New York REIT Announces Results for Second Quarter 2017
August 09 2017 - 4:25PM
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, 2017.
Financial Results
Liquidation Basis of
Accounting
As a result of 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. The liquidation basis of
accounting requires, among other things, that management estimate
net sales proceeds on an undiscounted basis as well as include in
the Company's assets and liabilities the undiscounted estimate of
future revenues and expenses of the Company through the end of the
liquidation. Management’s estimate of net assets in
liquidation at June 30, 2017 would result in estimated liquidating
distributions of approximately $9.21 per Common Share. This
estimate of liquidating distributions includes projections of
revenues, sales proceeds, costs and expenses to be incurred during
the period required to complete the plan of liquidation.
There is inherent uncertainty with these projections, and
accordingly, these projections could change materially based on a
number of factors both within and outside of NYRT's control
including the timing of the sales, the performance of the
underlying assets and any changes in the underlying assumptions of
projected cash flows.
The estimate of the current liquidating
distribution amount represents a decrease of $0.04 per Common Share
from the Company’s estimate at March 31, 2017. The decrease
is primarily the result of (i) a $2.5 million decrease in the
liquidation value of 50 Varick Street based on the contract for
sale, (ii) an increase of $1.7 million of projected tenant
improvements primarily at the 1440 Broadway and 256 W. 38th Street
properties, (iii) an increase of $1.2 million in the estimated fees
payable to our advisor over the duration of the liquidation due to
the timing of the acquisition of the additional interest in
Worldwide Plaza and a change in the anticipated holding period of
certain of our assets, (iv) other cumulative adjustments across the
portfolio which net to a $1.0 million decrease in net operating
cash flow, and (v) an increase of $400 thousand in interest expense
on the POL loans due to increases in the LIBOR rate.
2017 Subsequent Events
Financing Activity
- Kings Highway – Brooklyn, New York - On August 1, 2017, the
Company’s mortgage loan collateralized by the 1100 Kings Highway
property was modified to extend the maturity date to April 1, 2018
and to allow for partial release of the collateral. The loan
also requires a cash sweep starting January 1, 2018 unless the
property is under contract for sale for an amount equal to or
greater than 133% of the outstanding mortgage loan
payable.
Assets Sold
- 50 Varick Street – Manhattan, New York - On August 7, 2017, the
Company sold to an independent third party its 50 Varick Street
office property in Manhattan, New York for a gross sales price of
$135.0 million. The property was part of the collateral for
the Company’s $760.0 million cross collateralized and secured
loans. In connection with the sale, the Company paid down
$78.1 million of debt as required under the loan. After
satisfaction of debt, pro-rations and closing costs the Company
received net proceeds of approximately $49.1
million.
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. NYRT's shareholders recently 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. 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, 2017 |
Assets |
|
|
Investments in real
estate |
|
$ |
3,679,191 |
Cash and cash
equivalents |
|
|
39,800 |
Restricted cash held in
escrow |
|
|
24,055 |
Accounts
receivable |
|
|
4,861 |
Total Assets |
|
$ |
3,747,907 |
|
|
|
Liabilities |
|
|
Mortgage notes
payable |
|
$ |
2,025,916 |
Liability for estimated
costs in excess of estimated receipts during liquidation |
|
|
139,092 |
Liability for
non-controlling interests |
|
|
9,432 |
Accounts payable,
accrued expenses and other liabilities |
|
|
26,355 |
Related party fees
payable |
|
|
60 |
Total
Liabilities |
|
|
2,200,855 |
Commitments and
Contingencies |
|
|
Net assets in
liquidation |
|
$ |
1,547,052 |
|
|
|
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, 2017 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.
Investor Relations:
Wendy Silverstein, Chief Executive Officer
New York REIT, Inc.
wsilverstein@nyrt.com
(617) 570-4750
John Garilli, Chief Financial Officer
New York REIT, Inc.
jgarilli@nyrt.com
(617) 570-4750
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