Table of Contents
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM
10-Q
 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 2021
March 31, 2022
or
 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
                    
to
                    
Commission File Number 001-36416
001-36416*
*
 
NEW YORK REIT LIQUIDATING LLC
(Exact Name of Registrant as Specified in its Charter)
 
 
Delaware
 
83-2426528
State or Other Jurisdiction of
Incorporation or Organization
 
I.R.S. Employer
Identification No.
  
2 Liberty Square, Boston, MA
 
02109
Address of Principal Executive Offices
 
Zip Code
(617)
570-4750
Registrant’s Telephone Number, Including Area Code
 
Securities registered pursuant to Section 12(b) of the Exchange Act: None
 
Title of
each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
N/A
 
N/A
 
N/A
Securities registered pursuant to Section 12(g) of the Exchange Act:
Units
(Title of class)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days.    Yes
  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File to be submitted pursuant to Rule 405 of Regulation
S-T
(232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes
  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule
12b-2
of the Exchange Act. (Check one):
 
Large accelerated filer ☐  Accelerated filer 
☒
Large accelerated filer
 
Non-accelerated
☐
filer
☐  Smaller reporting company ☐
Non-accelerated
filer
 
☐  Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act
Rule12b-2).    
Yes  ☐    No  ☒
☒
As of AugustMay 1, 2021,2022 there were
 16,791,769 Units outstanding.
Documents incorporated by reference: None
*New York REIT Liquidating LLC is the successor in interest to New York REIT, Inc. and files reports under the Commission file number for New York REIT, Inc.
 
*New York REIT Liquidating LLC is the successor in interest to New York REIT, Inc. and files reports under the Commission file number for New York REIT, Inc.
 
 
Table of Contents
NEW YORK REIT LIQUIDATING LLC
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
   Page 
PART I – FINANCIAL INFORMATION
Item 1.
Financial Statements (unaudited)
  
Item 1. Financial Statements (unaudited)
Consolidated Statements of Net Assets (Liquidation Basis) as of June 30, 2021March 31, 2022 and December 31, 20202021
   3 
Consolidated Statements of Changes in Net Assets (Liquidation Basis) for the Three and Six Months Ended June 30,March 31, 2022 and 2021 and June 30, 2020
   4 
Notes to Consolidated Financial Statements
   5 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   15 
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
21
Item 4.
Controls and Procedures
   21 
Item 4. Controls and Procedures
21
PART II – OTHER INFORMATION
  
Item 1.
Legal Proceedings
   22 
Item 1A.
Risk Factors
   22 
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
   22 
Item 3.
Defaults Upon Senior Securities
   22 
Item 4.
Mine Safety Disclosures
   22 
Item 5.
Other Information
   22 
Item 6.
Exhibits
   22
2
2
 
Signatures
   24 
Table of Contents
NEW YORK REIT LIQUIDATING LLC
FORM
10-Q MARCH 31, 2022
JUNE 30, 2021
CONSOLIDATED STATEMENTS OF NET ASSETS
(Liquidation Basis)
(Unaudited, in thousands)
 
   March 31, 2022   December 31, 2021 
Assets
    
Investment in unconsolidated joint venture  $218,959   $226,175 
Cash and cash equivalents   7,875    7,535 
Restricted cash held in escrow   92,126    92,127 
           
Total Assets
   318,960    325,837 
Liabilities
          
Liability for estimated costs in excess of estimated receipts during liquidation   2,448    2,384 
Accounts payable, accrued expenses and other liabilities   385    342 
           
Total Liabilities
   2,833    2,726 
           
Commitments and Contingencies
   0     0  
Net assets in liquidation
  $316,127   $323,111 
           
   June 30, 2021   December 31, 2020 
Assets
          
 
 
 
 
 
 
 
 
 
Investment in unconsolidated joint venture
  $225,523   $230,092 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
   7,976    7,722 
 
 
 
 
 
 
 
 
 
Restricted cash held in escrow
   92,138    92,177 
 
 
 
 
 
 
 
 
 
Accounts receivable
   60    60 
 
 
 
 
 
 
 
 
 
   
 
 
   
 
 
 
Total Assets
   325,697    330,051 
   
Liabilities
          
 
 
 
 
 
 
 
 
 
Liability for estimated costs in excess of estimated receipts during liquidation
   2,363    2,342 
 
 
 
 
 
 
 
 
 
Accounts payable, accrued expenses and other liabilities
   408    319 
   
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
Total Liabilities
   2,771    2,661 
   
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
Commitments and Contingencies
   0    0 
 
 
 
 
 
 
 
Net assets in liquidation
  $322,926   $327,390 
  
 
 
   
 
 
 
The accompanying notes are an integral part of these unaudited consolidated financial statements.

3
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NEW YORK REIT LIQUIDATING LLC
FORM
10-Q MARCH 31, 2022
JUNE 30, 2021
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
(Liquidation Basis)
(Unaudited, in thousands)

   Three Months Ended  Six Months Ended 
   June 30, 2021  June 30, 2020  June 30, 2021  June 30, 2020 
     
Net assets in liquidation, beginning of period
  $325,737  $365,725  $327,390  $362,791 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in net assets in liquidation:
                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in liquidation value of investment in unconsolidated joint venture
   2,053   3,382   4,134   8,956 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remeasurement of assets and liabilities
   (666)   (578)   (1,378)   (1,539) 
   
 
 
  
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net changes in liquidation value
   1,387   2,804   2,756   7,417 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liquidating distributions to unitholders
   (4,198)   (1,679)   (7,220)   (3,358) 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in net assets in liquidation
   (2,811)   1,125   (4,464)   4,059 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets in liquidation, end of period
  $322,926  $366,850  $322,926  $366,850 
   
 
 
  
 
 
  
 
 
  
 
 
 
   Three Months Ended 
   March 31, 2022  March 31, 2021 
Net assets in liquidation, beginning of period
  $323,111  $327,390 
Changes in net assets in liquidation:         
Changes in liquidation value of investment in unconsolidated joint venture   (3,173)   2,081 
Remeasurement of assets and liabilities   (621)   (712) 
          
Net changes in liquidation value   (3,794)   1,369 
Liquidating distributions to unitholders   (3,190)   (3,022) 
          
Changes in net assets in liquidation   (6,984)   (1,653) 
          
Net assets in liquidation, end of period
  $316,127  $325,737 
          
The accompanying notes are an integral part of these unaudited consolidated financial statements.
 
4
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
March 31, 2022
(unaudited)
Note 1 — Organization
New York REIT Liquidating LLC (the “Company”) was formed on November 7, 2018 and is the successor entity to New York REIT, Inc., (the “Predecessor”). The Predecessor was incorporated on October 6, 2009 as a Maryland corporation that qualified as a real estate investment trust for U.S. federal income tax purposes (“REIT”) beginning with its taxable year ended December 31, 2010. On April 15, 2014, the Predecessor listed its common stock on the New York Stock Exchange (“NYSE��NYSE”) under the symbol “NYRT” (the “Listing”).
The sole purpose of the Company is to wind up the Company’s affairs and the liquidation of the Company’s assets with no objective to continue or to engage in the conduct of a trade or business, except as necessary for the orderly liquidation of the Company’s assets.

