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CEDAR REALTY TRUST, INC. (CDRPB)·Q3 2024 Earnings Summary
Executive Summary
- Cedar Realty Trust is consolidated under Wheeler Real Estate Investment Trust (WHLR); Q3 2024 consolidated revenue was $24.8M, down 1.6% year over year, with operating income of $13.9M. AFFO was $0.679M and AFFO per share was $1.75, while FFO per share was deeply negative due to non-operating fair value losses on derivative liabilities .
- Cedar’s portfolio occupancy improved to 86.3% (+110bps YoY) and leased rate to 89.7% (+100bps YoY). Q3 leasing renewals achieved a 10.26% rent spread, but new leases had a negative rent spread of (13.38)% compared to a strong 54.42% in Q3 2023, reflecting mix and anchor dynamics .
- Capital actions: Cedar completed a “modified Dutch auction” repurchase of 688,670 Series C preferred shares at $14.00 per share (~$9.6M), and declared Q4 dividends of $0.453125 (Series B) and $0.406250 (Series C) payable Nov 20, 2024, supporting preferred investor cash returns .
- Credit and non-GAAP headwinds: Big Lots bankruptcy impacted lease receivables (1.5% of ABR) and drove reserve increases; WHLR booked a $39.3M non-operating loss from derivative liabilities linked to convert price mechanics, pressuring GAAP EPS and FFO .
- Potential catalysts: ongoing asset dispositions (e.g., South Philadelphia held for sale), continued occupancy gains, and franchise-level leasing execution within Cedar’s Northeast footprint .
What Went Well and What Went Wrong
What Went Well
- Cedar occupancy and lease commitments improved: occupancy to 86.3% (+110bps YoY) and leased rate to 89.7% (+100bps YoY), signaling stabilizing tenant demand across the portfolio .
- Leasing execution: Q3 Cedar renewals totaled 96,523 sq ft at +$1.12/sq ft with a 10.26% renewal rent spread, underpinning base rent durability and cash flow normalization .
- Preferred shareholder support: Cedar repurchased 688,670 Series C preferred shares at $14.00 in the Dutch auction, and declared quarterly dividends for Series B/C payable Nov 20, 2024, reinforcing return-of-capital priorities .
What Went Wrong
- New lease economics: Cedar’s Q3 new lease rent spread was (13.38)%, a sharp reversal vs +54.42% in Q3 2023, reflecting lease mix/anchors and tougher market pricing for backfills in select centers .
- Credit and impairment: WHLR recorded higher credit adjustments tied to Big Lots bankruptcy and a $1.2M impairment on Oregon Avenue, weighing on operating metrics and net results .
- Non-operating volatility: a $39.3M loss from derivative liability fair value changes and reverse split-related costs materially pressured FFO and GAAP loss per share, obscuring solid property-level NOI .
Financial Results
Consolidated (WHLR) quarterly comparables (oldest → newest):
Cedar portfolio KPIs (YoY and current):
Cedar leasing detail (Q3 comparables):
Portfolio-level occupancy (ex-Cedar vs Cedar; as of 9/30/24):
Key drivers:
- YoY revenue decline and higher net loss reflect decreased market lease amortization, impairment, and derivative liability fair value losses, partially offset by increased tenant reimbursements and base rent .
- AFFO improvement vs prior periods indicates non-GAAP cash flow stability despite GAAP volatility .
Guidance Changes
Note: The company did not issue quantitative revenue/margin/OpEx guidance; only preferred dividend declarations were disclosed .
Earnings Call Themes & Trends
No Q3 2024 earnings call transcript was available for Cedar/WHLR; themes are derived from filings and supplemental materials.
Management Commentary
- Occupancy and leasing momentum: Management highlighted higher consolidated leased/occupied rates and Same-Property NOI growth driven by property revenue gains and operating expense discipline .
- Capital allocation and liability management: Cedar conducted a preferred repurchase via Dutch auction; WHLR managed conversions/redemptions and refinancing activity, though derivative liability fair value adjustments materially impacted GAAP metrics .
- Portfolio actions: Active dispositions (e.g., Oakland Commons earlier in the year; South Philadelphia held for sale) and targeted capex support backfills and tenant improvements .
Q&A Highlights
No Q3 2024 earnings call transcript was available; there were no publicly available Q&A disclosures in the period .
Estimates Context
- Wall Street consensus (S&P Global/Capital IQ) for CDRPB (preferred) is not applicable and unavailable; Cedar reports through WHLR consolidation. Attempts to pull WHLR Q3 2024 consensus were not successful due to retrieval limits. As a result, comparisons to consensus estimates are not provided in this recap (S&P Global data unavailable).
Key Takeaways for Investors
- Cedar’s occupancy and leased rates are improving, supporting base rent durability even as new lease spreads were negative in Q3; monitor mix effects and anchor backfills into 2025 .
- AFFO turned positive in Q3 ($0.679M; $1.75 per share), indicating underlying cash generation despite GAAP noise from derivative liability fair value changes and impairments .
- Preferred holders benefit from cash dividends (Series B/C) and the Dutch auction repurchase, which may reduce preferred overhang and cost of capital; watch ongoing declarations and tender activity .
- Credit risk from Big Lots (1.5% of ABR) is contained but noteworthy; re-leasing outcomes will drive near-term ABR and spread trajectory in affected centers .
- Capital structure remains complex: reverse splits, Series D redemptions settled in common, and convertible note conversion price adjustments inject non-operating volatility into FFO/EPS; focus on property-level NOI and AFFO for trend analysis .
- Asset rotation continues (held-for-sale components, selective dispositions), which can enhance liquidity and sharpen portfolio quality; track pricing and gains vs. capex needs .
- Near-term trading: Expect headlines around tenant credit events (Big Lots), preferred dividend actions, and any additional redemptions/conversion mechanics; medium term thesis hinges on occupancy gains, stable tenant reimbursements, and successful backfills in Cedar’s Northeast footprint .