Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  Cedar Realty Trust, Inc.    CDR

CEDAR REALTY TRUST, INC.

(CDR)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector news

CEDAR REALTY TRUST : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

share with twitter share with LinkedIn share with facebook
08/10/2020 | 05:16pm EDT

The following discussion should be read in conjunction with the Company's consolidated financial statements and related notes thereto included elsewhere in this report.


Executive Summary

The Company is a fully-integrated real estate investment trust that focuses
primarily on ownership, operation and redevelopment of grocery-anchored shopping
centers in high-density urban markets from Washington, D.C. to Boston. At June
30, 2020, the Company owned and managed a portfolio of 55 operating properties
(excluding properties "held for sale") totaling 8.3 million square feet of gross
leasable area ("GLA"). The portfolio was 90.0% leased and 88.9% occupied at June
30, 2020.

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.

Significant Circumstances and Transactions

COVID-19 Pandemic




As a result of COVID-19, the Company has received numerous rent relief requests,
most often in the form of rent deferrals. The Company has evaluated, and
continues to evaluate, each tenant rent relief request on an individual basis,
considering a number of factors. Not all tenant requests have resulted in
modification agreements, nor is the Company forgoing its contractual rights
under its lease agreements.  The Company has entered into lease modifications
that deferred approximately $2.0 million and waived approximately $0.4 million
for the quarter ended June 30, 2020, respectively. To date, the weighted average
payback period of deferred rent is approximately 10 months, beginning at various
time commencing in July 2020 through March 2021. For the quarter ended June 30,
2020, the Company has collected approximately 77% of contractual base rents and
monthly tenant reimbursements.  The Company currently remains in active
discussions and negotiations with its impacted tenants and anticipates the need
to grant additional rent concessions or other lease-related relief, such as the
deferral of lease payments for a period of time to be paid over the remaining
term of the lease. The nature and financial impact of such additional rent
relief is currently unknown as negotiations are in progress. The extent to which
COVID-19 impacts the Company's business, operations and financial results will
depend on numerous evolving factors that the Company is not able to predict at
this time.

As a result of the COVID-19 pandemic, the Company has taken the following actions:

• In March 2020, the Company borrowed an aggregate $75.0 million under its

          revolving credit facility to preserve financial flexibility.




       •  In April 2020 and July 2020, the Company's Board of Directors declared a

quarterly common dividend of $0.01 per share, reduced from $0.05 per

share from the February 2020 dividend, which preserves $3.6 million of

          cash per quarter.



• Dramatically reduced near-term redevelopment and other non-essential

          capital expenditures. The Company currently estimates full year 2020
          capital spend for its mixed-use urban redevelopments and value add
          renovations combined to be approximately $20 million (excluding
          approximately $7.5 million of capitalized overhead, interest and real
          estate taxes under GAAP).




       •  Transitioned all but a limited number of essential employees to remote
          work and does not anticipate any adverse impact on its ability to
          continue to operate its business. Currently, the Company has a limited

number of employees coming into offices as needed and has employees

visiting properties only as necessary to ensure that the properties with

          essential businesses that are open and operating are able to conduct
          business and serve their communities.




Real Estate

On July 23, 2020, the Company entered into a commercial lease agreement (the
"Lease") with the Government of the District of Columbia ("District"), for the
lease by the District of office space in a new 6-story building to be
constructed by the Company at

                                       21

--------------------------------------------------------------------------------


Senator Square. The building is planned to house the new office headquarters for
the District of Columbia'sDepartment of General Services'
("DGS") 700-member workforce. The term of the Lease is 20 years and 10 months,
to commence upon substantial completion and delivery to DGS. The Company
anticipates commencement of construction to occur in the first quarter of 2021
and currently estimates that the space will be delivered during the end of the
fourth quarter 2022.

