cdr-10k_20201231.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2020

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

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 Number)

44 South Bayles Avenue, Port Washington, NY	11050-3765
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (516) 767-6492

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


Title of each class	Name of each exchange on which registered	Trading Symbol(s)
Common Stock, $0.06 par value	New York Stock Exchange	CDR
7-1/4% Series B Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value	New York Stock Exchange	CDRpB
6-1/2% Series C Cumulative Redeemable Preferred Stock, $25.00 Liquidation Value	New York Stock Exchange	CDRpC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 has filed a report on and attestation to its management assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

Based on the closing sales price on June 30, 2020 of $6.56 per share, the aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $84,667,000.

The number of shares outstanding of the registrant’s Common Stock $.06 par value was 13,569,329 on February 1, 2021.

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the registrant’s definitive proxy statement relating to its 2021 annual meeting of shareholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

CEDAR REALTY TRUST, INC.

TABLE OF CONTENTS

PART I
1 and 2.	Business and Properties	4
1A.	Risk Factors	12
1B.	Unresolved Staff Comments	27
3.	Legal Proceedings	27
4.	Mine Safety Disclosures	27

PART II
5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27
6.	Selected Financial Data	29
7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
7A.	Quantitative and Qualitative Disclosures about Market Risk	43
8.	Financial Statements and Supplementary Data	44
9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	77
9A.	Controls and Procedures, including Management Report on Internal Control Over Financial Reporting	77
9B.	Other information	80

PART III
10.	Directors, Executive Officers and Corporate Governance	80
11.	Executive Compensation	80
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	80
13.	Certain Relationships and Related Transactions, and Director Independence	80
14.	Principal Accountant Fees and Services	80

PART IV
15.	Exhibits and Financial Statement Schedules	81
16.	Form 10-K Summary	84

Forward-Looking Statements

Certain statements made in this Annual Report on Form 10-K 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 economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including: (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to large and small businesses, particularly including our retail tenants and other retailers, that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, as well as individuals adversely impacted by the COVID-19 pandemic, (b) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of our retail tenants recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments under existing leases, (d) the potential adverse impact on returns from redevelopment projects, (e) to the extent we were seeking to sell properties in the near term, significantly greater uncertainty regarding our ability to do so at attractive prices, and (f) the broader impact of the severe economic contraction and increase in unemployment that has occurred in the short term and negative consequences that will occur if these trends are not quickly reversed; (ii) 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; (iii) the loss or bankruptcy of the Company’s tenants, particularly in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic; (iv) 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, particularly, in light of the adverse impact to the financial health of many retailers that has occurred and continues to occur as a result of the COVID-19 pandemic, and the significant uncertainty as to when and the conditions under which potential tenants will be able to operate physical retail locations in future; (v) macroeconomic conditions, such as a disruption of or lack of access to capital markets and the adverse impact of the recent significant decline in the Company’s share price from prices prior to the spread of the COVID-19 pandemic; (vi) 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; (vii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (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 Washington, D.C. to Boston corridor; (xiii) damage to the Company’s properties from catastrophic weather and other natural events, and the physical effects of climate change; (xiv) the inability of the Company to realize anticipated returns from its redevelopment activities; (xv) uninsured losses; (xvi) the Company’s ability and willingness to maintain its qualification as a REIT in light of economic, market, legal, tax and other considerations; and (xvii) information technology security breaches. For further discussion of factors that could materially affect the outcome of forward-looking statements, see “Risk Factors” in this report 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.

Part I.

Items 1 and 2. Business and Properties

Cedar Realty Trust, Inc. (the “Company”) is a real estate investment trust (“REIT”) that focuses primarily on ownership, operation and redevelopment of grocery-anchored shopping centers in high-density urban markets from Washington, D.C. to Boston. At December 31, 2020, the Company owned and managed a portfolio of 54 operating properties (excluding properties “held for sale”) totaling 8.1 million square feet of gross leasable area (“GLA”). The portfolio was 89.1% leased and 88.1% occupied at December 31, 2020.

The Company, organized in 1984, has elected to be taxed as a real estate investment trust (“REIT”) under applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”). To qualify as a REIT under those provisions, the Company must have a preponderant percentage of its assets invested in, and income derived from, real estate and related sources. The Company’s objectives are to provide to its stockholders a professionally-managed real estate portfolio consisting primarily of grocery-anchored shopping centers from Washington, D.C. to Boston, which will provide substantial cash flow, currently and in the future, taking into account an acceptable modest risk profile, and which will present opportunities for additional growth in income and capital appreciation.

The Company, organized as a Maryland corporation, has established an umbrella partnership structure through the contribution of substantially all of its assets to Cedar Realty Trust Partnership L.P. (the “Operating Partnership”), organized as a limited partnership under the laws of Delaware. The Company conducts substantially all of its business through the Operating Partnership. At December 31, 2020, the Company owned a 99.4% general and limited partnership interest in, and was the sole general partner of, the Operating Partnership. The limited partners’ interest in the Operating Partnership (0.6% at December 31, 2020) is represented by Operating Partnership Units (“OP Units”). The carrying amount of such interest is adjusted at the end of each reporting period to an amount equal to the limited partners’ ownership percentage of the Operating Partnership’s net equity. The 81,000 OP Units outstanding at December 31, 2020 are economically equivalent to shares of the Company’s common stock. The holders of OP Units have the right to exchange their OP Units for the same number of shares of the Company’s common stock or, at the Company’s option, for cash.

On November 25, 2020, the Company effected a 1-for-6.6 reverse stock split of the issued and outstanding shares of common stock. Each 6.6 shares of the Company's issued and outstanding common stock were combined into one share of the Company's common stock. The number of authorized shares and the par value of the common stock were not changed. In addition, the Company amended the Limited Partnership Agreement of our Operating Partnership to effect a corresponding reverse split of the partnership interests of the Operating Partnership. In accordance with accounting principles generally accepted in the United States (“GAAP”), all shares of common stock, restricted stock units, OP Units and per share/unit information that are presented in this Form 10-K were adjusted to reflect the reverse split on a retroactive basis for all periods presented.

The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to long-term leases. The Company’s operating results therefore depend on the ability of its tenants to make the payments required by the terms of their leases. The Company focuses its investment activities on grocery-anchored shopping centers. The Company believes that, because of the need of consumers to purchase food and other staple goods and services generally available at such centers, its type of “necessities-based” properties should provide relatively stable revenue flows even during difficult economic times.

The Company, the Operating Partnership, their subsidiaries and affiliated partnerships are separate legal entities. For ease of reference, the terms “we”, “our”, “us”, “Company” and “Operating Partnership” (including their respective subsidiaries and affiliates) refer to the business and properties of all these entities, unless the context otherwise requires. The Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York 11050-3765 (telephone 516-767-6492). The Company also maintains property management, construction management and/or leasing offices at several of its shopping-center properties. The Company’s website can be accessed at www.cedarrealtytrust.com, where a copy of the Company’s Forms 10-K, 10-Q, 8-K and other filings with the Securities and Exchange Commission (“SEC”) can be obtained free of charge. These SEC filings are added to the website as soon as reasonably practicable. The Company’s Code of Ethics, corporate governance guidelines and committee charters are also available on the website. Information on the website is not part of this Form 10-K.

Real Estate Summary

								Average
	Year				Percent			base rent per			Selected
Property Description	acquired		GLA		occupied			leased sq. ft.		Grocer Anchor		Other Anchors
Connecticut
Bethel Shopping Center		2013		101,105		95.1	%	$	23.49	Big Y		Dollar Tree
Brickyard Plaza		2004		227,598		99.2	%		8.79			Home Depot
												Kohl's
												Michaels
												PetSmart
Groton Shopping Center		2007		130,264		100.0	%		12.29	Aldi		TJ Maxx
												Goodwill
												Planet Fitness
												Dollar Tree
												Pet Supplies Plus
Jordan Lane		2005		177,504		72.2	%		12.87	Stop & Shop		Crunch Fitness
												Dollar Tree
New London Mall		2009		259,566		89.5	%		13.16	Shop Rite		Marshalls
												Home Goods
												PetSmart
Oakland Commons		2007		90,100		100.0	%		6.37	Walmart		Bristol Ten Pin
Southington Center		2003		155,842		98.5	%		7.90	Walmart		NAMCO
												Southington Wine & Spirit
Total Connecticut				1,141,979		92.5	%		11.68

Delaware
Christina Crossing		2017		119,446		90.7	%		19.59	Shop Rite

Maryland / Washington, D.C.
East River Park		2015		150,038		91.6	%		20.66	Safeway		District of Columbia
												CVS
Oakland Mills		2005		57,008		92.6	%		11.59	LA Mart
Patuxent Crossing (f/k/a San Souci Plaza) (a)		2009		264,134		82.3	%		11.00	McKay's Market and Café		Marshalls
												Home Goods
												World Gym
												JOANN Fabrics
												Dollar Tree
Senator Square		2018		42,941		100.0	%		28.56			Unity Health Care
												Dollar Tree
Shoppes at Arts District		2016		35,676		100.0	%		37.53	Yes! Organic Market		Busboys and Poets
Valley Plaza		2003		190,939		49.8	%		9.91			Ollie's Bargain Outlet
												Tractor Supply
Yorktowne Plaza		2007		136,197		65.6	%		12.43	Food Lion		Dollar Tree
Total Maryland / Washington, D.C.				876,933		76.5	%		15.60

Massachusetts
Fieldstone Marketplace	2005/2012			150,123		84.3	%		12.04	Shaw's		Work Out World
												Dollar Tree
												Family Dollar
Franklin Village Plaza	2004/2012			305,937		86.6	%		21.06	Stop & Shop		Marshalls
												NRG Labs
Kings Plaza		2007		168,243		82.2	%		8.65			Fun Z Trampoline Park
												Ocean State Job Lot
												Savers
												Dollar General
Norwood Shopping Center		2006		87,406		93.2	%		10.85	Big Y		Planet Fitness
												Dollar Tree
The Shops at Suffolk Downs		2005		121,187		98.8	%		14.55	Stop & Shop		Dollar Tree
										Target (b)

								Average
	Year				Percent			base rent per			Selected
Property Description	acquired		GLA		occupied			leased sq. ft.		Grocer Anchor	Other Anchors
Massachusetts (continued)
Timpany Plaza		2007		182,799		67.4	%		10.20		Big Lots
											Gardner Theater
											Tractor Supply
											Dollar Tree
Webster Commons		2007		98,984		96.7	%		11.85		Big Lots
											Planet Fitness
											CVS
											Aubuchon Hardware
Total Massachusetts				1,114,679		85.2	%		14.02

New Jersey
Pine Grove Plaza		2003		79,306		42.5	%		15.04	Acme Markets (b)	Dollar Tree
The Shops at Bloomfield Station		2016		63,844		84.1	%		19.20	Super Foodtown
Washington Center Shoppes		2001		157,300		92.8	%		11.39	Acme Markets	Planet Fitness
Total New Jersey				300,450		77.7	%		13.71

New York
Carman's Plaza		2007		195,485		58.9	%		22.26	Key Foods	Department of Motor Vehicle
											Popcorn Beauty
											Dollar Tree
Pennsylvania
Academy Plaza		2001		137,415		89.3	%		15.76	Acme Markets	Rite Aid
Camp Hill		2002		430,198		96.9	%		15.82	Giant Foods	Boscov's
											LA Fitness
											Barnes & Noble
											Staples
Colonial Commons		2011		410,432		92.0	%		13.53	Giant Foods (c)	Dick's Sporting Goods
											Home Goods
											Ross Dress For Less
											Marshalls
											JoAnn Fabrics
											David's Furniture
											Old Navy
											Dollar Tree
Crossroads II (a)		2008		133,717		97.2	%		19.67	Giant Foods	Dollar Tree
Fairview Commons		2007		52,964		77.5	%		10.69	Grocery Outlet	Dollar Tree
Fishtown Crossing		2001		127,265		88.0	%		17.39	IGA Supermarket	Pep Boys
											Dollar Tree
											Dollar General
Girard Plaza		2019		35,688		100.0	%		16.29	Save A Lot	Dollar General
Gold Star Plaza		2006		71,720		95.5	%		8.94	Redner's	Dollar Tree
Golden Triangle		2003		202,790		89.2	%		13.22		LA Fitness
											Marshalls
											Staples
											Immunotek
											Walgreens
											Dollar Tree
Halifax Plaza		2003		51,510		100.0	%		13.65	Giant Foods	Rite Aid
Hamburg Square		2004		102,058		96.7	%		6.50	Redner's	Chesaco RV
Lawndale Plaza		2015		92,773		100.0	%		18.57	Shop Rite
Meadows Marketplace	2004/2012			91,518		91.3	%		15.95	Giant Foods
Newport Plaza		2003		64,489		100.0	%		12.85	Giant Foods	Rite Aid
Northside Commons		2008		69,136		100.0	%		10.41	Redner's	Dollar Tree
Palmyra Shopping Center		2005		111,051		87.9	%		7.54	Weis Markets	Goodwill

								Average
	Year				Percent			base rent per				Selected
Property Description	acquired		GLA		occupied			leased sq. ft.			Grocer Anchor	Other Anchors
Pennsylvania (continued)
Quartermaster Plaza		2014		456,602		89.3	%		14.79		BJ's Wholesale Club	Home Depot
												Planet Fitness
												Staples
												PetSmart
												Walgreens
Riverview Plaza		2003		113,922		71.2	%		21.82			Pep Boys
												Staples
South Philadelphia		2003		193,085		76.3	%		12.06		Shop Rite	Ross Dress For Less
												LA Fitness
												Kid City
Swede Square		2003		100,809		91.1	%		16.86		Grocery Outlet	LA Fitness
The Point		2000		262,072		87.0	%		14.72		Giant Foods	Burlington
												Barton's Home Outlet
												Staples
												Dollar Tree
Trexler Mall		2005		336,687		98.2	%		11.01			Kohl's
												Urban Air
												Lehigh Wellness Partners
												Maxx Fitness
												Marshalls
												Home Goods
												Dollar Tree
Trexlertown Plaza		2006		325,171		94.5	%		14.26		Giant Foods	Hobby Lobby
												Burlington
												Big Lots
												Tractor Supply
Total Pennsylvania				3,973,072		91.5	%		14.12

Virginia
Coliseum Marketplace		2005		106,648		98.6	%		15.13		Kroger	Michaels
Elmhurst Square		2006		66,254		89.0	%		9.88		Food Lion
General Booth Plaza		2005		71,639		100.0	%		15.30		Food Lion
Kempsville Crossing		2005		79,512		94.6	%		12.05		Walmart	The Iron Asylum
Oak Ridge Shopping Center		2006		38,700		100.0	%		11.05		Food Lion
Total Virginia				362,753		96.4	%		13.16

Total (89.1% leased at December 31, 2020)				8,084,797		88.1	%	$	14.04	(d)

(a)

The Company has a 40% ownership interest in the San Souci Plaza joint venture and a 60% ownership interest in the Crossroads II joint venture. Based on partnership promotes, additional equity interests, and/or other terms of the related joint venture agreements, the Company currently recognizes the results of operations of these joint ventures in excess of its stated percentage ownership.

(b)	Tenant is a shadow anchor and is not included in GLA, percent occupied, and average base rent per leased sq.ft.

(c)	Giant Foods retains the leasehold obligation, as Hobby Lobby is a subtenant and currently occupying the space.

(d)

Average base rent is calculated as the aggregate, annualized contractual minimum rent for all occupied spaces divided by the aggregate GLA of all occupied spaces as of December 31, 2020. Tenant concessions are reflected in this measure except for a limited number of short-term (generally one to three months) free rent concessions provided to new tenants that took occupancy prior to the end of the reporting period but within the concession period. Average base rent would have been $13.82 per square foot if all such free rent concessions were reflected.

Tenant Concentration

	Number									Annualized		Percentage
	of				Percentage			Annualized		base rent		annualized
Tenant	stores		GLA		of GLA			base rent		per sq. ft.		base rents
Top twenty-five tenants (a):
Giant Foods		8		538,000		6.7	%	$	9,132,000	$	16.97		9.1	%
Shop Rite		4		252,000		3.1	%		4,092,000		16.24		4.1	%
Stop & Shop		3		211,000		2.6	%		2,884,000		13.67		2.9	%
Dollar Tree		21		224,000		2.8	%		2,430,000		10.85		2.4	%
LA Fitness		4		158,000		2.0	%		2,110,000		13.35		2.1	%
Big Y		2		106,000		1.3	%		2,006,000		18.92		2.0	%
Home Depot		2		253,000		3.1	%		1,977,000		7.81		2.0	%
Staples		5		106,000		1.3	%		1,812,000		17.09		1.8	%
BJ's Wholesale Club		1		118,000		1.5	%		1,760,000		14.92		1.8	%
Food Lion		4		163,000		2.0	%		1,559,000		9.56		1.6	%
Marshalls		6		170,000		2.1	%		1,447,000		8.51		1.4	%
Planet Fitness		5		99,000		1.2	%		1,283,000		12.96		1.3	%
Walmart		3		192,000		2.4	%		1,193,000		6.21		1.2	%
Redner's		3		159,000		2.0	%		1,160,000		7.30		1.2	%
Kohl's		2		147,000		1.8	%		1,031,000		7.01		1.0	%
Home Goods		4		105,000		1.3	%		1,002,000		9.54		1.0	%
District of Columbia		1		34,000		0.4	%		932,000		27.41		0.9	%
Shaw's		1		68,000		0.8	%		925,000		13.60		0.9	%
Boscovs		1		159,000		2.0	%		877,000		5.52		0.9	%
Walgreens		2		29,000		0.4	%		875,000		30.17		0.9	%
Kroger		1		58,000		0.7	%		863,000		14.88		0.9	%
PetSmart		3		63,000		0.8	%		857,000		13.60		0.9	%
Dick's Sporting Goods		1		56,000		0.7	%		784,000		14.00		0.8	%
CVS		2		20,000		0.2	%		783,000		39.15		0.8	%
Burlington Coat Factory		2		84,000		1.0	%		760,000		9.05		0.8	%
Sub-total top twenty-five tenants		91		3,572,000		44.2	%		44,534,000		12.47		44.6	%
Remaining tenants		693		3,548,000		43.9	%		55,426,000		15.62		55.4	%
Sub-total all tenants (b)		784		7,120,000		88.1	%	$	99,960,000	$	14.04		100.0	%
Vacant space	N/A			965,000		11.9	%
Total		784		8,085,000		100.0	%

(a)	Several of the tenants listed above share common ownership with other tenants:

(1) Giant Foods, Stop & Shop and Food Lion, and (2) Marshalls, Home Goods, and TJ Maxx (GLA of 30,000; annualized base rent of $315,000).

(b)	Comprised of large tenants (10,000 or more GLA) and small tenants as follows:

			Percentage					Annualized		Percentage
	Occupied		of occupied			Annualized		base rent		annualized
	GLA		GLA			base rent		per sq. ft.		base rents
Spaces ≥ 10,000 GLA		5,285,000		74.2	%	$	60,221,000	$	11.40		60.2	%
Spaces < 10,000 GLA		1,835,000		25.8	%		39,739,000		21.65		39.8	%
Total		7,120,000		100.0	%	$	99,960,000	$	14.04		100.0	%

Lease Expirations

Total Portfolio
								Annualized		Percentage
	Number				Percentage			expiring		of annualized
Year of lease	of leases		GLA		of GLA			base rents		expiring
expiration	expiring		expiring		expiring			per sq. ft.		base rents
Month-To-Month		45		146,000		2.1	%	$	16.83		2.5	%
2021		112		591,000		8.3	%		17.03		10.1	%
2022		105		549,000		7.7	%		16.84		9.2	%
2023		89		592,000		8.3	%		14.88		8.8	%
2024		97		788,000		11.1	%		14.71		11.6	%
2025		103		1,220,000		17.1	%		13.76		16.8	%
2026		51		496,000		7.0	%		14.94		7.4	%
2027		39		318,000		4.5	%		14.04		4.5	%
2028		33		354,000		5.0	%		11.47		4.1	%
2029		37		663,000		9.3	%		13.10		8.7	%
2030		35		564,000		7.9	%		9.26		5.2	%
Thereafter		38		839,000		11.8	%		13.31		11.2	%
All tenants		784		7,120,000		100.0	%	$	14.04		100.0	%


Spaces ≥ 10,000 GLA
								Annualized		Percentage
	Number				Percentage			expiring		of annualized
Year of lease	of leases		GLA		of GLA			base rents		expiring
expiration	expiring		expiring		expiring			per sq. ft.		base rents
Month-To-Month		2		34,000		0.6	%	$	6.74		0.4	%
2021		11		340,000		6.4	%		13.09		7.4	%
2022		12		267,000		5.1	%		12.42		5.5	%
2023		13		417,000		7.9	%		11.52		8.0	%
2024		19		587,000		11.1	%		11.59		11.3	%
2025		26		926,000		17.5	%		11.70		18.0	%
2026		13		381,000		7.2	%		12.34		7.8	%
2027		11		218,000		4.1	%		11.67		4.2	%
2028		10		280,000		5.3	%		9.27		4.3	%
2029		14		583,000		11.0	%		12.11		11.7	%
2030		10		487,000		9.2	%		7.37		6.0	%
Thereafter		14		765,000		14.5	%		12.14		15.4	%
All tenants		155		5,285,000		100.0	%	$	11.40		100.0	%


Spaces < 10,000 GLA
								Annualized		Percentage
	Number				Percentage			expiring		of annualized
Year of lease	of leases		GLA		of GLA			base rents		expiring
expiration	expiring		expiring		expiring			per sq. ft.		base rents
Month-To-Month		43		112,000		6.1	%	$	19.89		5.6	%
2021		101		251,000		13.7	%		22.37		14.1	%
2022		93		282,000		15.4	%		21.02		14.9	%
2023		76		175,000		9.5	%		22.89		10.1	%
2024		78		201,000		11.0	%		23.83		12.1	%
2025		77		294,000		16.0	%		20.23		15.0	%
2026		38		115,000		6.3	%		23.55		6.8	%
2027		28		100,000		5.4	%		19.20		4.8	%
2028		23		74,000		4.0	%		19.80		3.7	%
2029		23		80,000		4.4	%		20.25		4.1	%
2030		25		77,000		4.2	%		21.21		4.1	%
Thereafter		24		74,000		4.0	%		25.42		4.7	%
All tenants		629		1,835,000		100.0	%	$	21.65		100.0	%

The Company’s Properties

The following tables summarize information relating to the Company’s portfolio as of December 31, 2020:

	Number of				Percentage
State	properties		GLA		of GLA
Pennsylvania		23		3,973,072		49.1	%
Connecticut		7		1,141,979		14.1	%
Massachusetts		7		1,114,679		13.8	%
Maryland / Washington, D.C.		7		876,933		10.8	%
Virginia		5		362,753		4.5	%
New Jersey		3		300,450		3.7	%
New York		1		195,485		2.4	%
Delaware		1		119,446		1.5	%
Total portfolio		54		8,084,797		100.0	%

The terms of the Company’s retail leases generally vary from tenancies at will to 25 years, excluding renewal options. Anchor tenant leases are typically for 10 to 25 years, with one or more renewal options available to the lessee upon expiration of the initial lease term. By contrast, smaller store leases are typically negotiated for five-year terms. The longer terms of major tenant leases serve to protect the Company against significant vacancies and to assure the presence of strong tenants which draw consumers to its centers. The shorter terms of smaller store leases allow the Company under appropriate circumstances to adjust rental rates periodically and, where possible, to upgrade or adjust the overall tenant mix.

Most leases contain provisions requiring tenants to pay their pro rata share of real estate taxes, insurance and certain operating costs. Some leases also provide that tenants pay percentage rent based upon sales volume generally in excess of certain negotiated minimums.

Excluding properties held for sale or sold, Giant Food Stores, LLC, Stop & Shop, Inc. and Food Lion, LLC, each of which is owned by Ahold N.V., a Netherlands corporation, leased an aggregate of approximately 11% of the Company’s GLA at December 31, 2020, and accounted for an aggregate of approximately 13% of the Company’s total revenues during 2020. No other tenant leased more than 10% of GLA at December 31, 2020, or contributed more than 10% of total revenues during 2020.

Executive Offices

The Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York, pursuant to a lease that expires in February 2021. The Company is currently in negotiations on a short-term extension at its current executive office, while exploring long-term options.

Competition

The Company believes that competition for the acquisition and operation of grocery-anchored shopping centers is highly fragmented. It faces competition from institutional investors, public and private REITs, owner‑operators engaged in the acquisition, ownership, redevelopment and leasing of shopping centers, as well as from numerous local, regional and national real estate developers and owners in each of its markets. It also faces competition in leasing available space at its properties to prospective tenants. Competition for tenants varies depending upon the characteristics of each local market in which the Company owns and manages properties. The Company believes that the principal competitive factors in attracting tenants in its market are location, price and other lease terms, the presence of anchor tenants, the mix, quality and sales results of other tenants, and maintenance, appearance, access and traffic patterns of its properties.

Governmental Regulations

Compliance with various governmental regulations has an impact on our business, including our capital expenditures, earnings and competitive position, which can be material. We incur costs to monitor and take actions to comply with governmental regulations that are applicable to our business, which include, among others, federal securities laws and regulations, applicable stock exchange requirements, REIT and other tax laws and regulations, environmental and health and safety laws and regulations, local zoning, usage and other regulations relating to real property, the Americans with Disabilities Act of 1990 and laws and regulations applicable to our investment management business, including the U.S. Investment Advisers Act of 1940, the Alternative Investment Fund Managers

Directive, 2011/61/EU and related laws and regulations. See “Item 1A – Risk Factors” for a discussion of material risks to us, including, to the extent material, to our competitive position, relating to governmental regulations, and see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation” together with our consolidated financial statements, including the related notes included therein, for a discussion of material information relevant to an assessment of our financial condition and results of operations, including, to the extent material, the effects that compliance with governmental regulations may have upon our capital expenditures and earnings.

Environmental Matters

Under various federal, state, and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or other contaminants at property owned, leased, managed or otherwise operated by such person, and may be held liable to a governmental entity or to third parties for property damage, and for investigation and cleanup costs in connection with such contamination. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such conditions, may adversely affect the owner’s, lessor’s or operator’s ability to sell or rent such property or to arrange financing using such property as collateral. In connection with the ownership, operation, redevelopment and management of real estate, the Company may potentially become liable for removal or remediation costs, as well as certain other related costs and liabilities, including governmental fines and injuries to persons and/or property. Generally, the Company’s tenants must comply with environmental laws and meet any remediation requirements. In addition, leases typically impose obligations on tenants to indemnify the Company from any compliance costs the Company may incur as a result of environmental conditions on the property caused by the tenant. However, if a lease does not require compliance and/or indemnification, or if a tenant fails to or cannot comply, the Company could be forced to pay these costs.

The Company believes that environmental studies conducted at the time of acquisition with respect to its properties did not reveal any material environmental liabilities for which the Company is responsible and that would have a material adverse effect on its business, results of operations or liquidity. However, no assurances can be given that existing environmental studies with respect to any of the properties reveal all environmental liabilities, that any prior owner of or tenant at a property did not create a material environmental condition not known to the Company, or that a material environmental condition does not otherwise exist at any one or more of its properties. If a material environmental condition does in fact exist, it could have an adverse impact upon the Company’s financial condition, results of operations and liquidity.

Human Capital Management

The Company believes our employees are our greatest asset, and we pride ourselves on the diversity they bring to the Company. As of December 31, 2020, The Company had 63 full-time employees and one part-time employee.

The Company’s compensation program is designed to attract and reward talented individuals who possess the skills necessary to support our business objectives and assist in the achievement of our strategic goals. All of the Company’s full-time employees are provided with a comprehensive benefits and wellness package which includes paid time off and parental leave, medical, dental and vision insurance, disability, life insurance, 401(k) matching, and other benefits. The Company encourages professional development and internal mobility.

The Company also feels that one of the keys to our success is the Company’s ability to benefit from a wide range of opinions and experiences. The Company believes the best way to accomplish this is through promoting diversity across all layers of our organization. As of December 31, 2020, 56% of the Company’s mid-level, non-executive managers were female, as well as 36% of the Company’s executive team. In addition, as of December 31, 2020, 61% of the Company’s employee population was female.

Item 1A.

Risk Factors

Set forth below are the risk factors that we believe are material to our investors. Each of these risk factors could adversely affect our business, operating results, financial condition, ability to service our debt and make distributions to our stockholders, as well as the value of our common stock and other securities. In addition to the following disclosures, please refer to the other information contained in this Annual Report on Form 10-K including the accompanying consolidated financial statements and related notes. Some statements in this Annual Report on Form 10-K, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Language Regarding Forward Looking Statements”.

These risk factors are not exhaustive. We operate in a competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for us to predict all risk factors, nor can we assess the impact of such risk factors on our business or the extent to which any factor, or combination of factors, may affect our business. Investors should also refer to our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K for future periods for material updates to these risk factors.

Risks Related to Our Business and Properties

Our properties consist primarily of grocery-anchored shopping centers. Our performance therefore is linked to economic conditions in the market for retail space generally.

