10-Q

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 June 30, 2023


☐	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
7.25% Series B Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value	CDRpB	New York Stock Exchange
6.50% 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 ☒

As of August 4, 2023, there were 13,718,169 shares of Common Stock, $0.06 par value per share, outstanding.

CEDAR REALTY TRUST, INC.

INDEX


Forward-Looking Statements		3

Part I. Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets – June 30, 2023 (unaudited) and December 31, 2022	4

	Condensed Consolidated Statements of Operations – Three and six months ended June 30, 2023 and 2022 (unaudited)	5

	Condensed Consolidated Statements of Comprehensive Loss – Three and six months ended June 30, 2023 and 2022 (unaudited)	6

	Condensed Consolidated Statements of Equity – Six months ended June 30, 2023 and 2022 (unaudited)	7-9

	Condensed Consolidated Statements of Cash Flows – Six months ended June 30, 2023 and 2022 (unaudited)	10

	Notes to Condensed Consolidated Financial Statements (unaudited)	11-18

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19-25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25

Item 4.	Controls and Procedures	25 - 26

Part II. Other Information

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	26 - 27

Signatures		28

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.; (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; (vi) 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; (vii) financing risks, such as the Company’s inability to obtain new financing or refinancing on favorable terms as the result of market volatility or instability and increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (viii) the impact of the Company's leverage on operating performance; (ix) 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 and consumer confidence; (x) risks endemic to real estate and the real estate industry generally; (xi) competitive risks; (xii) risks related to the geographic concentration of the Company’s properties in the Northeast; (xiii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiv) the risk that the Company’s insurance coverage may not be sufficient to fully cover its losses; (xv) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; and (xvi) 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, 2022 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.

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2023			2022
	(unaudited)
ASSETS
Real estate:
Land	$	69,085,000		$	69,111,000
Buildings and improvements		295,106,000			294,999,000
		364,191,000			364,110,000
Less accumulated depreciation		(161,961,000	)		(157,468,000	)
Real estate, net		202,230,000			206,642,000

Real estate held for sale		113,000			—
Cash and cash equivalents		1,291,000			3,899,000
Restricted cash		10,533,000			9,564,000
Receivables, net		5,067,000			6,135,000
Deferred costs and other assets, net		7,964,000			7,924,000
TOTAL ASSETS	$	227,198,000		$	234,164,000

LIABILITIES AND EQUITY
Loans payable, net	$	131,555,000		$	131,462,000
Accounts payable, accrued expenses, and other liabilities		8,450,000			10,094,000
Due to Wheeler Real Estate Investment Trust, Inc.		8,556,000			7,328,000
Below market lease intangibles, net		2,864,000			3,078,000
Total liabilities		151,425,000			151,962,000

Commitments and contingencies		—			—

Equity:
Preferred stock		159,541,000			159,541,000
Common stock ($0.06 par value, 150,000,000 shares authorized, 13,718,000 shares, issued and outstanding)		823,000			823,000
Additional paid-in capital		868,323,000			868,323,000
Cumulative distributions in excess of net income		(952,914,000	)		(946,485,000	)
Total equity		75,773,000			82,202,000
TOTAL LIABILITIES AND EQUITY	$	227,198,000		$	234,164,000

See accompanying notes to condensed consolidated financial statements

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022
REVENUES
Rental revenues	$	8,253,000		$	8,293,000		$	16,894,000		$	16,808,000
Other revenues		31,000			137,000			313,000			338,000
Total revenues		8,284,000			8,430,000			17,207,000			17,146,000
EXPENSES
Operating, maintenance and management		1,729,000			1,945,000			4,140,000			4,181,000
Real estate and other property-related taxes		1,404,000			1,526,000			2,793,000			2,768,000
Corporate general and administrative		958,000			2,862,000			1,670,000			5,773,000
Depreciation and amortization		3,309,000			2,850,000			5,802,000			5,351,000
Total expenses		7,400,000			9,183,000			14,405,000			18,073,000

OTHER
Transaction costs		—			(30,457,000	)		—			(34,192,000	)
Impairment charges		—			(2,000	)		—			(199,000	)
Total other		—			(30,459,000	)		—			(34,391,000	)