Upon completion of the building, the District will be obligated to pay initial
annual net rent of approximately $5.4 million per year, subject to a 2.5% annual
escalator on each anniversary of rent commencement, plus certain operating
costs, property taxes and amortization of tenant improvements together totaling
approximately an additional $8.1 million per year, for an aggregate total annual
rent of approximately $13.5 million. The Lease provides for a free rent period
of 10 months immediately following rent commencement. The Lease also provides
the District with a tenant credit of approximately $6.8 million to be applied,
at the District's election, against either annual rent or any other tenant
payment obligations including tenant improvement costs, in excess of the tenant
improvement allowance. Pursuant to the Lease, the landlord will contribute up to
$155 per rentable square foot toward the cost of tenant improvements, to be
amortized over 240 months. In addition, the Lease provides that the Company will
contribute $9.38 per rentable square foot in additional tenant improvement
allowance between the 10th and 12th Lease years, upon the District's timely
election. The obligations of the District under the Lease are subject to annual
budget appropriation.



As of June 30, 2020, Carll's Corner, located in Bridgeton, New Jersey, Metro
Square, located in Owings Mills, Maryland, Suffolk Plaza, located in Suffolk,
Virginia, and The Commons, located in Dubois Pennsylvania, have been classified
as "real estate held for sale" on the accompanying consolidated balance sheet.



On January 31, 2020, the Company agreed to a cash payment in consideration for
permitting a dark anchor tenant to terminate its lease prior to the contractual
expiration at Metro Square. As a result of this termination, revenues for the
six months ended June 30, 2020, included approximately $7.1 million of other
income. Further, on July 9, 2020, the Company sold this property for $4.3
million.



During the six months ended June 30, 2020, the Company recorded impairment charges of $7.6 million in relation to properties classified as real estate held for sale, which are included in continuing operations in the accompanying consolidated statement of operations.

Unsecured Revolving Credit Facility and Term Loans




On August 4, 2020, the Company amended its existing $300 million unsecured
credit facility and term loans. After such amendments, the Company's financial
ratios and borrowing base are now all computed using trailing four quarters as
opposed to the current quarter annualized and interest rate swaps that are a
hedge of existing debt are now excluded from the definition of debt.

Critical Accounting Policies


The preparation of the consolidated financial statements in conformity with 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
impairments, 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 believes there have been no material changes to the items disclosed
as its critical accounting policies under Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," in the Company's
Annual Report on Form 10-K for the year ended December 31, 2019. See Note 2 -
"Summary of Significant Accounting Policies" for recently-adopted accounting
pronouncements.

                                       22
--------------------------------------------------------------------------------

Results of Operations

Comparison of three months ended June 30, 2020 to June 30, 2019



                                                                                           Change
                                               2020              2019             Dollars          Percent
Revenues                                   $  28,620,000$  35,660,000$  (7,040,000 )      -19.7%
Property operating expenses                  (10,486,000 )     (11,249,000 )         763,000        -6.8%
Property operating income                     18,134,000        24,411,000        (6,277,000 )
General and administrative                    (3,906,000 )      (5,418,000 )       1,512,000        -27.9%
Depreciation and amortization                (14,426,000 )     (10,346,000 )      (4,080,000 )      39.4%
Gain on sales                                          -         2,841,000        (2,841,000 )       n/a
Impairment charges                              (133,000 )               -          (133,000 )       n/a
Interest expense                              (5,678,000 )      (5,944,000 )         266,000        -4.5%
Net (loss) income                             (6,009,000 )       5,544,000       (11,553,000 )
Net (income) attributable to
noncontrolling interests                         (88,000 )        (161,000 )          73,000
Net (loss) income attributable to Cedar
Realty Trust, Inc.                         $  (6,097,000 )$   5,383,000$ (11,480,000 )





Revenues were lower primarily as a result of the negative impact of the COVID-19
pandemic, which resulted in (1) a decrease of $3.0 million in rental revenues
and expense recoveries and a decrease of $1.0 million in straight-line rental
revenues attributable to same-center properties, (2) a decrease of $2.1 million
in rental revenues and expense recoveries and a decrease of $0.4 million in
straight-line rental and the amortization of intangible lease liabilities
revenues attributable to redevelopment properties. In addition, there was a
decrease of $0.7 million in rental revenues and expense recoveries attributable
to properties that were sold or held for sale in 2019 and 2018. These negative
results were partially offset by an increase of $0.2 million in rental revenues
and expense recoveries attributable to a property acquired in 2019.



