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New words:
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achieve, added, agreeable, apparent, applied, arrive, assertion, assessing, back, bankruptcy, bespoke, block, calculating, clear, closely, compare, concession, consulting, consumer, contest, contested, continued, convention, created, dead, deal, deducted, desire, determine, discrete, distort, eliminate, established, evolved, examined, Factory, FFO, found, funding, index, informative, Innovate, internally, Knotel, led, light, linked, metric, multiple, mutually, NAREIT, National, NOI, nominal, optional, package, Paper, past, platform, practical, predictably, prepayment, presenting, private, proactive, promulgated, proportionate, prospectively, proxy, rapidly, ratably, ready, recast, reform, relief, rendered, representative, resource, side, spending, supplemental, tangible, trade, treat, treating, trend, type, uncertainty, unconsolidated, unemployment, unique, unlevered, virtual, white
Financial report summary
?Risks
- All of our real estate assets are located in the New York City area and, therefore, our business is particularly vulnerable to an economic downturn in New York City.
- We have no operating history with businesses that are not REIT qualifying assets. We cannot make any assurance that our new business plan will be successfully implemented.
- We face competition for tenants and acquisitions from entities that may have more capital than us.
- There is no assurance we will restart paying cash dividends.
- We may be unable to secure funds for future tenant improvements or capital needs.
- Our properties have been and may continue to be subject to impairment charges.
- We are subject to risks associated with a pandemic, epidemic or outbreak of a contagious disease, such as the global COVID-19 pandemic, which may have a material adverse effect on our business.
- We may change our targeted investments without stockholder consent.
- Part of our strategy for building our portfolio involves acquiring assets opportunistically. This strategy involves a higher risk of loss than more conservative investment strategies.
- Two of our individual real estate investments represent a material percentage of our assets.
- We rely significantly on the following major tenants and therefore, are subject to tenant credit concentrations that make us more susceptible to adverse events with respect to these tenants.
- We may in the future acquire or originate real estate debt or invest in real estate-related securities issued by real estate market participants, which could expose us to additional risks.
- We generally obtain only limited warranties when we purchase a property and therefore have only limited recourse if our due diligence did not identify any issues that lower the value of our property.
- We may be unable to sell a property at the time or on the terms we desire.
- We have acquired or financed, and may continue to acquire or finance, properties with lock-out provisions which may prohibit us from selling a property, or may require us to maintain specified debt levels for a period of years on some properties.
- We may be unable to renew leases or re-lease space as leases expire.
- We depend on tenants for our revenue, and accordingly lease terminations, tenant default and bankruptcy have adversely affected and could in the future adversely affect the income produced by our properties.
- A sale-leaseback transaction may be recharacterized in a tenant’s bankruptcy proceeding.
- If we sell a property by providing financing to the purchaser, we will bear the risk of default by the purchaser.
- Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of co-venturers and disputes between us and our co-venturers.
- Covenants, conditions and restrictions may restrict our ability to operate a property, which may adversely affect our operating costs.
- Our real properties are subject to property taxes that may increase in the future, which could adversely affect our cash flow.
- We may suffer uninsured losses relating to real property or have to pay expensive premiums for insurance coverage.
- Actual or threatened terrorist attacks and other acts of violence, civilian unrest, or war may affect the markets in which we operate our business and our profitability.
- Inflation may have an adverse effect on our investments and results of operations.
- We face possible risks associated with the natural disasters and the physical effects of climate change.
- Failure to succeed in new markets or in new asset classes may have adverse consequences on our performance.
- We may be adversely affected by certain trends that reduce demand for office real estate.
- We are subject to risks that affect the general and New York City retail environments.
- Costs of complying with governmental laws and regulations, including those relating to environmental matters and discovery of previously undetected environmentally hazardous conditions, may adversely affect our operating results.
- There are costs associated with complying with the Americans with Disabilities Act.
- Our level of indebtedness may increase our business risks.
- We have been in breach of several of our mortgage loan covenants for multiple quarters.
- Changes in the debt markets could materially and adversely impact us.
- Increasing interest rates could increase the amount of our debt payments.
- Our loan agreements contain restrictive covenants that limit operating and financial flexibility.
- Interest-only and adjustable rate indebtedness may increase our risk of default.
- Our Advisor faces conflicts of interest relating to the purchase and leasing of properties and these conflicts may not be resolved in our favor, which could adversely affect our investment opportunities.
- Our Property Manager is an affiliate of our Advisor and therefore we face conflicts of interest in determining whether to assign certain operating assets to our Property Manager or an unaffiliated property manager.
- Our Advisor faces conflicts of interest relating to joint ventures, which could result in a disproportionate benefit to the other venture partners.
- Our Advisor, AR Global and their officers and employees and certain of our executive officers and other key personnel face competing demands relating to their time, and this may cause returns on our investments to suffer.
- Our officers and directors face conflicts of interest related to the positions they hold with related parties.
- Our Advisor faces conflicts of interest relating to the structure of the compensation it may receive.
- The trading price of our Class A common stock may fluctuate significantly.
- Maryland law prohibits certain business combinations, which may make it more difficult for us to be acquired and may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
- We have a classified board, which may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
- The stockholder rights plan adopted by our Board may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
- We may terminate our advisory agreement in only limited circumstances, which may require payment of a termination fee.
- We depend on our Advisor and our Property Manager to provide us with executive officers, key personnel and all services required for us to conduct our operations and our operating performance may be impacted by any adverse changes in the financial health or reputation of our Advisor and our Property Manager.
- Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions and proceedings that may be initiated by our stockholders.
- Maryland law limits the ability of a third party to buy a large stake in us and exercise voting power in electing directors, which may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
- We depend on our OP and its subsidiaries for cash flow and are structurally subordinated in right of payment to the obligations of our OP and its subsidiaries.
- Failure to qualify as a REIT for prior taxable years would subject us to U.S. federal income tax and potentially state and local tax.
- We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility, and reduce the market price of shares of our stock.
- Non-U.S. stockholders will be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax on dividends and other distributions received from us and upon the disposition of shares of our stock.
Management Discussion
- (1)Represents the GAAP basis annualized straight-line rent that is recognized over the term on the respective leases, which includes free rent, periodic rent increases, and excludes recoveries.
- (2)The weighted-average remaining lease term (years) is based on annualized straight-line rent.
- Our total overall portfolio occupancy improved as of March 31, 2024 to 87.2% from a total portfolio occupancy of 84.0% as of March 31, 2023 from the following: