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New York City REIT (NYC)

Participants
Louisa Quarto Investor Relations
Mike Weil Chief Executive Officer
Chris Masterson Chief Financial Officer
Bryan Maher B. Riley Securities
Call transcript
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Operator

Good day and thank you for standing by and welcome to the New York City REIT Inc.

Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Louisa Quarto. ahead. go Please

Louisa Quarto

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

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

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

Mike Weil

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

into REIT a and by of New of York another collection the City real asset execute Times the We segment our continues New X XX%. co-working on our to increasing XXXX at Square of strategy growing occupancy company market. Avenue proactive strategy Innovate quarter a Americas, to NYC, York management launched City at increased highlighted rent diversifying estate

New was and our the at for Finally, management. Year of operations Street by property XXX BOMA York Building William named superior

onsite return and a pedestrian decline effort recent As of is use The young city deliver a City’s tribute strong in the which continues in in support the encourage aggressive in back estate New already trends rise CBRE particular XXXX, the vaccination leasing Further results. through fuel office return fundamental City ongoing other traffic We More City York such to segments campaign. as home, continues occupancy. follow-through belief highly New be increase continues on pre-pandemic set apartment return to office The After remain the York workers and continue as to necessity to meet to an baseline. from supply apparent demand estate City’s based soared Pent-up lifestyle initial market. asking is building dedication York of to long-term team. broadly, an York New some will to according should of for recognition the systems, in rents real of in conditions to their this space. back extensive drive by the prices. Chao real expect strength New in for its testament helping and pre-pandemic see exceed climbed natural focus or a retail outstanding the the work city and in spearheaded the our CBRE management are of leasing, we as is to the building confident A prices. from work Together, to which upgrades of XX% is have our departed team. management limited cases to asset has to Chris to award to research, office office pre-pandemic exceptional and echoed

X retail includes condominium York assets portfolio City entirely office and New and in Manhattan. located Our in primarily

large government York agencies. of investment City a grade portfolio have CVS, featuring City this TD New including Bank, We tenants, number National pure-play built and Bank

of XX, of had and of or million million, grade years, term XX lease rated implied foot that investment lease our average that were tenants top occupancy square an Across have term grade of Knotel end has the Times commencement portfolio feet NYC’s XX-year lease $XXX the September we increased X.X occupancy to X.X As the with XX% XX.X% remaining square quarter. years. of remaining has leased at previously of Quarter-over-quarter average investment replaced at an lease X term. X.X Square weighted was a all of and assets, X,XXX a our X.X% third

reported rent includes XX% increase quarter, the year. after quarter XX% full strong XX% quarter. being at the we quarter across resumed rent last X For last off tenants from written fourth paying retail several a the related to a This third collection Square X% rent of recorded rent portfolio, that last cash of Times from and at improvement $XXX,XXX original a increase

collection a and Our asset challenges. from recovery our team tenants related pandemic management engaged towards drive with remains complete to helping working rent

including ongoing State having and with GSA. the tenants New dialogue York the renewals, several key negotiate to of also are We

including and annualized Our X and rent. portfolio increased add Square leasing increase $XXX,XXX Times lease executed by after end to X line a of quarter is to at occupancy signed expected LOIs pipeline, straight XX%, occupancy X%

moving-ready to This launched into strategy better segment opened a NYC, As mentioned, quarter. work formally real New Americas, XXXX took diversify City tenants. meeting York space opportunity which investment of turnkey co-working initial seamless our offices, minimal to and at bespoke comforts in-place ensure technology the Innovate on growing we offices estate terms market this and space the the a clients. Avenue great a with all private the virtual offers to office and with and agreements staff of and over Onsite furnishings NYC service experience. of of full leased was modern Innovate with

over space it We rental Innovate quarter initiative are more already in generated this last the this seeing than quarter. did as results from NYC income $XXX,XXX

Knotel space a work lease and of These former Knotel as half that seeking part third more that a of tenants X of weighted leases formerly the surrender occupied. XX% former Knotel up with to We sign been some quarter line tenants, this Including were XX,XXX whom we the better remaining annualized and average by agreement term due of subtenants available or same occupied return years formerly $X.X of have creditworthy the after with leases NYC. feet lines are quarter has previously Sports rent X XX,XXX feet actively signed Universal included paying lease rent square the of to straight have nearly replaced space leased end, the square than rent Knotel a lease quarter Through of to almost combined of the with space. the finalized and and million. spaces, Along Knotel. past consideration we for of

gym will we better former into are converting for which positioned be space leasing. this office believe We space,

which our space transfer CBRE garages have network best We to with goal connection parking fact be of the engaged of new quarter week, in the tenant. the garages. of our to with operator, through operator, million transition the last backfilling in payment was original their the of management lease included And fourth In from seamless results. agreed with a the creditworthy the termination former new relationship to who finalized a these operator, a we operator fee $X.X will we to

quarter, York City new continued leases the X forward with We increasing REIT rent tenants, negotiating growing third have portfolio. and New across to Times at during existing occupancy Square and collection the drive

BOMA replaced initiative York the almost award. Knotel by opens have former XXX XXXX our which Street, co-working a a our Launching also of the was at Americas of space two-thirds peers honored new at Avenue We with William diversifies deliver We Masterson to our Chris over third go will exciting results. Chris? it turn the our chapter to well-positioned New to is portfolio over I NYC and value. quarter for business. City long-term that believe

Chris Masterson

Thanks Mike.

