Enterprising Investor
6 months ago
Bellevue Capital Partners, LLC Announces Final Results of its Tender Offer for Shares of American Strategic Investment Corp. (10/
NEW YORK, Oct. 27, 2023 /PRNewswire/ -- Bellevue Capital Partners, LLC ("Bellevue") announced today the final results of its tender offer to purchase for cash up to 350,000 shares of American Strategic Investment Co. (NYSE: NYC) ("ASIC") common stock at a price of $10.25 per share (the "Tender Offer"), which expired at 11:59 p.m., New York City time, on October 26, 2023.
Based on the final count by Computershare Trust Company, N.A., the depositary for the tender offer, 223,460 shares of ASIC's common stock were properly tendered and not properly withdrawn at a price of $10.25 per share, for an aggregate cost of approximately $2,290,465, in cash, less any fees, expenses or applicable withholding taxes relating to the tender offer. The repurchased shares represent approximately 9.6% of ASIC's shares outstanding as of August 8, 2023.
Computershare Trust Company, N.A., the depositary for the tender offer, will promptly issue payment for the shares of ASIC common stock validly tendered and accepted for purchase in the tender offer, and will return all other shares tendered and not purchased in the tender offer.
About Bellevue Capital Partners, LLC
Bellevue is a leading, diversified investment, asset management and operating platform and the sole member of AR Global Investments, LLC, the parent company to the advisor and property manager of ASIC.
https://www.prnewswire.com/news-releases/bellevue-capital-partners-llc-announces-final-results-of-tender-offer-for-shares-of-american-strategic-investment-corp-301970150.html
Enterprising Investor
2 years ago
New York City REIT Announces Second Quarter 2022 Results (8/12/22)
NEW YORK--(BUSINESS WIRE)--New York City REIT, Inc. (NYSE: NYC) (“NYC” or the “Company”), a real estate investment trust that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City, announced today its financial and operating results for the second quarter ended June 30, 2022.
Second Quarter 2022 and Subsequent Event Highlights
- Revenue increased to $16.2 million from $15.0 million in the second quarter 2021
- Net loss attributable to common stockholders was $11.3 million compared to $11.1 million in second quarter 2021
- Cash net operating income (“NOI”) increased $1.0 million to $7.0 million from $6.0 million in prior year second quarter
- Funds from Operations (“FFO”) was negative $4.2 million, compared to negative $4.0 million in second quarter 2021
- Core Funds from Operations (“Core FFO”) was negative $1.5 million from negative $1.9 million in second quarter 2021
- Collected 98% of original cash rent due in second quarter 20221, up from 91% in second quarter 2021
- 71% of annualized straight-line rent from Top 10 tenants2 is derived from investment grade or implied investment grade3 rated tenants with a weighted-average remaining lease term of 9.6 years as of June 30, 2022
- Portfolio occupancy grew to 85% as of June 30, 2022 from 84% in the first quarter, 2022, with weighted-average lease term4 of 7.1 years
- Over 140,000 square feet of new leasing and lease renewals including long-term leases for two parking garages and a 10-year lease renewal with the GSA at 123 William Street
- Forward leasing pipeline of 23,400 square feet that is expected to increase occupancy by an additional 2% and grow straight-line rent by $1.2 million
Portfolio debt is 100% fixed rate with no maturities through the end of 2023
CEO Comments
“We continue to effectively execute our asset management strategy, signing over 140,000 square feet of leases during the second quarter and driving occupancy up,” said Michael Weil, CEO of NYC. “Specifically, we have grown portfolio occupancy and weighted-average remaining lease term both sequentially and year over year, which we see as an indicator of the long-term demand starting to return in the New York City market. Our leasing pipeline is expected to continue contributing to growing our occupancy, and our balance sheet is well-positioned, with long-term debt locked in at fixed rates and no maturities through the end of next year. We are committed to building shareholder value through increased leasing and strong pro-active management of our portfolio. ”
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Real Estate Portfolio
The Company’s portfolio consisted of eight properties comprised of 1.2 million rentable square feet as of June 30, 2022. Portfolio metrics include:
- 84.6% leased
- 7.1 years remaining weighted-average lease term
- 71% of annualized straight-line rent5 from top 10 tenants derived from investment grade or implied investment grade tenants with 9.6 years of weighted-average remaining lease term
- Diversified portfolio, comprised of 22% financial services tenants, 18% government and public administration tenants, 15% non-profit and 45% all other industries, based on square feet
Capital Structure and Liquidity Resources
As of June 30, 2022, the Company had $8.1 million of cash and cash equivalents.6 The Company’s net debt7 to gross asset value8 was 40.1%, with net debt of $391.4 million.
All of the Company’s debt was fixed-rate as of June 30, 2022. The Company’s total combined debt had a weighted-average interest rate of 4.4%.9
Rent Collection Update
Second Quarter of 2022
For the second quarter of 2022, NYC collected 98% of the original cash rents that were due across the portfolio, including 100% of the original cash rent payable from the top 10 tenants in the portfolio (based on annualized straight-line rent). Cash rent collected includes both contractual rents and deferred rents paid during the period.
Footnotes/Definitions
1 Comparing the percentage of Cash Rent due and collected for Q2’2022 against Q2’2021. See Annual report on Form 10-K for additional detail regarding Cash Rent collections. “Cash Rent” represents total of all contractual rents on a cash basis due from tenants as stipulated in the originally executed lease agreements for the applicable period taking into account any deferrals or lease amendments. “Original Cash Rent” refers to contractual rents on a cash basis due from tenants as stipulated in their originally executed lease agreement based on leases in place for the applicable period, prior to any rent deferral agreement. We calculate “Original Cash Rent collections” by comparing the total amount of rent collected during the period to the original Cash Rent due for the applicable period. Total rent collected during the period includes both original Cash Rent due and payments made by tenants pursuant to rent deferral agreements. This information may not be indicative of any future period.
2 Top 10 tenants based on annualized straight-line rent as of June 30, 2022.
3 As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. The term “parent" for these purposes includes any entity, including any governmental entity, owning more than 50% of the voting stock in a tenant. Ratings information is as of June 30, 2022. Based on annualized straight-line rent, top 10 tenants are 51% actual investment grade rated and 20% implied investment grade rated.
4 The weighted-average remaining lease term (years) is based on annualized straight-line rent as of June 30, 2022.
5 Annualized straight-line rent is calculated using the most recent available lease terms as of June 30, 2022.
6 Under one of our mortgage loans, we are required to maintain minimum liquid assets (i.e. cash and cash equivalents and restricted cash) of $10.0 million.
7 Total debt of $399.5 million less cash and cash equivalents of $8.1 million as of June 30, 2022. Excludes the effect of deferred financing costs, net, mortgage premiums, net and includes the effect of cash and cash equivalents.
8 Defined as the carrying value of total assets of $805.9 million plus accumulated depreciation and amortization of $171.3 million as of June 30, 2022.
9 Weighted based on the outstanding principal balance of the debt.
Webcast and Conference Call
NYC will host a webcast and call on August 12, 2022 at 11:00 a.m. ET to discuss its financial and operating results. This webcast will be broadcast live over the Internet and can be accessed by all interested parties through the NYC website, www.newyorkcityreit.com, in the “Investor Relations” section.
Dial-in instructions for the conference call and the replay are outlined below.
To listen to the live call, please go to NYC’s “Investor Relations” section of the website at least 15 minutes prior to the start of the call to register and download any necessary audio software. For those who are not able to listen to the live broadcast, a replay will be available shortly after the call on the NYC website at www.newyorkcityreit.com.
Live Call
Dial-In (Toll Free): 1-888-330-3127
International Dial-In: 1-646-960-0855
Conference ID: 5954637
Conference Replay*
Domestic Dial-In (Toll Free): 1-800-770-2030
International Dial-In: 1-647-362-9199
Conference Number: 5954637
*Available from August 12, 2022 through November 12, 2022.
About New York City REIT, Inc.
New York City REIT, Inc. (NYSE: NYC) is a publicly traded real estate investment trust listed on the NYSE that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City. Additional information about NYC can be found on its website at www.newyorkcityreit.com.
https://www.businesswire.com/news/home/20220812005008/en/New-York-City-REIT-Announces-Second-Quarter-2022-Results
Enterprising Investor
2 years ago
NYC Independent Directors Express Confidence in NYC With Share Purchases, Stock Election (1/27/22)
NEW YORK--(BUSINESS WIRE)--New York City REIT, Inc. (NYSE: NYC) (“NYC” or the “Company”) announced this morning that the Company’s independent directors have acquired 24,852 shares of NYC Class A Common stock. NYC’s independent directors personally purchased an aggregate of 19,660 NYC Class A shares since January 19, 2022. In addition, each NYC independent director made an election to receive stock in lieu of cash for board services rendered during the fourth quarter 2021, as permitted under NYC’s director compensation plan.
“My fellow independent board members and I are strong believers in the long-term value of New York City real estate,” said Betty Tuppeny, Lead Independent Director. “We believe the proactive management strategy that NYC’s advisor and board of directors pursued over the last two years has helped guide the Company through the pandemic and build a stronger company. Our recent stock purchases demonstrate the depth of our confidence in the Company’s future.”
The table below details the shares acquired by each independent board member.
[Table deleted]
About New York City REIT, Inc.
New York City REIT, Inc. is a publicly traded REIT that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City. Additional information about NYC can be found on its website at www.newyorkcityreit.com.
Important Information
NYC intends to file a proxy statement on Schedule 14A, an accompanying proxy card and other relevant documents with the SEC in connection with such solicitation of proxies from NYC stockholders for NYC's 2022 annual meeting of stockholders. NYC STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ NYC'S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and stockholders may obtain a copy of the definitive proxy statement, an accompanying proxy card, any amendments or supplements to the definitive proxy statement and other documents filed by NYC with the SEC at no charge at the SEC's website at www.sec.gov. Copies will also be available at no charge in the “SEC Filings” subsection of the “Financial Information” section of NYC's Investor Relations website at investors.newyorkcityreit.com or by contacting NYC's Investor Relations department at info@ar-global.com, as soon as reasonably practicable after such materials are electronically filed with, or furnished to, the SEC.
