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Wheeler Real Estate Investment Trust, Inc. (WHLR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue rose 5.3% year over year to $27.6M and operating expenses fell 2.7%, driving Same-Property NOI up 4.8% to $16.1M .
  • Reported net income attributable to common was $32.0M, but diluted EPS was a loss of $3.79 due to capital structure and derivative fair value effects; FFO per share spiked to $248.50 and AFFO per share to $18.46 on very low average share counts, highlighting extraordinary non-operating items and per-share volatility .
  • Leasing execution remained solid: WHLR occupancy 94.8% (Cedar 86.7%), renewal rent uplift 11.39% and new rent spread 37.76%; consolidated occupancy was 92.3% .
  • The largest “surprise” was a $41.4M non-operating gain from changes in fair value of derivative liabilities tied to convertible notes and preferred stock mechanics, versus large losses in Q2/Q3; this swing materially affected reported results and per-share metrics .
  • Near-term catalysts/risks: continued preferred redemptions and conversion price resets for the convertible notes (conversion price ~$16.88 at 12/31/24 and subsequently adjusted to ~$3.88 in Feb 2025), ongoing asset sales, and Cedar preferred tender offers—all of which may impact dilution, leverage, and cash flows .

What Went Well and What Went Wrong

  • What Went Well

    • Same-Property NOI increased 4.8% ($0.7M) on higher property revenue (+$1.2M), with operating cost growth contained (+$0.4M) .
    • Leasing strength: 28 renewals (139.8k sq ft) at +11.39% over prior rents; 7 new leases (24.0k sq ft) at $14.91/sq ft with 37.76% new rent spread; 34 properties 100% leased .
    • Portfolio occupancy improved: WHLR 94.8% (up 120 bps), combined portfolio 92.3% occupied; ABR at WHLR $51.4M and Cedar $22.0M .

  • What Went Wrong

    • Legal fees rose $0.4M and repairs/taxes increased, partially offsetting opex reductions; interest expense rose with higher rates and principal balances; property-level debt interest increased year-over-year .
    • Non-operating complexities persist: capital structure costs ($1.5M) linked to reverse splits and preferred redemptions; continued preferred redemptions and conversions add dilution uncertainty .
    • Cedar occupancy remains comparatively lower (86.7% occupied; 88.9% leased), indicating continued re-leasing work and potential NOI drag vs. WHLR portfolio .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$26.215 $24.792 $27.593
Operating Income ($USD Millions)$7.167 $13.894 $4.637
Net Income Attributable to Common ($USD Millions)$12.377 $(35.675) $32.037
Basic EPS ($USD)$0.55 N/A $173.35
Diluted EPS ($USD)— $(91.99) $(3.79)
FFO per Share and OP Units ($USD)$0.93 $(90.98) $248.50
AFFO per Share and OP Units ($USD)$0.06 $1.75 $18.46

Segment/Portfolio Highlights

Portfolio KPIQ4 2023Q3 2024Q4 2024
WHLR Occupancy (%)93.6% 94.8% 94.8%
WHLR Leased (%)95.9% 95.8% 94.9%
WHLR Annualized Base Rent ($USD 000s)$49,819 $51,209 $51,411
Cedar Occupancy (%)86.4% 86.3% 86.7%
Cedar Leased (%)89.6% 89.7% 88.9%
Cedar Annualized Base Rent ($USD 000s)$25,755 $23,948 $22,037
Combined Occupancy (%)91.1% 92.0% 92.3%

KPIs

KPIQ4 2023Q3 2024Q4 2024
Same-Property NOI ($USD 000s)$10,992 $14,923 $16,109
WHLR Renewals (Count/Sq Ft)26 / 138,049 42 / 332,528 28 / 139,842
WHLR Renewal Rent Spread (per sq ft; % change)$0.66; 5.53% $0.59; 6.52% $1.36; 11.39%
WHLR New Leases (Count/Sq Ft)14 / 56,926 10 / 30,345 7 / 24,025
WHLR New Rent Spread (%)N/A 39.02% 37.76%

Guidance Changes

No formal revenue, margin, EPS, or cash flow guidance was provided in the Q4 2024 8-K press release or supplemental materials .

