Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
SIGNATURES
Table of Contents
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K (the "Form 10-K") of Cedar Realty Trust, Inc. (the "Company") contains "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 (the "Exchange Act"), that are subject to risks, uncertainties and other factors which may cause the actual results, performance or achievements 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. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.
Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned not to place undue reliance on forward-looking statements, which reflect our management's view only as of the date of this Form 10-K. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
Factors that could cause actual results, performance or achievements to differ materially from any forward-looking statements made in this Form 10-K include, but are not limited to:
• the use of and demand for retail space, including in relation to 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;
• general and economic business conditions, including the rate and other terms on which we are able to lease our properties;
• the loss or bankruptcy of the Company's tenants;
• the geographic concentration of our properties in the Northeast;
• availability, terms and deployment of capital;
• the degree and nature of our competition;
• changes in applicable laws and governmental regulations, including federal tax law and other regulatory provisions as a result of the One Big Beautiful Bill Act ("OBBBA");
• changes to accounting rules, tax rates and similar matters, including tariff-related measures;
• 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;
• 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 non-renewal 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;
• litigation risks generally;
• the risk that shareholder litigation in connection with the Merger (defined below) may result in significant indemnification costs;
• tax audits and other regulatory inquiries;
• the Company's ability to maintain compliance with the financial and other covenants in its debt agreements;
• 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 and increases in the Company's borrowing costs as a result of changes in interest rates and other factors;
• the impact of the Company's leverage on operating performance;
• our ability to successfully execute strategic or necessary asset acquisitions and divestitures;
• our ability to continue to pay quarterly dividends on our preferred stock;
• our ability to repurchase shares of our preferred stock, and the price and timing of such repurchases;
• risks endemic to real estate and the real estate industry generally;
• the adverse effect any future pandemic, endemic or outbreak of infectious disease, and mitigation efforts to control their spread;
• competitive risks;
• risks to our information systems - or those of our tenants or vendors - from service interruption, misappropriation of data, breaches of security, impacts of artificial intelligence, or other cyber-related attacks;
• the Company's ability to maintain compliance with the listing standards of the New York Stock Exchange ("NYSE");
Table of Contents
• damage to the Company's properties from catastrophic weather and other natural events, and the physical effects of climate change;
• the risk that an uninsured loss on the Company's properties or a loss that exceeds the limits of the Company's insurance policies could subject the Company to lost capital or revenue on those properties;
• the risk that continued increases in the cost of necessary insurance could negatively impact the Company's profitability;
• the Company's ability and willingness to maintain its qualification as a real estate investment trust ("REIT") in light of economic, market, legal, tax and other considerations;
• the ability of our operating partnership, Cedar Realty Trust Partnership, L.P. (the "Operating Partnership"), and each of our other partnerships and limited liability companies to be classified as partnerships or disregarded entities for federal income tax purposes;
• the impact of government shutdowns; and
• inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws.
Forward-looking statements in this Form 10-K should be read in light of these factors. 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.
Table of Contents
Part I.
Item 1. Business
The Company is a REIT that focuses on owning and operating income producing retail properties with a primary focus on grocery-anchored shopping centers, predominantly located in the Northeast. At December 31, 2025, the Company owned a portfolio of 12 properties totaling 1.9 million square feet of gross leasable area ("GLA"). The portfolio was 92.4% leased and 92.4% occupied at December 31, 2025.
The Company, organized as a Maryland corporation in 1984, has elected to be taxed as a 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 is a commercial real estate investment company that owns income-producing retail properties with a primary focus on grocery-anchored centers.
The Company 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 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, 2025, the Company, which is a subsidiary of Wheeler Real Estate Investment Trust, Inc. ("WHLR"), owned a 100.0% interest in, and was the sole general partner of, the Operating Partnership. The Company's 7.25% Series B Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock") and 6.50% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock" and, together with the Series B Preferred Stock, the "Preferred Stock") remain outstanding and continue to trade on the NYSE.
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.
Human Capital Management
Our Team
All individuals that provide services to the Company are employees of WHLR and participate in WHLR's compensation, benefits, professional development and other programs. For a discussion of WHLR's human capital management, please see WHLR's 2025 Annual Report on Form 10-K.
Business Objectives and Investment Strategy
Our primary business objective is to maximize the value of our portfolio. We intend to achieve this objective utilizing the following investment strategies:
• Focus on necessity-based retail . We own and operate retail properties that serve the essential day-to-day shopping needs of the surrounding communities. These necessity-based centers attract high levels of daily traffic resulting in cross-selling of goods and services from our tenants. The majority of our tenants provide non-cyclical consumer goods and services that are less impacted by fluctuations in the economy. We believe these centers that provide essential goods and services such as groceries result in a stable, lower-risk portfolio of retail investment properties.
• Focus on secondary and tertiary markets with strong demographics and demand . Our properties are in markets that have strong demographics such as population density, population stability, consistent tenant sales trends and growth in household income. We seek to identify new tenants and renew leases with existing tenants in these locations that support the need for necessity-based retail and limited new supply. We aim to identify and pursue attractive investment opportunities in regions with low taxes and a pro-business environment.
• Increase operating income through leasing strategies and expense management . We employ intensive lease management strategies to optimize occupancy. Management has extensive expertise in acquiring and managing under-performing properties and increasing operating income through more effective leasing strategies and expense management. Our leases generally require the tenant to reimburse us for a substantial portion of the expenses incurred in operating, maintaining, repairing, and managing the shopping center and the common areas, along with the associated insurance costs and real estate taxes. In many cases, the tenant is either fully or partially responsible for all maintenance of the property, thereby limiting our
Table of Contents
financial exposure towards maintaining the center and increasing our net income. We refer to this arrangement as a "triple net lease."
• Selectively utilize our capital to improve retail properties. We intend to make capital investments where the risk adjusted returns on such capital is accretive to our stockholders. We allocate capital to value-added improvements of retail properties to increase rents, extend long-term leases with anchor tenants and increase occupancy. We selectively allocate capital to revenue enhancing projects that we believe will improve the market position of a given property.
• Recycling and sensible management of our property portfolio. We intend to sell non-income producing land parcels or non-core assets utilizing sales proceeds to deleverage the balance sheet and invest in higher yielding opportunities. Properties may be slated for disposition based upon management's periodic review of our portfolio, and approval by our Board of Directors (the "Board of Directors").
• Strategy for optimizing capital structure. The Company seeks to mitigate risk and optimize its capital structure through continuous focus on maintaining prudent leverage and lengthy average debt maturities, as well as access to a diverse selection of capital sources, including the secured and unsecured debt markets, unsecured lines of credit, and other sources. In addition, the Company has been and intends to continue repurchasing its Preferred Stock as both series of preferred stock are currently trading at a discount to their liquidation value, presenting a strategic opportunity to buy back shares at favorable prices. By reducing the number of shares outstanding that are eligible for dividend payments, we believe we can offset the net operating income lost from the recent sales of certain properties as we seek to enhance our financial stability, strengthen our balance sheet, optimize our capital allocation, and maximize shareholder value.
• Strategy for integrating acquisitions. As the Company undertakes acquisitions, we seek to thoughtfully integrate the acquired properties and any software and personnel to maximize efficiencies both at the property and corporate level.
Governmental Regulations Affecting Our Properties
We and our properties are subject to a variety of federal, state and local environmental, health, safety, tax and similar laws. The application of these laws to a specific property that we own depends on a variety of property-specific circumstances, including the current and former uses of the property, the building materials used at the property and the physical layout of the property. Neither existing environmental, health, safety and similar laws nor the costs of our compliance with these laws have had a material adverse effect on our financial condition or results of operations, and management does not believe they will for the fiscal year ending December 31, 2026. In addition, we have not incurred, and do not expect to incur, any material costs or liabilities due to environmental contamination at properties we currently own or have owned in the past. However, we cannot predict the impact of new or changed laws or regulations on properties we currently own or may acquire in the future. We have no current plans for substantial capital expenditures with respect to compliance with environmental, health, safety and similar laws and we carry environmental insurance that covers a number of environmental risks for most of our properties.
Competition
Numerous commercial developers and real estate companies compete with us with respect to the leasing of properties. Some of these competitors may possess greater capital resources than we do, although we do not believe that any single competitor or group of competitors in any of the primary markets where our properties are located are dominant in that market. This competition may interfere with our ability to attract and retain tenants, leading to increased vacancy rates and/or reduced rents and adversely affect our ability to minimize operating expenses.
Retailers at our properties also face competition from online retailers, outlet stores, discount shopping clubs, superstores, and other forms of sales and marketing of goods and services, such as direct mail. This competition could contribute to lease defaults and insolvency of tenants.
Climate
Some of our properties could be subject to natural or other disasters. In addition, we may acquire properties that are located in areas that are subject to natural disasters, such as earthquakes and droughts. Because of the geographic concentration of our properties, a single severe weather event or natural disaster could impact multiple of our properties. Properties could also be affected by increases in the frequency or severity of tornadoes, hurricanes or other severe weather, 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.
Table of Contents
While several of our properties are located in areas that have experienced hurricanes, tornados, severe rain storms, or snow during the past two years, there has been no substantial damage or change in operations related to weather events.
Insurance
The Company carries comprehensive liability, property, fire, flood, wind, extended coverage, business interruption and rental loss insurance covering all of the properties in its portfolio under an insurance policy, in addition to other coverages, such as trademark and pollution coverage that may be appropriate for certain of its properties. The Company carries a directors', officers', entity and employment practices liability insurance policy that covers such claims made against the Company and its directors and officers. The Company believes the policy specifications and insured limits are appropriate and adequate for its properties and the other covered items given the relative risk of loss, the cost of the coverage, requirements from any and all lenders and general industry practice; however, its insurance coverage may not be sufficient to fully cover losses.
Available Information
We are subject to the reporting requirements of the Exchange Act. Therefore, we file reports, proxy statements and other information with the Securities and Exchange Commission (the "SEC"). The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including us.
The Company's investor relations website can be accessed under the "Investors" tab at https://ir.cedarrealtytrust.com/, where a copy of the Company's Forms 10-K, 10-Q, 8-K and other filings with the SEC can be obtained free of charge. These SEC filings are added to the website as soon as reasonably practicable. Information on the website is not part of this Form 10-K.
Investors and others should note that we currently announce material information using SEC filings and press releases. In the future, we will continue to use these channels to distribute material information about the Company, and may also utilize public conference calls, webcasts, our website and/or various social media sites to communicate important information about the Company, key personnel, trends, corporate initiatives and other matters. Information that we post on our website or on social media channels could be deemed material; therefore, we encourage investors, the media, our tenants, business partners and others interested in the Company to review the information posted on our website as well as on LinkedIn at https://www.linkedin.com/company/wheeler-real-estate-investment-trust/. Any updates to the list of social media channels we may use to communicate material information will be posted on the Investor Relations page of our website at https://ir.cedarrealtytrust.com/.
