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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER: 001-31817

 

CEDAR REALTY TRUST, INC.

(Exact name of registrant as specified in its charter)

 

Maryland

42-1241468

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

 

 

2529 Virginia Beach Blvd.

Virginia Beach, Virginia

23452

(Address of principal executive offices)

(Zip Code)

Registrant's telephone number, including area code: (757) 627-9088

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

7-1/4% Series B Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value

 

CDRpB

 

New York Stock Exchange

6-1/2% Series C Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value

 

CDRpC

 

New York Stock Exchange

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

 

 

 

 

 

Non-accelerated filer

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

At November 4, 2022, there were 13,718,169 shares of Common Stock, $0.06 par value, outstanding.

 

 

 


 

CEDAR REALTY TRUST, INC.

INDEX

 

Forward-Looking Statements

3

 

 

Part I. Financial Information

 

 

 

 

 

Item 1.

 

Financial Statements (unaudited)

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets – September 30, 2022 and December 31, 2021

4

 

 

 

 

 

 

Condensed Consolidated Statements of Operations – Three and nine months ended September 30, 2022 and 2021

5

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income (Loss) – Three and nine months ended September 30, 2022 and 2021

6

 

 

 

 

 

 

Condensed Consolidated Statements of Equity – Nine months ended September 30, 2022 and 2021

7-10

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows – Nine months ended September 30, 2022 and 2021

11

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

12-22

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

23-30

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

31

 

 

 

 

Item 4.

 

Controls and Procedures

31

 

 

Part II. Other Information

 

 

 

 

 

Item 1.

 

Legal Proceedings

31

 

 

 

 

Item 1A.

 

Risk Factors

31

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

31

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

31

 

 

 

 

Item 4.

 

Mine Safety Disclosures

32

 

 

 

 

Item 5.

 

Other Information

32

 

 

 

 

Item 6.

 

Exhibits

32

 

 

 

 

Signatures

33

 

2


 

Forward-Looking Statements

 

Certain statements made in this Current Report on Form 10-Q or incorporated by reference herein are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, as such, may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Cedar Realty Trust, Inc. (the “Company”) to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, are generally identifiable by use of the words “may”, “will”, “should”, “estimates”, “projects”, “anticipates”, “believes”, “expects”, “intends”, “future”, and words of similar import, or the negative thereof. Factors that could cause actual results, performance or achievements to differ materially from current expectations include, but are not limited to: (i) the ability of the Company to successfully integrate its business with Wheeler Real Estate Investment Trust, Inc. following the completion of the Transactions (as defined herein); (ii) the risk that shareholder litigation in connection with the Transactions may result in significant costs of defense, indemnification and liability; (iii) the ability and willingness of the Company's tenants and other third parties to satisfy their obligations under their respective contractual arrangements with the Company; (iv) the loss or bankruptcy of the Company's tenants; (v) the ability and willingness of the Company's tenants to renew their leases with the Company upon expiration, the Company's ability to re-lease its properties on the same or better terms in the event of nonrenewal or in the event the Company exercises its right to replace an existing tenant, and obligations the Company may incur in connection with the replacement of an existing tenant; (vi) risks related to the market for retail space generally, including reductions in consumer spending, variability in retailer demand for leased space, adverse impact of e-commerce, ongoing consolidation in the retail sector and changes in economic conditions, including increased inflation and interest rates, and consumer confidence; (vii) risks endemic to real estate and the real estate industry generally; (viii) damage to the Company's properties from catastrophic weather and other natural events, and the physical effects of climate change; (ix) uninsured losses; (x) the Company's ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; and (xi) information technology security breaches. For further discussion of factors that could materially affect the outcome of forward-looking statements, see “Risk Factors” in Part I, Item 1A, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and other documents that the Company files with the Securities and Exchange Commission from time to time.

Except for ongoing obligations to disclose material information as required by the federal securities laws, the Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. All of the above factors are difficult to predict, contain uncertainties that may materially affect the Company’s actual results and may be beyond the Company’s control. New factors emerge from time to time, and it is not possible for the Company’s management to predict all such factors or to assess the effects of each factor on the Company’s business. Accordingly, there can be no assurance that the Company’s current expectations will be realized.

