Wheeler Real Estate Investment Trust, Inc. · NASDAQ:WHLR
Wheeler Real Estate Investment Trust — Investor Presentation (November 2017)
36 slides from Wheeler Real Estate Investment Trust's investor presentation, Nov 14, 2017
Slide 1: November 2017
NASDAQ: WHLR November 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 All senior management
Slide 8: Tenant Overview
TENANT OVERVIEW Top 10 tenants represent approximately 32% of the portfolio’s annualized base rent and 34% of total gross leasable area Focus on tenants that create consistent consumer demand, offering items such as food, postal, dry-cleaning, health services and off-price or discount retailers Mini
Slide 9: Development Pipeline Creates Additional Revenue Opportunities
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: Redevelopment Progresses Toward Completion
REDEVELOPMENT PROGRESSES TOWARD COMPLETION 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 distance of the Univers
Slide 11: Revenue Enhancing Outparcel Development
REVENUE ENHANCING OUTPARCEL DEVELOPMENT Folly Road Crossing Location Charleston, SC Square Feet 53,994 Purchase Price $11.25M Anchor Harris Teeter Occupancy 100.0% Bought in April 2016 as part of 14 center portfolio Strong demographics 18 years remaining on Harris Teeter lease Development of 7,500 s
Slide 12: Earnings Trajectory Improves Through Scaled Operations
EARNINGS TRAJECTORY IMPROVES THROUGH SCALED OPERATIONS General and administrative expenses have been significantly reduced through strategic cost-containment initiatives and remains in-line with internal budgets Efforts included reducing third-party services as well as creating internal efficiencies
Slide 13: Stable Portfolio Focused on Necessity-Based Shopping
STABLE PORTFOLIO FOCUSED ON NECESSITY-BASED SHOPPING Predominantly Grocery-Anchored Portfolio Strong Grocer Rent to Sales 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 and
Slide 14: Alex City Marketplace
ALEX CITY MARKETPLACE Location Alexander City, AL Square Feet 147,791 Anchor Winn-Dixie 2015 % Leased 87.1% ABR $913,691 ABR/SF $7.10 2017 % Leased 99.2% ABR $1,078,837 ABR/SF $7.42 OPERATIONAL EXPERTISE Future Outparcel Development Purchased in 2015 for 8.2% cap rate Harbor Freight Tools backfilled
Slide 15: Anchor Backfill Progress
ACHOR BACKFILL PROGRESS Four anchor vacancies announced between 4Q16-2Q17 Three of four vacancies are wholly or partially backfilled and either executed or in lease negotiation Career Point at Perimeter Square backfill at a materially higher rate and still upside for remaining space to be backfilled
Slide 16: Adapting to Change Provides Opportunity
ADAPTING TO CHANGE PROVIDES OPPORTUNITY 94% of retail sales still take place at the store level(1) In 2015, 65% of grocers offered some kind of online ordering(1) 28% of WHLR grocers offer online services Point of sale still at physical store Retailers and retail locations are adapting to new consum
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 3.2% for WHLR properties compared to an ind
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 One expiring anchor accounts for nearly half of all remaining expiring square footage in 2017; has been backfilled Weighted average remaining lease term of 4.
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 September 30, 2017, over 235,000 square feet of leases were signed or renewed Average weighted increase of 5.8% over prior rates on renewals Through the first 9 months o
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: Risk Analysis Moves to Risk Mitigation
RISK ANALYSIS MOVES TO RISK MITIGATION Undertook extensive analysis to evaluate anchor risk Evaluated 75 anchors 20,000 square feet or more within portfolio Subsequent to mitigation progress thus far, management estimates one or two “at-risk” remaining anchors Risk evaluated based on rent per square
Slide 22: 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 23: Demand for Retail Locations
DEMAND FOR RETAIL LOCATIONS Non-Core assets provide WHLR the ability demonstrate retail demand and cap rate compression Wheeler will continue to evaluate its portfolio for specialty and ancillary income opportunities and the sale of non-core assets Status Property Name Location Square Footage Purcha
Slide 24: Strength in Income Metrics
STRENGTH IN INCOME METRICS Adjusted EBITDA / Interest Expense(1),(2) Adjusted EBITDA / Fixed Charges(1),(2) AFFO before Pref. Dividends / Pref. Dividends(1),(2) Annualized AFFO per Share(1) (1) For a definition of AFFO, Adjusted EBITDA and other Non-GAAP measures and a reconciliation to GAAP measure
Slide 25: Appendix
Appendix WHEELER REAL ESTATE INVESTMENT TRUST
Slide 26: Property Overview (as of 09/30/2017)
PROPERTY OVERVIEW (as of 09/30/2017) 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. Foot Alex
Slide 27: Property Overview (continued)
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. Foot Grove Park Orangeburg, SC 15 106,557 92.6
Slide 28: Property Overview Continued (as of 09/30/2017)
PROPERTY OVERVIEW CONTINUED (as of 09/30/2017) 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 29: 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 30: Debt Profile and Maturities
Recently executed term sheet and commitment letter to extend and increase revolving credit facility and with Key Bank Increase of $2.5M to $52.5M Interest rate is LIBOR + 250 Accordion feature increased from $100M to $150M Since April of 2016, have reduced $8M line of credit with Revere Capital to $
Slide 31: Consolidated Statement of Operations
CONSOLIDATED STATEMENT OF OPERATIONS (Amounts in thousands, except per share amounts) Three Months Ended September 30, Three Months Ended June 30, (unaudited) (unaudited) 2017 2017 2016 2016 TOTAL REVENUES $ 15,198 $ 11,911 OPERATING EXPENSES: Property operations 3,726 3,027 Non-REIT management and
Slide 32: Balance Sheet Summary
Balance sheet summary (Amounts in thousands, except per share amounts) September 30, 2017 June 30, 2017 December 31, 2016 December 31, 2016 (unaudited) (unaudited) ASSETS: Investment properties, net $ 383,861 $ 388,880 Cash and cash equivalents 5,663 4,863 Restricted cash 9,625 9,652 Rents and other
Slide 33: 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 September 30, 2017. (Amounts in thousands, except per share amounts) FFO and AFFO T
Slide 34: Debt and Equity Outstanding
September 30, 2017 June 30, 2017 Debt Outstanding ($000) Outstanding ($000) Security Senior Convertible Debt (9% Coupon, December 2018 Maturity) (1),(2) $1,369 $1,369 KeyBank Line of Credit (3.74% @ 9/30/2017, 3.70% @ 6/30/2017, May 2018 Maturity)(3) $68,032 $68,032 Vantage South Line of Credit (4.2
Slide 35: 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 36: Think Retail. Think Wheeler.
NASDAQ: WHLR Think Retail. Think Wheeler.®
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