Substantially all of the Predecessor’s business was conducted through its operating partnership, New York Recovery Operating Partnership, L.P., a Delaware limited partnership (the “OP”).
On August 22, 2016, the Predecessor’s Board of Directors (the “Board”) approved a plan of liquidation to sell in an orderly manner all or substantially all of the assets of the Predecessor and its OPoperating partnership (the “OP”) and to liquidate and dissolve the Predecessor and the OP (the “Liquidation Plan”), subject to stockholder approval (see Note 2). The Liquidation Plan was approved at a special meeting of stockholders on January 3, 2017. All of the assets held by the OP have been sold and the OP was dissolved prior to the conversion on November 7, 2018.
As of June 30, 2021,March 31, 2022, the Company’s only significant assets are a 50.1% equity interest in WWP Holdings LLC (“WWP”), which owns 1 property,1property, known as Worldwide Plaza, aggregating 2.0 million rentable square feet with an average occupancy of 97.3%91.2%
,
and a $90.7 million cash reserve to be utilized for improvements at the property owned by WWP. The property consisted of office space, retail space and a garage representing 88%, 5% and 7%, respectively, of rentable square feet as of June 30, 2021.March 31, 2022.
The Company has no employees. Since March 8, 2017, all advisory duties are administered by Winthrop REIT Advisors, LLC (the “Winthrop Advisor”).
Note 2 – Liquidation Plan
The Liquidation Plan provides for an orderly sale of the Company’s assets, payment of the Company’s liabilities and other obligations and the winding down of operations and dissolution of the Company. The Predecessor was not, and the Company is not, permitted to make any new investments except to make protective acquisitions or advances with respect to its existing assets (see Note 6). The Company is permitted to satisfy any existing contractual obligations and fund required tenant improvements and capital expenditures at its real estate property owned by the joint venture in which the Company owns an interest.
The Liquidation Plan enables the Company to sell any and all of its assets without further approval of the unitholders and provides that liquidating distributions be made to the unitholders as determined by the Company’s board of managers (the “Board of Managers”). In order to comply with applicable laws, the Predecessor converted into the Company, a limited liability company. The conversion of the Predecessor to a limited liability company was approved by the stockholders on September 7, 2018 and became effective on November 7, 2018.
In October 2018, the Predecessor announced the withdrawal of its common stock from listing on the NYSE in connection with the conversion. November 2, 2018 was the last day on which shares of common stock were traded on the NYSE and the stock transfer books were closed as of 4:00 p.m. (Eastern Time) on such date. At the effective time of the conversion, each outstanding share of common stock was converted into one unit of common membership interest in the limited liability company (a “Unit”), and holders of shares of common stock automatically received one Unit (which Unit was in book entry form) for each share of our common stock held by such stockholder. Holders of Units should note that unlike shares of common stock, which, in addition to being listed on the NYSE, were freely
5
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
(unaudited)
transferable, Units are not listed for trading and generally are not transferable except by will, intestate succession or operation of law. Therefore, the recipients of Units will not have the ability to realize any value from these interests except from distributions made by the Company, the timing of which will be solely in the discretion of the Board of
5
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
Managers. The Board of Managers is currently comprised of three members: Randolph C. Read, Craig T. Bouchard and Howard Goldberg.
Additionally, John Lee and Joseph Moinian representing two of the Company’s largest unitholder, was addedunitholders, serve as a board observer (“Observer”)observers to the Company’s Board of Managers effective June 30, 2020 in an unpaid positionpositions with no voting rights in connection with Board of Managers matters.
The Company is deemed to be the same entity as the Predecessor with the same assets and liabilities as the Predecessor.Predecessor on the date of conversion. In addition, the charter and bylaws of the Predecessor were replaced by the operating agreement of the Company. For tax purposes, the fair value of each Unit in the Company received by stockholders when the conversion became effective, which reflects the value of the remaining assets of the Company (net of liabilities), was equal to the average of the high and low trading prices for shares of the Predecessor’s common stock on the last three days on which shares were traded on the NYSE.
The business of the Company is the same as the business of the Predecessor immediately preceding the conversion, which, consistent with the Liquidation Plan, consists of the continued ownership of the Predecessor’s interest in Worldwide Plaza, the only remaining property-related asset. Under its operating agreement, the business and affairs of the Company will be managed by or under the direction of its Board of Managers, and the sole purpose is winding up the affairs of the Company and the liquidation of its remaining property-related asset. TheOn March 14, 2022, pursuant to the terms of the operating agreement of the Company, the Board of Managers extended the term of the Company such that the Company will remain in existence until the earlier of (i) the distribution of all its assets pursuant to liquidation or (ii) November 7, 2022 which is four years from the effective time of the conversion. The term may be extended to such later date as the Board of Managers determines is reasonably necessary to fulfill the purposes of the Company.December 31, 2023.
The dissolution process and the amount and timing of future distributions to unitholders involves risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount which will be ultimately distributed to unitholders and no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in the Consolidated Statement of Net Assets.
Note 3 — Summary of Significant Accounting Policies
Basis of Presentation
The accompanying consolidated financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany accounts and transactions have been eliminated in consolidation.
Rent collections for retail and amenities tenants at Worldwide Plaza were not impacted by the
COVID-19
pandemic during the sixthree months ended June 30, 2021 andMarch 31, 2022, though they were impacted during the year ended December 31, 2020.2021. It is still uncertain as to the extent of the future impact of the
COVID-19
pandemic, including its multiple variants and government protectionsprotective measures thereto on rent collections at the property for future quarters. As of June 30,During the years ended December 31, 2021, WWP continues to collect the property collected
100%
of the office rents that are due at Worldwide Plaza. With respect to the retail and amenities tenants of the property, approximately $4.3 million of base rents remain unpaid as of June 30, 2021 as those tenants are seeking rent concessions as a result of the
COVID-19
pandemic. The unpaid rents represent approximately 3.0% of total rents due at the property since April 1, 2020. Negotiations with those tenants are ongoing. At this time, we anticipate that a majority of rent concessions will be in the form of a rent deferral and not rent forgiveness, resulting in a delay in collections and not a reduction in collections. WWP does not plan to forgo any of its contractual rights under its lease agreements in connection with any relief requests. As of the date of this filing,were due. WWP has forgiven approximately $107,000
$494,000
of base rents for current retail and amenities tenants and has written off approximately
 $477,000 of base rents related to surrendered retail and amenities space. To date, the impact of the
COVID-19
pandemic has not been material to the Company, however, it is not possible to estimate the future impact of the pandemic at this time.
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
March 31, 2022
(unaudited)
 
