ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 18, 2023, WHLR-BEAVER RUIN VILLAGE, LLC¸ WHLR-BEAVER RUIN VILLAGE II, LLC¸ WHLR-BROOK RUN ASSOCIATES, LLC, WHLR-BRA I ASSOCIATES, LLC¸ WHLR-BRA II ASSOCIATES, LLC¸ WHLR-BRYAN STATION LLC¸ WHLR CROCKETT SQUARE, LLC¸ WHLR-FREEWAY JUNCTION LLC¸WHLR-FT. HOWARD SQUARE, LLC¸ WHLR-SHOPPES AT MYRTLE PARK, LLC, each of which is a Delaware limited liability company (collectively, the “Borrower”) and each of which is a wholly owned subsidiary of Wheeler REIT, L.P., a Virginia limited partnership (the “Operating Partnership”), of which Wheeler Real Estate Investment Trust, Inc., a Maryland corporation (the “Company”), is the sole general partner, entered into a Term Loan Agreement (the “Loan Agreement”) with Guggenheim Real Estate, LLC (the “Lender”).
Under the Loan Agreement, the Lender agreed to make a loan to the Borrower in the principal amount of $53,070,000 (the “Loan”), with a scheduled maturity date of June 10, 2033 (such date, or any earlier date on which the entire Loan is required to be paid in full by acceleration or otherwise, (the “Maturity Date”).
The Loan will accrue interest at a fixed rate of 6.24% per annum. Interest on the principal balance of the Loan will accrue from and after the date of the Loan Agreement until the obligations under the Loan Agreement are paid in full.
Commencing on July 10, 2023 and continuing thereafter, the Borrower will pay interest in arrears on the tenth (10th) day of each month (each, a “Payment Date”) until the obligations under the Loan Agreement are paid in full. Commencing on July 10, 2028 and continuing thereafter on each Payment Date until the Maturity Date, the Borrower will pay to the Lender monthly installments of principal in accordance with a 30-yr amortization schedule as detailed in a schedule made a part of the Loan Agreement.
The obligations of the Borrower under the Loan Agreement are secured by customary mortgage-level collateral.
The Operating Partnership serves as a guarantor on the Loan.
Under the Loan Agreement, the Borrower is subject to certain financial covenants that require, among other things, that the Borrower cause the Operating Partnership to maintain throughout the term of the Loan a consolidated net worth of not less than $75,000,000, and minimum liquidity of $6,000,000.
The Borrower shall use the proceeds of the Loan to refinance the real properties owned by the Borrower, to pay various operating expenses and other charges in compliance with the Loan Agreement, to make enumerated deposits into various reserve funds established by the Loan Agreement, to pay customary closing costs and expenses associated with the Loan, to fund certain working capital requirements associated with the real properties owned by the Borrower, and distribute the balance, if any, to the Borrower.
There is no material relationship between the Company and its affiliates and the Lender and its affiliates.
The foregoing description of the Loan Agreement is not complete and is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.