Business Context and Reporting Period
Company: Wheeler Real Estate Investment Trust, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: December 21, 2012
Event: Acquisition of Surrey Plaza Associates, LLC ("Surrey") and its sole asset, Surrey Plaza, a grocery-anchored shopping center in Hawkinsville, Georgia.
Key Financial Metrics
- Aggregate Purchase Price: Approximately $2.3 million.
- Payment Structure:
- 83,748 units of membership interest in Wheeler Real Estate Investment Trust, L.P. (WHLP) valued at $5.90 per unit.
- Assumption of $1,745,530 in bank indebtedness (subsequently repaid in full by the Registrant).
- Transaction Fees: 1% of the Aggregate Purchase Price paid in cash to Wheeler Interests, LLC.
- Funding Source: Cash proceeds generated from the Registrant's initial public offering earlier in the year.
Material Changes
The Registrant expanded its portfolio by acquiring 100% of the membership interests in Surrey. The acquired asset, Surrey Plaza, is a 100% leased property built in 1993. The tenant base includes Harvey's Supermarket and Rite-Aid, which collectively lease approximately 86% of the gross leasable area. The transaction involved the assumption and immediate repayment of existing bank debt associated with the property.
Guidance, Outlook, and Risks
Management Commentary: The acquisition was executed through the Registrant's operating partnership, WHLP. The property is situated along the Golden Isles Parkway, a connector between I-95 and I-75.
Related Party Transaction: Mr. Jon S. Wheeler, Chairman and President of the Registrant, is the sole shareholder of Wheeler Interests, LLC, which received the assumption fee.
Financial Reporting: Requisite financial statements for the acquired business are scheduled to be filed no later than 71 calendar days after this report. Pro forma financial information is not provided in this filing.
Investor Verification Checklist
- Verify the 71-day filing deadline for the acquired business's financial statements.
- Confirm the full repayment of the $1.745 million assumed indebtedness.
- Review the valuation of the 83,748 WHLP units at $5.90 per unit.
- Assess the related-party nature of the 1% assumption fee paid to Wheeler Interests, LLC.
- Monitor the lease expiration dates for the anchor tenants (Harvey's Supermarket and Rite-Aid) controlling 86% of the leasable area.