NEW YORK, March 1, 2018 /PRNewswire/ -- New York REIT, Inc.
(NYSE: NYRT) (the "Company" or "NYRT"), which is liquidating and
winding down pursuant to a plan of liquidation, announced today its
financial results for the fourth quarter ended December 31, 2017.
Liquidation Status
As of February 28, 2018, the
Company has sold, or entered into firm contracts to sell, all of
its properties except for the remaining 50.1% interest in Worldwide
Plaza, the Viceroy Hotel and the 33 West 56th Street
Garage. The Company currently expects the 33 West
56th Street Garage will be sold during the second
quarter of 2018 and that the Viceroy Hotel will have a signed
purchase and sale contract by the end of the second quarter of
2018, although there can be no assurance that either one of these
events will take place in this time frame. The Company has
combined debt outstanding of $57.2
million as of today. As of February 28, 2018, the Company has paid aggregate
cash liquidating distributions of $851.4
million, or $5.07 per
share.
Financial Results
Liquidation Basis of Accounting
Following NYRT's shareholder approval of the plan of liquidation
on January 3, 2017, effective
January 1, 2017, in accordance with
Generally Accepted Accounting Principles ("GAAP"), the Company
began reporting its financial results on the liquidation basis of
accounting. Accordingly, on January 1,
2017 the carrying value of the Company's investments in real
estate were adjusted to their liquidation value, which represents
the estimated amount of cash that the Company will collect on
disposal of assets as it carries out its liquidation activities
under the Liquidation Plan. The current estimate of net
assets in liquidation as of December 31,
2017 has been estimated based on undiscounted cash flow
projections assuming that all of the properties will be sold by
June 30, 2018 except for the
remaining interest in Worldwide Plaza. The actual timing of
sales has not yet been determined and is subject to future events
and uncertainties and the estimates are subject to change based on
the actual timing of future asset sales and other factors.
The liquidation value of the Company's investments in real estate
is presented on an undiscounted basis. Estimated costs to
dispose of assets and revenues expected to be earned as management
carries out its liquidation activities through the end of the
projected liquidation period have been presented separately from
the related assets. Liabilities are carried at their
contractual amounts due as adjusted for the impact of timing of the
planned liquidation.
Based on the liquidation basis of accounting, the current
estimate of net assets in liquidation at December 31, 2017 results in estimated future
liquidating distributions of approximately $4.96 per Common Share, of which $2.00 per common share was distributed on
January 26, 2018.
For financial statement presentation purposes, Worldwide Plaza
has been valued at $1.725 billion,
based on the recent market transaction associated with the
Company's sale of a 48.7% interest in the property on October 18, 2017. The Worldwide Plaza value
also includes an additional $90.7
million which is classified as restricted cash and has been
set aside to fund the Company's share of potential future leasing
and capital costs at Worldwide Plaza. To the extent the full
$90.7 million reserve is not used,
the balance is expected to be available for distribution to
shareholders. The Company's plan to hold the investment in
Worldwide Plaza beyond its original estimated liquidation period
and to make further capital investment to release and reposition
the property are all actions that are outside the scope of normal
liquidation activities. Accordingly, the estimated accretion
in future market value will be reflected in the financial results
as the specific actions related to the repositioning have been
completed and such increases in market value can be observed.
Any assets held longer than the two-year period following the
shareholder approval of the Plan of Liquidation must be transferred
to a non-traded entity for the remainder of the holding period,
however, such transfer may be completed at any time prior to the
two year anniversary of the approval of the Plan of
Liquidation. The Company currently projects that the
remaining interest in Worldwide Plaza will be sold by November 1, 2021.
