After deducting the placement fee and commissions and estimated expenses of
this offering and the formation transactions, we expect net proceeds from
this offering of approximately $13.39 million, assuming completion of the
minimum offering, or $18.19 million, assuming completion of the maximum
offering at the initial public offering price of $5.25 per share.
We intend to contribute the net proceeds of this offering to our Operating
Partnership in exchange for common units and our Operating Partnership will
use the net proceeds received from us as described below:
• Approximately $0.5 million to repay outstanding indebtedness.
• Approximately $2.0 million for general working capital, which will initially
be used to fund dividend payments.
• Approximately $1.78 million to reimburse our Operating Partnership for the
purchase of the membership interests of DF-1 Carrollton, LLC, the current
owner of The Shoppes at Eagle Harbor, one of the original eight properties
in our operating portfolio.
• Approximately $4.18 million in cash payments to those Prior Investors who
have elected to receive cash instead of Operating Partnership Units for their
contribution of membership interests in the Ownership Entities.
• The balance, approximately $4.93 million (assuming a minimum offering) or
$9.73 million (assuming a maximum offering) will be used for future
acquisitions.
We compete with a number of developers, owners and operators of retail real
estate, many of which own properties similar to ours in the same markets in
which our properties are located and some of which have greater financial
resources than we do. In operating and managing our portfolio, we compete
for tenants based on a number of factors, including location, rental rates,
security, flexibility and expertise to design space to meet prospective
tenants’ needs and the manner in which the property is operated, maintained
and marketed. As leases at our properties expire, we may encounter significant
competition to renew or re-let space in light of the large number of competing
properties within the markets in which we operate. As a result, we may be
required to provide rent concessions or abatements, incur charges for tenant
improvements and other inducements, including early termination rights or
below-market renewal options, or we may not be able to timely lease vacant
space. In that case, our financial condition, results of operations, cash
flow, per share trading price of our common stock and ability to satisfy
our debt service obligations and to pay dividends to you may be adversely
affected.
We also face competition when pursuing acquisition and disposition
opportunities. Our competitors may be able to pay higher property acquisition
prices, may have private access to opportunities not available to us and
otherwise be in a better position to acquire a property. Competition may also
have the effect of reducing the number of suitable acquisition opportunities
available to us, increase the price required to consummate an acquisition
opportunity and generally reduce the demand for retail space in our markets.
Likewise, competition with sellers of similar properties to locate suitable
purchasers may result in us receiving lower proceeds from a sale or in us
not being able to dispose of a property at a time of our choosing due to
the lack of an acceptable return.
Company Description
We are a Maryland corporation formed with the principle objective of
acquiring, financing, developing, leasing, owning and managing income
producing assets such as strip centers, neighborhood centers, grocery-anchored
centers, community centers and free-standing retail properties. Our strategy
is to opportunistically acquire and reinvigorate well-located, potentially
dominant retail properties in secondary and tertiary markets that generate
attractive risk-adjusted returns. We will target competitively protected
properties in communities that have stable demographics and have historically
exhibited favorable trends, such as strong population and income growth. We
generally lease our properties to national and regional retailers that offer
consumer goods and generate regular consumer traffic. We believe our tenants
carry goods that are less impacted by fluctuations in the broader U.S.
economy and consumers’ disposable income, generating more predictable
property-level cash flows.
Upon consummation of this offering, we expect that our portfolio will be
comprised of five retail shopping centers, two free-standing retail
properties, and one office building. Five of these properties are located
in Virginia, one is located in Florida, one is located in North Carolina
and one is located in Oklahoma. As of June 30, 2012, our portfolio had a
total gross leasable area (“GLA”) of 348,490 square feet and an occupancy
level of approximately 90%.
We believe our markets, which currently include the Mid-Atlantic, Southeast
and Southwest, are characterized by strong demographics and dynamic,
diversified economies that will continue to generate jobs and future demand
for commercial real estate.
We were formed as a Maryland corporation on June 23, 2011. Jon S. Wheeler,
our Chairman and President, when combined with his affiliates, is our largest
stockholder. Our administrative services will be provided externally by WHLR
Management, LLC (our “Administrative Service Company”) which is wholly owned
by Mr. Wheeler. Pursuant to the terms of an administrative services agreement
between our Administrative Service Company and us, our Administrative Service
Company will be responsible for identifying targeted real estate investments
for our board of directors’ consideration; overseeing the management of the
investments; handling the disposition of the real estate investments our
board of directors has chosen to sell; and administering our day-to-day
business operations, including but not limited to, leasing duties, property
management, payroll and accounting functions. We will also benefit from
Mr. Wheeler’s partially or wholly owned related businesses and platform
that specializes in retail real estate investment and management.
Mr. Wheeler’s organization includes (i) Wheeler Interests, LLC, an
acquisition and asset management firm, (ii) Wheeler Real Estate, LLC, a
real estate leasing management and administration firm, (iii) Wheeler
Development, LLC, a full service real estate development firm, (iv) Wheeler
Capital, LLC, a capital investment firm specializing in venture capital,
financing, and small business loans, (v) Site Applications, LLC, a full
service facility company equipped to handle all levels of building
maintenance, and (vi) TESR, LLC, a tenant coordination company specializing
in tenant relations and community events (collectively,
our “Services Companies”).
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Our principal executive office is located at Riversedge North, 2529
Virginia Beach Boulevard, Suite 200, Virginia Beach, Virginia 23452. Our
telephone number is 757-627-9088. We have reserved the website located at
www.WHLR.us.