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

per share $X.X For the last third negative FFO compared of to to negative a quarter. per Core FFO second $X.XX $X.X million million stockholders quarter. million common the was attributable last million was negative XXXX, $X.XX $X.X to or our in quarter compared negative $X share to compared quarter

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

Mike Weil

$X.X space we over of strategy accelerate where work tenants, term the survive creative and success years this the we over straight with a open traffic In leased alternative the former or we our line alongside York at last that lines have demand new please over returning year. observed X% in finished With for more pace city for am couldn’t a pre-pandemic market, and that, we success Despite beyond. evidence developing we are its apartments, to believe office seeing their leases asset re-leasing found the I the solutions. or hard interest whether X-year average our questions. and million week, Thanks, dozen These look we totaled the in the leasing City foot the to negotiated have conditions, square pandemic, our we new XXXX year, portfolio. Chris. totaling forward Square, will index we XX,XXX high-quality tenants last as X.X the active the where New of in management leases Times feet the has proud rents momentum cases headwinds asking XXXX weighted seen been of created rent. and signed We have operator, have favorite done to our of have of renewals and properties. annualized Every

Operator

Riley you. Thank first of with from We coming B. line Securities. Maher question Bryan [Operator our the Instructions] have

Your is line open.

Mike Weil

Hi, Bryan.

Bryan Maher

for the that doing hope Good Listening keep those estate that are guys believe to everything heart to morning, real not up? well. all fainted New Michael, to I City you leased to Chris. me comments do with is York have you leads

Chris Masterson

think to your complete that I a Bryan, it able we a end were Chao outcomes We some reasonable we being So, successes in to by with the the beginning really and is we going have fantastic done heart, to work third and And to we into XXXX. the of faint from momentum did company for But had of the the but were the not able of groups year. quarter pleased post end within third XXXX necessitated of spent necessary the we of I am the the find the COVID. were that help the the and job. lot quarter, shareholders. was Chris hard point, of really And beneficial organization. to the to what needed

Bryan Maher

money there NYC where Yes me far. plan of all, first is to done. – in Well congrats that kind lucky that put and XX%, at in back pretty more Times carve on you the do I a that well and full space Couple you have I for And that’s Innovate properties a Innovate in pretty questions space have is, My was you is way question successes from think the general, leased specifically that? XX% over occupied September, building to a you well, also out could there incremental And of so property on could some and it. NYC? at enough tour to the impressive. of up get Square? other pretty occupancy, that’s if there is X

Mike Weil

Yes.

We that a Innovate now So important with NYC. of part have first, the most platform. is

We services. the have can We the provide technology.

in that so thoughts. option for to will viable staffing, is the just it have a I get to We Chris us. turn minute it a over his

favor. of back, this comes I back type long-term for expect market the to commuter direct are see see will we think As but leasing, that we I coming both going into space also demand

– presence don’t the with so evaluate out it, is we as but ability only to going any building-by-building pleased have? of it space, is what basis. Innovate having very more have love online really to create answer people the that Chris a well, my you with certainly anticipate So, I on team you NYC forward I a And the We aggressive do and Innovate able we thoughts – we NYC know am to Chris, NYC. Innovate have available. been will

Chris Masterson

think right. I that’s Mike,

I think will look across it we certainly when our evaluate portfolio.

I XXXX of intensive. that existing of the certainly made given Innovate, practical strategic and think out at we were on office launching right launched the that Americas floors sense, the they build two decision

other look really at as lends think space just themselves you I if portfolio leases. of some whole, our to direct our a

certainly But make other path. look can we So, I launched we again, sense. most since think likely this, that at had situations that’s the

Bryan Maher

And little correctly, call on and I for good hear in the tenant you Did on to garage moving is us while? them a the new more expect Okay. original say you without a situation, problems can then to this? a place stay you tenant give that’s

Mike Weil

yes. possible. give is restrictive way lease. to Quick of at well closely as a retrieve frankly, that weekend, Park. The Chris the our open with in City background Park Quick the next We the parking signage And legally we had hours a sure that ICON. very we communicated NYC answer Quick collect terrific in early the wanted a They we building place. some They didn’t to situation. unnecessary We Street this for to day which questions needed make parking the from again, with a contacted was us job ICON, has situation working then rights makes those with did which XXth under in legal garage York They operator. Quick hours situation. exposure New really Park garage to much had we the did wanted transition to for And the reason that of both enforce to customers. very And very ICON extended monthly any tenants is Park understood ICON. the the the And garage, as happy. just had residents were the space over with day able the was terrible established