Management believes that implementation of the business plan for
Worldwide Plaza will take at least two years and may take up to
four years given the size of the building, the scope and nature of
the capital investment and the time needed to allow for the
critical milestones in leasing and asset repositioning to take
place. Management estimates that once these actions are
implemented and come to fruition, the value of the property could
be in the range of $1.9 billion to
$2.2 billion on an undiscounted
basis. Assuming additional investment in Worldwide Plaza of
$64.0 million from the Company's
reserve, plus a corresponding investment from the Company's joint
venture partners, a future value for Worldwide Plaza between
$2.0 billion and $2.2 billion would produce a residual value
between $2.19 and $2.77 per share, an increase of $0.32 to $0.90 per
share over the Company's current carrying value. In addition,
there are contractual rents at Worldwide Plaza that generate
predictable cash flow during the estimated four-year hold period
which, net of expenses, we estimate would produce an additional
$0.43 per Common Share over a
four-year hold period versus the $0.13 per share currently accrued based on a 12
month holding period assumed for liquidation accounting
purposes. Management's estimate, and the estimates below,
like any estimate or projection, are 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 the estimated increase in the
value of the property.
If our future cash flow projections and residual value estimates
are realized, this would result in an estimate of future
liquidating distributions, inclusive of the $2.00 per share paid in January 2018, of between $5.58 and $6.16 per
share. The difference between the higher per share estimate
of future value and the reported $4.96 per share estimate is derived from an
increase ranging from $0.32 to
$0.90 per share in the estimated
future value of Worldwide Plaza, plus an additional $0.30 per share of net cash flow generated by
holding Worldwide Plaza for an additional three-year holding period
beyond what is recognized in the financial statements.
Fourth Quarter Activity
Financing and Sales Activity
- Worldwide Plaza – Manhattan, New
York - On October 18,
2017, the Company sold a 48.7% interest in Worldwide Plaza
to a joint venture managed by SL Green Realty Corp. and RXR Realty
LLC based on the agreed upon value of the property 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 Company received cash at closing of approximately
$355.0 million from the sale and
excess proceeds from the financing, which is net of certain closing
costs, including $109.0 million of
defeasance and prepayment costs, and a $90.7
million capital reserve. 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.
- 245-249 West 17th Street and 218 West
18th Street – Manhattan, New York - On October 11, 2017, the Company sold to an
independent third party the 245-249 West 17th Street
(Twitter) and 218 West 18th Street (Red Bull) office properties in Manhattan, New York for a gross sales price of
$514.1 million. The properties
were part of the collateral for the $760.0
million cross collateralized and secured loans. In
connection with the sale, the Company paid down $347.9 million of debt as required under the
loans. After satisfaction of debt, pro-rations and closing
costs the Company received net proceeds of approximately
$146.2 million.
- 229 West 36th Street and 256 West 38th
Street – Manhattan, New York –
On November 6, 2017, the Company sold
to an independent third party the 229 West 36th Street
and 256 West 38th Street office properties in
Manhattan, New York for a gross
sales price of $155.9 million.
The 229 West 36th Street property was part of the
collateral for the $760.0 million
cross collateralized and secured loans. In connection with
the sale, the Company paid down $66.1
million of debt as required under the loans. The 256
West 38th Street property was encumbered by a
$24.5 million mortgage loan which was
satisfied in full upon the sale of the property. After pay
down of debt under the cross collateralized and secured loans,
satisfaction of the mortgage debt, pro-rations and closing costs
the Company received aggregate net proceeds of approximately
$58.8 million.
- 1440 Broadway – On December 19,
2017, the Company sold to an independent third party the
1440 Broadway office property in Manhattan, New York for a gross sales price of
$520.0 million. The 1440
Broadway property was encumbered by a $305.0
million mortgage loan which was satisfied in full upon the
sale of the property. After satisfaction of debt, pro-rations
and closing costs, the Company received net proceeds of
approximately $192.9 million.
Distributions
On November 28, 2017, the Company
paid a cash liquidating distribution of $2.07 per share to shareholders of record as of
November 20, 2017.
On December 27, 2017, the Company
paid a cash liquidating distribution of $1.00 per share to shareholders of record as of
December 8, 2017.