Our properties consist primarily of grocery-anchored shopping centers, and our performance therefore is linked to economic conditions in the market for retail space generally. This means that we are subject to the risks that affect the retail environment generally, including the levels of consumer spending, the willingness of retailers to lease space in our shopping centers, tenant bankruptcies, the impact of e-commerce on the demand for retail space, ongoing consolidation in the retail sector, and changes in economic conditions and consumer confidence. A downturn in the U.S. economy and reduced consumer spending due to sustained levels of high unemployment or other factors could (i) negatively impact our tenants’ ability to meet their lease obligations due to poor operating results, lack of liquidity or other reasons, and therefore decrease the revenue generated by our properties and/or the value of our properties, (ii) affect our ability to lease space and negotiate and maintain favorable rents, and (iii)reduce the demand for leasing space in our shopping centers, which could result in a decline in our occupancy percentage and reduction in rental revenues.

The COVID-19 pandemic has had, and could continue to have, a material adverse effect on our and our tenants’ businesses, financial condition, results of operations, cash flow, liquidity and ability to satisfy debt service obligations.

During the first quarter of 2020, a novel strain of coronavirus (“COVID-19”) began spreading globally, with the outbreak being classified as a pandemic by the World Health Organization on March 11, 2020. The COVID-19 pandemic has caused, and could continue to cause, significant disruptions to the U.S. and global economy, and has contributed to significant volatility and negative pressure in financial markets. In the United States, federal, state and local governmental responses seeking to contain or mitigate the pandemic have included “shelter-in-place” and “stay-at-home” orders, mandatory shutdowns of “non-essential” businesses, social distancing practices and/or restrictions on construction projects, all of which have adversely impacted our business and that of our tenants.

Our retail tenants depend on in-person interactions with their customers to generate unit-level profitability, and the COVID-19 pandemic and related governmental imposed restrictions have decreased, and may continue to decrease, customer willingness to frequent our tenants’ businesses, which may result in their inability to maintain profitability and make timely rental payments to us under their leases or to otherwise seek lease modifications or to declare bankruptcy. We own properties across the United States, including in some of the states that have been significantly impacted by the COVID-19 pandemic, such as New York, New Jersey, Massachusetts and Pennsylvania. We collected approximately 94%, 91% and 77%, of contractual base rents and monthly tenant reimbursements for the quarters ended December 31, 2020, September 30, 2020 and June 30, 2020, respectively. We currently remain in active discussions and negotiations with our impacted tenants and anticipate the need to grant rent concessions or other lease-related relief, such as the deferral of lease payments for a period of time to be paid over the remaining term of the lease. The nature and financial impact of such rent relief is currently unknown as negotiations are in progress.

Moreover, the ongoing COVID-19 pandemic and restrictions intended to prevent and mitigate its spread could have additional adverse effects on our business, including with regards to:

•

the ability and willingness of our tenants to renew their leases upon expiration;

•

our ability to re-lease properties on the same or better terms in the event of non-renewal or in the event we exercise our right to replace an existing tenant, and obligations we may incur in connection with the replacement of an existing tenant;

•

the price of our common stock, which could lead to our common stock to be delisted from the NYSE;

•

the adverse impact of current economic conditions on the market value of our real estate portfolio and consequently on our estimated value per share;

•

anticipated returns from development and redevelopment projects, which have been temporarily delayed;

•

to the extent we were seeking to sell properties in the near term, significantly greater uncertainty regarding our ability to do so at attractive prices;

•

the broader impact of the severe economic contraction due to the COVID-19 pandemic, the resulting increase in unemployment that has occurred in the short-term and its effect on consumer behavior, and negative consequences that will occur if these trends are not timely reversed;

•

state, local or industry-initiated efforts, such as a rent freeze for tenants or a suspension of a landlord’s ability to enforce evictions, which may affect our ability to collect rent or enforce remedies for the failure to pay rent;

•

severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions, which could make it difficult for us to access debt and equity capital on attractive terms, or at all, and impact our ability to fund business activities and repay liabilities on a timely basis;

•

our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due, and our potential inability to comply with the financial covenants of our credit facility and other debt agreements, which could result in a default and potential acceleration of indebtedness and impact our ability to make additional borrowings under our credit facility or otherwise in the future; and

•

potential reduction in our operating effectiveness as employees work remotely or if key personnel become unavailable due to illness or other personal circumstances related to COVID-19, as well as increased cybersecurity risks related to the use of remote technology.

We have reduced our common quarterly dividend in an effort to preserve cash due to current economic uncertainty and we may choose to do the same in the future. Additionally, we may in the future choose to pay distributions in our stock rather than solely in cash, which may result in our stockholders having a tax liability with respect to such distributions that exceeds the amount of cash received, if any.

While the rapid developments regarding the COVID-19 pandemic preclude any prediction as to its ultimate adverse impact, the current economic, political and social environment presents material risks and uncertainties with respect to our and our tenants’ business, financial condition, results of operations, cash flows, liquidity and ability to satisfy debt service obligations.

The geographic concentration of our properties in the Washington, D.C. to Boston corridor exposes us to greater economic risks than if the distribution of our properties encompassed a broader region.

Our performance depends on the economic conditions in markets where our properties are geographically concentrated. Our properties are located largely in the region that straddles the Washington, D.C. to Boston corridor, which exposes us to greater economic risks than if our properties were more diversely located (in particular, 23 of our properties are located in Pennsylvania). Any adverse economic or real estate developments resulting from the regulatory environment, business climate, weather or other conditions in such regions could have an adverse impact on our business.

Anchor tenants are crucial to the success of our retail properties and vacated anchor space directly and indirectly affects our rental revenues.

Our properties consist primarily of grocery-anchored shopping centers. Anchor tenants pay a significant portion of the total rents at a property and contribute to the success of other tenants by drawing large numbers of customers to a property. Vacated anchor space not only directly reduces rental revenues, but, if not re-tenanted with a tenant with comparable consumer attraction, could adversely affect the rest of the property primarily through the loss of customer drawing power. In addition, in the event that certain anchor tenants cease to occupy a property, such an action results in a significant number of other tenants having the contractual right to terminate their leases, or pay a reduced rent based on a percentage of the tenant's sales, at the affected property, which could adversely affect the future income from such property, also known as “co-tenancy.”

Our performance and value are subject to risks associated with real estate assets and with the real estate industry.

Our performance and value are subject to risks associated with real estate assets and with the real estate industry, including, among other things, risks related to adverse changes in national, regional and local economic and market conditions. Our continued ability to make expected distributions to our stockholders depends on our ability to generate sufficient revenues to meet operating expenses, future debt service and capital expenditure requirements. Events and conditions generally applicable to owners and operators of real property that are beyond our control may decrease cash available for distribution and the value of our properties.

These events and conditions include, but may not be limited to, the following:

•

local oversupply, increased competition or declining demand for real estate;

•

local economic conditions, which may be adversely impacted by business layoffs, industry slow‑downs, natural disasters and other factors;

•

weather conditions that may increase or decrease energy costs and other weather-related expenses;

•

non-payment or deferred payment of rent or other charges by tenants, either as a result of tenant-specific financial conditions, or general economic events or circumstances adversely affecting consumer disposable income or credit;

•

vacancies or an inability to rent space on acceptable terms;

•

increased operating costs, including real estate taxes, insurance premiums, utilities, costs associated with the need to periodically renovate and re-lease space, and repairs and maintenance;

•

volatility and/or increases in interest rates, or the non-availability of funds in the credit markets in general;

•

increased costs of complying with current, new or expanded governmental regulations;

•

the relative illiquidity of real estate investments;

•

changing market demographics;

•

changing traffic patterns; and

•

an inability to refinance maturing debt in acceptable amounts and/or on acceptable terms.

In the event of default by a tenant, we may experience delays in enforcing, as well as incur substantial costs to enforce, our rights as a landlord. In addition, costs associated with our operations, such as real estate and personal property taxes, insurance, and mortgage payments, generally are not reduced even as occupancy or rental rates decrease, tenants fail to pay base and additional rent or other circumstances cause a reduction in income. As a result, our financial performance, cash flow from operations and our ability to make distributions to our stockholders may be adversely affected.

As substantially all of our revenue is derived from rental income, failure of tenants to pay rent or delays in arranging leases and occupancy at our properties could seriously harm our operating results and financial condition.

Substantially all of our revenue is derived from rental income from our properties. Downturns in the economy generally or in our tenants’ business may weaken our tenants’ financial condition and result in, among other things, delayed lease commencement, failure to make rental payments when due, non-extension of leases upon expiration, insolvency or bankruptcy. Any leasing delays, failure to make rental or other payments when due, or tenant bankruptcies, could result in the termination of tenants’ leases, which would have a negative impact on our operating results. In addition, adverse market and economic conditions and competition may impede our ability to renew leases or re-let space as leases expire, which could harm our business and operating results.

Our business may be seriously harmed if a major tenant fails to renew its lease(s) or vacates one or more properties and prevents us from re-leasing such premises by continuing to pay base rent for the balance of the lease terms. In addition, the loss of such a major tenant could result in lease terminations or reductions in rent by other tenants at the affected properties, as provided in their respective leases. Excluding properties held for sale or sold, no tenant leased more than 10% of GLA at December 31, 2020 or contributed more than 10% of total revenues during 2020, except for Giant Food Stores, LLC, Stop & Shop, Inc. and Food Lion, LLC, each of which is owned by Ahold N.V., a Netherlands corporation, which leased an aggregate of approximately 11% of our GLA at December 31, 2020, and accounted for an aggregate of approximately 13% of our total revenues, during 2020.

We may be restricted from re-leasing space based on existing exclusivity lease provisions with some of our tenants. In these cases, the leases contain provisions giving the tenant the exclusive right to sell particular types of merchandise or provide specific types of services within the particular retail center, which limits the ability of other tenants within that center to sell such merchandise or provide such services. When re-leasing space after a vacancy by one of such other tenants, such lease provisions may limit the number and types of prospective tenants for the vacant space. The failure to re-lease space or to re-lease space on satisfactory terms could harm operating results.

We face potential material adverse effects from tenant bankruptcies.

Any bankruptcy filings by, or relating to, one of our tenants or a lease guarantor would generally bar efforts by us to collect pre-bankruptcy debts from that tenant, or lease guarantor, unless we receive an order permitting us to do so from the bankruptcy court. A bankruptcy by a tenant or lease guarantor could delay efforts to collect past due balances, and could ultimately preclude full or, in fact, any collection of such sums. If a lease is affirmed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must generally be paid in full. However, if a lease is disaffirmed by a tenant in bankruptcy, we would have only an unsecured claim for damages, which would be paid normally only to the extent that funds are available, and only in the same percentage as is paid to all other members of the same class of unsecured creditors. In addition, we may be unable to replace the tenant at current rental rates. It is

possible, and indeed likely, that we would recover substantially less than, or in fact no portion of, the full value of any unsecured claims we hold, and would be required to write off any straight-line rent receivable recorded for such tenant, which may in turn harm our financial condition.

Our development and redevelopment activities may not yield anticipated returns, which would harm our operating results and reduce funds available for distributions to stockholders.

We have limited experience in substantially developing and redeveloping properties in our markets. Development and redevelopment projects entail considerable risks, including:

•

time lag between commencement and completion, leaving us exposed to higher-than-estimated construction costs, including labor and material costs, as well as changes in the overall rental markets;

•

failure or inability to obtain construction or permanent financing on favorable terms;

•

inability to sell properties we identify for sale as part of a capital recycling strategy;

•

expenditure of money and time on projects that may never be completed;

•

inability to secure key anchor or other tenants;

•

inability to achieve projected rental rates or anticipated pace of lease-up;

•

inability to obtain various government and other approvals;

•

delays in completion relating to weather, labor disruptions, construction or zoning delays; and

•

higher costs incurred than originally estimated.

In addition, the entitlement and development of real estate entails extensive approval processes, sometimes involving multiple regulatory jurisdictions. It is common for a project to require multiple approvals, permits and consents from U.S. federal, state and local governing and regulatory bodies. Compliance with these and other regulations and standards is time intensive and costly and may require additional long range infrastructure review and approvals which can add to project cost. In addition, development of properties containing delineated wetlands may require one or more permits from the U.S. federal government and/or state and local governmental agencies. Any of these issues can materially affect the cost, timing and economic viability of our development and redevelopment projects.

Moreover, properties we redevelop or acquire may fail to achieve the occupancy or rental rates we project, within the time frames we project, at the time we make the decision to invest, which may result in the properties’ failure to achieve the returns we projected. Our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs or decrease cash flow from the property. In addition, our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller of such building or property, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost.

At times, we may also be required to use unionized construction workers or to pay the prevailing wage in a jurisdiction to unionized workers. Due to the highly labor intensive and price competitive nature of the construction business, the cost of unionization and/or prevailing wage requirements for new developments or redevelopments could be substantial. Unionization and prevailing wage requirements could adversely affect a project’s profitability. In addition, union activity or a union workforce could increase the risk of a strike, which would adversely affect our ability to meet our construction timetables, which could adversely affect our reputation and our results of operations.

Additionally, new real estate under development activities typically require substantial time and attention from management, and the time frame required for development, construction and lease-up of these properties could require several years to realize any significant cash return. The foregoing risks could cause the development of properties to hinder the Company’s growth and have an adverse effect on its results of operations and cash flows.

Developing and redeveloping properties will require significant capital investment, which may be funded through debt and equity financing, implementing a capital recycling strategy, entering into a joint venture arrangement with respect to one or more properties, or suspending or reducing distributions to our stockholders.

Property ownership through joint ventures could limit our control of those investments and reduce their expected return.

As of December 31, 2020, we owned two of our operating properties through consolidated joint ventures. Our joint ventures, and joint ventures we may enter into in the future, may involve risks not present with respect to our wholly owned properties, including the following:

•

we may share decision-making authority with our joint venture partners regarding certain major decisions affecting the ownership or operation of the joint venture and the joint venture property, such as, but not limited to, (1) additional capital contribution requirements, (2) signing of major leases, (3) obtaining debt financing, and (4) obtaining consent prior to the sale or transfer of our interest in the joint venture to a third party, which may prevent us from taking actions that are opposed by our joint venture partners;

•

our joint venture partners might become bankrupt or fail to fund their share of required capital contributions, which may increase our financial commitment to the joint venture;

•

our joint venture partners may have business interests or goals with respect to the property that conflict with our business interests and goals, which could increase the likelihood of disputes regarding the ownership, management or disposition of the property;

•

disputes may develop with our joint venture partners over decisions affecting the property or the joint venture, which may result in litigation or arbitration that would increase our expenses and distract our officers and/or trustees from focusing their time and effort on our business, and possibly disrupt the day-to-day operations of the property such as by delaying the implementation of important decisions until the conflict is resolved; and

•

the activities of a joint venture could adversely affect our ability to qualify as a REIT.

“New Technology” developments may negatively impact our tenants and our business.

We may be adversely affected by developments in new technology, such as e-commerce, which may cause the business of certain of our tenants to become substantially diminished or functionally obsolete. As a result of such developments, our tenants may be unable to pay rent, become insolvent, file for bankruptcy protection, close their stores, or terminate their leases. The use of the Internet by consumers continues to gain in popularity and the migration toward new technology commerce is expected to continue.

Recent annual increases in online sales have also caused many retailers to sell products online on their websites with pick-ups at a store or warehouse or through deliveries, which may have the effect of decreasing the reported amount of their in-store sales and the amount of rent we are able to collect from them. With respect to grocer tenants, on-line grocery orders have become increasingly available, particularly in urban areas, but have not yet become a major factor affecting grocers in our portfolio. We cannot predict with certainty how growth in e-commerce, including same-day grocery delivery services, will impact the demand for space at our properties or how much revenue will be generated at “bricks and mortar” store locations in the future. If we are unable to anticipate and respond promptly to trends in retailer and consumer behavior, our occupancy levels and financial results could suffer.

Competition may impede our ability to renew leases or re‑let spaces as leases expire, as well as impede our further growth, which could harm our business and operating results.

We face competition from similarly positioned retail centers within our respective trade areas that may affect our ability to renew leases or re-let space as leases expire, as well as impede our further growth. Certain national retail chain bankruptcies and resulting store closings/lease disaffirmations have generally resulted in increased available retail space which, in turn, has resulted in increased competitive pressure to renew tenant leases upon expiration and to find new tenants for vacant space at such properties. In addition, any new competitive properties that are developed within the trade areas of our existing properties may result in increased competition for customer traffic and creditworthy tenants. Increased competition for tenants may require us to make tenant and/or capital improvements to properties beyond those that we would otherwise have planned to make. Any unbudgeted tenant and/or capital improvements we undertake may reduce cash that would otherwise be available for distributions to stockholders. Ultimately, to the extent we are unable to renew leases or re-let space as leases expire, our business and operations could be negatively impacted.

Numerous commercial developers and real estate companies compete with us seeking properties for acquisition within our existing target markets. While we continue to evaluate the market for available properties, our ability to acquire properties on favorable terms is subject to a number of risks. We may be unable to acquire a desired property because of competition from other well-capitalized real estate investors, including other REITs and institutional investment funds. This competition may operate to reduce the properties available for acquisition in these markets, reduce the rate of return on these properties, and interfere with our ability to attract and retain tenants. High barriers to entry in the Washington, D.C. to Boston corridor due to mature economies, road patterns, density of population, restrictions on development, and high land costs, coupled with large numbers of often overlapping government jurisdictions, may make it difficult for us to continue to grow in these areas.

Mortgage debt obligations could expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt.

If a property or group of properties is mortgaged to secure payment of debt and we are unable to meet mortgage payments, the holder of the mortgage or lender could foreclose on the property, resulting in a loss of our investment. Alternatively, if we decide to sell assets in the current market to raise funds to repay matured debt, it is possible that these properties will be disposed of at a loss.

Our properties may be subject to impairment charges.

On a periodic basis, we assess whether there are any indicators that the value of our held-for-use real estate assets and other investments may be impaired. Held-for-use real estate assets are impaired only if the estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property are less than the carrying value of the property. The estimate of cash flows considers factors such as expected future operating income, capital expenditures, trends and prospects, the effects of demand, tenant-operator performance, competition and other factors. If we are evaluating the potential sale of an asset or development alternatives, the future cash flow considerations include the most likely course of action at the balance sheet date based on current plans, intended holding periods and available market information including a market discount rate applied to the estimated future proceeds. We are required to make subjective assessments as to whether there are impairments in the value of our real estate assets and other investments. These assessments have a direct impact on our earnings because recording an impairment charge results in an immediate negative adjustment to earnings. There can be no assurance that we will not take additional charges in the future related to the impairment of our assets. Any future impairment could have a material adverse effect on our results of operations in the period in which the charge is taken.

Our capital migration strategy entails various risks.

We intend to sell properties and reinvest those proceeds in the acquisition of higher quality properties in our target markets, the development and redevelopment of our properties, or use the proceeds to pay down debt. While we hope to minimize the dilutive effect of these sales on our earnings, in the near term the returns on the disposed assets are likely to exceed the returns we are able to achieve through the reinvestment of those proceeds. Also, in the event we are unable to sell these assets for amounts equal to or in excess of their current carrying values, we would be required to recognize an impairment charge. Any such impairment charges or earnings dilution could materially and adversely affect our business, financial condition, operating results and cash flows and the market price of our publicly traded securities.

Future acquisitions may result in disruptions to our business, may strain management resources and may result in earnings per share and stockholder dilution.

If we acquire a business involving multiple properties, we will be required to integrate the operations, personnel and accounting and information systems of the acquired business and train, retain and motivate any key personnel from the acquired business. In addition, acquisitions of or investments in companies may cause disruptions in our operations and divert management’s attention away from day-to-day operations, which could impair our relationships with our current tenants and employees. The issuance of equity or debt securities in connection with any acquisition or investment could be substantially dilutive to our stockholders.

Commercial real estate investments are relatively illiquid.

Real estate investments are relatively illiquid. Our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, supply and demand, availability of financing, interest rates and other factors that are beyond our control. We cannot be certain that we will be able to sell any property for the price and other terms we seek, or that any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot estimate with certainty the length of time needed to find a willing purchaser and to complete the sale of a property. We may be required to expend funds to correct defects or to make improvements before a property can be sold. Factors that impede our ability to dispose of properties could adversely affect our financial condition and operating results.

Our business could be negatively affected by stockholder activism, which could impact the trading price and volatility of our common stock.

In recent years, proxy contests and other forms of stockholder activism have been directed against numerous public companies, including us. If a proxy contest or an unsolicited takeover proposal was made with respect to us, we could incur significant costs in defending the Company, which would have an adverse effect on our financial results. Stockholder activists may also seek to involve

themselves in the governance, strategic direction and operations of the Company. If individuals are elected to our board of directors with a specific agenda, even though less than a majority, our ability to effectively and timely implement our current initiatives and execute on our long-term strategy may be adversely affected. While we continually and actively engage with stockholders and consider their views on business and strategy, stockholder activism consumes a significant amount of management’s attention and other company resources and diverts the attention of management and our employees from our business.

Any perceived uncertainties as to our future direction resulting from such stockholder activism or proxy contest could result in the loss of potential business opportunities, be exploited by our competitors, cause concern to our current or potential customers, and make it more difficult to attract and retain qualified personnel and business partners, all of which could adversely affect our business. Furthermore, actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Risks Related to Our Liquidity and Financial Condition

The level of our indebtedness and any constraints on credit may impede our operating performance, and put us at a competitive disadvantage.

The level of our indebtedness may harm our business and operating results by (1) requiring us to use a substantial portion of our available liquidity to pay required debt service and/or repayments or establish additional reserves, which would reduce amounts available for distributions, (2) placing us at a competitive disadvantage compared to competitors that have less debt or debt at more favorable terms, (3) making us more vulnerable to economic and industry downturns and reducing our flexibility in responding to changing business and economic conditions, and (4) limiting our ability to borrow more money for operations or capital expenditures. In addition, increases in interest rates may impede our operating performance and put us at a competitive disadvantage. Further, payments of required debt service or amounts due at maturity, or creation of additional reserves under loan agreements, could adversely affect our liquidity. Our organizational documents do not limit the level or amount of debt that we may incur, no do we have a policy limiting our debt to any particular level.

We may be adversely affected by changes in the London Interbank Offered Rate (“LIBOR”) reporting practices

As of December 31, 2020, we had (1) approximately $150.0 million of variable-rate debt outstanding, which consists of our unsecured revolving credit facility and a term loan, and (2) $425.0 million for which we have interest rate swap agreements that convert LIBOR rates to fixed rates. In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC") which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. We are not able to predict when LIBOR will cease to be available or when there will be sufficient liquidity in the SOFR markets. Any changes adopted by the FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.

Any volatility or instability in the credit markets could adversely affect our ability to obtain new financing or to refinance existing indebtedness.

Any instability in the credit markets may negatively impact our ability to access debt financing, to arrange property‑specific financing or to refinance our existing debt as it matures on favorable terms or at all. As a result, we may be forced to seek potentially less attractive financings, including equity investments, on terms that may not be favorable to us. In doing so, we may be compelled to dilute the interests of existing stockholders that could also adversely reduce the trading price of our common stock.

We may be exposed to additional risks through our hedging activities, including the risks that a counterparty will not perform and that the hedge will not yield the economic benefits we anticipate.

To manage our exposure to variable interest rate risk, we use derivative instruments that involve risk, such as the risk that counterparties may fail to honor their obligations under these arrangements, or that these arrangements may not be effective in reducing our exposure to interest rate changes. There can be no assurance that our hedging arrangements will qualify for hedge accounting or that our hedging activities will have the desired beneficial impact on our results of operations. If we decide to terminate a hedging agreement, there could be significant costs and cash requirements involved to fulfill our obligations under the hedging agreement. Failure to effectively hedge against interest rate changes may adversely affect our results of operations.

In addition, under the REIT qualification provisions of the Code, income we could receive from certain hedging transactions may be treated as non-qualifying income for purposes of the REIT gross income tests. As a result of these rules, we may need to limit or entirely avoid otherwise advantageous hedging techniques.

The financial covenants in our loan agreements may restrict our operating or acquisition activities, which may harm our financial condition and operating results.

The financial covenants in our loan agreements may restrict our operating or acquisition activities, which may harm our financial condition and operating results. Our unsecured credit facilities and the mortgages on our properties contain customary negative covenants, such as those that limit our ability, without the prior consent of the lender, to sell or otherwise transfer any ownership interest, to further mortgage the applicable property, to enter into leases, or to discontinue insurance coverage. Our ability to borrow under our unsecured revolving credit facility is subject to compliance with these financial and other covenants, including restrictions on the maximum availability, which is based on the adjusted net operating income of designated unencumbered properties, the payment of dividends, and overall restrictions on the amount of indebtedness we can incur. If we breach covenants in our debt agreements, the lenders could declare a default and require us to repay the debt immediately and, if the debt is secured, take possession of the property or properties securing the loan.

BUSINESS CONTINUITY RISKS

As a relatively small public REIT, our general and administrative expenses constitute a larger percentage of our total revenues than those of many of our peers.

Our revenues for the year ended December 31, 2020 were $135.5 million. Because our company is smaller than many other publicly-traded REITs, our general and administrative expenses are, and will continue to be, a larger percentage of our total revenues than those of such peers. If we are unable to successfully execute on our strategy and grow our business, our general and administrative expenses will continue to have a greater effect on our financial performance and reduce the amount of cash flow available to distribute to our stockholders.

Natural disasters and severe weather conditions could have an adverse impact on our cash flow and operating results.

Some of our properties could be subject to potential natural or other disasters. In addition, we may acquire properties that are located in areas which are subject to natural disasters. Properties could also be affected by increases in the frequency or severity of hurricanes or other storms, whether such increases are caused by global climate changes or other factors. The occurrence of natural disasters or severe weather conditions can increase investment costs to repair or replace damaged properties, increase operating costs, increase future property insurance costs, and/or negatively impact the tenant demand for lease space. If insurance is unavailable to us, or is unavailable on acceptable terms, or if our insurance is not adequate to cover business interruption or losses from such events, our earnings, liquidity and/or capital resources could be adversely affected.

Potential losses may not be covered by insurance.

Potential losses may not be covered by insurance. We carry comprehensive liability, fire, flood, extended coverage and rental loss insurance under a blanket policy covering all of our properties. We believe the policy specifications and insured limits are appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. We do not carry insurance for losses related to war, nuclear accidents, and nuclear, biological and chemical occurrences from terrorist’s acts. Some of the insurance, such as those covering losses due to wind, floods and earthquakes, is subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses. The availability of insurance coverage may decrease and the prices for insurance may increase as a consequence of significant losses incurred by the insurance industry and other factors outside our control. As a result, we may be unable to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and toxic mold, or, if offered, the expense of obtaining these types of insurance may not be justified. Additionally, certain tenants have termination rights in respect of certain casualties. If we receive casualty proceeds, we may not be able to reinvest such proceeds profitably or at all, and we may be forced to recognize taxable gain on the affected property. If we experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. Tenants may not properly maintain their insurance policies or have the ability to pay the deductibles associated with such policies. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged.

Future terrorist attacks and shooting incidents could harm the demand for, and the value of, our properties.

Future terrorist attacks, such as the number of highly publicized terrorists acts and shootings that have occurred at domestic and international retail properties, could harm the demand for, and the value of, our properties. Terrorist attacks could directly impact the value of our properties through damage, destruction, loss or increased security costs, and the availability of insurance for such acts may be limited or may be subject to substantial cost increases. If such an incident were to occur at one of our properties, we may be subject to significant liability claims. While we attempt to mitigate this risk through insurance coverage and the employment of third party security services where we feel conditions warrant, we cannot guarantee that losses would not exceed applicable insurance coverages, thereby adversely affecting our results of operations and our ability to meet our obligations, including distributions to our stockholders. To the extent that our tenants are impacted by future attacks, their ability to continue to honor obligations under their existing leases could be adversely affected.

Use of social media may adversely impact our reputation and business.

There has been a significant increase in the use of social media platforms, including weblogs, social media websites and other forms of Internet-based communications, which allow individuals access to a broad audience, including our significant business constituents. The availability of information through these platforms is virtually immediate as is its impact and may be posted at any time without affording us an opportunity to redress or correct it timely. This information may be adverse to our interests, may be inaccurate and may harm our reputation, brand image, goodwill, performance, prospects or business. Furthermore, these platforms increase the risk of unauthorized disclosure of material non-public information regarding our company.

REGULATORY AND LITIGATION RISKS

We could incur significant costs related to government regulation and litigation over environmental matters and various other federal, state and local regulatory requirements.

All real property and the operations conducted on real property are subject to federal, state and local laws, ordinances and regulations relating to hazardous materials, environmental protection and human health and safety. Accordingly, we or our tenants may be required to investigate and clean up certain hazardous or toxic substances released on properties we own or operate, and also may be required to pay other related costs. Our leases typically impose obligations on our tenants to indemnify us for any compliance costs we may incur as a result of environmental conditions on the property caused by the tenant. If a tenant fails to or is unable to comply, we could be forced to pay these costs. If not addressed, environmental conditions could impair our ability to sell or re-lease the affected properties in the future, result in lower sales prices or rent payments, and restrict our ability to borrow funds using the affected properties as collateral.

