SLKW Investments Voices Concern over Wheeler Real Estate's Capital Strategy

DALLAS--(BUSINESS WIRE)--

SLKW Investments, LLC ("SLKW") today issued the following statement regarding Wheeler Real Estate Investment Trust, Inc. WHLR ("Wheeler" or the "Company"):

Dear Fellow Wheeler Shareholders:

We recently had the opportunity to voice some concerns about Wheeler's current capital strategy to the Company's Board of Directors. While we appreciate Jon Wheeler and the other board members hearing us out, we are disappointed that they have chosen to take no action to address the issues we raised. Our attached letter to the Board raises these issues, which are summarized below:

• Directors owe a duty to both preferred and common holders.
• We recommend a new common stock dividend policy tied to actual cash flow as opposed to projections.
• We note that additional preferred B dividends and new preferred D dividends will lead to short-term dilution in AFFO available to common shareholders.
• We caution management against hurrying acquisitions or due diligence to mitigate short-term diminution of AFFO from additional preferred dividends.

We continue to believe that Wheeler is undervalued by the market based on the potential for growth of AFFO, and we hope that the Board will further consider our recommendations so that this potential is no longer obscured.

Following is the text of the September 30, 2016 Letter from SLKW to Jon Wheeler and the Wheeler Board:

Dear Jon:

We've watched with interest and increasing concern as you have continued to grow the company.

We are sympathetic to the realities that a Microcap REIT faces up against significant public company expenses and the need to maintain a platform to acquire and aggressively manage retail properties but feel that

1. An aggressive common dividend and
2. The high pace of acquisitions demanded to use up the significant chunk of capital just raised heightens the risk of our enterprise.

We want to remind you and your board that your fiduciary duties apply to all stockholders – common and existing preferred B holders and now the preferred D holders.

The board's continued emphasis on paying out an artificial 13%+ yield, all of which represents a return of capital, seems misplaced especially that you have raised additional senior capital.

In addition, raising large amounts of capital for new investment at this time in the real estate cycle appears to us to raise pressure to keep pace of acquisitions at the expense of maintaining the appropriate level of due diligence.

As we have listened to investor presentations and calls over the last year, the message that WHLR is a small company with good AFFO growth prospects has been lost to discussions/questions/concerns on the "path to AFFO coverage of the dividend." Our recommendation would be to change the narrative to a solid and growing dividend at an 85% of AFFO payout plan. If we understand where management is heading, you'd be at the current dividend level by the end of 2017 unless you choose to develop (less 2017 cash flow but perhaps higher returns than stabilized acquisitions 24 months out) or management misses its numbers.

Thanks for your consideration, Robert J Stetson

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