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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: (212)
415-6500 |
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 |
|
true |
|
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 (800) 770-2030
Toll Dial in Number:
1 (647) 362-9199
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.
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.
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.
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.
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