Item 1A. Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
Item 1B. Unresolved Staff Comments: None
Item 1C. Cybersecurity
Cybersecurity Risk Management and Strategy
The Company depends on the proper functioning, availability and security of its information systems, including financial, data processing, communications and operating systems. Several information systems are software applications provided by third parties. Although risks from cybersecurity threats have to date not materially affected us, our business strategy, results of operations or financial condition, like other companies in our industry, we could, from time to time, experience threats and security incidents related to our and our third-party vendors' information systems, including attempts to gain unauthorized access to our confidential data, and other electronic security breaches. Such cybersecurity 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, there is no guarantee such efforts will be successful in preventing a cybersecurity attack. A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful cybersecurity attack could disrupt and otherwise adversely affect our business operations.
The Company does not believe that it has experienced any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company and its business strategy, results of operations and/or financial condition.
Assessment, identification and management of cybersecurity related risks are integrated into our overall risk management process. Cybersecurity related risks are included in the risk universe we evaluate to assess top risks to the Company at least annually.
Table of Contents
To the extent our processes identify a heightened cybersecurity related risk, risk owners are assigned to develop risk mitigation plans, which are then tracked to completion.
Cybersecurity Governance
The Board of Directors of our parent company, WHLR, has primary oversight over cybersecurity risk as part of its risk oversight function and has delegated oversight of cybersecurity risk strategy and governance and of other information technology risks to the Audit Committee of WHLR's Board of Directors (the "Audit Committee"). The Audit Committee reports to the full Board of Directors of WHLR regarding its activities, including those related to cybersecurity. Senior management, including the Company's CEO and CFO, is responsible for assessing and managing cybersecurity risk, and provides briefings regarding the assessment and management of such risk to the Audit Committee, which then reports, as necessary, to WHLR's Board of Directors. Although members of our senior management do not have direct cybersecurity expertise obtained through certifications, their experience managing the Company, which includes consulting and coordinating as necessary with a third party information technology expert referred to below, enables them to effectively assess and manage material risks from cybersecurity threats.
Through WHLR, the Company retained an information technology expert third party company to assist in managing relevant risks. In particular, the Company outsources its information technology function and monitoring to a third party provider whereby it benefits from a professionally managed network monitoring, management, maintenance, detection and response system and a 24/7 security operations center with both onsite and remote support services. Any cybersecurity incident would be reported to the Company promptly by our third party consultant and material and potentially material incidents would be assessed by management and the Audit Committee for remediation and future prevention and detection.
The Company, at least annually, updates its policies or procedures that could help mitigate cybersecurity risks. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. The Company has incorporated cybersecurity coverage in its insurance policies; however, there is no assurance that the insurance the Company maintains will cover all cybersecurity breaches or that policy limits will be sufficient to cover all related losses.
Item 2. Properties
Real Estate Portfolio
The following tables present an overview of our properties and undeveloped land as of December 31, 2025:
Property
Location
Number
Tenants
Total
Leasable
Square
Feet
Percentage
Leased
Percentage
Occupied
Total
Occupied
Square
Feet
Annualized
Base
Rent (1)
Annualized
Base Rent
per
Occupied
Square Foot
Brickyard Plaza
Berlin, CT
Coliseum Marketplace
Hampton, VA
Fairview Commons
New Cumberland, PA
Gold Star Plaza
Shenandoah, PA
Golden Triangle
Lancaster, PA
Hamburg Square
Hamburg, PA
Patuxent Crossing
California, MD
Pine Grove Plaza
Brown Mills, NJ
Southington Center
Southington, CT
Timpany Plaza
Gardner, MA
Trexler Mall
Trexlertown, PA
Washington Center Shoppes
Sewell, NJ
Total
(1) Monthly base rent on occupied space as of the end of the current reporting period multiplied by twelve months, excluding the impact of tenant concessions and rent abatements.
Undeveloped Land
Location
Parcel Size (in acres)
South Philadelphia parcel
Philadelphia, PA
Table of Contents
Major Tenants
The following table sets forth information regarding the ten largest tenants in our operating portfolio based on annualized base rent as of December 31, 2025:
Tenants
Category
Annualized
Base Rent
Total
Annualized
Base Rent
Total
Occupied
Square Feet
Percent
Total
Leasable
Square Feet
Annualized
Base Rent
per Occupied
Square Foot
Kohl's
Discount Retailer
Lehigh Valley Health
Health
Redner's
Grocery
TJX Companies (1)
Discount Retailer
Home Depot
Home Improvement
Urban Air
Entertainment
Dollar Tree
Discount Retailer
Michaels
Hobby/Craft
LA Fitness
Gym
Onelife Fitness
Gym
Total
(1) Marshalls 3 / HomeGoods 2
Lease Expirations
The following table sets forth information with respect to the lease expirations of our properties as of December 31, 2025:
Lease Expiration Period
Number of
Expiring
Leases
Total
Expiring
Square
Footage
% of Total
Expiring
Square
Footage
% of Total
Occupied
Square
Footage
Expiring
Expiring
Annualized
Base Rent
% of Total
Annualized
Base Rent
Expiring
Base Rent
per Occupied
Square Foot
Available
Month-To-Month
Thereafter
Total
The Company's Properties
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.
Table of Contents
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.
WHLR performs property management and leasing services for the Company pursuant to the Wheeler Real Estate Company Management Agreement (as defined below). See Note 15 of "Notes to Consolidated Financial Statements" included in Item 8 below for further information.
Item 3. Legal Proceedings
See Note 10 of "Notes to Consolidated Financial Statements" included in Item 8 below for information relating to legal proceedings.
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 and Holders
WHLR is the sole holder of the Company's common stock. The Company's Preferred Stock remains outstanding and continues to trade on the NYSE.
Dividends
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 Code. The Company paid preferred stock dividends during 2024 and 2025. The following table presents the income tax status of distributions per share paid to our preferred stockholders:
Years ended December 31,
Series B Preferred Stock
Dividend paid per share
Ordinary income
Capital gains
Return of capital
Series C Preferred Stock
Dividend paid per share
Ordinary income
Capital gains
Return of capital
Issuer Purchases of Equity Securities
On August 8, 2024, the Board of Directors authorized the repurchase of up to an aggregate amount of $10.0 million of the Company’s Preferred Stock over a period of twelve months (the "2024 Repurchase Program"), which expired on August 8, 2025.
On August 8, 2025, the Board of Directors authorized the repurchase of up to an aggregate amount of $20.0 million of the Company's Preferred Stock over a period of twenty-four months (the "2025 Repurchase Program" and together with the 2024 Repurchase Program, the "Repurchase Programs"). The 2025 Repurchase Program was publicly announced on August 12, 2025. The timing, price and actual number of shares of Preferred Stock repurchased under the 2025 Repurchase Program will depend on a variety of factors, including price, market conditions and regulatory requirements. The repurchases may be made in the open market, in privately negotiated transactions, block trades or by other means, as determined by management. The 2025 Repurchase Program supersedes the 2024 Repurchase Program.
Table of Contents
There were no repurchases of the Series B Preferred Stock and Series C Preferred Stock under the 2024 Repurchase Program during the three months ended December 31, 2025.
The following table provides a summary of stock repurchase activity under the 2025 Repurchase Program. There were no repurchases of the Series B Preferred Stock during the three months ended December 31, 2025.
Series C Preferred Stock
Period
Total Number of Shares Purchased
Weighted Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (1)
October 1, 2025 through October 31, 2025
November 1, 2025 through November 30, 2025
December 1, 2025 through December 31, 2025
Total
(1) Reflects the dollar value of shares that may yet be repurchased under the 2025 Repurchase Program announced on August 12, 2025.
Tender Offers
On December 27, 2024, the Company announced and commenced a "modified Dutch auction" tender offer to purchase up to an aggregate amount paid of $12.5 million of shares of Series C Preferred Stock at a price of not less than $13.75 nor greater than $15.75 per share of Series C Preferred Stock, to the sellers in cash, less any applicable withholding taxes and without interest (the "December 2024 Tender Offer"). Following the expiration of the December 2024 Tender Offer on January 28, 2025, the Company accepted for purchase 645,276 shares of its Series C Preferred Stock at $15.75 per share for approximately $10.2 million, excluding related fees and expenses.
On February 21, 2025, the Company announced and commenced concurrent but separate offers to purchase up to an aggregate amount paid of $9.5 million of (i) up to 584,615 shares of Series C Preferred Stock for a purchase price of $16.25 per share, in cash, (the "February 2025 Series C Offer") and (ii) up to 535,211 shares of Series B Preferred Stock for a purchase price of $17.75 per share, in cash (the "February 2025 Series B Offer" and, together with the February 2025 Series C Offer, the "February 2025 Tender Offers"), each less any applicable withholding taxes and without interest. The February 2025 Tender Offers were intended to expire at 5:00 p.m., New York City time, on March 21, 2025.
Following the expiration of the February 2025 Series C Offer on March 21, 2025, the Company purchased 655,883 shares of Series C Preferred Stock that were properly tendered and not properly withdrawn at the purchase price of $16.25 per share, which included 71,268 shares that the Company elected to purchase pursuant to its ability to purchase up to an additional 2% of its outstanding Series C Preferred Stock. The aggregate price for the Series C Preferred Stock purchased in the February 2025 Series C Offer was approximately $10.7 million, excluding related fees and expenses.
On March 21, 2025, the February 2025 Series B Offer was extended to expire at 5:00 p.m., New York City time, on April 4, 2025, and the aggregate amount of shares that could be purchased pursuant to the February 2025 Tender Offers was increased by $10 million, such that up to 563,380 Series B shares could be purchased in the February 2025 Series B Offer. Following the expiration of the February 2025 Series B Offer on April 4, 2025, the Company accepted for purchase 592,372 shares of Series B Preferred Stock that were properly tendered and not properly withdrawn at the purchase price of $17.75 per share, which included 28,992 shares that the Company elected to purchase pursuant to its ability to purchase up to an additional 2% of its outstanding Series B Preferred Stock. The aggregate purchase price for the Series B Preferred Stock purchased in the February 2025 Series B Offer was approximately $10.5 million, excluding fees and expenses relating to the February 2025 Series B Offer.
See Note 11 of "Notes to Consolidated Financial Statements" included in Item 8 below for further information.
Item 6. Reserved
Table of Contents
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion summarizes the significant factors affecting our consolidated operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion should be read in conjunction with the Company's consolidated financial statements and related notes thereto included elsewhere in this Form 10-K.
In addition to historical information, this discussion and analysis contains forward-looking statements based on current expectations that involve risks, uncertainties and assumptions, such as our plans, objectives, expectations and intentions as further described under the caption above entitled "Cautionary Note on Forward-Looking Statements." Our actual results or other events and the timing of events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the caption above entitled "Cautionary Note on Forward-Looking Statements." These forward-looking statements are not historical facts but are the intent, belief or current expectations of our management based on its knowledge and understanding of our business and industry.
Executive Summary
The Company is a fully-integrated REIT that focuses on owning and operating income producing retail properties with a primary focus on grocery-anchored shopping centers, predominantly located in the Northeast. At December 31, 2025, the Company owned a portfolio of 12 properties totaling 1.9 million square feet of GLA. The portfolio was 92.4% leased and 92.4% occupied at December 31, 2025.
