SLKW Investments Reiterates Concern Over Wheeler Real Estate’s Capital Strategy

DALLAS--()--SLKW Investments, LLC (“SLKW”) today issued the following statement regarding Wheeler Real Estate Investment Trust, Inc. (NYSE: WHLR) (“Wheeler” or the “Company”):

Dear Fellow Wheeler Shareholders:

We have taken the opportunity to reiterate our concerns about Wheeler’s current capital strategy to the Company’s Board of Directors. The main points from our attached letter to the Board are summarized below:

  • Directors owe a duty to both preferred and common holders.
  • We recommend a dividend payout of 85% run-rate AFFO.

We continue to believe that Wheeler is undervalued by the market, and we hope that the Board will further consider our recommendations so discussions of the company can focus on stability and growth.

Following is the text of the May 25, 2017 Letter from SLKW to Jon Wheeler and the Wheeler Board:

Dear Jon:

We must repeat our missive of last year’s fourth quarter as you seem to us to have again chosen an aggressive path with the common dividend – nearly full payout of AFFO guidance (something small, growthy REITs, not just WHLR, have trouble forecasting) instead of retaining some cash (now needed for anchor re-tenanting, among other things) and preserving a margin of safety to keep potential cuts in dividends from being a constant source of analyst, investor and management focus.

We want to again remind you and your board that your fiduciary duties apply to all stockholders – common and preferred holders.

We continue to suggest that the best path would be to set the dividend based on current, run rate AFFO with a cushion: our advice would be 85% of current AFFO. Then the WHLR discussion might be about stability, growth, etc. as opposed to making projections in order to cover the common dividend.

The best of the REITs – which retain cash for growth investments – use taxable income as the governor of the dividend.

Thanks for your consideration, Robert J. Stetson


SLKW Investments LLC
Jennifer C. Stetson, 310-963-9576

Release Summary

SLKW Investments reiterates concern over Wheeler Real Estate’s (WHLR) capital strategy.

SLKW Investments, LLC