Participants in the Solicitation
NYC, its directors, and certain of its executive officers may be deemed to be participants in the solicitation of proxies from NYC stockholders in connection with matters to be considered at NYC's 2022 annual meeting of stockholders. Information regarding the direct and indirect interests, by security holdings or otherwise, of NYC's directors and executive officers, in NYC is included in NYC's Proxy Statement on Schedule 14A for its 2021 annual meeting of stockholders, filed with the SEC on March 30, 2021, NYC's Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 29, 2021, and in NYC's Current Reports on Form 8-K filed with the SEC from time to time. Changes to the direct or indirect interests of NYC's directors and executive officers are set forth in SEC filings on Initial Statements of Beneficial Ownership on Form 3, Statements of Change in Ownership on Form 4 and Annual Statements of Changes in Beneficial Ownership on Form 5. These documents are available free of charge as described above. Updated information regarding the identities of potential participants and their direct or indirect interests, by security holdings or otherwise, in NYC will be set forth in the Proxy Statement for NYC's 2022 annual meeting of stockholders and other relevant documents to be filed with the SEC, if and when they become available.
https://www.businesswire.com/news/home/20220127005221/en/
Enterprising Investor
2 years ago
NYC Publishes 2021 Year in Review Highlighting Proactive Asset Management, 37% Total Return1 and Continued Rent Collection Success (1/11/22)
NEW YORK--(BUSINESS WIRE)--New York City REIT, Inc. (NYSE: NYC) (“NYC” or the “Company”) published an investor presentation describing the Company’s strong results and successful achievements during 2021.
Highlights of these results include
NYC investors benefited from an exceptional Total Return in 2021 of 37%, outperforming several peer and index benchmarks, including New York City office peers and the S&P 500 Index
- NYC outperformed the S&P 500 by over 6%
- NYC outperformed peer REITs with New York City focus2 by 12%
Increased Cash Rent3 collection rate to 94% in the fourth quarter 2021, a 12% increase from the same quarter in 2020
- 97% of original Cash Rent collection from NYC’s top 10 tenants in Q4’21
- NYC collected 100% of the deferred rent due in Q3’21 and Q4’21 that was subject to an Approved Agreement4
- NYC’s portfolio mix of Investment Grade5 and government agency tenants with core commercial business continues to provide dependable rental income
Completed 12 new leases in 2021, totaling over 86,000 square feet and $4.3 million of annualized straight-line
- Added credit-worthy, rent-paying tenants to its portfolio in 2021, including a fortune 50 technology company and a publicly traded, Aa1 implied Investment Grade rated e-commerce technology company
- Forward Leasing Pipeline6 of 21,700 SF for Q3’21 that included one lease executed shortly after the third quarter and two executed LOIs
- The Leasing Pipeline is expected to increase portfolio Occupancy7 to 87% and Occupancy at 9 Times Square by 5%
NYC’s Estimated per-share Net Asset Value ranges from $22.12 - $28.10, indicating significant upside potential for NYC Shareholders
- NYC’s estimate of 2022 property-level income results in an estimated NAV per share of $22.12 - $28.10, indicating significant upside potential for NYC shareholders
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Refer to the sections below titled “Limitations on, and risks related to, the Estimated NAV per Share” and “Estimation of Property-Level Income” for additional information relating to the limitations on, and risks related to, the estimated NAV per share and important disclosure notes used herein. Balance sheet accounts such as cash and cash equivalents, other assets, fair value of debt outstanding and other liabilities used herein as of the last reporting period of September 30, 2021. Although the Company does not believe that any activity affecting the Company’s assets and liabilities between September 30, 2021 and December 31, 2021 would have a material impact on estimated NAV per share, there can be no assurance that the estimated NAV per share would be materially the same if the book value of these particular items as of December 31, 2021 was used in calculating the estimated NAV.
Link to Investor Presentation
The entire presentation, including information about assumptions, limitations and risks associated with information contained in the presentation can be found in the investor relations section of NYC’s website at http://investors.newyorkcityreit.com/events-and-presentations/presentations/default.aspx and in on the Company’s Current Report on Form 8-K filed with the Securities Exchange Commission on Form 8-K on January 10, 2021 and available at the SEC’s website at www.sec.gov.
Footnotes/Definitions
1 From S&P Capital IQ. Total Return calculated over the period beginning on January 1, 2021 through December 31, 2021. Total Return is calculated by taking the ending share price less the beginning share price plus dividends paid divided by the beginning share price, shown as a percentage
2 Peer group includes SLG, VNO, ESRT and PGRE
3 Collection data as of January 7, 2022. Total rent collected during the period includes both original Cash Rent due and payments made by tenants pursuant to rent deferral agreements or otherwise. Excludes fourth quarter Cash Rent received or Deferral Agreements executed after January 7, 2022 that would apply to fourth quarter Cash Rent or any Deferral Agreement that would apply to fourth quarter Cash Rent. Eliminating the impact of deferred rent paid, we collected the same percentage of original Cash Rent due as of January 7, 2022. This information may not be indicative of any future period and remains subject to changes based ongoing collection efforts and negotiation of additional agreements. The impact of the COVID-19 pandemic on our rental revenue for the fourth quarter of 2021 and thereafter cannot be determined at present. The ultimate impact on our future results of operations and liquidity will depend on the overall length and severity of the COVID-19 pandemic, which may continue to adversely impact results of operations and liquidity.
4 Represents Deferral Agreements as well as amendments granting the tenant a rent credit for some portion of original Cash Rent due. The rent credit is generally coupled with an extension of the lease. The terms of the lease amendments providing for rent credits differ by tenant in terms of the length and amount of the credit. A “Deferral Agreement” is an executed or approved amendment to an existing lease agreement to defer a certain portion of Cash Rent due.
5 As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. Ratings information is as of September 30, 2021. Top 10 tenants are 52% actual investment grade rated and 19% implied investment grade rated.
6 Includes (i) all leases fully executed by both parties as of October 31, 2021, but after September 30, 2021, and (ii) all leases under negotiation with an executed LOI by both parties as of October 31, 2021. This represents one executed lease that commenced in the fourth quarter of 2021 totaling 8,780 square feet and two LOIs that total 12,966 square feet. Excludes license agreements entered into with a new operator on October 26, 2021 at the 200 Riverside Boulevard and 400 E. 67th Street - Laurel Condominium properties which replaced prior lease agreements with the original tenant terminated on the same date. Leasing pipeline should not be considered an indication of future performance.
