American Strategic Investment Q4 2024 Earnings Report

American Strategic Investment EPS Results

• Actual EPS: -$2.60
• Consensus EPS: -$2.06
• Beat/Miss: Missed by -$0.54
• One Year Ago EPS: N/A

American Strategic Investment Revenue Results

• Actual Revenue: $14.89 million
• Expected Revenue: $14.74 million
• Beat/Miss: Beat by +$151.00 thousand
• YoY Revenue Growth: N/A

American Strategic Investment Announcement Details

• Quarter: Q4 2024
• Date: 3/19/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, March 19, 2025
• Conference Call Time: 11:00AM ET

American Strategic Investment (NYSE:NYC) Co. (NYSE: NYC) owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City.

American Strategic Investment Q4 2024 Earnings Call Transcript

Key Takeaways

• ASIC completed the disposition of 9 Times Square for $63.5 million, generating net proceeds of approximately $13.5 million, and has relaunched marketing to sell 123 William Street and 196 Orchard as part of its diversification strategy beyond Manhattan real estate.
• At year-end, the portfolio consisted of six assets valued at $470.8 million (1 million sq ft), with 80.8% occupancy and a weighted average lease term of 6.3 years, where 77% of straight-line rent comes from investment-grade or implied investment-grade tenants.
• During 2024, ASIC secured five new leases totaling over 37,000 sq ft and $2 million of straight-line rent, while building a pipeline of renewals and new leases aimed at increasing occupancy in resilient industries such as financial services and healthcare.
• Full-year revenue was $61.6 million (down from $62.7 million), with a GAAP net loss of $140.6 million and adjusted EBITDA of $11.9 million; cash NOI improved slightly to $27.6 million from $27.3 million in 2023.
• The company maintains a conservative balance sheet with 100% fixed-rate debt, net leverage of 56.9%, net debt of $340.2 million at a 4.4% average interest rate, and a weighted average debt term of 3.6 years.

Presentation

[Operator]

Good morning, and welcome to the American Strategic Investment Co.

[Operator]

Fourth Quarter and Year End twenty twenty four Earnings Call. All lines have been placed on mute to prevent any background noise. I would now like to turn the conference over to Curtis Parker, Senior Vice President. Please go ahead.

[Curtis Parker, Senior Vice President at American Strategic Investment]

Thank you, operator. Good morning, everyone, and thank you for joining us for ASIC's fourth quarter and year end earnings call. This event is also being webcast in the Investor Relations section of our website. Joining me today on the call to discuss the quarter's results are Michael Anderson, American Strategic Investment Company's Chief Executive Officer and Mike Lesanto, the Chief Financial Officer. The following information contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties.

[Curtis Parker, Senior Vice President at American Strategic Investment]

Please review the Forward Looking and Cautionary Statements section at the end of our fourth quarter twenty twenty four earnings release for various factors that could cause actual results to differ materially from forward looking statements made during our call today. 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 ended 12/31/2024, to be filed 03/19/2025, for a more detailed discussion of the risk factors that could cause these differences. Any forward looking statements provided during this call are only made as of the date of this call. As stated in our SEC filings, ASIC disclaims any intent or obligation to update or revise these forward looking statements, except as required to do so by law.

[Curtis Parker, Senior Vice President at American Strategic Investment]

Please note that all fourth quarter twenty twenty four financial information is unaudited. Also, during today's call, we will discuss non GAAP financial measures, which we believe can be useful in evaluating the company's financial and operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release, which is posted on our website. 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.

[Curtis Parker, Senior Vice President at American Strategic Investment]

I'll now turn the call over to Michael Anderson, Chief Executive Officer. Please go ahead, Michael.

[Michael Anderson, Chief Executive Officer at American Strategic Investment]

Thanks, Curtis. Good morning and thank you for joining us. Today, we will discuss the results for the fourth quarter and full year 2024. As part of our ongoing diversification strategy, as previously communicated, we completed the disposition of 9 Times Square for $63,500,000 The sale of this property improved the leverage in our balance sheet and generated net proceeds of approximately $13,500,000 strengthening our cash position. We've also relaunched the marketing efforts to sell 123 William Street and 196 Orchard as we continue to pursue our strategy of diversifying beyond real estate in Manhattan through the strategic sale of properties and the acquisition of higher yielding assets.