Liquidation Basis of Accounting
As a result of the approval of the Liquidation Plan by the stockholders, the Company adopted the liquidation basis of accounting as of January 1, 2017 and for the periods subsequent to December 31, 2016 in accordance with GAAP. Accordingly, on January 1, 2017, the carrying value of the Company’s assets were adjusted to their liquidation value, which represented the estimated amount of cash that the Company expected to collect on disposal of assets as it carried out its liquidation activities under the Liquidation Plan. All properties have been sold except for the remaining interest in Worldwide Plaza. For purposes of liquidation accounting, the Company’s estimate of net assets in liquidation assumes a sale of Worldwide Plaza at June 30, 2022.March 31, 2023. The actual timing of sale has not yet been determined and is subject to future events and uncertainties. These estimates are subject to change based on the actual timing of the sale of the Company’s remaining property.
Liabilities are carried at their contractual amounts due as adjusted for the timing and other assumptions related to the liquidation process.
The Company accrues costs and revenues that it expects to incur and earn as it carries out its liquidation activities through the end of the projected liquidation period, which ends on June 30, 2022,March 31, 2023, to the extent it has a reasonable basis for estimation. Estimated costs expected to be incurred through the end of the liquidation period include corporate overhead costs associated with satisfying known and contingent liabilities and other costs associated with the winding down and dissolution of the Company. Revenues are based on current interest rate assumptions. These amounts are classified as a net liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets. Actual costs and revenues may differ from amounts reflected in the consolidated financial statements due to the inherent uncertainty in estimating future events. These differences may be material. See Note 4 for further discussion. Actual costs incurred but unpaid as of June 30, 2021March 31, 2022 and December 31, 20202021 are included in accounts payable, accrued expenses and other liabilities on the Consolidated Statements of Net Assets.
Use of Estimates
Certain of the Company’s accounting estimates are particularly important for an understanding of the Company’s financial position and results of operations and require the application of significant judgment by management. As a result, these estimates are subject to a degree of uncertainty. Under liquidation accounting, the Company is required to estimate all costs and revenue it expects to incur and earn through the end of liquidation including the estimated amount of cash it expects to collect on the disposal of its assets and the estimated costs to dispose of its assets. All of the estimates and evaluations are susceptible to change and actual results could differ materially from the estimates and evaluations.
Revenue Recognition
Under the liquidation basis of accounting, the Company accrues all revenue that it expects to earn through the end of liquidation to the extent it has a reasonable basis for estimation. The Company has no revenues other than interest income. These amounts are classified within liability for estimated costs in excess of estimated receipts during liquidation on the Consolidated Statements of Net Assets.
Investment in Unconsolidated Joint Venture
The Company accounts for its investment in unconsolidated joint venture under the equity method of accounting because the Company exercises significant influence over but does not control the entity and is not considered to be the primary beneficiary.
The investment in unconsolidated joint venture is recorded at its liquidation value, or net realizable value, which is comprised of an estimate of the expected sale proceeds upon disposition plus the estimated net cash flow from the venture during the liquidation period. The Company evaluates the net realizable value of its unconsolidated joint
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
venture at each reporting period. Any changes in net realizable value will be reflected as a change in the Company’s
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
(unaudited)
net assets in liquidation. The liquidation value of the Company’s remaining investment in Worldwide Plaza as of June 30, 2021March 31, 2022 and December 31, 20202021 is based on estimated cash flow projections utilizing appropriate discount and capitalization rates as well as available market information and assumptions regarding capital expenditures.
​​​​​​​
Restricted Cash
At June 30, 2021March 31, 2022 and December 31, 2020,2021, restricted cash primarily consists of the $90.7 million capital improvement reserve for Worldwide Plaza and $1.4 million being held in escrow in connection with the sale of the Viceroy Hotel (the “Viceroy Escrow”). The Viceroy Escrow was established from proceeds of the sale of the Viceroy Hotel and was required to cover a potential seller’s obligation to fund any shortfalls to the New York Hotel Pension Fund should the purchaser of the property withdraw from the Pension Fund without fully funding the then outstanding shortfall due to the Pension Fund.
Recent Accounting Pronouncements
There are no new accounting pronouncements that are applicable or relevant to the Company under the liquidation basis of accounting.
Note 4 - 4—Liability for Estimated Costs in Excess of Estimated Receipts During Liquidation
The liquidation basis of accounting requires the Company to estimate net cash flows from operations and to accrue all costs associated with implementing and completing the plan of liquidation. The Company currently estimates that it will have costs in excess of estimated receipts during the liquidation. These amounts can vary significantly due to, among other things, the timing and estimates for operating expenses, interest earned on reserves and the costs associated with the winding down of operations. These costs are estimated and are anticipated to be paid out over the liquidation period.
At June 30, 2021March 31, 2022 and December 31, 2020,2021, the Company had accrued the following net expenses expected to be incurred during liquidation (in thousands):
   June 30, 2021   December 31, 2020 
   
General and administrative expenses
  $2,363   $2,342 
   
 
 
   
 
 
 
   
Liability for estimated costs in excess of estimated receipts during liquidation
  $2,363   $2,342 
   
 
 
   
 
 
 

   March 31, 2022   December 31, 2021 
General and administrative expenses  $(2,448)   $(2,384) 
           
Liability for estimated costs in excess of estimated receipts during liquidation  $(2,448)   $(2,384) 
           

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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
March 31, 2022
(unaudited)
 
The change in the liability for estimated costs in excess of estimated receipts during liquidation for the sixthree months ended June 30,March 31, 2022 and 2021 and 2020 are as follows (in thousands):
   January 1, 2021   Net Change
in Working
Capital (1)		   Remeasurement
of Assets and
Liabilities		   June 30, 2021 
Liabilities:
                    
General and administrative expenses
  $(2,342)   $1,357   $(1,378)   $(2,363) 
   
 
 
   
 
 
   
 
 
   
 
 
 
     
Total liability for estimated costs in excess of estimated receipts during liquidation
  $(2,342)   $1,357   $(1,378)   $(2,363) 
   
 
 
   
 
 
   
 
 
   
 
 
 
   
January 1,
 
2020
   
Net
 
Change
in
 
Working
Capital (1)
   Remeasurement
of Assets and
Liabilities		   
June 30,
 
2020
 
Liabilities:
                    
General and administrative expenses
  $(2,348)   $1,511   $(1,539)   $(2,376) 
   
 
 
   
 
 
   
 
 
   
 
 
 
     
Total liability for estimated costs in excess of estimated receipts during liquidation
  $(2,348)   $1,511   $(1,539)   $(2,376) 
   
 
 
   
 
 
   
 
 
   
 
 
 
 
   January 1, 2022   Net Change
in Working
Capital (1)		   Remeasurement
of Assets and
Liabilities		   March 31, 2022 
Liabilities:
                    
General and administrative expenses  $(2,384)   $557   $(621)   $(2,448) 
                     
Total liability for estimated costs in excess of estimated receipts during liquidation  $(2,384)   $557   $(621)   $(2,448) 
                     
   January 1, 2021   Net Change
in Working
Capital (1)		   Remeasurement
of Assets and
Liabilities		   March 31, 2021 
Liabilities:
                    
General and administrative expenses  $(2,342)   $506   $(712)   $(2,548) 
                     
Total liability for estimated costs in excess of estimated receipts during liquidation  $(2,342)   $506   $(712)   $(2,548) 
                     
(1)
Represents changes in cash, restricted cash, accounts receivable, accounts payable and accrued expenses as a result of the Company’s operating activities for the
six
three months ended June 30, 2021March 31, 2022 and 2020.2021.
Note
 5 – Net Assets in Liquidation
Net assets in liquidation decreased by $2.8 $7.0 
million during the three months ended June 30, 2021March 31, 2022, primarily due to a 
$3.2 
million liquidating distribution to unitholders, of $4.2 million and a $0.7 million
 net
decrease due to a remeasurement of estimated costs. The decrease was offset in part by
a net
increase of $2.1 million in the estimated liquidation value of the Company’s investment in Worldwide
Plaza related to the estimated distributions to be received from working capital at the property and property operations.
Net assets in liquidation decreased by $4.5 million during the six months ended June 30, 2021, primarily due to liquidating distribution
s
to unitholders of $7.2 million and a $1.4 million
net
decrease due to a remeasurement of estimated costs. The decrease was offset
 in pa
rt
 by a net increasedecrease of $4.1 million in the estimated liquidation value of the
C
ompany’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations.$
3.2 
Net assets in liquidation increased by $1.1 million during the three months ended June 30, 2020, primarily due to a net increase of $3.4 million in the estimated liquidation value of the Company’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations. The increase was offset
in part
by a liquidating distribution to unitholders of $1.7 millionoperations and a $0.6 
$
0.6 
million
net
decrease due to a remeasurement of estimated costs.
Net assets in liquidation increaseddecreased by $4.1$1.7 million during the sixthree months ended June 30, 2020,March 31, 2021 primarily due to a netliquidating distribution to unitholders of $3.0 million and a $0.7 million decrease due to a remeasurement of estimated costs. The decrease was offset in part by an increase of $9.0 $2.1 
million in the estimated liquidation value of the Company’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations. The increase was offset
in part
by liquidating distributions to unitholders of $3.4 million and a $1.5 million
 net
decrease due to a remeasurement of estimated costs.
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
(unaudited)

