Following weeks of turmoil in its C-suite, Virginia Beach, VA-based Wheeler Property Investment Trust (NASDAQ: WHLR )has begun the procedure of selecting an independent third-party consultant to help in determining and pursuing options to make the most of shareholder worth.
Regardless of investors petitioning for such a relocation last summertime, it took the shooting of the REIT’s name chairman, CEO and president, Jon Wheeler, and the resignation of its CFO prior to the REIT’s board put the plan into action. The REIT supplied no reasons for the executive departures.
After the REIT’s stock lost more than 60% of its worth given that the very first week of December, the company has actually now taken a number of steps planned to support, inning accordance with newly appointed CEO David Kelly. Among its initial steps was a choice to close its Charleston, SC, workplace and put the 7 undeveloped homes in Virginia and North Carolina on the market for sale.
The REIT stated it’s also working to identify other possessions to put on the market.
Wheeler owns and runs 64 grocery-anchored shopping mall, one office complex and has 7 undeveloped properties in Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, Oklahoma, Tennessee, Kentucky, New Jersey, Pennsylvania and West Virginia.
“We have actually discovered through a thorough evaluation that the business’s existing portfolio and organizational structure validates our pre-existing belief that our real estate portfolio is strong and performing well,” Kelly said in a declaration.
Nevertheless, Wheeler revealed that it is presently in “proactive and substantive” discussions among its main tenants, Southeastern Grocers (SEG), concerning a potential result on the stability of the REIT’s portfolio.
Recent media reports have actually shown that Southeastern Grocers might remain in financial distress and has been thinking about applying for insolvency protection.
Since last September, Southeastern Grocers leased 19 supermarket locations from Wheeler, including 14 Bi-Lo grocery store shops. SEG’s leases total 724,348 of rented square feet with annualized base rent of $6.2 million, which represents about 15% of Wheeler’s leasable square footage.
“We have been in proactive and substantive conversations with SEG with the goal of ensuring our portfolio’s stability,” Kelly stated. “While we are not at liberty to talk about all the information surrounding these conversations, we are encouraged by our development and plan to be able to share more information with you in the future.”
Likewise troubling to investors has been Wheeler REIT’s newest purchase.
Last month, Wheeler REIT obtained a retail shopping center in Norfolk, VA, known as JANAF, an acronym for Joint Army Navy Flying Force, for $85.65 million, including the assumption of roughly $58.9 countless mortgage loans protected by the property. The REIT paid for the property in part by releasing about $1.5 million of the REIT’s common stock.
That offer didn’t agree with Andrew Jones, managing partner of North Star Partners, which controls about 6.6% of Wheeler’s exceptional stock. Jones was among the very first to call on the REIT to consider tactical alternatives last summer season. He composed once again to them late last month.
“After disregarding his earlier request, “the board went on to approve the improperly conceived JANAF acquisition, which has actually led to more destruction of investor worth. In addition to being a diversion from the company’s strategy of getting smaller grocery anchored shopping centers, it was financed with favored equity that essentially handed out $12.475 million in shareholder worth. This represents a dilution in investor worth of $1.33/ share,” Jones composed.
Jones has required a total liquidation of the REIT that would lead to the sale of all the business’s possessions in an organized way.