We could incur significant costs related to government regulations and litigation over environmental matters. Under various federal, state and local laws, ordinances and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances or other contaminants at property owned, leased, managed or otherwise operated by such person, and may be held liable to a governmental entity or to third parties for property damage, and for investigation, remediation and cleanup costs in connection with such contamination. The cost of investigation, remediation or removal of such substances may be substantial, and the presence of such substances, or the failure to properly remediate such conditions, may adversely affect the owner’s, lessor’s or operator’s ability to sell or rent such property or to arrange financing using such property as collateral. We may be liable without regard to whether we knew of, or were responsible for, the environmental contamination and with respect to properties we have acquired, whether the contamination occurred before or after the acquisition.

We believe environmental studies conducted at the time of acquisition with respect to all of our properties did not reveal any material environmental liabilities for which the Company is responsible, and we are unaware of any subsequent environmental matters that would have created a material liability. If one or more of our properties were not in compliance with federal, state and local laws, including environmental laws, we could be required to incur additional costs to bring the property into compliance. If we incur substantial costs to comply with such requirements, our business and operations could be adversely affected. If we fail to comply with such requirements, we might additionally incur governmental fines or private damage awards. There can be no assurance that existing requirements will not change or that future requirements will not require us to make significant unanticipated expenditures that will adversely impact our business and operations.

The Americans with Disabilities Act of 1990 (the “ADA”) could require us to take remedial steps with respect to our properties.

Our existing properties, as well as properties we may acquire, may be required to comply with Title III of the ADA. We may incur significant costs to comply with the ADA, as amended, and similar laws, which require that all public accommodations meet federal

requirements related to access and use by disabled persons, and with various other federal, state and local regulatory requirements, such as state and local fire and life safety requirements.

Risks Related to Our Qualification as a REIT and other Tax Matters

If we fail to continue to qualify as a REIT, our distributions will not be deductible, and our income will be subject to taxation, thereby reducing earnings available for distribution.

If we do not continue to qualify as a REIT, our distributions will not be deductible, and our income will be subject to taxation, reducing earnings available for distribution. We have elected to be taxed as a REIT under the Code. A REIT will generally not be subject to federal and substantially all state and local income taxation on that portion of its income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its taxable income to its stockholders and complies with certain other requirements. In addition, we would be subject to a 4% excise tax if we fail to distribute sufficient income to meet a minimum distribution test based on our ordinary income, capital gain and aggregate undistributed income from prior years. If we cease to qualify as a REIT, we will also be subject to state and local income taxes in certain of the jurisdictions in which our properties are located. In addition, tax laws would no longer require us to pay any distributions to our stockholders. Unless we are entitled to relief under specific statutory provisions, we could not elect to be taxed as a REIT again for the four taxable years following the year during which we were disqualified. Even if we qualify as a REIT for federal income tax purposes, we may be subject to certain state and local income and franchise taxes and to federal income and excise taxes on our undistributed taxable income.

We intend to make distributions to stockholders to comply with the requirements of the Code. However, differences in timing between the recognition of taxable income and the actual receipt of cash could require us to sell assets, borrow funds or pay a portion of the dividend in common stock to meet the 90% distribution requirement of the Code. Certain assets generate substantial differences between taxable income and income recognized in accordance with accounting principles generally accepted in the United States (“GAAP”). Such assets include, without limitation, operating real estate that was acquired through structures that may limit or completely eliminate the depreciation deduction that would otherwise be available for income tax purposes. As a result, the Code requirement to distribute a substantial portion of our otherwise net taxable income in order to maintain REIT status could cause us to (1) distribute amounts that could otherwise be used for future acquisitions, capital expenditures or repayment of debt, (2) borrow on unfavorable terms, (3) sell assets on unfavorable terms, or (4) if necessary, pay a portion of our common dividend in common stock. If we fail to obtain debt or equity capital in the future, it could limit our operations and our ability to grow, which could have a material adverse effect on the value of our common stock.

Complying with REIT requirements may cause us to forego otherwise attractive opportunities and limit our growth opportunities.

In order to qualify as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, our sources of income, the nature of our investments in commercial real estate and related assets, the amounts we distribute to stockholders and the ownership of our stock. We may also be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Frequent asset sales could trigger adverse tax consequences.

Tax laws applicable to REITs require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, which may cause us to forego or defer sales of properties that otherwise would be in our best interest. Therefore, we may be unable to adjust our portfolio mix promptly in response to market conditions, which may adversely affect our financial position.

To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. We may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory.

In addition, the sale of our properties may generate gains for tax purposes which, if not adequately deferred through “like kind exchanges” under Section 1031 of the Code or other tax deference strategies, could require us to pay income taxes or make additional distributions to our stockholders, thus reducing our capital available for investment in other properties, or if the proceeds of such sales are already invested in other properties, require us to obtain additional funds to pay such taxes or make such distributions, in either such case to permit us to maintain our status as a REIT.

Failure to qualify as a domestically-controlled REIT could subject our non-U.S. stockholders to adverse federal income tax consequences.

We will be a domestically-controlled REIT if, at all times during a specified testing period, less than 50% in value of its shares are held directly or indirectly by non-U.S. stockholders. Because our shares are publicly traded, we cannot guarantee that we will, in fact, be a domestically-controlled REIT. If we fail to qualify as a domestically-controlled REIT, our non-U.S. stockholders that otherwise would not be subject to federal income tax on the gain attributable to a sale of our shares would be subject to taxation upon such a sale if either (a) the shares were not considered to be “regularly traded” under applicable Treasury regulations on an established securities market, such as the NYSE, or (b) the shares were considered to be “regularly traded” on an established securities market and the selling non-U.S. stockholder owned, actually or constructively, more than 10% in value of the outstanding shares at any time during specified testing periods. If gain on the sale or exchange of our shares was subject to taxation for these reasons, the non-U.S. stockholder would be subject to federal income tax with respect to any gain on a net basis in a manner similar to the taxation of a taxable U.S. stockholder, subject to any applicable alternative minimum tax and special alternative minimum tax in the case of nonresident alien individuals, and corporate non-U.S. stockholders may be subject to an additional branch profits tax.

We may choose to make distributions in our own stock, in which case you may be required to pay income taxes without receiving any cash dividends.

In connection with our qualification as a REIT, we are required to annually distribute to our stockholders at least 90% of our REIT taxable income (which does not equal net income, as calculated in accordance with GAAP), determined without regard to the deduction for dividends paid and excluding net capital gain. In order to satisfy this requirement, we may make distributions that are payable in cash and/or shares of our stock (which could account for up to 90% of the aggregate amount of such distributions) at the election of each stockholder. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, U.S. stockholders may be required to pay income taxes with respect to such distributions in excess of the cash portion of the distribution received. Accordingly, U.S. stockholders receiving a distribution of our shares may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution. If a U.S. stockholder sells the stock that it receives as part of the distribution in order to pay this tax, the sales proceeds may be less than the amount it must include in income with respect to the distribution, depending on the market price of our stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. tax with respect to such distribution, including in respect of all or a portion of such distribution that is payable in stock, by withholding or disposing of part of the shares included in such distribution and using the proceeds of such disposition to satisfy the withholding tax imposed. In addition, if a significant number of our stockholders determine to sell shares of our stock in order to pay taxes owed on dividend income, such sale may put downward pressure on the market price of our stock.

Various tax aspects of such a taxable cash/stock distribution are uncertain and have not yet been addressed by the Internal Revenue Service (“IRS”). No assurance can be given that the IRS will not impose requirements in the future with respect to taxable cash/stock distributions, including on a retroactive basis, or assert that the requirements for such taxable cash/stock distributions have not been met.

Dividends paid by REITs generally do not qualify for reduced tax rates.

Generally, dividends payable by REITs do not qualify for reduced tax rates under the Code. For the calendar year 2018, the maximum federal individual tax rate for nonqualified dividends payable is 37.0%; qualified dividends from most C corporations received by individuals are subject to a reduced maximum federal rate of 20%. In addition to these rates, certain high income individuals may be subject to an additional 3.8% tax on certain investment income, including dividends and capital gains. As a REIT, our distributions to individual stockholders generally are not eligible for the reduced rates and are, consequently, taxed at ordinary income rates. Effective for taxable years beginning after December 31, 2017 and before January 1, 2026, those U.S. stockholders that are individuals, trusts or estates may deduct 20% of their dividends from REITs (excluding qualified dividend income and capital gains dividends). For those U.S. stockholders in the top marginal tax bracket of 37%, the deduction for REIT dividends yields an effective income tax rate of 29.6% (exclusive of the net investment income tax) on REIT dividends. The more favorable federal tax rates applicable to regular corporate dividends may result in the stock of REITs being perceived to be less attractive than the stock of corporations that pay dividends qualifying for reduced rates of tax, which may adversely affect the value of the stock of REITs.

Changes to the federal, state and municipality tax laws could have a significant negative impact on the overall economy, our tenants, and our business.

At any time, the federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be amended. We cannot predict when or if any new federal income tax law, regulation or administrative interpretation, or any amendment to any existing federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. A shortfall in tax revenues for states and municipalities in which we operate may lead to changes in state and municipalities tax laws. We and our stockholders could be adversely affected by any such change in, or any new, federal income tax law, regulation, or administrative interpretation.

In December 2017 the Tax Cuts and Jobs Act (the “TCJA”) was signed into law. The provisions of the TCJA are far-reaching and generally applied to taxable years beginning after December 31, 2017, while many provisions, in particular those affecting individual taxpayers, expire at the end of 2025. As a result of the changes implemented by the TCJA, our taxable income and the amount of distributions to our stockholders required in order to maintain our REIT status, and our relative tax advantage as a REIT, may significantly change. As a REIT, we are required to distribute at least 90% of our taxable income to our stockholders annually. Among other things, the TCJA:

•

reduced the corporate income tax rate from 35% to 21% (including taxable REIT subsidiaries of which ours currently do not have significant taxable income);

•

reduced the rate of U.S. federal withholding tax on distributions made to non-U.S. stockholders by a REIT that are attributable to gains from the sale or exchange of U.S. real property interests from 35% to 21%;

•

limited the deduction for net interest expense incurred by a business to 30% of the “adjusted taxable income” of the taxpayer, except, among others, certain real property businesses electing to not be subject to the limitation. Making this election requires the electing real property trade or business to depreciate non-residential real property, residential rental property, and qualified improvement property over a longer period using the alternative depreciation system. We have not yet determined whether to make any such available elections;

•

mandated the use of the less favorable alternative depreciation system to depreciate real property in the event a real property business elects to avoid the interest deduction restriction above;

•

reduced the benefits of like-kind exchanges that defer capital gains for tax purposes to only exchanges of real property;

•

reduced the highest marginal income tax rate for individuals to 37.0% from 39.6% (excluding, in each case, the 3.8% Medicare tax on net investment income);

•

reduced the net operating loss deduction to 80% of taxable income (where taxable income is determined without regard to the net operating loss deduction itself), generally eliminated net operating loss carrybacks and allows unused net operating losses to be carried forward;

•

generally allows a deduction for individuals equal to 20% of certain income from pass-through entities, including ordinary dividends distributed by a REIT (excluding capital gain dividends and qualified dividend income), generally resulting in a maximum effective federal income tax rate applicable to such dividends of 29.6% compared to 37.0% (excluding, in each case, the 3.8% Medicare tax on net investment income); and

•

established limits on certain deductions for individuals, including deductions for state and local income taxes, and eliminates deductions for miscellaneous itemized deductions (including certain investment expenses).

The TCJA is a complex revision to the U.S. federal income tax laws with contrasting impacts on different categories of taxpayers and industries, and will require subsequent rulemaking and interpretation in a number of areas. The long-term impact of the TCJA on the overall economy and the real estate industry cannot be predicted at this early stage. Furthermore, the TCJA may negatively impact certain of our tenants’ operating results, financial condition, and future business plans. There can be no assurance that the TCJA will not negatively impact our operating results, financial condition, and future business operations.

Stockholders are urged to consult with their own tax advisors with respect to the impact that the TCJA and other legislation may have on their investment and the status of legislative, regulatory or administrative developments and proposals and their potential effect on their investment in our shares.

Risks Related to Our Organization and Structure

Our charter and Maryland law contain provisions that may delay, defer or prevent a change of control transaction and depress our stock price.

Our charter and Maryland law contain provisions that may delay, defer or prevent a change of control transaction and depress the price of our common stock. The charter, subject to certain exceptions, authorizes directors to take such actions as are necessary and desirable relating to qualification as a REIT, and to limit any person to beneficial ownership of no more than 9.9% of the outstanding shares of our common stock. This ownership limit may delay or impede a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interests of stockholders. Our Board of Directors, in its sole discretion, may exempt a proposed transferee from the ownership limit, but not grant an exemption from the ownership limit to any proposed transferee whose direct or indirect ownership could jeopardize our status as a REIT. These restrictions on transferability and ownership will not apply if our Board of Directors determines that it is no longer in our best interests to continue to qualify as, or to be, a REIT. Our Board of Directors has waived the ownership limit to permit certain institutional investors to own common stock in excess of the ownership limit and may grant additional waivers in the future as long as the Company is able to maintain its REIT status. This concentration of ownership could deprive other stockholders of an opportunity to receive a premium for their shares of common stock as part of a sale of our Company and ultimately might affect the market price of our common stock.

We may authorize and issue stock and OP Units without stockholder approval. Our charter authorizes the Board of Directors to issue additional shares of common or preferred stock, to issue additional OP Units, to classify or reclassify any unissued shares of common or preferred stock, and to set the preferences, rights and other terms of such classified or unclassified shares. We have agreed not to use our preferred stock for anti-takeover purposes or in connection with a stockholder rights plan unless we obtain stockholder approval. Certain provisions of the Maryland General Corporation Law (the “MGCL”) may have the effect of inhibiting a third party from making a proposal to acquire us or of impeding a change of control under circumstances that otherwise could provide the holders of shares of our common stock with the opportunity to realize a premium over the then-prevailing market price of such shares, including:

•

“business combination” provisions that, subject to limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person or an affiliate thereof who beneficially owns 10% or more of the voting power of our shares) for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter imposes special appraisal rights and special stockholder voting requirements on these combinations; and

•

“control share” provisions that provide that our “control shares” (defined as shares that, when aggregated with other shares controlled by the stockholder, entitle the stockholder to exercise one of three increasing ranges of voting power in electing directors) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of control shares) have no voting rights except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares.

We have opted out of these provisions of the MGCL. However, the Board of Directors may, by resolution, elect to opt in to the business combination provisions of the MGCL, and we may, by amendment to our bylaws, opt in to the control share provisions of the MGCL.

Our ability to pay dividends is limited by the requirements of Maryland law.

Our ability to pay dividends on our common stock is limited by the laws of the State of Maryland. Under applicable Maryland law, a Maryland corporation generally may not make a distribution if, after giving effect to the distribution, the corporation would not be able to pay its debts as they become due in the usual course of business, or the value of the corporation’s total assets would be less than the sum of its total liabilities plus, unless the corporation’s charter provides otherwise, the amount that would be needed, if the corporation were dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. Accordingly, we generally may not make a distribution on our common stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of preferred stock then outstanding, if any, with preferences senior to those of our common stock.

Our Board of Directors may change our strategy without stockholder approval.

Our Board of Directors may change our strategy with respect to capitalization, investment, distributions and/or operations. Our Board of Directors may establish investment criteria or limitations as it deems appropriate, but currently does not limit the number or types of properties in which we may seek to invest or the concentration of investments in any one geographic region or the amount of development or redevelopment activity occurring across our portfolio. Although our Board of Directors has no present intention to revise or amend our strategies and policies, it may do so at any time without a vote by our stockholders. Accordingly, the results of decisions made by our Board of Directors and implemented by management could adversely affect our financial condition or results of operations, including our ability to distribute cash to stockholders or qualify as a REIT.

The rights of stockholders to take action against our directors and officers are limited.

Maryland law provides that a director or officer has no liability in that capacity if he or she satisfies his or her duties to us and our stockholders. As permitted by the MGCL, our charter limits the liability of our directors and officers to us and our stockholders for monetary damages, except for liability resulting from actual receipt of an improper benefit or profit in money, property or service, or a final judgment based upon a finding of active and deliberate dishonesty by the director or officer that was material to the cause of action adjudicated.

In addition, our charter and bylaws, as well as indemnification agreements that we have entered into with certain of our officers require us to indemnify our directors and officers, among others, for actions taken by them in those capacities to the maximum extent permitted by Maryland law. As a result, we and our stockholders may have more limited rights against our directors and officers than might otherwise exist for companies organized in other jurisdictions. Accordingly, in the event that actions taken in good faith by any of our directors or officers impede the performance of our company, your ability to recover damages from such director or officer will be limited. In addition, we will be obligated to advance the defense costs incurred by our directors and officers with indemnification agreements, and may, at the discretion of our Board of Directors, advance the defense costs incurred by our employees and other agents, in connection with legal proceedings.

Risks Related to Ownership of Our Common Stock

The market value of our debt and equity securities is subject to various factors that may cause significant fluctuations or volatility.

As with other publicly traded securities, the market price of our publicly traded securities depends on various factors which may change from time-to time and are often out of our control. Among the conditions that may affect the market price of our publicly traded securities are the following:

•

the extent of institutional investor interest in us;

•

the market perception of our business compared to other REITS;

•

the market perception of retail REITs, in general, compared to other investment alternatives;

•

our financial condition and performance, including changes in our funds from operations, operating funds from operations or earnings estimates;

•

the market’s perception of our growth potential and potential future cash dividends;

•

publication of research reports about us or our industry by securities analysts;

•

speculation in the press or investment community;

•

the passage of legislation or other regulatory developments that adversely affect us, our tax status, or our industry;

•

our credit or analyst ratings;

•

any future issuances of equity or debt securities;

•

any future repurchases of equity securities;

•

our failure to satisfy the listing requirements of the NYSE

•

our failure to comply with the requirements of the Sarbanes-Oxley Act;

•

additions or departures of key management personnel;

•

strategic actions by us or our competitors, such as acquisitions or restructurings;

•

an increase in market interest rates;

•

our ability to access the capital markets to raise additional capital;

•

and general economic and financial market conditions.

These factors may cause the market price of our common stock to decline, in some cases regardless of our financial condition, results of operations, business or prospects. Effective April 28, 2020, the average closing price of our common stock was less than $1.00 over the prior 30-consecutive trading day period, and as a result, we received notice from the NYSE that our stock could be delisted.

Due to unprecedented market-wide declines as a result of the ongoing COVID-19 pandemic, the NYSE notice advised that we had until December 31, 2020 to regain compliance with the minimum share price requirement. On November 27, 2020, we completed a 1-for-6.6 reverse stock split of our common stock that resulted in the price of our common stock exceeding $1.00 per share and remaining above that level for at least the following 30 trading days, thereby curing the NYSE default. The reverse stock split did not require a stockholders’ vote.

It is impossible to ensure that the market price of our common stock will not fall in the future. A decrease in the market price of our common stock could reduce our ability to raise additional equity in the public markets. Selling common stock at a decreased market price would have a dilutive impact on existing stockholders.

Economic conditions in the U.S. economy in general, and any uncertainty in the credit markets and retail environment, could adversely affect our ability to continue to pay dividends or cause us to reduce the amount of our dividends.

We paid dividends totaling $0.53 per share during 2020, and paid dividends totaling $1.32 per share during 2019 and 2018. We reduced our common quarterly dividend in 2020 in an effort to preserve cash due to the current economic uncertainty. Any prolonged downturn in the state of the U.S. economy, weakness in capital markets and/or difficult retail environment may cause us to further reduce, or suspend, the payment of dividends, which could, among other things, affect our ability to qualify as a REIT for federal income tax purposes.

Future offerings of debt securities, which would be senior to our common and preferred stock, or equity securities, which would dilute the interests of our existing stockholders and may be senior to our existing common stock, may adversely affect the market prices of our common and preferred stock.

In the future, we may attempt to increase our capital resources by making additional offerings of debt or equity securities, including senior or subordinated notes and classes of preferred or common stock. Holders of debt securities or shares of preferred stock will generally be entitled to receive interest payments or distributions, both current and in connection with any liquidation or sale, prior to the holders of our common stock. Furthermore, offerings of common stock or other equity securities may dilute the holdings of our existing stockholders. We are not required to offer any such equity securities to existing stockholders on a preemptive basis, and future offerings of debt or equity securities, or perceptions that such offerings may occur, may reduce the market prices of our common and preferred stock or the distributions that we pay with respect to our common stock. Because we may generally issue any such debt or equity securities in the future without obtaining the consent of our stockholders, our stockholders bear the risk of our future offerings reducing the market prices of our common and preferred stock and diluting their proportionate ownership.

GENERAL RISKS

We face risks relating to cybersecurity attacks, loss of confidential information and other business disruptions.

We rely extensively on computer systems to manage our business and process transactions. Our business is at risk from and may be impacted by cybersecurity attacks, including attempts to gain unauthorized access to our confidential data and other electronic security breaches. Such cyber-attacks can range from individual attempts to gain unauthorized access to our information technology systems to more sophisticated security threats. While we employ a number of measures to prevent, detect and mitigate these threats including password protection, backup servers and annual penetration testing, there is no guarantee such efforts will be successful in preventing a cyber-attack. Cybersecurity incidents, depending on their nature and scope, could potentially lead to the compromise of confidential information, improper use of our systems and networks, manipulation and destruction of data, system downtimes and operational disruptions, which in turn could adversely affect our reputation, competitiveness and results of operations. In the event a security breach or failure results in the disclosure of sensitive tenant or other third-party data, or the transmission of harmful/malicious code to third parties, we could be subject to liability or claims.

Furthermore, it is possible that our computer systems, including our back-up systems, could be subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, catastrophic events such as fires, hurricanes, earthquakes and tornadoes, and intentional and inadvertent acts and errors by our employees. If our computer systems cease to function properly or are damaged, we may have to make a significant investment to repair or replace them, and we may suffer interruptions in our operations in the interim. Any material interruption in our computer systems or issues with the ongoing implementation of newly adopted IT solutions may have a material adverse effect on our business or results of operations or on our ability to timely and accurately report the results of our operations.

Our success depends on key personnel whose continued service is not guaranteed.

Our success depends on the efforts of key personnel, whose continued service is not guaranteed. Key personnel could be lost because we could not offer, among other things, competitive compensation programs. If one or more of our senior executives or key employees are unable to continue in their present positions or if their employment contracts are terminated or not renewed, we may not be able to replace them easily or at all. Competition for key personnel is intense, and such experienced individuals in our industry are in short supply. The loss of services of key personnel could materially and adversely affect our operations because of diminished relationships with lenders, sources of equity capital, construction companies, and existing and prospective tenants, and the ability to conduct our business and operations without material disruption.

We could be subject to litigation that may negatively impact our cash flows, financial condition and results of operations.

From time to time, we may be a defendant in lawsuits and regulatory proceedings relating to our business. Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. We could experience a negative impact to our cash flows, financial condition and results of operations due to an unfavorable outcome.

Item 1B.

Unresolved Staff Comments: None

Item 3.

Legal Proceedings

The Company is not presently involved in any litigation, nor, to its knowledge, is any litigation threatened against the Company or its subsidiaries, which is either not covered by the Company’s liability insurance, or, in management’s opinion, would result in a material adverse effect on the Company’s financial position or results of operations.

Item 4.

Mine Safety Disclosures: Not applicable

Part II.

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

The Company had 13,529,969 shares of common stock outstanding held by approximately 140 stockholders of record at December 31, 2020. The Company believes it has more than approximately 5,000 beneficial holders of its common stock. The Company’s shares trade on the NYSE under the symbol “CDR”.

Stockholder Return Performance Presentation

The following line graph sets forth for the period January 1, 2016 through December 31, 2020, a comparison of the percentage change in the cumulative total stockholder return on the Company’s common stock compared to the cumulative total return of the Russell 2000 index and the National Association of Real Estate Investment Trusts All Equity REIT Index (“NAREIT All Equity REIT Index”). The graph assumes that the shares of the Company’s common stock were bought at the price of $100 per share and that the value of the investment in each of the Company’s common stock and the indices was $100 at the beginning of the period. The graph further assumes the reinvestment of dividends when paid.

Item 6.

Selected Financial Data

	Years ended December 31,
	2020			2019			2018			2017			2016
Operations data:
Total revenues	$	135,538,000		$	144,083,000		$	152,020,000		$	146,008,000		$	151,086,000
Expenses:
Property operating expenses		45,596,000			48,347,000			47,894,000			44,329,000			44,515,000
General and administrative		16,865,000			18,804,000			16,915,000			16,907,000			18,154,000
Acquisition pursuit costs		-			-			-			156,000			3,426,000
Depreciation and amortization		48,412,000			45,861,000			40,053,000			40,115,000			40,787,000
Total expenses		110,873,000			113,012,000			104,862,000			101,507,000			106,882,000
Other:
Gain on sales		4,396,000			2,942,000			4,864,000			7,099,000			59,000
Impairment charges		(7,607,000	)		(8,938,000	)		(20,689,000	)		(9,538,000	)		(6,347,000	)
Total other		(3,211,000	)		(5,996,000	)		(15,825,000	)		(2,439,000	)		(6,288,000	)

Operating income		21,454,000			25,075,000			31,333,000			42,062,000			37,916,000

Non-operating income and expense:
Interest expense		(21,974,000	)		(23,509,000	)		(22,146,000	)		(22,199,000	)		(26,529,000	)
Early extinguishment of debt costs		-			-			(4,829,000	)		(210,000	)		(2,623,000	)
Total non-operating income and expense		(21,974,000	)		(23,509,000	)		(26,975,000	)		(22,409,000	)		(29,152,000	)


Net (loss) income		(520,000	)		1,566,000			4,358,000			19,653,000			8,764,000

Net (income) loss attributable to noncontrolling interests		(552,000	)		(490,000	)		(469,000	)		(510,000	)		179,000

Net (loss) income attributable to Cedar Realty Trust, Inc.		(1,072,000	)		1,076,000			3,889,000			19,143,000			8,943,000

Preferred stock dividends and redemption costs		(10,752,000	)		(10,752,000	)		(14,370,000	)		(21,542,000	)		(14,408,000	)

Net (loss) attributable to common shareholders	$	(11,824,000	)	$	(9,676,000	)	$	(10,481,000	)	$	(2,399,000	)	$	(5,465,000	)

Net (loss) per common share attributable to common shareholders (basic and diluted):	$	(0.92	)	$	(0.78	)	$	(0.83	)	$	(0.25	)	$	(0.50	)

Dividends to common shareholders	$	7,147,000		$	17,808,000		$	18,301,000		$	17,681,000		$	17,049,000
Per common share	$	0.53		$	1.32		$	1.32		$	1.32		$	1.32

Weighted average number of common shares - basic and diluted		13,104,000			13,082,000			13,397,000			12,753,000			12,375,000

Item 6.

Selected Financial Data (continued)


	Years ended December 31,
Balance sheet data:	2020			2019			2018			2017			2016

Real estate, net	$	1,098,909,000		$	1,125,345,000		$	1,146,713,000		$	1,192,656,000		$	1,183,359,000
Real estate held for sale/conveyance		9,498,000			13,230,000			11,592,000			-			-
Other assets		68,844,000			67,050,000			64,596,000			59,762,000			50,162,000
Total assets	$	1,177,251,000		$	1,205,625,000		$	1,222,901,000		$	1,252,418,000		$	1,233,521,000

Debt obligations	$	624,274,000		$	630,575,000		$	624,834,000		$	580,125,000		$	607,745,000
Other liabilities		65,519,000			60,975,000			39,351,000			42,182,000			43,779,000
Total liabilities		689,793,000			691,550,000			664,185,000			622,307,000			651,524,000

Equity:
Cedar Realty Trust, Inc. shareholders' equity		483,498,000			510,561,000			555,425,000			628,336,000			580,740,000
Noncontrolling interests		3,960,000			3,514,000			3,291,000			1,775,000			1,257,000
Total equity		487,458,000			514,075,000			558,716,000			630,111,000			581,997,000

Total liabilities and equity	$	1,177,251,000		$	1,205,625,000		$	1,222,901,000		$	1,252,418,000		$	1,233,521,000

Other data:
Funds From Operations ("FFO") (a)	$	39,848,000		$	42,073,000		$	45,241,000		$	40,032,000		$	41,067,000
Operating Funds From Operations ("Operating FFO") (a)	$	40,331,000		$	40,769,000		$	53,577,000		$	48,325,000		$	49,241,000

Cash flows provided by (used in):
Operating activities	$	42,580,000		$	53,675,000		$	57,900,000		$	57,093,000		$	59,247,000
Investing activities	$	(18,369,000	)	$	(22,342,000	)	$	(14,938,000	)	$	(45,497,000	)	$	48,763,000
Financing activities	$	(25,321,000	)	$	(30,563,000	)	$	(48,204,000	)	$	(10,139,000	)	$	(109,923,000	)

Square feet of GLA		8,085,000			8,328,000			8,729,000			9,010,000			9,128,000
Percent occupied		88.1	%		91.5	%		90.7	%		91.3	%		89.9	%
Average annualized base rent per square foot	$	14.04		$	14.02		$	13.78		$	13.51		$	13.50

(a)

See Item 7 - "Management Discussion and Analysis of Financial Condition and Results of Operations" for a reconciliation of FFO and Operating FFO to net (loss) income attributable to common shareholders.