OPERATING INCOME (LOSS)		884,000			(31,212,000	)		2,802,000			(35,318,000	)

NON-OPERATING INCOME AND EXPENSES
Interest expense, net		(1,951,000	)		(3,130,000	)		(3,855,000	)		(5,837,000	)
Total non-operating income and expenses		(1,951,000	)		(3,130,000	)		(3,855,000	)		(5,837,000	)

NET LOSS FROM CONTINUING OPERATIONS		(1,067,000	)		(34,342,000	)		(1,053,000	)		(41,155,000	)

DISCONTINUED OPERATIONS
Income from discontinued operations		—			7,698,000			—			13,946,000
Impairment charges		—			(16,119,000	)		—			(16,630,000	)
Total loss from discontinued operations		—			(8,421,000	)		—			(2,684,000	)

NET LOSS		(1,067,000	)		(42,763,000	)		(1,053,000	)		(43,839,000	)

Net loss attributable to noncontrolling interests:
Limited partners' interest in Operating Partnership		—			176,000			—			196,000
Total net loss attributable to noncontrolling interests		—			176,000			—			196,000

NET LOSS ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.		(1,067,000	)		(42,587,000	)		(1,053,000	)		(43,643,000	)

Preferred stock dividends		(2,688,000	)		(2,688,000	)		(5,376,000	)		(5,376,000	)

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(3,755,000	)	$	(45,275,000	)	$	(6,429,000	)	$	(49,019,000	)

NET LOSS PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS (BASIC AND DILUTED):
Continuing operations	$	(0.27	)	$	(2.78	)	$	(0.47	)	$	(3.49	)
Discontinued operations		—			(0.63	)		—			(0.20	)
	$	(0.27	)	$	(3.41	)	$	(0.47	)	$	(3.69	)

Weighted average number of common shares - basic and diluted		13,718,000			13,288,000			13,718,000			13,287,000

See accompanying notes to condensed consolidated financial statements

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)


	Three months ended June 30,						Six months ended June 30,
	2023			2022			2023			2022

Net loss	$	(1,067,000	)	$	(42,763,000	)	$	(1,053,000	)	$	(43,839,000	)

Unrealized gain on change in fair value of cash flow hedges		—			3,114,000			—			11,452,000

Comprehensive loss		(1,067,000	)		(39,649,000	)		(1,053,000	)		(32,387,000	)

Comprehensive loss attributable to noncontrolling interests		—			166,000			—			137,000

Comprehensive loss attributable to Cedar Realty Trust, Inc.	$	(1,067,000	)	$	(39,483,000	)	$	(1,053,000	)	$	(32,250,000	)

See accompanying notes to condensed consolidated financial statements

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

Six months ended June 30, 2023

(unaudited)


											Cumulative
									Additional		distributions
	Preferred stock				Common stock				paid-in		in excess of			Total
	Shares		Amount		Shares		Amount		capital		net income			Equity
Balance, December 31, 2022		6,450,000	$	159,541,000		13,718,000	$	823,000	$	868,323,000	$	(946,485,000	)	$	82,202,000
Net income		—		—		—		—		—		14,000			14,000
Preferred stock dividends		—		—		—		—		—		(2,688,000	)		(2,688,000	)
Balance, March 31, 2023		6,450,000		159,541,000		13,718,000		823,000		868,323,000		(949,159,000	)		79,528,000
Net (loss)		—		—		—		—		—		(1,067,000	)		(1,067,000	)
Preferred stock dividends		—		—		—		—		—		(2,688,000	)		(2,688,000	)
Balance, June 30, 2023		6,450,000	$	159,541,000		13,718,000	$	823,000	$	868,323,000	$	(952,914,000	)	$	75,773,000

See accompanying notes to condensed consolidated financial statements

CEDAR REALTY TRUST, INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

Six months ended June 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			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		—		—		—			—			—			—		—			8,289,000			8,289,000
Share-based compensation, net		—		—		(21,000	)		(1,000	)		2,459,000