compared to an
Slide 18: Lease Expiration Schedule by Calendar Year
LEASE EXPIRATION SCHEDULE BY CALENDAR YEAR Minimal Annualized Base Rent (ABR) attributed to anchor tenant lease expirations occurring in 2017 Weighted average remaining lease term of 4.37 years Weighted average remaining lease term for anchor tenants1 is 5.07 years Anchors defined here as leases com
Slide 19: Leasing Trends
LEASING TRENDS Wheeler has maintained stable occupancy rates – average of 94.5% since the Company’s IPO For the three months ended June 30, 2017, approximately 108,743 square feet was renewed at an average weighted increase of 5.14% over prior rates excluding the Office Max renewal As of June 30, 20
Slide 20: WHLR Portfolio Supply/Demand Profile In-Line with Industry
WHLR PORTFOLIO SUPPLY/DEMAND PROFILE IN-LINE WITH INDUSTRY WLHR’s assets are located in lower population-density markets and have the lowest number of competing grocers within a 3-mile radius among all publicly traded shopping center REITs Construction costs of new stores do not command enough marke
Slide 21: Acquisition Strategy
ACQUISITION STRATEGY Well located properties in secondary and tertiary markets High unlevered returns (expected cap rates of ~9%) Focus on dominant multi-tenant grocery-anchored centers with necessity-based inline tenants National & regional tenants High traffic count and ease of access Sale of non-
Slide 22: Demand for Retail Locations
DEMAND FOR RETAIL LOCATIONS Non-Core assets provide WHLR the ability demonstrate retail demand and cap rate compression Monetized value via sale of vacant Steak & Shake and land parcel Carolina Place in 2Q16 Wheeler will continue to evaluate its portfolio for specialty and ancillary income opportuni
Slide 23: Strength in Income Metrics
STRENGTH IN INCOME METRICS Butler Square Adjusted EBITDA / Interest Expense1,2 Adjusted EBITDA / Fixed Charges1,2 AFFO before Pref. Dividends / Pref. Dividends1,2 Annualized AFFO per Share1 For a definition of AFFO, Adjusted EBITDA and other Non-GAAP measures and a reconciliation to GAAP measures, p
Slide 24: Appendix
Appendix WHEELER REAL ESTATE INVESTMENT TRUST
Slide 25: Property Overview Continued
PROPERTY OVERVIEW CONTINUED (as of 06/30/2017) Property Location Number ofTenants (1) Total LeasableSquare Feet PercentageLeased (1) Percentage Occupied Total SF Occupied AnnualizedBase Rent (2) AnnualizedBase Rent (2) Annualized Base Rent per Occupied Sq. Foot Annualized Base Rent per Occupied Sq.
Slide 26: Property Overview Continued
PROPERTY OVERVIEW CONTINUED (as of 06/30/2017) Property Location Number ofTenants (1) Total LeasableSquare Feet PercentageLeased (1) Percentage Occupied Total SF Occupied AnnualizedBase Rent (2) AnnualizedBase Rent (2) Annualized Base Rent per Occupied Sq. Foot Annualized Base Rent per Occupied Sq.
Slide 27: Non-GAAP Measures
NON-GAAP MEASURES Funds from Operations (FFO): an alternative measure of a REIT's operating performance, specifically as it relates to results of operations and liquidity. FFO is a measurement that is not in accordance with accounting principles generally accepted in the United States (GAAP). Wheele
Slide 28: Debt Profile and Lending Relationships
Lending relationships with nationally recognized banks $75 Million revolving credit facility with KeyBank National Association Currently in process of reducing outstanding balance to below $50 million Interest expense savings of $0.01/share Weighted average interest rate of 4.47% Revere line of cred
Slide 29: Consolidated Statement of Operations
CONSOLIDATED STATEMENT OF OPERATIONS (Amounts in thousands, except per share amounts) Three Months Ended June 30, Three Months Ended June 30, (unaudited) (unaudited) 2017 2017 2016 2016 TOTAL REVENUES $ 14,719 $ 11,084 OPERATING EXPENSES: Property operations 3,747 2,797 Non-REIT management and leasi
Slide 30: Balance Sheet Summary
Balance sheet summary (Amounts in thousands, except per share amounts) June 30, 2017 June 30, 2017 December 31, 2016 December 31, 2016 (unaudited) (unaudited) ASSETS: Investment properties, net $ 384,432 $ 388,880 Cash and cash equivalents 7,052 4,863 Restricted cash 9,242 9,652 Rents and other tena
Slide 31: FFO and AFFO
FFO and AFFO 1) Other non-recurring expenses are detailed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Quarterly Report on From 10-Q for the period ended June 30, 2017. (Amounts in thousands, except per share amounts) FFO and AFFO Three M
Slide 32: Capital Structure
CAPITAL STRUCTURE March 31, 2017 June 30, 2017 Debt Outstanding ($000) Outstanding ($000) Security Senior Convertible Debt (9% Coupon, Dec-18 Maturity) 1,2 $1,369 $1,369 Key Bank Line of Credit (3.70% @ 06/30/17, 3.46% @ 3/31/17,May-18 Maturity) $68,032 $68,032 Vantage South Line of Credit (4.25%, S
Slide 33: Simplified 2017 Full Year Guidance
SIMPLIFIED 2017 FULL YEAR GUIDANCE 2017 Detail Net Operating Income $40M 92-93% NOI margin on $44M of in-place rents Third Party Fees, Net $2M Property management fees, leasing commissions, and development fees, net of taxes Interest Income $1M Cash interest income from loan to Sea Turtle Marketplac
Slide 34: Think Retail. Think Wheeler.
NASDAQ: WHLR Think Retail. Think Wheeler.®
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