Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 9, 2024

 

American Strategic Investment Co.

(Exact Name of Registrant as Specified in Charter)

 

Maryland		001-39448		46-4380248
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)
222 Bellevue Ave, Newport, Rhode Island 02840
(Address, including zip code, of Principal Executive Offices)
Registrant’s telephone number, including area code: [phone]

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, $0.01 par value per share		NYC		New York Stock Exchange
Class A Preferred Stock Purchase Rights				New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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. ¨

 

 

Common Stock [Member]

 

 

 

Item 7.01 Regulation FD Disclosure.

 

Earnings Call Script

 

On August 9, 2024, American Strategic Investment Co. (the “Company”) hosted a conference call to discuss its financial and operating results for the quarter ended June 30, 2024. A transcript of the pre-recorded portion of the conference call is furnished as Exhibit 99.1 to this Current Report on Form 8-K. As previously disclosed, a replay of the entire conference call is available through November 7, 2024 by telephone as follows:

 

Toll Free Dial in Number: 1 [phone]

Toll Dial in Number: 1 [phone]

Conference ID: 5954637

 

The information contained in this Current Report on Form 8-K, including Exhibit 99.1 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

The statements in this Current Report on Form 8-K that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “may,” “will,” “seeks,” “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include (a) the anticipated benefits of the Company’s election to terminate its status as a real estate investment trust, (b) whether the Company will be able to successfully acquire new assets or businesses, (c) the ability of the Company to enter into a definitive agreement for the sale of 9 Times Square on the contemplated terms and consummate such sale, (d) the ability of the Company to execute its business plan and sell certain of its properties on commercially practicable terms, if at all, (e) the potential adverse effects of the geopolitical instability due to the ongoing military conflict between Russia and Ukraine and Israel and Hamas, including related sanctions and other penalties imposed by the U.S. and European Union, and the related impact on the Company, the Company’s tenants, and the global economy and financial markets, (f) the potential adverse effects of inflationary conditions and higher interest rate environment, (g) that any potential future acquisition is subject to market conditions and capital availability and may not be completed on favorable terms, or at all, and (h) the Company may not be able to continue to meet the New York Stock Exchange's (“NYSE”) continued listing requirements and rules, and the NYSE may delist the Company's common stock, which could negatively affect the Company, the price of the Company's common stock and the Company's shareholders' ability to sell the Company's common stock, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on April 1, 2024 and all other filings with the Securities and Exchange Commission after that date including but not limited to the subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

 

Exhibit No		Description
99.1		Transcript
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	American Strategic Investment Co.
Date: August 9, 2024	By:	/s/ Michael Anderson
		Michael Anderson
		Chief Executive Officer

 

 

 

Exhibit 99.1

 

American Strategic Investment Co (NYSE: NYC) Second Quarter Earnings Call

 

Executives

 

Michael Anderson - President & CEO

Michael LeSanto – CFO

 

Operator

 

Good morning and welcome to the American Strategic Investment Company's Second Quarter Earnings Call. [Operator Instructions]. I would now like to turn the conference over to Curtis Parker, Senior Vice President. Please go ahead.

 

Curtis Parker

 

Thank you. Good morning, everyone and thank you for joining us for our second quarter 2024 Earnings Call. This event is also being webcast in the Investor Relations section of our website. Joining me today on the call to discuss the quarter's results are Michael Anderson, American Strategic Investment Company's Chief Executive Officer, and Mike LeSanto, the Chief Financial Officer.

 

The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. Please review the forward-looking and cautionary statements section at the end of the Second Quarter 2024 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings including the Form 10-K filed for the year ended December 31, 2023, filed on April 1, 2024, and all subsequent SEC filings for a more detailed discussion of the risk factors that could cause these differences.

 

Any forward-looking statements provided during this conference call are only made as of the date of this call. As stated in our SEC filings, the Company disclaims any intent or obligation to update or revise these forward-looking statements except as required by law. Also, during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release which is posted on our website at www.americanstrategicinvestment.com. Please also refer to our earnings release for more detailed information about what we consider to be implied investment grade tenants, a term we will use throughout today's call.

 

1

 

 

I will now turn the call over to Michael Anderson, Chief Executive Officer. Please go ahead, Michael.

 

Michael Anderson

 

Thanks, Curtis. Good morning and thank you all for joining us. Our positive results for the second quarter included Adjusted EBITDA growth of nearly 50% compared to the second quarter of 2023. We achieved this growth through a reduction in G&A and operating expenses, coupled with our ongoing leasing success. We also delivered an 80 basis point expansion in occupancy, to 85.9%, compared to the same quarter in 2023.