7 Represents percentage of square footage of which the tenant has taken possession of divided by the respective total rentable square feet as of the date or period end indicated.
8 Calculated based on estimated reimbursements and Cash Rent, excluding free rent, for all existing in-place leases for fiscal year 2022. Includes new leases and lease extension assumptions that the Company reasonably expect to complete for the fiscal year 2022. In preparation, management considered factors such as space currently available and being negotiated for and the estimated applicable market rental terms. There can be no assurance that the Company will complete these leases on their estimated terms or at all. The advisor believes that the use of Cash Rent is reasonable to use for this analysis as opposed to Annualized Straight-line Rent because estimated NAV per share is a estimation of 2022 property-level cash flows and is not a long-term discounted cash flow valuation. The projected property-level income does not include any acquisitions or dispositions except for the sale of the Hit Factory. As previously disclosed, this property is not generating any net operating income. Acquisitions or dispositions would impact actual property-level income and the estimated NAV per share depending on how the Company funded the acquisitions which could include the net proceeds from issuance of additional shares of Class A common stock.
9 Calculated based on estimated property operating expenses, occupancy and pricing for fiscal year 2022 at our current properties, excluding the Hit Factory and any future acquisitions or dispositions.
10 The advisor believes that property-level income cannot be reconciled to the most comparable GAAP number because the advisor is making assumptions on future leasing activity and it is unable to reconcile to current Annualized Straight-line Rent without unreasonable expense.
11 Cap rates used herein are determined by the advisor in its sole discretion and based upon its knowledge and opinion of the New York City real estate market.
12 Represents cash and cash equivalents as of September 30, 2021. The advisor does not believe that any activity affecting the Company’s assets and liabilities between September 30, 2021 and December 31, 2021 would have a material impact on estimated NAV per share.
13 Represents restricted cash, prepaid expenses and other assets, excluding straight-line rent receivables as of September 30, 2021. The advisor does not believe that any activity affecting the Company’s assets and liabilities between September 30, 2021 and December 31, 2021 would have a material impact on estimated NAV per share as of December 31, 2021.
14 Represents the fair value of the mortgage notes payable as of September 30, 2021. The fair value of mortgage note payable is deemed to be equivalent to its carrying value because it bears interest at a variable rate that fluctuates with the market and there has been no significant change in the credit risk or credit markets since origination. The advisor does not believe that any activity affecting the Company’s assets and liabilities between September 30, 2021 and December 31, 2021 would have a material impact on estimated NAV per share.
15 Represents amounts associated with accounts payable and accrued expenses, excluding the liability for straight-line rent adjustments; and deferred rent and other liabilities as of September 30, 2021. The advisor does not believe that any activity affecting the Company’s assets and liabilities between September 30, 2021 and December 31, 2021 would have a material impact on estimated NAV per share.
Limitations on, and risks related to, the Estimated NAV per Share
The Company’s estimated net asset value per share (“NAV”) as of December 31, 2021 contained herein was calculated by applying two different capitalization rates to property-level income projected for 2022 by the advisor to arrive at the estimated market value of the Company’s portfolio, and then deducting from this amount the fair value of the Company’s mortgage notes payable as of September 30, 2021 as set forth in the notes to the Company’s financial statements as of September 30, 2021, and adding the book value of cash and cash equivalents and other assets, net of other liabilities, as set forth in the Company’s financial statements as of September 30, 2021. The estimated NAV per share was calculated by dividing the estimated NAV by the number of shares of the Company’s Class A common stock on a fully-diluted basis outstanding as of December 31, 2021. Other information is being provided shortly after the end of the Company's 2021 fiscal year, and accordingly information about that fiscal year remains unavailable pending the progress of its year-end financial close process.
The estimated NAV per share was calculated as of a specific time, will likely change, and does not represent the amount a stockholder would receive from a third party now or in the future for his or her shares of the Company’s Class A common stock. There is no assurance that the trading price of the Company’s Class A common stock will not continue to trade at a significant discount to, equal or exceed this estimate. The estimated NAV per share does not represent the book value of the Company’s real estate, which is generally based on the amortized cost of the property, subject to certain adjustments, or the Company’s enterprise value. The estimated NAV per share is not a representation or guarantee that the Company’s shares of Class A common stock will or should trade at this amount, and investors should not rely on the estimated NAV per share in making a decision to buy or sell shares of the Company’s Class A common stock.
