Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2020 | May 11, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-55393 | |
Entity Registrant Name | New York City REIT, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 46-4380248 | |
Entity Address, Address Line One | 650 Fifth Ave., 30th Floor | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10019 | |
City Area Code | 212 | |
Local Phone Number | 415-6500 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 30,994,891 | |
Entity Central Index Key | 0001595527 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Real estate investments, at cost: | ||
Land | $ 193,658 | $ 193,658 |
Buildings and improvements | 567,210 | 565,829 |
Acquired intangible assets | 102,365 | 103,121 |
Total real estate investments, at cost | 863,233 | 862,608 |
Less accumulated depreciation and amortization | (121,031) | (114,322) |
Total real estate investments, net | 742,202 | 748,286 |
Cash and cash equivalents | 53,240 | 51,199 |
Restricted cash | 8,490 | 7,098 |
Operating lease right-of-use asset | 55,529 | 55,579 |
Prepaid expenses and other assets (including amounts due from related parties of $0 and $0 at March 31, 2020 and December 31, 2019, respectively) | 6,353 | 8,602 |
Straight-line rent receivable | 22,341 | 21,649 |
Deferred leasing costs, net | 9,024 | 8,943 |
Total assets | 897,179 | 901,356 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Mortgage notes payable, net | 395,417 | 395,031 |
Accounts payable, accrued expenses and other liabilities (including amounts due to related parties of $339 and $222 at March 31, 2020 and December 31, 2019, respectively) | 8,531 | 7,033 |
Operating lease liability | 54,855 | 54,866 |
Below-market lease liabilities, net | 17,641 | 18,300 |
Derivative liability, at fair value | 3,918 | 1,327 |
Deferred revenue | 5,624 | 4,250 |
Total liabilities | 485,986 | 480,807 |
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding at March 31, 2020 and December 31, 2019 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 30,994,891 shares issued and outstanding as of March 31, 2020 and December 31, 2019 | 310 | 310 |
Additional paid-in capital | 685,867 | 685,844 |
Accumulated other comprehensive loss | (3,918) | (1,327) |
Distributions in excess of accumulated earnings | (271,066) | (264,278) |
Total stockholders’ equity | 411,193 | 420,549 |
Total liabilities and equity | $ 897,179 | $ 901,356 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Due from related party | $ 0 | $ 0 |
Due to related party | $ 339 | $ 222 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 30,994,891 | 30,990,448 |
Common stock, shares outstanding (in shares) | 30,994,891 | 30,990,448 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue from tenants | $ 17,477 | $ 17,051 |
Operating expenses: | ||
Asset and property management fees to related parties | 1,998 | 1,548 |
Property operating | 8,016 | 7,336 |
General and administrative | 2,019 | 1,931 |
Depreciation and amortization | 7,519 | 7,414 |
Total operating expenses | 19,552 | 18,229 |
Operating loss | (2,075) | (1,178) |
Other income (expense): | ||
Interest expense | (4,832) | (3,560) |
Other income | 119 | 154 |
Total other expense | (4,713) | (3,406) |
Net loss | (6,788) | (4,584) |
Other comprehensive loss: | ||
Change in unrealized loss on derivative | (2,591) | (70) |
Other comprehensive loss | (2,591) | (70) |
Comprehensive loss | $ (9,379) | $ (4,654) |
Weighted-average shares outstanding — Basic and Diluted (in dollars per share) | 30,981,830 | 30,977,955 |
Net loss per share attributable to common stockholders — Basic and Diluted (in dollars per share) | $ (0.22) | $ (0.15) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings |
Beginning Balance (in shares) at Dec. 31, 2018 | 30,990,448 | ||||
Beginning Balance at Dec. 31, 2018 | $ 443,680 | $ 310 | $ 685,758 | $ 0 | $ (242,388) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-based compensation | 21 | 21 | |||
Net loss | (4,584) | (4,584) | |||
Other comprehensive loss | (70) | (70) | |||
Ending Balance (in shares) at Mar. 31, 2019 | 30,990,448 | ||||
Ending Balance at Mar. 31, 2019 | 439,047 | $ 310 | 685,779 | (70) | (246,972) |
Beginning Balance (in shares) at Dec. 31, 2019 | 30,994,891 | ||||
Beginning Balance at Dec. 31, 2019 | 420,549 | $ 310 | 685,844 | (1,327) | (264,278) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Equity-based compensation | 23 | 23 | |||
Net loss | (6,788) | (6,788) | |||
Other comprehensive loss | (2,591) | (2,591) | |||
Ending Balance (in shares) at Mar. 31, 2020 | 30,994,891 | ||||
Ending Balance at Mar. 31, 2020 | $ 411,193 | $ 310 | $ 685,867 | $ (3,918) | $ (271,066) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (6,788) | $ (4,584) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 7,519 | 7,414 |
Amortization of deferred financing costs | 386 | 221 |
Accretion of below- and amortization of above-market lease liabilities and assets, net | (362) | (467) |
Equity-based compensation | 23 | 21 |
Changes in assets and liabilities: | ||
Straight-line rent receivable | (691) | (1,411) |
Straight-line rent payable | 27 | 27 |
Prepaid expenses, other assets and deferred costs | 1,829 | 1,044 |
Accounts payable, accrued expenses and other liabilities | 1,111 | (235) |
Deferred revenue | 1,374 | 368 |
Net cash provided by operating activities | 4,428 | 2,398 |
Cash flows from investing activities: | ||
Investments in real estate | 0 | 0 |
Capital expenditures | (995) | (705) |
Net cash used in investing activities | (995) | (705) |
Cash flows from financing activities: | ||
Payments of financing costs | 0 | 0 |
Net cash provided by financing activities | 0 | 0 |
Net change in cash, cash equivalents and restricted cash | 3,433 | 1,693 |
Cash, cash equivalents and restricted cash, beginning of period | 58,297 | 54,801 |
Cash, cash equivalents and restricted cash, end of period | 61,730 | 56,494 |
Cash, cash equivalents and restricted cash, end of period | 61,730 | 56,494 |
Supplemental Disclosures: | ||
Cash paid for interest | 4,307 | 3,117 |
Non-Cash Investing and Financing Activities: | ||
Accrued capital expenditures | $ 385 | $ 1,393 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization New York City REIT, Inc. (including, New York City Operating Partnership L.P., (the “OP”) and its subsidiaries, the “Company”) was formed to invest its assets in office properties located in the five boroughs of New York City, with a focus on Manhattan. The Company has also purchased for investment purposes certain real estate investment assets that accompany office properties, including retail spaces and amenities, and may purchase hospitality assets, residential assets and other property types located exclusively in New York City. All such properties may be acquired and owned by the Company alone or jointly with another party. As of March 31, 2020 , the Company owned eight properties consisting of 1.2 million rentable square feet, acquired for an aggregate purchase price of $790.7 million . The Company was incorporated on December 19, 2013 as a Maryland corporation and elected to be taxed as a real estate investment trust for U.S. federal income tax purposes (“REIT”) beginning with its taxable year ended December 31, 2014. Substantially all of the Company’s business is conducted through the OP. In March 2019, the Company changed its name from American Realty Capital New York City REIT, Inc. to New York City REIT, Inc. On October 24, 2019, the Company’s board of directors approved an estimated net asset value per share of its common stock (the “Estimated Per-Share NAV”) as of June 30, 2019 which was published on October 25, 2019. This was the third annual update of Estimated Per-Share NAV the Company has published. Until the Company lists shares of its common stock or another liquidity event occurs, the Company intends to publish subsequent valuations of Estimated Per-Share NAV at least once annually, at the discretion of the Company’s board of directors. The Company has no employees. New York City Advisors, LLC (the “Advisor”) has been retained by the Company to manage the Company’s affairs on a day-to-day basis. The Company has retained New York City Properties, LLC (the “Property Manager”) to serve as the Company’s property manager. The Advisor and Property Manager are under common control with AR Global Investments, LLC (the successor business to AR Capital, LLC, “AR Global”), and these entities receive compensation, fees and expense reimbursements for services related to the investment and management of the Company’s assets. The Company is the sole general partner and holds substantially all of the units of limited partner interests in the OP (“OP units”). The Advisor contributed $2,020 to the OP in exchange for 90 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results for the entire year or any subsequent interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019 , which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2020 . Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2020 . Principles of Consolidation The consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. The Company currently presents straight-line rent receivable and straight-line rent payable on its own line items in the consolidated statement of cash flows and consolidated balance sheets, which was previously included within prepaid expenses and other assets. Impacts of the COVID-19 Pandemic The preparation of consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. During the first quarter of 2020, there was a global outbreak of a novel coronavirus, (the virus that causes COVID-19), which has spread to over 200 countries and territories, including the United States, and has spread to every state in the United States. The World Health Organization has designated COVID-19 as a pandemic, and numerous countries, including the United States, have declared national emergencies with respect to COVID-19. The global impact of the outbreak has been rapidly evolving, and as cases of COVID-19 have continued to be identified in additional countries, many countries have reacted by instituting quarantines and restrictions on travel, closing financial markets and/or restricting trading and operations of non-essential offices and retail centers. Such actions are creating disruption in global supply chains, and adversely impacting many industries. The outbreak could have a continued adverse impact on economic and market conditions and trigger a period of global economic slowdown. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19 on economic and market conditions. The Company believes the estimates and assumptions underlying its consolidated financial statements are reasonable and supportable based on the information available as of March 31, 2020 , however uncertainty over the ultimate impact COVID-19 will have on the global economy generally, and the Company’s business in particular, makes any estimates and assumptions as of March 31, 2020 inherently less certain than they would be absent the current and potential impacts of COVID-19. Actual results may ultimately differ from those estimates. New York City, where all the Company’s properties are located, has been among the hardest hit locations in the country and continues to operate under a mandatory order to close all non-essential operations. The Company’s properties remain accessible to all tenants, while each tenant operates under the appropriate operating restrictions. In addition, as operating restrictions expire, operating costs may begin to rise, including for services, labor and personal protective equipment and other supplies, as the Company’s property managers take appropriate actions to protect tenants and property management personnel. Some of these costs may be recoverable through reimbursement from tenants. The financial stability and overall health of tenants is critical to the Company’s business. The negative effects that the global pandemic has had on the economy includes the closure or reduction in activity for many retail operations such as some of those operated by the Company’s tenants. This has impacted the ability of some of the Company’s tenants to pay their monthly rent either temporarily or in the long term. The Company has already experienced delays in rent collections in the month of April. The Company has taken a proactive approach to achieve mutually agreeable solutions with its tenants and in some cases the Company has executed rent deferral agreements in April 2020. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess the modification to determine if the lease modification should be treated as a separate lease and if not, modification accounting would be applied which would require a company to reassess the classification of the lease. However, in light of the COVID-19 pandemic in which many leases are being modified, the Financial Accounting Standards Board (“FASB”) and SEC has provided relief that will allow companies to make a policy election as to whether they treat COVID-19 related lease amendments as a provision included in the pre-concession arrangement, and therefore, not a lease modification, or to treat the lease amendment as a modification. In order to be considered COVID-19 related, cash flows must be substantially the same or less than those prior to the concession. If the cash flows are substantially the same or less, there are two methods to potentially account for such rent deferrals under the relief, (1) as if no changes to the lease contract were made, and (2) as if the deferred payments are variable lease payments. Under method (1), a lessor would increase its lease receivable and a lessee would increase its accounts payable as receivables/payments accrue. In its income statement, a lessor would continue to recognize revenue during the deferral period. The Company has elected to use method (2) and therefore will have no change in the current classification of its leases in connection with many of the leases impacted by negotiations with its tenants. Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of March 31, 2020 , these leases had an average remaining lease term of 6.8 years. Because many of the Company’s leases provide for rental increases at specified intervals, straight-line basis accounting requires that the Company record a receivable for, and include in revenue from tenants, unbilled rent receivables that the Company will receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When the Company acquires a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed. The Company defers the revenue related to lease payments received from tenants in advance of their due dates. Pursuant to certain of the Company’s lease agreements, tenants are required to reimburse the Company for certain property operating expenses (recorded in total revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. Under ASC 842, the Company has elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For comparative purposes, the Company reflected prior revenue and reimbursements reported under ASC 842 also on a single line. For expenses paid directly by the tenant, under both ASC 842 and 840, the Company has reflected them on a net basis. The following tables present future base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. (In thousands) Future Base Rent Payments 2020 (remainder) $ 45,655 2021 58,496 2022 54,704 2023 46,662 2024 42,191 Thereafter 198,434 Total $ 446,142 The Company continually reviews receivables related to rent and unbilled rents receivable and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under ASC 842, the Company is required to assess, based on credit risk, if it’s probable that it will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. In fiscal 2020, this assessment would include consideration of the impacts of the COVID-19 pandemic on our tenant’s ability to pay rents in accordance with their contracts. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it’s probable it will collect virtually all of the lease payments (base rent and additional rent), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it’s not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants in accordance with new accounting rules, on the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable. In accordance with the lease accounting rules the Company records uncollectable amounts as reductions in revenue from tenants. During the three months ended March 31, 2020 , the Company reduced lease income by $5,000 for amounts deemed uncollectable during the period. There were no such reductions recorded during the three months ended March 31, 2019 . Investments in Real Estate The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or an asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired asset. See Purchase Price Allocation section in this Note for a discussion of the initial accounting for investments in real estate. Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on the Company's operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the three months ended March 31, 2020 or 2019 . Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. The Company evaluates probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of March 31, 2020 and December 31, 2019 , the Company did not have any properties held for sale. As more fully discussed in this Note under Recently Issued Accounting Pronouncements - ASU No. 2016-02 Leases , all of the Company’s leases as lessor prior to adoption of ASC 842 were accounted for as operating leases and will continue to be accounted for as operating leases under the transition guidance. The Company will evaluate new leases originated after the adoption date (by the Company or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. For the three months ended March 31, 2020 and 2019 , the Company has no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules. The Company is also the lessee under a land lease which was previously classified, prior to adoption of ASC 842, and will continue to be classified as an operating lease under transition elections unless subsequently modified. This lease is reflected on the balance sheet and the rent expense is reflected on a straight line basis over the lease term. Purchase Price Allocation In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an if vacant basis. Intangible assets may include the value of in-place leases and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. There were no acquisitions during the three months ended March 31, 2020 or 2019 . For acquired properties with leases classified as operating leases, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, discount rates, fair market lease rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company's evaluation of the specific characteristics of each tenant’s lease and the Company's overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The Company did not record any intangible asset amounts related to customer relationships during the three months ended March 31, 2020 or 2019 . Gain on Dispositions of Real Estate Investments Gains on sales of rental real estate after January 1, 2018 are not considered sales to customers and will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). The Company did not have any dispositions during the three months ended March 31, 2020 or 2019 . Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statement of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. The Company did not recognize any impairment losses for the three months ended March 31, 2020 or 2019 . Accounting for Leases Lessor Accounting As a lessor of real estate, the Company has elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Lessee Accounting For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. For additional information and disclosures related to the Company’s operating leases, see Note 8 - Commitments and Contingencies . Depreciation and Amortization Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, 5 years for fixtures and improvements and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods. Recently Issued Accounting Pronouncements Adopted as of January 1, 2020: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amended guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the amended standard requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The new guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. |
Real Estate Investments
Real Estate Investments | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investments | Note 3 — Real Estate Investments There were no real estate assets acquired or liabilities assumed during the three months ended March 31, 2020 or 2019. Significant Tenants As of March 31, 2020 and December 31, 2019, there were no tenants whose annualized rental income on a straight-line basis, based on leases commenced, represented greater than 10% of total annualized rental income for all portfolio properties on a straight-line basis. The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangibles and amortization and accretion of above- and below-market lease assets and liabilities, net, for the periods presented: Three Months Ended March 31, (In thousands) 2020 2019 In-place leases $ 1,852 $ 2,246 Other intangibles 291 291 Total included in depreciation and amortization $ 2,143 $ 2,537 Above-market lease intangibles $ 285 $ 336 Below-market lease liabilities (659 ) (815 ) Total included in revenue from tenants $ (374 ) $ (479 ) Below-market ground lease, included in property operating expenses $ 12 $ 12 The following table provides the projected amortization expense and adjustments to revenues for the next five years as of March 31, 2020 : (In thousands) 2020 (remainder) 2021 2022 2023 2024 In-place leases $ 5,228 $ 5,902 $ 4,787 $ 3,548 $ 2,797 Other intangibles 874 937 708 708 708 Total to be included in depreciation and amortization $ 6,102 $ 6,839 $ 5,495 $ 4,256 $ 3,505 Above-market lease assets $ 855 $ 1,079 $ 991 $ 842 $ 512 Below-market lease liabilities (1,927 ) (2,314 ) (1,823 ) (1,597 ) (1,567 ) Total to be included in revenue from tenants $ (1,072 ) $ (1,235 ) $ (832 ) $ (755 ) $ (1,055 ) |
Mortgage Notes Payable, Net
Mortgage Notes Payable, Net | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable, Net | Note 4 — Mortgage Notes Payable, Net The Company’s mortgage notes payable, net as of March 31, 2020 and December 31, 2019 are as follows: Outstanding Loan Amount Portfolio Encumbered Properties March 31, December 31, Effective Interest Rate Interest Rate Maturity (In thousands) (In thousands) 123 William Street (1) 1 $ 140,000 $ 140,000 4.74 % Fixed Mar. 2027 1140 Avenue of the Americas 1 99,000 99,000 4.18 % Fixed Jul. 2026 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage 2 50,000 50,000 4.59 % Fixed May 2028 8713 Fifth Avenue 1 10,000 10,000 5.05 % Fixed Nov. 2028 9 Times Square 1 55,000 55,000 3.73 % Fixed (2) Apr. 2024 196 Orchard Street 1 51,000 51,000 3.91 % Fixed Aug. 2029 Mortgage notes payable, gross 7 405,000 405,000 4.35 % Less: deferred financing costs, net (3) (9,583 ) (9,969 ) Mortgage notes payable, net $ 395,417 $ 395,031 _____________________ (1) As of March 31, 2020 , $2.5 million was in escrow in accordance with the conditions under the loan agreement and presented as part of restricted cash on the unaudited consolidated balance sheet. The escrow amount will be released to fund leasing activity, tenant improvements and leasing commissions related to this property. (2) Fixed as a result of the Company having entered into a “pay-fixed” interest rate swap agreement, which is included in derivatives, at fair value on the consolidated balance sheet as of March 31, 2020 (see Note 6 — Derivatives and Hedging Activities ). (3) Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. Nationwide Life Insurance Company Loan On July 17, 2019, the Company, through the OP, entered into a loan agreement with Nationwide Life Insurance Company for a $51.0 million loan in connection with the acquisition of 196 Orchard Street. The loan bears interest at a fixed rate of 3.85% and matures on August 1, 2029. The loan requires monthly interest-only payments, with the principal balance due on the maturity date, and is secured by, among other things, a first mortgage on the property. The Company has guaranteed, (i) at all times, certain enumerated recourse liabilities of the borrower under the agreement, and (ii) from and after certain events of defaults and other breaches under the agreement and other loan documents (including bankruptcies or similar events), payment of all amounts due to the lender in respect of the loan. Capital One Loan On April 26, 2019, the Company, through the OP, entered into a term loan agreement with Capital One, National Association, as administrative agent, and the other lenders party thereto for a $55.0 million loan with an interest rate fixed at 3.67% by a swap agreement. The loan has a maturity date of April 26, 2024, and requires monthly interest-only payments, with the principal balance due on the maturity date. The loan is secured by, among other things, a mortgage lien on the Company’s previously unencumbered 9 Times Square property. The Company has guaranteed certain enumerated recourse liabilities of the borrower under the agreement and the guaranty requires the Company to maintain a minimum net worth in excess of $175.0 million and minimum liquid assets of $10.0 million . Collateral and Principal Payments Real estate assets and intangible assets of $826.6 million , at cost (net of below-market lease liabilities), at March 31, 2020 have been pledged as collateral to the Company’s mortgage notes payable and are not available to satisfy the Company’s other obligations unless first satisfying the mortgage note payable on the property. The Company is required to make payments of interest on its mortgage notes payable on a monthly basis. The following table summarizes the scheduled aggregate principal payments subsequent to March 31, 2020 : (In thousands) Future Minimum Principal Payments 2020 (remainder) $ — 2021 — 2022 — 2023 — 2024 55,000 Thereafter 350,000 Total $ 405,000 The Company’s mortgage notes payable require compliance with certain property-level debt covenants. As of March 31, 2020 , the Company was in compliance with the debt covenants under its mortgage note agreements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 5 — Fair Value of Financial Instruments The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the instrument. This alternative approach also reflects the contractual terms of the instrument, as applicable, including the period to maturity, and may use observable market-based inputs, including interest rate curves and implied volatilities, and unobservable inputs, such as expected volatility. The guidance defines three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Financial Instruments Carried at Fair Value The following table presents information about the Company’s assets and liabilities measured at fair value as of March 31, 2020 and December 31, 2019 . (In thousands) Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total March 31, 2020 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (3,918 ) $ — $ (3,918 ) Total $ — $ (3,918 ) $ — $ (3,918 ) December 31, 2019 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (1,327 ) $ — $ (1,327 ) Total $ — $ (1,327 ) $ — $ (1,327 ) Financial Instruments Not Carried at Fair Value The Company is required to disclose at least annually the fair value of financial instruments for which it is practicable to estimate the value. The fair value of short-term financial instruments such as cash and cash equivalents, restricted cash, prepaid expenses and other assets, accounts payable and distributions payable approximates their carrying value on the consolidated balance sheets due to their short-term nature. The fair value of the variable mortgage note payable may differ from its carrying value due to widening of credit spreads during the current period. The fair values of the Company’s financial instruments that are not reported at fair value on the consolidated balance sheet are reported below: March 31, 2020 December 31, 2019 (In thousands) Level Gross Principal Balance Fair Value Gross Principal Balance Fair Value Mortgage note payable — 123 William Street 3 $ 140,000 $ 150,224 $ 140,000 $ 151,428 Mortgage note payable — 1140 Avenue of the Americas 3 $ 99,000 $ 102,740 $ 99,000 $ 103,340 Mortgage note payable — 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage 3 $ 50,000 $ 53,406 $ 50,000 $ 53,951 Mortgage note payable — 8713 Fifth Avenue 3 $ 10,000 $ 11,044 $ 10,000 $ 11,175 Mortgage note payable — 9 Times Square 3 $ 55,000 $ 52,058 $ 55,000 $ 54,759 Mortgage note payable — 196 Orchard Street 3 $ 51,000 $ 51,748 $ 51,000 $ 52,369 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Note 6 — Derivatives and Hedging Activities Risk Management Objective of Using Derivatives The Company currently uses derivative financial instruments, including an interest rate swap, and may in the future use others, including options, floors and other interest rate derivative contracts, to hedge all or a portion of the interest rate risk associated with its borrowings. The principal objective of such arrangements is to minimize the risks and costs associated with the Company’s operating and financial structure as well as to hedge specific anticipated transactions. The Company does not intend to utilize derivatives for speculative or other purposes other than interest rate risk management. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company endeavors to only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations. On March 28, 2019, the Company entered into a forward starting five -year interest rate swap which became effective on May 1, 2019. The Company entered into this derivative in order to lock-in and swap the floating rate interest on its term loan encumbering the Company’s 9 Times Square property to a fixed rate. Upon entering into the swap, the Company paid a deposit of $0.8 million which was refunded at the closing of the new financing for the 9 Times Square property effective as of April 26, 2019. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of March 31, 2020 and December 31, 2019 . (In thousands) Balance Sheet Location March 31, December 31, 2019 Derivatives designated as hedging instruments: Interest Rate “Pay-fixed” Swap Derivative liability, at fair value $ (3,918 ) $ (1,327 ) Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve the receipt of variable-rate amounts if interest rates rise above the cap strike rate on the contract and payments of variable-rate amounts if interest rates fall below the floor strike rate on the contract. The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the quarter ended March 31, 2020 and year ended December 31, 2019 , such derivatives were used to hedge the variable cash flows associated with variable-rate debt. Amounts reported in accumulated other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates that $1.0 million will be reclassified from other comprehensive loss as an increase to interest expense. As of March 31, 2020 and December 31, 2019 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk. March 31, 2020 December 31, 2019 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest Rate “Pay-fixed” Swap 1 $ 55,000 1 $ 55,000 The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the period ended March 31, 2020 and December 31, 2019 . Three Months Ended March 31, (In thousands) 2020 2019 Amount of loss recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) $ (2,660 ) $ (70 ) Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense $ (69 ) $ — Total interest expense recorded in consolidated statements of operations and comprehensive loss $ 4,832 $ 3,560 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2020 and December 31, 2019 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet. Gross Amounts Not Offset on the Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of Assets (Liabilities) Presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount March 31, 2020 $ — $ (3,918 ) $ — $ (3,918 ) $ — $ — (3,918 ) December 31, 2019 $ — $ (1,327 ) $ — $ (1,327 ) $ — $ — (1,327 ) Credit-risk-related Contingent Feature s The Company has agreements with its derivative counterparty that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. As of March 31, 2020 , the fair value of derivatives in a net liability position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $4.1 million . As of March 31, 2020 , the Company has not posted any collateral related to these agreements and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value of $4.1 million . |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Common Stock | Note 7 — Common Stock As of March 31, 2020 and December 31, 2019 , the Company had 31.0 million shares of common stock outstanding, including unvested restricted shares and shares issued pursuant to the DRIP. In 2018, until the Company suspended payment of distributions, the Company paid a monthly distribution equivalent to $1.5125 per annum, per share of common stock payable by the 5th day following each month end to stockholders of record at the close of business each day during the prior month. On February 27, 2018, the Company’s board of directors unanimously authorized a suspension of the distributions that the Company pays to holders of the Company’s common stock, effective as of March 1, 2018. The Company first established an estimated net asset value per share of its common stock (“Estimated Per-Share NAV”) in 2016. On October 23, 2018, the Company’s board of directors approved an Estimated Per-Share NAV as of June 30, 2018, which was published on October 25, 2018. On October 24, 2019, the Company’s board of directors approved an Estimated Per-Share NAV as of June 30, 2019 which was published on October 25, 2019. This was the third annual update of Estimated Per-Share NAV the Company has published. The Company intends to publish subsequent valuations of Estimated Per-Share NAV at least once annually, at the discretion of the Company’s board of directors. Share Repurchase Program The Company has a share repurchase program (the “SRP”) that enables qualifying stockholders, subject to certain conditions and limitations, to sell their shares to the Company. The Company suspended the SRP effective September 25, 2018, and the suspension will remain in effect until the Company announces that it will resume paying regular cash distributions to its stockholders, if it does so at all. Under the SRP, qualifying stockholders may request that the Company repurchase all or a portion of their shares of common stock provided that the amount is at least 25% of the shares held by the stockholder. Additionally, under the SRP, subject to certain conditions, only repurchase requests made following the death or qualifying disability of stockholders that purchased shares of the Company’s common stock or received their shares from the Company (directly or indirectly) through one or more non-cash transactions may be considered for repurchase. Additionally, repurchases of shares of the Company’s common stock when requested pursuant to the SRP are at the sole discretion of the Company’s board of directors and generally will be made semiannually (each six-month period ending June 30 or December, a “fiscal semester”). Further, the repurchase price per share is equal to 100% of the Estimated Per-Share NAV in effect on the last day of the fiscal semester in which the repurchase request was received by the Company. Pursuant to the SRP, repurchases for any fiscal semester are limited to a maximum of 2.5% of the weighted average number of shares of common stock outstanding during the previous fiscal year, with a maximum for any fiscal year of 5.0% of the weighted average number of shares of common stock outstanding during the previous fiscal year. In addition, the Company is only authorized to repurchase shares to the extent that the Company has sufficient liquid assets, and funding for the SRP is limited to the amount of proceeds received during that same fiscal semester through the issuance of the Company’s common stock pursuant to the DRIP, as well as any reservation of funds the Company’s board of directors, may, in its sole discretion, make available for this purpose. No repurchases were made through the SRP for the three months ended March 31, 2020 because the SRP was suspended. When a qualifying stockholder requests a repurchase and the repurchase is approved by the Company’s board of directors, the Company will reclassify the obligation from equity to a liability based on the value of the obligation. Shares purchased under the SRP will have the status of authorized but unissued shares. The following table reflects the number of shares repurchased cumulatively through March 31, 2020 . Numbers of Shares Repurchased Weighted-Average Price per Share Cumulative repurchases as of December 31, 2019 1,259,734 $ 22.03 Three months ended March 31, 2020 — — Cumulative repurchases as of March 31, 2020 1,259,734 $ 22.03 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 — Commitments and Contingencies Lessee Arrangement - Ground Lease The Company entered into a ground lease agreement in 2016 related to the acquisition of 1140 Avenue of the Americas under a leasehold interest arrangement and recorded an ROU asset and lease liability related to this lease upon adoption of ASU 2016-02 during the year ended December 31, 2019. The ground lease is considered an operating lease. In computing the lease liabilities, the Company discounts future lease payments at an estimated incremental borrowing rate at adoption or acquisition if later. The terms of the Company’s ground leases are significantly longer than the terms of borrowings available to the Company on a fully-collateralized basis. The Company’s estimate of this rate required significant judgment. As of March 31, 2020 , the Company’s operating ground leases have a weighted-average remaining lease term, including assumed renewals, of 46.8 years and a weighted-average discount rate of 8.6% . As of March 31, 2020 , the Company’s balance sheet includes an ROU asset and liability of $55.5 million and $54.9 million , respectively, which are included in operating lease right-of-use asset and operating lease liability, respectively, on the consolidated balance sheet. For the three months ended March 31, 2020 , the Company paid cash of $1.2 million for amounts included in the measurement of lease liabilities and recorded expense of $1.2 million on a straight-line basis in accordance with the standard. The Company paid cash of $1.2 million and incurred ground rent expense of $1.2 million during the three months ended March 31, 2019 . The lease expense is recorded in property operating expenses in the consolidated statements of operations and comprehensive loss. The Company did not enter into any additional ground leases as lessee during the three months ended March 31, 2020 . The following table reflects the ground lease rent payments due from the Company and a reconciliation to the net present value of those payments as of March 31, 2020 : (In thousands) Future Base Rent Payments 2020 (remainder) $ 3,560 2021 4,746 2022 4,746 2023 4,746 2024 4,746 Thereafter 207,246 Total lease payments $ 229,790 Less: Effects of discounting (174,935 ) Total present value of lease payments $ 54,855 Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. There are no material legal or regulatory proceedings pending or known to be contemplated against the Company. Environmental Matters In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. As of March 31, 2020 , the Company has not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the results of operations. |
Related Party Transactions and
Related Party Transactions and Arrangements | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Note 9 — Related Party Transactions and Arrangements As of March 31, 2020 and December 31, 2019 , an entity wholly owned by AR Global owned 8,888 shares of the Company’s outstanding common stock. Fees and Participations Paid in Connection with the Operations of the Company On November 16, 2018, the members of a special committee of the Company’s board of directors approved certain amendments to the Amended and Restated Advisory Agreement (the “Original Advisory Agreement”) with the Advisor (the “Second Advisory Agreement”). The Company also entered into a related amendment (the “November 2018 PMA Amendment”) to the Company’s Property Management and Leasing Agreement with the Property Manager. The Second Advisory Agreement, which superseded the Original Advisory Agreement, and the November 2018 PMA Amendment both took effect on November 16, 2018. The initial term of the Second Advisory Agreement ends in July 2030, and will automatically renew for successive five-year terms unless either party gives written notice of its election not to renew at least 180 days prior to the then-applicable expiration date. The Company may only elect not to renew the Second Advisory Agreement on this basis with the prior approval of at least two-thirds of the Company’s independent directors, and no change of control fee (as defined in the Second Advisory Agreement) is payable if the Company makes this election. Acquisition Fees Under the Original Advisory Agreement and until November 16, 2018, the Advisor was paid an acquisition fee of 1.5% of (A) the contract purchase price of each acquired property and (B) the amount advanced for a loan or other investment. The Advisor was also reimbursed for expenses incurred related to selecting, evaluating and acquiring assets on the Company’s behalf, regardless of whether the Company actually acquired the related assets. Specifically, the Company reimbursed the Advisor or its affiliates for services provided for which they incurred investment-related expenses, or insourced expenses. The insourced expenses were fixed at, and were not to exceed, 0.5% of the contract purchase price of each property and 0.5% of the amount advanced for each loan or other investment, which was paid at the closing of the investment. The Advisor was also reimbursed for legal expenses incurred in the process of acquiring properties, in an amount not to exceed 0.10% of the contract purchase price. In addition, the Company also paid third parties, or reimbursed the Advisor for any reasonable investment-related expenses due to third parties. In no event was the total of all acquisition fees, acquisition expenses and any financing coordination fees (as described below) payable with respect to the Company’s portfolio of investments to exceed 4.5% of (A) the contract purchase price or (B) the amount advanced for all loans or other investments. Once the proceeds from the primary offering were fully invested in 2017, the aggregate