Property operating expenses were lower primarily as a result of (1) a decrease
of $0.3 million in property operating expenses attributable to same-center
properties, (2) a decrease of $0.3 million in property operating expenses
attributable to redevelopment properties, and (3) a decrease of $0.3 million in
property operating expenses attributable to properties that were sold or held
for sale in 2020 and 2019, partially offset by an increase of $0.1 million in
property operating expenses attributable to a property acquired in 2019.

General and administrative costs were lower primarily as a result of (1) cost
savings of $0.8 million as a result of the COVID-19 pandemic, predominately
related to the cancellation of leasing conventions along with the related travel
expenses, (2) a decrease of $0.5 million in payroll related costs, and (3) a
decrease of $0.2 million in legal and professional fees.

Depreciation and amortization expenses were higher as a result of (1)
accelerated depreciation of tenant improvements and leasing commissions of $4.2
million as a result of tenants vacating their spaces, and (2) an increase of
$0.1 million attributable to a property acquired in 2019, partially offset by a
decrease of $0.2 million attributable to properties that were sold or held for
sale in 2020 and 2019.

Gain on sale in 2019 relates to the sale of Maxatawny Marketplace, located in Maxatawny, Pennsylvania.

Impairment charges in 2020 relates to Metro Square, located in Owings Mills, Maryland, and The Commons, located in Dubois Pennsylvania.


Interest expense was lower as a result of (1) a decrease in the overall weighted
average interest rate which resulted in a decrease in interest expense of $0.8
million, and (2) an increase in capitalized interest of $0.3 million, partially
offset by increase in the overall weighted average principal balance which
resulted in an increase in interest expense of $0.8 million.

                                       23

--------------------------------------------------------------------------------

Comparison of six months ended June 30, 2020 to June 30, 2019



                                                                                           Change
                                               2020              2019             Dollars          Percent
Revenues                                   $  71,105,000$  72,543,000$  (1,438,000 )      -2.0%
Property operating expenses                  (23,329,000 )     (24,426,000 )       1,097,000        -4.5%
Property operating income                     47,776,000        48,117,000          (341,000 )
General and administrative                    (8,908,000 )     (10,216,000 )       1,308,000        -12.8%
Depreciation and amortization                (28,173,000 )     (20,475,000 )      (7,698,000 )      37.6%
Gain on sales                                          -         2,942,000        (2,942,000 )       n/a
Impairment charges                            (7,607,000 )               -        (7,607,000 )       n/a
Interest expense                             (11,195,000 )     (11,835,000 )         640,000        -5.4%
Net (loss) income                             (8,107,000 )       8,533,000       (16,640,000 )
Net (income) attributable to
noncontrolling interests                        (236,000 )        (268,000 )          32,000
Net (loss) income attributable to Cedar
Realty Trust, Inc.                         $  (8,343,000 )$   8,265,000$ (16,608,000 )




Revenues were lower primarily as a result of the negative impact of the COVID-19
pandemic, which resulted in (1) a decrease of $3.2 million in rental revenues
and expense recoveries and a decrease of $1.3 million in straight-line rental
revenues attributable to same-center properties, (2) a decrease of $2.7 million
in rental revenues and expense recoveries and a decrease of $0.4 million in
straight-line rental and the amortization of intangible lease liabilities
revenues attributable to redevelopment properties. In addition, there was a
decrease of $1.3 million in rental revenues and expense recoveries attributable
to properties that were sold or held for sale in 2019 and 2018. These negative
results were partially offset by (1) $7.1 million in revenue in the quarter
ended March 31, 2020 relating to a dark anchor tenant terminating its lease
prior to the contractual expiration in 2020 at Metro Square, and (2) an increase
of $0.4 million in rental revenues and expense recoveries attributable to a
property acquired in 2019.



