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Articles Tagged with ARC New York City REIT

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New York City REIT (“NYC REIT”) declared a dividend of $0.10 per share on each share of NYC REIT’s Class A common stock and Class B common stock payable on January 15, 2021 to common stockholders of record at the close of business on January 11, 2021.  While the continuing dividends are welcome, they provide modest relief to shareholders whose shares’ value continues to languish, with NYC REIT shares trading at below $10.00 a share during most of 2021.

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Previously, on November 12, 2020, NYC REIT filed its quarterly report with the SEC, for the period ending September 30, 2020 and reported a net loss per common share of $(0.96), versus a loss of $(0.38) from the third quarter of 2019.  NYC REIT also disclosed that it had only collected 85% of the cash rents due on its portfolio properties, all located in New York City, and stated as follows as to its outlook going forward:  “The negative impacts of the COVID-19 pandemic has caused and may continue to cause certain of our tenants to be unable to make rent payments to us timely, or at all, which has had, and could continue to have, an adverse effect on the amount of cash we receive from our operations and therefore our ability to fund operating expenses and other capital needs, which, beginning in October 2020, include dividends to our common stockholders.”

NYC REIT’s share price has languished since the company listed its shares on the New York Stock Exchange on August 18, 2020.   Based on NYC REIT’s current share price, on a pre-split basis, investors who acquired their NYC shares pre-IPO—when the Company was still structured as a non-traded REIT—have suffered losses of 75% or more of the principal invested.

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Investors in New York City REIT Inc., formerly known as American Realty Capital New York City REIT (“ARC NYC REIT”), may have arbitration claims to be pursued before the Financial Industry Regulatory Authority (“FINRA”), if their ARC NYC REIT investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the broker or financial advisor.  According to its website, ARC NYC REIT is structured to provide its investors with a combination of current income and capital appreciation through strategic investments in high-quality commercial real estate located throughout the five boroughs of New York City.

Piggybank in a Cage
In October 2019, the independent directors of  ARC NYC REIT approved an estimated net asset value of $20.26 per share, as of June 30, 2019. Last year’s NAV per share was also $20.26, and shares were originally sold for $25.00 each.

However, net asset value or NAV may not reflect the actual value that shareholders would realize if ARC NYC REIT were liquidated, listed on an exchange or merged with a public company.  Financial analysts frequently assume that non-traded investments such as ARC NYC REIT will trade at a discount to NAV if listed on a securities exchange.  In a prominent example of this phenomenon, a large non-traded REIT known as American Finance Trust or AFIN listed its shares in 2018 had published an estimated NAV of $23.56 a share, yet shares later traded for as little as $10.08 after AFIN was listed on the Nasdaq Global Select Market.  AFIN shares now trade at $14.56 a share as of the close of the market on December 4, 2019.

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Investors in American Realty Capital New York City REIT (“ARC NYC REIT”), may have arbitration claims to be pursued before the Financial Industry Regulatory Authority (“FINRA”), if their ARC NYC REIT investment was recommended by a financial advisor who lacked a reasonable basis for the recommendation, or if the nature of the investment was misrepresented by the broker or financial advisor.  According to its website, ARC NYC REIT is structured to provide its investors with a combination of current income and capital appreciation through strategic investments in high-quality commercial real estate located throughout the five boroughs of New York City.

Money Whirlpool
Recently a Tel Aviv, Israel based private real estate investment fund, Comrit Investments 1 LP (“Comrit”) — launched an unsolicited tender offer to purchase up to 1.6 million shares of ARC NYC REIT for $13.61 a share.  This is lower than a previous $14.68 per share tender offer, since expired, that Comrit made in early 2018

A publicly registered non-traded real estate investment trust (“REIT”), ARC NYC REIT was incorporated in December 2013 as a Maryland REIT and is registered with the SEC.  Accordingly, ARC NYC REIT was permitted to sell securities to the investing public at large, including numerous unsophisticated retail investors who bought shares through the initial public offering (“IPO”) upon the recommendation of a broker or money manager.

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