 

3


 

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

 

 

(unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

Land

 

$

71,763,000

 

 

$

68,865,000

 

Buildings and improvements

 

 

292,715,000

 

 

 

300,962,000

 

 

 

 

364,478,000

 

 

 

369,827,000

 

Less accumulated depreciation

 

 

(157,831,000

)

 

 

(155,250,000

)

Real estate, net

 

 

206,647,000

 

 

 

214,577,000

 

 

 

 

 

 

 

 

Real estate held for sale

 

 

 

 

 

757,037,000

 

Investment in unconsolidated joint venture

 

 

 

 

 

4,654,000

 

Cash and cash equivalents

 

 

2,062,000

 

 

 

3,039,000

 

Restricted cash

 

 

11,404,000

 

 

 

230,000

 

Receivables

 

 

5,579,000

 

 

 

13,580,000

 

Other assets and deferred charges, net

 

 

8,348,000

 

 

 

23,777,000

 

TOTAL ASSETS

 

$

234,040,000

 

 

$

1,016,894,000

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

Mortgage loan payable - held for sale

 

$

 

 

$

156,821,000

 

Finance lease obligation - held for sale

 

 

 

 

 

5,314,000

 

Unsecured revolving credit facility

 

 

 

 

 

66,000,000

 

Unsecured term loans

 

 

 

 

 

298,903,000

 

Secured term loan, net

 

 

126,596,000

 

 

 

 

Accounts payable and accrued liabilities

 

 

8,645,000

 

 

 

42,099,000

 

Due to Wheeler Real Estate Investment Trust, Inc.

 

 

7,358,000

 

 

 

 

Unamortized intangible lease liabilities

 

 

4,916,000

 

 

 

5,367,000

 

Unamortized intangible lease liabilities - held for sale

 

 

 

 

 

2,422,000

 

Total liabilities

 

 

147,515,000

 

 

 

576,926,000

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

Cedar Realty Trust, Inc. shareholders' equity:

 

 

 

 

 

 

Preferred stock

 

 

159,541,000

 

 

 

159,541,000

 

Common stock ($0.06 par value, 150,000,000 shares authorized, 13,718,000 and 13,658,000 shares, issued and outstanding, respectively)

 

 

823,000

 

 

 

820,000

 

Treasury stock (0 and 387,000 shares, respectively, at cost)

 

 

 

 

 

(13,266,000

)

Additional paid-in capital

 

 

868,323,000

 

 

 

881,009,000

 

Cumulative distributions in excess of net income

 

 

(942,162,000

)

 

 

(582,464,000

)

Accumulated other comprehensive loss

 

 

 

 

 

(8,258,000

)

Total Cedar Realty Trust, Inc. shareholders' equity

 

 

86,525,000

 

 

 

437,382,000

 

Noncontrolling interests:

 

 

 

 

 

 

Limited partners' OP Units

 

 

 

 

 

2,586,000

 

Total noncontrolling interests

 

 

 

 

 

2,586,000

 

Total equity

 

 

86,525,000

 

 

 

439,968,000

 

TOTAL LIABILITIES AND EQUITY

 

$

234,040,000

 

 

$

1,016,894,000

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements

 

4


 

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Rental revenues

 

$

7,696,000

 

 

$

8,409,000

 

 

$

24,139,000

 

 

$

29,854,000

 

Other

 

 

288,000

 

 

 

86,000

 

 

 

626,000

 

 

 

420,000

 

Total revenues

 

 

7,984,000

 

 

 

8,495,000

 

 

 

24,765,000

 

 

 

30,274,000

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Operating, maintenance and management

 

 

2,254,000

 

 

 

1,259,000

 

 

 

6,070,000

 

 

 

5,419,000

 

Real estate and other property-related taxes

 

 

1,557,000

 

 

 

1,520,000

 

 

 

4,325,000

 

 

 

5,200,000

 

General and administrative

 

 

3,875,000

 

 

 

3,965,000

 

 

 

9,648,000

 

 

 

13,465,000

 

Depreciation and amortization

 

 

4,010,000

 

 

 

3,038,000

 

 

 

9,361,000

 

 

 

9,475,000

 

Total expenses

 

 

11,696,000

 

 

 

9,782,000

 

 

 

29,404,000

 

 

 

33,559,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sales

 

 

 

 

 

 

 

 

 

 

 

48,857,000

 

Transaction costs

 

 

(23,971,000

)

 

 

 

 

 

(58,163,000

)

 

 

 

Impairment charges

 

 

(9,151,000

)

 

 

(58,987,000

)

 

 

(9,350,000

)

 

 

(57,138,000

)

Total other

 

 

(33,122,000

)

 

 

(58,987,000

)

 

 

(67,513,000

)

 