Property operating expenses were lower primarily as a result of (1) a decrease
of $0.4 million in property operating expenses attributable to same-center
properties, (2) a decrease of $0.4 million in property operating expenses
attributable to properties that were sold or held for sale in 2020 and 2019, and
(3) a decrease of $0.3 million in property operating expenses attributable to
redevelopment properties, partially offset by an increase of $0.2 million in
property operating expenses attributable to a property acquired in 2019.

General and administrative costs were lower primarily as a result of (1) cost
savings of $0.7 million as a result of the COVID-19 pandemic, predominately
related to the cancellation of leasing conventions along with the related travel
expenses, (2) a decrease of $0.4 million in payroll related costs, and (3) a
decrease of $0.2 million in legal and professional fees.

Depreciation and amortization expenses were higher as a result (1) accelerated
depreciation of tenant improvements and leasing commissions of $4.2 million as a
result of tenants vacating their spaces, (2) accelerated depreciation of $2.1
million in the quarter ended March 31, 2020 relating to the demolition of
certain existing buildings at a redevelopment property, (3) an increase of $1.0
million attributable to same-center properties, (4) a $0.8 million write-off in
the quarter ended March 31, 2020 arising from a lease termination for permitting
a dark anchor to terminate its lease prior to the contractual expiration at a
property that was classified held for sale in 2020, and (5) an increase of $0.1
million attributable to a property acquired in 2019, partially offset by (1) a
decrease of $0.4 million attributable to properties that were sold or held for
sale in 2020 and 2019, and (2) a decrease of $0.2 million attributable to
redevelopment properties.

Gain on sale in 2019 relates to the sale of Maxatawny Marketplace, located in Maxatawny, Pennsylvania.

Impairment charges in 2020 relates to Metro Square, located in Owings Mills, Maryland, and The Commons, located in Dubois Pennsylvania.


Interest expense was lower as a result of (1) a decrease in the overall weighted
average interest rate which resulted in a decrease in interest expense of $1.5
million, and (2) an increase in capitalized interest of $0.1 million, partially
offset by increase in the overall weighted average principal balance which
resulted in an increase in interest expense of $1.0 million.



Same-Property Net Operating Income


Same-property net operating income ("same-property NOI") is a widely-used
non-GAAP financial measure for REITs that the Company believes, when considered
with financial statements prepared in accordance with GAAP, is useful to
investors as it provides an indication of the recurring cash generated by the
Company's properties by excluding certain non-cash revenues and expenses, as
well as other infrequent items such as lease termination income which tends to
fluctuate more than rents from year to year. Properties

                                       24

--------------------------------------------------------------------------------


are included in same-property NOI if they are owned and operated for the
entirety of both periods being compared, except for properties undergoing
significant redevelopment and expansion until such properties have stabilized,
and properties classified as held for sale. 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 reconciles same-property NOI to the Company's consolidated
operating income:



                                       Three months ended June 30,           Six months ended June 30,
                                          2020               2019             2020              2019
Operating (loss) income              $      (331,000 )$ 11,488,000$   3,088,000$  20,368,000
Add (deduct):
General and administrative                 3,906,000        5,418,000         8,908,000        10,216,000
Gain on sales                                      -       (2,841,000 )               -        (2,942,000 )
Impairment charges                           133,000                -         7,607,000                 -
Depreciation and amortization             14,426,000       10,346,000        28,173,000        20,475,000
Straight-line rents                          988,000         (111,000 )         945,000          (335,000 )
Amortization of intangible lease
liabilities                                 (307,000 )       (631,000 )        (766,000 )      (1,222,000 )
Other adjustments                            (54,000 )       (108,000 )           1,000          (123,000 )
NOI related to properties not
defined as same-property                  (3,041,000 )     (5,145,000 )     (14,287,000 )     (10,212,000 )
Same-property NOI                    $    15,720,000$ 18,416,000     $ 

