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Articles Tagged with 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.

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 (“NYC REIT”, formerly known as American Realty Capital New York City REIT)  may have FINRA arbitration claims, if their 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 stockbroker or advisor.

Wastebasket Filled with Crumpled Dollar Bills
NYC REIT is a former public, non-traded REIT that listed on the New York Stock Exchange (“NYSE”) on August 18, 2020 under the ticker symbol “NYC”.  Investors who were relying on NYC REIT’s most recent estimated NAV of $20.26 a share (valued as of June 30, 2019) were in for an unwelcome surprise, as despite a reverse split of its shares of 2.43 to 1, NYC REIT shares closed their first day of trading at $17.60 a share.

This price doesn’t sound so bad until one accounts for the reverse split- after the 2.43 to 1 reverse split, pre-split shares of NYC REIT are effectively worth only about $7.24 a pre-split share.  While drastically below the sponsor’s stated value of $20.26 a share, this price is only modestly below the $8.75 to $9.50 a share purchase of NYC REIT in the illiquid private market before share listed.  Shares of the REIT were originally sold to the public for $25.00.

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