The 
net assets in liquidation at June 30, 2021,March 31, 2022, presented on an undiscounted basis, include the Company’s proportionate share in Worldwide Plaza’s net assets which include a property value of $1.65 billion based on estimated cash flow projections utilizing appropriate discount and capitalization rates as well as available market information and assumptions regarding capital expenditures.
There were 16,791,769
Units outstanding at June 30, 2021.March 31, 2022. The net assets in liquidation as of June 30, 2021,March 31, 2022, if sold at their net asset value, would result in liquidating distributions of approximately $19.23
$18.83 per Unit. On August 3, 2021,
May 6, 2022
,
the Board of Managers declared a cash liquidating distribution of $0.13
$0.10
per Unit payable on May
23
August 18,
2021, 2022 to unitholders of record on May
16
August 11,
2021,, 2022, reducing the estimate of future liquidating
distributions to $19.10 $18.70
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

per Unit. The net assets in liquidation as of June 30, 2021March 31, 2022, of $322.9$316.1 million, if sold at their net asset value, plus the cumulative liquidating distribution paid to unitholders of $1.023$1.032 billion ($60.9461.45 per Unit) prior to June 30, 2021March 31, 2022 would result in cumulative liquidating distributions to unitholders of $80.17$80.28 per Unit. There is inherent uncertainty with these projections, and they could change materially based on the timing of the sale of the Company’s remaining investment, the performance of the underlying asset and any changes in the underlying assumptions of the projected cash flows.
Note 6 — Investment in Unconsolidated Joint Venture
On October 30, 2013, the Predecessor purchased a 48.9% equity interest in Worldwide Plaza for a contract purchase price of $220.1 million, based on the property value at that time for Worldwide Plaza of $1.3 billion less $875.0 million of debt on the property.
On June 1, 2017, the Predecessor acquired an additional 49.9% equity interest on exercise of the Predecessor’s option to purchase pursuant to the Company’s rights under the joint venture agreement of Worldwide Plaza for a contract purchase price of $276.7 million, based on the option price of approximately $1.4 billion less $875.0 million of debt on the property. The Predecessor’s joint venture partner exercised its right to retain 1.2% of the aggregate membership interests in Worldwide Plaza. Following the exercise of the option, the Predecessor owned a total equity interest of 98.8% in Worldwide Plaza.
On October 18, 2017, the Predecessor sold a 48.7% interest in Worldwide Plaza to a joint venture managed by SL Green Realty Corp. and RXR Realty LLC based on an estimated underlying property value of $1.725 billion. In conjunction with the equity sale, there was a concurrent $1.2 billion refinancing of the existing Worldwide Plaza debt. The Predecessor received cash at closing of approximately $446.5 million from the sale and excess proceeds from the financing, net of closing costs which included $108.3 million of defeasance and prepayment costs. The new debt on Worldwide Plaza bears interest at a blended rate of approximately 3.98% per annum, requires monthly payments of interest only and matures in November 2027.
The Company has set aside $90.7 million of the proceeds in a separate account to fund future capital improvements to Worldwide Plaza. Following the sale of its interest, the Company now holds a 50.1% interest in Worldwide Plaza. The Company has determined that this investment is an investment in a variable interest entity (“VIE”). The Company has determined that it is not the primary beneficiary of this VIE since the Company does not have the power to direct the activities that most significantly impact the VIE’s economic performance. The Company accounts for this investment using the equity method of accounting.
The lease with one of the tenants at the Worldwide Plaza property contains a right of first offer in the event that Worldwide Plaza sells 100% of the property. The right requires Worldwide Plaza to offer the tenant the option to purchase 100% of the Worldwide Plaza property, at the price, and on other material terms, proposed by Worldwide Plaza to third parties. If, after a
45-day
period, that tenant does not accept the offer, Worldwide Plaza may then sell the property to a third party, provided that Worldwide Plaza will be required to
re-offer
the property to that tenant if it desires to sell the property for a purchase price (and other economic consideration) less than 92.5% of the initial purchase price contained in the offer to that tenant.
 
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
March 31, 2022
(unaudited)
 
The following table lists the tenants whose annualized cash rent represented greater than 10% of total annualized cash rent for the sixthree months ended June 30,March 31, 2022 and 2021, and 2020, including annualized cash rent related to the Company’s unconsolidated joint venture:

      March 31, 
Property Portfolio
  
Tenant
  2022  2021 
Worldwide Plaza  Cravath, Swaine & Moore, LLP   50.4%   48.1% 
Worldwide Plaza  Nomura Holdings America, Inc.   28.8%   30.5% 
      June 30, 
Property Portfolio
  Tenant  2021  2020 
Worldwide Plaza
  
Cravath, Swaine & Moore,
LLP
   47.4%   48.4% 
Worldwide Plaza
  
Nomura Holdings America,
Inc.
   30.0%   30.7% 
The termination, delinquency or
non-renewal
of any of the above tenants may have a material adverse effect on the Company’s operations. The lease with Cravath, Swaine & Moore expires in
August 2024
and the tenant has informed Worldwide Plaza that they do not intend to enter into a new lease upon expiration of the existing lease.
The amounts reflected in the following tables are based on the going concern basis financial information of Worldwide Plaza. Under liquidation accounting, equity investments are carried at net realizable value.
The condensed balance sheets as of June 30, 2021March 31, 2022 and December 31, 20202021 for Worldwide Plaza are as follows:
 
(In thousands)
  June 30,
2021		   December 31,
2020		 
Real estate assets, at cost
  $840,644   $839,789 
Less accumulated depreciation and amortization
   (270,184)    (256,925) 
   
 
 
   
 
 
 
Total real estate assets, net
   570,460    582,864 
Cash and cash equivalents
   27,143    36,084 
Other assets
   134,433    139,084 
   
 
 
   
 
 
 
Total assets
  $732,036   $758,032 
   
 
 
   
 
 
 
   
Debt
  $1,262,567   $1,254,081 
Other liabilities
   166,142    166,549 
   
 
 
   
 
 
 
Total liabilities
   1,428,709    1,420,630 
Deficit
   (696,673)    (662,598) 
   
 
 
   
 
 
 
Total liabilities and deficit
  $732,036   $758,032 
   
 
 
   
 
 
 
(In thousands)
  March 31,
2022		   December 31,
2021		 
Real estate assets, at cost  $841,129   $840,798 
Less accumulated depreciation and amortization   (285,476)    (281,011) 
           
Total real estate assets, net   555,653    559,787 
Cash and cash equivalents   48,270    53,351 
Other assets   123,512    122,921 
           
Total assets  $727,435   $736,059 
           
Debt  $1,275,876   $1,271,177 
Other liabilities   181,757    181,005 
           
Total liabilities   1,457,633    1,452,182 
Deficit   (730,198)    (716,123) 
           
Total liabilities and deficit  $727,435   $736,059 
           
 
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
March 31, 2022
(unaudited)
 
The condensed statements of operations for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 for Worldwide Plaza are as follows:
 