Item 7.

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

The following discussion should be read in conjunction with the Company’s consolidated financial statements and related notes thereto included elsewhere in this report.

Executive Summary

The Company is a fully-integrated real estate investment trust that focuses primarily on ownership, operation and redevelopment of grocery-anchored shopping centers in high- density urban markets from Washington, D.C. to Boston. At December 31, 2020, the Company owned and managed a portfolio of 54 operating properties (excluding properties “held for sale”) totaling 8.1 million square feet of GLA. The portfolio was 89.1% leased and 88.1% occupied at December 31, 2020.

The Company, organized as a Maryland corporation, has established an umbrella partnership structure through the contribution of substantially all of its assets to the Operating Partnership, organized as a limited partnership under the laws of Delaware. The Company conducts substantially all of its business through the Operating Partnership. At December 31, 2020, the Company owned a 99.4% general and limited partnership interest in, and was the sole general partner of, the Operating Partnership. The limited partners’ interest in the Operating Partnership (0.6% at December 31, 2020) is represented by Operating Partnership Units (“OP Units”). The carrying amount of such interest is adjusted at the end of each reporting period to an amount equal to the limited partners’ ownership percentage of the Operating Partnership’s net equity. The 81,000 OP Units outstanding at December 31, 2020 are economically equivalent to shares of the Company’s common stock. The holders of OP Units have the right to exchange their OP Units for the same number of shares of the Company’s common stock or, at the Company’s option, for cash.

On November 25, 2020, the Company effected a 1-for-6.6 reverse stock split of the issued and outstanding shares of common stock. Each 6.6 shares of the Company's issued and outstanding common stock were combined into one share of the Company's common stock. The number of authorized shares and the par value of the common stock were not changed. In addition, the Company amended the Limited Partnership Agreement of our Operating Partnership to effect a corresponding reverse split of the partnership interests of the Operating Partnership. In accordance with GAAP, all shares of common stock, restricted stock units, OP Units and per share/unit information that are presented in this Form10-K were adjusted to reflect the reverse split on a retroactive basis for all periods presented.

2020 Significant Circumstances and Transactions

COVID-19 Pandemic

As a result of COVID-19, the Company has received numerous rent relief requests, most often in the form of rent deferrals. The Company has evaluated, and continues to evaluate, each tenant rent relief request on an individual basis, considering a number of factors. Not all tenant requests have resulted in modification agreements, nor is the Company forgoing its contractual rights under its lease agreements. The Company has entered into lease modifications that deferred approximately $3.2 million and waived approximately $1.5 million of rental income for 2020, respectively. To date, the weighted average payback period of deferred rent is approximately 10 months, beginning at various time commencing in July 2020 through March 2021. The Company has collected approximately 94%, 91% and 77% of contractual base rents and monthly tenant reimbursements for the quarters ended December 31, 2020, September 30, 2020 and June 30, 2020, respectively. The Company currently remains in active discussions and negotiations with its impacted tenants and anticipates the need to grant additional rent concessions or other lease-related relief, such as the deferral of lease payments for a period of time to be paid over the remaining term of the lease. The nature and financial impact of such additional rent relief is currently unknown as negotiations are in progress. The extent to which COVID-19 impacts the Company’s business, operations and financial results will depend on numerous evolving factors that the Company is not able to predict at this time.

As a result of the COVID-19 pandemic, the Company took the following actions:

•

In March 2020, the Company borrowed an aggregate $75.0 million under its revolving credit facility to preserve financial flexibility. In August 2020, the Company repaid substantially all of this borrowing.

•

In April 2020 and July 2020, the Company’s Board of Directors declared a quarterly common dividend of $0.066 per share, reduced from $0.330 per share from the February 2020 dividend, which preserves $3.6 million of cash per quarter.

•

Dramatically reduced near-term redevelopment and other non-essential capital expenditures. In addition, the Company reduced general and administrative costs by $1.9 million in 2020 versus 2019.

•

Transitioned all but a limited number of essential employees to remote work and does not anticipate any adverse impact on its ability to continue to operate its business. Currently, the Company has a limited number of employees coming into offices as needed and has employees visiting properties only as necessary to ensure that the properties with essential businesses that are open and operating are able to conduct business and serve their communities.

Real Estate

On July 23, 2020, the Company entered into a commercial lease agreement (the “Lease”) with the Government of the District of Columbia (the “District”), for the lease by the District of approximately 240,000 square feet of office space in a new six-story building to be constructed by the Company at Senator Square. The building is planned to house the new office headquarters for the District of Columbia’s Department of General Services’ (“DGS”) 700-member workforce. The term of the Lease is 20 years and 10 months, to commence upon substantial completion and delivery to DGS. The Company anticipates commencement of construction to occur in the first quarter of 2021 and currently estimates that the space will be delivered during the end of the fourth quarter 2022.

Upon completion of the building, the District will be obligated to pay initial annual net rent of approximately $5.4 million per year, subject to a 2.5% annual escalator on each anniversary of rent commencement, plus certain operating costs, property taxes and amortization of tenant improvements together totaling approximately an additional $8.1 million per year, for an aggregate total annual rent of approximately $13.5 million. The Lease provides for a free rent period of 10 months immediately following rent commencement. The Lease also provides the District with a tenant credit of approximately $6.8 million to be applied, at the District’s election, against either annual rent or any other tenant payment obligations including tenant improvement costs, in excess of the tenant improvement allowance. Pursuant to the Lease, the landlord will contribute up to $155 per rentable square foot toward the cost of tenant improvements, to be amortized over 240 months. In addition, the Lease provides that the Company will contribute $9.38 per rentable square foot in additional tenant improvement allowance between the 10th and 12th Lease years, upon the District’s timely election. The obligations of the District under the Lease are subject to annual budget appropriation.

As of December 31, 2020, Carll’s Corner, located in Bridgeton, New Jersey, and The Commons, located in Dubois, Pennsylvania, have been classified as “real estate held for sale” on the accompanying consolidated balance sheet.

On January 31, 2020, the Company agreed to a cash payment in consideration for permitting a dark anchor tenant to terminate its lease prior to the contractual expiration at Metro Square. As a result of this termination, revenues for the nine months ended September 30, 2020, included approximately $7.1 million of other income.

During 2020, the Company sold the properties listed below:

		Date	Sales		Gain on
Property	Location	Sold	Price		Sale
2020
Metro Square	Owings Mills, MD	7/9/2020	$	4,288,000	$	-
Oakland Mills outparcel building	Columbia, MD	9/17/2020		1,050,000		643,000
Glen Allen Shopping Center	Glen Allen, VA	10/8/2020		8,540,000		1,780,000
Pine Grove Plaza outparcel building	Brown Mills, NJ	11/2/2020		1,100,000		565,000
Suffolk Plaza	Suffolk, VA	12/10/2020		6,950,000		1,408,000
			$	21,928,000	$	4,396,000

During the year ended December 31, 2020, the Company recorded impairment charges of $7.6 million in relation to properties classified as real estate held for sale, which are included in continuing operations in the accompanying consolidated statement of operations.

Unsecured Revolving Credit Facility and Term Loans

Common Stock

On November 25, 2020, the Company effected a 1-for-6.6 reverse stock split of the issued and outstanding shares of common stock. Each 6.6 shares of the Company's issued and outstanding common stock were combined into one share of the Company's common stock. The number of authorized shares and the par value of the common stock were not changed. In addition, the Company amended the Limited Partnership Agreement of our Operating Partnership to effect a corresponding reverse split of the partnership interests of the Operating Partnership. In accordance with GAAP, all shares of common stock, restricted stock units, OP Units and per share/unit information that are presented in this Form 10-K were adjusted to reflect the reverse split on a retroactive basis for all periods presented.

2019 Significant Transactions

Acquisition

On June 19, 2019, the Company purchased Girard Plaza, a shopping center adjacent to its South Philadelphia property, located in Philadelphia, Pennsylvania. The purchase price for the property was $8.5 million, which has been allocated to real estate assets and liabilities.

Dispositions

On February 15, 2019, the Company sold Maxatawny Marketplace, located in Maxatawny, Pennsylvania. The sales price for the property was $10.3 million, which resulted in a gain on sale of $0.1 million, which has been included in continuing operations in the accompanying consolidated statement of operations.

On June 26, 2019, the Company sold Fort Washington Center, located in Fort Washington, Pennsylvania. The sales price for the property was $9.0 million, which resulted in a gain on sale of $2.8 million, which has been included in continuing operations in the accompanying consolidated statement of operations.

Real Estate Held for Sale

As of December 31, 2019, Carll’s Corner, located in Bridgeton, New Jersey, Suffolk Plaza, located in Suffolk, Virginia and The Commons, located in Dubois, Pennsylvania, have been classified as “real estate held for sale” on the accompanying consolidated balance sheet. During 2019, an impairment charge of $8.9 million has been recorded in connection with a property held for sale, which has been included in continuing operations in the accompanying consolidated statements of operations.

Equity

On December 18, 2018, the Company’s Board of Directors approved a stock repurchase program, which authorized the Company to purchase up to $30.0 million of the Company’s common stock in the open market or through private transactions, subject to market conditions. The stock repurchase program expired on December 18, 2019. During 2019, the Company repurchased approximately 311,000 shares at a weighted average price per share of $22.03. Since approval of the plan on December 18, 2018, the Company repurchased 428,000 shares at a weighted average price per share of $21.45.

Summary of Critical Accounting Policies

The preparation of the consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition and the allowance for doubtful accounts receivable, real estate investments and purchase accounting allocations related thereto, asset impairment, and derivatives used to hedge interest-rate risks. Management’s estimates are based both on information that is currently available and on various other assumptions management believes to be reasonable under the circumstances. Actual results could differ from those estimates and those estimates could be different under varying assumptions or conditions.

The Company has identified the following critical accounting policies, the application of which requires significant judgments and estimates:

Revenue Recognition

Rental income with scheduled rent increases is recognized using the straight-line method over the respective terms of the leases. The aggregate excess of rental revenue recognized on a straight-line basis over base rents under applicable lease provisions is included in straight-line rents receivable on the consolidated balance sheet. Leases also generally contain provisions under which the tenants reimburse the Company for a portion of property operating expenses and real estate taxes incurred; such income is recognized in the periods earned. In addition, certain operating leases contain contingent rent provisions under which tenants are required to pay a percentage of their sales in excess of a specified amount as additional rent. The Company defers recognition of contingent rental income until those specified targets are met.

The Company must make estimates as to the collectability of its accounts receivable related to base rent, straight-line rent, expense reimbursements and other revenues. Management analyzes accounts receivable by considering tenant creditworthiness, current economic conditions, and changes in tenants’ payment patterns when evaluating the adequacy of the allowance for doubtful accounts receivable. These estimates have a direct impact on net income, because a higher bad debt allowance would result in lower net income, whereas a lower bad debt allowance would result in higher net income.

Real Estate Investments

Real estate investments are carried at cost less accumulated depreciation. The provision for depreciation is calculated using the straight-line method based on estimated useful lives. Expenditures for maintenance, repairs and betterments that do not materially prolong the normal useful life of an asset are charged to operations as incurred. Expenditures for betterments that substantially extend the useful lives of real estate assets are capitalized.

Real estate investments include costs of development and redevelopment activities, and construction in progress. Capitalized costs, including interest and other carrying costs during the construction and/or renovation periods, are included in the cost of the related asset and charged to operations through depreciation over the asset's estimated useful life. The Company is required to make subjective estimates as to the useful lives of its real estate assets for purposes of determining the amount of depreciation to reflect on an annual basis. These assessments have a direct impact on net income. A shorter estimate of the useful life of an asset would have the effect of increasing depreciation expense and lowering net income, whereas a longer estimate of the useful life of an asset would have the effect of reducing depreciation expense and increasing net income.

A variety of costs are incurred in the acquisition, development and leasing of a property, such as pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs, and other costs incurred during the period of development. After a determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. The Company ceases capitalization on the portions substantially completed and occupied, or held available for occupancy, and capitalizes only those costs associated with the portions under construction. The Company considers a construction project as substantially completed and held available for occupancy upon the completion of tenant improvements, but not later than one year from cessation of major development activity. Determination of when a development project is substantially complete and capitalization must cease involves a degree of judgment. The effect of a longer capitalization period would be to increase capitalized costs and would result in higher net income, whereas the effect of a shorter capitalization period would be to reduce capitalized costs and would result in lower net income.

The Company allocates the fair value of real estate acquired to land, buildings and improvements. In addition, the fair value of in-place leases is allocated to intangible lease assets and liabilities. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, which value is then allocated to land, buildings and improvements based on management’s determination of the fair values of such assets. In valuing an acquired property’s intangibles, factors considered by management include an estimate of carrying costs during the expected lease-up periods, such as real estate taxes, insurance, other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on its evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs.

leases are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of below-market leases associated with the original non-cancelable lease terms are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of the leases associated with below-market renewal options that are likely of exercise are amortized to rental income over the respective renewal periods. The value of other intangible assets (including leasing commissions, tenant improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If a lease were to be terminated prior to its stated expiration or not renewed, all unamortized amounts relating to that lease would be recognized in operations at that time.

Management is required to make subjective assessments in connection with its valuation of real estate acquisitions. These assessments have a direct impact on net income, because (1) above-market and below-market lease intangibles are amortized to rental income, and (2) the value of other intangibles is amortized to expense. Accordingly, higher allocations to below-market lease liability and other intangibles would result in higher rental income and amortization expense, whereas lower allocations to below-market lease liability and other intangibles would result in lower rental income and amortization expense.

Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These estimates of cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. A real estate investment held for sale is carried at the lower of its carrying amount or estimated fair value, less the cost of a potential sale. Depreciation and amortization are suspended during the period the property is held for sale. Management is required to make subjective assessments as to whether there are impairments in the value of its real estate properties. These assessments have a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made.

New Accounting Pronouncements

See Note 2 of Notes to Consolidated Financial Statements included in Item 8 below for information relating to new accounting pronouncements.

Results of Operations

Comparison of 2020 to 2019

							Change
	2020			2019			Dollars			Percent
Revenues	$	135,538,000		$	144,083,000		$	(8,545,000	)	-5.9%
Property operating expenses		(45,596,000	)		(48,347,000	)		2,751,000		-5.7%
Property operating income		89,942,000			95,736,000			(5,794,000	)
General and administrative		(16,865,000	)		(18,804,000	)		1,939,000		-10.3%
Depreciation and amortization		(48,412,000	)		(45,861,000	)		(2,551,000	)	5.6%
Gain on sales		4,396,000			2,942,000			1,454,000		n/a
Impairment charges		(7,607,000	)		(8,938,000	)		1,331,000		n/a
Interest expense		(21,974,000	)		(23,509,000	)		1,535,000		-6.5%
Net (loss) income		(520,000	)		1,566,000			(2,086,000	)
Net (income) attributable to noncontrolling interests		(552,000	)		(490,000	)		(62,000	)
Net (loss) income attributable to Cedar Realty Trust, Inc.	$	(1,072,000	)	$	1,076,000		$	(2,148,000	)

Revenues were lower primarily as a result of the negative impact of the COVID-19 pandemic, which resulted in (1) a decrease of $5.4 million in rental revenues and expense recoveries and a decrease of $1.8 million in straight-line rental and the amortization of intangible lease liabilities revenues attributable to same-center properties, (2) a decrease of $5.5 million in rental revenues and expense recoveries and a decrease of $1.2 million in straight-line rental and the amortization of intangible lease liabilities revenues attributable to redevelopment properties. In addition, there was a decrease of $2.1 million in rental revenues and expense recoveries attributable to properties that were sold or held for sale in 2019 and 2018. These negative results were partially offset by (1) $7.1 million in revenue in the quarter ended March 31, 2020 relating to a dark anchor tenant terminating its lease prior to the contractual expiration in 2020 at Metro Square, and (2) an increase of $0.4 million in rental revenues and expense recoveries attributable to a property acquired in 2019.

Property operating expenses were lower primarily as a result of (1) a decrease of $2.0 million in property operating expenses attributable to redevelopment properties, (2) a decrease of $0.6 million in property operating expenses attributable to properties that

were sold or held for sale in 2020 and 2019, and (3) a decrease of $0.3 million in property operating expenses attributable to same-center properties, partially offset by an increase of $0.2 million in property operating expenses attributable to a property acquired in 2019.

General and administrative costs were lower primarily as a result of (1) cost savings of $1.1 million as a result of the COVID-19 pandemic, predominately related to the cancellation of leasing conventions along with the related travel expenses and (2) a decrease of $0.9 million in legal and professional fees.

Depreciation and amortization expenses were higher as a result of (1) accelerated depreciation of tenant improvements and leasing commissions of $4.2 million as a result of tenants vacating their spaces, (2) accelerated depreciation of $2.1 million in the quarter ended March 31, 2020 relating to the demolition of certain existing buildings at a redevelopment property, (3) an increase of $1.3 million attributable to same-center properties, and (4) a $0.7 million write-off in the quarter ended March 31, 2020 arising from a lease termination for permitting a dark anchor to terminate its lease prior to the contractual expiration at a property that was classified held for sale in 2020, by (1) a decrease of $5.0 million attributable to redevelopment properties, and (2) a decrease of $0.6 million attributable to properties that were sold or held for sale in 2020 and 2019.

Gain on sales in 2020 relates to the sale of (1) Glen Allen Shopping Center, located in Glen Allen, Virginia, (2) Suffolk Plaza, located in Suffolk, Virginia, (3) an outparcel building at Oakland Mills, located in Columbia, Maryland, and (4) an outparcel building at Pine Grove Plaza, located in Brown Mills, New Jersey. Gain on sales in 2019 relates to the sale of Maxatawny Marketplace, located in Maxatawny, Pennsylvania and Fort Washington Center, located in Fort Washington, Pennsylvania.

Impairment charges in 2020 relates to Metro Square, located in Owings Mills, Maryland, and The Commons, located in Dubois Pennsylvania. Impairment charges.in 2019 relate to The Commons, located in Dubois, Pennsylvania.

Interest expense was lower as a result of (1) a decrease in the overall weighted average interest rate which resulted in a decrease in interest expense of $1.8 million, and (2) an increase in capitalized interest of $1.0 million, partially offset by increase in the overall weighted average principal balance which resulted in an increase in interest expense of $1.3 million.as higher as a result of an increase in the overall weighted average interest rate.

Comparison of 2019 to 2018

							Change
	2019			2018			Dollars			Percent
Revenues	$	144,083,000		$	152,020,000		$	(7,937,000	)	-5.2%
Property operating expenses		(48,347,000	)		(47,894,000	)		(453,000	)	0.9%
Property operating income		95,736,000			104,126,000			(8,390,000	)
General and administrative		(18,804,000	)		(16,915,000	)		(1,889,000	)	11.2%
Depreciation and amortization		(45,861,000	)		(40,053,000	)		(5,808,000	)	14.5%
Gain on sales		2,942,000			4,864,000			(1,922,000	)	n/a
Impairment charges		(8,938,000	)		(20,689,000	)		11,751,000		n/a
Interest expense		(23,509,000	)		(22,146,000	)		(1,363,000	)	6.2%
Early extinguishment of debt costs		—			(4,829,000	)		4,829,000		n/a
Net income		1,566,000			4,358,000			(2,792,000	)
Net (income) attributable to noncontrolling interests		(490,000	)		(469,000	)		(21,000	)
Net income attributable to Cedar Realty Trust, Inc.	$	1,076,000		$	3,889,000		$	(2,813,000	)

Revenues were lower primarily as a result of (1) $5.4 million relating to a dark anchor tenant terminating its lease prior to the contractual expiration in 2018 at West Bridgewater Plaza, (2) a decrease of $3.4 million in rental revenues and expense recoveries attributable to properties that were sold or held for sale in 2019 and 2018, (3) a decrease of $0.8 million in rental revenues and expense recoveries attributable to same-center properties which was driven by the adoption of the new lease accounting standard (see Note 2 – “Issued and Adopted Accounting Pronouncements”), and (4) a decrease of $0.1 million in rental revenues and expense recoveries attributable to redevelopment properties, partially offset by (1) an increase of $1.7 million in rental revenues and expense recoveries attributable to properties acquired in 2019 and 2018, and (2) an increase of other income of $0.4 million.

Property operating expenses were higher primarily as a result of (1) an increase of $1.1 million in property operating expenses attributable to properties acquired in 2019 and 2018, and (2) an increase of $0.6 million in property operating expenses attributable to the Company’s redevelopment properties, partially offset by (1) a decrease of $0.8 million in property operating expenses attributable to properties that were sold or held for sale in 2019 and 2018, and (2) a decrease of $0.7 million in property operating expenses

attributable to same-center properties which was driven by the adoption of the new lease accounting standard (see Note 2 – “Issued and Adopted Accounting Pronouncements”).

General and administrative costs were higher primarily as a result of (1) an increase in payroll expense of $2.8 million predominantly relating to the adoption of the new lease accounting standard in 2019 which no longer permits the capitalization of initial direct leasing costs, and (2) an increase in legal and professional fees of $0.6 million, partially offset by the reversal of $1.5 million of accrued expenses related to the termination of the prior Chief Operating Officer.

Depreciation and amortization expenses were higher primarily as a result (1) accelerated depreciation of $4.3 million in 2019 relating to the demolition of certain existing buildings at redevelopment properties, (2) an increase of $1.5 million attributable to same-center properties, (3) an increase of $1.2 million attributable to redevelopment properties, and (4) an increase of $0.5 million attributable to properties acquired in 2019 and 2018, partially offset by a decrease of $1.6 million attributable to properties that were sold or held for sale in 2019 and 2018.

Gain on sales in 2019 relates to the sale of Maxatawny Marketplace, located in Maxatawny, Pennsylvania and Fort Washington Center, located in Fort Washington, Pennsylvania. Gain on sale in 2018 relates to the sale of Mechanicsburg Center, located in Mechanicsburg, Pennsylvania.

Impairment charges in 2019 relate to The Commons, located in Dubois, Pennsylvania. Impairment charges in 2018 relate to (1) West Bridgewater Plaza, located in West Bridgewater, Pennsylvania totaling $9.4 million, and (2) Carll’s Corner, located in Bridgeton, New Jersey totaling $11.3 million

Interest expense was higher as a result of an increase in the overall weighted average interest rate.

Early extinguishment of debt costs in 2018 relates to defeasement fees and the accelerated write-off of unamortized costs associated with the prepayment of certain mortgage loans payable.

Same-Property Net Operating Income

Same-property net operating income (“same-property NOI”) is a widely-used non-GAAP financial measure for REITs that the Company believes, when considered with financial statements prepared in accordance with GAAP, is useful to investors as it provides an indication of the recurring cash generated by the Company’s properties by excluding certain non-cash revenues and expenses, as well as other infrequent items such as lease termination income which tends to fluctuate more than rents from year to year. Properties are included in same-property NOI if they are owned and operated for the entirety of both periods being compared, except for properties undergoing significant redevelopment and expansion until such properties have stabilized, and properties classified as held for sale. Consistent with the capital treatment of such costs under GAAP, tenant improvements, leasing commissions and other direct leasing costs are excluded from same-property NOI.

The most directly comparable GAAP financial measure is consolidated operating income. Same-property NOI should not be considered as an alternative to consolidated operating income prepared in accordance with GAAP or as a measure of liquidity. Further, same-property NOI is a measure for which there is no standard industry definition and, as such, it is not consistently defined or reported on among the Company’s peers, and thus may not provide an adequate basis for comparison among REITs.

The following table reconciles same-property NOI to the Company’s consolidated operating income:

	Years ended December 31,
	2020			2019
Operating income	$	21,454,000		$	25,075,000
Add (deduct):
General and administrative		16,865,000			18,804,000
Gain on sales		(4,396,000	)		(2,942,000	)
Impairment charges		7,607,000			8,938,000
Depreciation and amortization		48,412,000			45,861,000
Straight-line rents		1,208,000			(405,000	)
Amortization of intangible lease liabilities		(1,373,000	)		(2,827,000	)
Other adjustments		(426,000	)		(571,000	)
NOI related to properties not defined as same-property		(22,703,000	)		(20,432,000	)
Same-property NOI	$	66,648,000		$	71,501,000

Number of same properties		45			45
Same-property occupancy, end of period		90.0	%		91.0	%
Same-property leased, end of period		91.2	%		93.1	%
Same-property average base rent, end of period	$	13.69		$	13.71

Same-property NOI for the comparable years decreased 6.8% as a result of the negative impact of the COVID-19 pandemic which reduced rental revenues for the same-property portfolio.

Leasing Activity

The following is a summary of the Company’s retail leasing activity during 2020:

												Tenant
					New rent		Prior rent		Cash basis			improvements
	Leases				per		per		%			per
	signed		GLA		sq.ft. ($)		sq.ft. ($)		change			sq.ft. ($)
Renewals		91		820,700		14.68		14.54		0.9	%		0.96
New Leases - Comparable		28		131,600		13.69		14.40		-4.9	%		20.74	(a)
New Leases - Non-Comparable (b)		2		10,700		14.16	n/a		n/a				28.98	(a)
Total (c)		121		963,000		14.54	n/a		n/a				3.97

(a)

Includes both tenant allowance and landlord work. Excludes first generation space.

(b)

Includes leases signed at first generation and expansion spaces.

(c)

Legal fees and leasing commissions averaged a combined total of $1.14 per square foot.

Liquidity and Capital Resources

The Company funds operating expenses and other short-term liquidity requirements, including debt service, tenant improvements, leasing commissions, preferred and common dividend distributions and distributions to minority interest partners, if made, primarily from its operations. The Company may also use its revolving credit facility for these purposes. The Company expects to fund long-term liquidity requirements for property acquisitions, redevelopment costs, capital improvements, and maturing debt initially with its revolving credit facility, and ultimately through a combination of issuing and/or assuming additional debt, the sale of equity securities, the issuance of additional OP Units, and/or the sale of properties. Although the Company believes it has access to secured and unsecured financing, there can be no assurance that the Company will have access to financing for development projects, financing for additional construction projects, or proceeds from refinancing of existing debt.

As a result of the COVID-19 pandemic which has created significant economic uncertainty, the Company took the following actions: (1) in March 2020, the Company borrowed an aggregate $75.0 million under its revolving credit facility to preserve financial flexibility, (2) in April, July and October 2020, the Company’s Board of Directors declared a quarterly common dividend of $0.066 per share, reduced from $0.330 per share from the February 2020 dividend, which preserves $3.6 million of cash per quarter, and (3) dramatically reduced near-term redevelopment and other non-essential capital expenditures.

Effective April 28, 2020, the average closing price of the Company’s common stock had been less than $1.00 over the prior 30-consecutive trading day period, and as a result, the Company received notice from the NYSE that the Company had until December 31, 2020 to regain compliance with the minimum share price requirement. The threat of delisting and/or a delisting of the Company’s common stock could have adverse effects, such as restricting the Company’s ability to obtain equity financing. On November 25, 2020, to regain compliance with the minimum NYSE share price requirement, the Company effected a 1-for-6.6 reverse stock split of the issued and outstanding shares of common stock. Each 6.6 shares of the Company's issued and outstanding common stock were combined into one share of the Company's common stock. The number of authorized shares and the par value of the common stock were not changed. In addition, the Company amended the Limited Partnership Agreement of our Operating Partnership to effect a corresponding reverse split of the partnership interests of the Operating Partnership.

On August 4, 2020, the Company amended its existing $300 million unsecured credit facility and term loans. After such amendments, the Company’s financial ratios and borrowing base are now all computed using the trailing four quarters as opposed to the current quarter annualized and interest rate swaps that are a hedge of existing debt are now excluded from the definition of debt. The $300 million unsecured credit facility consists of (1) a $250 million revolving credit facility, and (2) a $50 million term loan. The revolving credit facility may be extended, at the Company’s option, for an additional one-year period, subject to customary conditions. Under an accordion feature, the facility can be increased to $750 million, subject to customary conditions and lending commitments. Interest on borrowings under the unsecured credit facility and term loans are based on the Company’s leverage ratio.

The Company’s unsecured credit facility and term loans contain financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facilities could result in the acceleration of the related debt and exercise of other lender remedies. Although the credit facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income for the trailing twelve months, as defined in the agreements. As of the date of filing this Form 10-K, the Company had $175.0 million outstanding and $56.7 million available for additional borrowings under its revolving credit facility, and was in compliance with all financial covenants. However, the COVID-19 pandemic may negatively impact the Company’s future ability to remain compliant with all financial covenants, including the ability to generate sufficient unencumbered property adjusted net operating income to support current borrowings (See “Item 1A – Risk Factors” above). The Company’s unencumbered property adjusted net operating income was not significantly impacted by the COVID-19 pandemic until the quarter ended June 30, 2020. Accordingly, not until the quarter ended March 31, 2021, will the unencumbered property adjusted net operating income for the trailing twelve months fully reflect the negative impact of the COVID-19 pandemic.