Quick that basis. be a So, successful on operator long-term we do believe will Park a

Bryan Maher

that Sports, said you comfortable that is gym it more rents having think moving then And longer do office? and versus with term suspicion now My but an net impact when the done, is you Great. more can is on a $X it’s on an little what you office, feel discuss? to and rents the being change Universal there collecting is all bit the the for a maybe it being be about

Chris Masterson

filings. we It’s any we that public because in not something right about discuss can now, haven’t it talked

yes, the for it’s the building shouldn’t in give down. more little So, let I And much back overall makes an we us Bryan, on and gym other better come concept a it tenants a Nobody But the and frankly. building you further get as comfortable. some to noise bit that, concern nobody, office say the people a out. in about building traffic but in use of can – use

put the this a Times a to we believe to traditional will in desirable And more look continue a floor be we strong. Square that is will So, user sub-market use. long-term

Bryan Maher

for is on Factory, the last me, property? or plans to just either then the And Hit that Okay. sell any update release there

Mike Weil

Nothing at can a that discuss. we is point

the right share we be anything to Bryan with Factory. very any the now? can Hit the marketing, continued of you that in have disposition We think Chris, active

Chris Masterson

brokers our are the but of team are various in with who engaged in and market investors Nothing through working with interested product. we this now, right

Mike Weil

And that would have some And of there still have inquire small would are the like And are it portfolio, it a people we It’s the It’s Chris I potential that focus but something way. like there about. an just incredibly in before not something on. resolved is the of frankly, very one. positive and I end to my active part buyers. It’s to this is goal resolved year. definitely

Bryan Maher

market. But there there is to the are Okay, real space, office to take New be you a exactly, maybe come York have strong if for balance come here people the including out the dynamics how anything what’s dialogue have rents advantage able with your given seeing with on going estate that might young City continued I any of much back opportunities more, there the be that son just kids, market. living people to We to my the back you office, second situation? with there one know in sheet has into moved and as

Mike Weil

As up? an as standpoint, acquisition far lease as from far as the Bryan or

Bryan Maher

acquisition, No,

Mike Weil

Yes. The high And really have we acquisition pipeline very trade to at active, get seen which interesting. some buildings is more levels. has started pre-COVID

seen had smaller estate. through we the is What the have City New next real don’t see will also have opportunity York We to landlords in this. just fight that

we any So an are I XXXX, that think going to market have? have that in Chris, active you thoughts

Chris Masterson

that’s think early have that Bryan, a seen market. a flurry fall, since of really have right. I said hit the We we opportunities

seen opportunities also have off-market. have been some We that

all Manhattan. XXXX. think taking these And And continue this city, we in examination will focusing are on I really opportunities throughout close so, a primarily at the early

Bryan Maher

assets on million of both asset as And the within maybe looking sweet an and has far the maybe maybe asset, amount we can portfolio are get and your just different $XX what an spot range? as you goes dollar refresher a of for some some

Mike Weil

looking are for $XXX that to to upside. kind million In activity, see have range that buildings sub-markets Bryan. in of but stable look So, the really $XXX we we asset continue strong million we buildings,

to to we next be take going years over to something even we what to want a is but possibly think don’t have advantage to rents couple we see growing as of want the asset, from we further the COVID. able complete return stabilized of have that of be occupancy, rebounding going reposition is So, the economy

So, Square, portfolio XXX Williams as buildings very the the similar far XXXX of we now to as the that types Times have in the X Avenue of Americas.

the that’s to So, type and for provide are means with looking Not New we are somewhat improve need then of upside don’t build the that the where his management boutique, to relationships REIT, in buildings. looking in for that work these as that asset out trophy Chris think think community ability no maybe whether lease I continues haven’t have platform acceptable just they certainly lobby an City a us opportunity improvement, the mechanical continue while. York And we then buildings us the expression. for of assets, of to we type buildings side I benefit type they in some really we some that’s through by And upgrades for. if this building, investment that as had brokerage

Bryan Maher

Thank you.

Mike Weil

Yes. Thanks, Bryan.

Operator

Thank over comments. the you, turn Weil back to for call I will now Mike closing any

Mike Weil

Great. you Well, joining Thank you. all thank us. for

have by the with in we with a encouraged year on forward quarter. portfolio. we to were out forward can and to more said normalized executing XXXX, success continue momentum. XXXX Bryan, the so, finishing to the positive quite plans this of As our third forward look We move much frankly I And looking

very all much. you thank So,

Operator

today’s call. conference This for Thank you concludes participating.

now may disconnect. You