The measures employed by the Company’s advisor to project property-level income and calculate this estimate of NAV per share may not be comparable to measures used by other companies and were based upon a number of estimates, assumptions, judgments and opinions made by the Company’s advisor that may not be accurate or complete, including estimates and assumptions such as capitalization rates and estimations of new or extended leases, future rent and expenses. The advisor’s estimation of property-level income does not include any acquisitions or dispositions in calendar year 2022 except for the sale of the Hit Factory. Acquisitions or dispositions would impact actual property-level income and the estimated NAV per share depending on how the Company funded the acquisitions which could include the net proceeds from issuance of additional shares of Class A common stock. The Hit Factory property, as previously disclosed, is not generating income. The estimated market value of the Company’s real estate assets is based solely on the advisor’s estimation of property-level income for 2022, applying capitalization rates selected by the advisor based on its opinion and knowledge of the New York City real estate market, without any independent third-party review or third-party appraisals of assets and does not necessarily represent the value the Company would receive or accept if the Company’s real estate assets were marketed for sale or a third-party appraisal of the Company’s real estate assets or the price the Company's board may accept if a third party made an offer for the shares of the Class A common stock. The estimated value also does not take into consideration transaction costs or other items such as tax adjustments that may impact the value a buyer might ascribe to the Company’s real estate assets was prepared. The cash and cash equivalents and other assets, net of other liabilities, used in calculating the estimated NAV were based on the book value in the Company’s financial statements as of September 30, 2021 and do not reflect activities subsequent to September 30, 2021. Although the Company does not believe that any activity affecting the Company’s assets and liabilities between September 30, 2021 and December 31, 2021 would have a material impact on estimated NAV per share, there can be no assurance that the estimated NAV per share would be materially the same if the book value of these particular items as of December 31, 2021 was used in calculating the estimated NAV.
Estimation of Property-Level Income
In connection with estimating NAV, the Company’s advisor prepared an unaudited estimation of the Company’s property-level income for all of calendar year 2022. This information is subjective in many respects and is not necessarily predicative of actual future results and should not be relied upon as such. The internal prospective financial information used by the Company’s advisor to prepare the property-level income estimation for 2022 was based on numerous variables and assumptions that were deemed to be reasonable as of date when the estimation was finalized. These assumptions are inherently uncertain and may be beyond the Company’s control. Important factors that may affect actual results and cause the Company to fail to meet the estimation include, but are not limited to, risks and uncertainties relating to the Company’s business (including that tenant pay the cash rent required in their respective leases and the Company does not incur significant additional expenses that are not anticipated), the potential adverse effects of the ongoing global COVID-19 pandemic, including actions taken to contain or treat COVID-19, on the Company’s tenants and the global economy and financial market, industry performance, the legal and regulatory environment, general business and economic conditions and other factors described or referenced under the section entitled “Forward-Looking Statements” contained in the Appendix to this presentation, including those presented in the section titled “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC on March 29, 2021 as well as other subsequent reports filed with the SEC. There can be no assurance that the estimation will be realized or that actual results will not be significantly higher or lower than forecasted.
In addition, the estimation was not prepared with a view toward complying with U.S. generally accepted accounting principles, the published guidelines of the SEC regarding estimations and the use of non-GAAP measures or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Neither the Company’s independent registered public accounting firm, nor any other independent accountants, have compiled, examined or performed any procedures with respect to the estimation contained in this presentation, nor have they expressed any opinion or any other form of assurance on the information or the potential for the Company achieving the estimation. The estimation of property-level income is a non-GAAP financial measure and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. The estimated property-level income for 2022 has not been reconciled the estimated net income (loss) for 2022, the most directly comparable GAAP financial measure, the advisor believes that property-level income cannot be reconciled to the most comparable GAAP number because the advisor is making assumptions on future leasing activity and it is unable to reconcile to current Annualized Straight-line Rent without unreasonable expense.
About New York City REIT, Inc.
New York City REIT, Inc. is a publicly traded REIT that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City. Additional information about NYC can be found on its website at www.newyorkcityreit.com.
Important Notice Regarding Securities Ratings
A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time. Each rating agency has its own methodology for assigning ratings and, accordingly, each rating should be evaluated independently of any other rating.
https://www.businesswire.com/news/home/20220111005252/en/NYC-Publishes-2021-Year-in-Review-Highlighting-Proactive-Asset-Management-37-Total-Return1-and-Continued-Rent-Collection-Success
Enterprising Investor
2 years ago
Comrit Investments Sends Letter to New York City REIT Stockholders Regarding the Urgent Need for Boardroom Change (1/04/22)
Believes Adding an Independent Stockholder Representative to the Board at the 2022 Annual Meeting is Key to Addressing NYC REIT’s 86% Trading Price Discount Relative to NAV
Contends the Market Recognizes the Current Board has Been More Concerned with Compensating its External Advisor and Limiting Stockholders’ Rights Instead of Developing a Value-Enhancing Strategy
Urges Stockholders to Visit www.RebuildNYCREIT.com to Sign Up for Important Updates and Learn About Sharon Stern, Comrit’s Highly Qualified, Independent Director Candidate
NEW YORK & TEL AVIV, Israel--(BUSINESS WIRE)--Comrit Investments 1, LP (together with its affiliates, “Comrit” or “we”), a long-term stockholder of New York City REIT, Inc. (NYSE: NYC) (“NYC REIT” or the “Company”), today announced that it has issued the following letter to NYC REIT stockholders. Comrit recently nominated Sharon Stern, a highly qualified, independent director candidate with significant real estate investment experience, for election to the Company’s Board of Directors at the 2022 Annual Meeting of Stockholders. Stockholders can visit www.RebuildNYCREIT.com for additional information pertaining to our campaign and to sign up for important updates.
***
January 4, 2022
Fellow Stockholders,
Comrit Investments 1, LP (together with its affiliates, “Comrit” or “we”) is a long-term stockholder of New York City REIT, Inc. (NYSE: NYC) (“NYC REIT” or the “Company”), which is why we believe our interests are squarely aligned with yours. We invested in NYC REIT because we believe the Company has an attractive portfolio of properties that can be a source of long-term growth and stock price appreciation. Unfortunately, rather than capitalize on the opportunities at hand, we contend that NYC REIT’s current Board of Directors (the “Board”) is riddled with conflicts of interest and, through an onerous advisory agreement, has awarded excessive compensation to the Company’s external advisor notwithstanding staggering underperformance. In our view, stockholder-driven change is urgently needed in the Company’s insular boardroom.