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 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, 2025, the Company, which is a subsidiary of WHLR, owned a 100.0% interest in, and was the sole general partner of, the Operating Partnership.
The Company derives substantially all of its revenues from rents and operating expense reimbursements received pursuant to 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.
2025 Significant Circumstances and Transactions
Since January 1, 2024, the Company has invested approximately $15.1 million in its properties. The Company's asset dispositions were executed, in part, to capitalize on the value created through those investments. Additionally, the Company executed a series of capital management and financing transactions designed to support its strategic objective of redeploying capital generated from these asset dispositions to enhance cash flow. These transactions included entering into short‑term and intermediate‑term credit arrangements to provide liquidity utilizing proceeds from asset sales to reduce borrowings, and completing tender offers and repurchases of the Company’s outstanding preferred stock.
Dispositions
The following properties were sold during the year ended December 31, 2025:
Disposal Date
Property
Contract Price
Gain
Net Proceeds
November 3, 2025
Fieldstone Marketplace
October 31, 2025
Carll's Corner
October 29, 2025
South Philadelphia land parcel
March 13, 2025
Oregon Avenue
February 11, 2025
Webster Commons
Impairments
During the year ended December 31, 2025, the Company recorded impairment charges of approximately $5.8 million on Fieldstone Marketplace, located in New Bedford, Massachusetts.
Table of Contents
October 2022 Term Loan
On October 28, 2022, the Company entered into a term loan agreement with Guggenheim Real Estate, LLC for $110.0 million at a fixed rate of 5.25% with interest-only payments due monthly (the "October 2022 Term Loan"). The October 2022 Term Loan was collateralized by 10 properties, consisting of Brickyard Plaza, Fairview Commons, Gold Star Plaza, Golden Triangle, Hamburg Square, Pine Grove Plaza, Southington Center, Trexler Mall, Washington Center and Webster Commons. Upon the 2025 disposition of Webster Commons, the Company paid down approximately $9.1 million to release the property from collateral and paid a $0.5 million loan prepayment premium. This will result in future annual savings in interest expense of $0.5 million.
April 2025 Bridge Loan
On April 4, 2025, the Company entered into a bridge loan agreement with KeyBank National Association for $10.0 million (the "April 2025 Bridge Loan"). The interest rate under the April 2025 Bridge Loan is the term SOFR rate plus the applicable margin of 1.30%. Interest payments are due monthly, and any outstanding principal is due at maturity. In August 2025, the maturity date was extended from January 4, 2026 to February 15, 2028, with no further extension options. The April 2025 Bridge Loan is guaranteed by the Company and WHLR, with the guarantee secured by WHLR's cash pledged as collateral as of December 31, 2025. Upon the 2025 dispositions of Carll's Corner and Fieldstone Marketplace, the Company paid down approximately $4.0 million of the April 2025 Bridge Loan.
August 2025 Credit Facility
On August 15, 2025, the Company entered into a credit facility agreement with KeyBank National Association to draw up to $20.0 million (the "August 2025 Credit Facility") pursuant to which the Company may request a loan advance no more frequently than once per calendar month and which can only be used in conjunction with the 2025 Repurchase Program (as defined below). The interest rate under the August 2025 Credit Facility for each draw is at the Company's option of either a base rate, daily simple SOFR or term SOFR, plus an applicable margin. Interest payments are due monthly, and any outstanding principal is due at maturity on August 15, 2027. The total outstanding principal under the August 2025 Credit Facility must be reduced to no greater than $10.0 million by February 15, 2027. The August 2025 Credit Facility was collateralized by three properties, consisting of Carll's Corner, Fieldstone Marketplace, and the South Philadelphia parcels, and is guaranteed by the Company and WHLR. Upon the 2025 dispositions of a South Philadelphia land parcel, Carll's Corner and Fieldstone Marketplace, they were released from collateral and the Company paid down approximately $10.3 million of the August 2025 Credit Facility. Although the August 2025 Credit Facility provides for total borrowings of up to $20.0 million, the Company did not have access to the full commitment as of December 31, 2025. Availability under the facility is subject to certain covenants and conditions established at origination, including requirements tied to projected asset sales and projected net sales proceeds.
Stock Repurchase Programs
On August 8, 2024, the Board of Directors authorized the repurchase of up to an aggregate amount of $10.0 million of Preferred Stock over a period of twelve months, which expired on August 8, 2025.
On August 8, 2025, the Board of Directors authorized the repurchase of up to an aggregate amount of $20.0 million of the Company's Preferred Stock over a period of twenty-four months (the "2025 Repurchase Program"). The 2025 Repurchase Program was publicly announced on August 12, 2025. The timing, price and actual number of shares of Preferred Stock repurchased under the 2025 Repurchase Program will depend on a variety of factors, including price, market conditions and regulatory requirements. The repurchases may be made in the open market, in privately negotiated transactions, block trades or by other means, as determined by management. The 2025 Repurchase Program supersedes the 2024 Repurchase Program.
During the year ended December 31, 2025, there were no repurchases of Series B Preferred Stock and Series C Preferred Stock under the 2024 Repurchase Program and there were no repurchases of Series B Preferred Stock and 624,313 shares of Series C Preferred Stock under the 2025 Repurchase Program. See Note 11 of "Notes to Consolidated Financial Statements" included in Item 8 below for further information.
Tender Offers
On December 27, 2024, the Company announced and commenced the December 2024 Tender Offer. Following the expiration of the December 2024 Tender Offer on January 28, 2025, the Company accepted for purchase 645,276 shares of its Series C Preferred Stock at $15.75 per share for approximately $10.2 million, excluding related fees and expenses.
