cdr-10q_20170930.htm

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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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 ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: At October 31, 2017, there were 91,316,792 shares of Common Stock, $0.06 par value, outstanding.

Certain statements made in this 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 Company’s actual results, performance or achievements 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 which could cause actual results to differ materially from current expectations include, but are not limited to: adverse general economic conditions in the United States and uncertainty in the credit and retail markets; financing risks, such as the inability to obtain new financing or refinancing on favorable terms as the result of market volatility or instability; risks related to the market for retail space generally, including reductions in consumer spending, variability in retailer demand for leased space, tenant bankruptcies, adverse impact of internet sales demand, ongoing consolidation in the retail sector and changes in economic conditions and consumer confidence; risks endemic to real estate and the real estate industry generally; the impact of the Company’s level of indebtedness on operating performance; inability of tenants to meet their rent and other lease obligations; adverse impact of new technology and e-commerce developments on the Company’s tenants; competitive risk; risks related to the geographic concentration of the Company’s properties in the Washington, D.C. to Boston corridor; the effects of natural and other disasters; the inability of the Company to realize anticipated returns from its redevelopment activities; and the risk factors discussed under Part I, Item 1A, “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

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.

	September 30,			December 31,
	2017			2016
ASSETS
Real estate:
Land	$	304,237,000		$	301,299,000
Buildings and improvements		1,225,171,000			1,195,130,000
		1,529,408,000			1,496,429,000
Less accumulated depreciation		(332,893,000	)		(313,070,000	)
Real estate, net		1,196,515,000			1,183,359,000

Real estate held for sale		1,815,000			—
Cash and cash equivalents		2,240,000			2,882,000
Restricted cash		2,523,000			2,880,000
Receivables		17,275,000			14,894,000
Other assets and deferred charges, net		35,421,000			29,506,000
TOTAL ASSETS	$	1,255,789,000		$	1,233,521,000

LIABILITIES AND EQUITY
Mortgage loans payable	$	135,815,000		$	138,243,000
Unsecured revolving credit facility		95,000,000			72,000,000
Unsecured term loans		396,855,000			397,502,000
Accounts payable and accrued liabilities		30,572,000			23,463,000
Unamortized intangible lease liabilities		18,325,000			20,316,000
Total liabilities		676,567,000			651,524,000

Commitments and contingencies		—			—

Equity:
Cedar Realty Trust, Inc. shareholders' equity:
Preferred stock ($.01 par value, 12,500,000 shares authorized):
Series B ($25.00 per share liquidation value, 3,450,000 and 10,000,000 shares authorized, respectively, 3,450,000 and 7,950,000 shares issued and outstanding, respectively)		82,734,000			190,661,000
Series C ($25.00 per share liquidation value, 6,050,000 and 0 shares authorized, respectively, 3,000,000 and 0 shares issued and outstanding, respectively)		74,954,000			—
Common stock ($.06 par value, 150,000,000 shares authorized, 91,319,000 and 85,316,000 shares, issued and outstanding, respectively)		5,479,000			5,119,000
Treasury stock (3,367,000 and 3,264,000 shares, respectively, at cost)		(18,539,000	)		(18,129,000	)
Additional paid-in capital		876,121,000			829,526,000
Cumulative distributions in excess of net income		(445,007,000	)		(426,864,000	)
Accumulated other comprehensive income		2,012,000			427,000
Total Cedar Realty Trust, Inc. shareholders' equity		577,754,000			580,740,000
Noncontrolling interests:
Minority interests in consolidated joint ventures		(739,000	)		(1,132,000	)
Limited partners' OP Units		2,207,000			2,389,000
Total noncontrolling interests		1,468,000			1,257,000
Total equity		579,222,000			581,997,000
TOTAL LIABILITIES AND EQUITY	$	1,255,789,000		$	1,233,521,000

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
REVENUES
Rents	$	28,362,000		$	30,159,000		$	84,790,000		$	89,186,000
Expense recoveries		7,436,000			7,523,000			22,796,000			23,952,000
Other		600,000			111,000			1,285,000			778,000
Total revenues		36,398,000			37,793,000			108,871,000			113,916,000
EXPENSES
Operating, maintenance and management		5,578,000			5,555,000			18,084,000			18,346,000
Real estate and other property-related taxes		4,931,000			5,019,000			14,597,000			14,840,000
General and administrative		4,121,000			4,318,000			12,494,000			13,640,000
Acquisition pursuit costs		-			293,000			156,000			3,417,000
Depreciation and amortization		9,807,000			10,413,000			30,178,000			31,046,000
Total expenses		24,437,000			25,598,000			75,509,000			81,289,000

OTHER
Gain on sale		—			—			7,099,000			59,000
Impairment charges		—			(6,270,000	)		(9,850,000	)		(6,270,000	)
Total other		—			(6,270,000	)		(2,751,000	)		(6,211,000	)

OPERATING INCOME		11,961,000			5,925,000			30,611,000			26,416,000

NON-OPERATING INCOME AND EXPENSES
Interest expense		(5,544,000	)		(6,636,000	)		(16,638,000	)		(20,769,000	)
Early extinguishment of debt costs		—			(50,000	)		—			(37,000	)
Total non-operating income and expenses		(5,544,000	)		(6,686,000	)		(16,638,000	)		(20,806,000	)