2018 Subsequent Events
Sales Activity
- 333 West 34th Street – On January 5, 2018, the Company sold to an
independent third party the 333 West 34th Street office
property in Manhattan, New York
for a gross sales price of $255.0
million. The property was part of the collateral for
the $760.0 million POL Loans.
In connection with the sale, the Company paid down $110.6 million as required under the POL Loans
upon the sale of the property. After satisfaction of debt,
pro-rations and closing costs, the Company received net proceeds of
approximately $134.6 million.
- 350 West 42nd Street – On January
10, 2018, the Company sold to an independent third party the
350 West 42nd Street retail property in Manhattan, New York for a gross sales price of
$25.1 million. The property was
part of the collateral for the $760.0
million POL Loans. After satisfaction of debt,
pro-rations and closing costs, the Company received net proceeds of
approximately $12.6 million. In
connection with the sale, the Company paid down $11.3 million as required under the POL Loans
upon the sale of the property.
- One Jackson Square – On February 6, 2018, the Company sold to an
independent third party the One Jackson Square retail property in
Manhattan, New York for a gross
sales price of $31.0 million.
The property was part of the collateral for the $760.0 million POL Loans. In connection
with the sale, we paid down $13.0
million as required under the POL Loans upon the sale of the
property. After satisfaction of debt, pro-rations and closing
costs, the Company received net proceeds of approximately
$16.5 million.
- 306 East 61st Street – On February 16, 2018, the Company sold to an
independent third party the 306 East 61st Street office
property in Manhattan, New York
for a gross sales price of $47.0
million. The property was encumbered by a $19.0 million mortgage loan payable which was
satisfied in full at closing. After satisfaction of debt,
pro-rations and closing costs, the Company received net proceeds of
approximately $26.5 million.
- 2091 Coney Island Avenue – On February 14, 2018, the Company sold to an
independent third party the 2091 Coney Island Avenue office
property in Brooklyn, New York for
a gross sales price of $3.8
million. The property, together with the retail
property located at 2067-2073 Coney Island Avenue make up 1100
Kings Highway. The property is part of the collateral for the
$20.2 million mortgage note payable
on 1100 Kings Highway. In connection with the sale, the
Company was required to pay down the outstanding mortgage loan by
$4.4 million.
- 416 Washington Street – contract for sale – On
January 22, 2018, the Company entered
into a contract to sell to an independent third party the 416
Washington Street retail property in New
York, New York for a gross sales price of $11.2 million. The property is part of the
collateral for the $760.0 million POL
Loans. In connection with the sale, the Company expects to
pay down $5.5 million as required
under the POL Loans upon the sale of the property. If
consummated, the sale of the property is expected to close in the
first quarter of 2018.
- 2067 – 2073 Coney Island Avenue – contract for sale – On
January 25, 2018, the Company entered
into a contract to sell to an independent third party the 2067-2073
Coney Island Avenue retail property in Brooklyn, New York for a gross sales price of
$30.5 million. The property is
part of the collateral for the mortgage note payable on 1100 Kings
Highway, which has a current outstanding balance of $15.9 million. If consummated, the sale of
the property is expected to close in the second quarter 2018.
- 350 Bleecker Street and
367-387 Bleecker Street – contract for sale – On February 15, 2018, the Company entered into a
combined contract to sell to an independent third party the 350
Bleecker Street and 367-387 Bleecker Street properties located in
Manhattan, New York for a gross
sale price of $31.5 million.
The properties are part of the collateral for the $760.0 million POL Loans. In connection
with the sale the Company expects to pay down the POL Loans by
$21.1 million. If consummated,
the sale of the properties is expected to close in the second
quarter of 2018.
Distribution
On January 26, 2018, the Company
paid a cash liquidating distribution of $2.00 per share to shareholders of record as of
January 19, 2018.