On February 21, 2025, the Company announced and commenced the February 2025 Series C Offer and the February 2025 Series B Offer. Following the expiration of the February 2025 Series C Offer on March 21, 2025, the Company purchased 655,883
Table of Contents
shares of its Series C Preferred Stock at $16.25 per share, which included 71,268 shares that the Company elected to purchase pursuant to its ability to purchase up to an additional 2% of its outstanding Series C Preferred Stock, for approximately $10.7 million, excluding related fees and expenses. Following the expiration of the February 2025 Series B Offer on April 4, 2025, the Company purchased 592,372 shares of its Series B Preferred Stock at $17.75 per share, which included 28,992 shares that the Company elected to purchase pursuant to its ability to purchase up to an additional 2% of its outstanding Series B Preferred Stock, for approximately $10.5 million, excluding related fees and expenses. See Note 11 of "Notes to Consolidated Financial Statements" included in Item 8 below for further information.
Preferred Stock Contributions from WHLR
During the fourth quarter of 2025, WHLR entered into subscription agreements with certain investors to issue WHLR’s Series D Cumulative Convertible Preferred Stock in exchange for the Company's Series C Preferred Stock held by such investors. Immediately following the closings of such transactions, WHLR contributed a total of 54,000 shares of Series C Preferred Stock to the Company.
Management evaluated the transactions under Accounting Standards Codification ("ASC") 845, Nonmonetary Transactions, and determined that the fair value of the contributed preferred stock approximated the fair value of the WHLR Series D Preferred Stock issued in the exchanges. No gain or loss was recognized by the Company as a result of the contributions. See Note 11 of "Notes to Consolidated Financial Statements" included in Item 8 below for further information.
The preferred stock repurchases and tender offers significantly reduced the outstanding preferred stock and represent a key component of the Company’s capital optimization strategy.
Related Party Transactions
The Company is a subsidiary of WHLR. WHLR performs property management and leasing services for the Company pursuant to the Wheeler Real Estate Company Management Agreement (as defined below). The management fee is 4% of gross operating income, leasing commissions range from 3% to 6%, and sales commissions range from 0% to 4%, contingent on third-party broker arrangement. During the years ended December 31, 2025 and 2024, the Company paid WHLR $0.7 million and $1.4 million, respectively, for these services. The Operating Partnership and WHLR's operating partnership, Wheeler REIT, L.P., are party to a cost sharing and reimbursement agreement, pursuant to which the parties agreed to share costs and expenses associated with certain employees, certain facilities and property, and certain arrangements with third parties (the "Cost Sharing Agreement"). As of December 31, 2025 and 2024, the related party amounts due to WHLR were $11.3 million and $9.5 million, respectively. See Note 11 of "Notes to Consolidated Financial Statements" included in Item 8 below for information regarding the preferred stock contributions from WHLR.
Summary of Critical Accounting Policies
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States ("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 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, net on the consolidated balance sheets. 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.
Table of Contents
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 include costs of both acquired and constructed assets, and 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. 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.
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-cancelable 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 depreciation and amortization expense 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 of real estate investments held for use 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 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. 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 (loss), 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.
Table of Contents
Results of Operations
Comparison of 2025 to 2024
Years ended December 31,
Change
Dollars
Percent
Revenues
Property operating expenses
Net operating income
Corporate general and administrative
Depreciation and amortization
Gain on sales, net
Impairment charges
Interest expense, net
Loss on loan prepayment
Net (loss) income
Revenues were lower primarily as a result of (1) a decrease of $5.69 million in rental revenues and tenant reimbursements, net of credit adjustments on operating lease receivables, attributable to properties that were sold in 2024 and 2025, (2) a decrease in other income of $0.09 million attributable to one-time transactions, partially offset by (3) an increase of $0.27 million in market lease amortization and straight line rents, and (4) an increase of $0.63 million in rental revenues and tenant reimbursements, net of credit adjustments on operating lease receivables, attributable to Same-Properties (as defined below).
Property operating expenses were lower primarily as a result of (1) a decrease of $2.88 million in property operating expenses attributable to properties that were sold in 2024 and 2025, partially offset by (2) an increase of $0.34 million in property operating expenses attributable to Same-Properties (as defined below).
Corporate general and administrative costs were higher primarily as a result of (1) an increase of $0.34 million in legal and professional fees, partially offset by (2) $0.12 million in costs savings, a result of negotiating vendor contracts, and (3) a decrease of $0.06 million in cost sharing allocations.
Depreciation and amortization expenses were lower primarily as a result of (1) a decrease of $1.26 million in depreciation and amortization attributable to properties that were sold in 2024 and 2025, partially offset by (2) an increase of $0.28 million in depreciation and amortization attributable to Same-Properties (as defined below).
Gain on sales, net in 2025 relate to the sales of Carll's Corner, a South Philadelphia land parcel, Oregon Avenue, and Webster Commons, and in 2024 relate to the sales of the South Philadelphia retail center, Kings Plaza, the Brickyard Plaza land parcel, and Oakland Commons.
Impairment charges in 2025 relate to Fieldstone Marketplace and in 2024 relate to Oregon Avenue.
Interest expense, net was higher as a result of (1) an increase of $0.27 million in default interest expense tied to a cash sweep event that was accrued for relating to one of the Company's fixed term loans and has since been cured, (2) an increase of $0.09 million in interest expense relating to the changes in the overall weighted average interest rate and the overall weighted average principal debt balance, partially offset by (3) a decrease of $0.29 million in amortization expense of deferred financing costs, and (4) $0.04 million increase in interest income.
Loss on loan prepayment in 2025 relates to the October 2022 Term Loan, including accelerated amortization of $0.20 million.