   Three Months Ended  Six Months Ended 
(In thousands)
  June 30,
2021		  June 30,
2020		  June 30,
2021		  June 30,
2020		 
Rental income
  $36,923   $33,660   $72,270   $69,103 
     
Operating expenses:
                    
Operating expenses
   16,161    14,626    32,653    31,682 
Depreciation and amortization
   6,358    5,050    16,617    10,098 
   
 
 
   
 
 
   
 
 
   
 
 
 
Total operating expenses
   22,519    19,676    49,270    41,780 
     
Operating income
   14,404    13,984    23,000    27,323 
Interest expense
   (19,670)    (19,221)    (39,130)    (38,418) 
   
 
 
   
 
 
   
 
 
   
 
 
 
Net loss
  $(5,266)   $(5,237)   $(16,130)   $(11,095) 
   
 
 
   
 
 
   
 
 
   
 
 
 
   Three Months Ended
March 31,		 
(In thousands)
  2022   2021 
Rental income  $35,507   $35,347 
Operating expenses:          
Operating expenses   16,225    16,492 
Depreciation and amortization   5,189    10,259 
           
Total operating expenses   21,414    26,751 
Operating income   14,093    8,596 
Interest expense   (19,936)    (19,460) 
           
Net loss  $(5,843)   $(10,864) 
           
Note 7 — Common Equity
The Company had 16,791,769 Units outstanding as of June 30, 2021March 31, 2022 and December 31, 2020.2021. The Company expects to make periodic liquidating distributions out of cash flow distributions received from Worldwide Plaza and proceeds from the ultimate sale of the Company’s interest in Worldwide Plaza, subject to satisfying its liabilities and obligations, in lieu of regular monthly dividends. Through June 30, 2021,March 31, 2022, the Company paid aggregate distributions equal to $60.94 $61.45
per share/Unit. On May
6
August 3,
2021,, 2022, the Company declared a cash liquidating distribution of $0.13
$0.10
 
per Unit payable to unitholders of record as of
May
August
1116
,
2021. 2022. There can be no assurance as to the actual amount or timing of future liquidating distributions unitholders will receive.
Note 8 — Commitments and Contingencies
Litigation and Regulatory Matters
In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no legal or regulatory proceedings pending or known to be contemplated against the Company from which the Company expects to incur a material loss.
Environmental Matters
In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. The Company, through its joint venture, maintains environmental insurance for its propert
y
property that provides coverage for potential environmental liabilities, subject to the policy’s coverage conditions and limitations. The Company has not been notified by any governmental authority of any
non-compliance,
liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the consolidated results of operations.
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
March 31, 2022
(unaudited)
 
Note 9 — Related Party Transactions and Arrangements
Winthrop Advisor and its Affiliates
The activities of the Liquidating LLC are administered by the Winthrop Advisor pursuant to the terms of an advisory agreement, as amended, (the “Advisory Agreement”) between the Company and the Winthrop Advisor.
The original term of the Advisory Agreement ended on November 7, 2018, the effective date of the conversion of the Company to a liquidating entity (the “Liquidation Date”). The Advisory Agreement is subject to automatic
one-month
renewal periods on the expiration of any renewal term, unless terminated by a majority of the Board of Managers or the Winthrop Advisor, upon written notice 45 days before the expiration of any renewal term and will automatically terminate at the effective time of the final disposition of the assets held by the Company. The Advisory Agreement may be terminated upon 15 days written notice by a majority of the Board of Managers if the Company’s chief executive officer resigns or is otherwise unavailable to serve as the Company’s chief executive officer for any reason and the Winthrop Advisor has not proposed a new chief executive officer acceptable to a majority of the Board of Managers. On July 12, 2018, the Company’s independent directors voted unanimously to appoint John Garilli as Chief Executive Officer upon the resignation of Wendy Silverstein from the position and accordingly did not exercise the Company’s right to terminate the Advisory Agreement.
From the Liquidation Date through July 31, 2020, the Company paid to the Winthrop Advisor a monthly fee of $100,000 and a supplemental fee of $50,000 per quarter (prorated for any partial quarter) for any period that the principal executive and financial officers of the Company are required to certify the financial and other information contained in the Company’s quarterly and annual reports pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended. On October 30, 2020, the Advisory Agreement was amended to reduce the monthly fee payable to Winthrop Advisor to $83,000 effective August 1, 2020. All other terms of the Advisory Agreement remained unchanged.
In connection with the adoption of liquidation accounting, the Company accrues costs it expects to incur through the end of liquidation. As of June 30, 2021March 31, 2022 and December 31, 2020,2021, the Company has accrued asset management fees totaling $1.2 million payable to the Winthrop Advisor representing management’s estimate of future asset management fees to final liquidation, provided there is no assurance that the contract will continue to be extended at the same terms, if at all. This amount is included in estimated costs in excess of estimated receipts during liquidation.
In connection with the payment of (i) any distributions of money or other property by the Company to its stockholders or unitholders during the term of the Advisory Agreement and (ii) any other amounts paid to the Company’s stockholders or unitholders on account of their shares of common stock or membership interests in the Company in connection with a merger or other change in control transaction pursuant to an agreement with the Company entered into after March 8, 2017 (such distributions and payments, the “Hurdle Payments”), in excess of $110.00 per share (the “Hurdle Amount”), when taken together with all other Hurdle Payments, the Company will pay an incentive fee to Winthrop Advisor in an amount equal to 10.0% of such excess (the “Incentive Fee”). The Hurdle Amount will be increased on an annualized basis by an amount equal to the product of (a) the Treasury Rate plus 200 basis points and (b) the Hurdle Amount minus all previous Hurdle Payments. Based on the current estimated undiscounted net assets in liquidation, the Winthrop Advisor would not be entitled to receive any such incentive fee.
The Company paid the Winthrop Advisor $300,000 and $350,000
for the three months ended June 30, 2021 and 2020, respectively and $600,000 and $700,000 for the six months ended June 30, 2021 and 2020, respectively.March 31, 2022.
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2021
(unaudited)
Note 10 — Economic Dependency
The Company has engaged Winthrop Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services, transaction management and investor relations.
As a result of these relationships, the Company is dependent upon Winthrop Advisor. In the event that Winthrop Advisor is unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services.
1
3
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NEW YORK REIT LIQUIDATING LLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
Note 11 — Subsequent Events
The Company has evaluated subsequent events through the filing of this Quarterly Report on Form
10-Q
and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements except as disclosed in Notes 5 and 7.
 
