American Strategic Investment (NYC) - 2024 Q2 - Quarterly Report

Financial Performance - The net loss attributable to common stockholders for the quarter ended June 30, 2024, was $91.9 million, compared to a net loss of$10.9 million for the same quarter in 2023[124]. - Net loss attributable to common stockholders was $99.5 million for the six months ended June 30, 2024, compared to$22.7 million for the same period in 2023, reflecting a significant increase in losses[135]. - Revenue from tenants decreased slightly to $15.8 million for the three months ended June 30, 2024, compared to$15.8 million for the same period in 2023[126]. - Revenue from tenants decreased to $31.2 million for the six months ended June 30, 2024, from$31.3 million for the same period in 2023, primarily due to lower reimbursable operating expenses[137]. - Adjusted EBITDA for the three months ended June 30, 2024, was $4,479,000, compared to$3,002,000 for the same period in 2023, representing a 49.1% increase[174]. Property and Occupancy - As of June 30, 2024, the company owned seven properties with a total of 1.2 million rentable square feet and an overall occupancy rate of 85.9%[112]. - The occupancy rate at 9 Times Square improved to 70.6% as of June 30, 2024, up from 68.0% a year earlier, due to new leases signed[121]. - The occupancy rate at 1140 Avenue of the Americas increased to 79.3% as of June 30, 2024, compared to 74.6% for the same period in 2023[121]. - The overall portfolio occupancy improved from 85.1% as of June 30, 2023, to 85.9% as of June 30, 2024[121]. - Occupancy across the portfolio decreased to 85.9% as of June 30, 2024, down from 86.7% as of December 31, 2023[167]. Expenses and Charges - Property operating expenses increased to $8.5 million for the three months ended June 30, 2024, from$8.4 million for the same period in 2023, primarily due to higher maintenance expenses[127]. - Impairment charges of $84.7 million were recorded for the 9 Times Square property during the three months ended June 30, 2024, significantly higher than the$0.2 million impairment recorded for the same period in 2023[128]. - General and administrative expenses decreased to $2.0 million for the three months ended June 30, 2024, from$2.4 million for the same period in 2023, attributed to lower legal and insurance fees[130]. - Depreciation and amortization expense decreased to $5.2 million for the three months ended June 30, 2024, compared to$6.7 million for the same period in 2023, due to a lower depreciable asset base[131]. - Interest expense increased to $5.2 million for the three months ended June 30, 2024, from$4.7 million for the same period in 2023, partly due to the maturity of a $49.5 million interest rate swap[133]. Capital and Financing - The company raised gross proceeds of$5.0 million through a non-transferable rights offering completed on February 22, 2023[112]. - The company borrowed $0.15 million from the Advisor for working capital needs, with an interest rate of 9.39$394.3 million, gross asset value was $705.5 million, and leverage was 55.9$399.5 million, bearing a weighted-average effective interest rate of 4.90%[155]. - The principal amount of the loan secured by 1140 Avenue of the Americas was $99.0 million, with breaches in debt service coverage provisions for the last 16 quarters[156]. Strategic Changes - The company terminated its REIT election effective January 1, 2023, to expand its investment strategy beyond qualifying REIT income[112]. - The company did not make any new acquisitions or investments in the quarter ended June 30, 2024[149]. - A purchase and sale agreement has been executed to dispose of the 9 Times Square property for a contract price of$63.5 million, expected to close by January 2025[170]. - The company expects to invest less in capital expenditures for the full year ending December 31, 2024, compared to 2023[169]. Cash Flow and Liquidity - Net cash provided by operating activities was $739,000 for the six months ended June 30, 2024, a significant increase from a net cash used of$4.2 million in the same period of 2023[145]. - Cash and cash equivalents as of June 30, 2024, were $5.2 million, slightly down from$5.3 million as of December 31, 2023[150]. - As of June 30, 2024, two mortgages totaling $109.0 million remained in cash trap events, limiting the use of excess cash flows[113]. - As of June 30, 2024, the company was operating under two cash traps at properties representing 23$3.20 per share prior to that[166]. - The company has not paid dividends to stockholders since those declared and paid through the six months ended June 30, 2022, with future dividends dependent on profitability and cash flow generation[175]. Market and Economic Conditions - Approximately 83% of the company's leases contain rent escalation provisions, which increase cash rent by an average cumulative increase of 2.2% per year[177]. - As of June 30, 2024, the 12-month CPI increase was 3.0%, which may impact leases without indexed escalation provisions[177]. - There has been no material change in the company's exposure to market risk during the six months ended June 30, 2024[180]. - The company has no off-balance sheet arrangements that materially affect its financial condition or results of operations[179].