amount of acquisition fees and any financing coordination fees could not exceed 1.5% of (A) the contract purchase price and (B) the amount advanced for a loan or other investment, as applicable, for all the assets acquired. The Second Advisory Agreement does not provide for an acquisition fee, however the Advisor may continue to be reimbursed for acquisition-related expenses and insourced acquisition expenses which are subject to limitations on administrative and overhead expenses (see the “Professional Fees and Other Reimbursements” section below for additional information on limitations on administrative and overhead expenses). Accordingly, no acquisition fees have been incurred after November 16, 2018 and no acquisition fees were incurred to the Advisor for the three months ended March 31, 2020 or March 31, 2019 . Financing Coordination Fees Under the Original Advisory Agreement, the Company was required to pay a financing coordination fee to the Advisor or its assignees in connection with the financing of any investment in real estate assets, real estate related loans or any other asset, assumption of any loans with respect to any investment or refinancing of any loan in an amount equal to 0.75% of the amount made available or outstanding under the loan, including any assumed loan. The Second Advisory Agreement eliminates financing coordination fees payable to the Advisor. Accordingly, no financing coordination fees have been incurred after November 16, 2018 and no financing coordination fees were incurred to the Advisor for the three months ended March 31, 2020 or March 31, 2019 . Asset Management Fees and Variable Management/Incentive Fees With respect to periods ending prior to October 1, 2015, for its asset management services, the Company issued to the Advisor an asset management subordinated participation by causing the OP to issue (subject to periodic approval by the board of directors) to the Advisor performance-based, restricted, forfeitable partnership units in the OP designated as “Class B Units”. During these periods, the Company caused the OP to issue 159,159 Class B Units pursuant to the then effective advisory agreement. The Class B Units are intended to be profits interests, and vest, and are no longer subject to forfeiture, at such time as: (a) the value of the OP’s assets plus all distributions made by the Company to its stockholders equal or exceeds the total amount of capital contributed by investors plus a 6.0% cumulative, pretax, non-compounded annual return thereon, or the “economic hurdle;” (b) any one of the following events occurs concurrently with or subsequently to the achievement of the economic hurdle described above: (i) a listing of the Company’s common stock on a national securities exchange; (ii) a transaction to which the Company or the OP is a party, as a result of which OP units or the Company’s common stock are or will be exchanged for or converted into the right, or the holders of such securities will otherwise be entitled, to receive cash, securities or other property or any combination thereof; or (iii) the termination of the advisory agreement without cause by an affirmative vote of a majority of the Company’s independent directors after the economic hurdle has been met; and (c) the Advisor pursuant to the advisory agreement is providing services to the Company immediately prior to the occurrence of an event of the type described in clause (b) above (the “performance condition”). Any outstanding Class B Units will be forfeited immediately if the advisory agreement is terminated for any reason other than a termination without cause. Additionally, any outstanding Class B Units will be forfeited immediately if the advisory agreement is terminated without cause by an affirmative vote of a majority of the Company’s independent members of the Board of Directors before the economic hurdle has been met. The value of issued Class B Units will be determined and expensed when the Company deems the achievement of the performance condition to be probable. As of March 31, 2020 , the Company cannot determine the probability of achieving the performance condition. The Advisor receives distributions on Class B Units, whether vested or unvested, at the same rate as distributions, if any, received on the Company’s common stock. Such distributions on issued Class B Units, if any, are expensed in the consolidated statements of operations and comprehensive loss until the performance condition is considered probable to occur. As of March 31, 2020 , the Company’s board of directors had approved the issuance of 159,159 Class B Units in connection with the arrangement. Beginning on October 1, 2015, and in lieu of the asset management subordinated participation, the Company began paying a base asset management fee in cash to the Advisor or its assignees as compensation for services rendered in connection with the management of the Company’s assets. The base asset management fee was payable on the first business day of each month in the amount of 0.0625% multiplied by the lower of the cost of assets and the estimated fair market value of the Company’s assets as reported in the applicable periodic or current report filed with the SEC disclosing the fair market value. The Second Advisory Agreement changed the calculation of the base asset management fee to a fixed amount of (x) $0.5 million payable on the first business day of each month plus (y) a variable amount equal to (a) 1.25% of the equity proceeds received after November 16, 2018, divided by (b) 12 . The base asset management fee is payable in cash, however the Advisor may elect to receive OP units or common stock of the Company, or a combination thereof, at the Advisor’s election. Equity proceeds are defined as, with respect to any period, cumulative net proceeds of all common and preferred equity and equity-linked securities issued by the Company and its subsidiaries during the period, including: (i) any equity issued in exchange or conversion of exchangeable notes based on the stock price at the date of issuance and convertible equity; (ii) any other issuances of equity, including but not limited to units in the OP (excluding equity-based compensation but including issuances related to an acquisition, investment, joint-venture or partnership); and (iii) effective following the time the Company commences paying a dividend of at least $0.05 per share per annum to its stockholders (although the Company is not currently paying distributions to its stockholders), any cumulative Core Earnings (as defined in the Second Advisory Agreement) in excess of cumulative distributions paid on the Company’s common stock. The Second Advisory Agreement also entitles the Advisor to a variable management fee, payable quarterly in arrears, equal to (i) the product of (a) the diluted weighted-average outstanding shares of common stock for the calendar quarter (excluding any equity-based awards that are subject to performance metrics that are not currently achieved) multiplied by (b) 15.0% multiplied by (c) the excess of Core Earnings Per Adjusted Share (as defined in the Second Advisory Agreement) for the previous three-month period in excess of $0.06 , plus (ii) the product of (x) the diluted weighted-average outstanding shares of common stock for the calendar quarter (excluding any equity-based awards that are subject to performance metrics that are not currently achieved) multiplied by (y) 10.0% multiplied by (z) the excess of Core Earnings Per Adjusted Share for the previous three-month period in excess of $0.08 . The variable management fee is payable in cash, shares of the Company’s common stock, OP units or a combination thereof, at the Advisor’s election. The Company paid cash of $1.5 million and $1.5 million for asset management fees during the three months ended March 31, 2020 and March 31, 2019 , respectively. Property Management Fees Pursuant to the Property Management and Leasing Agreement, dated as of April 24, 2014 (the “PMA”) and prior to the November 2018 PMA Amendment effective on November 16, 2018, except in certain cases where the Company contracted with a third party, the Company paid the Property Manager a property management fee equal to: (i) for non-hotel properties, 4.0% of gross revenues from the properties managed, plus market-based leasing commissions; and (ii) for hotel properties, a market-based fee based on a percentage of gross revenues. Pursuant to the PMA, the Company reimburses the Property Manager for property-level expenses. The Property Manager may also subcontract the performance of its property management and leasing services duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services. On April 13, 2018, in connection with the loan the Company entered into in April 2018, the borrowers entered into a new property management agreement with the Property Manager (the “April 2018 PMA”) to manage the properties secured by the loan. With respect to these properties, the substantive terms of the April 2018 PMA are identical to the terms of the PMA, except that the April 2018 PMA does not include provisions related to the management of the hotels. On April 13, 2018, concurrently with entering into the April 2018 PMA, the Company and the Property Manager entered into an amendment to the PMA (the “April 2018 PMA Amendment”). Prior to this amendment, the Property Manager had been retained by the Company, pursuant to the PMA, to manage, operate and maintain all the Company’s properties. Following the April 2018 PMA Amendment, any of the Company’s properties that are or become subject to a separate property management agreement with the Property Manager (including the properties secured by the loan, which are subject to the April 2018 PMA) are not subject to the PMA. On November 16, 2018, the effective date of the November 2018 PMA Amendment, the property management fees the Company pays the Property Manager for non-hotel properties decreased to 3.25% of gross revenues from the properties managed, plus market-based leasing commissions. The November 2018 PMA Amendment also amended the term of the PMA to make it coterminous with the term of the Second Advisory Agreement. The Company incurred approximately $0.5 million and $48,562 in property management fees during the three months ended March 31, 2020 and March 31, 2019 , respectively. Professional Fees and Other Reimbursements Under the Original Advisory Agreement, and prior to the Second Advisory Agreement effective on November 16, 2018, the Company reimbursed the Advisor’s costs of providing administrative services, subject to the limitation that the Company would not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeded the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash expenses and excluding any gain from the sale of assets for that period, unless the Company’s independent directors determined that such excess was justified based on unusual and nonrecurring factors which they deemed sufficient, in which case the excess amount would have been reimbursed to the Advisor in subsequent periods. This reimbursement included reasonable overhead expenses for employees of the Advisor or its affiliates directly involved in the performance of services on behalf of the Company, including the reimbursement of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. Additionally, under the Original Advisory Agreement, the Company reimbursed the Advisor for personnel costs in connection with other services; however, the Company did not reimburse the Advisor for personnel costs in connection with services for which the Advisor received acquisition fees, acquisition expense reimbursements or real estate commissions and no reimbursement was made for salaries, bonuses or benefits paid to the Company’s executive officers. The Second Advisory Agreement eliminated the previously existing limits on reimbursement by the Company of the Advisor’s expenses and costs based on total operating expenses and added new administrative expense reimbursement limits as follows: • With respect to administrative and overhead expenses of the Advisor, including administrative and overhead expenses of all employees of the Advisor or its affiliates directly or indirectly involved in the performance of services but not including their salaries, wages, and benefits (which may not exceed comparable market rates), these costs may not exceed in any fiscal year, (i) $0.4 million , or (ii) if the Asset Cost (as defined in the Second Advisory Agreement) as of the last day of the fiscal quarter immediately preceding the month is equal to or greater than $1.25 billion , (x) the Asset Cost as of the last day of the fiscal quarter multiplied by (y) 0.10% . • With respect to the salaries, wages, and benefits of all employees of the Advisor or its affiliates directly or indirectly involved in the performance of services (including the Company’s executive officers), these amounts must be comparable to market rates and reimbursements may not exceed, in any fiscal year, (i) $2.6 million , or (ii) if the Asset Cost as of the last day of the fiscal year is equal to or greater than $1.25 billion , (x) the Asset Cost as of the last day of the fiscal year multiplied by (y) 0.30% . The Company began implementing the limits above in the month of December 2018. Total reimbursement expenses for administrative and personnel services provided by the Advisor during the three months ended March 31, 2020 were $1.0 million , of which $0.3 million were related to administrative and overhead expenses and $0.7 million were related to salaries, wages, and benefits. For the three months ended March 31, 2019 , total reimbursement expenses for administrative and personnel services provided by the Advisor were $1.0 million , of which $0.3 million were related to administrative and overhead expenses and $0.7 million were related to salaries, wages and benefits. The following table details amounts incurred in connection with the Company’s operations-related services described above as of and for the periods presented: Three Months Ended March 31, Payable (receivable) as of (In thousands) 2020 2019 March 31, 2020 December 31, 2019 Acquisition fees and reimbursements: Acquisition fees and related cost reimbursements $ — $ — $ — $ — Financing coordination fees and leasing commissions (1) — 