Debt and finance lease obligations are composed of the following at December 31, 2020:

		December 31, 2020
					Contractual
	Maturity	Balance			interest rates
Description	dates	outstanding			weighted-average
Fixed-rate mortgage	Jun 2026	$	45,645,000		3.9%
Finance lease obligation	Sep 2050		5,631,000		5.3%
Unsecured credit facilities:
Variable-rate:
Revolving credit facility	Sep 2021 (a)		175,000,000		2.7%(b)
Term loan	Sep 2022		50,000,000		1.9%
Fixed-rate (c):
Term loan	Feb 2022		50,000,000		3.3%
Term loan	Sep 2022		50,000,000		3.5%
Term loan	Apr 2023		100,000,000		3.5%
Term loan	Sep 2024		75,000,000		3.9%
Term loan	Jul 2025		75,000,000		4.8%
			626,276,000		3.4%
Unamortized issuance costs			(2,002,000	)
		$	624,274,000

(a)

The revolving credit facility is subject to a one-year extension at the Company’s option.

(b)

rate of 3.9% on $75.0 million of the facility, and a variable-rate of 1.8% on the remaining $100.0 million of the facility, resulting in a blended interest rate of 2.7% at December 31, 2020.

(c) The interest rates on these term loans consist of LIBOR plus a credit spread based on the Company’s leverage ratio, for which the Company has interest rate swap agreements which convert the LIBOR rates to fixed rates. Accordingly, these term loans are presented as fixed-rate debt.

The following table details the Company’s debt and finance lease obligation maturities at December 31, 2020:


	Mortgage Loan		Finance Lease		Revolving			Term				Unamortized
Year	Payable		Obligation		Credit Facility			Loans		Total		Issuance Costs			Total
2021	$	1,074,000	$	35,000		175,000,000	(a)	$	-	$	176,109,000	$	(647,000	)	$	175,462,000
2022		1,116,000		37,000		-			150,000,000		151,153,000		(499,000	)		150,654,000
2023		1,160,000		39,000		-			100,000,000		101,199,000		(274,000	)		100,925,000
2024		1,206,000		41,000		-			75,000,000		76,247,000		(207,000	)		76,040,000
2025		1,253,000		44,000		-			75,000,000		76,297,000		(115,000	)		76,182,000
Thereafter		39,836,000		5,435,000		-			-		45,271,000		(260,000	)		45,011,000
	$	45,645,000	$	5,631,000	$	175,000,000		$	400,000,000	$	626,276,000	$	(2,002,000	)	$	624,274,000

(a)

The revolving credit facility is subject to a one-year extension at the Company's option.

The Company’s revolving credit facility expires in September 2021, and is subject to a one-year extension at the Company’s option. In addition, the Company is exploring obtaining secured debt on certain properties to address some, or all, of the Company’s debt maturities in 2022.

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 common and preferred stock dividends during 2019, and has continued to declare and pay common and preferred stock dividends during 2020. While the Company intends to continue paying regular quarterly dividends, 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. Additionally, the Board of Directors may reduce, as it did with the May 2020 common stock dividend of $0.066 per common share, or suspend payment of dividends to retain cash and reduce debt obligations and/or to fund redevelopments and other capital needs. 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.

Contractual Obligations and Commercial Commitments

The following table sets forth the Company’s significant debt repayment, interest, finance and operating lease obligations at December 31, 2020:

	Maturity Date
	2021		2022		2023		2024		2025		Thereafter		Total
Debt:
Mortgage loan payable	$	1,074,000		1,116,000	$	1,160,000	$	1,206,000	$	1,253,000	$	39,836,000	$	45,645,000
Unsecured revolving credit facility (a)		175,000,000		-		-		-		-		-		175,000,000
Unsecured term loans		-		150,000,000		100,000,000		75,000,000		75,000,000		-		400,000,000
Interest payments (b)		18,450,000		13,735,000		9,326,000		7,249,000		3,592,000		527,000		52,879,000
Finance lease obligation (principal and interest)		333,000		333,000		333,000		333,000		333,000		10,394,000		12,059,000
Operating lease obligations		1,113,000		1,112,000		1,112,000		1,114,000		993,000		28,554,000		33,998,000
Total	$	195,970,000	$	166,296,000	$	111,931,000	$	84,902,000	$	81,171,000	$	79,311,000	$	719,581,000

(a)	The revolving credit facility is subject to a one-year extension at the Company's option.

(b)

Represents interest payments expected to be incurred on the Company's debt obligations as of December 31, 2020, including interest that may subsequently be capitalized. The interest rates used in this calculation in regards to the unsecured revolving credit facility and term loan not subject to interest rate swap agreements consist of LIBOR plus a credit spread based on the Company’s leverage ratio as of December 31, 2020, with the rate in effect at December 31, 2020 being assumed to remain in effect until their maturities. The interest rates used in this calculation in regards to the unsecured term loans subject to interest rate swap agreements consists of LIBOR plus a credit spread based on the Company’s leverage ratio as of December 31, 2020, for which the Company has converted the LIBOR rates to fixed rates.

In addition, the Company has outstanding construction commitments totaling approximately $4.5 million at December 31, 2020.

Off-Balance Sheet Arrangements

Other than the items disclosed in the Contractual Obligations and Commercial Commitments section above, the Company had no off-balance sheet arrangements as of December 31, 2020 that are reasonably likely to have a current or future material effect on the Company’s financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Net Cash Flows

	Years ended December 31,
	2020			2019			2018
Cash flows provided by (used in):
Operating activities	$	42,580,000		$	53,675,000		$	57,900,000
Investing activities	$	(18,369,000	)	$	(22,342,000	)	$	(14,938,000	)
Financing activities	$	(25,321,000	)	$	(30,563,000	)	$	(48,204,000	)

Operating Activities

Net cash provided by operating activities, before net changes in operating assets and liabilities, was $57.5 million, $56.1 million, and $66.7 million for 2020, 2019 and 2018, respectively. The increase between 2020 and 2019 was primarily a result of the Company accepting a payment of $8.0 million in consideration for permitting a dark anchor tenant to terminate its lease prior to the contractual expiration in 2020, which was partially offset by (1) the negative impact of the COVID-19 pandemic in 2020, and (2) property dispositions in 2020 and 2019. The decrease between 2019 and 2018 was primarily a result of (1) the Company accepting a payment of $4.3 million in consideration for permitting a dark anchor tenant to terminate its lease prior to the contractual expiration in 2018, (2) an increase in cash paid for interest, and (3) property dispositions in 2019 and 2018.

Investing Activities

Net cash flows used in investing activities were primarily the result of the Company’s property disposition activities, property acquisitions and expenditures for property improvements. During 2020, the Company incurred expenditures of $39.6 million for property improvements, which was partially offset by $21.2 million in proceeds from the sale of properties. During 2019, the Company incurred expenditures of $31.9 million for property improvements, and acquired a property for $9.1 million, which was partially offset by $18.7 million in proceeds from the sales of properties. During 2018, the Company incurred expenditures of $30.4 million for property improvements and issued a $3.5 million mortgage note receivable, which was partially offset by $19.1 million in proceeds from the sale of properties.

Financing Activities

During 2020, the Company repaid a $75.0 million term loan, had $17.9 million of preferred and common stock distributions, had $1.1 million of mortgage repayments, and paid $0.3 million of debt financing costs, which were partially offset by net advances of $69.0 million under the revolving credit facility. During 2019, the Company paid $28.6 million of preferred and common stock distributions, had $6.8 million of common stock repurchases, and had $1.0 million of mortgage repayments, which was partially offset by net borrowings of $6.0 million under the revolving credit facility. During 2018, the Company had $80.3 million of repayments of mortgage obligations, paid $50.0 million to partially redeem shares of its Series B Preferred Stock, had $29.6 million of preferred and common stock distributions, had $5.2 million of payment for early extinguishment of debt costs, had $2.3 million of common stock repurchases, and $0.7 million of payments for debt financing costs, which was partially offset by a $75.0 million borrowing under a new term loan, and net borrowings of $45.0 million under the revolving credit facility.

Funds From Operations

Funds From Operations (“FFO”) is a widely recognized supplemental non-GAAP measure utilized to evaluate the financial performance of a REIT. The Company presents FFO in accordance with the definition adopted by the National Association of Real Estate Investment Trusts (“Nareit”). Nareit generally defines FFO as net income (determined in accordance with GAAP), excluding gains (losses) from sales of real estate properties, impairment write-downs on real estate properties directly attributable to decreases in the value of depreciable real estate, plus real estate related depreciation and amortization, and adjustments for partnerships and joint ventures to reflect FFO on the same basis. The Company considers FFO to be an appropriate measure of its financial performance because it captures features particular to real estate performance by recognizing that real estate generally appreciates over time or maintains residual value to a much greater extent than other depreciable assets.

The Company also considers Operating Funds From Operations (“Operating FFO”) to be an additional meaningful financial measure of financial performance because it excludes items the Company does not believe are indicative of its core operating performance, such as non-capitalized acquisition pursuit costs, amounts relating to early extinguishment of debt and preferred stock redemption costs, management transition costs and certain redevelopment costs. The Company believes Operating FFO further assists in comparing the Company’s performance across reporting periods on a consistent basis by excluding such items.

FFO and Operating FFO should be reviewed with net income attributable to common shareholders, the most directly comparable GAAP financial measure, when trying to understand the Company’s operating performance. FFO and Operating FFO do not represent cash generated from operating activities and should not be considered as an alternative to net income attributable to common shareholders or to cash flow from operating activities. The Company’s computations of FFO and Operating FFO may differ from the computations utilized by other REITs and, accordingly, may not by comparable to such REITs.

A reconciliation of net (loss) attributable to common shareholders to FFO and Operating FFO for the years ended December 31, 2020, 2019 and 2018 is as follows:

	Years ended December 31,
	2020			2019			2018
Net (loss) attributable to common shareholders	$	(11,824,000	)	$	(9,676,000	)	$	(10,481,000	)
Real estate depreciation and amortization		48,297,000			45,677,000			39,858,000
Limited partners' interest		(66,000	)		(57,000	)		(28,000	)
Gain on sales		(4,396,000	)		(2,942,000	)		(4,864,000	)
Impairment charges		7,607,000			8,938,000			20,689,000
Consolidated minority interests:
Share of income		618,000			547,000			497,000
Share of FFO		(388,000	)		(414,000	)		(430,000	)
FFO applicable to diluted common shares		39,848,000			42,073,000			45,241,000
Redevelopment costs (a)		483,000			196,000			—
Reversal of management transition costs (b)		—			(1,500,000	)		—
Preferred stock redemption costs		—			—			3,507,000
Financing costs (c)		—			—			4,829,000
Operating FFO applicable to diluted common shares	$	40,331,000		$	40,769,000		$	53,577,000

FFO per diluted common share	$	2.88		$	3.05		$	3.22
Operating FFO per diluted common share	$	2.91		$	2.95		$	3.81
Weighted average number of diluted common shares (d):
Common shares and equivalents		13,758,000			13,728,000			13,994,000
OP Units		81,000			83,000			65,000
		13,839,000			13,811,000			14,059,000

(a)

Includes redevelopment project costs expensed pursuant to GAAP such as certain demolition and lease termination costs.

(b)

General and administrative expenses were reduced as a result of the reversal of previously accrued expenses associated with the termination of the prior Chief Operating Officer. As original estimated expenses were added back to operating FFO when recorded in 2016, the reversal of such expenses have been deducted from Operating FFO.

(c)

Represents extinguishment of debt costs.

(d)

The weighted average number of diluted common shares used to compute FFO and Operating FFO applicable to diluted common shares includes OP Units, unvested restricted stock units and unvested restricted shares that are excluded from the computation of diluted EPS.

Inflation

Inflation has been relatively low in recent years (including our three most recent fiscal years) and has not had a significant detrimental impact on the Company’s results of operations. There have been mixed indications of an increase in inflation in the U.S. economy. If inflation rates increase, 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 and many of the operating expenses it incurs. Significant inflation rate increases over a prolonged period of time may have a material adverse impact on the Company’s business.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

One of the principal market risks facing the Company is the risk of interest rate changes, primarily through its variable-rate revolving credit facility and term loans. The Company’s objectives with respect to interest rate risk are to limit the impact of interest rate changes on operations and cash flows, and to lower its overall borrowing costs. To achieve these objectives, the Company may borrow at either fixed rates or at variable rates and enter into derivative financial instruments, such as interest rate swaps, to mitigate its interest rate risk. The Company does not enter into derivative or interest rate transactions for speculative purposes. The Company is not directly subject to foreign currency risk.

The Company has entered into forward interest rate swap agreements which convert the LIBOR rates to fixed rates for certain unsecured term loans. At December 31, 2020, the Company had $18.9 million included in accounts payable and accrued liabilities on the consolidated balance sheet relating to the fair value of the interest rate swaps applicable to certain unsecured term loans.

At December 31, 2020, long-term debt consisted of a fixed-rate mortgage loan payable, a finance lease obligation, unsecured term loans, and the Company’s unsecured variable-rate credit facility. Excluding unamortized premiums and debt issuance costs, the average interest rate on the $476.3 million of fixed-rate debt outstanding was 3.9%, with maturities at various dates through 2050. The average interest rate on the $150.0 million of variable-rate debt outstanding, which consists of a portion of the unsecured revolving credit facility and a term loan, was 1.8%. With respect to the $150.0 million of variable-rate debt, if contractual interest rates either increase or decrease by 100 bps, the Company’s interest cost would increase or decrease respectively by approximately $1.5 million per annum.

With respect to the Company’s fixed rate mortgage and unsecured term loans, changes in interest rates generally do not affect the Company’s interest expense as these notes are at fixed rates for extended terms. Because the Company presently intends to hold its existing fixed-rate debt either to maturity or until the sale of the associated property, these fixed-rate notes pose an interest rate risk to the Company’s results of operations and its working capital position only upon the refinancing of that indebtedness. The Company’s possible risk is from increases in long-term interest rates that may occur as this may increase the cost of refinancing maturing fixed-rate debt. In addition, the Company may incur prepayment penalties or defeasance costs when prepaying or defeasing debt.

Item 8.

Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm		45-46

Consolidated Balance Sheets, December 31, 2020 and 2019		47

Consolidated Statements of Operations, years ended December 31, 2020, 2019, and 2018		48

Consolidated Statements of Comprehensive Income, years ended December 31, 2020, 2019 and 2018		49

Consolidated Statements of Equity, years ended December 31, 2020, 2019 and 2018		50-51

Consolidated Statements of Cash Flows, years ended December 31, 2020, 2019 and 2018		52

Notes to Consolidated Financial Statements		53-73

Schedule Filed As Part Of This Report
Schedule III – Real Estate and Accumulated Depreciation, December 31, 2020		74-76

All other schedules have been omitted because the required information is not present, is not present in amounts sufficient to require submission of the schedule, or is included in the consolidated financial statements or notes thereto.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Cedar Realty Trust, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Cedar Realty Trust, Inc. as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notesand schedule listed in the index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 11, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates.

Impairment of Real Estate Investments

Description of the Matter

The Company’s real estate, net totaled $1.10 billion as of December 31, 2020. As explained in Note 2 to the consolidated financial statements, the Company reviews each real estate investment held for use for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable.

Auditing management’s impairment assessment was complex and involved a high degree of subjectivity due to the significant estimation required in determining the future estimated undiscounted net cash flows expected to be generated from assets with indicators of impairment. The estimated undiscounted cash flows are sensitive to assumptions such as expected future operating income, trends and prospects, as well as the effects of leasing demand, capital expenditures, competition and other factors, which are forward-looking and could be affected by future economic and market conditions.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of internal controls over management’s impairment process. This included testing controls over management’s review of the estimated undiscounted cash flows, including the significant assumptions and data used to develop the cash flows.

Our testing of the Company’s impairment assessment included, among other procedures, evaluating the appropriateness of the assumptions used to develop the estimated undiscounted cash flows. We utilized information obtained from market participants and recent industry market surveys to evaluate the assumptions used in the Company’s analyses. We held discussions with management regarding recent leasing activity and current and historical tenant credit quality and payment trends to understand the probability of future events that could affect the cash flow assumptions. We also searched for and evaluated information that corroborated or contradicted the Company’s assumptions. In addition, we tested the completeness and accuracy of the data that was used in management’s analyses.

/s/ ERNST & YOUNG LLP

We have served as the Company’s auditor since 1984.

New York, New York

February 11, 2021

CEDAR REALTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
	2020			2019
ASSETS
Real estate:
Land	$	284,694,000		$	293,456,000
Buildings and improvements		1,242,784,000			1,221,750,000
		1,527,478,000			1,515,206,000
Less accumulated depreciation		(428,569,000	)		(389,861,000	)
Real estate, net		1,098,909,000			1,125,345,000

Real estate held for sale		9,498,000			13,230,000
Cash and cash equivalents		1,637,000			2,747,000
Receivables		21,952,000			22,164,000
Other assets and deferred charges, net		45,255,000			42,139,000
TOTAL ASSETS	$	1,177,251,000		$	1,205,625,000

LIABILITIES AND EQUITY
Mortgage loan payable	$	45,385,000		$	46,370,000
Finance lease obligation		5,340,000			5,364,000
Unsecured revolving credit facility		175,000,000			106,000,000
Unsecured term loans		398,549,000			472,841,000
Accounts payable and accrued liabilities		56,580,000			50,502,000
Unamortized intangible lease liabilities		8,939,000			10,473,000
Total liabilities		689,793,000			691,550,000

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, 13,530,000 and 13,488,000 shares, issued and outstanding, respectively)		812,000			809,000
Treasury stock (447,000 and 465,000 shares, respectively, at cost)		(15,133,000	)		(16,311,000	)
Additional paid-in capital		879,790,000			877,256,000
Cumulative distributions in excess of net income		(522,696,000	)		(503,725,000	)
Accumulated other comprehensive (loss)		(18,816,000	)		(7,009,000	)
Total Cedar Realty Trust, Inc. shareholders' equity		483,498,000			510,561,000
Noncontrolling interests:
Minority interests in consolidated joint ventures		1,053,000			435,000
Limited partners' OP Units		2,907,000			3,079,000
Total noncontrolling interests		3,960,000			3,514,000
Total equity		487,458,000			514,075,000
TOTAL LIABILITIES AND EQUITY	$	1,177,251,000		$	1,205,625,000

See accompanying notes to consolidated financial statements

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Years ended December 31,
	2020			2019			2018
REVENUES
Rental revenues	$	127,171,000		$	142,719,000		$	147,236,000
Other		8,367,000			1,364,000			4,784,000
Total revenues		135,538,000			144,083,000			152,020,000
EXPENSES
Operating, maintenance and management		25,545,000			27,593,000			27,771,000
Real estate and other property-related taxes		20,051,000			20,754,000			20,123,000
General and administrative		16,865,000			18,804,000			16,915,000
Depreciation and amortization		48,412,000			45,861,000			40,053,000
Total expenses		110,873,000			113,012,000			104,862,000

OTHER
Gain on sales		4,396,000			2,942,000			4,864,000
Impairment charges		(7,607,000	)		(8,938,000	)		(20,689,000	)
Total other		(3,211,000	)		(5,996,000	)		(15,825,000	)

OPERATING INCOME		21,454,000			25,075,000			31,333,000

NON-OPERATING INCOME AND EXPENSES
Interest expense		(21,974,000	)		(23,509,000	)		(22,146,000	)
Early extinguishment of debt costs		-			-			(4,829,000	)
Total non-operating income and expenses		(21,974,000	)		(23,509,000	)		(26,975,000	)

NET (LOSS) INCOME		(520,000	)		1,566,000			4,358,000

Net (income) loss attributable to noncontrolling interests:
Minority interests in consolidated joint ventures		(618,000	)		(547,000	)		(497,000	)
Limited partners' interest in Operating Partnership		66,000			57,000			28,000
Total net (income) attributable to noncontrolling interests		(552,000	)		(490,000	)		(469,000	)

NET (LOSS) INCOME ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.		(1,072,000	)		1,076,000			3,889,000

Preferred stock dividends		(10,752,000	)		(10,752,000	)		(10,863,000	)
Preferred stock redemption costs		-			-			(3,507,000	)

NET (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(11,824,000	)	$	(9,676,000	)	$	(10,481,000	)

NET (LOSS) PER COMMON SHARE ATTRIBUTABLE TO COMMON SHAREHOLDERS (BASIC AND DILUTED):	$	(0.92	)	$	(0.78	)	$	(0.83	)

Weighted average number of common shares - basic and diluted		13,104,000			13,082,000			13,397,000

See accompanying notes to consolidated financial statements

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Years ended December 31,
	2020			2019			2018

Net (loss) income	$	(520,000	)	$	1,566,000		$	4,358,000

Unrealized (loss) gain on change in fair value of cash flow hedges		(11,878,000	)		(14,286,000	)		1,518,000

Comprehensive (loss) income		(12,398,000	)		(12,720,000	)		5,876,000

Comprehensive (income) attributable to noncontrolling interests		(481,000	)		(404,000	)		(490,000	)

Comprehensive (loss) income attributable to Cedar Realty Trust, Inc.	$	(12,879,000	)	$	(13,124,000	)	$	5,386,000

See accompanying notes to consolidated financial statements

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF EQUITY

Years ended December 31, 2020, 2019 and 2018

																			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, 2017		8,450,000		$	207,508,000			13,836,000		$	830,000		$	(18,463,000	)	$	879,711,000		$	(446,944,000	)	$	5,694,000		$	628,336,000
Net (loss) income		—			—			—			—			—			—			3,889,000			—			3,889,000
Unrealized gain on change in fair value of cash flow hedges		—			—			—			—			—			—			—			1,497,000			1,497,000
Share-based compensation, net		—			—			(17,000	)		(1,000	)		1,891,000			1,461,000			—			—			3,351,000
Redemptions of Series B Shares		(2,000,000	)		(47,967,000	)		—			—			—			1,458,000			(3,507,000	)		—			(50,016,000	)
Common stock sales, net of issuance expenses		—			—			—			—			—			9,000			—			—			9,000
Common stock repurchases		—			—			(117,000	)		(7,000	)		—			(2,322,000	)		—			—			(2,329,000	)
Preferred stock dividends		—			—			—			—			—			—			(10,863,000	)		—			(10,863,000	)
Distributions to common shareholders/noncontrolling interests		—			—			—			—			—			—			(18,301,000	)		—			(18,301,000	)
Redemption of OP Units		—			—			—			—			—			—			—			—			—
Issuance of OP Units		—			—			—			—			—			—			—			—			—
Reallocation adjustment of limited partners' interest		—			—			—			—			—			(148,000	)		—			—			(148,000	)
BALANCE, DECEMBER 31, 2018		6,450,000			159,541,000			13,702,000			822,000			(16,572,000	)		880,169,000			(475,726,000	)		7,191,000			555,425,000
Prior period adjustment - adoption of lease accounting standard		—			—			—			—			—			—			(515,000	)		—			(515,000	)
BALANCE, DECEMBER 31, 2018, RESTATED		6,450,000			159,541,000			13,702,000			822,000			(16,572,000	)		880,169,000			(476,241,000	)		7,191,000			554,910,000
Net (loss) income		—			—			—			—			—			—			1,076,000			—			1,076,000
Unrealized (loss) on change in fair value of cash flow hedges		—			—			—			—			—			—			—			(14,200,000	)		(14,200,000	)
Share-based compensation, net		—			—			95,000			6,000			261,000			3,862,000			—			—			4,129,000
Common stock sales, net of issuance expenses		—			—			2,000			—			—			23,000			—			—			23,000
Common stock repurchases		—			—			(311,000	)		(19,000	)		—			(6,825,000	)		—			—			(6,844,000	)
Preferred stock dividends		—			—			—			—			—			—			(10,752,000	)		—			(10,752,000	)
Distributions to common shareholders/noncontrolling interests		—			—			—			—			—			—			(17,808,000	)		—			(17,808,000	)
Redemption of OP Units		—			—			—			—			—			—			—			—			—
Reallocation adjustment of limited partners' interest		—			—			—			—			—			27,000			—			—			27,000
BALANCE, DECEMBER 31, 2019		6,450,000			159,541,000			13,488,000			809,000			(16,311,000	)		877,256,000			(503,725,000	)		(7,009,000	)		510,561,000
Net income (loss)		—			—			—			—			—			—			(1,072,000	)		—			(1,072,000	)
Unrealized (loss) on change in fair value of cash flow hedges		—			—			—			—			—			—			—			(11,807,000	)		(11,807,000	)
Share-based compensation, net		—			—			40,000			3,000			1,178,000			2,528,000			—			—			3,709,000
Common stock sales, net of issuance expenses		—			—			2,000			—			—			13,000			—			—			13,000
Preferred stock dividends		—			—			—			—			—			—			(10,752,000	)		—			(10,752,000	)
Distributions to common shareholders/noncontrolling interests		—			—			—			—			—			—			(7,147,000	)		—			(7,147,000	)
Reallocation adjustment of limited partners' interest		—			—			—			—			—			(7,000	)		—			—			(7,000	)
BALANCE, DECEMBER 31, 2020		6,450,000		$	159,541,000			13,530,000		$	812,000		$	(15,133,000	)	$	879,790,000		$	(522,696,000	)	$	(18,816,000	)	$	483,498,000

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENT OF EQUITY

Years ended December 31, 2020, 2019 and 2018

Continued

	Noncontrolling Interests
	Minority
	interests in			Limited
	consolidated			partners'						Total
	joint ventures			OP Units			Total			equity
BALANCE, DECEMBER 31, 2017	$	(609,000	)	$	2,384,000		$	1,775,000		$	630,111,000
Net (loss) income		497,000			(28,000	)		469,000			4,358,000
Unrealized gain on change in fair value of cash flow hedges		—			21,000			21,000			1,518,000
Share-based compensation, net		—			—			—			3,351,000
Redemptions of Series B Shares		—			—			—			(50,016,000	)
Common stock sales, net of issuance expenses		—			—			—			9,000
Common stock repurchases		—			—			—			(2,329,000	)
Preferred stock dividends		—			—			—			(10,863,000	)
Distributions to common shareholders/noncontrolling interests		—			(90,000	)		(90,000	)		(18,391,000	)
Redemption of OP Units		—			(7,000	)		(7,000	)		(7,000	)
Issuance of OP Units		—			975,000			975,000			975,000
Reallocation adjustment of limited partners' interest		—			148,000			148,000			—
BALANCE, DECEMBER 31, 2018		(112,000	)		3,403,000			3,291,000			558,716,000
Prior period adjustment - adoption of lease accounting standard		—			—			—			(515,000	)
BALANCE, DECEMBER 31, 2018, RESTATED		(112,000	)		3,403,000			3,291,000			558,201,000
Net (loss) income		547,000			(57,000	)		490,000			1,566,000
Unrealized (loss) on change in fair value of cash flow hedges		—			(86,000	)		(86,000	)		(14,286,000	)
Share-based compensation, net		—			—			—			4,129,000
Common stock sales, net of issuance expenses		—			—			—			23,000
Common stock repurchases		—			—			—			(6,844,000	)
Preferred stock dividends		—			—			—			(10,752,000	)
Distributions to common shareholders/noncontrolling interests		—			(111,000	)		(111,000	)		(17,919,000	)
Redemption of OP Units		—			(43,000	)		(43,000	)		(43,000	)
Reallocation adjustment of limited partners' interest		—			(27,000	)		(27,000	)		—
BALANCE, DECEMBER 31, 2019		435,000			3,079,000			3,514,000			514,075,000
Net income (loss)		618,000			(66,000	)		552,000			(520,000	)
Unrealized (loss) on change in fair value of cash flow hedges		—			(71,000	)		(71,000	)		(11,878,000	)
Share-based compensation, net		—			—			—			3,709,000
Common stock sales, net of issuance expenses		—			—			—			13,000
Preferred stock dividends		—			—			—			(10,752,000	)
Distributions to common shareholders/noncontrolling interests		—			(42,000	)		(42,000	)		(7,189,000	)
Reallocation adjustment of limited partners' interest		—			7,000			7,000			—
BALANCE, DECEMBER 31, 2020	$	1,053,000		$	2,907,000		$	3,960,000		$	487,458,000

See accompanying notes to consolidated financial statements

CEDAR REALTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years ended December 31,
	2020			2019			2018
OPERATING ACTIVITIES
Net (loss) income	$	(520,000	)	$	1,566,000		$	4,358,000
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Gain on sales		(4,396,000	)		(2,942,000	)		(4,864,000	)
Impairment charges		7,607,000			8,938,000			20,689,000
Extinguishment of debt costs		—			—			4,829,000
Straight-line rents and expenses, net		1,279,000			(265,000	)		(1,142,000	)
Provision for doubtful accounts		1,478,000			412,000			2,273,000
Depreciation and amortization		48,412,000			45,861,000			40,053,000
Amortization of intangible lease liabilities, net		(1,373,000	)		(2,827,000	)		(4,361,000	)
Expense relating to share-based compensation, net		3,723,000			4,117,000			3,763,000
Amortization of premium on mortgage loans payable		—			—			(80,000	)
Amortization of deferred financing costs		1,331,000			1,286,000			1,224,000
Changes in operating assets and liabilities, net of effects of acquisitions and dispositions:
Rents and other receivables		(2,811,000	)		(812,000	)		(3,902,000	)
Prepaid expenses and other		(9,216,000	)		(3,037,000	)		(6,591,000	)
Accounts payable and accrued liabilities		(2,934,000	)		1,378,000			1,651,000
Net cash provided by operating activities		42,580,000			53,675,000			57,900,000

INVESTING ACTIVITIES
Expenditures for real estate improvements		(39,551,000	)		(31,910,000	)		(30,377,000	)
Net proceeds from sales of real estate		21,182,000			18,651,000			19,118,000
Acquisition of real estate		—			(9,083,000	)		(179,000	)
Issuance of mortgage note receivable		—			—			(3,500,000	)
Net cash (used in) investing activities		(18,369,000	)		(22,342,000	)		(14,938,000	)

FINANCING ACTIVITIES
Repayments under revolving credit facility		(104,000,000	)		(21,000,000	)		(123,500,000	)
Advances under revolving credit facility		173,000,000			27,000,000			168,500,000
Repayment under term loan		(75,000,000	)		—			—
Advance under term loan		—			—			75,000,000
Mortgage repayments		(1,067,000	)		(1,027,000	)		(80,330,000	)
Payment of early extinguishment of debt costs		—			—			(5,159,000	)
Payments of debt financing costs		(326,000	)		—			(705,000	)
Noncontrolling interests:
Distributions to limited partners		(42,000	)		(111,000	)		(90,000	)
Redemption of OP Units		—			(43,000	)		(7,000	)
Redemption on preferred stock		—			—			(50,016,000	)
Common stock sales less issuance expenses, net		13,000			22,000			9,000
Common stock repurchases		—			(6,844,000	)		(2,329,000	)
Preferred stock dividends		(10,752,000	)		(10,752,000	)		(11,276,000	)
Distributions to common shareholders		(7,147,000	)		(17,808,000	)		(18,301,000	)
Net cash (used in) financing activities		(25,321,000	)		(30,563,000	)		(48,204,000	)

Net (decrease) increase in cash, cash equivalents and restricted cash		(1,110,000	)		770,000			(5,242,000	)
Cash, cash equivalents and restricted cash at beginning of year		2,747,000			1,977,000			7,219,000
Cash, cash equivalents and restricted cash at end of year	$	1,637,000		$	2,747,000		$	1,977,000

Reconciliation to consolidated balance sheets:
Cash and cash equivalents	$	1,637,000		$	2,747,000		$	1,977,000
Restricted cash		—			—			—
Cash, cash equivalents and restricted cash	$	1,637,000		$	2,747,000		$	1,977,000

See accompanying notes to consolidated financial statements

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Note 1. Business and Organization

Cedar Realty Trust, Inc. (the "Company") is a real estate investment trust ("REIT") that focuses primarily on ownership, operation and redevelopment of grocery-anchored shopping centers in high-density urban markets from Washington, D.C. to Boston. At December 31, 2020, the Company owned and managed a portfolio of 54 operating properties (excluding properties “held for sale”).