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/QuarterN/A N/A N/A
Margins (EBIT/Net)FY/QuarterN/A N/A N/A
OpExFY/QuarterN/A N/A N/A
OI&E/TaxFY/QuarterN/A N/A N/A
Segment/PortfolioFY/QuarterN/A N/A N/A
DividendsFY/QuarterCedar preferred dividends announced Jan 30, 2025 As announced Maintained for Cedar preferred

Earnings Call Themes & Trends

No earnings call transcript was available in the document catalog for Q4 2024.

TopicPrevious Mentions (Q2 2024 and Q3 2024)Current Period (Q4 2024)Trend
Leasing/OccupancyWHLR 93.3%/95.6%; Cedar 86.0%/90.1%; strong renewal uplift and new rent spreads WHLR 94.8%/94.9%; Cedar 86.7%/88.9%; renewal uplift +11.39%, new spread +37.76% Improving occupancy; strong pricing power
Tenant Credit (Big Lots)Bankruptcy reserve ~$0.2M; negotiations ongoing No new disclosure in Q4 materials Monitor risk; no new update
Capital Markets (Reverse Splits/Derivatives)Reverse splits (May, June); derivative losses ($5.0M Q2; $39.3M Q3) One-for-two split in Nov; large derivative gain $41.4M Volatile but favorable in Q4
DispositionsOakland Commons gain; settlement with City of Grove Multiple Q4 sales incl. South Philadelphia loss; continued portfolio pruning Active asset recycling
Debt/InterestInterest expense down Q2; property debt interest rising with rates/principal Weighted avg rate up; interest expense +4.6% YoY in Q4 Slight deterioration in financing costs
Listing/Preferred/Convertible NotesCedar tender offer; convertible note conversion price ~$14.30 (Q2) Convertible note conversion price ~$16.88 (12/31/24); Feb 2025 reset to ~$3.88 Elevated dilution risk

Management Commentary

  • Non-operating derivative fair value swing: “Recognized a non-operating gain of $41.4 million in net changes in fair value of derivative liabilities, primarily related to the conversion rate on the Convertible Notes relative to market trade prices of the Convertible Notes and Common Stock.”
  • Leasing highlights and occupancy metrics are explicitly quantified in the supplemental materials rather than expressed via direct management quotes .

Q&A Highlights

No Q&A transcript was available; the company furnished press release and supplemental information via 8-K, without a posted earnings call transcript in the catalog .

Estimates Context

Consensus EPS and revenue estimates for Q4 2024 from S&P Global were unavailable due to data access limits at the time of query. As a result, beats/misses versus Wall Street consensus cannot be assessed in this recap.

Key Takeaways for Investors

  • Reported results were dominated by a large non-operating derivative gain in Q4, reversing sizable losses in prior quarters; per-share metrics (EPS/FFO/AFFO) were highly volatile due to reverse splits and low average share counts—focus on underlying quarterly revenue/NOI trends rather than headline per-share values .
  • Core operations improved: revenue +5.3% YoY, opex −2.7% YoY, Same-Property NOI +4.8%; leasing strength (double-digit renewal lifts and robust new rent spreads) supports rent roll durability into 2025 .
  • Portfolio quality mixed: WHLR assets exhibit high occupancy and stable ABR; Cedar’s lower occupancy requires continued re-leasing, suggesting uneven NOI growth across the consolidated platform .
  • Financing backdrop: weighted-average interest rates ticked higher and interest expense modestly increased; leverage remains elevated with ~$499.5M total debt and long-dated maturities concentrated “thereafter,” warranting close monitoring of refinancing risk and debt service coverage .
  • Ongoing capital structure actions—preferred redemptions/conversions and convertible note conversion price resets (to ~$16.88 at 12/31/24 and ~$3.88 in Feb 2025)—are material dilution overhangs and potential trading catalysts .
  • Active portfolio optimization via dispositions (e.g., South Philadelphia sale at a loss, plus subsequent Webster Commons sale in Feb 2025) may improve liquidity and focus but could create near-term NOI volatility .
  • Trading implications: expect elevated volatility around additional reverse splits, preferred tenders/redemptions, and any asset sales; near-term narrative is driven more by capital structure dynamics than fundamentals until balance sheet and share dilution paths stabilize .