6 — — Ongoing fees: Asset and property management fees to related parties (2) 1,998 1,548 (8 ) (4) (6 ) (4) Professional fees and other reimbursements (3) 1,042 1,033 347 (4) 228 (4) Distributions on Class B units — — — — Total related party operation fees and reimbursements $ 3,040 $ 2,587 $ 339 $ 222 _____________________ (1) Financing coordination fees are included as deferred financing costs within mortgage notes payable, net and leasing commissions are included within deferred leasing costs, net on the consolidated balance sheets, respectively. (2) Beginning on April 1, 2019, property management fees due to the Property Manager are no longer adjusted for reimbursable expenses paid by the Company to third-party property managers. (3) Amounts for the three months ended March 31, 2020 and 2019 are included in general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss. (4) Included in accounts payable, accrued expense and other liabilities on the consolidated balance sheet. Fees and Participations Paid in Connection with Liquidation or Listing Annual Subordinated Performance Fees Under the Original Advisory Agreement and until eliminated in the Second Advisory Agreement effective November 16, 2018, the Company was required to pay the Advisor an annual subordinated performance fee calculated on the basis of the Company’s return to stockholders, payable annually in arrears, such that for any year in which investors received payment of 6.0% per annum, the Advisor was entitled to 15.0% of the excess return, provided that the amount paid to the Advisor did not exceed 10.0% of the aggregate return for such year, and that the amount paid to the Advisor was not paid unless investors received a return of capital contributions. This fee was to be paid only upon the sale of assets, distributions or other event which resulted in the return on stockholders’ capital exceeding 6.0% per annum. Furthermore, no subordinated performance fees can be incurred after November 16, 2018 and no subordinated performance fees were incurred to the Advisor for the three months ended March 31, 2020 and March 31, 2019 . Brokerage Commissions Under the Original Advisory Agreement and until eliminated in the Second Advisory Agreement effective November 16, 2018, the Company was required to pay a brokerage commission to the Advisor or its affiliates on the sale of properties, not to exceed the lesser of 2.0% of the contract sale price of the property and 50.0% of the total brokerage commission paid if a third party broker was also involved; provided, however, that in no event could the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6.0% of the contract sales price and a reasonable, customary and competitive real estate commission. Any brokerage commissions payable to the Advisor or its affiliates, were to be subject to approval in each case, payable to the Advisor if the Advisor or its affiliates, as determined by a majority of the independent directors, provided a substantial amount of services in connection with the sale. No broker commissions can be incurred after November 16, 2018 and no such fees were incurred during the three months ended March 31, 2020 and March 31, 2019 . Subordinated Participation in Real Estate Sales Pursuant to the limited partnership agreement of the OP, upon a liquidation or sale of all or substantially all of the Company’s assets, including through a merger or sale of stock, New York City Special Limited Partnership, LLC (the “Special Limited Partner”), a subsidiary of AR Global, which is the special limited partner of the OP, will be entitled to receive a subordinated distribution from the OP equal to 15.0% of remaining net sale proceeds after return of capital contributions to investors plus payment to investors of an annual 6.0% cumulative, pre-tax non-compounded return on the capital contributed by investors. The Special Limited Partner will not be entitled to the subordinated participation in net sale proceeds unless the Company’s investors have received a return of their capital plus a 6.0% cumulative non-compounded annual return on their capital contributions. No such participation in net sales proceeds became due and payable during the three months ended March 31, 2020 or 2019 . Any amount of net sales proceeds paid to the Special Limited Partner or any of its affiliates prior to the Company’s listing or termination or non-renewal of the advisory agreement with the Advisor, as applicable, will reduce dollar for dollar the amount of the subordinated incentive listing distribution and subordinated incentive termination distribution described below. Subordinated Participation in Connection with a Listing If the Company’s shares of common stock are listed on a national exchange, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive subordinated incentive listing distributions from the OP equal to 15.0% of the amount by which the Company’s market value plus distributions exceeds the aggregate capital contributed by investors plus an amount equal to a 6.0% cumulative, pre-tax non-compounded annual return to investors. The Special Limited Partner will not be entitled to the subordinated incentive listing distributions unless investors have received a 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. No such distributions were incurred during three months ended March 31, 2020 or 2019 . If the Special Limited Partner or any of its affiliates receives the subordinated incentive listing distribution, the Special Limited Partner and its affiliates will no longer be entitled to receive the subordinated participation in net sales proceeds described above or the subordinated incentive termination distribution described below. Termination Payments Subordinated Participation in Connection with a Termination of the Advisory Agreement Upon termination or non-renewal of the Company’s advisory agreement with or without cause, the Special Limited Partner will be entitled to receive a promissory note as evidence of its right to receive subordinated termination distributions from the OP equal to 15.0% of the amount, calculated as of the termination date, by which the sum of the Company’s market value plus distributions exceeds the sum of the aggregate capital contributed by investors plus an amount equal to an annual 6.0% cumulative, pre-tax, non-compounded annual return to investors. The Special Limited Partner will not become entitled to the subordinated termination distributions unless as of the termination the Company’s investors were entitled to their capital contributions if the Company were liquidated plus a 6.0% cumulative, pre-tax non-compounded annual return on their capital contributions. The Special Limited Partner may elect to defer its right to receive the subordinated termination distribution until either a listing on a national securities exchange or other liquidity event occurs, subsequently, in which case the Company’s market value will be calculated as of the date of the applicable listing or liquidity event. No such distributions were incurred during the three months ended March 31, 2020 or 2019 . If the Special Limited Partner or any of its affiliates receives the subordinated incentive termination distribution, the Special Limited Partner and its affiliates will no longer be entitled to receive the subordinated participation in net sales proceeds above or the subordinated incentive listing distribution described above. Termination Fees Payable to the Advisor The Second Advisory Agreement requires the Company to pay a termination fee to the Advisor in the event the Second Advisory Agreement is terminated prior to the expiration of the initial term in certain limited scenarios. The termination fee will be payable to the Advisor if either the Company or the Advisor exercises the right to terminate the Second Advisory Agreement in connection with the consummation of the first change of control (as defined in the Second Advisory Agreement). The termination fee is equal to • $15 million plus an amount equal to the product of (i) three (if the termination is effective on or prior to June 30, 2020) or four (if the termination is effective after June 30, 2020), multiplied by (ii) applicable Subject Fees. The “Subject Fees” are equal to (i) the product of • (a) 12 , multiplied by (b) the actual base management fee for the month immediately prior to the month in which the Second Advisory Agreement is terminated, plus (ii) the product of (x) four multiplied by (y) the actual variable management fee for the quarter immediately prior to the quarter in which the Second Advisory Agreement is terminated, plus, (iii) without duplication, the annual increase in the base management fee resulting from the cumulative net proceeds of any equity issued by the Company and its subsidiaries in respect of the fiscal quarter immediately prior to the fiscal quarter in which the Second Advisory Agreement is terminated. In connection with the termination or expiration of the Second Advisory Agreement, the Advisor will be entitled to receive (in addition to any termination fee) all amounts then accrued and owing to the Advisor, including an amount equal to then-present fair market value of its shares of the Company’s common stock and interest in the OP. |
Economic Dependency
Economic Dependency | 3 Months Ended |
Mar. 31, 2020 | |
Economic Dependency [Abstract] | |
Economic Dependency | Economic Dependency Under various agreements, the Company has engaged or will engage the Advisor, its affiliates and entities under common control with the Advisor to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services, transaction management services and investor relations. As a result of these relationships, the Company is dependent upon the Advisor and its affiliates. In the event that the Advisor and its affiliates are unable to provide the Company with the respective services, the Company will be required to find alternative providers of these services. |
Equity-Based Compensation
Equity-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Restricted Share Plan The Company has an employee and director incentive restricted share plan (as amended to date, the “RSP”). The RSP provides for the automatic grant of the number of restricted shares equal to $30,000 divided by the then-current Estimated Per-Share NAV. These automatic grants are made without any further approval by the Company’s board of directors or the stockholders, after initial election to the board of directors and after each annual stockholder meeting, with such restricted shares vesting annually over a five -year period following the grant date in increments of 20.0% per annum. The RSP provides the Company with the ability to grant awards of restricted shares to the Company’s board of directors, officers and employees (if the Company ever has employees), employees of the Advisor and its affiliates, employees of entities that provide services to the Company, directors of the Advisor or of entities that provide services to the Company, certain consultants to the Company and the Advisor and its affiliates or to entities that provide services to the Company. The total number of shares granted as awards under the RSP may not exceed 5.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time and in any event will not exceed 1.5 million shares (as such number may be adjusted for stock splits, stock dividends, combinations and similar events). Restricted share awards entitle the recipient to receive shares of common stock from the Company under terms that provide for vesting over a specified period of time. Restricted share awards provide for accelerated vesting of the portion of the unvested restricted shares scheduled to vest in the year of the recipient’s voluntary termination or the failure to be re-elected to the Company’s board of directors. Restricted shares may not, in general, be sold or otherwise transferred until restrictions are removed and the shares have vested. Holders of restricted shares receive cash distributions on the same basis as distributions paid on shares of common stock, if any, prior to the time that the restrictions on the restricted shares have lapsed and thereafter. Any distributions payable in shares of common stock are subject to the same restrictions as the underlying restricted shares. The following table displays restricted share award activity during the three months ended March 31, 2020 : Number of Weighted-Average Issue Price Unvested, December 31, 2019 13,201 $ 21.00 Granted — — Vested (267 ) 22.50 Unvested, March 31, 2020 12,934 $ 20.97 As of March 31, 2020 , the Company had $0.3 million of unrecognized compensation cost related to unvested restricted share awards granted under the RSP and is expected to be recognized over a weighted-average period of 3.0 years . Restricted share awards are expensed in accordance with the service period required. Compensation expense related to restricted share awards was approximately $22,494 and $20,992 for the three months ended March 31, 2020 and March 31, 2019 , respectively. Compensation expense related to restricted share awards is recorded as general and administrative expense in the accompanying unaudited consolidated statements of operations and comprehensive loss. Other Share-Based Compensation The Company may issue common stock in lieu of cash to pay fees earned by the Company’s board of directors at the respective director’s election. There are no restrictions on the shares issued. There were no shares of common stock issued in lieu of cash during the three months ended March 31, 2020 or March 31, 2019 . |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Net Loss Per Share | Net Loss Per Share The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended March 31, 2020 2019 Net loss (in thousands) $ (6,788 ) $ (4,584 ) Basic and diluted weighted average shares outstanding 30,981,830 30,977,955 Basic and diluted net loss per share $ (0.22 ) $ (0.15 ) The Company had the following weighted-average common share equivalents as of March 31, 2020 and March 31, 2019 , which were excluded from the calculation of diluted net loss per share attributable to stockholders as the effect would have been anti-dilutive: Three Months Ended March 31, 2020 2019 Unvested restricted shares 13,057 12,359 OP units 90 90 Class B units 159,159 159,159 Total weighted-average anti-dilutive common share equivalents 172,306 171,608 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13 — Subsequent Events The Company has evaluated subsequent events through the filing of this Quarterly Report on Form 10-Q and determined that there have not been any events that have occurred that would require adjustments to disclosures in the consolidated financial statements. Dispositions During the three months ended March 31, 2020, the Company entered into a purchase and sale agreement to dispose of 421 W. 54th Street property for a contract price of $7.1 million . Subsequent to March 31, 2020, the buyer terminated the transaction and the Company retained the security deposit of $0.7 million . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying consolidated financial statements of the Company included herein were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to this Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair statement of results for the interim periods. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results for the entire year or any subsequent interim period. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019 , which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2020 . Except for those required by new accounting pronouncements discussed below, there have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2020 . |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, the OP and its subsidiaries. All inter-company accounts and transactions are eliminated in consolidation. In determining whether the Company has a controlling financial interest in a joint venture and the requirement to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the other partners or members as well as whether the entity is a variable interest entity (“VIE”) for which the Company is the primary beneficiary. Substantially all of the Company’s assets and liabilities are held by the OP. The Company has determined the OP is a VIE of which the Company is the primary beneficiary. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. The Company currently presents straight-line rent receivable and straight-line rent payable on its own line items in the consolidated statement of cash flows and consolidated balance sheets, which was previously included within prepaid expenses and other assets. |
Revenue Recognition and Leases | Revenue Recognition The Company’s revenues, which are derived primarily from lease contracts, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of March 31, 2020 , these leases had an average remaining lease term of 6.8 Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases. If a tenant with a below-market rent renewal does not renew, any remaining unamortized amount will be taken into income at that time. Capitalized above-market ground lease values are amortized as a reduction of property operating expense over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property operating expense over the remaining terms of the respective leases and expected below-market renewal option periods. Accounting for Leases Lessor Accounting As a lessor of real estate, the Company has elected, by class of underlying assets, to account for lease and non-lease components (such as tenant reimbursements of property operating expenses) as a single lease component as an operating lease because (a) the non-lease components have the same timing and pattern of transfer as the associated lease component; and (b) the lease component, if accounted for separately, would be classified as an operating lease. Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed. Lessee Accounting For lessees, the accounting standard requires the application of a dual lease classification approach, classifying leases as either operating or finance leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. Lease expense for operating leases is recognized on a straight-line basis over the term of the lease, while lease expense for finance leases is recognized based on an effective interest method over the term of the lease. Also, lessees must recognize a right-of-use asset (“ROU”) and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease, may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction. For additional information and disclosures related to the Company’s operating leases, see Note 8 - Commitments and Contingencies . The Company continually reviews receivables related to rent and unbilled rents receivable and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. Under ASC 842, the Company is required to assess, based on credit risk, if it’s probable that it will collect virtually all of the lease payments at lease commencement date and it must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant. In fiscal 2020, this assessment would include consideration of the impacts of the COVID-19 pandemic on our tenant’s ability to pay rents in accordance with their contracts. Partial reserves, or the ability to assume partial recovery are no longer permitted. If the Company determines that it’s probable it will collect virtually all of the lease payments (base rent and additional rent), the lease will continue to be accounted for on an accrual basis (i.e. straight-line). However, if the Company determines it’s not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants in accordance with new accounting rules, on the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable. In accordance with the lease accounting rules the Company records uncollectable amounts as reductions in revenue from tenants. During the three months ended March 31, 2020 , the Company reduced lease income by $5,000 for amounts deemed uncollectable during the period. There were no such reductions recorded during the three months ended March 31, 2019 . |
Depreciation and Amortization | Depreciation and Amortization Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings, 15 years for land improvements, 5 years for fixtures and improvements and the shorter of the useful life or the remaining lease term for tenant improvements and leasehold interests. The value of in-place leases, exclusive of the value of above-market and below-market in-place leases, is amortized to expense over the remaining periods of the respective leases. The value of customer relationship intangibles, if any, is amortized to expense over the initial term and any renewal periods in the respective leases, but in no event does the amortization period for intangible assets exceed the remaining depreciable life of the building. If a tenant terminates its lease, the unamortized portion of the in-place lease value and customer relationship intangibles is charged to expense. Assumed mortgage premiums or discounts are amortized as an increase or reduction to interest expense over the remaining terms of the respective mortgages. |
Investments in Real Estate | Gain on Dispositions of Real Estate Investments Gains on sales of rental real estate after January 1, 2018 are not considered sales to customers and will generally be recognized pursuant to the provisions included in ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”). The Company did not have any dispositions during the three months ended March 31, 2020 or 2019 . Investments in Real Estate The Company evaluates the inputs, processes and outputs of each asset acquired to determine if the transaction is a business combination or an asset acquisition. If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations and comprehensive loss. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired asset. See Purchase Price Allocation section in this Note for a discussion of the initial accounting for investments in real estate. Disposal of real estate investments that represent a strategic shift in operations that will have a major effect on the Company's operations and financial results are required to be presented as discontinued operations in the consolidated statements of operations. No properties were presented as discontinued operations during the three months ended March 31, 2020 or 2019 . Properties that are intended to be sold are to be designated as “held for sale” on the consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year. The Company evaluates probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of March 31, 2020 and December 31, 2019 , the Company did not have any properties held for sale. As more fully discussed in this Note under Recently Issued Accounting Pronouncements - ASU No. 2016-02 Leases , all of the Company’s leases as lessor prior to adoption of ASC 842 were accounted for as operating leases and will continue to be accounted for as operating leases under the transition guidance. The Company will evaluate new leases originated after the adoption date (by the Company or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant. This situation is met if, among other things, there is an automatic transfer of title during the lease, a bargain purchase option, the non-cancelable lease term is for more than major part of remaining economic useful life of the asset (e.g., equal to or greater than 75%), if the present value of the minimum lease payments represents substantially all (e.g., equal to or greater than 90%) of the leased property’s fair value at lease inception, or if the asset so specialized in nature that it provides no alternative use to the lessor (and therefore would not provide any future value to the lessor) after the lease term. Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. For the three months ended March 31, 2020 and 2019 , the Company has no leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules. The Company is also the lessee under a land lease which was previously classified, prior to adoption of ASC 842, and will continue to be classified as an operating lease under transition elections unless subsequently modified. This lease is reflected on the balance sheet and the rent expense is reflected on a straight line basis over the lease term. |
Purchase Price Allocation | Purchase Price Allocation In both a business combination and an asset acquisition, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values. Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an if vacant basis. Intangible assets may include the value of in-place leases and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics. In addition, any assumed mortgages receivable or payable and any assumed or issued non-controlling interests (in a business combination) are recorded at their estimated fair values. In allocating the fair value to assumed mortgages, amounts are recorded to debt premiums or discounts based on the present value of the estimated cash flows, which is calculated to account for either above or below-market interest rates. In a business combination, the difference between the purchase price and the fair value of identifiable net assets acquired is either recorded as goodwill or as a bargain purchase gain. In an asset acquisition, the difference between the acquisition price (including capitalized transaction costs) and the fair value of identifiable net assets acquired is allocated to the non-current assets. There were no acquisitions during the three months ended March 31, 2020 or 2019 . For acquired properties with leases classified as operating leases, the Company allocates the purchase price of acquired properties to tangible and identifiable intangible assets acquired and liabilities assumed, based on their respective fair values. In making estimates of fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. The Company also considers information obtained about each property as a result of the Company’s pre-acquisition due diligence in estimating the fair value of the tangible and intangible assets acquired and intangible liabilities assumed. Tangible assets include land, land improvements, buildings, fixtures and tenant improvements on an as-if vacant basis. The Company utilizes various estimates, processes and information to determine the as-if vacant property value. Estimates of value are made using customary methods, including data from appraisals, comparable sales, discounted cash flow analysis and other methods. Fair value estimates are also made using significant assumptions such as capitalization rates, discount rates, fair market lease rates and land values per square foot. Identifiable intangible assets include amounts allocated to acquire leases for above- and below-market lease rates and the value of in-place leases as applicable. Factors considered in the analysis of the in-place lease intangibles include an estimate of carrying costs during the expected lease-up period for each property, taking into account current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at contract rates during the expected lease-up period, which typically ranges from six to 24 months. The Company also estimates costs to execute similar leases including leasing commissions, legal and other related expenses. Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The aggregate value of intangible assets related to customer relationship, as applicable, is measured based on the Company's evaluation of the specific characteristics of each tenant’s lease and the Company's overall relationship with the tenant. Characteristics considered by the Company in determining these values include the nature and extent of its existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals, among other factors. The Company did not record any intangible asset amounts related to customer relationships during the three months ended March 31, 2020 or 2019 . |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets When circumstances indicate the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If an impairment exists, due to the inability to recover the carrying value of a property, the Company would recognize an impairment loss in the consolidated statement of operations and comprehensive loss to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. These assessments have a direct impact on net income because recording an impairment loss results in an immediate negative adjustment to net earnings. The Company did not recognize any impairment losses for the three months ended March 31, 2020 or 2019 . |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted as of January 1, 2020: In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The objective of ASU 2018-13 is to improve the effectiveness of disclosures in the notes to the financial statements by removing, modifying, and adding certain fair value disclosure requirements to facilitate clear communication of the information required by generally accepted accounting principles. The amended guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which changes how entities measure credit losses for financial assets carried at amortized cost. The update eliminates the requirement that a credit loss must be probable before it can be recognized and instead requires an entity to recognize the current estimate of all expected credit losses. Additionally, the amended standard requires credit losses on available-for-sale debt securities to be carried as an allowance rather than as a direct write-down of the asset. On July 25, 2018, the FASB proposed an amendment to ASU 2016-13 to clarify that operating lease receivables recorded by lessors (including unbilled straight-line rent) are explicitly excluded from the scope of ASU 2016-13. The new guidance is effective for the Company beginning on January 1, 2020. The Company adopted the new guidance on January 1, 2020 and determined it did not have a material impact on its consolidated financial statements. |
