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New York City REIT (NYC)

Participants
Louisa Quarto EVP
Mike Weil CEO
Chris Masterson CFO
Chris Chao SVP, Asset Management
Bryan Maher B. Riley Securities
Call transcript
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Operator

Good morning, and welcome to the New York City REIT First Quarter Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Louisa Quarto, Executive Vice President. Please go ahead.

Louisa Quarto

Thank you, operator. thank earnings joining call. and first for everyone, XXXX quarter morning, you us for NYC’s Good This Investor NYC’s Relations is section event being of website webcast at in the www.newyorkcityreit.com.

actual refer filings results only the forward-looking and this and Officer; all Masterson, filed uncertainties. may forward-looking to more you or our a forward-looking conference NYC’s of discussion results The for XXXX, and or factors on discuss the today for statements, Chief the Officer. Chris this call call SEC filings, of are Financial XXXX, Should of or more of information by call. XX-K me date Weil, could Any detailed NYC’s as filed Form differences. implied one from XX, on statements. risk the Joining uncertainties materially cause to these these risks ended quarter’s those following the statements are Chief March which SEC We Mike of Executive subject materialize, to December differ that during the risks subsequent contains are year provided made expressed XX, including all the

over intent investment-grade consider Michael use term go a performance. in Please measures, for law. detailed call, we available with these to turn filings, measure most SEC which stated as the our disclaims we tenants, information obligation our prepared should for measures discuss Weil, These about call financial directly the non-GAAP earnings in throughout release today’s GAAP. GAAP be evaluating be more required to A reconciliation not to NYC in ahead, will Executive useful company’s will Mike. Chief revise call. we to As Please believe in measures update our or substitute I’ll can financial release. now Officer. be earnings the we refer to of considered Also, isolation or in accordance results forward-looking any as is what our except today’s statements, or also implied a by during these financial comparable

Mike Weil

thank morning, and Good us Louisa. today. Thanks, for you joining

drive portfolio New the proactive leasing rent the City impressive a substantially strategy, results over activity. through continues being of cash highlighted York are summer. year prospect in coming the collection and After City York over improving down, by management on and New across quarter-over-quarter locked ramping about enthusiastic of REIT asset to up reopening significant scale we the weeks a a

all tourist We throughout growth from is seeing it of these alignment attractions of and the another as will businesses, to participants city. talent, believe inspiration the that revitalize all as for The that and governor should revenue. We’re an and restaurants, on and intentions depends these cultural serve the of city. catalyst for vibrant interlocked returned, institutions community the segments mayor the

tenants, For XX% collection group increase the XX% top across collections our portfolio, quarter. the XX a from with recorded quarter, collected our point we first quarter, last basis XX% of last strong from consistent this cash from XXX with rent

long-term with Americas, are to business engaged come to estate, longest-standing remain drive strength At We normal of a our portfolio grow we’re and their real the create and Avenue confident to further tenants, our New XXXX near resume for highly see acceptable value. to as term. remained rent Our City success our has the agreement mutually the shareholder in model our York operations tenants helping work asset to management restaurants opportunity team of of one able and to with instance, collection. excited the in

including a New York primarily built City New Bank, assets investment-grade number entirely high-quality a in CVS, and office that government in Bank agencies. Manhattan. tenants, condominium located features portfolio and pure-play X Our portfolio TD National is diversified and City York of We’ve City large across retail

of an and of the remaining investment-grade have rated March XX% and earnings in we were or tenants believe stability implied term of portfolio. top increases NYC’s almost lease quality XX XX our average investment-grade XX, As years, which

million, of XX.X%, occupancy million X.X incremental a of lease substantial square available opportunity earnings up as and remaining foot portfolio the weighted years $XXX.X lease growth Our we for has term average X.X space.

lease X of last to and Knotel In with first to over composed formerly $X.X with actively of total XX,XXX straight-line license and we global occupied. a agreement replacement that a discussed million seeking human we short-term leases a As feet we’re in resource up quarter, Knotel annualized space quarter, sign lease company former square technology Fortune with that rent. X-year a executed the leases tenants company and XX

intent also executed technology a the X-year a letter for company. of aforementioned with nonbinding lease We

X we $XXX,XXX leases feet square Additionally, completed annualized X,XXX rent. new and totaling straight-line over in

To open we previously though whom remain rent. tenants quarters prior fully several discussed, for on of substantial and receivables furnished creditworthy for Even payments. approximately Our basis date, withholding letters by purposes, of in nonbinding lease space Further, formerly largely Knotel. to portfolio and condition we intent year, collectible position matters, space, aggressively no the we’ve the a we these turnkey engaged significant signed to surrender are We half last occupancy leasing to or businesses down we XX% prime are see the from concluded quarter. these as the for feel leased remaining very of tenants. is strongly of value which during rent of XX% occupied took for at of write-offs opportunity not and an our uncollectible we there’s as we end their space excellent by for was operating, accounting result as in of believe create the us an Knotel with

of legal unpaid We will us these our rent. payments in tenants’ in pursuit are to extremely aggressive remain our allowing and recover these confident position,