33,669,000 $ 36,225,000


Number of same properties                         46               46                46                46
Same-property occupancy, end of
period                                          90.2 %           91.4 %            90.2 %            91.4 %
Same-property leased, end of
period                                          91.5 %           91.6 %            91.5 %            91.6 %
Same-property average base rent,
end of period                        $         13.57     $      13.56$       13.57$       13.56

Same-property NOI for the comparable three and six month periods decreased 14.6% and 7.1%, respectively as a result of the negative impact of the COVID-19 pandemic which reduced rental revenues for the same-property portfolio.

Leasing Activity

The following is a summary of the Company's retail leasing activity during the six months ended June 30, 2020:



                                                                                                          Tenant
                                                      New rent        Prior rent       Cash basis      improvements
                           Leases                        per             per               %                per
                           signed         GLA        sq.ft. ($)      
sq.ft. ($)         change         sq.ft. ($)
Renewals                        34       440,300           13.52            13.34              1.4 %            1.54
New Leases - Comparable         16        49,900           19.21            22.75            -15.5 %           33.87   (a)
New Leases -
Non-Comparable (b)               1         1,600           23.00              n/a              n/a              0.00   (a)
Total (c)                       51       491,800           14.13              n/a              n/a              4.81





    (a) Includes both tenant allowance and landlord work. Excludes first
        generation space.


  (b) Includes leases signed at first generation and expansion spaces.


(c) Legal fees and leasing commissions averaged a combined total of $1.01 per

square foot.

Liquidity and Capital Resources


The Company funds operating expenses and other short-term liquidity
requirements, including debt service, tenant improvements, leasing commissions,
preferred and common dividend distributions and distributions to minority
interest partners, if made, primarily from its operations. The Company may also
use its revolving credit facility for these purposes. The Company expects to
fund long-term liquidity requirements for property acquisitions, redevelopment
costs, capital improvements, and maturing debt

                                       25

--------------------------------------------------------------------------------


initially with its revolving credit facility, and ultimately through a
combination of issuing and/or assuming additional debt, the sale of equity
securities, the issuance of additional OP Units, and/or the sale of properties.
Although the Company believes it has access to secured and unsecured financing,
there can be no assurance that the Company will have access to financing for
development projects, financing for additional construction projects, or
proceeds from refinancing of existing debt.

As a result of the COVID-19 pandemic which has created significant economic
uncertainty, the Company took the following actions: (1) in March 2020, the
Company borrowed an aggregate $75.0 million under its revolving credit facility
to preserve financial flexibility, (2) in April 2020 and July 2020, the
Company's Board of Directors declared a quarterly common dividend of $0.01 per
share, reduced from $0.05 per share from the February 2020 dividend, which
preserves $3.6 million of cash per quarter, and (3) dramatically reduced
near-term redevelopment and other non-essential capital expenditures. The
Company currently estimates capital spend in 2020 to be approximately $15
million for its three ongoing mixed-use urban redevelopment projects.

Effective April 28, 2020, the average closing price of the Company's common
stock had been less than $1.00 over the prior 30-consecutive trading day period,
and as a result, the Company received notice from the NYSE that the Company has
until December 31, 2020 to regain compliance with the minimum share price
requirement. The threat of delisting and/or a delisting of the Company's common
stock could have adverse effects, such as restricting the Company's ability to
obtain equity financing. The Company will continue to monitor the closing price
of its common stock and consider available options.



