CEDAR REALTY TRUST INC

Previous wording

The Company is a fully-integrated real estate investment trust that focuses on owning and operating income producing retail properties with a primary focus on grocery-anchored shopping centers primarily in the Northeast, and is a subsidiary of WHLR. At March 31, 2024, the Company owned a portfolio of 19 properties.

Current wording

The Company is a fully-integrated real estate investment trust that focuses on owning and operating income producing retail properties with a primary focus on grocery-anchored shopping centers primarily in the Northeast, and is a subsidiary of WHLR. At June 30, 2024, the Company owned a portfolio of 18 properties.

Previous wording

On February 29, 2024, the Company entered into the Revolving Credit Agreement. The interest rate under the Revolving Credit Agreement is the daily SOFR, plus applicable margins of 0.10% plus 2.75%. Interest payments are due monthly, and any outstanding principal is due at maturity on February 28, 2025. The Revolving Credit Agreement may be extended, at the Company's option, for up to two additional three-month periods, subject to customary conditions. The Revolving Credit Agreement is collateralized by 6 properties, consisting of Carll's Corner, Fieldstone Marketplace, Oakland Commons, Kings Plaza, Oregon Avenue and South Philadelphia, and proceeds will be used for capital expenditures and tenant improvements for such properties.

Current wording

On February 29, 2024, the Company entered into the Revolving Credit Agreement. The interest rate under the Revolving Credit Agreement is the daily SOFR, plus applicable margins of 0.10% plus 2.75%. Interest payments are due monthly, and any outstanding principal is due at maturity on February 28, 2025. The Revolving Credit Agreement may be extended, at the Company's option, for up to two additional three-month periods, subject to customary conditions. The Revolving Credit Agreement is collateralized by 6 properties, consisting of Carll's Corner, Fieldstone Marketplace, Oakland Commons, Kings Plaza, Oregon Avenue and South Philadelphia, and proceeds will be used for capital expenditures and tenant improvements for such properties. Upon the disposition of Oakland Commons, the property was released from collateral and the outstanding borrowings were repaid.

Previous wording

The Company is a subsidiary of WHLR. WHLR performs property management and leasing services for the Company, pursuant to the Wheeler Real Estate Company Management Agreement. The management fee is 4% of gross operating income, and leasing commissions range from 3% to 6%. During the three months ended March 31, 2024, the Company paid WHLR $0.3 million for these services. During the three months ended March 31, 2023, the Company paid WHLR $0.4 million for these services. The Operating Partnership and WHLR's operating partnership, Wheeler REIT, L.P., are party to the Cost Sharing Agreement. The related party amounts due to WHLR are comprised of:

Current wording

The Company is a subsidiary of WHLR. WHLR performs property management and leasing services for the Company, pursuant to the Wheeler Real Estate Company Management Agreement. The management fee is 4% of gross operating income, and leasing commissions range from 3% to 6%. During the three and six months ended June 30, 2024, the Company paid WHLR $0.6 million and $0.9 million, respectively, for these services. During the three and six months ended June 30, 2023, the Company paid WHLR $0.0 million and $0.4 million, respectively, for these services. The Operating Partnership and WHLR's operating partnership, Wheeler REIT, L.P., are party to the Cost Sharing Agreement. The related party amounts due to WHLR are comprised of:

Previous wording

Corporate general and administrative costs were lower primarily as a result of a decrease of $0.20 million in legal and professional fees.

Current wording

Corporate general and administrative costs were lower primarily as a result of a decrease of $0.29 million in legal and professional fees.

Previous wording

Depreciation and amortization expenses were lower primarily as a result of a decrease of $0.60 million attributable to same center properties.

Current wording

Depreciation and amortization expenses were lower primarily as a result of a decrease of $1.13 million attributable to a property held for sale in 2024.