XXX feet of generate $XXX,XXX. X-year Our annualized Street proactive deliver overall NYC will a enhance William at quarter straight-line portfolio to X,XXX executed to of rent continues lease the square to approach portfolio. that we net the quality results management for Subsequent end, new that

We’re were current the pipeline forward to leasing expirations a terms, feet. of assuming increase totals they currently terminations. of would over occupancy on deals square that XX,XXX consummated XX%, also these our no or portfolio If all building leases

We’re also in from over licensees of in and space tenants place. and operating keeping co-working their of one taking advanced stages our

to and plans the large office capable large that the very at the relax aggressive weeks, near in of right team, to at workers discounted more to an back to prices present vibrant end week million familiar that documented news has We York the the opportunity by a as a the real reawakening New offices for occupancy that have believe have technology such once attractive New unique signals past and Google Mayor City the in with. of prices. June. back City acquire called workers York vaccinated we dislocation a city city and opportunity. and our We bolster diversified de assets that believe irreplaceable York potentially to In being the this summer, employers be may the We goal the Times value city articles last of plans several people York operating on City asset of scale an we’re JPMorgan New are long-term experience recognizable X offices will Blasio future. the New as the of short-term in growing, We bring the restriction and confidence believe to city Square is seeing capitalize the by estate. XX,XXX

trophy turn occupied the York for non long Chris? the to and New we Chris condominiums owning other over of market stable, results. first term, enduring over Over that it center remain an I’ll believe Masterson and high-quality retail office go the estate. foremost will to City commerce real quarter global buildings,

Chris Masterson

Thanks, Mike.

$XX.X of the The net million company’s stockholders compared loss first First compared quarter to to to was quarter a quarter $XX.X loss quarter XXXX. $XX.X XXXX XXXX. net fourth in million was revenue fourth attributable million the million common $X.X in of GAAP

first negative FFO $X.X the XXXX, attributable FFO negative quarter. to last quarter quarter. For compared the million to stockholders Core negative to compared was was million fourth common of in $X.X million million $X.X $X negative our

at average remaining weighted quarter a GAAP of and the first call in for years. measures to of average We leverage net debt XX.X%. the with net a X.X% income X be With maturities turn remarks. closing term Form nearly debt release, million found net years no weighted within effective maintains a non-GAAP of earnings interest $XXX.X prudent ended next balance with debt supplemental a always, also can of conservative the with rate As and back Mike XX-Q. and X NYC reconciliation some I’ll that, our to sheet of

Mike Weil

We that is Thanks, York positioned well portfolio deliver value. City to believe New Chris. long-term our

institutions forth based from maintain time aggressive lease for return rate significant near-term of We greatly of leaves X please active line term to to own New portfolio concentrated The announcements and the XX accelerated business in government busy We’ll expirations benefit believe are properties remaining base, portfolio, for making and our workers live there city, assets we pandemic. comprised average York and on is will Operator, continued tenant occupancy contribute which portfolio are state we relative place own world-class open investment long-weighted of at our stability, the in York the Manhattan by performance that continued which line and a our an scale City be diversified provide room tremendous the believe rent. office of the federal largest believe City limited that of the grade. Our a great of the set offices, XX.X% and work. and the approach this the straight-line employers. and imminent leasing will during lease growth the a We return questions. to of the the by restaurants value annualized high-quality New to and in

Operator

from Securities. Our from Instructions] Bryan Maher comes question B. [Operator Riley first

Bryan Maher

A questions couple me. of for

for acquisitions seeing, bit Can what what is quarters? your give talked next, appetite on scope? You you’re the over a you us prepared maybe color say, And NYC’s comments. making opportunities more acquisitions X about in briefly little

Mike Weil

Sure.

ask join specifically, asset Chris start. platform for can up Chris as York as answer Chao REIT, jump think before. us spoken well. management today, you to the and City I in I did have New Chris before to I’ll he But heads First, we

million assets We roll New as, I range few City million always York what these to REIT. York the of describe of to seen market businesses $XX typical have the types $XXX seen in City. solid would I fit as trophy of buildings we’ve with would New occupying boutique criteria non that rent come in the a a that the, describe assets

So a businesses. accounting those lot of firms, law types firms, of

be to where maybe year period estate. long it some has to of re-leasing, longer where some place out family-owned We owners be to there’s that and work taken just was a just retenanting reviewed they this a no COVID needs want have coming of or real OMs asset, done them