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NEW YORK REIT LIQUIDATING LLC
June 30, 2021March 31, 2022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of New York REIT Liquidating LLC and the notes thereto. As used herein, the terms “Company,” “Liquidating LLC,” “we,” “our” and “us” refer to New York REIT Liquidating LLC, a Delaware limited liability company, and, as required by context to New York REIT, Inc., a Maryland corporation (the “Predecessor”), to New York Recovery Operating Partnership LP, a Delaware Limited Partnership (the “OP”), and to their subsidiaries. We are externally managed by Winthrop REIT Advisors, LLC (the “Winthrop Advisor”). Capitalized terms used herein but not otherwise defined have the meaning ascribed to those terms in “Part I—Financial Information” included in the notes to consolidated financial statements and contained herein.
Forward-Looking Statements
Certain statements conta
i
ned herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximates,” “believes,” “estimates,” “expects,” “anticipates,” “intends,” “plans,” “should,” “would,” “will,” “may” or similar expressions in this Quarterly Report on Form
10-Q.
These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. Factors that may cause actual results to differ materially from those contemplated by the forward-looking statements include, but are not limited to, public health crises, such as the
COVID-19
pandemic, as well as those set forth in our Annual Report on Form
10-K
for the year ended December 31, 20202021 under “Forward Looking Statements” and “Item 1A. Risk Factors,” as well as our other filings with the Securities and Exchange Commission. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. We expressly disclaim any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on forward-looking statements, which are based on information, judgments and estimates at the time they are made, to anticipate future results or trends.
Management’s Discussion and Analysis of Financial Condition and Results of Operations includeincludes a discussion of our unaudited consolidated interim financial statements and notes thereto. These unaudited interim financial statements are prepared in conformity with accounting principles generally accepted in the United States of America which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates.
Overview
On August 22, 2016 the Predecessor’s Board of Directors (the “Board”) approved a plan of liquidation to sell in an orderly manner all or substantially all of our assets and the assets of the OP (the “Liquidation Plan”), subject to stockholder approval. The Liquidation Plan was approved at a special meeting of stockholders on January 3, 2017.
The Liquidation Plan provides for an orderly sale of our assets, payment of our liabilities and other obligations and the winding down of operations and the dissolution of the Company. We are no longer permitted to make any new investments except to make protective acquisitions or advances with respect to our existing assets. We are permitted to satisfy any existing contractual obligations and pay for required tenant improvements and capital expenditures at our real estate property owned by the joint venture in which we own an interest.
In order to comply with applicable tax laws, the Predecessor converted into a limited liability company known as New York REIT Liquidating LLC. The conversion to the Company was approved by the stockholders on September 7, 2018 and became effective on November 7, 2018. The Liquidation Plan enables us to sell our assets without further approval of the stockholders or unitholders and provides that liquidating distributions be made to the stockholders as determined by the Board, and following the conversion, to our unitholders as determined by the Board of Managers.
 
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NEW YORK REIT LIQUIDATING LLC
June 30, 2021March 31, 2022
 