Cedar Realty Trust Partnership, L.P. (the "Operating Partnership") is the entity through which the Company conducts substantially all of its business and owns (either directly or through subsidiaries) substantially all of its assets. At December 31, 2020, the Company owned a 99.4% general and limited partnership interest in, and was the sole general partner of, the Operating Partnership. The limited partners’ interest in the Operating Partnership (0.6% at December 31, 2020) is represented by partnership units in the Operating Partnership (“OP Units”). The carrying amount of such interest is adjusted at the end of each reporting period to an amount equal to the limited partners’ ownership percentage of the Operating Partnership’s net equity. The 81,000 OP Units are economically equivalent to the Company’s common stock. The holders of OP Units have the right to exchange their OP Units for the same number of shares of the Company’s common stock or, at the Company’s option, for cash. Unless specifically noted otherwise, all references to OP Units exclude limited partnership units held by the Company.

As used herein, the "Company" refers to Cedar Realty Trust, Inc. and its subsidiaries on a consolidated basis, including the Operating Partnership or, where the context so requires, Cedar Realty Trust, Inc. only.

Note 2. Summary of Significant Accounting Policies

Reverse Stock Split

Principles of Consolidation/Basis of Preparation

The consolidated financial statements include the accounts and operations of the Company, the Operating Partnership, its subsidiaries, and certain joint venture partnerships in which it participates. The Company consolidates all variable interest entities (“VIEs”) for which it is the primary beneficiary. Generally, a VIE is an entity with one or more of the following characteristics: (1) the total equity investment at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (2) as a group, the holders of the equity investment at risk (a) lack the power through voting or similar rights to make decisions about the entity’s activities that significantly impact the entity’s performance, (b) have no obligation to absorb the expected losses of the entity, or (c) have no right to receive the expected residual returns of the entity, or (3) the equity investors have voting rights that are not proportional to their economic interests, and substantially all of the entity’s activities either involve, or are conducted on behalf of, an investor that has disproportionately fewer voting rights. A VIE is required to be consolidated by its primary beneficiary. The primary beneficiary of a VIE has (1) the power to direct the activities that most significantly impact the entity’s economic performance, and (2) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. Significant judgments related to these determinations include estimates about the current values, performance of real estate held by these VIEs, and general market conditions.

The Financial Accounting Standards Board (“FASB”) issued guidance which amended the consolidation requirements, including introducing a separate consolidation analysis specific to limited partnerships and other similar entities. Under the analysis, limited partnerships and other similar entities will be considered variable interest entities unless the limited partners hold substantive kick-out rights or participating rights. The guidance was adopted on January 1, 2016. The Company evaluated its existing joint venture property at San Souci Plaza based on the new guidance, determined the entity to be a variable interest entity, and continued to consolidate the entity. At December 31, 2020, this VIE owned real estate with a carrying value of $25.4 million and no mortgage loan payable.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

The Company has a 60%-owned joint venture originally formed to develop the project known as Crossroads II. This joint venture is consolidated as it is deemed to be a VIE and the Company is the primary beneficiary. The Company (1) guaranteed all related debt, (2) does not require its partners to fund additional capital requirements, (3) has an economic interest greater than its voting proportion and (4) directs the management activities that significantly impact the performance of the joint venture. At December 31, 2020, this VIE owned real estate with a carrying value of $36.9 million and no mortgage loan payable.

The accompanying financial statements are prepared on the accrual basis in accordance with accounting principles generally accepted in the United States (“GAAP”), which requires management to make estimates and assumptions that affect the disclosure of contingent assets and liabilities, the reported amounts of assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the periods covered by the financial statements. Actual results could differ from these estimates.

Real Estate Investments

Real estate investments are carried at cost less accumulated depreciation. The provision for depreciation is calculated using the straight-line method based upon the estimated useful lives of the respective assets of between 3 and 40 years, with buildings being depreciated at the upper end of the range. Depreciation expense amounted to $43.6 million, $41.8 million and $36.1 million for 2020, 2019 and 2018, respectively. Expenditures for betterments that substantially extend the useful lives of the assets are capitalized. Expenditures for maintenance, repairs, and betterments that do not substantially prolong the normal useful life of an asset are charged to operations as incurred.

Real estate investments include costs of development and redevelopment activities, and construction in progress. Capitalized costs, including interest and other carrying costs during the construction and/or renovation periods, are included in the cost of the related asset and charged to operations through depreciation over the asset’s estimated useful life. A variety of costs are incurred in the development and leasing of a property, such as pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs, and other costs incurred during the period of development. After a determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. The Company ceases capitalization on the portions substantially completed and occupied, or held available for occupancy, and capitalizes only those costs associated with the portions under development. The Company considers a construction project to be substantially completed and held available for occupancy upon the completion of tenant improvements, but not later than one year from cessation of major construction activity.

The Company allocates the fair value of real estate acquired to land, buildings and improvements. In addition, the fair value of in-place leases is allocated to intangible lease assets and liabilities. The fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant, which value is then allocated to land, buildings and improvements based on management’s determination of the fair values of these assets. In valuing an acquired property’s intangibles, factors considered by management include an estimate of carrying costs during the expected lease-up periods, such as real estate taxes, insurance, other operating expenses, and estimates of lost rental revenue during the expected lease-up periods based on its evaluation of current market demand. Management also estimates costs to execute similar leases, including leasing commissions, tenant improvements, legal and other related costs.

The values of acquired above-market and below-market leases are recorded based on the present values (using discount rates which reflect the risks associated with the leases acquired) of the differences between the contractual amounts to be received and management’s estimate of market lease rates, measured over the terms of the respective leases that management deemed appropriate at the time of the acquisitions. Such valuations include consideration of the non-cancellable terms of the respective leases as well as any applicable renewal periods. The fair values associated with below-market rental renewal options are determined based on the Company’s experience and the relevant facts and circumstances that existed at the time of the acquisitions. The values of above-market leases are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of below-market leases associated with the original non-cancelable lease terms are amortized to rental income over the terms of the respective non-cancelable lease periods. The portion of the values of the leases associated with below-market renewal options that are likely of exercise are amortized to rental income over the respective renewal periods. The value of other intangible assets (including leasing commissions, tenant improvements, etc.) is amortized to expense over the applicable terms of the respective leases. If a lease were to be terminated prior to its stated expiration or not renewed, all unamortized amounts relating to that lease would be recognized in operations at that time.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends and prospects, as well as the effects of leasing demand, capital expenditures, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value.

Effective January 1, 2018, the Company has adopted the guidance on gains and losses from the derecognition of nonfinancial assets. This guidance applies to all nonfinancial assets (including real estate) for which the counterparty is not a customer and also clarifies that all businesses are derecognized using the deconsolidation guidance. Additionally, it defines an in substance nonfinancial asset as a financial asset that is promised to a counterparty in a contract in which substantially all of the fair value of the asset promised in the contract is concentrated in nonfinancial assets, which excludes cash or cash equivalents and liabilities. The Company believes these criteria for all real estate sold were met during 2019 and 2018. Under prior guidance, sales of real estate were recognized only when sufficient down payments had been obtained, possession and other attributes of ownership had been transferred to the buyer and the Company had no significant continuing involvement. The Company believes these criteria were met for all real estate sold during 2017.

Properties Held For Sale

The Company follows the guidance for reporting discontinued operations, whereby a disposal of an individual property or group of properties is required to be reported in “discontinued operations” only if the disposal represents a strategic shift that has, or will have, a major effect on the Company’s operations and financial results. The results of operations for those properties not meeting such criteria are reported in “continuing operations” in the consolidated statements of operations.

The carrying values of the assets and liabilities of properties determined to be held for sale, principally the net book values of the real estate and the related mortgage loans payable expected to be assumed by the buyers, are reclassified as “held for sale” on the Company’s consolidated balance sheets at the time such determinations are made, on a prospective basis only. In addition, the Company anticipates that sales of all such properties remaining classified as “held for sale” at the balance sheet date will be concluded within one year from such date.

The Company, when applicable, conducts a continuing review of the values for all properties “held for sale” based on final sales prices and sales contracts entered into. Impairment charges/reversals, if applicable, are based on a comparison of the carrying values of the properties with either (1) actual sales prices less costs to sell for properties sold, or contract amounts for properties in the process of being sold, (2) estimated sales prices, less costs to sell, based on discounted cash flow analyses, if no contract amounts are being negotiated (see Note 4 - “Fair Value Measurements”), or (3) with respect to land parcels, estimated sales prices, less costs to sell, based on comparable sales completed in the selected market areas. Prior to the Company’s determination to dispose of properties, which are subsequently reclassified to “held for sale”, the Company performed recoverability analyses based on the estimated undiscounted cash flows that were expected to result from the real estate investments’ use and eventual disposal. The projected undiscounted cash flows of each property reflects that the carrying value of each real estate investment would be recovered. However, as a result of the properties’ meeting the “held for sale” criteria, such properties were written down to the lower of their carrying value and estimated fair values less costs to sell.

Cash and Cash Equivalents / Restricted Cash

Cash and cash equivalents consist of cash in banks and short-term investments with original maturities when purchased of less than ninety days, and include cash at consolidated joint ventures of $0.2 million and $0.3 million at December 31, 2020 and 2019, respectively.

The terms of mortgage loans payable may require the Company to deposit certain replacement and other reserves with its lenders. Such “restricted cash” is generally available only for property-level requirements for which the reserves have been established.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Fair Value Measurements

The accounting guidance for fair value measurement establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

•

Level 1 – Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

•

Level 2 – Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible while also considering counterparty credit risk in the assessment of fair value.

Revenue Recognition and Receivables

Management has determined that all of the Company’s leases with its various tenants are operating leases. Rental income with scheduled rent increases is recognized using the straight-line method over the respective non-cancelable terms of the leases. The aggregate excess of rental revenue recognized on a straight-line basis over the contractual base rents is included in receivables on the consolidated balance sheet. Leases also generally contain provisions under which the tenants reimburse the Company for a portion of property operating expenses and real estate taxes incurred, generally attributable to their respective allocable portions of gross leasable area. Such income is recognized in the periods earned. In addition, a limited number of operating leases contain contingent rent provisions under which tenants are required to pay, as additional rent, a percentage of their sales in excess of a specified amount. The Company defers recognition of contingent rental income until those specified sales targets are met. Revenues also include items such as lease termination fees, which tend to fluctuate more than rents from year to year. Termination fees are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration. The Company recognizes lease termination income when the following conditions are met: (1) the lease termination agreement has been executed, (2) the lease termination fee is determinable, (3) all the Company’s landlord services pursuant to the terminated lease have been rendered, and (4) collectability of the lease termination fee is assured.

In November 2018, the FASB clarified the existing accounting treatment relating to receivables arising from operating leases, stating that such receivables are not within the scope of the expected credit loss standard and that impairment of receivables arising from operating leases should be accounted for in accordance with the recently-adopted lease accounting standard. This required the Company, as of January 1, 2019, to review its existing lease portfolio to determine if all future lease payments are probable of collection and, if the Company determined that all future lease payments are not probable of collection, the Company will account for these leases on a cash basis. This required that all amounts that were historically recorded as bad debt expense, and previously included in operating expenses in the Company’s consolidated statement of operations, now be recorded as a direct reduction of rental revenues. In accordance with this guidance, $8.3 million and $2.4 million of rental revenue relating to certain leases that were no longer deemed probable of collection were not recorded as rental revenue for the years ended December 31, 2020 and 2019, respectively. Of these amounts, $1.4 million and $0.3 million, respectively, represented deferred rent receivables that were written-off for the years ended December 31, 2020 and 2019. Prior to January 1, 2019, the Company made estimates as to the collectability of its accounts receivable related to base rent, straight-line rent, percentage rent, expense reimbursements and other revenues. When management analyzed accounts receivable and evaluated the adequacy of the allowance for doubtful accounts, it considered such things as historical bad debts, tenant creditworthiness, current economic trends, current developments relevant to a tenant’s business specifically and to its business category generally, and changes in tenants’ payment patterns. The allowance for doubtful accounts was $1.4 million and $0.6 million at December 31, 2020 and 2019, respectively. The provision for doubtful accounts (included in operating, maintenance and management expenses) was $1.5 million, $0.4 million and $2.2 million in 2020, 2019 and 2018, respectively.

Segment Information

The Company’s primary business is the ownership and operation of grocery-anchored shopping centers. The Company reviews operating and financial information for each property on an individual basis and, accordingly, each property represents an individual operating segment. The Company evaluates financial performance using property operating income, which consists of rental income and other property income, less operating expenses and real estate taxes. No individual property constitutes more than 10% of the

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Company’s revenues or property operating income, and the Company has no operations outside of the United States of America. Therefore, the Company has aggregated its properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities including the fact that they are operated using consistent business strategies, are typically located in major metropolitan areas, and have similar tenant mixes.

Income Taxes

The Company, organized in 1984, has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). A REIT will generally not be subject to federal income taxation on that portion of its income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of such REIT taxable income to its stockholders and complies with certain other requirements. As of December 31, 2020, the Company was in compliance with all REIT requirements.

The Company follows a two-step approach for evaluating uncertain federal, state and local tax positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the amount of benefit that more-likely-than-not will be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when a company subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The Company has not identified any uncertain tax positions which would require an accrual.

Derivative Financial Instruments

The Company occasionally utilizes derivative financial instruments, principally interest rate swaps, to manage its exposure to fluctuations in interest rates. The Company has established policies and procedures for risk assessment, and the approval, reporting and monitoring of derivative financial instruments. Derivative financial instruments must be effective in reducing the Company’s interest rate risk exposure in order to qualify for hedge accounting. When the terms of an underlying transaction are modified, or when the underlying hedged item ceases to exist, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income for each period until the derivative financial instrument matures or is settled. Any derivative financial instrument used for risk management that does not meet the hedging criteria is marked-to-market with the changes in value included in net income. The Company has not entered into, and does not plan to enter into, derivative financial instruments for trading or speculative purposes.

Share-Based Compensation

During 2017, the Company’s shareholders approved the 2017 Stock Incentive Plan (the “2017 Plan”), which replaced the Company’s 2012 Stock Incentive Plan (the “2012 Plan”). As of the effective date of the 2017 Plan, the Company may not grant any further awards under the 2012 Plan. The 2017 Plan establishes the procedures for the granting of, among other things, restricted stock awards. On May 1, 2019, the Company’s shareholders approved an amendment to the 2017 Plan, which increased the maximum number of shares of the Company’s common stock that may be issued pursuant to the 2017 Plan by 303,000 shares, to a new total of 909,000 shares (see Note 14 – “Share-Based Compensation”), and the maximum number of shares that may be granted to a participant in any calendar year may not exceed 76,000. All grants issued pursuant to the 2017 Plan generally vest (1) at the end of designated time periods for time-based grants, or (2) upon the completion of a designated period of performance for performance-based grants and satisfaction of performance criteria. Time–based grants are valued according to the market price for the Company’s common stock at the date of grant. For performance-based grants, the Company generally engages an independent appraisal company to determine the value of the shares at the date of grant, taking into account the underlying contingency risks associated with the performance criteria. The value of all grants are being expensed on a straight-line basis over their respective vesting periods (irrespective of achievement of the market performance-based grants) adjusted, as applicable, for forfeitures. For restricted share grants subject to graded vesting, the amounts expensed are at least equal to the measured expense of each vested tranche. Based on the terms of the 2017 Plan, those grants of restricted shares that are contributed to the Rabbi Trusts are classified as treasury stock on the Company’s consolidated balance sheet.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Supplemental Consolidated Statements of Cash Flows Information

	Years ended December 31,
	2020		2019		2018
Supplemental disclosure of cash activities:
Cash paid for interest	$	23,208,000	$	23,859,000	$	22,191,000
Supplemental disclosure of non-cash activities:
Capitalization of interest and financing costs		2,674,000		1,649,000		1,528,000
Buildings and improvements included in accounts payable and accrued liabilites		2,976,000		3,669,000		521,000
Recognition of right-of-use assets and related lease liabilities		703,000		13,778,000		—
Issuance of OP Units in connection with a land parcel acquisition		—		—		975,000

Issued and Adopted Accounting Pronouncements

In May 2014, the FASB issued guidance which amends the accounting for revenue recognition. Under the amended guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which a company expects to be entitled to and receive in exchange for those goods or services. Leases are specifically excluded from this guidance and will be governed by the applicable lease codification. The guidance, effective January 1, 2018, did not have a material effect on the Company’s consolidated financial statements.

In August 2016, the FASB issued guidance that clarifies how an entity should classify certain cash receipts and cash payments on its statement of cash flows. The guidance established that an entity will classify cash payments for debt prepayment or extinguishment costs as financing cash flows. In addition, the guidance provides entities with an alternative to consider regarding the nature of the source of distributions that an investor receives from an equity method investment when classifying distributions received in its cash flow statement (the nature of the distribution approach). Alternatively, entities can elect to classify the distributions received from equity method investees based on the cumulative earnings approach. The guidance, effective January 1, 2018, did not have a material effect on the Company’s consolidated financial statements.

In November 2016, the FASB issued guidance that requires entities to show the changes in the total of cash, cash equivalents and restricted cash in the statement of cash flows. When cash, cash equivalents and restricted cash are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions on the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. The guidance, effective January 1, 2018, did not have a material effect on the Company’s consolidated financial statements.

In May 2017, the FASB issued guidance which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as a modification. Under the new guidance, an entity will not apply modification accounting if the award’s fair value, vesting conditions, and the classification of the award as equity or a liability are the same immediately before and after the change. The guidance, effective January 1, 2018, did not have a material effect on the Company’s consolidated financial statements.

In February 2016, the FASB issued guidance amending the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. The guidance, effective for annual and interim reporting periods beginning on or after December 15, 2018, requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. The Company is not required to reassess the classification of existing ground leases where it is the lessee and therefore these leases will continue to be accounted for as operating leases. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than twelve months regardless of their classification. Leases with a term of twelve months or less continue to be accounted for pursuant to existing guidance for operating leases. Based on the Company’s future obligations under its ground lease and executive office lease agreements for which the Company is the lessee, the newly adopted guidance resulted in the recognition of (1) right-of-use assets of $14.6 million included in other assets and deferred charges, net, and (2) right-of-use liabilities of $14.6 million included in accounts payable and accrued liabilities, on the Company’s consolidated balance sheet as of January 1, 2019. In the event the Company modifies existing ground leases or enters into new ground leases after adoption of the new standard, such leases may be classified as finance leases. Additionally, the guidance requires that lessees and lessors capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. Under this guidance,

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

allocated payroll costs and other costs that are incurred regardless of whether the lease is obtained will no longer be capitalized as initial direct costs and instead will be expensed as incurred. During 2019, the Company expensed $2.8 million of leasing costs which would have previously been capitalized.

The FASB provided lessors with a practical expedient, elected by class of underlying asset, to account for lease and non-lease components as a single lease component if certain criteria are met. Lessors that make these elections are required to provide additional disclosures. The FASB provided an additional (and optional) transition method that allows entities to initially apply the guidance at the adoption date (January 1, 2019) and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The Company applied both these practical expedients upon adoption. The practical expedient allowed the Company to not separate expenses reimbursed by customers from the associated rental revenue if certain criteria were met. The Company assessed these criteria and concluded that the timing and pattern of transfer for rental revenue and the associated rental expense recoveries are the same and, as the leases qualify as operating leases, the Company accounted for and presented rents and expense recoveries as a single component under rental revenues in the consolidated statement of operations for 2019.

In June 2016, the FASB issued guidance which enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better calculate credit loss estimates. The guidance will apply to most financial assets measured at amortized cost and certain other instruments, including accounts receivable, loans, held-to-maturity debt securities, net investments in leases, and off-balance-sheet credit exposures. The guidance will require that the Company estimate the lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. The Company will also be required to disclose information about how it developed the allowances, including changes in the factors that influenced the Company’s estimate of expected credit losses and the reasons for those changes. The guidance was effective January 1, 2020, and the guidance did not have a material effect on the Company’s consolidated financial statements.

In April 2020, the FASB issued a question-and-answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of a novel strain of coronavirus (“COVID-19”). Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated with the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A clarifies that entities may elect to not evaluate whether lease-related relief that lessors provide to mitigate the economic effects of COVID-19 on lessees is a lease modification under ASC 842. Instead, an entity that elects not to evaluate whether a concession directly related to COVID-19 is a modification can then elect whether to apply the modification guidance (i.e. assume the relief was always contemplated by the contract or assume the relief was not contemplated by the contract). Both lessees and lessors may make this election. The Company evaluated its election on a disaggregated basis, with such election applied consistently to leases with similar characteristics and similar circumstances.

During 2020, the Company provided lease concessions to certain tenants in response to the impact of COVID-19, in the form of rent deferrals. The Company has made an election to account for such lease concessions consistent with how those concessions would be accounted for under ASC 842 if enforceable rights and obligations for those concessions had already existed in the leases. This election is available for concessions related to the effects of the COVID-19 pandemic that do not result in a substantial increase in our rights as lessor, including concessions that result in the total payments required by the modified lease being substantially the same as or less than total payments required by the original lease.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Substantially all of the Company’s concessions to date provide for a deferral of payments with no substantive changes to the consideration in the original lease. These deferrals affect the timing, but not the amount, of the lease payments. The Company is accounting for these deferrals as if no changes to the lease were made. Under this accounting, the Company increases its receivables as tenant payments accrue and continues to recognize rental income. During 2020, the Company has entered into lease modifications that deferred approximately $3.2 million, of which $2.4 million relates to deferrals that the Company continued to recognize rental income. In addition, during 2020, the Company has entered into agreements that waived approximately $1.5 million of rent.

Note 3. Real Estate

Real estate activity for 2020 and 2019 is composed of the following:

	Years ended December 31,
	2020			2019
Cost
Balance, beginning of year	$	1,515,206,000		$	1,508,682,000
Properties transferred to held for sale		(22,512,000	)		(36,265,000	)
Property acquisitions		—			9,333,000
Outparcel dispositions		(840,000	)		—
Asset write-offs		—			(3,633,000	)
Improvements and betterments		35,624,000			37,089,000
Balance, end of the year	$	1,527,478,000		$	1,515,206,000

Accumulated depreciation
Balance, beginning of the year	$	389,861,000		$	361,969,000
Properties transferred held for sale		(3,947,000	)		(10,143,000	)
Outparcel dispositions		(90,000	)		—
Asset write-offs		—			(3,107,000	)
Depreciation expense		42,745,000			41,142,000
Balance, end of the year	$	428,569,000		$	389,861,000

Net book value	$	1,098,909,000		$	1,125,345,000

At December 31, 2020, Franklin Village Plaza was pledged as collateral for a mortgage loan payable. See Note 8 - “Mortgage Loans Payable and Credit Facilities”.

2019 Acquisition

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Dispositions

During 2020, 2019 and 2018, the Company sold the properties listed below:

		Date	Sales		Gain on
Property	Location	Sold	Price		Sale
2020
Metro Square	Owings Mills, MD	7/9/2020	$	4,288,000	$	-
Oakland Mills outparcel building	Columbia, MD	9/17/2020		1,050,000		643,000
Glen Allen Shopping Center	Glen Allen, VA	10/8/2020		8,540,000		1,780,000
Pine Grove Plaza outparcel building	Brown Mills, NJ	11/2/2020		1,100,000		565,000
Suffolk Plaza	Suffolk, VA	12/10/2020		6,950,000		1,408,000
			$	21,928,000	$	4,396,000
2019
Maxatawny Marketplace	Maxatawny, PA	2/15/2019	$	10,330,000	$	101,000
Fort Washington Center	Fort Washington, PA	6/26/2019		9,048,000		2,841,000
			$	19,378,000	$	2,942,000
2018
Mechanicsburg Center	Mechanicsburg, PA	8/28/2018	$	16,100,000	$	4,864,000
West Bridgewater Plaza	West Bridgewater, MA	9/28/2018		3,500,000		-
			$	19,600,000	$	4,864,000

The Company recorded impairment charges of $7.2 million relating to Metro Square during 2020, and $9.4 million relating to West Bridgewater Plaza during 2018, which are included in continuing operations in the accompanying consolidated statements of operations.

Real Estate Held for Sale

As of December 31, 2020, Carll’s Corner, located in Bridgeton, New Jersey, and The Commons, located in Dubois Pennsylvania, have been classified as “real estate held for sale” on the accompanying consolidated balance sheet.

During, 2020, the Company recorded impairment charges of $0.4 million in connection with The Commons. In addition, the Company recorded an impairment charge of $8.9 million in connection with The Commons in 2019 and $11.3 million in connection with Carll’s Corner in 2018. These impairment charges have been included in continuing operations in the accompanying consolidated statement of operations.

Development Asset

On July 23, 2020, the Company entered into a commercial lease agreement (the “Lease”) with the Government of the District of Columbia (the “District”), for the lease by the District of office space in a new six-story building to be constructed by the Company at Senator Square. The building is planned to house the new office headquarters for the District of Columbia’s Department of General Services’ (“DGS”) 700-member workforce. The term of the Lease is 20 years and 10 months, to commence upon substantial completion and delivery to DGS. The Company anticipates commencement of construction to occur in the first quarter of 2021 and currently estimates that the space will be delivered during the end of the fourth quarter 2022.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

additional tenant improvement allowance between the 10th and 12th Lease years, upon the District’s timely election. The obligations of the District under the Lease are subject to annual budget appropriation.

Note 4. Fair Value Measurements

The carrying amounts of cash and cash equivalents, restricted cash, rents and other receivables, certain other assets, accounts payable and accrued liabilities, and variable-rate debt approximate their fair value due to their terms and/or short-term nature. The fair value of the Company’s investments and liabilities related to deferred compensation were determined to be Level 1 within the valuation hierarchy, and were based on independent values provided by financial institutions.

The fair value of the Company’s fixed rate mortgage loan was estimated using available market information and discounted cash flow analyses based on borrowing rates the Company believes it could obtain with similar terms and maturities. As of December 31, 2020 and December 31, 2019, the fair value of the Company’s fixed rate mortgage loan payable, which was determined to be Level 3 within the valuation hierarchy, was $47.0 million and $47.0 million, respectively; the carrying value of such loan was $45.4 million and $46.4 million, respectively. As of December 31, 2020 and December 31, 2019, respectively, the aggregate fair values of the Company’s unsecured revolving credit facility and term loans approximated the carrying values. In addition, the fair values of the Company’s mortgage note receivable and finance lease obligation, which were determined to be Level 3 within the valuation hierarchy, approximated their carrying values as of December 31, 2020 and December 31, 2019, respectively.

The valuation of the liabilities for the Company’s interest rate swaps, which are measured on a recurring basis, were determined to be Level 2 within the valuation hierarchy, and were based on independent values provided by financial institutions. Such valuations were determined using widely accepted valuation techniques, including discounted cash flow analyses, on the expected cash flows of each derivative. The analyses reflect the contractual terms of the swaps, including the period to maturity, and user-observable market-based inputs, including interest rate curves (“significant other observable inputs”). The fair value calculation also includes an amount for risk of non-performance using “significant unobservable inputs” such as estimates of current credit spreads to evaluate the likelihood of default. The Company has concluded that, as of December 31, 2020, the fair value associated with the “significant unobservable inputs” relating to the Company’s risk of non-performance was insignificant to the overall fair value of the interest rate swap agreements and, as a result, that the relevant inputs for purposes of calculating the fair value of the interest rate swap agreements, in their entirety, were based upon “significant other observable inputs”.

Nonfinancial assets and liabilities measured at fair value in the consolidated financial statements consist of real estate held for sale, which, if applicable, are measured on a nonrecurring basis, and have been determined to be (1) Level 2 within the valuation hierarchy, where applicable, based on the respective contracts of sale, adjusted for closing costs and expenses, or (2) Level 3 within the valuation hierarchy, where applicable, based on estimated sales prices, adjusted for closing costs and expenses, determined by discounted cash flow analyses, income capitalization analyses or a sales comparison approach if no contracts had been concluded. The discounted cash flow and income capitalization analyses include all estimated cash inflows and outflows over a specific holding period and, where applicable, any estimated debt premiums. These cash flows were composed of unobservable inputs which included forecasted rental revenues and expenses based upon existing in-place leases, market conditions and expectations for growth. Capitalization rates and discount rates utilized in these analyses were based upon observable rates that the Company believed to be within a reasonable range of current market rates for the respective properties. The sales comparison approach is utilized for certain land values and includes comparable sales that were completed in the selected market areas. The comparable sales utilized in these analyses were based upon observable per acre rates that the Company believes to be within a reasonable range of current market rates for the respective properties.

Valuations were prepared using internally-developed valuation models. These valuations are reviewed and approved, during each reporting period, by a diverse group of management, as deemed necessary, including personnel from the acquisition, accounting, finance, operations, development and leasing departments, and the valuations are updated as appropriate. In addition, the Company may engage third-party valuation experts to assist with the preparation of certain of its valuations.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

The following tables show the hierarchy for those assets measured at fair value on a recurring basis as of December 31, 2020 and December 31, 2019, respectively:

	December 31, 2020
Description	Level 1		Level 2		Level 3		Total
Investments related to deferred
compensation liabilities (a)	$	948,000	$	—	$	—	$	948,000
Deferred compensation liabilities (b)	$	952,000	$	—	$	—	$	952,000
Interest rate swaps liability (b)	$	—	$	18,927,000	$	—	$	18,927,000


	December 31, 2019
Description	Level 1		Level 2		Level 3		Total
Investments related to deferred
compensation liabilities (a)	$	823,000	$	—	$	—	$	823,000
Deferred compensation liabilities (b)	$	824,000	$	—	$	—	$	824,000
Interest rate swaps asset (a)	$	—	$	136,000	$	—	$	136,000
Interest rate swaps liability (b)	$	—	$	7,180,000	$	—	$	7,180,000

(a) Included in other assets and deferred charges, net, in the accompanying consolidated balance sheets.
(b) Included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.

As of December 31, 2020, real estate held for sale on the consolidated balance sheet consisted of (1) one retail property, totaling $2.1 million, which was determined to be Level 3 asset under the hierarchy, and was measured at fair value less cost to sell on a non- recurring basis using a direct capitalization approach, consisting of a capitalization rate of 8.5%, and (2) one retail property, totaling $7.4 million, which was determined to be Level 3 asset under the hierarchy, and was measured at fair value less cost to sell on a non-recurring basis using a discounted cash flow approach, consisting of a capitalization rate of 11.5% and a discount rate of 8.0%.

Note 5. Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents in excess of insured amounts and tenant receivables. The Company places its cash and cash equivalents with high quality financial institutions. Management performs ongoing credit evaluations of its tenants and requires certain tenants to provide security deposits and/or suitable guarantees.

Excluding properties held for sale and sold, Giant Food Stores, LLC, Stop & Shop, Inc. and Food Lion, LLC, each of which is owned by Ahold N.V., a Netherlands corporation, accounted for an aggregate of approximately 13%, 12% and 11% of the Company’s total revenues during 2020, 2019 and 2018, respectively.

The Company’s properties are located largely in the region straddling the Washington, D.C. to Boston corridor, which exposes it to greater economic risks than if the properties it owned were located in a greater number of geographic regions (in particular, 23 of the Company’s properties are located in Pennsylvania).

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Note 6. Receivables

Receivables at December 31, 2020 and 2019 are composed of the following:

	December 31,
	2020		2019
Rents and other receivables, net (a)	$	6,541,000	$	5,061,000
Mortgage note receivable		3,500,000		3,500,000
Straight-line rents, net		11,911,000		13,603,000
	$	21,952,000	$	22,164,000

(a)

Includes $1.9 million of net receivables related to deferred rent as a result of COVID-19 as of December 31, 2020.

Note 7. Other Assets and Deferred Charges, Net

Other assets and deferred charges, net, at December 31, 2020 and 2019 are composed of the following:

	December 31,
	2020		2019
Lease origination costs (a)	$	22,331,000	$	19,947,000
Right-of-use assets (b)		13,828,000		13,638,000
Prepaid expenses		6,906,000		6,048,000
Investments related to share-based compensation		948,000		823,000
Unsecured revolving credit facility financing costs		623,000		1,021,000
Leasehold improvements, furniture and fixtures		85,000		200,000
Interest rate swaps		—		136,000
Other		534,000		326,000
Total other assets and deferred charges, net	$	45,255,000	$	42,139,000

(a)

Lease origination costs include the unamortized balance of intangible lease assets resulting from purchase accounting allocations of $5.5 million (cost of $19.4 million and accumulated amortization of $13.9 million) and $6.6 million (cost of $19.9 million and accumulated amortization of $13.3 million) as of December 31, 2020 and 2019, respectively.

(b)

In connection with of the new lease accounting standard (see Note 2 – “Issued and Adopted Accounting Pronouncements”), the Company recorded right-of-use assets and liabilities based on its future obligation under its ground lease and executive office lease agreements for which the Company is the lessee.

Deferred charges are amortized over the terms of the related agreements. Amortization expense related to deferred charges (including amortization of deferred financing costs included in non-operating income and expense) amounted to $6.2 million, $5.3 million and $5.2 million for 2020, 2019, and 2018, respectively. The unamortized balances of deferred lease origination costs is net of accumulated amortization of $37.1 million at December 31, 2020. In addition, deferred financing costs relating to the unsecured revolving credit facility is net of accumulated amortization of $2.1 million at December 31, 2020. Deferred lease origination costs and deferred financing costs relating to the unsecured revolving credit facility will be charged to future operations as follows:

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

	Lease		Unsecured revolving
	origination		credit facility
	costs		financing costs
2021	$	2,436,000	$	623,000
2022		2,094,000		—
2023		1,805,000		—
2024		1,467,000		—
2025		1,196,000		—
Thereafter		13,333,000		—
	$	22,331,000	$	623,000

Note 8. Mortgage Loans Payable and Unsecured Credit Facilities

Debt and finance lease obligations are composed of the following at December 31, 2020 and 2019:

		December 31, 2020				December 31, 2019
					Contractual				Contractual
	Maturity	Balance			interest rates	Balance			interest rates
Description	dates	outstanding			weighted-average	outstanding			weighted-average
Fixed-rate mortgage	Jun 2026	$	45,645,000		3.9%	$	46,679,000		3.9%
Finance lease obligation	Sep 2050		5,631,000		5.3%		5,665,000		5.3%
Unsecured credit facilities:
Variable-rate:
Revolving credit facility	Sep 2021 (a)		175,000,000		2.7%(b)		106,000,000		3.2%
Term loan	Sep 2022		50,000,000		1.9%		50,000,000		3.3%
Fixed-rate (c):
Term loan	Feb 2022		50,000,000		3.3%		50,000,000		3.0%
Term loan	Sep 2022		50,000,000		3.5%		50,000,000		2.8%
Term loan	Apr 2023		100,000,000		3.5%		100,000,000		3.2%
Term loan	Sep 2024		75,000,000		3.9%		75,000,000		3.7%
Term loan	Jul 2025		75,000,000		4.8%		75,000,000		4.6%
Term loan	n/a		-		-		75,000,000		3.6%
			626,276,000		3.4%		633,344,000		3.5%
Unamortized issuance costs			(2,002,000	)			(2,769,000	)
		$	624,274,000			$	630,575,000

(a)

The revolving credit facility is subject to a one-year extension at the Company’s option

(b)

The interest rate on the revolving credit facility consists of LIBOR plus a credit spread based on the Company’s leverage ratio. The Company has an interest rate swap agreement expiring in February 2021, which converts the LIBOR rate to a fixed rate of 3.9% on $75.0 million of the facility, and a variable-rate of 1.8% on the remaining $100.0 million of the facility, resulting in a blended interest rate of 2.7% at December 31, 2020.

(c)

The interest rates on these term loans consist of LIBOR plus a credit spread based on the Company’s leverage ratio, for which the Company has interest rate swap agreements which convert the LIBOR rates to fixed rates. Accordingly, these term loans are presented as fixed-rate debt.

Unsecured Revolving Credit Facility and Term Loans

The Company has a $300 million unsecured credit facility that consists of (1) a $250 million revolving credit facility, expiring on September 8, 2021, and (2) a $50 million term loan, expiring on September 8, 2022. The revolving credit facility may be extended, at the Company’s option, for an additional one-year period, subject to customary conditions. On August 4, 2020, the Company amended its existing $300 million unsecured credit facility and term loans. After such amendments, the Company’s financial ratios and borrowing base are now all computed using the trailing four quarters as opposed to the current quarter annualized and interest rate swaps that are a hedge of existing debt are now excluded from the definition of debt. Under an accordion feature, the facility can be increased to $750 million, subject to customary conditions and lending commitments. Interest on borrowings under the revolving credit facility component can range from LIBOR plus 135 basis points (“bps”) to 195 bps (165 bps at December 31, 2020) and interest on borrowings under the term loan component can range from LIBOR plus 130 to 190 bps (160 bps at December 31, 2020), each based on the Company’s leverage ratio.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

The details of the remaining unsecured term loans are as follows:

Amount		Maturity date	Interest range
$	50,000,000	February 2022	LIBOR + 130 bps to 190 bps
$	50,000,000	September 2022	LIBOR + 130 bps to 190 bps
$	100,000,000	April 2023	LIBOR + 165 bps to 225 bps
$	75,000,000	September 2024	LIBOR + 170 bps to 225 bps
$	75,000,000	July 2025	LIBOR + 170 bps to 225 bps

The Company’s unsecured credit facility and term loans contain financial covenants including, but not limited to, maximum debt leverage, maximum secured debt, minimum fixed charge coverage, and minimum net worth. In addition, the facility contains restrictions including, but not limited to, limits on indebtedness, certain investments and distributions. The Company’s failure to comply with the covenants or the occurrence of an event of default under the facilities could result in the acceleration of the related debt and exercise of other lender remedies. Although the credit facility is unsecured, borrowing availability is based on unencumbered property adjusted net operating income for the trailing twelve months, as defined in the agreements. As of the date of filing this Form 10-K, the Company had $175.0 million outstanding and $56.7 available for additional borrowings under its revolving credit facility, and was in compliance with all financial covenants. Additionally, the COVID-19 pandemic may negatively impact the Company’s future ability to remain compliant with all financial covenants, including the ability to generate sufficient unencumbered property adjusted net operating income to support current borrowings. The Company’s unencumbered property adjusted net operating income was not significantly impacted by the COVID-19 pandemic until the quarter ended June 30, 2020. Accordingly, not until the quarter ended March 31, 2021, will the unencumbered property adjusted net operating income for the trailing twelve months fully reflect the negative impact of the COVID-19 pandemic.

Scheduled Principal Payments

Scheduled principal payments on a mortgage loan payable, finance lease obligation, unsecured term loans, and the unsecured credit facility at December 31, 2020, due on various dates from 2021 to 2050, are as follows:


	Mortgage Loan		Finance Lease		Revolving			Term				Unamortized
Year	Payable		Obligation		Credit Facility			Loans		Total		Issuance Costs			Total
2021	$	1,074,000	$	35,000		175,000,000	(a)	$	-	$	176,109,000	$	(647,000	)	$	175,462,000
2022		1,116,000		37,000		-			150,000,000		151,153,000		(499,000	)		150,654,000
2023		1,160,000		39,000		-			100,000,000		101,199,000		(274,000	)		100,925,000
2024		1,206,000		41,000		-			75,000,000		76,247,000		(207,000	)		76,040,000
2025		1,253,000		44,000		-			75,000,000		76,297,000		(115,000	)		76,182,000
Thereafter		39,836,000		5,435,000		-			-		45,271,000		(260,000	)		45,011,000
	$	45,645,000	$	5,631,000	$	175,000,000		$	400,000,000	$	626,276,000	$	(2,002,000	)	$	624,274,000

(a)

The revolving credit facility is subject to a one-year extension at the Company's option.

Derivative Financial Instruments

At December 31, 2020, the Company had $18.9 million included in accounts payable and accrued liabilities on the consolidated balance sheet relating to the fair value of the interest rate swaps applicable to the unsecured term loans discussed above. Charges and/or credits relating to the changes in the fair value of the interest rate swaps are made to accumulated other comprehensive income (loss), noncontrolling interests (minority interests in consolidated joint ventures and limited partners’ interest), or operations (included in interest expense), as applicable. Over time, the unrealized gains and losses recorded in accumulated other comprehensive loss will be reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affect earnings. The Company estimates that approximately $6.9 million of accumulated other comprehensive loss will be reclassified as a charge to earnings within the next twelve months.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

The following is a summary of the derivative financial instruments held by the Company at December 31, 2020 and December 31, 2019:

December 31, 2020

Designation/

Fair

Maturity

Balance sheet

Cash flow

Derivative

Count

value

dates

location

Qualifying

Interest rate swaps

18,927,000

2021-2025

Accounts payable and accrued liabilities

December 31, 2019

Designation/

Fair

Maturity

Balance sheet

Cash flow

Derivative

Count

value

dates

location

Qualifying

Interest rate swaps

136,000

2020-2023

Other assets and deferred charges, net

Qualifying

Interest rate swaps

7,180,000

2021-2025

Accounts payable and accrued liabilities

The notional values of the interest rate swaps held by the Company at December 31, 2020 and December 30, 2019 were $425.0 million and $425.0 million, respectively.

The following presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations and the consolidated statements of equity 2020, 2019 and 2018, respectively:

		(Loss) gain recognized in other
		comprehensive (loss) income
		(effective portion)
Designation/		Years ended December 31,
Cash flow	Derivative	2020			2019			2018
Qualifying	Interest rate swaps	$	(17,940,000	)	$	(13,090,000	)	$	2,185,000

		Gain (loss) recognized in other
		comprehensive (loss) income
		reclassified into earnings (effective portion)
		Years ended December 31,
	Classification	2020			2019			2018
	Continuing Operations	$	(6,062,000	)	$	1,196,000		$	667,000

As of December 31, 2020, the Company believes it has no significant risk associated with non-performance of the financial institutions which are the counterparties to its derivative contracts.

Note 9. Intangible Lease Asset/Liability

Unamortized intangible lease liabilities that relate to below-market leases amounted to $8.9 million and $10.5 million at December 31, 2020 and December 31, 2019, respectively. Unamortized intangible lease assets that relate to above-market leases amounted to $0.2 million and $0.4 million at December 31, 2020 and December 31, 2019, respectively.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

The unamortized balance of intangible lease liabilities at December 31, 2020 is net of accumulated amortization of $32.3 million, and will be credited to future operations as follows:

2021	$	931,000
2022		865,000
2023		794,000
2024		630,000
2025		619,000
Thereafter		5,100,000
	$	8,939,000

Note 10. Commitments and Contingencies

The Company is a party to certain legal actions arising in the normal course of business. Management does not expect there to be adverse consequences from these actions that would be material to the Company’s consolidated financial statements.

Under various federal, state, and local laws, ordinances, and regulations, an owner or operator of real estate may be required to investigate and clean up hazardous or toxic substances, or petroleum product releases, at its properties. The owner may be liable to governmental entities or to third parties for property damage, and for investigation and cleanup costs incurred by such parties in connection with any contamination. Generally, the Company’s tenants must comply with environmental laws and meet any remediation requirements. In addition, leases typically impose obligations on tenants to indemnify the Company from any compliance costs the Company may incur as a result of environmental conditions on the property caused by the tenant. However, if a lease does not require compliance, or if a tenant fails to or cannot comply, the Company could be forced to pay these costs. Management is unaware of any environmental matters that would have a material impact on the Company’s consolidated financial statements.

The Company’s executive offices are located at 44 South Bayles Avenue, Port Washington, New York. The terms of the lease, which will expire in February 2021, provide for future minimum rents of $0.1 million in 2021.

The Company is the lessee under several ground lease and its executive office lease agreements. In accordance with the adoption of the new lease accounting standard (see Note 2 – “Issued and Adopted Accounting Pronouncements”), the Company recorded right-of-use assets and related lease liabilities for these leases as of January 1, 2019. As of December 31, 2020, the Company’s weighted average remaining lease term is approximately 30.7 years and the weighted average discount rate used to calculate the Company’s lease liability is approximately 5.7%. Rent expense under the Company’s ground lease and executive office lease agreements was approximately $1.8 million, $1.7 million and $1.1 million for 2020, 2019 and 2018, respectively.

The following table represents a reconciliation of the Company’s undiscounted future minimum lease payments for its ground lease and executive office lease agreements applicable to right-of-use liabilities as of December 31, 2020:

2021	$	1,113,000
2022		1,112,000
2023		1,112,000
2024		1,114,000
2025		993,000
Thereafter		28,554,000
Total undiscounted future minimum lease payments		33,998,000
Future minimum lease payments, discount		(19,921,000	)
Right-of-use liabilities	$	14,077,000

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Note 11. Shareholders’ Equity

Preferred Stock

The Company’s 7.25% Series B Cumulative Redeemable Preferred Stock “Series B Preferred Stock” has no stated maturity, is not convertible into any other security of the Company, and is redeemable, in whole or in part, at the Company’s option beginning May 22, 2017 at a price of $25.00 per share plus accrued and unpaid distributions.

The Company’s 6.50% Series C Cumulative Redeemable Preferred Stock “Series C Preferred Stock” has no stated maturity, is not convertible into any other security of the Company, and is redeemable at the Company’s option beginning August 24, 2022 at a price of $25.00 per share plus accrued and unpaid distributions.

The Company is authorized to issue up to 12,500,000 shares of preferred stock. The following tables summarize details about the Company’s preferred stock:

	Series B		Series C
	Preferred Stock		Preferred Stock
Par value	$	0.01	$	0.01
Liquidation value	$	25.00	$	25.00

	December 31, 2020				December 31, 2019
	Series B		Series C		Series B		Series C
	Preferred Stock		Preferred Stock		Preferred Stock		Preferred Stock
Shares authorized		1,450,000		6,450,000		1,450,000		6,450,000
Shares issued and outstanding		1,450,000		5,000,000		1,450,000		5,000,000
Balance	$	34,767,000	$	124,774,000	$	34,767,000		124,774,000

On January 12, 2018, the Company redeemed 2,000,000 shares of Series B Preferred Stock at a price of $25.00 per share for an aggregate of $50.0 million, plus all accrued and unpaid dividends up to (but excluding) the redemption date.

Common Stock

On November 25, 2020, the Company effected a 1-for-6.6 reverse stock split of the issued and outstanding shares of common stock. Each 6.6 shares of the Company's issued and outstanding common stock were combined into one share of the Company's common stock. The number of authorized shares and the par value of the common stock were not changed. In addition, the Company amended the Limited Partnership Agreement of our Operating Partnership to effect a corresponding reverse split of the partnership interests of the Operating Partnership. In accordance with GAAP, all shares of common stock, restricted stock units, OP Units and per share/unit information that are presented in this Form 10-K were adjusted to reflect the reverse split on a retroactive basis for all periods presented.

On December 18, 2018, the Company’s Board of Directors approved a stock repurchase program, which authorized the Company to purchase up to $30.0 million of the Company’s common stock in the open market or through private transactions, subject to market conditions. The stock repurchase program expired on December 18, 2019. During 2018, the Company repurchased approximately 117,000 shares at a weighted average price per share of $19.91. During 2019, the Company repurchased an additional 311,000 shares at a weighted average price per share of $22.03. Since approval of the plan on December 18, 2018, the Company has repurchased 428,000 shares at a weighted average price per share of $21.45.

The Company has a Dividend Reinvestment and Direct Stock Purchase Plan (“DRIP”) which offers a convenient method for shareholders to invest cash dividends and/or make optional cash payments to purchase shares of the Company’s common stock. Such purchases are at 100% of market value. There were no significant transactions under the DRIP during 2020, 2019 and 2018. At December 31, 2020, there remained 427,000 shares authorized under the DRIP.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Dividends

The following table provides a summary of dividends declared and paid per share:

	Years ended December 31,
	2020		2019		2018
Common stock	$	0.528	$	1.320	$	1.320
7.25% Series B Preferred Stock	$	1.812	$	1.812	$	1.812
6.50% Series C Preferred Stock	$	1.625	$	1.625	$	1.625

At December 31, 2020 and 2019, there were $1.2 million and $1.2 million, respectively, of accrued preferred stock dividends.

On January 15, 2021, the Company’s Board of Directors declared a dividend of $0.066 per share with respect to its common stock. At the same time, the Board declared a dividend of $0.453125 and $0.406250 per share with respect to the Company’s Series B Preferred Stock and Series C Preferred Stock, respectively. The distributions are payable on February 22, 2021 to shareholders of record on February 10, 2021.

Note 12. Revenues

Rents for 2020, 2019 and 2018, respectively, are comprised of the following:

	Years ended December 31,
	2020			2019		2018
Base rents	$	95,987,000		$	105,041,000	$	107,630,000
Expense recoveries		29,241,000			33,475,000		33,378,000
Percentage rent		1,778,000			971,000		725,000
Straight-line rents		(1,208,000	)		405,000		1,142,000
Amortization of intangible lease liabilities, net		1,373,000			2,827,000		4,361,000
Total rents	$	127,171,000		$	142,719,000	$	147,236,000

The Company recognizes lease termination income when the following conditions are met: (1) the lease termination agreement has been executed, (2) the lease termination fee is determinable, (3) all the Company’s landlord services pursuant to the terminated lease have been rendered, and (4) collectability of the lease termination fee is assured. On January 31, 2020, the Company agreed to a cash payment in consideration for permitting a dark anchor tenant to terminate its lease prior to the contractual expiration at Metro Square. As a result of this termination, revenues for 2020, included approximately $7.1 million of other income. In April 2018, the Company accepted a cash payment of $4.3 million in consideration for permitting a dark anchor tenant to terminate its lease prior to the contractual expiration. As a result of this termination, revenues for 2018 includes $5.4 million, consisting of (1) $3.8 million of other income (the $4.3 million cash payment reduced by $0.5 million straight-line rent receivable) and (2) $1.5 million accelerated intangible lease liability amortization.

Annual future base rents due to be received under non-cancelable operating leases in effect at December 31, 2020 are approximately as follows (excluding those base rents applicable to properties classified as real estate held for sale):

2021	$	93,213,000
2022		85,973,000
2023		85,650,000
2024		75,194,000
2025		62,652,000
Thereafter		334,634,000
	$	737,316,000

Total future minimum rents do not include expense recoveries for real estate taxes and operating costs, or percentage rents based upon tenants’ sales volume. Such additional revenue amounts aggregated approximately $31.1 million, $34.4 million and $34.1 million for 2020, 2019 and 2018, respectively. Such amounts do not include amortization of intangible lease liabilities.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Note 13. 401(k) Retirement Plan

The Company has a 401(k) retirement plan (the “Plan”), which permits all eligible employees to defer a portion of their compensation under the Code. Pursuant to the provisions of the Plan, the Company may make discretionary contributions on behalf of eligible employees. The Company made contributions to the Plan of $375,000, $387,000, and $371,000 for 2020, 2019, and 2018, respectively.

Note 14. Share-Based Compensation

The following tables set forth certain share-based compensation information for 2020, 2019, and 2018, respectively:

	Years ended December 31,
	2020			2019			2018
Expense relating to share/unit grants	$	3,954,000		$	4,496,000		$	4,217,000
Amounts capitalized		(231,000	)		(379,000	)		(454,000	)
Total charged to operations	$	3,723,000		$	4,117,000		$	3,763,000

				Weighted average
	Shares			grant date value
Unvested shares/units, December 31, 2019		645,000		$	27.92
Restricted share grants		63,000		$	17.48
Vested during period		(59,000	)	$	37.73
Forfeitures/cancellations		(7,000	)	$	40.38
Unvested shares/units, December 31, 2020		642,000		$	25.86

At December 31, 2020, approximately 0.3 million shares remained available for grants pursuant to the 2017 Plan and, at that date, there remained an aggregate of $5.8 million applicable to all grants and awards to be expensed over a weighted average period of 2.1 years.

During 2020, there were 63,000 time-based restricted shares issued with a weighted average grant date fair value of $17.48 per share. During 2019, there were 79,000 time-based restricted shares issued, with a weighted average grant date fair value of $21.25 per share. Excluding the grants relating to the Company’s President and CEO (see below), during 2018, there were 92,000 time-based restricted shares issued, with a weighted average grant date fair value of $32.54 per share.

The total fair values of shares vested during 2020, 2019, and 2018 were $938,000, $485,000, and $7,556,000, respectively.

President and CEO Employment Contract

Upon employment on June 15, 2011, the Company’s President and CEO received restricted share grants totaling 378,800 shares, one-half of which was time-based, vesting upon the seventh anniversary of the date of grant (June 15, 2018), and the other half market performance-based, to be earned if the total annual return on an investment in the Company’s common stock (“TSR”) was at least an average of 6.5% per year for the seven years ended June 15, 2018. On June 15, 2018, approximately 189,400 time-based shares vested and approximately 189,400 market performance-based shares were forfeited as the market performance criteria was not achieved.

On June 15, 2018, in connection with a new amended and restated employment agreement, the Company’s President and CEO received an approximate 152,000 time-based restricted share grant at a market price of $28.91. However, as a result of an existing limitation within the 2017 Plan, only approximately 114,000 shares were granted on June 15, 2018, with the remaining 38,000 shares granted on January 1, 2019. All 152,000 time-based restricted shares will vest upon the fifth anniversary of the effective date of the employment agreement (June 15, 2023), subject to the Company’s President and CEO continuous employment with the Company through such date, subject to certain exceptions. Consistent with such time-based restricted grant awards to other participants, dividends will be paid on these shares.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

In addition, on June 15, 2018, the Company’s President and CEO was also granted a market performance-based equity award of approximately 227,000 restricted stock units (“RSUs”) and approximately 227,000 dividend equivalent rights of the Company. Each RSU represents a contingent right to receive one common share if certain market performance criteria are achieved. During the three years ending June 15, 2021 (the “Interim Performance Period”), a maximum of approximately 114,000 shares can be earned. Any portion of the market performance based equity award that is not earned as of the end of the Interim Performance Period will be carried forward for calculation for the five years ending June 15, 2023 (the “Full Performance Period”). The percentage of the market performance-based equity award to be earned will be determined based on the Company’s average annual TSR over the Interim Performance Period and/or over the Full Performance Period as follows: if average annual TSR (1) is below 4%, the percentage of grant earned would be 0%, (2) equals 4%, the percentage of grant earned would be 33.3%, (3) equals 6.5%, the percentage of grant earned would be 66.7%, and (4) equals 10% or above, the percentage of grant earned would be 100%. Linear interpolation shall be applied to determine the percentage of the market performance-based equity award that is earned where the average annual TSR over the performance period falls between the percentages set forth above. An independent appraisal determined the value of the market performance-based equity award for the interim and full performance periods to be $21.78 and $19.60 per share, respectively, compared to a market price at the date of grant of $28.91 per share.

The dividend equivalent rights will accrue and will be deemed to be reinvested into the Company’s common stock and payment with respect to the dividend equivalent rights will be deferred until the end of the Interim Performance Period, or the Full Performance

Period, as the case may be, to coincide with the vesting, if any, of the market performance-based equity award. Payment will only be made for the portion of the market performance-based equity award that is earned and vests.