Fair Value Measurement, Policy | Fair Value of Financial Instruments The Company determines fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the instrument. This alternative approach also reflects the contractual terms of the instrument, as applicable, including the period to maturity, and may use observable market-based inputs, including interest rate curves and implied volatilities, and unobservable inputs, such as expected volatility. The guidance defines three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3 — Unobservable inputs that reflect the entity’s own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of future minimum rental payments for operating leases under Topic 842 | The following tables present future base rent payments due to the Company over the next five years and thereafter. These amounts exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to sales thresholds and increases in annual rent based on exceeding certain economic indexes, among other items. (In thousands) Future Base Rent Payments 2020 (remainder) $ 45,655 2021 58,496 2022 54,704 2023 46,662 2024 42,191 Thereafter 198,434 Total $ 446,142 |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Real Estate Investments, Net [Abstract] | |
Finite-lived intangible assets amortization expense | The following table discloses amounts recognized within the consolidated statements of operations and comprehensive loss related to amortization of in-place leases and other intangibles and amortization and accretion of above- and below-market lease assets and liabilities, net, for the periods presented: Three Months Ended March 31, (In thousands) 2020 2019 In-place leases $ 1,852 $ 2,246 Other intangibles 291 291 Total included in depreciation and amortization $ 2,143 $ 2,537 Above-market lease intangibles $ 285 $ 336 Below-market lease liabilities (659 ) (815 ) Total included in revenue from tenants $ (374 ) $ (479 ) Below-market ground lease, included in property operating expenses $ 12 $ 12 |
Schedule of finite-lived intangible assets, future amortization expense | The following table provides the projected amortization expense and adjustments to revenues for the next five years as of March 31, 2020 : (In thousands) 2020 (remainder) 2021 2022 2023 2024 In-place leases $ 5,228 $ 5,902 $ 4,787 $ 3,548 $ 2,797 Other intangibles 874 937 708 708 708 Total to be included in depreciation and amortization $ 6,102 $ 6,839 $ 5,495 $ 4,256 $ 3,505 Above-market lease assets $ 855 $ 1,079 $ 991 $ 842 $ 512 Below-market lease liabilities (1,927 ) (2,314 ) (1,823 ) (1,597 ) (1,567 ) Total to be included in revenue from tenants $ (1,072 ) $ (1,235 ) $ (832 ) $ (755 ) $ (1,055 ) |
Mortgage Notes Payable, Net (Ta
Mortgage Notes Payable, Net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The Company’s mortgage notes payable, net as of March 31, 2020 and December 31, 2019 are as follows: Outstanding Loan Amount Portfolio Encumbered Properties March 31, December 31, Effective Interest Rate Interest Rate Maturity (In thousands) (In thousands) 123 William Street (1) 1 $ 140,000 $ 140,000 4.74 % Fixed Mar. 2027 1140 Avenue of the Americas 1 99,000 99,000 4.18 % Fixed Jul. 2026 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage 2 50,000 50,000 4.59 % Fixed May 2028 8713 Fifth Avenue 1 10,000 10,000 5.05 % Fixed Nov. 2028 9 Times Square 1 55,000 55,000 3.73 % Fixed (2) Apr. 2024 196 Orchard Street 1 51,000 51,000 3.91 % Fixed Aug. 2029 Mortgage notes payable, gross 7 405,000 405,000 4.35 % Less: deferred financing costs, net (3) (9,583 ) (9,969 ) Mortgage notes payable, net $ 395,417 $ 395,031 _____________________ (1) As of March 31, 2020 , $2.5 million was in escrow in accordance with the conditions under the loan agreement and presented as part of restricted cash on the unaudited consolidated balance sheet. The escrow amount will be released to fund leasing activity, tenant improvements and leasing commissions related to this property. (2) Fixed as a result of the Company having entered into a “pay-fixed” interest rate swap agreement, which is included in derivatives, at fair value on the consolidated balance sheet as of March 31, 2020 (see Note 6 — Derivatives and Hedging Activities ). (3) Deferred financing costs represent commitment fees, legal fees, and other costs associated with obtaining commitments for financing. These costs are amortized to interest expense over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are expensed when the associated debt is refinanced or repaid before maturity. Costs incurred in seeking financial transactions that do not close are expensed in the period in which it is determined that the financing will not close. |
Schedule of maturities of long-term debt | The following table summarizes the scheduled aggregate principal payments subsequent to March 31, 2020 : (In thousands) Future Minimum Principal Payments 2020 (remainder) $ — 2021 — 2022 — 2023 — 2024 55,000 Thereafter 350,000 Total $ 405,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial instruments measured on a non-recurring basis | The following table presents information about the Company’s assets and liabilities measured at fair value as of March 31, 2020 and December 31, 2019 . (In thousands) Quoted Prices in Active Markets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total March 31, 2020 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (3,918 ) $ — $ (3,918 ) Total $ — $ (3,918 ) $ — $ (3,918 ) December 31, 2019 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (1,327 ) $ — $ (1,327 ) Total $ — $ (1,327 ) $ — $ (1,327 ) |
Schedule of instruments not reported at fair value | The fair values of the Company’s financial instruments that are not reported at fair value on the consolidated balance sheet are reported below: March 31, 2020 December 31, 2019 (In thousands) Level Gross Principal Balance Fair Value Gross Principal Balance Fair Value Mortgage note payable — 123 William Street 3 $ 140,000 $ 150,224 $ 140,000 $ 151,428 Mortgage note payable — 1140 Avenue of the Americas 3 $ 99,000 $ 102,740 $ 99,000 $ 103,340 Mortgage note payable — 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage 3 $ 50,000 $ 53,406 $ 50,000 $ 53,951 Mortgage note payable — 8713 Fifth Avenue 3 $ 10,000 $ 11,044 $ 10,000 $ 11,175 Mortgage note payable — 9 Times Square 3 $ 55,000 $ 52,058 $ 55,000 $ 54,759 Mortgage note payable — 196 Orchard Street 3 $ 51,000 $ 51,748 $ 51,000 $ 52,369 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivatives instruments | The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet as of March 31, 2020 and December 31, 2019 . (In thousands) Balance Sheet Location March 31, December 31, 2019 Derivatives designated as hedging instruments: Interest Rate “Pay-fixed” Swap Derivative liability, at fair value $ (3,918 ) $ (1,327 ) |
Schedule of notional amounts of outstanding derivative positions | As of March 31, 2020 and December 31, 2019 , the Company had the following derivatives that were designated as cash flow hedges of interest rate risk. March 31, 2020 December 31, 2019 Interest Rate Derivative Number of Instruments Notional Amount Number of Instruments Notional Amount (In thousands) (In thousands) Interest Rate “Pay-fixed” Swap 1 $ 55,000 1 $ 55,000 |
Schedule of gain or loss recognized | The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the period ended March 31, 2020 and December 31, 2019 . Three Months Ended March 31, (In thousands) 2020 2019 Amount of loss recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) $ (2,660 ) $ (70 ) Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense $ (69 ) $ — Total interest expense recorded in consolidated statements of operations and comprehensive loss $ 4,832 $ 3,560 |
Schedule of offsetting | The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2020 and December 31, 2019 . The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet. Gross Amounts Not Offset on the Balance Sheet (In thousands) Gross Amounts of Recognized Assets Gross Amounts of Recognized (Liabilities) Gross Amounts Offset on the Balance Sheet Net Amounts of Assets (Liabilities) Presented on the Balance Sheet Financial Instruments Cash Collateral Received (Posted) Net Amount March 31, 2020 $ — $ (3,918 ) $ — $ (3,918 ) $ — $ — (3,918 ) December 31, 2019 $ — $ (1,327 ) $ — $ (1,327 ) $ — $ — (1,327 ) |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of repurchased shares | The following table reflects the number of shares repurchased cumulatively through March 31, 2020 . Numbers of Shares Repurchased Weighted-Average Price per Share Cumulative repurchases as of December 31, 2019 1,259,734 $ 22.03 Three months ended March 31, 2020 — — Cumulative repurchases as of March 31, 2020 1,259,734 $ 22.03 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases under Topic 842 | The following table reflects the ground lease rent payments due from the Company and a reconciliation to the net present value of those payments as of March 31, 2020 : (In thousands) Future Base Rent Payments 2020 (remainder) $ 3,560 2021 4,746 2022 4,746 2023 4,746 2024 4,746 Thereafter 207,246 Total lease payments $ 229,790 Less: Effects of discounting (174,935 ) Total present value of lease payments $ 54,855 |
Related Party Transactions an_2
Related Party Transactions and Arrangements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of amount contractually due and forgiven in connection with operation related services | The following table details amounts incurred in connection with the Company’s operations-related services described above as of and for the periods presented: Three Months Ended March 31, Payable (receivable) as of (In thousands) 2020 2019 March 31, 2020 December 31, 2019 Acquisition fees and reimbursements: Acquisition fees and related cost reimbursements $ — $ — $ — $ — Financing coordination fees and leasing commissions (1) — 6 — — Ongoing fees: Asset and property management fees to related parties (2) 1,998 1,548 (8 ) (4) (6 ) (4) Professional fees and other reimbursements (3) 1,042 1,033 347 (4) 228 (4) Distributions on Class B units — — — — Total related party operation fees and reimbursements $ 3,040 $ 2,587 $ 339 $ 222 _____________________ (1) Financing coordination fees are included as deferred financing costs within mortgage notes payable, net and leasing commissions are included within deferred leasing costs, net on the consolidated balance sheets, respectively. (2) Beginning on April 1, 2019, property management fees due to the Property Manager are no longer adjusted for reimbursable expenses paid by the Company to third-party property managers. (3) Amounts for the three months ended March 31, 2020 and 2019 are included in general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss. (4) Included in accounts payable, accrued expense and other liabilities on the consolidated balance sheet. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of restricted share awards activity | The following table displays restricted share award activity during the three months ended March 31, 2020 : Number of Weighted-Average Issue Price Unvested, December 31, 2019 13,201 $ 21.00 Granted — — Vested (267 ) 22.50 Unvested, March 31, 2020 12,934 $ 20.97 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of earnings per share | The following is a summary of the basic and diluted net loss per share computation for the periods presented: Three Months Ended March 31, 2020 2019 Net loss (in thousands) $ (6,788 ) $ (4,584 ) Basic and diluted weighted average shares outstanding 30,981,830 30,977,955 Basic and diluted net loss per share $ (0.22 ) $ (0.15 ) |
Schedule of antidilutive securities excluded from computation of earnings per share | The Company had the following weighted-average common share equivalents as of March 31, 2020 and March 31, 2019 , which were excluded from the calculation of diluted net loss per share attributable to stockholders as the effect would have been anti-dilutive: Three Months Ended March 31, 2020 2019 Unvested restricted shares 13,057 12,359 OP units 90 90 Class B units 159,159 159,159 Total weighted-average anti-dilutive common share equivalents 172,306 171,608 |
Organization (Details)
Organization (Details) ft² in Millions | Mar. 31, 2020USD ($)ft²employeepropertyshares |
Subsidiary, Sale of Stock [Line Items] | |
Number of real estate properties | property | 8 |
Net rentable area (sqft) | ft² | 1.2 |
Aggregate purchase price of real estate | $ 790,700,000 |
Special Limited Partner | |
Subsidiary, Sale of Stock [Line Items] | |
Contributed capital | $ 2,020 |
Limited partner units (in shares) | shares | 90 |
New York City Operating Partnership, L.P. | |
Subsidiary, Sale of Stock [Line Items] | |
Number of employees | employee | 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Weighted average remaining lease term | 6 years 9 months 18 days | |
