Wheeler Real Estate Investment Trust, Inc. Q2 FY2021 earnings call

Team Appreciation - Thanked team for commitment during unique times, praised board expansion and new directors' contribution. ### Sale Activity - Closed on sale of Camp Hill Mall for ~$90M at 6.5% cap rate, noting strong asset sale market for grocery-anchored centers. ### Leasing - Robust leasing pipeline with 40 leases executed in Q2 totaling 209,100 sq ft, 15 new comparable leases, 23 renewals. Rent collection was 97% of base rent. ### Redevelopment - Progress on mixed use projects like Northeast Heights joint venture with Goldman Sachs and Asland, and value-add redevelopment at Norwood, Valley Plaza, etc., with leasing and construction milestones achieved.

For the second quarter of 2021, operating FFO was $8.5 million or $0.61 per share, and property NOI was $20.8 million. Excluding redevelopment properties, same-property NOI increased 8.2% over the comparable period in 2020, and 10.2% including redevelopment. The company closed on the sale of the Camp Hill Mall for roughly $90 million, representing an approximate 6.5% cap rate. Revenue contribution details weren't explicitly broken down by product segment beyond the overall portfolio performance.

Leasing Pipeline - Leasing pipeline is very strong, occupancy expected to continue creeping up as value-add redevelopments and leasing pipeline are executed. ### Spread Improvement - Expect better lease spreads as deals from the height of the pandemic are worked through. ### Occupancy Trend - Anticipate occupancy to move into the low to mid 90s as value-add projects and leasing pipeline progress, controlling for major mixed use redevelopment.

COVID Impact - Potential resurgence of COVID-19 could impact retailers and leasing activity. ### Redevelopment Risks - Potential occupancy drag from removing tenants at Northeast Heights in future phases. ### Debt Risks - Uncertainties around refinancing the revolving credit facility and early refinancing of the $50 million term loan maturing in 2022.

Q: Hi, good afternoon. First question, Robin, the leased rate improved sequentially by about 80 basis points, that’s a solid move. Do you feel that that momentum should continue? Do you see leasing trending higher from here? And then can you also talk about the pricing power you commented on the new lease spreads in the quarter? You worked through some lease signings, it sounds like that you began negotiating earlier in the recovery, would you expect to see new lease spreads inflect higher now that you have worked through some of those?

A: Yes, thank you, Todd. So related to volume, we definitely are seeing kind of increased volume, I would say in the last couple of months, some of which are at the tail end of Q2 and going into this next quarter. So, I would expect that we are starting to see retailers look at expanding their operations, opening new stores, opening new restaurants, etcetera. So, we are seeing good momentum there. Related to spreads equally, as I mentioned many of the deals that – or several of the deals that were closed during the second quarter were started during the height of the pandemic as far as the economic terms. And so I do expect to see an improvement in those terms relative to spreads as we go through the coming month.

Q: Hi, good afternoon, or good evening, guys. Thanks for taking my question. Just a little bit of more information on the leasing pipeline, if you will. How robust do you see or how much demand do you see? Obviously, one way to look at it is looking at your lease to occupied spread, but if you can also maybe give us a little bit of an update in terms of your total pipeline as it stands right now and the mix of that pipeline?

A: Let me do this. Robin, why don’t you maybe take a first step at it, and then I will just amplify to the extent necessary? Robin Zeigler: Sure. So, thanks Floris for the question. I would say kind of, I guess, starting at the end and going to the beginning of your question. The types of deals that we are seeing in the pipeline are everything from anchor deals to national smalls or national anchor deals to national small shops to the local retailers. So, we are seeing a wide breadth there, the types of deals coming through. And a lot of the activity that we talked about, at first, retailers were kind of dealing with their low hanging fruit and the things that were already in process pre-pandemic, are now focused on growth and expansion. And so we are seeing the benefit of that both in fellow wise coming through that are executed the deals that are just in negotiations that are in the pipeline. So, I think, as we had said before, I think we do expect over the coming quarters to get back to kind of that pre-pandemic, low-90%ish occupancy related to really add to that on the leased occupancy side. And then related to just deal structure, again, we are seeing better spreads. And then we did kind of during this quarter, we are seeing deals that are – that represent better spreads based on what we have seen thus far. So, we are expecting that activity to continue.