New York City REIT, Inc. (NYC)

[Enterprising Investor]

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.

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