American Strategic Investment (NYC) Q2 2024 earnings summary

Executive summary

• Portfolio consists of seven commercial properties in Manhattan totaling 1.2 million sq ft, with 85.9% occupancy and a weighted-average remaining lease term of 6.3 years, anchored by 81% investment grade top 10 tenants.

• Adjusted EBITDA grew nearly 50% year-over-year in Q2 2024 to $4.5 million, driven by reduced expenses and leasing success.

• A definitive agreement was signed to sell 9 Times Square for $63.5 million, expected to generate $13.5 million in net proceeds, reduce leverage, and enable reinvestment.

• Portfolio remains concentrated in resilient industries and investment-grade tenants, with active management focused on leasing, strategic dispositions, and long-term tenant relationships.

• No dividends paid since Q2 2022; future dividends remain uncertain.

Financial highlights

• Q2 2024 revenue was $15.8 million, flat year-over-year.

• GAAP net loss attributable to common stockholders was $91.9 million, up from $10.9 million in Q2 2023, primarily due to an $84.7 million non-cash impairment on 9 Times Square.

• Cash Net Operating Income for Q2 2024 was $7.4 million, nearly flat year-over-year.

• Interest expense increased to $5.2 million in Q2 2024 from $4.7 million in Q2 2023, due to swap maturity.

• Net loss per share widened to $(36.48) from $(4.77) year-over-year.

Outlook and guidance

• Proceeds from asset sales are intended for redeployment into higher-yielding assets, particularly outside Manhattan, and operating business-type investments.

• Management anticipates both 123 William Street and 196 Orchard Street could be under contract by year-end, with new leases expected to increase occupancy to 86.3%.

• Management expects 2024 capital expenditures to be lower than 2023, barring unforeseen needs.

• Continued focus on value creation through divestment and reinvestment strategy.

• No guidance provided on reinstating dividends.