Table of Contents
Same-Property Net Operating Income
Same-property net operating income ("Same-Property NOI") is a widely-used non-GAAP financial measure for REITs. The Company believes that Same-Property NOI is a useful measure of the Company's property operating performance. The Company defines Same-Property NOI as property revenues (rental and other revenues) less property and related expenses (property operation and maintenance and real estate taxes). Because Same-Property NOI excludes above (below) market lease amortization, straight-line rents, general and administrative expenses, depreciation and amortization, gain or loss on sale or capital expenditures and leasing costs and impairment charges, it provides a performance measure, that when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing perspective not immediately apparent from operating income. The Company uses Same-Property NOI to evaluate its operating performance since Same-Property NOI allows the Company to evaluate the impact of factors, such as occupancy levels, lease structure, lease rates and tenant base, have on the Company's results, margins and returns. Properties are included in Same-Property NOI if they are owned and operated for the entirety of both periods being compared ("Same-Property" or "Same-Properties"). 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 is a reconciliation of Same-Property NOI from operating income (the most directly comparable GAAP financial measure):
Years ended December 31,
Operating income
Add (deduct):
Corporate general and administrative
Gain on sales
Impairment charges
Depreciation and amortization
Straight-line rents
Above (below) market lease amortization, net
Other non-property revenue
NOI related to properties not defined as Same-Property
Same-Property NOI
Number of Same-Properties
Same-Property occupancy, end of period
Same-Property leased, end of period
Same-Property average base rent, end of period
Same-Property NOI for the comparable years increased 1.7% primarily as a result of an increase in expense recoveries and base rents, partially offset by an increase in property operating expenses.
Table of Contents
Leasing Activity
The following is a summary of the Company's retail leasing activity for our portfolio:
Years ended December 31,
Property Data (1):
Number of properties owned and leased, end of period
Aggregate gross leasable area, end of period
Renewals (2):
Leases renewed with rate increase (sq feet)
Leases renewed with rate decrease (sq feet)
Leases renewed with no rate change (sq feet)
Total leases renewed (sq feet)
Leases renewed with rate increase (count)
Leases renewed with rate decrease (count)
Leases renewed with no rate change (count)
Total leases renewed (count)
Option exercised (count)
Weighted average on rate increases (per sq foot)
Weighted average on rate decreases (per sq foot)
Weighted average on all renewals (per sq foot)
Weighted average change of renewals over prior rates
New Leases (2) (3):
New leases (sq feet)
New leases (count)
Weighted average rate (per sq foot)
Weighted average change of new leases over prior rates
(1) Excludes undeveloped land parcels.
(2) Lease data presented is based on average rate per square foot over the renewed or new lease term.
(3) The Company does not include ground leases entered into for the purposes of new lease square feet and weighted average rate (per square foot) on new leases.
Table of Contents
Liquidity and Capital Resources
The Company funds operating expenses and other liquidity requirements, including debt service and loan maturities, tenant improvements, and leasing commissions, primarily from its operations, asset sales and the $15.9 million in cash, cash equivalents and restricted cash as of December 31, 2025. The Company does not have any scheduled debt maturities for the year ending December 31, 2026, except for the monthly principal payments relating to Timpany Plaza. The Company is working to increase revenue by improving occupancy, which includes backfilling vacant anchor spaces and replacing defaulted tenants. Tenant improvements and leasing commissions for these efforts will be partially funded by restricted cash, strategic disposition of assets and financing of properties.
In 2024 and 2025, the Company retired a total of 2,770,778 shares of Series C Preferred Stock and a total of 592,372 shares of Series B Preferred Stock, which carried an aggregate liquidation value of $84.1 million, for approximately $53.4 million, including fees and expenses. These retirements were funded by asset sales, the April 2025 Bridge Loan, and the August 2025 Credit Facility. The shares retired in 2024 and 2025 will reduce future annual dividend payments by $5.6 million. The Company intends to continue repurchasing its Preferred Stock as both series are currently trading at a discount to their liquidation value, presenting a strategic opportunity to buy back shares at favorable prices. By reducing the number of shareholders eligible for dividend payments, the Company believes it can offset the net operating income lost from the recent sales of certain properties as it seeks to enhance its financial stability, strengthen its balance sheet, optimize its capital allocation, and maximize shareholder value.
Term 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 and are not available to fund other property-level or Company-level obligations.
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 Code. The Company paid preferred stock dividends during 2024 and 2025, and has continued to declare preferred stock dividends through the first quarter of 2026. 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. 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 purposes.
The following table sets forth the Company's significant debt repayment, interest, and operating lease obligations at December 31, 2025:
Maturity Date
Thereafter
Total
Debt:
Fixed-rate term loans
Variable-rate loans
Interest payments (1)
Operating lease obligations
Total
(1) Represents interest payments expected to be incurred on the Company's debt obligations as of December 31, 2025.
Other than the items disclosed in the table above, the Company had no off-balance sheet arrangements as of December 31, 2025 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,
Cash flows provided by (used in):
Operating activities
Investing activities
Financing activities
Table of Contents
Operating Activities
Net cash provided by operating activities, before net changes in operating assets and liabilities, was $7.2 million for 2025. Net cash provided by operating activities, before net changes in operating assets and liabilities, was $10.2 million for 2024. The decrease was primarily a result of property dispositions in 2024 and 2025.
Investing Activitie s
Net cash flows provided by investing activities were primarily the result of net proceeds received from the sale of real estate, partially offset by the Company's expenditures for property improvements. During 2025, the Company received $33.5 million of net proceeds from the sale of 4 properties and a land parcel, which was partially offset by $3.5 million of expenditures for property improvements. During 2024, the Company received $37.2 million of net proceeds from the sale of 3 properties and a land parcel, which was partially offset by $11.6 million of expenditures for property improvements.