On August 4, 2020, the Company amended its existing $300 million unsecured
credit facility and term loans. After such amendments, the Company's financial
ratios and borrowing base are now all computed using trailing four quarters as
opposed to the current quarter annualized and interest rate swaps that are a
hedge of existing debt are now excluded from the definition of debt. The $300
million unsecured credit facility consists of (1) a $250 million revolving
credit facility, and (2) a $50 million term loan. The revolving credit facility
may be extended, at the Company's option, for an additional one-year period,
subject to customary conditions. Under an accordion feature, the facility can be
increased to $750 million, subject to customary conditions and lending
commitments. Interest on borrowings under the unsecured credit facility and term
loans are based on the Company's leverage ratio.

The Company's unsecured credit facility and term loans contain financial
covenants including, but not limited to, maximum debt leverage, maximum secured
debt, minimum fixed charge coverage, and minimum net worth. In addition, the
facility contains restrictions including, but not limited to, limits on
indebtedness, certain investments and distributions. The Company's failure to
comply with the covenants or the occurrence of an event of default under the
facilities could result in the acceleration of the related debt and exercise of
other lender remedies. Although the credit facility is unsecured, borrowing
availability is based on unencumbered property adjusted net operating income for
the trailing twelve months, as defined in the agreements. As of the date of
filing this Quarterly Report on Form 10-Q, the Company had $106.9 million
outstanding and $74.5 available for additional borrowings under its revolving
credit facility, and was in compliance with all financial covenants. However,
the COVID-19 pandemic may negatively impact the Company's future ability to
remain compliant with all financial covenants, including the ability to generate
sufficient unencumbered property adjusted net operating income to support
current borrowings. See "Item 1A - Risk Factors" in the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020.


                                       26

--------------------------------------------------------------------------------


Debt and finance lease obligations are composed of the following at June 30,
2020:



                                                             June 30, 2020
                                                                       Contractual
                                     Maturity        Balance         interest rates
Description                           dates        outstanding      weighted-average
Fixed-rate mortgage                  Jun 2026     $  46,167,000           3.9%
Finance lease obligation             Sep 2050         5,649,000           5.3%
Unsecured credit facilities (a):
Variable-rate:
Revolving credit facility          Sep 2021 (b)     176,900,000           2.4%
Term loan                            Sep 2022        50,000,000           2.6%
Fixed-rate (c):
Term loan                            Feb 2021        75,000,000           3.7%
Term loan                            Feb 2022        50,000,000           3.1%
Term loan                            Sep 2022        50,000,000           3.3%
Term loan                            Apr 2023       100,000,000           3.3%
Term loan                            Sep 2024        75,000,000           3.8%
Term loan                            Jul 2025        75,000,000           4.7%
                                                    703,716,000           3.3%
Unamortized issuance costs                           (2,386,000 )
                                                  $ 701,330,000

(a) During the third quarter of 2020, the weighted average interest rate for

        the Company's unsecured credit facilities will increase 15 bps as a result
        of an increase in the Company's leverage ratio.

(b) The revolving credit facility is subject to a one-year extension at the Company's option.


(b) The interest rates on these term loans consist of LIBOR plus a credit spread
based on the Company's leverage ratio, for which the Company has interest rate
swap agreements which convert the LIBOR rates to fixed rates. Accordingly, these
term loans are presented as fixed-rate debt.

The following table details the Company's debt and finance lease obligation
maturities at June 30, 2020:



              Mortgage Loan       Finance Lease          Revolving               Term
   Year          Payable           Obligation         Credit Facility            Loans             Total
   2020      $       522,000$        17,000     $               -       $           -     $     539,000
   2021            1,074,000              35,000           176,900,000  

(a) 75,000,000 253,009,000

   2022            1,116,000              37,000                     -         150,000,000       151,153,000
   2023            1,160,000              39,000                     -         100,000,000       101,199,000
   2024            1,206,000              41,000                     -          75,000,000        76,247,000
Thereafter        41,089,000           5,480,000                     -          75,000,000       121,569,000
             $    46,167,000$     5,649,000$     176,900,000$ 475,000,000$ 703,716,000

(a) The revolving credit facility is subject to a one-year extension at the

Company's option.