Fortunately, we see a clear remedy for numerous issues confronting NYC REIT today: install a highly qualified, independent director who is unhindered by legacy biases and conflicts of interest and who is laser-focused on unlocking value for stockholders. After thoroughly evaluating the Company’s capital structure, governance, portfolio management practices and strategy, we nominated Sharon Stern for election to NYC REIT's Board. We believe Ms. Stern has the real estate investment and corporate governance expertise – as well as a strong track record of value creation – required to help restore credibility atop the Company. NYC REIT stockholders deserve fresh perspectives in the boardroom given that they have seen their shares depreciate by approximately 60% since NYC REIT publicly listed in August 2020.1
In the days following our nomination, leadership’s response to our significant concerns and Ms. Stern’s qualifications was to direct the Company’s lawyers to tell us that they intend to resist our efforts and oppose Ms. Stern’s candidacy. NYC REIT’s response to our good faith efforts to engage and discuss Ms. Stern’s credentials reinforces our view that adding an independent director – selected with input from stockholders – will help reset the Company’s entrenched boardroom culture. Any objective review of the current Board’s track record will show that the status quo cannot persist.
The Current Board Has Presided Over Negative Returns for Stockholders
In its New York Stock Exchange ("NYSE") listing presentation, NYC REIT stated it would become the "leading pure-play publicly traded REIT focused on New York City real estate" under the guidance of its "experienced management team."2 However, since choosing to publicly list in August 2020 rather than liquidate and return capital to stockholders, the Company has subjected its investors to stock price depreciation of approximately 60%. NYC REIT has also significantly lagged peers and relevant indices over every germane time horizon:
[Tables deleted]
Source: Bloomberg (TSR runs through 11/30/21, the day before Comrit publicly announced our nomination.)
Stockholders are painfully aware that a dollar invested in the Company a year ago is worth significantly less today. In our view, this underperformance stems from several key failures:
Staggering discount to net asset value (“NAV”) – Although publicly-listed real estate investment trusts often trade at modest discounts to their NAV, we believe there should be at least a credible plan to address the balance sheet erosion and the fact that NYC REIT’s stock trades at an approximate 86% discount to the Company’s own stated NAV.4 This is an astounding discount that appears to indicate the market’s lack of trust in the current leadership team.
Significant losses – Under the current Board, NYC REIT has incurred significant losses. According to its fiscal year 2020 earnings results, the Company posted an operating loss of more than $22.5 million. Comparably, NYC REIT's peers earned an average of $68.9 million in operating income. While NYC REIT only generated approximately $62.9 million in revenue in 2020, its peers produced an average of $976 million in revenue over the same period.
Conflicting interests – In addition to holding the dual Chairman and Chief Executive Officer role at NYC REIT, Michael Weil is also the CEO of AR Global and the CEO of NYC REIT’s external advisor and property manager. We question how a fully engaged and truly independent Board could allow Mr. Weil to ink a generous advisory deal in favor of AR Global, which automatically renews for successive five-year terms and entitles the advisor to a $15 million+ early termination fee, at the expense of the Company’s stockholders. It does not seem like stockholders’ interests are being prioritized by the current Board.
Bloated expense structure – The current Board is wasting stockholders' precious capital on egregious advisory agreements and operating expenses with its external advisors while investors have been forced to endure negative returns. Notably, NYC REIT has paid approximately $21.7 million in management fees and reimbursements to its external advisors and property manager, both owned by AR Global, since 2019.5
The Current Board Has Severely Limited Stockholders' Rights
We believe NYC REIT's troubling corporate governance demonstrates that the Board is more focused on protecting itself than unlocking value for investors. Beyond the Company’s terrible financial performance, we believe stockholders should be aware of the numerous anti-investor maneuvers that this Board has taken:
Classified board – NYC REIT has a classified or "staggered" Board, meaning each director is only up for election every three years as opposed to every year. This protects incumbent directors from annual scrutiny and makes it more difficult for stockholders to enact change.
Highly restrictive poison pill – NYC REIT's unusual and suspect poison pill punishes stockholders for purchasing more than 4.9% of the Company's stock in what we believe is a brazen attempt by the Board and management to maintain control of the Company and entrench themselves.
Poor governance policies – NYC REIT's Board failed to establish a nominating and corporate governance committee or compensation committee until the Company decided to publicly list in August 2020 rather than liquidate and return capital to stockholders, leading us to question the Board's commitment to fulfilling its obligations to its true owners. Additionally, the Board has placed limitations on stockholders' ability to amend the Company's bylaws.
Multiple attempts to erode stockholder rights – In 2016, the Board – which included Elizabeth K. Tuppeny, who is up for election at this year's Annual Meeting of Stockholders (the "Annual Meeting") – attempted on two different occasions to strip stockholders of essential rights. These included proposals that would eliminate the requirement that independent directors have prior real estate experience and would allow the Board to extend the Company’s agreement with AR Global for an indefinite period of time.6
It has become clear to us that true stockholder representation is desperately needed in the boardroom to instill accountability, help reverse the Company’s prolonged underperformance and ensure the interests of stockholders always remain paramount.