About NYRT
NYRT is a publicly traded real estate investment trust listed on
the NYSE that owns income-producing commercial real estate,
including office and retail properties, located in New York
City. NYRT's shareholders recently adopted a plan of
liquidation pursuant to which NYRT is liquidating and winding down
and, in connection therewith, is seeking to sell its assets in an
orderly fashion to maximize shareholder value. For more
information, please visit our website at www.nyrt.com.
Forward-Looking Statements
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995. The statements in this release state the
Company's and management's hopes, intentions, beliefs, expectations
or projections of the future and are forward-looking statements for
which the Company claims the protections of the safe harbor for
forward-looking statements under the Private Securities Litigation
Reform Act of 1995. It is important to note that future
events and the Company's actual results could differ materially
from those described in or contemplated by such forward-looking
statements. Such forward looking statements include, but are
not limited to, statements about potential increases in liquidating
distributions if the joint venture is able to complete targeted
capital improvements, critical tenant lease renewals and reposition
this asset. Factors that could cause actual results to differ
materially from current expectations include, but are not limited
to, (i) general economic conditions, (ii) the inability of major
tenants to continue paying their rent obligations due to
bankruptcy, insolvency or general downturn in their business, (iii)
local real estate conditions, (iv) increases in interest rates, (v)
increases in operating costs and real estate taxes, (vi) changes in
accessibility of debt and equity capital markets and (vii) the
timing of asset sales. Additional information concerning
factors that could cause actual results to differ materially from
those forward-looking statements is contained from time to time in
the Company's filings with the Securities and Exchange Commission,
copies of which may be obtained from the Company or the Securities
and Exchange Commission. The Company refers you to the
documents filed by the Company from time to time with the
Securities and Exchange Commission, specifically the section titled
"Risk Factors" in the Company's most recent Annual Report on Form
10-K, as may be updated or supplemented in the Company's Form 10-Q
filings, which discuss these and other factors that could adversely
affect the Company's results.
CONSOLIDATED
STATEMENT OF NET ASSETS
(Liquidation
Basis)
(unaudited, in
thousands)
|
|
|
|
|
|
December 31,
2017
|
Assets
|
|
|
Investments in real
estate
|
|
$
488,616
|
Investment in
unconsolidated joint venture
|
|
257,634
|
Cash and cash
equivalents
|
|
241,019
|
Restricted cash held
in escrow
|
|
99,768
|
Accounts
receivable
|
|
3,696
|
Total
Assets
|
|
$
1,090,733
|
|
|
|
|
|
|
Liabilities
|
|
|
Mortgage notes
payable
|
|
$
215,494
|
Liability for
estimated costs in excess of estimated receipts during
liquidation
|
|
27,228
|
Accounts payable,
accrued expenses and other liabilities
|
|
14,881
|
Related party fees
payable
|
|
17
|
Total
Liabilities
|
|
257,620
|
Commitments and
Contingencies
|
|
|
|
|
|
Net assets in
liquidation
|
|
$
833,113
|
Further details regarding the Company's results of operations,
properties, joint ventures and tenants are available in the
Company's Form 10-K for the year ended December 31, 2017 which will be filed with the
Securities and Exchange Commission and will be available for
download at the Company's website www.nyrt.com or at the
Securities and Exchange Commission website www.sec.gov.
Contacts
|
|
|
|
Media:
|
Investor
Relations:
|
Jonathan
Keehner
|
Wendy Silverstein,
Chief Executive
Officer
|
Mahmoud
Siddig
|
New York REIT,
Inc.
|
Joele Frank,
Wilkinson Brimmer Katcher
|
wsilverstein@nyrt.com
|
jkeehner@joelefrank.com
|
(617)
570-4750
|
msiddig@joelefrank.com
|
|
(212)
355-4449
|
John Garilli, Chief
Financial Officer
|
|
New York REIT,
Inc.
|
|
jgarilli@nyrt.com
|
|
(617)
570-4750
|
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SOURCE New York REIT, Inc.