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New York REIT Announces Results for the Second Quarter 2018

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New York REIT Announces Results for the Second Quarter 2018

PR Newswire

NEW YORK, Aug. 8, 2018 /PRNewswire/ -- New York REIT, Inc. (NYSE:NYRT) (the "Company" or "NYRT"), which is liquidating and winding down pursuant to a plan of liquidation, announced today its financial results for the second quarter ended June 30, 2018.  All per share amounts have been restated to reflect the effect of the 1-for-10 reverse stock split which was completed on March 15, 2018.

Liquidation Status

As of August 8, 2018, the Company has sold all of its properties except for the remaining 50.1% interest in Worldwide Plaza and the Viceroy Hotel.  The Viceroy Hotel is currently under contract for sale as discussed below.  The Company has no debt outstanding other than its pro-rata share of the non-recourse debt on Worldwide Plaza.  To date, the Company has paid aggregate cash liquidating distributions of $55.55 per share.

The Company has filed a Registration Statement on Form S-4 with the Securities and Exchange Commission with respect to solicitation of stockholder approval to convert the Company to a limited liability company.  The Registration Statement became effective on August 6, 2018.  A special meeting of stockholders will be held on Friday, September 7, 2018 at 11:00 AM, local time, at the offices of Proskauer Rose LLP, 11 Times Square, New York, New York to conduct the vote on the conversion.

Financial Results

Liquidation Basis of Accounting

Following NYRT's shareholder approval of the plan of liquidation on January 3, 2017, effective January 1, 2017, in accordance with Generally Accepted Accounting Principles ("GAAP"), the Company began reporting its financial results on the liquidation basis of accounting.  Accordingly, on January 1, 2017 the carrying value of the Company's investments in real estate were adjusted to their liquidation value, which represents the estimated amount of cash that the Company will collect on disposal of assets as it carries out its liquidation activities under the Liquidation Plan.  The current estimate of net assets in liquidation as of June 30, 2018 has been estimated based on undiscounted cash flow projections assuming that all of the properties will be sold by September 30, 2018 except for the remaining interest in Worldwide Plaza.  While the actual timing of sales for the two remaining properties cannot be known with certainty, the Viceroy Hotel is currently scheduled to close in the third quarter, or shortly thereafter, while the sale of the Company's remaining interest in Worldwide Plaza may take an additional two to four years, given ongoing tenant negotiations and other items in the property business plan.  Based on these factors, the actual timing of sales for these two properties is subject to future events and uncertainties.  The liquidation value of the Company's investments in real estate is presented on an undiscounted basis.  Estimated costs to dispose of assets and revenues expected to be earned as management carries out its liquidation activities through the end of the projected liquidation period have been presented separately from the related assets.  Liabilities are carried at their contractual amounts due as adjusted for the impact of timing of the planned liquidation. 

Based on the liquidation basis of accounting, the current estimate of net assets in liquidation at June 30, 2018 results in estimated future liquidating distributions of approximately $25.09 per share.

For financial statement presentation purposes, Worldwide Plaza has been valued at $1.725 billion, based on the market transaction associated with the Company's sale of a 48.7% interest in the property on October 18, 2017.  The Worldwide Plaza value also includes an additional $90.7 million which is classified as restricted cash and has been set aside to fund the Company's share of potential future leasing and capital costs at Worldwide Plaza.  To the extent the full $90.7 million reserve is not used, the balance is expected to be available for distribution to shareholders.  The Company's plan to hold the investment in Worldwide Plaza beyond its original estimated liquidation period and to make further capital investment to re-lease and reposition the property are all actions that are outside the scope of normal liquidation activities.  Accordingly, the estimated accretion in future market value will be reflected in the financial results as the specific actions related to the repositioning have been completed and such increases in market value can be observed. 

Any assets held longer than the two-year period following the shareholder approval of the Plan of Liquidation must be transferred to a liquidating trust or another non-traded liquidating entity prior to the two year anniversary.  The Company currently projects that the remaining interest in Worldwide Plaza will be sold by November 1, 2021.  A special meeting of stockholders will be held on Friday, September 7, 2018 to vote on the conversion of the Company to a limited liability company instead of transferring the Company's remaining assets to a liquidating trust.  The date of transfer to a non-traded liquidating trust or conversion to a limited liability company has not yet been determined and will be dependent on the results of the vote, however, the Company currently estimates that the transfer will occur in November 2018, but in any event no later than December 31, 2018.  It is currently anticipated that the only Company asset remaining at the time of transfer will be its interest in Worldwide Plaza.

