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): November 12, 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 November 12, 2024, American Strategic Investment Co. (the “Company”) hosted a conference call to discuss its financial and operating results for the quarter ended September 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 February 10, 2025 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 consummate the disposition of 9 Times Square on the terms contemplated, if at all, (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 or disposition 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: November 12, 2024	By:	/s/ Michael Anderson
		Michael Anderson
		Chief Executive Officer

 

 

Exhibit 99.1

 

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

 

Executives

 

Michael Anderson - President & CEO

Michael LeSanto – CFO

 

Operator

 

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

 

Curtis

 

Thank you. Good morning, everyone and thank you for joining us for our third 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 Third 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 third quarter included additional incremental Cash NOI growth compared to the third quarter of 2023. We achieved this growth through ongoing leasing success and occupancy gains. Specifically, we delivered a 70 basis point expansion in occupancy, to 85.8%, compared to the same quarter in 2023.

 

Beyond the strong operating execution, as previously announced, we have entered into a definitive agreement to sell our property at 9 Times Square for $63.5 million, which is expected to close in the fourth quarter of 2024. 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. We incurred a non-cash impairment of $1.9 million for this property 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.

 

To further strengthen our balance sheet we are actively marketing 123 William Street and 196 Orchard for sale. We believe these properties are well-positioned to generate significant returns. Proceeds from any sale will be used to diversify our portfolio into higher-yielding assets, as discussed last year. We are excited about this initiative and its potential to increase long-term value.

 

While we are committed to creating long-term value in our portfolio, our focus remains on our current assets. Our portfolio's weighted average remaining lease term was 5.9 years as of September 30, 2024, with 45% of our leases extending beyond 2030 based on Annualized Straight-Line Rent. We believe that this, coupled with a high-quality tenant base featuring top 10 tenants who are 81% investment grade or implied investment grade, provides significant portfolio stability.

 

2 

 

 

We believe our proactive asset management strategy has enhanced our $490 million, 1.2 million square foot New York City real estate portfolio. Located primarily in Manhattan, our seven office and retail properties benefit from a strong tenant base, including several large investment-grade firms. By focusing on resilient industries and transit-oriented locations, we believe we've positioned ourselves for long-term success. We are further encouraged by third quarter data showing positive net absorption in the New York City office market, reversing a long-running trend and halting vacancy rates. In our own portfolio we continue to see strong interest from potential lessees for our remaining available space.¹

 

Our third-quarter results highlight the effectiveness of our consistent portfolio management approach. By prioritizing tenant retention, property enhancements, and cost control, we believe we've built a solid foundation for maximizing shareholder value. As we divest certain Manhattan assets to reduce leverage and pursue higher-yielding opportunities, we are confident in our ability to deliver on this strategy and unlock additional value.

 

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

 

Mike LeSanto

 

Thank you Michael. Third quarter 2024 revenue was $15.4 million compared to $16.0 million in the third quarter of 2023. The company's GAAP net loss attributable to common stockholders was $34.5 million in the third quarter of 2024, compared to a net loss of $9.4 million in the third quarter of 2023, due primarily to non-cash impairments, one of which Michael discussed earlier.

 

For the third quarter of 2024, Adjusted EBITDA was $3.1 million compared to $3.4 million in the third quarter of 2023. Cash net operating income grew by $0.3 million to $6.8 million from $6.5 million in the third quarter of 2023. The growth was achieved through ongoing leasing success along with a reduction in G&A and operating expenses.

 

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.

 

 

¹ See Jeffries "3Q24 Office Market Update - 10-18-24"

 

3 

 

 

At quarter end, our balance sheet included Net Leverage of approximately 60%, a weighted-average interest rate of 4.9%, and 2.5 years of weighted-average debt maturity.

 

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

 

Michael Anderson

 

Thank you, Mike, and thank you all for joining us today. Our strong quarterly performance, driven by increased occupancy and growing Cash NOI, is a direct result of our strategic portfolio management. As we begin divesting certain Manhattan assets, we anticipate generating significant cash proceeds and reducing our leverage. These funds will be crucial in expanding our portfolio into new, higher-yielding opportunities. We believe this is a strategic move to enhance shareholder value and are committed to keeping you updated on our progress.

 

Operator, please open the lines for questions.

 

4 

 

Cover	Nov. 12, 2024
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 12, 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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