So we’re in look I the what is the to York continue time think very active for we probably And we’re We buy. the see to to to one New the really increase portfolio. in find X City, make market. but acquisition, that. maybe the fit Chris would stability going to and want we occupancy, right going take our It’s in that

Bryan Maher

is update Great. any selling And there that Hit asset? the Factory potentially on

Mike Weil

you give update an I’ll there.

the you really which in in increase have but leasing enough, always know, opportunity. we’ve asset As that is have interested Interestingly and been seen it we we there, does marketing interest, small it been sit is something very it. a an in portfolio,

with with market a that negotiating think in lease I Chris opportunity a industry. potential fair group it’s a to sale. related will we continue to it So now is say right for longer-term

And So updating more to good it’s would I look have as you fit. information. we forward a concrete

Bryan Maher

City well I those And with Any rent you Gifts. know it’s had lot I Times Equinox as believe York of Equinox. agreements, X coming Great. some I signed as and people New back into New York the businesses, to Square a and with update moving Love parol then visitation market

Mike Weil

talented portfolio I’ll Love New with frankly, it’s tenant great I very been and a New experience. in York outcome I start York business. man business a Well, and, really love the and a is positive because terrific a

reopenings is back. him. coming Obviously, City beneficial really York and So month see New to of pleased we’ve every to business traffic been in his

for the We’re seen all with listened I to And Love having that level governor about vaccinations, high very is New of the and mayor’s reopening both excited tremendous and commentary for the just New come but reopening York. agreement, a extension only I deferral, some Not this did it location involve to And we some of did New an And York. abatements, also term. is some business. Love premier York’s

litigation to we looking that because again, location have to and the very against the taken, be forward We know great to absolutely both think I them. tenant, look is quite the their frustrating litigation. outcome landlord and they really operating I’m Equinox, as have together, So that so be It’s open successful. we no tenant successful no of reason a have and are. we successful. they pending position they’ve excuse outcome And can come that and for that to problem that the they a forward

Bryan Maher

And me. Great. for more then a just couple of

the of balance far. congratulations quickly But On for that all, of side Knotel that have -- so space? outlook what so you the getting on first what’s the re-leased

Mike Weil

space. you So, conversation, Chris you’ve got public like and in sense that bit want a update that. our keep it to Chao, think, to disclosures, would talk great I But Obviously, little Bryan. to of a Chris, we we’ll at general about continue activity to

Chris Chao

noticed to over Street starting past walk activity tremendous had good certainly. X talk and -- We’ve to them. seen been floors. looking -- and of months tenants at tours Bryan, XXX pick up you West just really Knotel a where There’s we’ve several number XXst through really a the leasing again. Yes, tremendous

As these floors continue new to really Street. releases we’ve ready XXX on existing our an that, see And and traction stated a are an And front. tenant we we’ve for at the would on working in -- to William built, I And actually with same say go. LOI we’re that lease. that fully to furnished

pleased the that so And with far. so quite we’ve we’re had progress

Bryan Maher

Great.

Mike Weil

rents And location. seeing levels the if pre-COVID just Bryan, up can add, this we’re to I market at holding

essentially as So build-out discount a And is we’re this not to mentioned, space. significant first-generation seeing need rents. Chris

in costs construction significant retenanting. anticipating not we’re So

to not momentum. want leasing got his done, retenanting. team Chris are good don’t certainly active we’ve -- and I So we’re in but And

Bryan Maher

of year? just last couple back a Chris $X do years, Where over then And that. you look kind this that last years when sticks million Great. and that, for last you the in for think maybe best me, X-ish it On this of year, is the Masterson. little think I CapEx, X-ish, before was out

Chris Masterson

You just out kind the repeat phone. please? on beginning you can Sorry, of my cut

Bryan Maher

it it Sorry. I asking million And about looked was when closer million. $X the back closer CapEx million only little $X X just million. we for before this that, a is was $X kind $X $X year, to years or million, it million, last was of XXXX for because over to $X the And at year? the

Chris Masterson

general, It’s what up new towards probably it’ll year. to to closer $X in. going on in do will to probably out need end coming I say would it depend end the any million. tenants would I probably we this shake say with But the lower

Operator

concludes There back are This turn no our more management the conference like question-and-answer session. questions remarks. any closing the in I’d for to to queue. over

Mike Weil

for to just our some taking I the to thank first and want time everybody for update listening quarter.

news based that very is This COVID reopening in positive York underway We’re about obviously and New is the City. dropping. on the cases regarding excited vaccinations

again at to So a to we’re of quarter. talking second the forward forward and looking the positive XXXX look end

you all much. thank very So

Operator

attending concluded. now you has today’s presentation. for conference The Thank

disconnect. now may You