NEW YORK--(BUSINESS WIRE)--New York City REIT, Inc. (NYSE: NYC), a real estate investment trust that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City, announced today its financial and operating results for the third quarter ended September 30, 2020.

Third Quarter 2020 and Subsequent Event Highlights

• Revenue was $17.0 million as compared to $18.6 million for the third quarter 2019
• Net loss attributable to common stockholders was $12.3 million as compared to $4.8 million for the third quarter 2019
• Cash net operating income (“NOI”) was $6.1 million compared to $8.8 million for the third quarter 2019
• Funds from Operations (“FFO”) of $(3.6) million, compared to $3.0 million for the third quarter 2019
• Core Funds from Operations (“Core FFO”) of $0.5 million compared to $3.0 million in the prior year third quarter
• Collected 85% of cash rent due in third quarter 20201, including 85% among the top 10 tenants2
• High quality 1.2 million square foot, $860.2 million3 portfolio composed of eight office and retail condominium assets primarily located in Manhattan
• 68% of the top 10 tenants portfolio-wide rated as investment grade or implied investment grade4
• Portfolio occupancy of 88.6% as of September 30, 2020
• Executed occupancy of 90% and $1 million of additional annual cash rent based on new leases that as of November 1, 2020 that have been signed where the tenant has yet to take possession or commenced paying rent
• Early 10-year5 lease extension with City National Bank, the largest tenant at 1140 Avenue of the Americas, adding $44 million of gross rent from an investment-grade tenant
• Executed one lease extension that provided approximately seven months of rent relief in the form of a deferral and rent credit in exchange for a five-year lease extension, providing a net increase of $16.0 million of cash rent
• Increased weighted-average lease term6 to 7.5 years from 6.6 years at the end of the second quarter 2020
• Strong balance sheet with net leverage of 36.2%, no debt maturities in the next three years and a weighted average debt maturity of 6.4 years
• Listed shares of Class A common stock on the New York Stock Exchange on August 18, 2020

“New York City REIT completed a successful third quarter, highlighted by listing our Class A shares on the NYSE, collecting over 85% of the cash rent due in the quarter, and significantly increasing our weighted-average remaining lease term to over 7.5 years, despite the ongoing challenges of the COVID-19 pandemic,” Michael Weil, Chief Executive Officer, commented. “We signed an early, 10-year lease extension with City National Bank, our largest tenant at 1140 Avenue of the Americas worth $44 million of additional cash rent to our future revenue and negotiated a short-term rent deferral in exchange for a five-year lease extension worth $16.0 million. We have built a stable, high-quality pure-play New York City portfolio with occupancy of over 88%, and we remain highly confident in the long-term trends of New York City real estate, our business model, and the opportunities to grow our portfolio while building shareholder value.”

Financial Results

(a) All per share data based on 12,772,176 and 12,749,456 diluted weighted-average shares outstanding for the three months ended September 30, 2020 and 2019, respectively. 2019 values are retroactively adjusted for the effects of the reverse stock split in August 2020.

Real Estate Portfolio

The Company’s portfolio consisted of eight properties comprised 1.2 million rentable square feet as of September 30, 2020. Portfolio metrics include:

• 88.6% leased, compared to 92.4% at the end of third quarter 2019, with 7.5 years remaining weighted-average lease term

• 68% of annualized straight-line rent7 from top 10 tenants derived from investment grade or implied investment grade tenants
• 76% office (based on an annualized straight-line rent)

Capital Structure and Liquidity Resources

As of September 30, 2020, the Company had $39.1 million of cash and cash equivalents. The Company’s net debt8 to gross asset value9 was 36.2%, with net debt of $365.9 million.

All of the Company’s debt was fixed-rate as of September 30, 2020. The Company’s total combined debt had a weighted-average interest rate of 4.4%10, resulting in an interest coverage ratio of 1.2 times11.

Rent Collection Update

Third Quarter of 2020

For the third quarter of 2020, NYC collected 85% of the cash rents that were due across the portfolio, including 85% of the cash rent payable from the top 10 tenants in the portfolio (based on annualized straight-line rent) and 91% of the cash rent payable from office tenants and 61% of the cash rent payable from retail tenants.

Of the third quarter 2020 cash rent remaining, lease amendments providing for either a rent deferral or a rent credit have been approved for 8% of the unpaid cash rent, while another 6% of rents are currently in negotiation for similar lease amendments. The remaining 1% generally consists of tenants who have made partial payment and/or tenants without active communication on a potential approved agreement.

Footnotes/Definitions

1 This information may not be indicative of any future period. The impact of the COVID-19 pandemic on the Company’s rental revenue for the fourth quarter of 2020 and thereafter cannot be determined at present. The ultimate impact on our future results of operations and liquidity will depend on the overall length and severity of the COVID-19 pandemic, which management is unable to predict. With respect to ongoing negotiations of rent deferrals or credits, there can be no assurance that these negotiations will be successful and will lead to formal agreements on favorable terms, or at all. With respect to the other remaining unpaid amounts, there can be no assurance the Company will be successful in its efforts to collect or defer these amounts on a timely basis, or at all.

2 Top 10 tenants based on annualized straight-line rent as of September 30, 2020.

3 Total real estate investments at cost.

4 As used herein, investment grade includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade. Implied investment grade may include actual ratings of tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring a company’s probability of default. Ratings information is as of September 30, 2020. Top 10 tenants are 56% actual investment grade rated and 12% implied investment grade rated.

5 Assumes tenant does not exercise option to terminate extension term after five years (in 2028) upon payment of termination fee.

6 The weighted-average remaining lease term (years) is based on annualized straight-line rent as of September 30, 2020.

7 Annualized straight-line rent is calculated using the most recent available lease terms as of September 30, 2020.

8 Total debt of $405.0 million less cash and cash equivalents of $39.1 million as of September 30, 2020. Excludes the effect of deferred financing costs, net, mortgage premiums, net and includes the effect of cash and cash equivalents.

9 Defined as the carrying value of total assets of $878.0 million plus accumulated depreciation and amortization of $132.4 million as of September 30, 2020.

10 Weighted based on the outstanding principal balance of the debt.

11The interest coverage ratio is calculated by dividing adjusted EBITDA by cash paid for interest (interest expense less amortization of deferred financing costs, net, and change in accrued interest and amortization of mortgage premiums on borrowings) for the quarter ended September 30, 2020.

About New York City REIT, Inc.

New York City REIT, Inc. (NYSE: NYC) is a publicly traded real estate investment trust listed on the NYSE that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City. Additional information about NYC can be found on its website at www.newyorkcityreit.com.