In October 2018, wethe Predecessor announced the withdrawal of ourits common stock from listing on the NYSE in connection with the conversion. November 2, 2018 was the last day on which shares of ourits common stock were traded on the NYSE and our stock transfer books were closed as of 4:00 p.m. (Eastern Time) on such date. At the effective time of the conversion, each outstanding share of common stock was converted into one unit of common membership interest in the liquidating LLC (a “Unit”), and holders of shares of our common stock automatically received one Unit (which Unit was in book entry form) for each share of ourthe Predecessor’s common stock held by such stockholder. Unlike shares of ourthe Predecessor’s common stock, which, in addition to being listed on the NYSE, were freely transferable, Units are not listed for trading and generally are not transferable except by will, intestate succession or operation of law. Therefore, the holders of Units do not have the ability to realize any value from these interests except from distributions made by the Company, the timing of which will be solely in the discretion of the Board of Managers. On October 26, 2018, theThe Board of Managers designated is currently comprised of three members: Randolph C. Read, P. Sue Perrotty, Craig T. Bouchard and Howard GoldbergGoldberg. John Lee and Joe C. McKinney,Joseph Moinian, representing all the previous memberstwo of the Board, toCompany’s largest unitholders, serve as the initial members of the Board of Managers.
On June 29, 2020, Joe C. McKinney and P. Sue Perrotty each resigned fromobservers to the Board of Managers effective July 29, 2020. Mr. McKinney and Ms. Perrotty did not resign as a result of any disagreement with the Company on any matter relating to its operations, policies or practices. The resignations were tendered in conjunction with the Company’s cost saving initiatives. Additionally, Joseph Moinian, the Company’s largest unitholder, was added as an Observer to our Board of Managers effective June 30, 2020 in an unpaid positionpositions with no voting rights in connection with Board matters.
The Company is deemed to be the same entity as the Predecessor with the same assets and liabilities as the Predecessor.Predecessor on the date of conversion. In addition, the charter and bylaws of the Predecessor were replaced by the operating agreement of the Company. For tax purposes, the fair value of each Unit in the Company received by stockholders when the conversion became effective, which reflected the value of the remaining assets of the Company (net of liabilities), was $14.00 per Unit and was equal to the average of the high and low trading prices for shares of the Predecessor’s common stock on the last three days on which the shares were traded on the NYSE.
The business of the Company is the same as the business of the Predecessor immediately preceding the conversion, which, consistent with the Liquidation Plan, consists of the continued ownership of the Predecessor’s interest in Worldwide Plaza, the only remaining property-related asset. Under its operating agreement, the business and affairs of the Company will be managed by or under the direction of its Board of Managers, and the sole purpose is winding up the affairs of the Company and the liquidation of its remaining property-related asset. TheOn March 14, 2022, pursuant to the terms of the operating agreement of the Company, the Board of Managers extended the term of the Company such that the Company will remain in existence until the earlier of (i) the distribution of all itscompany assets pursuant to liquidation or (ii) November 7, 2022, which is four years from the effective time of the conversion. The term may be extended to such later date as the Board of Managers determines is reasonably necessary to fulfill the purposes of the Company.December 31, 2023.
The dissolution process and the amount and timing of distributions to unitholders involves risks and uncertainties. Accordingly, it is not possible to predict the timing or aggregate amount which will be ultimately distributed to unitholders, and no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in the Consolidated Statement of Net Assets. To date, liquidating distributions totaling $60.94$61.45 per common share/Unit have been paid.
Liquidation Plan
As of the date of this Quarterly Report on Form
10-Q,
all of our property related assets have been sold except our remaining interest in Worldwide Plaza. For purposes of liquidation accounting, our estimate of net assets in liquidation value assumes a sale of Worldwide Plaza at June 30, 2022March 31, 2023 based on a value of $1.65 billion. The actual timing of sale has not yet been determined and is subject to future events and uncertainties. These estimates are subject to change based on the actual timing of the sale of our remaining interest in Worldwide Plaza and the actual cash distributions received from the property during our holding period.
The net assets in liquidation of $322.9$316.1 million at June 30, 2021March 31, 2022 are presented on an undiscounted basis. Our current estimate of the liquidation value of investment in unconsolidated joint venture includes Worldwide Plaza at $1.65 billion which is based on estimated cash flow projections utilizing appropriate discount and capitalization rates as well as available market information and assumptions regarding capital expenditures. Net operating income at
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NEW YORK REIT LIQUIDATING LLC
June 30, 2021
Worldwide Plaza has remained relatively steady throughout the
COVID-19
pandemic. We will continue to monitor the market and adjust the net realizable value of the investment, if necessary, at each reporting period. The timing of the sale of the property, and the ultimate value we receive from the sale, are subject to change. The capital plan includes targeted capital improvements aimed at maintaining the institutional quality of the building and an appropriate allocation to allow for critical tenant lease renewals and rolls. In addition, capital will be available for management
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NEW YORK REIT LIQUIDATING LLC
March 31, 2022
to focus on repositioning the property primarily as it relates to
re-tenanting
and modernizing the space currently occupied by Cravath Swaine & Moore. We have set aside approximately $90.7 million from the refinancing proceeds to cover an estimate of our share of potential future leasing and capital costs at the property. To the extent the full $90.7 million reserve is not used, the balance is expected to be available for distribution to unitholders. Our joint venture partners have committed to contribute their
pro-rata
share of the budgeted capital investment. To date, all capital costs incurred at the property have been satisfied from operating cash flow of the property.
Management believes that the combined team of SL Green and RXR Realty will addprovide the necessary talent, expertise and capital, along with the capital contributed by us, to bring this Class A asset with its investment grade tenant roster to its full potential. Management’s estimate, like any estimate or projection, is subject to various assumptions and uncertainties including the joint venture’s ability to execute on the business plan, tenants paying their rental obligations, the equity capital and financing markets and New York City market conditions generally. There is no assurance that the joint venture will be successful in taking these various actions and that these actions will, in fact, result in anany increase in the value of the property.
Current Activity
For the fiscal quarter ended June 30, 2021,March 31, 2022, there were no property sales.
Liquidity and Capital Resources
As of June 30, 2021,March 31, 2022, we had cash and cash equivalents of $8.0$7.9 million. Our total assets and undiscounted net assets in liquidation were $325.7$319.0 million and $322.9$316.1 million, respectively, at June 30, 2021.March 31, 2022.
Our principal demands for funds are to pay or fund operating expenses, capital expenditures and liquidating distributions to our unitholders. We believe that cash flow distributions we expect to receive from our investment in Worldwide Plaza will continue to provide adequate capital to fund our operating, administrative and other expenses incurred during liquidation. We currently estimate that our current cash balance is sufficient to cover approximately three years of net operating expenses at the Company. If by August 31, 2023, all or substantially all the space currently leased by Cravath, Swaine & Moore has not been
re-leased
on specified terms, the joint venture that owns Worldwide Plaza would be restricted from making distributions under the terms of its indebtedness. If cash flow distributions from Worldwide Plaza are suspended or lower than currently estimated as a result of the economic conditions caused by the
COVID-19
pandemic and government protective measures, we will still be able to satisfy our current operating, administrative and other expenses; however, it is likely that liquidating distributions to our unitholders would be suspended or reduced accordingly. Our principal sources and uses of funds are further described below.
Principal Sources of Funds
Cash Flows from Operating Activities
Our cash flows from operating activities are primarily dependent upon the occupancy level at Worldwide Plaza, the net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants at Worldwide Plaza and the level of operating and other costs, including general and administrative expenses and other expenses associated with carrying out our Liquidation Plan.
Rent collections for retail and amenities tenants at Worldwide Plaza were not impacted by the
COVID-19
pandemic during the sixthree months ended June 30, 2021 andMarch 31, 2022 though they were impacted during the year ended December 31, 2020.2021. It is still uncertain as to the extent of the future impact of the
COVID-19
pandemic, including its multiple variants and government protectionsprotective measures thereto on rent collections at the property for future quarters. As of June 30,During the year ended December 31, 2021, WWP continues to collectthe property collected 100% of the office rents that are due at Worldwide Plaza. With respect to the retail and amenities tenants of the property, approximately $4.3 million of base rents remain unpaid as of June 30, 2021 as those tenants are seeking rent concessions as a result of the
COVID-19
pandemic. The unpaid rents represent approximately 3.0% of total rents due at the property since April 1, 2020. Negotiations with
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NEW YORK REIT LIQUIDATING LLC
June 30, 2021
those tenants are ongoing. At this time, we anticipate that a majority of rent concessions will be in the form of a rent deferral and not rent forgiveness, resulting in a delay in collections and not a reduction in collections. WWP does not plan to forgo any of its contractual rights under its lease agreements in connection with any relief requests. As of the date of this filing,were due. WWP has forgiven approximately $107,000$494,000 of base rents for current retail and amenities tenants and has written off approximately $477,000 of base rents related to surrendered retail and amenities space. To date, the impact of the
COVID-19
pandemic has not been material to the Company, however, it is not possible to estimate the future impact of the pandemic at this time.
See Note 3 to our consolidated financial statements included elsewhere in this Quarterly Report on Form
10-Q
for additional information regarding the impacts and risks we face relating to the
COVID-19
pandemic.
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NEW YORK REIT LIQUIDATING LLC
March 31, 2022
Sales Proceeds
In connection with the Liquidation Plan, we plan to sell our remaining 50.1% interest in Worldwide Plaza.
Principal Use of Funds
Capital Expenditures
As of June 30, 2021,March 31, 2022, we owned a 50.1% interest in the joint venture that owns Worldwide Plaza. In connection with the leasing of the property, the joint venture entered into agreements with its tenants to provide allowances for tenant improvements. These allowances require the joint venture to fund capital expenditures up to amounts specified in the lease agreements. Our share of capital expenditures for the sixthree months ended June 30, 2021March 31, 2022 was funded from property cash flow.
In October 2017 we set aside approximately $90.7 million from the proceeds of our sale of a 48.7% interest in Worldwide Plaza to cover estimated future leasing and capital improvement costs at the property. Our joint venture partners have committed to contribute their
pro-rata
share of the budgeted capital investment. To date, none of the $90.7 million has been utilized.
Liquidating Distributions
Until such time as we are able to dispose of our remaining asset, the actual amount and timing of, and record dates for, future liquidating distributions will be determined by our Board of Managers and will depend upon the timing and amount of cash flow distributions we receive from our Worldwide Plaza joint venture and the amounts deemed necessary by our Board of Managers to pay or provide for our liabilities and obligations. The timing and amount of our final liquidating distribution will be dependent on the timing and proceeds of the sale of our remaining interest in Worldwide Plaza. As the Company is treated as a partnership for federal and state income tax purposes, any such liquidating distributions on the Units will be deemed a return of capital.
Cash Flows
Our level of liquidity based upon cash and cash equivalents increased by approximately $0.3$0.4 million from $7.7$7.5 million at December 31, 20202021 to $8.0$7.9 million at June 30, 2021.March 31, 2022.
The holders of shares of common stock of the Predecessor approved the Liquidation Plan on January 3, 2017, and we adopted the liquidation basis of accounting effective January 1, 2017. We did not make any acquisitions in new investments during 20202021 or the first sixthree months of 2021,2022, and, in accordance with the Liquidation Plan, no further acquisitions are expected.
Our primary sources of
non-operating
cash flow for the sixthree months ended June 30, 2021March 31, 2022 include:
 
$8.74.0 million distributions in respect of our interest in Worldwide Plaza.
Our primary uses of
non-operating
cash flow for the three months ended March 31, 2022 include:
$3.2 million for liquidating distributions to unitholders.
Our primary sources of
non-operating
cash flow for the three months ended March 31, 2021 include:
$3.8 million distributions in respect to our interest in Worldwide Plaza.
Our primary uses of
non-operating
cash flow for the three months ended March 31, 2021 include:
$3.0 million for liquidating distributions to unitholders.
 