NET INCOME (LOSS)		6,417,000			(761,000	)		13,973,000			5,610,000

Net (income) loss attributable to noncontrolling interests:
Minority interests in consolidated joint ventures		(138,000	)		59,000			(393,000	)		239,000
Limited partners' interest in Operating Partnership		21,000			15,000			22,000			15,000
Total net (income) loss attributable to noncontrolling interests		(117,000	)		74,000			(371,000	)		254,000

NET INCOME (LOSS) ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.		6,300,000			(687,000	)		13,602,000			5,864,000

Preferred stock dividends		(3,535,000	)		(3,602,000	)		(10,739,000	)		(10,806,000	)
Preferred stock redemption costs		(7,890,000	)		-			(7,890,000	)		-

NET (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(5,125,000	)	$	(4,289,000	)	$	(5,027,000	)	$	(4,942,000	)

NET (LOSS) PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS (BASIC AND DILUTED)	$	(0.06	)	$	(0.05	)	$	(0.07	)	$	(0.07	)

Weighted average number of common shares - basic and diluted		85,642,000			81,676,000			83,049,000			81,670,000

	Cedar Realty Trust, Inc. Shareholders
	Preferred stock										Common stock										Cumulative			Accumulated
															Treasury			Additional			distributions			other
	Series B						Series C								stock,			paid-in			in excess of			comprehensive
	Shares			Amount			Shares		Amount		Shares		Amount		at cost			capital			net income			income		Total
Balance, December 31, 2016		7,950,000		$	190,661,000			—	$	-		85,316,000	$	5,119,000	$	(18,129,000	)	$	829,526,000		$	(426,864,000	)	$	427,000	$	580,740,000
Net income		—			—			—		—		—		—		—			—			13,602,000			—		13,602,000
Unrealized gain on change in fair value of flow hedges		—			—			—		—		—		—		—			—			—			1,585,000		1,585,000
Share-based compensation, net		—			—			—		—		251,000		15,000		(410,000	)		2,984,000			—			—		2,589,000
Net proceeds from sales of Series C Shares		—			—			3,000,000		74,954,000		—		—		—			(2,617,000	)		—			—		72,337,000
Redemptions of Series B Shares		(4,500,000	)		(107,927,000	)		—		—		—		—		—			3,307,000			(7,890,000	)		—		(112,510,000	)
Common stock sales, net of issuance expenses		—			—			—		—		5,752,000		345,000		—			42,819,000			—			—		43,164,000
Preferred stock dividends		—			—			—		—		—		—		—			—			(10,739,000	)		—		(10,739,000	)
Distributions to common shareholders/noncontrolling interests		—			—			—		—		—		—		—			—			(13,116,000	)		—		(13,116,000	)
Redemption of OP Units		—			—			—		—		—		—		—			—			—			—		—
Reallocation adjustment of limited partners' interest		—			—			—		—		—		—		—			102,000			—			—		102,000
Balance, September 30, 2017		3,450,000		$	82,734,000			3,000,000	$	74,954,000		91,319,000	$	5,479,000	$	(18,539,000	)	$	876,121,000		$	(445,007,000	)	$	2,012,000	$	577,754,000

	Noncontrolling Interests
	Minority			Limited
	interest in			partners'
	consolidated			interest in
	joint			Operating					Total
	ventures			Partnership			Total		Equity
Balance, December 31, 2016	$	(1,132,000	)	$	2,389,000		$	1,257,000	$	581,997,000
Net income		393,000			(22,000	)		371,000		13,973,000
Unrealized gain on change in fair value of flow hedges		—			6,000			6,000		1,591,000
Share-based compensation, net		—			—			—		2,589,000

Large accelerated filer	☐		Accelerated filer	☒

Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐

			Emerging growth company	☐

Forward-Looking Statements		3

Part I. Financial Information

Item 1.	Financial Statements (unaudited)

	Consolidated Balance Sheets – September 30, 2017 and December 31, 2016	4

	Consolidated Statements of Operations– Three and nine months ended September 30, 2017 and 2016	5

	Consolidated Statements of Comprehensive Income – Three and nine months ended September 30, 2017 and 2016	6
	Consolidated Statement of Equity– Nine months ended September 30, 2017	7

	Consolidated Statements of Cash Flows– Nine months ended September 30, 2017 and 2016	8

	Notes to Consolidated Financial Statements – September 30, 2017	9-18

Item 2.	Management’s Discussion and Analysis of Financial Condition And Results of Operations	19-27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	27-28

Part II. Other Information

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 3.	Defaults Upon Senior Securities	29

Item 4.	Mine Safety Disclosures	29

Item 5.	Other Information	29

Item 6.	Exhibits	29

Signatures		30

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016

Net income (loss)	$	6,417,000		$	(761,000	)	$	13,973,000		$	5,610,000

Other comprehensive income - unrealized gain (loss) on change in fair value of cash flow hedges		1,279,000			2,506,000			1,591,000			(7,060,000	)

Comprehensive income (loss)		7,696,000			1,745,000			15,564,000			(1,450,000	)

Comprehensive (income) loss attributable to noncontrolling interests		(122,000	)		59,000			(377,000	)		279,000

Comprehensive income (loss) attributable to Cedar Realty Trust, Inc.	$	7,574,000		$	1,804,000		$	15,187,000		$	(1,171,000	)