Previous wording

Interest expense, netwas higher as a result of (1) an increase of $0.14 million in interest expense due to an increase in the overall weighted average principal balance, (2) an increase of $0.08 million in interest expense due to an increase in the overall weighted average interest rate, and (3) an increase of $0.05 million in amortization expense of deferred financing costs.

Current wording

Interest expense, netwas higher as a result of (1) an increase of $0.14 million in interest expense due to an increase in the overall weighted average principal debt balance, (2) an increase of $0.09 million in interest expense due to an increase in the overall weighted average interest rate, and (3) an increase of $0.13 million in amortization expense of deferred financing costs.

Previous wording

Revenues were lower as a result of (1) a decrease of $0.20 million in other income attributable to insurance reimbursements received in 2023, partially offset by (2) an increase of $0.05 million in rental revenues and expense recoveries attributable to same center properties.

Current wording

Revenues were higher primarily as a result of (1) an increase of $0.30 million in rental revenues and expense recoveries attributable to same center properties, (2) an increase of $0.05 million in rental revenues and expense recoveries attributable to a property that was sold in 2024, partially offset by (3) a decrease of $0.07 million in other income attributable to one-time transactions and (4) a decrease of $0.12 million in market lease amortization and straight line rents.

Previous wording

Same-Property NOI for the three months ended March 31, 2024 increased 3.3% compared to the same period in the prior year. The results are driven primarily by an increase in average base rent of $0.31 per square foot and an increase in occupancy of 50 basis points. Property operating expenses were relatively consistent period over period.

Current wording

Same-Property NOI for the three and six months ended June 30, 2024 increased 7.9% and 5.8%, respectively, compared to the same periods in the prior year. The results are driven primarily by an increase in average base rent of $0.13 per square foot and an increase in occupancy of 200 basis points. Property operating expenses were relatively consistent period over period.

Previous wording

The following is a summary of the Company's retail leasing activity for the 19-property portfolio:

Current wording

The following is a summary of the Company's retail leasing activity for our portfolio:

Previous wording

The Company funds operating expenses and other liquidity requirements, including debt service and loan maturities, tenant improvements, and leasing commissions, primarily from its operations and the $9.8 million in restricted cash and the Revolving Credit Agreement as of March 31, 2024. The Revolving Credit Agreement is due at maturity on February 28, 2025, and is expected to be repaid with cash from property sales. The Company is working to increase revenue by improving occupancy, which includes backfilling vacant anchor spaces and replacing defaulted tenants. Tenant improvements and leasing commissions for these efforts will be partially funded by restricted cash, strategic disposition of assets and financing of properties.

Current wording

The Company funds operating expenses and other liquidity requirements, including debt service and loan maturities, tenant improvements, and leasing commissions, primarily from its operations and the $8.5 million in restricted cash and borrowings from the Revolving Credit Agreement as of June 30, 2024. The Revolving Credit Agreement is due at maturity on February 28, 2025. The Company is working to increase revenue by improving occupancy, which includes backfilling vacant anchor spaces and replacing defaulted tenants. Tenant improvements and leasing commissions for these efforts will be partially funded by restricted cash, strategic disposition of assets and financing of properties.

Previous wording

The Company has $6.1 million outstanding construction commitments at March 31, 2024.

Current wording

The Company has $3.5 million outstanding construction commitments at June 30, 2024.

Previous wording

In order to continue qualifying as a REIT, the Company is required to distribute at least 90% of its "REIT taxable income," as defined in the Internal Revenue Code of 1986, as amended (the "Code"). The Company paid preferred stock dividends through the first quarter of 2024 and has continued to declare preferred stock dividends through the second quarter of 2024. Future dividend declarations will continue to be at the discretion of the Board of Directors, and will depend on the cash flow and financial condition of the Company, capital requirements, annual distribution requirements under the REIT provisions of the Code, and such other factors as the Board of Directors may deem relevant. The Company intends to continue to operate its business in a manner that will allow it to qualify as a REIT for U.S. federal income tax requirements.