Financing Activities
During 2025, the Company paid $41.9 million for the repurchase of preferred stock, paid down variable-rate borrowings of $19.3 million primarily under the August 2025 Credit Facility and the April 2025 Bridge Loan, paid down fixed-rate borrowings of $9.2 million primarily under the October 2022 Term Loan Agreement, paid $6.6 million of preferred stock dividends, paid $0.5 million in a loan prepayment premium, and paid $0.5 million of debt financing costs, which was partially offset by $15.3 million in proceeds received from the August 2025 Credit Facility and $10.0 million in proceeds received from the April 2025 Bridge Loan. During 2024, the Company paid $11.5 million for the repurchase of preferred stock, paid $10.4 million of preferred stock dividends, paid down borrowings of $5.2 million under the February 29, 2024 revolving credit agreement with KeyBank National Association ("Revolving Credit Agreement"), paid $0.5 million of term loan principal, and paid $0.4 million of debt financing costs, which was partially offset by $5.2 million in proceeds received from the Revolving Credit Agreement and $2.5 million in proceeds received related to the Timpany Plaza Loan Agreement (as defined below).
Funds From Operations
We use funds from operations ("FFO"), a non-GAAP measure, as an alternative measure of our operating performance, specifically as it relates to results of operations and liquidity. We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts ("Nareit") in its March 1995 White Paper (as amended in November 1999, April 2002 and December 2018). As defined by Nareit, FFO represents net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus real estate-related depreciation and amortization (excluding amortization of loan origination costs), plus impairment of real estate related long-lived assets and after adjustments for unconsolidated partnerships and joint ventures. Most industry analysts and equity REITs, including us, consider FFO to be an appropriate supplemental measure of operating performance because, by excluding gains or losses on dispositions and excluding depreciation, FFO is a helpful tool that can assist in the comparison of the operating performance of a company’s real estate between periods, or as compared to different companies. Management uses FFO as a supplemental measure to conduct and evaluate our business because there are certain limitations associated with using GAAP net income alone as the primary measure of our operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, while historically real estate values have risen or fallen with market conditions. Accordingly, we believe FFO provides a valuable alternative measurement tool to GAAP when presenting our operating results.
We believe the computation of FFO in accordance with Nareit's definition includes certain items that are not indicative of the results provided by our operating portfolio and affect the comparability of our period-over-period performance. These items include, but are not limited to, legal settlements, non-cash amortization on loans and acquisition costs. Therefore, in addition to FFO, management uses Adjusted FFO ("AFFO"), which we define to exclude such items. Management believes that these adjustments are appropriate in determining AFFO as they are not indicative of the operating performance of our assets. In addition, we believe that AFFO is a useful supplemental measure for the investing community to use in comparing us to other REITs as many REITs provide some form of adjusted or modified FFO. However, there can be no assurance that AFFO presented by us is comparable to the adjusted or modified FFO of other REITs.
Table of Contents
A reconciliation of net income attributable to common shareholders to FFO and AFFO is as follows:
Years ended December 31,
Net income attributable to common shareholders
Real estate depreciation and amortization
Gain on sales, net
Impairment charges
FFO applicable to common shares
Deemed contributions on preferred stock
Straight-line rents
Deferred financing costs amortization
Loss on loan prepayment
Above (below) market lease amortization, net
AFFO applicable to common shares
FFO per common share
AFFO per common share
Weighted average number of common shares
Macroeconomic Considerations
Evolving macroeconomic conditions, including global macroeconomic challenges such as changes in trade policies, sanctions, treaties, tariffs, regulatory requirements, uncertainty in the markets, economic instability and fluctuations in inflation and interest rates, may affect our business. Substantially all of the Company's 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, insurance and many of the operating expenses it incurs. In addition, many of our leases are for terms of less than ten years, which permits us to seek increased rents upon re-rental at market rates. However, significant inflation rate increases over a prolonged period of time may have a material adverse impact on the Company's business. Conversely, deflation could lead to downward pressure on rents and other sources of income.
Fluctuations in interest rates and governmental tariff-related measures could significantly impact our operating portfolio and overall financial performance. Interest rate increases could result in higher incremental borrowing costs for the Company and our tenants. The duration of the Company's indebtedness and our relatively low exposure to floating rate debt have mitigated the direct impact of inflation and interest rate increases. In a low or stable interest rate environment, we may benefit from lower borrowing costs, enabling strategic investments, acquisitions, or capital returns to shareholders. Additionally, we monitor market conditions to adjust our capital allocation accordingly, maintain a disciplined financial approach and seek to optimize returns while managing exposure to interest rate volatility. The degree and pace of these changes have had and may continue to have impacts on our business. Changes in tariffs could lead to construction cost variances for the Company, additional tenant costs, which may affect rental rates, and shifts in tenant mix that may impact the Company's operating income.
Recent Tax Law Update
On July 4, 2025, President Trump signed the OBBBA into law. The OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017. Such extensions included the permanent extension of the 20% deduction for “qualified REIT dividends” for individuals and other non-corporate taxpayers. The OBBBA also increased the percentage limit under the REIT asset test applicable to taxable REIT subsidiaries (the permissible value of taxable REIT subsidiary securities that a REIT may hold) from 20% to 25% of the value of the REIT’s total assets for taxable years beginning after December 31, 2025. The Company is currently evaluating this legislation to determine its potential impact on the Company’s consolidated financial statements and related disclosures.
Table of Contents
