American Strategic Investment Co.

Good morning and welcome to the New York City REIT first quarter earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. And I'd like to turn the conference over to Luisa Cuarto, Executive Vice President. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us for NYC's first quarter 2021 earnings call. This event is being webcast in the investor relations section of NYC's website at www.NewYorkCityREIT.com. Joining me today on the call to discuss the quarter's results are Mike Weil, NYC's Chief Executive Officer, and Chris Masterson, NYC's Chief Financial Officer. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the Form 10-K filed for the year end of December 31, 2020, filed on March 29, 2021, and all subsequent SEC filings for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are only made as of the date of this call. As stated in our SEC filings, NYC disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. Also, during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. Reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release. Please also refer to our earnings release for more detailed information about what we consider to be implied investment grade tenants, a term we will use throughout today's call. I'll now turn the call over to Michael Weil, Chief Executive Officer. Please go ahead, Mike.

Thanks, Louisa. Good morning, and thank you for joining us today. New York City REIT continues to drive results through a proactive asset management strategy, highlighted by improving quarter-over-quarter cash rent collection across the portfolio and impressive leasing activity. After over a year of being substantially locked down, we are enthusiastic about the prospect of New York City reopening on a significant scale in the coming weeks and ramping up over the summer. We're seeing an alignment of intentions from the mayor to the governor and all of the businesses, restaurants, tourist attractions, and cultural institutions that should revitalize the vibrant city. The community is interlocked and depends on all of these segments for talent, inspiration, and revenue. We believe that as these participants return, it will serve as another catalyst for growth throughout the city. For the first quarter, we recorded strong cash rent collection of 85% across the portfolio, a 300 basis point increase from 82% last quarter, with 89% collected from our top 10 tenants, consistent with our collections from this group last quarter. Our asset management team has remained engaged with our tenants, helping to drive rent collection. At 1140 Avenue of the Americas, for instance, we're able to work with one of our longest-standing tenants to come to a mutually acceptable agreement and are excited to see their success as restaurants resume normal operations in the near term. We remain highly confident in the long-term strength of New York City real estate, our business model, and the opportunity to further grow our portfolio and create shareholder value. Our portfolio is diversified across eight high-quality office and retail condominium assets located entirely in New York City and primarily in Manhattan. We've built a pure play New York City portfolio that features a number of large investment-grade tenants, including City National Bank, CVS, TD Bank, and government agencies. As of March 31st, NYC's top 10 tenants were 73% investment grade or implied investment grade rated and have an average remaining lease term of almost 10 years, which we believe increases the quality and stability of earnings in our portfolio. Our $861.2 million, 1.2 million square foot portfolio has occupancy of 82.8%, a weighted average remaining lease term of 6.9 years, and the opportunity for substantial incremental earnings growth as we lease up available space. As we discussed last quarter, we're actively seeking to sign leases with former tenants of Notel and to lease up space that Notel formerly occupied. In the first quarter, we executed two replacement leases composed of a two-year lease with a global human resource company and a short-term license agreement with a Fortune 50 technology company. that total over 23,000 square feet and $1.1 million in annualized straight line rent. We also executed a non-binding letter of intent per five-year lease with the aforementioned technology company. Additionally, we completed two new leases totaling 6,800 square feet and over $360,000 in annualized straight line rent. Our portfolio occupancy of 83% was down from 87% at the end of last year, largely as a result of no-tell surrender of their space during the quarter. To date, we've leased or signed non-binding letters of intent to lease approximately half of the space formerly occupied by no-tell. We believe there's an opportunity for us to create significant value by aggressively leasing the remaining prime space, which is in excellent turnkey condition and fully furnished to credit-worthy tenants. Further, as we previously discussed, We remain engaged with several tenants for whom we took substantial write-offs in prior quarters for uncollectible rent. Even though we concluded these receivables are not collectible for accounting purposes, we feel very strongly in our position on these matters. As businesses are open and operating, and we see no basis for the withholding of rent payments, we will remain aggressive in our pursuit of these payments and are extremely confident in our legal position. allowing us to recover these tenants' unpaid rent. Our proactive approach to portfolio management continues to deliver results that enhance the overall quality of the NYC portfolio. Subsequent to quarter-end, we executed a new seven-year lease at 123 William Street for 7,800 square feet that will generate net annualized straight-line rent of $315,000. We're also building a forward pipeline of leasing deals that currently totals over 21,000 square feet. If all of these leases were consummated on the current terms, they would increase our portfolio occupancy to 85%, assuming no expirations or terminations. We're also in advanced stages of taking over and operating co-working space from one of our tenants and keeping their licensees in place. We have an aggressive, capable team, the right technology, and the operating experience to capitalize on this opportunity. We believe that the short-term dislocation in New York City asset prices may present a unique opportunity to acquire attractive assets at potentially discounted prices. We believe that New York is an irreplaceable city, and the signals we're seeing bolster our confidence in the long-term value of New York City real estate. In the past several weeks, news articles have documented the reawakening of Times Square, plans to relax occupancy restriction for offices, and the plans of large employers such as Google and JP Morgan to bring workers back to the office at a large scale in the very near future. Mayor de Blasio called back 80,000 New York City workers to city offices last week and has a goal of 5 million people being vaccinated by June. We believe that by the end of the summer, the city will be recognizable once more as the growing, diversified, vibrant city that we're familiar with. Over the long term, we believe that New York City will remain an enduring center of global commerce and the foremost market for owning stable, occupied, non-trophy office buildings, retail condominiums, and other high-quality real estate. I'll turn it over to Chris Masterson to go over the first quarter results. Chris?