 

(8,281,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING LOSS

 

 

(36,834,000

)

 

 

(60,274,000

)

 

 

(72,152,000

)

 

 

(11,566,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-OPERATING INCOME AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense)

 

 

615,000

 

 

 

(3,152,000

)

 

 

(5,222,000

)

 

 

(11,134,000

)

Total non-operating income and expenses

 

 

615,000

 

 

 

(3,152,000

)

 

 

(5,222,000

)

 

 

(11,134,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS FROM CONTINUING OPERATIONS

 

 

(36,219,000

)

 

 

(63,426,000

)

 

 

(77,374,000

)

 

 

(22,700,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

DISCONTINUED OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations

 

 

356,000

 

 

 

6,292,000

 

 

 

14,302,000

 

 

 

17,236,000

 

Impairment charges

 

 

 

 

 

(23,749,000

)

 

 

(16,629,000

)

 

 

(23,749,000

)

Gain on sales

 

 

125,500,000

 

 

 

 

 

 

125,500,000

 

 

 

1,047,000

 

Total income (loss) from discontinued operations

 

 

125,856,000

 

 

 

(17,457,000

)

 

 

123,173,000

 

 

 

(5,466,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

 

89,637,000

 

 

 

(80,883,000

)

 

 

45,799,000

 

 

 

(28,166,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (income) loss attributable to noncontrolling interests:

 

 

 

 

 

 

 

 

 

 

 

 

Minority interests in consolidated joint ventures

 

 

 

 

 

(125,000

)

 

 

 

 

 

(397,000

)

Limited partners' interest in Operating Partnership

 

 

(328,000

)

 

 

492,000

 

 

 

(132,000

)

 

 

214,000

 

Total net (income) loss attributable to noncontrolling interests

 

 

(328,000

)

 

 

367,000

 

 

 

(132,000

)

 

 

(183,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.

 

 

89,309,000

 

 

 

(80,516,000

)

 

 

45,667,000

 

 

 

(28,349,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock dividends

 

 

(2,688,000

)

 

 

(2,688,000

)

 

 

(8,064,000

)

 

 

(8,064,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

$

86,621,000

 

 

$

(83,204,000

)

 

$

37,603,000

 

 

$

(36,413,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS (BASIC AND DILUTED):

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(2.87

)

 

$

(4.97

)

 

$

(6.37

)

 

$

(2.36

)

Discontinued operations

 

 

9.29

 

 

 

(1.31

)

 

 

9.19

 

 

 

(0.41

)

 

 

$

6.42

 

 

$

(6.28

)

 

$

2.82

 

 

$

(2.77

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares - basic and diluted

 

 

13,494,000

 

 

 

13,252,000

 

 

 

13,357,000

 

 

 

13,191,000

 

 

See accompanying notes to condensed consolidated financial statements

5


 

 

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited)

 

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

89,637,000

 

 

$

(80,883,000

)

 

$

45,799,000

 

 

$

(28,166,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized (loss) gain on change in fair value of cash flow hedges

 

 

(3,131,000

)

 

 

1,595,000

 

 

 

8,321,000

 

 

 

6,811,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

 

86,506,000

 

 

 

(79,288,000

)

 

 

54,120,000

 

 

 

(21,355,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (income) loss attributable to noncontrolling interests

 

 

(332,000

)

 

 

358,000

 

 

 

(195,000

)

 

 

(228,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss) attributable to Cedar Realty Trust, Inc.

 

$

86,174,000

 

 

$

(78,930,000

)

 

$

53,925,000

 

 

$

(21,583,000

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements

 

6


 

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

Nine months ended September 30, 2022

(unaudited)

 

 

 

Cedar Realty Trust, Inc. Shareholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury

 

 

Additional

 

 

distributions

 

 

other

 

 

 

 

 

 

Preferred stock

 

 

Common stock

 

 

stock,

 

 

paid-in

 

 

in excess of

 

 

comprehensive

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

at cost

 

 

capital

 

 

net income

 

 

(income) loss

 

 

Total

 

Balance, December 31, 2021

 

 

6,450,000

 

 

$

159,541,000

 

 

 

13,658,000

 

 

$

820,000

 

 

$

(13,266,000

)

 

$

881,009,000

 

 

$

(582,464,000

)

 

$

(8,258,000

)

 

$

437,382,000

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,056,000

)

 

 

 

 

 

(1,056,000

)

Unrealized gain on change in fair value of cash flow hedges