Zacks Investment Research recently initiated the coverage of Wheeler Real Estate Investment Trust, Inc. WHLR, assigning a "Neutral" recommendation to the company's shares. This assessment comes amid a mixed outlook for the company, which has been making notable strides in the real estate investment trust, or REIT, space despite industry challenges.
WHLR, headquartered in Virginia Beach, VA, is a fully integrated, self-managed commercial real estate investment company. It focuses on owning, leasing and operating income-producing retail properties, with an emphasis on grocery-anchored shopping centers in secondary and tertiary markets.
Wheeler Real Estate has taken decisive steps to improve its financial standing, including the redemption and exchange of Series D Preferred Stock and the sale of non-core assets. These moves reduced leverage and generated $5.7 million in net gains in the latest quarter. Occupancy rates remain high at 93.3%, bolstered by positive leasing spreads that reflect strong tenant demand and pricing power.
The research report highlights several key factors that could drive WHLR’s future growth. These include its resilient same-property net operating income and defensive tenant base with grocery anchors and regional dominance. Wheeler Real Estate’s real estate portfolio was 91.3% occupied and 92% leased as of March 31, 2025. Leasing activity in the first quarter of 2025 included 40 renewals totaling 273,579 square feet, with a weighted average increase of $1.26 per square foot — a 12.5% rise over previous rents. Additionally, eight new leases were signed for 68,502 square feet, achieving a 38.1% rental rate premium over the prior tenants’ base rent.
However, potential investors should consider certain risks outlined in the report. Wheeler Real Estate’s cash on hand declined to $19.2 million against a hefty $489 million debt load, narrowing its liquidity. Legal disputes and sluggish performance at subsidiary Cedar Realty further complicate WHLR’s turnaround story.
Wheeler Real Estate’s stock has significantly underperformed its industry peers and the broader market over the past year. The valuation metrics for the company indicate that although the stock is appropriately priced for its challenges, and while it may not offer near-term upside, it could appeal to contrarian investors willing to tolerate elevated risk for possible long-term gains.
For a comprehensive analysis of Wheeler Real Estate’s financial health, strategic initiatives and market positioning, you are encouraged to view the full Zacks research report. This in-depth report provides a detailed discussion of the company's operational strategies, financial performance, and the potential risks and opportunities that lie ahead.
Read the full Research Report on Wheeler Real Estate here>>>
Note: Our initiation of coverage on Wheeler Real Estate, which has a modest market capitalization of $3.5 million, aims to equip investors with the information needed to make informed decisions in this promising but inherently risky segment of the market.
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Wheeler Real Estate Investment Trust, Inc. (WHLR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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