 

Additionally, as we previously announced, we signed a non-binding agreement to sell our property at 9 Times Square for $63.5 million, which became definitive last week. The sale of this property would reduce leverage on our balance sheet and generate net proceeds of approximately $13.5 million, strengthening our cash position. While there is no guarantee the sale will close, we continue to work with the buyer to complete the transaction. We acquired this property in 2014 for $170.3 million. Accordingly, we incurred a non-cash impairment of $84.7 million in this quarter's results. Importantly, and as we previously shared, we successfully extended our debt on this asset through year end as we work to close this transaction.

 

The marketing process for the sale of 123 William Street and 196 Orchard is ongoing. We believe that these properties are also well-positioned to generate significant net proceeds. We intend to use the proceeds from any disposition to diversify our portfolio into higher yielding assets, a strategy we discussed last year. We are excited to be moving forward on this initiative and look forward to the opportunity to increase value over time.

 

While we are committed to value creation, we are focused on our current assets. As of June 30, 2024, our portfolio weighted average remaining lease term was 6.3 years, as 45% of our leases extend beyond the year 2030 based on Annualized Straight-Line Rent, which we believe enhances the stability of the real estate we own. Of the top 10 tenants, 81% are investment grade or implied investment grade, showing the quality of our tenant roster. These tenants had a remaining lease term of 7.9 years, providing further stability to our portfolio.

 

2

 

 

We believe our pro-active asset management strategy has enhanced the marketability of our $593 million, 1.2 million square foot New York City real estate portfolio. Concentrated primarily in Manhattan, our seven office and retail properties boast a strong tenant base, including several large investment-grade firms. By focusing on resilient industries like finance and healthcare, and strategically locating our properties in desirable, transit-oriented areas, we believe we've positioned ourselves for success.

 

Our second quarter results underscore the value of our consistent portfolio management approach. By prioritizing tenant retention, property enhancement, and cost control, we've created a solid foundation for maximizing shareholder value. As we embark on divesting certain Manhattan assets to reduce leverage and pursue higher-yielding opportunities, we are confident in our ability to execute on this strategy.

 

With that, I'll turn it over to Mike LeSanto to go over the second quarter results. Mike?

 

Mike LeSanto

 

Thank you Michael. Second quarter 2024 revenue was relatively flat as we produced $15.8 million in the second quarter of 2024 compared to $15.8 million in the second quarter of 2023. The company's GAAP net loss attributable to common stockholders was $91.9 million in the second quarter of 2024, compared to a net loss of $10.9 million in the second quarter of 2023, due primarily to the non-cash impairment Michael discussed earlier.

 

For the second quarter of 2024, Adjusted EBITDA was $4.5 million compared to $3.0 million in the second quarter of 2023. The growth was achieved through a reduction in cash paid for G&A and operating expenses, coupled with our ongoing leasing success. Cash net operating income was nearly flat at $7.4 million compared to $7.5 million in the second quarter of 2023.

 

As always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release and quarterly supplemental on our website.

 

3

 

 

At quarter end, we had a relatively conservative balance sheet based on Net Leverage of approximately 56%, a weighted-average interest rate of 4.9%, and 2.7 years of weighted-average debt maturity.

 

I'll now turn the call back to Michael for some closing remarks.

 

Michael Anderson

 

Thanks, Mike, and thank you all for joining us today. Our strong performance this quarter, marked by increased occupancy and growing Adjusted EBITDA, is a direct result of our strategic portfolio management efforts. As we initiate the divestment of certain Manhattan assets, we anticipate generating substantial cash proceeds and reducing our leverage. These funds will be instrumental in expanding our portfolio into new, higher-yielding opportunities. We believe that this is a strategic opportunity to enhance shareholder value and are committed to providing updates on our progress.

 

Operator, please open the lines for questions.

 

4

 

Cover	Aug. 09, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 09, 2024
Entity File Number	001-39448
Entity Registrant Name	American Strategic Investment Co.
Entity Central Index Key	0001595527
Entity Tax Identification Number	46-4380248
Entity Incorporation, State or Country Code	MD
Entity Address, Address Line One	222 Bellevue Ave
Entity Address, City or Town	Newport
Entity Address, State or Province	RI
Entity Address, Postal Zip Code	02840
City Area Code	212
Local Phone Number	415-6500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A common stock, $0.01 par value per share
Trading Symbol	NYC
Security Exchange Name	NYSE
Rights [Member]
Document Information [Line Items]
Title of 12(b) Security	Class A Preferred Stock Purchase Rights
No Trading Symbol Flag	true
Security Exchange Name	NYSE

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