The remaining property-specific mortgage loan payable matures in 2026. Mortgage
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 is 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 Internal Revenue
Code of 1986, as amended (the "Code"). The Company paid common and preferred
stock dividends during 2019, and has continued to declare and pay common and
preferred stock dividends during 2020. While the Company intends to continue
paying regular quarterly dividends, 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. Additionally, the Board of
Directors may reduce, as it did with the May 2020 common stock dividend of $0.01
per common share, or

                                       27
--------------------------------------------------------------------------------


suspend payment of dividends to retain cash and reduce debt obligations and/or
to fund redevelopments and other capital needs. 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 requirements.

Net Cash Flows



                                       Six months ended June 30,
                                        2020              2019
Cash flows provided by (used in):
Operating activities                $  24,518,000$  28,392,000
Investing activities                $ (18,644,000 )$  (5,606,000 )
Financing activities                $  59,612,000$ (22,682,000 )




Operating Activities

Net cash provided by operating activities, before net changes in operating
assets and liabilities, was $31.2 million for the six months ended June 30, 2020
and $27.5 million for the six months ended June 30, 2019. The increase was
primarily a result of the Company accepting a payment of $8.0 million in
consideration for permitting a dark anchor tenant to terminate its lease prior
to the contractual expiration in 2020, which was partially offset by (1) the
negative impact of the COVID-19 pandemic in the quarter ended June 30, 2020, and
(2) property dispositions in 2019.

Investing Activities




Net cash flows used in investing activities were primarily the result of the
Company's property acquisitions, expenditures for property improvements and
property disposition activities. During the six months ended June 30, 2020 the
Company incurred expenditures of $18.6 million for property improvements. During
the six months ended June 30, 2019, the Company incurred expenditures of $15.2
million for property improvements, and acquired a property for $9.1 million,
which was partially offset by $18.7 million in proceeds from the sales of
properties.

Financing Activities



During the six months ended June 30, 2020, the Company had net advances of $70.9
million under the revolving credit facility, which was partially offset by $10.7
million of preferred and common stock distributions, and $0.5 million of
mortgage repayments. During the six months ended June 30, 2019, the Company paid
$14.3 million of preferred and common stock distributions, had $6.8 million of
common stock repurchases, had net repayments of $1.0 million under the revolving
credit facility, and $0.5 million of mortgage repayments.

Funds From Operations


Funds From Operations ("FFO") is a widely recognized supplemental non-GAAP
measure utilized to evaluate the financial performance of a REIT. The Company
presents FFO in accordance with the definition adopted by the National
Association of Real Estate Investment Trusts ("Nareit"). Nareit generally
defines FFO as net income (determined in accordance with GAAP), excluding gains
(losses) from sales of real estate properties, impairment write-downs on real
estate properties directly attributable to decreases in the value of depreciable
real estate, plus real estate related depreciation and amortization, and
adjustments for partnerships and joint ventures to reflect FFO on the same
basis. The Company considers FFO to be an appropriate measure of its financial
performance because it captures features particular to real estate performance
by recognizing that real estate generally appreciates over time or maintains
residual value to a much greater extent than other depreciable assets.

The Company also considers Operating Funds From Operations ("Operating FFO") to
be an additional meaningful financial measure of financial performance because
it excludes items the Company does not believe are indicative of its core
operating performance, such as non-capitalized acquisition pursuit costs,
amounts relating to early extinguishment of debt and preferred stock redemption
costs, management transition costs and certain redevelopment costs. The Company
believes Operating FFO further assists in comparing the Company's performance
across reporting periods on a consistent basis by excluding such items.