Comrit Believes Stockholders Have a Unique Opportunity to Improve NYC REIT’s Insular Board at the 2022 Annual Meeting of Stockholders
Our nominee, Ms. Stern, is a real estate investment and corporate governance expert with a strong track record of value creation. Since she joined the board of directors of Cedar Realty Trust, Inc. (NYSE: CDR), the company’s stock has appreciated approximately 40%.7 Ms. Stern possesses deep knowledge of the commercial real estate sector, having led organizations focused on the acquisition, development and management of multi-residential and commercial properties. We believe this experience, as well as her public company governance acumen, would make her an ideal director for NYC REIT’s Board.
In the coming weeks, we will share more information on why Ms. Stern can be an advocate for all stockholders in the boardroom and help unlock the significant value trapped within NYC REIT’s underperforming stock. We look forward to engaging with you.
Sincerely,
Ziv Sapir
Managing Partner
Comrit Investments 1, LP
***
COMRIT IS COMMITTED TO BUILDING A BETTER NYC REIT FOR ALL STOCKHOLDERS. SIGN UP FOR UPDATES AT WWW.REBUILDNYCREIT.COM.
***
About Comrit Investments
Comrit Investments 1, LP is an investment partnership that invests in income generating real estate through public non-traded real estate investment trusts. Founded in 2015 and based in Tel Aviv, Washington D.C. and New York City, Comrit is sponsored by I.B.I. Investment House Ltd. (TLV: IBI), an Israel-based market leader in alternative fund offerings. Comrit’s management team collectively has 30 years of experience investing across the U.S. real estate market.
1 Stock price as of market close on August 18, 2020, the day NYC REIT began trading on the NYSE, to market close on November 30, 2021.
2 Company presentation dated August 13, 2020.
3 Company peers include Empire State Realty Trust, SL Green Realty Trust, Vornado Realty Trust and Paramount Group, Inc. Company peers were included in NYC REIT's NYSE listing presentation dated August 13, 2020.
4 As of market close on November 30, 2021, NYC REIT’s stock price was $6.70 compared to a NAV of $49.23, which is the most recent NAV disclosed by the Company in a presentation filed with the SEC on August 13, 2020 (Form 8-K; Company presentation).
5 In each of the years ended December 31, 2020 and 2019, the Company paid cash asset management fees of?$6 million to its advisor and reimbursed its advisor for $3.6 million and $3.2 million, respectively, of professional fees and other reimbursements. In each of the years ended December 31, 2020 and 2019, the Company paid its property manager property management fees of $1.6 million and $1.3 million, respectively; NYC REIT 2021 Definitive Proxy Statement; Company filings.
6 Company's 2016 definitive proxy statement.
7 Stock price as of market close on April 28, 2021, the day Cedar Realty Trust, Inc. (NYSE: CDR) announced Sharon Stern was joining its Board of Directors, to market close on November 30, 2021.
https://www.businesswire.com/news/home/20220104005418/en/
Enterprising Investor
2 years ago
Comrit Investments Nominates Highly Qualified and Independent Director Candidate for Election to New York City REIT’s Board of Directors (12/01/21)
Sends Letter to the Company’s Board Highlighting the Case for Adding an Experienced Real Estate Investment Expert with Fresh Perspectives to the Board
NEW YORK & TEL AVIV, Israel--(BUSINESS WIRE)--Comrit Investments 1, LP (together with its affiliates, “Comrit” or “we”), a long-term stockholder of New York City REIT, Inc. (NYSE: NYC) (“NYC REIT” or the “Company”), today issued the following open letter to the Company’s Board of Directors (the “Board”) regarding Comrit’s decision to nominate a highly qualified, independent candidate for election to the Company’s Board at the 2022 Annual Meeting of Stockholders (the “Annual Meeting”).
Below is the full text of the letter:
December 1, 2021
New York City REIT, Inc.
650 Fifth Avenue, 30th Floor
New York, NY 10019
Dear Members of the Board,
As you know, Comrit is a sizable stockholder of NYC REIT. We believe our significant interest entitles us to have our suggestions carefully considered and, where appropriate, implemented by the Company’s Board. Unfortunately, the Board and management team have opted to consistently dismiss our views over the years despite the Company’s troubling governance, stock price underperformance and trading price discount to Net Asset Value (“NAV”).
Although Comrit prefers to collaborate in a constructive and private manner with the companies we invest in, we cannot sit idly by as the Board continues to allow NYC REIT’s balance sheet to erode and the Company’s stock to trade at a discount of approximately 86% relative to NAV.1 We believe adding an independent real estate investment expert to the Board can help ensure that all paths to value creation are explored without bias. We hope that the Board agrees it is in stockholders’ best interests to appoint our nominee and avoid the need for a costly contested election at next year’s Annual Meeting.
It is important to stress that we did not come to this decision hastily. Our firm has spent a significant amount of time and resources thoroughly analyzing the Company’s real estate portfolio, capital structure and governance and attempting to engage with the Board. We are particularly concerned that despite stockholders enduring stock price depreciation of approximately 60% over the past 15 months, the Company paid more than $11.2 million in 2020 and $10.5 million in 2019 in management fees and reimbursements to its advisor and property manager, which are entities owned and controlled by AR Global Investments, LLC (“AR Global”).2
We are also concerned that in addition to holding the dual Chairman and Chief Executive Officer role at NYC REIT, Michael Weil is the Chief Executive Officer of AR Global and of NYC REIT’s advisor and property manager. We question how a fully engaged and truly independent Board could allow Mr. Weil to ink a generous advisory deal in favor of AR Global, which automatically renews for successive five-year terms and entitles the advisor to a more than $15 million early termination fee, at the expense of the Company’s stockholders. In our view, this is not only a gross misallocation of capital, especially given the Company’s performance, but forces us to question how seriously the directors have taken their obligations to stockholders. Further, the Company’s classified Board, poison pill and limitations on stockholders’ ability to amend the bylaws suggests that the Board is more focused on its own entrenchment than unlocking value for its investors.