Second Quarter Activity

Sales Activity


  • 350 Bleecker Street and 367-387 Bleecker Street – property sale – On April 19, 2018, the Company sold to an independent third party the 350 Bleecker Street and 367-387 Bleecker Street properties located in Manhattan, New York for a gross sale price of $31.5 million. The properties were part of the collateral for the Company's $760 million POL Loans. In connection with the sale, the Company was required to pay down the POL Loans by $21.1 million. After satisfaction of debt, pro-rations and closing costs, the Company received net proceeds of approximately $8.8 million. The estimated liquidation value of the properties was $31.5 million at March 31, 2018.
  • 416 Washington Streetproperty sale – On April 19, 2018, the Company sold to an independent third party the 416 Washington Street retail property in Manhattan, New York for a gross sales price of $11.2 million. The property was part of the collateral for the Company's $760 million POL Loans. The Company was required to pay down $5.5 million under the POL Loans upon the sale of the property. After satisfaction of debt, pro-rations and closing costs, the Company received net proceeds of approximately $5.1 million. The estimated liquidation value of the property was $11.2 million at March 31, 2018.
  • 2067 – 2073 Coney Island Avenue – property sale – On May 1, 2018, the Company sold to an independent third party the 2067-2073 Coney Island Avenue retail property in Brooklyn, New York for a gross sales price of $30.5 million. The property was part of the collateral for the $20.2 million mortgage note payable on 1100 Kings Highway. After satisfaction of debt, pro-rations and closing costs, the Company received net proceeds of approximately $13.7 million. The estimated liquidation value of the property was $30.5 million at March 31, 2018.
  • Centurion Parking Garage – property sale – On May 1, 2018 the Company sold to an independent third party the Centurion Parking Garage property located at 33 West 56th Street, Manhattan, New York, for a gross sales price of $3.5 million. After satisfaction of pro-rations and closing costs, the Company received net proceeds of approximately $3.3 million. The estimated liquidation value of the property was $3.5 million at March 31, 2018.

Assets Under Contract

Viceroy Hotel – contract for sale – On June 29, 2018, the Company entered into a contract to sell to an independent third party the Viceroy Hotel property located in Manhattan, New York for a sales price of $41.0 million. If consummated, the sale of the property is expected to close in the third quarter of 2018, or shortly thereafter.  After satisfaction of closing costs, the Company expects to receive net proceeds of approximately $39.5 million.  The estimated liquidation value of the property was $46.0 million at March 31, 2018 and has been decreased to $41.0 million at June 30, 2018 to reflect the contract for sale.

Loan Activity

POL Loans – In April 2018, the POL Loans were fully satisfied using proceeds from the sales of 382-384 Bleecker Street, 350 Bleecker Street, 416-425 Washington Street and reserves.

Distributions

On May 18, 2018, the Company paid a cash liquidating distribution of $4.85 per share to shareholders of record as of May 11, 2018.

About NYRT

NYRT is a publicly traded real estate investment trust listed on the NYSE that owns income-producing commercial real estate, including office and retail properties, located in New York City.  In January 2017, NYRT's shareholders adopted a plan of liquidation pursuant to which NYRT is liquidating and winding down and, in connection therewith, is seeking to sell its assets in an orderly fashion to maximize shareholder value.  For more information, please visit our website at www.nyrt.com.

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995.  The statements in this release state the Company's and management's hopes, intentions, beliefs, expectations or projections of the future and are forward-looking statements for which the Company claims the protections of the safe harbor for forward-looking statements under the Private Securities Litigation Reform Act of 1995.  It is important to note that future events and the Company's actual results could differ materially from those described in or contemplated by such forward-looking statements.  Such forward looking statements include, but are not limited to, statements about potential increases in liquidating distributions if the joint venture is able to complete targeted capital improvements, critical tenant lease renewals and repositioning of this asset.  Factors that could cause actual results to differ materially from current expectations include, but are not limited to, (i) general economic conditions, (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or general downturn in their business, (iii) local real estate conditions, (iv) increases in interest rates, (v) increases in operating costs and real estate taxes, (vi) changes in accessibility of debt and equity capital markets and (vii) the timing of asset sales.  Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the Company's filings with the Securities and Exchange Commission, copies of which may be obtained from the Company or the Securities and Exchange Commission.  The Company refers you to the documents filed by the Company from time to time with the Securities and Exchange Commission, specifically the section titled "Risk Factors" in the Company's most recent Annual Report on Form 10-K, as may be updated or supplemented in the Company's Form 10-Q filings, which discuss these and other factors that could adversely affect the Company's results.

CONSOLIDATED STATEMENT OF NET ASSETS

(Liquidation Basis)

(unaudited, in thousands)




June 30, 2018


December 31, 2017

Assets





Investments in real estate


$               41,000


$                     488,616

Investment in unconsolidated joint venture


265,362


257,634

Cash and cash equivalents


30,458


241,019

Restricted cash held in escrow


92,930


99,768

Accounts receivable


2,068


3,696

   Total Assets


431,818


1,090,733






Liabilities





Mortgage notes payable


-


215,494

Liability for estimated costs in excess of estimated





   receipts during liquidation


2,174


27,228

Accounts payable, accrued expenses and other liabilities


8,286


14,881

Related party fees payable


-


17

   Total Liabilities


10,460


257,620

Commitments and Contingencies





Net assets in liquidation


$             421,358


$                     833,113

Further details regarding the Company's results of operations, properties, joint ventures and tenants are available in the Company's Form 10-Q for the quarter ended June 30, 2018 which will be filed with the Securities and Exchange Commission and will be available for download at the Company's website www.nyrt.com or at the Securities and Exchange Commission website www.sec.gov.

Contacts


Media:                   

Investor Relations:



Jonathan Keehner

Mahmoud Siddig                 

John Garilli, Chief Financial Officer and

Chief Executive Officer

Joele Frank, Wilkinson Brimmer Katcher    

New York REIT, Inc.

jkeehner@joelefrank.com

jgarilli@nyrt.com

msiddig@joelefrank.com

(617) 570-4750

(212) 355-4449                              


 

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SOURCE New York REIT, Inc.

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