FFO and Operating FFO should be reviewed with net income attributable to common
shareholders, the most directly comparable GAAP financial measure, when trying
to understand the Company's operating performance. FFO and Operating FFO do not
represent cash generated from operating activities and should not be considered
as an alternative to net income attributable to common shareholders or to cash
flow from operating activities. The Company's computations of FFO and Operating
FFO may differ from the computations utilized by other REITs and, accordingly,
may not by comparable to such REITs.

                                       28

--------------------------------------------------------------------------------


A reconciliation of net (loss) income attributable to common shareholders to FFO
and Operating FFO for the three and six months ended June 30, 2020 and 2019 is
as follows:



                                        Three months ended June 30,          Six months ended June 30,
                                           2020               2019             2020              2019
Net (loss) income attributable to
common shareholders                   $    (8,785,000 )$  2,695,000$ (13,719,000 )$  2,889,000
Real estate depreciation and
amortization                               14,400,000       10,300,000        28,105,000       20,383,000
Limited partners' interest                    (52,000 )         17,000           (80,000 )         19,000
Gain on sales                                       -       (2,841,000 )               -       (2,942,000 )
Impairment charges                            133,000                -         7,607,000                -
Consolidated minority interests:
Share of income                               140,000          144,000           316,000          249,000
Share of FFO                                 (118,000 )       (107,000 )        (261,000 )       (186,000 )
FFO applicable to diluted common
shares                                      5,718,000       10,208,000        21,968,000       20,412,000
Redevelopment costs (a)                             -                -           483,000                -
Operating FFO applicable to diluted
common shares                         $     5,718,000$ 10,208,000

$ 22,451,000$ 20,412,000


FFO per diluted common share          $          0.06     $       0.11$        0.24$       0.22
Operating FFO per diluted common
share                                 $          0.06     $       0.11$        0.25$       0.22
Weighted average number of diluted
common shares (b):
Common shares and equivalents              90,829,000       90,526,000        90,798,000       90,694,000
OP Units                                      537,000          553,000           537,000          553,000
                                           91,366,000       91,079,000        91,335,000       91,247,000



(a) Includes redevelopment project costs expensed pursuant to GAAP such as

certain demolition and lease termination costs.

(b) The weighted average number of diluted common shares used to compute FFO

and Operating FFO applicable to diluted common shares includes OP Units and

unvested restricted shares/units that are excluded from the computation of

       diluted EPS.




Inflation

Inflation has been relatively low in recent years and has not had a significant
detrimental impact on the Company's results of operations. There have been mixed
indications of an increase in inflation in the U.S. economy. If inflation rates
increase, substantially all of the Company's tenant 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 and many of
the operating expenses it incurs. Significant inflation rate increases over a
prolonged period of time may have a material adverse impact on the Company's
business.

© Edgar Online, source Glimpses


share with twitter share with LinkedIn share with facebook
All news about CEDAR REALTY TRUST, INC.
10/29CEDAR : 3Q Earnings Snapshot
AQ
10/29CEDAR REALTY TRUST : Supplemental Financial Information
PU
10/29CEDAR REALTY TRUST : Management's Discussion and Analysis of Financial Condition..
AQ
10/29CEDAR REALTY TRUST, INC. : Results of Operations and Financial Condition, Financ..
AQ
10/29CEDAR REALTY TRUST : Reports Third Quarter 2020 Results And COVID-19 Update
PR
10/16CEDAR REALTY TRUST : Declares Dividends On Common And Preferred Stock
PR
10/13CEDAR REALTY TRUST : To Report Third Quarter 2020 Financial Results
PR
08/10CEDAR : 2Q Earnings Snapshot
AQ
08/10CEDAR REALTY TRUST : Management's Discussion and Analysis of Financial Condition..
AQ
08/10CEDAR REALTY TRUST, INC. : Entry into a Material Definitive Agreement, Creation ..
AQ
More news