The Board has an opportunity to welcome a stockholder-nominated director who can help bring new ideas, independence and a collegial mentality to the boardroom. Our nominee, Sharon Stern, is a real estate investment and corporate governance expert with a strong track record of value creation. Since she joined the board of directors of Cedar Realty Trust, Inc. (NYSE: CDR), the company’s stock has appreciated approximately 40%.3 Ms. Stern possesses deep knowledge of the commercial real estate sector, having led organizations focused on the acquisition, development and management of multi-residential and commercial properties. We believe this experience, as well as her public company governance acumen, would make her an ideal director for NYC REIT’s Board.
While we want to reach a negotiated outcome and remain open to a dialogue with you, we need to protect our interests and preserve our rights by nominating Ms. Stern. We firmly believe she can be an asset in the boardroom and help you unlock the significant value trapped within NYC REIT’s underperforming stock.
Sincerely,
Ziv Sapir
Managing Partner
Comrit Investments 1, LP
Sharon Stern Biography
Sharon Stern is a REIT expert and successful real estate entrepreneur. Ms. Stern is currently President of Eastmore Management and Metro Investments, two organizations focused on the acquisition, development and management of multi-residential and commercial properties in the downtown core of Montreal. Ms. Stern currently serves on the Board of Directors of Cedar Realty Trust, Inc. (NYSE: CDR), a publicly traded REIT specializing in grocer-anchored retail properties. At Cedar, Ms. Stern serves on both the Audit and Compensation committees. Ms. Stern is currently an Advisory Board member of McGill University’s Desautels Faculty of Management. Prior to founding Eastmore Management in 2015, Ms. Stern worked in Strategy and Corporate Development for the Business Development Bank of Canada. Ms. Stern earned a Bachelor’s Degree from McGill University in Economics and World Religions and a Master’s Degree from Brown University in Public Policy.
***
About Comrit Investments
Comrit Investments 1, LP is an investment partnership that invests in income generating real estate through public non-traded real estate investment trusts. Founded in 2015 and based in Tel Aviv, Washington D.C. and New York City, Comrit is sponsored by I.B.I. Investment House Ltd. (TLV: IBI), an Israel-based market leader in alternative fund offerings. Comrit’s management team collectively has 30 years of experience investing across the U.S. real estate market.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Comrit, together with the other participants named below, intends to file a preliminary proxy statement and accompanying proxy card with the Securities and Exchange Commission (“SEC”) to be used to solicit votes for the election of a highly qualified director nominee at the 2022 annual meeting of stockholders of New York City REIT, Inc. (the “Company”).
COMRIT STRONGLY ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC’S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE PARTICIPANTS IN THIS PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY STATEMENT WITHOUT CHARGE, WHEN AVAILABLE, UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO THE PARTICIPANTS’ PROXY SOLICITOR.
The participants in the proxy solicitation are anticipated to be Comrit, Comrit Investments Ltd., I.B.I. Investment House Ltd., Ziv Sapir and Sharon Stern.
As of the date hereof, Comrit beneficially owns 267,520 shares of Class A Common Stock, par value $0.01 per share, of the Company (the “Class A Common Stock”). Comrit Investments Ltd., as the general partner of Comrit, may be deemed the beneficial owner of the 267,520 shares of Class A Common Stock owned by Comrit. I.B.I. Investment House Ltd, as the majority owner of Comrit Investments Ltd., may be deemed the beneficial owner of the 267,520 shares of Class A Common Stock owned by Comrit. Ziv Sapir, as the Managing Partner and CEO of Comrit, and as the CEO and minority owner of Comrit Investments Ltd., may be deemed the beneficial owner of the 267,520 shares of Class A Common Stock owned by Comrit. As of the date hereof, Ms. Stern does not own any securities of the Company.
1 As of market close on November 30, 2021, NYC REIT’s stock price was $6.70 compared to a Net Asset Value of $49.23, which is the most recent Net Asset Value disclosed by the Company in a presentation filed with the Securities and Exchange Commission on August 13, 2020 (Link to Form 8-K; Link to the Company’s Presentation). According to the presentation, Duff & Phelps performed appraisals on each real estate asset in NYC REIT’s portfolio to determine the Company’s estimated Net Asset Value of $49.23.
2 Stock price as of market close on August 18, 2020, the day NYC REIT began trading on the NYSE, to market close on November 30, 2021. In each of the years ended December 31, 2020 and 2019, the Company paid cash asset management fees of?$6 million to its advisor and reimbursed its advisor for $3.6 million and $3.2 million, respectively, of professional fees and other reimbursements. In each of the years ended December 31, 2020 and 2019, the Company paid its property manager property management fees of $1.6 million and $1.3 million, respectively; NYC REIT 2021 Definitive Proxy Statement; Company SEC filings.
3 Stock price as of market close on April 28, 2021, the day Cedar Realty Trust, Inc. (NYSE: CDR) announced Sharon Stern was joining its Board of Directors, to market close on November 30, 2021.
https://www.businesswire.com/news/home/20211201005337/en/Comrit-Investments-Nominates-Highly-Qualified-and-Independent-Director-Candidate-for-Election-to-New-York-City-REIT%E2%80%99s-Board-of-Directors
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