[Michael Anderson, Chief Executive Officer at American Strategic Investment]

Our existing portfolio consists of six real estate assets throughout New York City, primarily in Manhattan. At year end, our $470,800,000 1 million square foot portfolio had occupancy of 80.8% and a weighted average remaining lease term of six point three years. Our New York City Centric portfolio features a mix of large investment grade tenants of whom the top 10 tenants are 77% investment grade or implied investment grade based on straight line rent, with a weighted average remaining lease term of eight years. Investment grade tenants in our portfolio include City National Bank, CVS and government agencies. We also continue to focus our leasing efforts on securing tenants in resilient industries, such as well capitalized financial services companies and medical institutions.

[Michael Anderson, Chief Executive Officer at American Strategic Investment]

Our core office properties are located in submarkets with close proximity to major transportation hubs. Our asset management team continues to drive our leasing efforts. To that point, by leveraging relationships with existing tenants and the brokerage community, they are able to secure five new leases totaling over 37,000 square feet and $2,000,000 of straight line rent during 2024. As we look ahead, we are proactively building a pipeline of new and renewal leases to increase occupancy in our portfolio. We remain committed to strengthening our existing portfolio of real estate assets as we explore additional income generating investments.

[Michael Anderson, Chief Executive Officer at American Strategic Investment]

We believe with the completion of past sales and the reinvigorated effort to sell two additional properties, we will be better positioned to take advantage of opportunities to invest in the long term future of our portfolio. It is our intention to build a portfolio that we believe will be accretive to shareholders. With that, I'll turn it over to Mike Cifanto to go over the fourth quarter and full year 2024 results. Mike?

[Michael LeSanto, CFO, Principal Accounting Officer and Principal Financial Officer & Treasurer at American Strategic Investment]

Thanks, Michael. Revenue was $61,600,000 for the year ended 12/31/2024, compared to $62,700,000 in 2023. Revenue for the fourth quarter twenty twenty four was $14,900,000 compared to $15,400,000 in the fourth quarter of twenty twenty three. The company's full year GAAP net loss attributable to common stockholders was $140,600,000 compared to a net loss of $105,900,000 in 2023. Net loss for the quarter was $6,700,000 compared to $73,900,000 for the fourth quarter in 2023.

[Michael LeSanto, CFO, Principal Accounting Officer and Principal Financial Officer & Treasurer at American Strategic Investment]

Adjusted EBITDA for 2024 was $11,900,000 and was $1,300,000 for the fourth quarter. We made good progress improving cash NOI, which for the full year was $27,600,000 compared to $27,300,000 in 2023 and which was $6,400,000 in the fourth quarter compared to $6,300,000 in the fourth quarter of twenty twenty three. As always, a reconciliation of GAAP net income to non GAAP measures can be found in our earnings release, supplemental and Form 10 ks. The company maintains a relatively conservative balance sheet with 100% fixed rate debt and prudent net leverage of 56.9%. We ended the fourth quarter with net debt of $340,200,000 at a weighted average effective interest rate of 4.4% and a weighted average remaining debt term of three point six years.

[Michael LeSanto, CFO, Principal Accounting Officer and Principal Financial Officer & Treasurer at American Strategic Investment]

Importantly, all of our debt is fixed rate or swapped to fixed rate after we locked in interest rates while they were broadly at historic lows. With that, I'll turn the call back to Michael for some closing remarks.

[Michael Anderson, Chief Executive Officer at American Strategic Investment]

Great. Thank you, Mike. One final note. On March 7, we announced that I would be resigning my position as CEO of ASIC. As such, this will be the last time I get to discuss the company's results with you.

[Michael Anderson, Chief Executive Officer at American Strategic Investment]

I'd like to thank you for your insight, support and ownership of ASIC over the years, and I take great comfort leaving the company in the hands of Nick Shor, Jr, who was recently approved by the board to the position of CEO. Nick has been a longtime employee of our advisor, ARGlobal, starting in 2011 and has ably fulfilled numerous roles during his tenure here. I believe I speak for the leadership team when I say that we are excited about the opportunities ahead of us for the company to unlock future value for our shareholders. Thank you for joining us today.

Participants

Executives

• Curtis Parker, Senior Vice President
• Michael Anderson, Chief Executive Officer
• Michael LeSanto, CFO, Principal Accounting Officer and Principal Financial Officer & Treasurer