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Our primary uses of
non-operating
cash flow for the six months ended June 30, 2021 include:
$7.2 million for liquidating distributions to unitholders.
Our primary sources of
non-operating
cash flow for the six months ended June 30, 2020 include:
$7.1 million distributions in respect to our interest in Worldwide Plaza.
Our primary uses of
non-operating
cash flow for the six months ended June 30, 2020 include:
$3.4 million for liquidating distributions to unitholders.
Contractual Obligations
We did not have any contractual debt or lease obligations as of June 30, 2021.March 31, 2022.
Comparability of Financial Data From Period to Period
Results of Operations
Our remaining asset continues to perform in a manner that is relatively consistent with prior reporting periods. We have experienced no significant changes in occupancy or rental rates at Worldwide Plaza.
Occupancy and Leasing
As of March 31, 2022, Worldwide Plaza was 97.3%91.2% leased, compared to 97.2% as of June 30, 2021 and 2020.March 31, 2021.
Changes in Net Assets in Liquidation
Net assets in liquidation decreased by $2.8$7.0 million during the three months ended June 30, 2021March 31, 2022, primarily due to a $3.2 million liquidating distribution to unitholders, of $4.2 million and a $0.7 million net decrease due to a remeasurement of estimated costs. The decrease was offset in part by an net increase of $2.1$3.2 million in the estimated liquidation value of the Company’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations.operations and a $0.6 million net decrease due to a remeasurement of estimated costs.
Net assets in liquidation decreased by $4.5$1.7 million during the sixthree months ended June 30,March 31, 2021 primarily due to a liquidating distributionsdistribution to unitholders of $7.2$3.0 million and a $1.4$0.7 million net decrease due to a remeasurement of estimated costs. The decrease was offset in part by a netan increase of $4.1$2.1 million in the estimated liquidation value of the Company’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations.
Net assets in liquidation increased by $1.1 million during the three months ended June 30, 2020, primarily due to a net increase of $3.4 million in the estimated liquidation value of the Company’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations. The increase was offset in part by a liquidating distribution to unitholders of $1.7 million and a $0.6 million net decrease due to a remeasurement of estimated costs.
Net assets in liquidation increased by $4.1 million during the six months ended June 30, 2020, primarily due to a net increase of $9.0 million in the estimated liquidation value of the Company’s investment in Worldwide Plaza related to the estimated distributions to be received from working capital at the property and property operations. The increase was offset in part by liquidating distributions to unitholders of $3.4 million and a $1.5 million net decrease due to a remeasurement of estimated costs.
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NEW YORK REIT LIQUIDATING LLC
June 30, 2021
The net assets in liquidation at June 30, 2021,March 31, 2022, which are presented on an undiscounted basis, includes Worldwide Plaza valued at $1.65 billion which is based on estimated cash flow projections utilizing appropriate discount and capitalization rates as well as available market information and assumptions regarding capital expenditures in the accompanying consolidated financial statements, resulting in estimated future liquidating distributions of approximately $19.23$18.83 per Unit. This estimate of liquidating distributions includes projections of costs and expenses to be incurred during the next 12 months and costs to dispose of the Company’s remaining investment in WWP. As of October 18, 2017, Worldwide Plaza is managed by a joint venture of SL Green and RXR Realty, two of the largest owner operators in New York City. We, along with our joint venture partners, are committed to investing significant additional capital into Worldwide Plaza to further improve and reposition the asset which we believe includes embedded opportunities to roll leases to increase the value of the property. Any change in the future market value of Worldwide Plaza, if any, will be evaluated at each reporting period and will be reflected in the Statement of Net Assets in liquidation at such times. Management’s estimate, like any estimate or projection, is subject to various assumptions and uncertainties including the joint venture’s ability to execute on the business plan, tenants paying their rental obligations, the equity capital and financing markets and New York City market conditions generally. There is no assurance that the joint venture will be successful in taking these various actions and that these actions will, in fact, result in an increase in the value of the property.
Our unaudited financial statements included in this Quarterly Report on Form
10-Q
are prepared on the liquidation basis of accounting and accordingly include an estimate of the liquidation value of our assets and other estimates, including estimates of anticipated cash flow, timing of asset sales and liquidation expenses. These estimates update estimates that we have previously provided. These estimates are based on multiple assumptions, some of which may prove to be incorrect, and the actual amount of liquidating distributions we pay to you may be more or less than these estimates. We cannot assure you of the actual amount or timing of liquidating distributions you will receive pursuant to the Liquidation Plan.
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NEW YORK REIT LIQUIDATING LLC
March 31, 2022
Tax Status
We are taxed as a partnership for federal and state income tax purposes. Accordingly, no provision or benefit for income taxes is made in the consolidated financial statements. All distributions from the Liquidating LLC will be considered a return of capital for tax purposes. Unitholders will receive a Schedule
K-1
from the Liquidating LLC annually reflecting their allocable share of the Liquidating LLC’s income, loss, gains and deductions.
Inflation
Many of Worldwide Plaza’s leases contain provisions designed to mitigate the adverse impact of inflation. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions.
Off-Balance
Sheet Arrangements
We have no
off-balance-sheet
arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.
Significant Accounting Estimates and Critical Accounting Policies
Set forth below is a summary of the significant accounting estimates and critical accounting policies that management believes are important to the preparation of our consolidated financial statements. Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations and require the application of significant judgment by our management. As a result, these estimates are subject to a degree of uncertainty. Subsequent to the adoption of the Liquidation Plan, we are required to estimate all costs and income we expect to incur and earn through the end of liquidation including the estimated amount of cash we expect to collect on the disposal of our assets and the estimated costs to dispose of our assets.
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NEW YORK REIT LIQUIDATING LLC
June 30, 2021
Investment in Unconsolidated Joint Venture
We account for our investment in unconsolidated joint venture under the equity method of accounting because we exercise significant influence over, but do not control the entity and are not considered to be the primary beneficiary. Under liquidation accounting, the investment in unconsolidated joint venture is recorded at its net realizable value. We evaluate the net realizable value of our unconsolidated joint venture at each reporting period. Any changes in net realizable value will be reflected as a change in our net assets in liquidation. The liquidation value of our remaining investment in Worldwide Plaza as of June 30, 2021March 31, 2022 is based on estimated cash flow projections utilizing appropriate discount and capitalization rates as well as available market information and assumptions regarding capital expenditures.
Recent Accounting Pronouncement
There are no new accounting pronouncements that are applicable or relevant to the Company under the liquidation basis of accounting.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
As of June 30, 2021,March 31, 2022, we had $601.2 million of unconsolidated mortgage debt reflecting our pro rata share of Worldwide Plaza’s total mortgage debt of $1.2 billion. This debt consisted of fixed-rate secured mortgage notes payable. Changes in market interest rates have no impact on interest due on the notes.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.
As of June 30, 2021March 31, 2022 an evaluation was performed under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in
Rules 13a-15(e)
under the Securities Exchange Act of 1934). Based on that evaluation, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 30, 2021.March 31, 2022.
Other Matters
There have been no changes in our internal control over financial reporting during the most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
The information related to litigation and regulatory matters contained in Note 8 — 8—Commitments and Contingencies of our notes to the consolidated financial statements included in this Quarterly Report on Form
10-Q
is incorporated by reference into this Item 1. Except as set forth therein, as of the end of the period covered by this Quarterly Report on Form
10-Q,
we are not a party to, and none of our properties are subject to, any material pending legal proceedings.
Item 1A. Risk Factors.
There have been no material changes to the risk factors previously disclosed in Part 1, Item 1A of our Annual Report on Form
10-K
for the year ended December 31, 2020.2021.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
Not applicable.
Item 5. Other Information.
None.
Item 6. Exhibits.
The exhibits listed on the Exhibit Index are included, or incorporated by reference, in this Quarterly Report on Form
10-Q.
 
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EXHIBIT INDEX
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form
10-Q
for the quarter ended June 30, 2021March 31, 2022 (and are numbered in accordance with Item 601 of Regulation
S-K).
 
Exhibit No.
  
Description
31.1*  Certification of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*  Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS  XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH  Inline XBRL Taxonomy Extension Schema Document
101.CAL  Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF  Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB  Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE  Inline XBRL Taxonomy Extension Presentation Linkbase Document
104  Cover Page Interactive Data File (embedded within Inline XBRL document)
 
*
Filed herewith
 
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
NEW YORK REIT LIQUIDATING LLC
By: 
/s/ John Garilli
 John Garilli
 Chief Executive Officer, President, Chief Financial Officer,
Treasurer and Secretary (Principal Executive Officer,
Principal Financial Officer and Principal Accounting Officer)
Date:
Date: August 5, 2021May 10 , 2022
 
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