Attached files
| file | filename |
|---|---|
| EX-23.1 - CONSENT OF CHERRY BEKAERT LLP - Wheeler Real Estate Investment Trust, Inc. | ex231forthoward.htm |
| EX-99.2 - FT. HOWARD PRO FORMA FINANCIALS - Wheeler Real Estate Investment Trust, Inc. | ex992forthoward.htm |
| 8-K/A - FT. HOWARD FINANCIALS 8-K/A - Wheeler Real Estate Investment Trust, Inc. | forthoward3-14financials8x.htm |
Exhibit 99.1
Report of Independent Auditor
To the Board of Directors and Shareholders of
Wheeler Real Estate Investment Trust, Inc.
Report on the Statement
We have audited the accompanying statement of revenues and certain operating expenses (the “Statement”) of Fort Howard Square Shopping Center (the “Property”) for the year ended December 31, 2014.
Management’s Responsibility for the Statement
Management is responsible for the preparation and fair presentation of this Statement, in accordance with accounting principles generally accepted in the United States of America, that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on this Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Statement is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Statement. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the Statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the Statement.
We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Statement referred to above presents fairly, in all material respects, the revenue and certain operating expenses of the Property for the year ended December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.
Emphasis of Matter
As further discussed in Note 1, on September 30, 2015, Wheeler Real Estate Investment Trust, Inc., through its subsidiary of Wheeler REIT, L.P., completed the acquisition of the Property.
The accompanying Statement was prepared as described in Note 2, for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and is not intended to be a complete presentation of the Property’s revenue and expenses. Our opinion is not modified with respect to this matter.
/s/ Cherry Bekaert LLP
Virginia Beach, Virginia
October 13, 2015
Fort Howard Square Shopping Center
Statements of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2015 (unaudited) and the Year Ended December 31, 2014
Six Months Ended June 30, 2015 | Year Ended December 31, 2014 | ||||||||
(unaudited) | |||||||||
REVENUES: | |||||||||
Rental income | $ | 541,481 | $ | 1,061,861 | |||||
Tenant reimbursements and other income | 73,256 | 147,273 | |||||||
Total Revenues | 614,737 | 1,209,134 | |||||||
CERTAIN OPERATING EXPENSES: | |||||||||
Property operating | 74,043 | 146,229 | |||||||
Real estate taxes | 37,599 | 75,198 | |||||||
Repairs and maintenance | 6,698 | 17,149 | |||||||
Other | 1,125 | 3,884 | |||||||
Total Certain Operating Expenses | 119,465 | 242,460 | |||||||
Excess of Revenues Over Certain Operating Expenses | $ | 495,272 | $ | 966,674 | |||||
See accompanying notes to statements of revenues and certain operating expenses.
Fort Howard Square Shopping Center
Notes to Statements of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2015 (unaudited) and the Year Ended December 31, 2014
1. Business and Purchase and Sales Agreement
On July 30, 2015, Wheeler Real Estate Investment Trust, Inc., through its subsidiary of Wheeler REIT, L.P. (the “Operating Partnership”), entered into a Purchase and Sale Agreement (the “Agreement”) to acquire Fort Howard Square Shopping Center (the “Property”), a 113,652 square foot shopping center located in Rincon, Georgia for a purchase price of approximately $11.5 million. On September 30, 2015, the Operating Partnership completed the acquisition. The Property is 95% occupied and is leased by nationally recognized tenants, including Goodwill and Dollar Tree.
2. Basis of Presentation
The Statements of Revenues and Certain Operating Expenses (the “Statements”) have been prepared for the purpose of complying with Rule 3-14 of Regulation S-X, promulgated by the Securities and Exchange Commission, and are not intended to be a complete presentation of the Property’s revenues and expenses. Certain operating expenses include only those expenses expected to be comparable to the proposed future operations of the Property. Expenses such as depreciation and amortization are excluded from the accompanying Statements. The Statements have been prepared on the accrual basis of accounting which requires management to make estimates and assumptions that affect the reported amounts of the revenues and expenses during the reporting periods. Actual results may differ from those estimates.
3. Revenues
The Property leases retail space under various lease agreements with its tenants. All leases are accounted for as noncancelable operating leases. The leases include provisions under which the Property is reimbursed for common area maintenance, real estate taxes and insurance costs. Pursuant to the lease agreements, income related to these reimbursed costs is recognized in the period the applicable costs are incurred. Certain leases contain renewal options at various periods at various rental rates.
The following table lists the tenants whose annualized rental income on a straight-line basis represented greater than 10% of total annualized rental income for all tenants on a straight line basis as of June 30, 2015 (unaudited) and December 31, 2014:
Tenant | June 30, 2015 | December 31, 2014 | ||||
Goodwill | 15.3 | % | 15.5 | % | ||
Fred's Store | 13.4 | % | 13.6 | % | ||
Goody's | 13.6 | % | 12.3 | % | ||
The termination, delinquency or nonrenewal of one of the above tenants may have a material adverse effect on revenues. No other tenant represents more than 10% of annualized rental income as of June 30, 2015 (unaudited) and December 31, 2014.
Fort Howard Square Shopping Center
Notes to Statements of Revenues and Certain Operating Expenses
For the Six Months Ended June 30, 2015 (unaudited) and the Year Ended December 31, 2014
(continued)
3. Revenues (continued)
The weighted average remaining lease terms for tenants at the property was 4.24 years as of June 30, 2015 (unaudited). Future minimum rentals to be received under noncancelable tenant operating leases for each of the next five years and thereafter, excluding CAM and percentage rent based on tenant sales volume, as of June 30, 2015 (unaudited) and December 31, 2014 were as follows:
Twelve Months Ending June 30, | Years Ending December 31, | |||||||
(unaudited) | ||||||||
2015 | — | 936,679 | ||||||
2016 | 942,680 | 946,356 | ||||||
2017 | 947,390 | 887,123 | ||||||
2018 | 614,357 | 342,711 | ||||||
2019 | 236,176 | 180,986 | ||||||
2020 | 172,788 | 172,788 | ||||||
Thereafter | 475,167 | 388,773 | ||||||
$ | 3,388,558 | $ | 3,855,416 | |||||
The above schedule takes into consideration all renewals and new leases executed subsequent to June 30, 2015 through the date of this report.
4. Subsequent Events
Management has evaluated all events and transactions that occurred after December 31, 2014 up through October 13, 2015, the date the financial statements were available to be issued, and are not aware of any events that have occurred subsequent to December 31, 2014 that would require additional adjustments to or disclosures in the Statements.