Press Release

New York REIT Announces Results for the Third Quarter 2018

Company Release - 10/30/2018 5:10 PM ET

NEW YORK, Oct. 30, 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 third quarter ended September 30, 2018.  All per share amounts have been restated to reflect the effect of the 1-for-10 reverse stock split which was completed on March 15, 2018.

Liquidation Status

Holders of the Company's common stock are reminded that, in connection with the conversion of the Company to a limited liability company to be known as New York REIT Liquidating LLC (the "LLC"), the last day of trading of the Company's common stock on the New York Stock Exchange will be Friday, November 2, 2018.  The conversion to the LLC is expected to occur at 5:00 p.m. Eastern on November 7, 2018.  At the effective time of the conversion, holders of the Company's common stock will automatically receive one membership interest in the LLC for each share of the Company's common stock held by such holder.  As previously disclosed, membership interests in the LLC will generally not be transferable except by will, intestate succession or operations of law.  For tax purposes, the fair value of each unit in the LLC received by Company stockholders when the conversion becomes effective, which reflects the value of the remaining assets of the Company (net of liabilities), will equal the average of the high and low trading prices for shares of the Company's common stock on the last three days on which the shares are traded on the NYSE.  For a detailed description of the federal income tax and investment considerations relating to the conversion and its effect on your interests in the Company, reference is made to the proxy statement/prospectus filed with the Securities and Exchange Commission ("SEC") on August 6, 2018, a copy of which is available on the SEC's website, www.sec.gov, as well as the Company's website, www.nyrt.com, under the investor relations tab.  Stockholders are strongly advised to contact their investment and tax advisors.

The Company has sold all of its properties except for the remaining 50.1% interest in Worldwide Plaza, and this will continue to be the only property-related asset of the LLC after the conversion becomes effective.  The Company has no debt outstanding other than its pro-rata share of the non-recourse debt on Worldwide Plaza.  To date, the Company has paid aggregate cash liquidating distributions of $58.80 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 September 30, 2018 has been estimated based on undiscounted cash flow projections, and assumes a final liquidation on September 30, 2019.  The actual timing of the sale of the Company's remaining interest in Worldwide Plaza may take an additional two to four years, given ongoing tenant negotiations and other items in the property business plan.  Based on these factors, the actual timing of the sale of this property, and the final liquidation of the Company (or the LLC), is subject to future events and uncertainties.  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 September 30, 2018 would result in estimated future liquidating distributions of approximately $25.45 per share.  On October 22, 2018, the Company paid a cash liquidating distribution of $3.25 per share, reducing the estimate of future liquidating distributions to $22.20 per share.

For financial statement presentation purposes, Worldwide Plaza has been valued at $1.725 billion, based on the 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 re-lease 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. 

Sales Activity

  • Viceroy Hotel – property sale – On October 4, 2018, the Company sold to an independent third party the Viceroy Hotel property located in Manhattan, New York for a sales price of $41.0 million.  After satisfaction of pro-rations and closing costs, the Company received net proceeds of approximately $39.8 million.  The estimated liquidation value of the property was $41.0 million at June 30, 2018 and September 30, 2018.

Distributions

On October 22, 2018, the Company paid a cash liquidating distribution of $3.25 per share to shareholders of record as of October 15, 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.  In January 2017, NYRT's shareholders 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 repositioning of 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.  The Company refers you to the documents filed by the Company from time to time with the SEC, particularly in the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections of the Company's most recent Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 1, 2018 and the Company Proxy Statement/Prospectus filed with the SEC on August 6, 2018, as such Risk Factors may be updated in subsequent reports.  The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

CONSOLIDATED STATEMENT OF NET ASSETS

(Liquidation Basis)

(unaudited, in thousands)




September 30, 2018


December 31, 2017

Assets





Investments in real estate


$                  41,000


$                     488,616

Investment in unconsolidated joint venture


268,039


257,634

Cash and cash equivalents


31,296


241,019

Restricted cash held in escrow


93,435


99,768

Accounts receivable


2,196


3,696

   Total Assets


435,966


1,090,733






Liabilities





Mortgage notes payable


-


215,494

Liability for estimated costs in excess of estimated





   receipts during liquidation


462


27,228

Accounts payable, accrued expenses and other liabilities


8,117


14,881

Related party fees payable


-


17

   Total Liabilities


8,579


257,620

Commitments and Contingencies





Net assets in liquidation


$                427,387


$                     833,113

Further details regarding the Company's results of operations, properties, joint ventures and tenants are available in the Company's Form 10-Q for the quarter ended September 30, 2018 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

Mahmoud Siddig                 

John Garilli, Chief Financial Officer and

Chief Executive Officer

Joele Frank, Wilkinson Brimmer Katcher    

New York REIT, Inc.

jkeehner@joelefrank.com 

jgarilli@nyrt.com

msiddig@joelefrank.com

(617) 570-4750

(212) 355-4449                              


 

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SOURCE New York REIT, Inc.