Note 15. Earnings Per Share

Basic earnings per share (“EPS”) is calculated by dividing net income (loss) attributable to the Company’s common shareholders by the weighted average number of common shares outstanding for the period including participating securities (restricted shares that have non-forfeitable rights to receive dividends issued pursuant to the Company’s share-based compensation program are considered participating securities). Unvested restricted shares that are participating securities are not allocated net losses and/or any excess of dividends declared over net income, as such amounts are allocated entirely to the common shareholders. For 2020, 2019 and 2018, the Company had 0.4 million, 0.4 million and 0.5 million, respectively, of weighted average unvested restricted shares outstanding. The following table provides a reconciliation of the numerator and denominator of the EPS calculations for the 2020, 2019 and 2018, respectively:

	Years ended December 31,
	2020			2019			2018
Numerator
Net (loss) income	$	(520,000	)	$	1,566,000		$	4,358,000
Preferred stock dividends		(10,752,000	)		(10,752,000	)		(10,863,000	)
Preferred stock redemption costs		-			-			(3,507,000	)
Net (income) attributable to noncontrolling interests		(552,000	)		(490,000	)		(469,000	)
Net earnings allocated to unvested shares		(238,000	)		(558,000	)		(628,000	)
Net (loss) attributable to vested common shares	$	(12,062,000	)	$	(10,234,000	)	$	(11,109,000	)
Denominator
Weighted average number of vested common shares outstanding, basic and diluted		13,104,000			13,082,000			13,397,000

Net (loss) per common share attributable to common shareholders, basic and diluted	$	(0.92	)	$	(0.78	)	$	(0.83	)

Fully-diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock. For 2020, 2019 and 2018, no restricted stock units would have been issuable under the Company’s President and CEO market performance-based equity award (see Note 14 – “Share-Based Compensation”) had the measurement periods ended on December 31, 2020, 2019 and 2018, respectively. Therefore, this market performance-based equity award had no impact in calculating diluted EPS for 2020, 2019 and 2018. Net loss attributable to noncontrolling interests of the Operating Partnership has been excluded from the numerator and the related OP Units have been excluded from the denominator for the purpose of calculating diluted EPS as there would have been no effect had such amounts been included. The weighted average number of OP Units outstanding was 81,000, 83,000 and 65,000 for 2020, 2019 and 2018, respectively.

Cedar Realty Trust, Inc.

Notes to Consolidated Financial Statements

December 31, 2020

Note 16. Selected Quarterly Financial Data (unaudited)

	Quarter ended
	March 31			June 30			September 30			December 31
2020
Revenues	$	42,485,000		$	28,620,000		$	31,175,000		$	33,258,000
Net (loss) income	$	(2,098,000	)	$	(6,009,000	)	$	1,404,000		$	6,183,000
Net (loss) income attributable to common shareholders	$	(4,934,000	)	$	(8,785,000	)	$	(1,421,000	)	$	3,316,000
Per common share (basic and diluted) (a)	$	(0.39	)	$	(0.67	)	$	(0.11	)	$	0.25

2019
Revenues	$	36,883,000		$	35,660,000		$	35,912,000		$	35,628,000
Net income (loss)	$	2,989,000		$	5,544,000		$	2,947,000		$	(9,914,000	)
Net income (loss) attributable to common shareholders	$	194,000		$	2,695,000		$	92,000		$	(12,657,000	)
Per common share (basic and diluted) (a)	$	0.00		$	0.20		$	(0.00	)	$	(0.98	)

(a)	Differences between the sum of the four quarterly per share amounts and the annual per share amounts, if any, are attributable to the effect of the weighted average outstanding share calculation for the respective periods.

Note 17. Subsequent Events

In determining subsequent events, management reviewed all activity from January 1, 2021 through the date of filing this Annual Report on Form 10-K.

Cedar Realty Trust, Inc.

Schedule III

Real Estate and Accumulated Depreciation

					Year built/		Gross		Initial cost to the Company
		Year		Percent	Year last		leasable				Building and
Property	State	acquired		owned	renovated		area		Land		Improvements
Academy Plaza	PA		2001	100%	1965/2013			137,415	$	2,406,000	$	9,623,000
Big Y Shopping Center	CT		2013	100%		2007		101,105		11,272,000		23,395,000
Camp Hill	PA		2002	100%	1958/2005			430,198		4,460,000		17,857,000
Carmans Plaza	NY		2007	100%	1954/2007			195,485		8,539,000		35,804,000
Christina Crossing	DE		2017	100%		2008		119,446		4,341,000		23,227,000
Coliseum Marketplace	VA		2005	100%	1987/2012			106,648		2,924,000		14,416,000
Colonial Commons	PA		2011	100%	2011/2013			410,432		9,367,000		37,496,000
Crossroads II	PA		2008	60%		2009		133,717		15,383,000		-
East River Park	DC		2015	100%	1946-1996			150,038		9,143,000		30,893,000
Elmhurst Square	VA		2006	100%	1961-1983			66,254		1,371,000		5,994,000
Fairview Commons	PA		2007	100%	1976/2003			52,964		858,000		3,568,000
Fieldstone Marketplace	MA	2005/2012		100%	1988/2003			150,123		5,229,000		21,440,000
Fishtown Crossing	PA		2001	100%		1988		127,265		2,942,000		11,769,000
Franklin Village Plaza (a)	MA	2004/2012		100%	1987/2005			305,937		14,270,000		61,915,000
General Booth Plaza	VA		2005	100%		1985		71,639		1,935,000		9,493,000
Girard Plaza	PA		2019	100%		1950’s/2010		35,688		4,685,000		4,648,000
Gold Star Plaza	PA		2006	100%		1988		71,720		1,644,000		6,519,000
Golden Triangle	PA		2003	100%	1960/2005			202,790		2,320,000		9,713,000
Groton Shopping Center	CT		2007	100%		1969		130,264		3,070,000		12,320,000
Halifax Plaza	PA		2003	100%		1994		51,510		1,412,000		5,799,000
Hamburg Square	PA		2004	100%	1993/2010			102,058		1,153,000		4,678,000
Jordan Lane	CT		2005	100%	1969/1991			177,504		4,291,000		21,176,000
Kempsville Crossing	VA		2005	100%	1985/2013			79,512		2,207,000		11,000,000
Kings Plaza	MA		2007	100%	1970/1994			168,243		2,413,000		12,604,000
Lawndale Plaza	PA		2015	100%		1998		92,773		3,635,000		21,854,000
Meadows Marketplace	PA	2004/2012		100%		2005		91,518		1,914,000		-
Newport Plaza	PA		2003	100%		1996		64,489		1,721,000		7,758,000
New London Mall	CT		2009	100%	1967/1997			259,566		14,891,000		24,967,000
Northside Commons	PA		2008	100%		2009		69,136		3,332,000		-
Norwood Shopping Center	MA		2006	100%	1965/2013			87,406		1,874,000		8,453,000
Oak Ridge Shopping Center	VA		2006	100%		2000		38,700		960,000		4,254,000
Oakland Commons	CT		2007	100%	1962/2013			90,100		2,504,000		15,662,000
Oakland Mills	MD		2005	100%	1960's/2004			57,008		1,611,000		6,292,000
Palmyra Shopping Center	PA		2005	100%	1960/2012			111,051		1,488,000		6,566,000
Pine Grove Plaza	NJ		2003	100%	2001/2002			79,306		2,010,000		6,489,000
Quartermaster Plaza	PA		2014	100%		2004		456,602		37,031,000		54,210,000
River View Plaza	PA		2003	100%	1991/1998			113,922		9,718,000		40,356,000
San Souci Plaza	MD		2009	40%	1985 - 1997			264,134		14,849,000		18,445,000
Senator Square	DC		2018	100%	1946 - 2005			42,941		-		5,327,000
Shoppes at Arts District	DC		2016	100%		2011		35,676		2,247,000		18,616,000
South Philadelphia	PA		2003	100%	1950/2003			193,085		8,222,000		36,314,000
Southington Center	CT		2003	100%	1972/2000			155,842		-		11,834,000
Swede Square	PA		2003	100%	1980/2012			100,809		2,268,000		6,232,000
The Brickyard	CT		2004	100%	1990/2012			227,598		7,632,000		29,308,000
The Point	PA		2000	100%	1972/2012			262,072		2,700,000		10,800,000
The Shops at Bloomfield Station	NJ		2016	100%		2015		63,844		625,000		17,674,000
The Shops at Suffolk Downs	MA		2005	100%	2005/2011			121,187		7,580,000		11,089,000
Timpany Plaza	MA		2007	100%	1970's-1989			182,799		3,412,000		19,240,000
Trexler Mall	PA		2005	100%	1973/2013			336,687		6,932,000		32,815,000
Trexlertown Plaza	PA		2006	100%	1990/2011			325,171		13,349,000		23,867,000
Valley Plaza	MD		2003	100%	1975/1994			190,939		1,950,000		7,766,000
Washington Center Shoppes	NJ		2001	100%	1979/1995			157,300		2,061,000		7,314,000
Webster Plaza	MA		2007	100%	1960's-2004			98,984		3,551,000		18,412,000
Yorktowne Plaza	MD		2007	100%	1970/2000			136,197		5,940,000		25,505,000
Other	n/a	n/a		100%	n/a			-		1,965,000		-
Total Portfolio								8,084,797	$	285,607,000	$	892,766,000

Cedar Realty Trust, Inc.

Schedule III

Real Estate and Accumulated Depreciation

				Gross amount at which carried at
(continued)	Subsequent			December 31, 2020
	cost					Building and				Accumulated
Property	capitalized (b)			Land		improvements		Total		depreciation
Academy Plaza	$	6,107,000		$	2,406,000	$	15,730,000	$	18,136,000	$	6,651,000
Big Y Shopping Center		361,000			10,268,000		24,760,000		35,028,000		5,560,000
Camp Hill		40,626,000			4,093,000		58,850,000		62,943,000		24,270,000
Carmans Plaza		18,641,000			8,421,000		54,563,000		62,984,000		17,896,000
Christina Crossing		1,603,000			4,341,000		24,830,000		29,171,000		3,595,000
Coliseum Marketplace		5,629,000			3,586,000		19,383,000		22,969,000		8,465,000
Colonial Commons		7,846,000			9,367,000		45,342,000		54,709,000		16,580,000
Crossroads II		29,734,000			17,671,000		27,446,000		45,117,000		8,147,000
East River Park		7,514,000			9,398,000		38,152,000		47,550,000		6,558,000
Elmhurst Square		1,251,000			1,371,000		7,245,000		8,616,000		2,668,000
Fairview Commons		452,000			858,000		4,020,000		4,878,000		1,470,000
Fieldstone Marketplace		3,386,000			5,167,000		24,888,000		30,055,000		10,740,000
Fishtown Crossing		9,676,000			2,843,000		21,544,000		24,387,000		5,417,000
Franklin Village Plaza (a)		6,494,000			14,681,000		67,998,000		82,679,000		19,215,000
General Booth Plaza		(132,000	)		1,935,000		9,361,000		11,296,000		3,522,000
Girard Plaza		52,000			4,685,000		4,700,000		9,385,000		405,000
Gold Star Plaza		755,000			1,644,000		7,274,000		8,918,000		3,409,000
Golden Triangle		12,824,000			2,320,000		22,537,000		24,857,000		10,288,000
Groton Shopping Center		8,552,000			3,113,000		20,829,000		23,942,000		6,453,000
Halifax Plaza		562,000			1,347,000		6,426,000		7,773,000		3,059,000
Hamburg Square		6,332,000			1,153,000		11,010,000		12,163,000		4,210,000
Jordan Lane		1,122,000			4,291,000		22,298,000		26,589,000		8,744,000
Kempsville Crossing		(2,754,000	)		2,207,000		8,246,000		10,453,000		3,399,000
Kings Plaza		1,684,000			2,408,000		14,293,000		16,701,000		4,489,000
Lawndale Plaza		1,091,000			3,635,000		22,945,000		26,580,000		4,783,000
Meadows Marketplace		11,959,000			1,914,000		11,959,000		13,873,000		4,324,000
Newport Plaza		586,000			1,682,000		8,383,000		10,065,000		3,948,000
New London Mall		4,797,000			8,807,000		35,848,000		44,655,000		15,186,000
Northside Commons		10,108,000			3,379,000		10,061,000		13,440,000		2,863,000
Norwood Shopping Center		1,017,000			1,874,000		9,470,000		11,344,000		3,447,000
Oak Ridge Shopping Center		471,000			960,000		4,725,000		5,685,000		1,878,000
Oakland Commons		(344,000	)		2,504,000		15,318,000		17,822,000		5,904,000
Oakland Mills		1,088,000			1,530,000		7,461,000		8,991,000		3,088,000
Palmyra Shopping Center		2,082,000			1,488,000		8,648,000		10,136,000		3,731,000
Pine Grove Plaza		579,000			1,622,000		7,456,000		9,078,000		3,386,000
Quartermaster Plaza		3,548,000			37,031,000		57,758,000		94,789,000		13,019,000
Riverview Plaza		9,598,000			10,872,000		48,800,000		59,672,000		20,002,000
San Souci Plaza		5,182,000			13,406,000		25,070,000		38,476,000		13,092,000
Senator Square		2,485,000			-		7,812,000		7,812,000		1,145,000
Shoppes at Arts District		75,000			2,247,000		18,691,000		20,938,000		3,338,000
South Philadelphia		17,210,000			10,363,000		51,383,000		61,746,000		23,388,000
Southington Center		1,704,000			-		13,538,000		13,538,000		5,429,000
Swede Square		8,254,000			2,272,000		14,482,000		16,754,000		6,309,000
The Brickyard		4,821,000			7,648,000		34,113,000		41,761,000		12,923,000
The Point		19,534,000			2,996,000		30,038,000		33,034,000		13,507,000
The Shops at Bloomfield Station		393,000			625,000		18,067,000		18,692,000		3,097,000
The Shops at Suffolk Downs		10,547,000			7,580,000		21,636,000		29,216,000		7,942,000
Timpany Plaza		2,366,000			3,368,000		21,650,000		25,018,000		7,006,000
Trexler Mall		13,691,000			6,932,000		46,506,000		53,438,000		16,945,000
Trexlertown Plaza		31,032,000			15,674,000		52,574,000		68,248,000		14,866,000
Valley Plaza		1,903,000			1,950,000		9,669,000		11,619,000		4,490,000
Washington Center Shoppes		6,891,000			2,000,000		14,266,000		16,266,000		6,315,000
Webster Plaza		4,035,000			4,082,000		21,916,000		25,998,000		7,353,000
Yorktowne Plaza		2,560,000			5,801,000		28,204,000		34,005,000		10,323,000
Other		1,525,000			878,000		2,612,000		3,490,000		332,000
Total Portfolio	$	349,105,000		$	284,694,000	$	1,242,784,000	$	1,527,478,000	$	428,569,000

Cedar Realty Trust, Inc.

Schedule III

Real Estate and Accumulated Depreciation

The changes in real estate and accumulated depreciation for the years ended December 31, 2020, 2019 and 2018, respectively, are as follows:

Cost	2020				2019			2018
Balance, beginning of the year	$	1,515,206,000			$	1,508,682,000		$	1,534,599,000
Properties transferred to held for sale		(22,512,000	)			(36,265,000	)		(61,505,000	)
Property acquisitions		—				9,333,000			6,481,000
Outparcel dispositions		(840,000	)			—			—
Improvements and betterments		35,624,000				37,089,000			29,107,000
Asset write-offs		—				(3,633,000	)		—
Balance, end of the year	$	1,527,478,000		(c)	$	1,515,206,000		$	1,508,682,000

Accumulated depreciation
Balance, beginning of the year	$	389,861,000			$	361,969,000		$	341,943,000
Properties transferred to held for sale		(3,947,000	)			(10,143,000	)		(14,886,000	)
Outparcel dispositions		(90,000	)			—			—
Depreciation expense (d)		42,745,000				41,142,000			34,912,000
Asset write-offs		—				(3,107,000	)		—
Balance, end of the year	$	428,569,000			$	389,861,000		$	361,969,000

Net book value	$	1,098,909,000			$	1,125,345,000		$	1,146,713,000

(a)

Amount of encumbrance totals $45.6 million at December 31, 2020.

(b)

Negative amounts represent write-offs of fully depreciated assets.

(c)

At December 31, 2020, the aggregate cost for federal income tax purposes was approximately $25.6 million greater than the Company's recorded values.

(d)

Depreciation is provided over the estimated useful lives of the buildings and improvements, which range from 3 to 40 years.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A.

Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) designed to ensure that information required to be disclosed in its filings under the Exchange Act is reported within the time periods specified in the rules and regulations of the Securities and Exchange Commission (“SEC”). In this regard, the Company has formed a Disclosure Committee currently comprised of several of the Company’s executive officers as well as certain other employees with knowledge of information that may be considered in the SEC reporting process. The Committee has responsibility for the development and assessment of the financial and non-financial information to be included in the reports filed with the SEC, and assists the Company’s Chief Executive Officer and Chief Financial Officer in connection with their certifications contained in the Company’s SEC filings. The Committee meets regularly and reports to the Audit Committee on a quarterly or more frequent basis. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated its disclosure controls and procedures as of December 31, 2019, and have concluded that such disclosure controls and procedures are effective.

During the three months ended December 31, 2020, there have been no changes in the Company’s internal controls over financial reporting or in other factors that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Management Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in “Internal Control – 2013 Integrated Framework”. Based on such assessment, management believes that, as of December 31, 2020, the Company’s internal control over financial reporting is effective based on those criteria.

Ernst & Young LLP, the Company’s independent registered public accounting firm, has issued an opinion on the Company’s internal control over financial reporting, which appears elsewhere in this report.

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Cedar Realty Trust, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Cedar Realty Trust, Inc.’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Cedar Realty Trust, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and schedule listed in the Index at Item 15(a) and our report dated February 11, 2021 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Item 9A. Controls and Procedures – “Management Report on Internal Control Over Financial Reporting”. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ ERNST & YOUNG LLP

New York, New York

February 11, 2021

Items 9B.

Other Information

None.

Part III.

In accordance with the rules of the SEC, certain information required by Part III is omitted and is incorporated by reference into this Form 10-K from the Company’s definitive proxy statement, which we expect to file in March 2021 (and in any event not later than 120 days after the close of our fiscal year), for the 2021 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A.

Item 10.

Directors, Executive Officers and Corporate Governance

This item is incorporated by reference to the definitive proxy statement for the 2021 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A.

Item 11.

Executive Compensation

This item is incorporated by reference to the definitive proxy statement for the 2021 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

This item is incorporated by reference to the definitive proxy statement for the 2021 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A.

Item 13.

Certain Relationships and Related Transactions and Director Independence

This item is incorporated by reference to the definitive proxy statement for the 2021 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A.

Item 14.

Principal Accountant Fees and Services

This item is incorporated by reference to the definitive proxy statement for the 2021 Annual Meeting of Shareholders, to be filed pursuant to Regulation 14A.

Part IV

Item 15.

Exhibits and Financial Statement Schedules

(a)

1. Financial Statements

The response to this portion of Item 15 is included in Item 8 of this report.

Financial Statement Schedules

The response to this portion of Item 15 is included in Item 8 of this report.

Exhibits

Item		Title or Description

3.1.a		Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of Form 10-K for the year ended December 31, 2013.

3.1.b		Articles Supplementary to Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.2 of Form 8-A filed on August 18, 2017.

3.1.c		Articles Supplementary to Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of Form 8-K filed on August 22, 2017.

3.1.d		Articles Supplementary to Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of Form 8-K filed on December 15, 2017.

3.1.e		Articles of Amendment to the Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of Form 8-K filed on May 7, 2018.

3.1.f		Articles of Amendment to the Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.1 of Form 8-K filed on November 27, 2020.

3.1.g		Articles of Amendment to the Articles of Incorporation of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.2 of Form 8-K filed on November 27, 2020.

3.2		Amended and Restated By-laws of Cedar Realty Trust, Inc., incorporated by reference to Exhibit 3.2 of Form 8-K filed on November 2, 2020.

3.3.a		Agreement of Limited Partnership of Cedar Shopping Centers Partnership, L.P., incorporated by reference to Exhibit 3.4 of the Registration Statement on Form S-11/A filed on October 14, 2003.

3.3.b		Amendment No. 1 to Agreement of Limited Partnership of Cedar Shopping Centers Partnership, L.P., incorporated by reference to Exhibit 3.5 of the Registration Statement on Form S-11/A filed on October 14, 2003.

3.3.c		Amendment No. 2 to Agreement of Limited Partnership of Cedar Shopping Centers Partnership, L.P., incorporated by reference to Exhibit 3.3.c of Form 10-K for the year ended December 31, 2004.

3.3.d		Amendment No. 3 to Agreement of Limited Partnership of Cedar Shopping Centers Partnership, L.P., incorporated by reference to Exhibit 3.3.d of Form 10-K for the year ended December 31, 2006.

3.3.e		Amendment No. 4 to Agreement of Limited Partnership of Cedar Shopping Centers Partnership, L.P., incorporated by reference to Exhibit 3.2 of Form 10-Q for the quarterly period ended September 30, 2010.

3.3.f		Amendment No. 5 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.2 of Form 8-K filed on May 16, 2012.

3.3.g		Amendment No. 6 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.2 of Form 8-K filed on May 29, 2012.

Item		Title or Description
3.3.h		Amendment No. 7 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.2 of Form 8-K filed on September 14, 2012.

3.3.i		Amendment No. 8 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.3 of Form 8-K filed on November 21, 2012.

3.3.j		Amendment No. 9 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.2 of Form 8-K filed on February 11, 2013.

3.3.k		Amendment No. 10 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.3 of Form 8-K filed on August 22, 2017.

3.3.1		Amendment No. 11 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P., incorporated by reference to Exhibit 3.2 of Form 8-K filed on December 15, 2017.

3.3.m		Amendment No. 12 to Agreement of Limited Partnership of Cedar Realty Trust Partnership, L.P.

4.1		Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, incorporated by reference to Exhibit 4.1 of Form 10-K for the year ended December 31, 2019.

10.1.a.1*		Cedar Realty Trust, Inc. 2012 Stock Incentive Plan, incorporated by reference to Exhibit A of the Definitive Proxy Statement filed on April 25, 2012.
10.1.a.2*		First Amendment to Cedar Realty Trust, Inc. 2012 Stock Incentive Plan.
10.1.b.1*		Cedar Realty Trust, Inc. 2017 Stock Incentive Plan, incorporated by reference to Annex A of the Definitive Proxy Statement filed on March 23, 2017.

10.1.b.2*		First Amendment to Cedar Realty Trust, Inc. 2017 Stock Incentive Plan, incorporated by reference to Annex A of the Definitive Proxy Statement filed on March 29, 2019.

10.1.b.3*		Second Amendment to Cedar Realty Trust, Inc. 2017 Stock Incentive Plan.

10.2.a*		2005 Cedar Shopping Centers, Inc. Deferred Compensation Plan, incorporated by reference to Exhibit 10.1 of Form 8-K filed on December 22, 2005.

10.2.b*		Amendment No. 1 to the 2005 Cedar Shopping Centers, Inc. Deferred Compensation Plan, effective as of December 21, 2006, incorporated by reference to Exhibit 10.2.b of Form 10-K for the year ended December 31, 2006.

10.2.c*		Amendment No. 2 to the 2005 Cedar Shopping Centers, Inc. Deferred Compensation Plan, effective as of December 11, 2007, incorporated by reference to Exhibit 10.2.c of Form 10-K for the year ended December 31, 2007.

10.2.d*		Amendment No. 3 to the 2005 Cedar Shopping Centers, Inc. Deferred Compensation Plan, effective as of December 16, 2008, incorporated by reference to Exhibit 10.2.d of Form 10-K for the year ended December 31, 2008.

10.2.e*		Amendment No. 4 to the 2005 Cedar Shopping Centers, Inc. Deferred Compensation Plan, effective as of June 30, 2011, incorporated by reference to Exhibit 10.4 of Form 10-Q for the quarterly period ended September 30, 2011.

10.2.f*		Amendment No. 5 to the 2005 Cedar Realty Trust, Inc. Deferred Compensation Plan, effective as of December 14, 2011, incorporated by reference to Exhibit 10.2.f of Form 10-K for the year ended December 31, 2011.

10.2.g*		Amendment No. 6 to the 2005 Cedar Realty Trust, Inc. Deferred Compensation Plan, effective as of December 12, 2012, incorporated by reference to Exhibit 10.2.g of Form 10-K for the year ended December 31, 2012.

10.2.h*		Amendment No. 7 to the 2005 Cedar Realty Trust, Inc. Deferred Compensation Plan, effective as of December 24, 2013, incorporated by reference to Exhibit 10.2.h of Form 10-K for the year ended December 31, 2013.

Item		Title or Description
10.3.a*		Amended and Restated Employment Agreement between Cedar Realty Trust, Inc. and Bruce J. Schanzer, dated effective as of June 15, 2018, incorporated by reference to Exhibit 10.1 of Form 8-K filed on June 18, 2018.

10.3.b*		Amended and Restated Employment Agreement between Cedar Realty Trust, Inc. and Philip Mays, dated effective as of June 6, 2018, incorporated by reference to Exhibit 10.1 of Form 8-K filed on January 3, 2019.

10.3.c*		Amended and Restated Employment Agreement between Cedar Realty Trust, Inc. and Robin McBride Zeigler, dated effective as of April 1, 2019, incorporated by reference to Exhibit 10.1 of Form 10-Q for the quarterly period ended September 30, 2019.

10.4.a.1		Fourth Amended and Restated Loan Agreement (the “Loan Agreement”) by and among Cedar Realty Trust Partnership, L.P., KeyBank National Association and other lending institutions which are or may become parties to the Loan Agreement, and KeyBank National Association (as Administrative Agent), dated as of September 8, 2017, incorporated by reference to Exhibit 10.1 of Form 10-Q for the quarterly period ended September 30, 2017.

10.4.a.2		First Amendment to Fourth Amended and Restated Loan Agreement, dated as of July 24, 2018, incorporated by reference to Exhibit 10.2 of Form 10-Q for the quarterly period ended June 30, 2018.

10.4.a.3		Second Amendment to Fourth Amended and Restated Loan Agreement, dated as of August 4, 2020, incorporated by reference to Exhibit 10.1 of Form 10-Q for the quarterly period ended September 30, 2020.

10.4.b.1		Third Amended and Restated Loan Agreement (the “Loan Agreement”) by and among Cedar Realty Trust Partnership, L.P., KeyBank National Association and other lending institutions which are or may become parties to the Loan Agreement, and KeyBank National Association (as Administrative Agent), dated as of July 24, 2018, incorporated by reference to Exhibit 10.1 of Form 10-Q for the quarterly period ended June 30, 2018.

10.4.b.2		First Amendment to Third Amended and Restated Loan Agreement, dated as of August 4, 2020, incorporated by reference to Exhibit 10.2 of Form 10-Q for the quarterly period ended September 30, 2020.

10.4.c.1		Loan Agreement (the “Loan Agreement”) by and among Cedar Realty Trust Partnership, L.P., Regions Bank and other lending institutions which are or may become parties to the Loan Agreement, and KeyBank National Association (as Administrative Agent), dated as of April 26, 2016 incorporated by reference to Exhibit 10.2 of Form 10-Q for the quarterly period ended March 31, 2016.

10.4.c.2		First Amendment to Loan Agreement, dated as of July 15, 2016 incorporated by reference to Exhibit 10.2 of Form 10-Q for the quarterly period ended September 30, 2016.

10.4.c.3		Second Amendment to Loan Agreement, dated as of July 24, 2018, incorporated by reference to Exhibit 10.3 of Form 10-Q for the quarterly period ended June 30, 2018.

10.4.c.4		Third Amendment to Loan Agreement, dated as of August 4, 2020, incorporated by reference to Exhibit 10.3 of Form 10-Q for the quarterly period ended September 30, 2020.

10.5		Commercial Lease Agreement with the Government of the District of Columbia’s Department of General Services, incorporated by reference to Exhibit 10.4 of Form 10-Q for the quarterly period ended September 30, 2020.

21.1		List of Subsidiaries of the Registrant

23.1		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm

31.1		Rule 13a-14(a) Certification of Chief Executive Officer

31.2		Rule 13a-14(a) Certification of Chief Financial Officer

32.1		Section 1350 Certification of Chief Executive Officer

32.2		Section 1350 Certification of Chief Financial Officer

Item		Title or Description
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because iXBRLtags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Management contracts or compensatory plans required to be filed pursuant to Rule 601 of Regulation S-K.

(b)

Exhibits

The response to this portion of Item 15 is included in Item 15(a)(3) above.

(c)

The following financial statement schedules are filed as part of the report:

The response to this portion of Item 15 is included in Item 15(a)(2) above.

Item 16.

Form 10-K Summary

None

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CEDAR REALTY TRUST, INC.

/s/ BRUCE J. SCHANZER		/s/ PHILIP R. MAYS
Bruce J. Schanzer		Philip R. Mays
President (principal executive officer)		Senior Executive Vice President, Chief Financial Officer and Treasurer
		(principal financial officer)

/s/ GASPARE J. SAITTA, II
Gaspare J. Saitta, II
Vice President and Chief Accounting Officer
(principal accounting officer)

February 11, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and as of the date indicated.

/s/ ABRAHAM EISENSTAT		/s/ GREGG GONSALVES
Abraham Eisenstat		Gregg Gonsalves
Director		Director

/s/ PAMELA N. HOOTKIN		/s/ SABRINA L. KANNER
Pamela N. Hootkin		Sabrina L. Kanner
Director		Director

/s/ STEVEN G. ROGERS		/s/ BRUCE J. SCHANZER
Steven G. Rogers		Bruce J. Schanzer
Director		Director
/s/ ROGER M. WIDMANN
Roger M. Widmann
Director

February 11, 2021