Current wording

In order to continue qualifying as a REIT, the Company is required to distribute at least 90% of its "REIT taxable income," as defined in the Internal Revenue Code of 1986, as amended (the "Code"). The Company paid preferred stock dividends through the second quarter of 2024 and has continued to declare preferred stock dividends through the third quarter of 2024. Future dividend declarations will continue to be at the discretion of the Board of Directors, and will depend on the cash flow and financial condition of the Company, capital requirements, annual distribution requirements under the REIT provisions of the Code, and such other factors as the Board of Directors may deem relevant. The Company intends to continue to operate its business in a manner that will allow it to qualify as a REIT for U.S. federal income tax requirements.

Previous wording

Net cash provided by operating activities, before net changes in operating assets and liabilities, was $2.2 million for the three months ended March 31, 2024. Net cash provided by operating activities, before net changes in operating assets and liabilities, was $2.2 million for the three months ended March 31, 2023.

Current wording

Net cash provided by operating activities, before net changes in operating assets and liabilities, was $4.7 million for the six months ended June 30, 2024. Net cash provided by operating activities, before net changes in operating assets and liabilities, was $4.0 million for the six months ended June 30, 2023.

Previous wording

Net cash flows used in investing activities were primarily the result of the Company's expenditures for property improvements. During the three months ended March 31, 2024, the Company incurred $2.1 million of expenditures for property improvements. During the three months ended March 31, 2023, the Company incurred $0.5 million of expenditures for property improvements. The increase in expenditures is due to the increased leasing activity.

Current wording

Net cash flows provided by investing activities were primarily the result of net proceeds received from the sale of real estate, partially offset by the Company's expenditures for property improvements. During the six months ended June 30, 2024, the Company received $5.7 million of net proceeds from the sale of Oakland Commons, partially offset by $5.5 million of expenditures incurred for property improvements. During the six months ended June 30, 2023, the Company incurred $2.1 million of expenditures for property improvements. These increases in expenditures are a result of increased leasing activity.

Previous wording

During the three months ended March 31, 2024, the Company received $1.4 million related to the Revolving Credit Agreement and $1.0 million related to the Timpany Plaza Loan Agreement, which was partially offset by $2.7 million of preferred stock distributions and $0.4 million of deferred financing costs paid by the Company. During the three months ended March 31, 2023, the Company paid $2.7 million of preferred stock distributions.

Current wording

During the six months ended June 30, 2024, the Company paid $5.4 million of preferred stock dividends, paid down borrowings of $3.6 million under the Revolving Credit Agreement and paid $0.4 million of deferred financing costs, which was partially offset by $3.6 million in proceeds received from the Revolving Credit Agreement and $1.0 million in proceeds received related to the Timpany Plaza Loan Agreement. During the six months ended June 30, 2023, the Company paid $5.4 million of preferred stock dividends.

Previous wording

We believe the computation of FFO in accordance with Nareit's definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include, but are not limited to, legal settlements, non-cash amortization on loans and acquisition costs. Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.

Current wording

We believe the computation of FFO in accordance with Nareit's definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include, but are not limited to, legal settlements, non-cash amortization on loans and acquisition costs. Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets. In addition, we believe that

Previous wording

The U.S. continues to experience elevated levels of inflation, which could continue or worsen. Substantially all of the Company's tenant leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes, insurance and many of the operating expenses it incurs. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. However, significant inflation rate increases over a prolonged period of time may have a material adverse impact on the Company's business. Conversely, deflation could lead to downward pressure on rents and other sources of income.

Current wording

The U.S. continues to experience inflation, which could continue or worsen. Substantially all of the Company's leases contain provisions designed to partially mitigate the negative impact of inflation in the near term. Such lease provisions include clauses that require tenants to reimburse the Company for inflation-sensitive costs such as real estate taxes, insurance and many of the operating expenses it incurs. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. However, significant inflation rate increases over a prolonged period of time may have a material adverse impact on the Company's business. Conversely, deflation could lead to downward pressure on rents and other sources of income.