Bad debt expense | $ 5,000 | $ 0 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | P40Y | |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | P15Y | |
Fixtures and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful life | P5Y |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Minimum Rental Payments) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2020 (remainder) | $ 45,655 |
2021 | 58,496 |
2022 | 54,704 |
2023 | 46,662 |
2024 | 42,191 |
Thereafter | 198,434 |
Total | $ 446,142 |
Real Estate Investments (Summar
Real Estate Investments (Summary of Amortization and Accretion of Market Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization and (accretion) of above- and below-market leases, net | $ (362) | $ (467) |
Depreciation and Amortization | In-place leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of leases and other intangibles | 1,852 | 2,246 |
Depreciation and Amortization | Other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of leases and other intangibles | 291 | 291 |
Depreciation and Amortization | Amortization of in-place leases and other intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of leases and other intangibles | 2,143 | 2,537 |
Rental Income | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of Below Market Lease | (659) | (815) |
Rental Income | Above-market leases | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of leases and other intangibles | 285 | 336 |
Rental Income | Amortization and (accretion) of above- and below-market leases, net | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization and (accretion) of above- and below-market leases, net | (374) | (479) |
Property Operating Expense | Amortization of below-market ground lease | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of leases and other intangibles | $ 12 | $ 12 |
Real Estate Investments (Summ_2
Real Estate Investments (Summary of Future Amortization Expense) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Depreciation and Amortization | |
Leases and Other Intangibles | |
2020 (remainder) | $ 6,102 |
2021 | 6,839 |
2022 | 5,495 |
2023 | 4,256 |
2024 | 3,505 |
Depreciation and Amortization | In-place leases | |
Leases and Other Intangibles | |
2020 (remainder) | 5,228 |
2021 | 5,902 |
2022 | 4,787 |
2023 | 3,548 |
2024 | 2,797 |
Depreciation and Amortization | Other intangibles | |
Leases and Other Intangibles | |
2020 (remainder) | 874 |
2021 | 937 |
2022 | 708 |
2023 | 708 |
2024 | 708 |
Rental Income | |
Below-market lease liabilities | |
2020 (remainder) | (1,927) |
2021 | (2,314) |
2022 | (1,823) |
2023 | (1,597) |
2024 | (1,567) |
Total to be included in revenue from tenants | |
2020 (remainder) | (1,072) |
2021 | (1,235) |
2022 | (832) |
2023 | (755) |
2024 | (1,055) |
Rental Income | Above-market leases | |
Leases and Other Intangibles | |
2020 (remainder) | 855 |
2021 | 1,079 |
2022 | 991 |
2023 | 842 |
2024 | $ 512 |
Mortgage Notes Payable, Net (Mo
Mortgage Notes Payable, Net (Mortgage Note) (Details) $ in Thousands | Mar. 31, 2020USD ($)property | Dec. 31, 2019USD ($) | Jul. 17, 2019USD ($) |
Debt Instrument [Line Items] | |||
Mortgage notes payable, gross | $ 405,000 | ||
Mortgage notes payable, net | $ 395,417 | $ 395,031 | |
Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 7 | ||
Mortgage notes payable, gross | $ 405,000 | 405,000 | |
Less: deferred financing costs, net | (9,583) | (9,969) | |
Mortgage notes payable, net | $ 395,417 | 395,031 | |
Effective Interest Rate | 4.35% | ||
123 William Street | |||
Debt Instrument [Line Items] | |||
Escrow deposit | $ 2,500 | ||
123 William Street | Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Mortgage notes payable, gross | $ 140,000 | 140,000 | |
Effective Interest Rate | 4.74% | ||
1140 Avenue of the Americas | Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Mortgage notes payable, gross | $ 99,000 | 99,000 | |
Effective Interest Rate | 4.18% | ||
400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 2 | ||
Mortgage notes payable, gross | $ 50,000 | 50,000 | |
Effective Interest Rate | 4.59% | ||
8713 Fifth Avenue | Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Mortgage notes payable, gross | $ 10,000 | 10,000 | |
Effective Interest Rate | 5.05% | ||
9 Times Square | Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Mortgage notes payable, gross | $ 55,000 | 55,000 | |
Effective Interest Rate | 3.73% | ||
196 Orchard Street | Mortgages Note Payable | |||
Debt Instrument [Line Items] | |||
Encumbered Properties | property | 1 | ||
Mortgage notes payable, gross | $ 51,000 | $ 51,000 | $ 51,000 |
Effective Interest Rate | 3.91% | 3.85% |
Mortgage Notes Payable, Net (Na
Mortgage Notes Payable, Net (Narrative) (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | Jul. 17, 2019 | Apr. 26, 2019 |
Debt Instrument [Line Items] | ||||
Mortgage notes payable, gross | $ 405,000,000 | |||
Debt instrument, collateral amount | 826,600,000 | |||
Mortgages Note Payable | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, gross | $ 405,000,000 | $ 405,000,000 | ||
Effective Interest Rate | 4.35% | |||
9 Times Square | Mortgages Note Payable | ||||
Debt Instrument [Line Items] | ||||
Loan amount | $ 55,000,000 | |||
Fixed interest rate, percent | 3.67% | |||
Debt covenant, minimum net worth requirement | $ 175,000,000 | |||
Debt covenant, minimum liquid assets requirement | $ 10,000,000 | |||
196 Orchard Street | Mortgages Note Payable | ||||
Debt Instrument [Line Items] | ||||
Mortgage notes payable, gross | $ 51,000,000 | $ 51,000,000 | $ 51,000,000 | |
Effective Interest Rate | 3.91% | 3.85% |
Mortgage Notes Payable, Net (_2
Mortgage Notes Payable, Net (Mortgage Principal Payments) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2020 (remainder) | $ 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 55,000 |
Thereafter | 350,000 |
Total | $ 405,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Financial Instruments Carried at Fair Value) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ (3,918) | $ (1,327) |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (3,918) | (1,327) |
Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (3,918) | (1,327) |
Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Interest Rate “Pay-fixed” Swap | Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (3,918) | (1,327) |
Interest Rate “Pay-fixed” Swap | Fair Value, Measurements, Nonrecurring | Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Interest Rate “Pay-fixed” Swap | Fair Value, Measurements, Nonrecurring | Significant Other Observable Inputs Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | (3,918) | (1,327) |
Interest Rate “Pay-fixed” Swap | Fair Value, Measurements, Nonrecurring | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments (Financial Instruments Not Carried at Fair Value) (Details) - Mortgages Note Payable - Significant Unobservable Inputs - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
123 William Street | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | $ 140,000 | $ 140,000 |
123 William Street | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 150,224 | 151,428 |
1140 Avenue of the Americas | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 99,000 | 99,000 |
1140 Avenue of the Americas | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 102,740 | 103,340 |
400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 50,000 | 50,000 |
400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 53,406 | 53,951 |
8713 Fifth Avenue | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 10,000 | 10,000 |
8713 Fifth Avenue | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 11,044 | 11,175 |
9 Times Square | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 55,000 | 55,000 |
9 Times Square | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 52,058 | 54,759 |
196 Orchard Street | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 51,000 | 51,000 |
196 Orchard Street | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | $ 51,748 | $ 52,369 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions | Mar. 28, 2019 | Mar. 31, 2020 |
Derivative [Line Items] | ||
Term of derivative | 5 years | |
Fair value of derivatives | $ 4.1 | |
Interest Rate “Pay-fixed” Swap | ||
Derivative [Line Items] | ||
Deposit for derivative | $ 0.8 | |
Cash Flow Hedging | Interest Rate “Pay-fixed” Swap | ||
Derivative [Line Items] | ||
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense | $ 1 |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities (Schedule of Balance Sheet Location) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Designated as Hedging Instrument | Interest Rate “Pay-fixed” Swap | Derivative liability, at fair value | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, at fair value | $ (3,918) | $ (1,327) |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities (Schedule of Notional Amounts) (Details) - Derivative liability, at fair value - Interest Rate “Pay-fixed” Swap $ in Thousands | Mar. 31, 2020USD ($)derivative | Dec. 31, 2019USD ($)derivative |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Number of Instruments | derivative | 1 | 1 |
Notional Amount | $ | $ 55,000 | $ 55,000 |
Derivatives and Hedging Activ_6
Derivatives and Hedging Activities (Schedule of Gain (Loss) Recognized on Derivatives) (Details) - Interest Rate “Pay-fixed” Swap - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of loss recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) | $ (2,660) | $ (70) |
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense | (69) | 0 |
Total interest expense recorded in consolidated statements of operations and comprehensive loss | $ 4,832 | $ 3,560 |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities (Schedule of Gross Presentation, Effects of Offsetting and Net Presentation) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 0 | $ 0 |
Gross Amounts of Recognized (Liabilities) | (3,918) | (1,327) |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amounts of Assets (Liabilities) Presented on the Balance Sheet | (3,918) | (1,327) |
Financial Instruments | 0 | 0 |
Cash Collateral Received (Posted) | 0 | 0 |
Net Amount | $ (3,918) | $ (1,327) |
Common Stock (Narrative) (Detai
Common Stock (Narrative) (Details) - $ / shares | 2 Months Ended | 3 Months Ended | |
Feb. 26, 2018 | Mar. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | |||
Common stock, shares outstanding (in shares) | 30,994,891 | 30,990,448 | |
Distributions declared per common share (in dollars per share) | $ 1.5125 | ||
Minimum percent of shares held by shareholders eligible for repurchase | 25.00% | ||
Percent of repurchase price per share equal to estimated per-share NAV | 100.00% | ||
Percent of weighted average outstanding stock for fiscal semester | 2.50% | ||
Percent of weighted average outstanding stock for fiscal year | 5.00% | ||
Common stock repurchases (in shares) | 0 | ||
Shares repurchased (in dollars per share) | $ 0 |
Common Stock (Repurchased Share
Common Stock (Repurchased Shares) (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Numbers of Shares Repurchased | |
Cumulative repurchases as of December 31, 2018 (in shares) | 1,259,734 |
Nine months ended September 30, 2019 (in shares) | 0 |
Cumulative repurchases as of March 31, 2019 (in shares) | 1,259,734 |
Weighted-Average Price per Share | |
Nine months ended September 30, 2019 (in dollars per share) | $ / shares | $ 0 |
Cumulative repurchases as of March 31, 2019 (in dollars per share) | $ / shares | $ 22.03 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Weighted average remaining lease term | 46 years 9 months 18 days | ||
Weighted average discount rate | 8.60% | ||
Operating lease right-of-use asset | $ 55,529 | $ 55,579 | |
Operating lease liability | 54,855 | $ 54,866 | |
Cash paid for lease liabilities | 1,200 | $ 1,200 | |
Lease expense | $ 1,200 | $ 1,200 |
Commitments and Contingencies_3
Commitments and Contingencies (Future Minimum Lease Payments Due) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 (remainder) | $ 3,560 | |
2021 | 4,746 | |
2022 | 4,746 | |
2023 | 4,746 | |
2024 | 4,746 | |
Thereafter | 207,246 | |
Total lease payments | 229,790 | |
Less: Effects of discounting | (174,935) | |
Total present value of lease payments | $ 54,855 | $ 54,866 |
Related Party Transactions an_3
Related Party Transactions and Arrangements (Details) - shares | Nov. 16, 2018 | Mar. 31, 2020 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 30,994,891 | 30,990,448 | |
Period Prior To Expiration Date Needed To Terminate Agreement | 180 days | ||
Special Limited Partner | |||
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 8,888 | 8,888 |
Related Party Transactions an_4
Related Party Transactions and Arrangements (Acquisition Fees) (Details) - USD ($) | Nov. 16, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Related Party Transaction [Line Items] | |||
Expenses incurred | $ 3,040,000 | $ 2,587,000 | |
New York City Reit Advisors, LLC | Advisor | Financing coordination fees and leasing commissions | |||
Related Party Transaction [Line Items] | |||
Expenses incurred | $ 0 | 0 | |
New York City Reit Advisors, LLC | Advisor | Acquisition fees and related cost reimbursements | |||
Related Party Transaction [Line Items] | |||
Expenses incurred | $ 0 | ||
New York City Reit Advisors, LLC | Contract Purchase Price | Advisor | |||
Related Party Transaction [Line Items] | |||
Acquisition fees as a percentage of benchmark | 1.50% | ||
Expected acquisition fees | 0.50% | ||
Financing advance fees as a percentage of benchmark, expected third party costs | 0.10% | ||
New York City Reit Advisors, LLC | Maximum | Contract Purchase Price | Advisor | |||
Related Party Transaction [Line Items] | |||
Acquisition fees as a percentage of benchmark | 4.50% | ||
Financing advance fees as a percentage of benchmark | 1.50% |
Related Party Transactions an_5
Related Party Transactions and Arrangements (Financing Coordination Fees) (Details) - USD ($) | Nov. 16, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Related Party Transaction [Line Items] | |||
Expenses incurred | $ 3,040,000 | $ 2,587,000 | |
New York City Reit Advisors, LLC | Advisor | Financing coordination fees and leasing commissions | |||
Related Party Transaction [Line Items] | |||
Expenses incurred | $ 0 | $ 0 | |
Amount Available or Outstanding Under Financing Arrangement | New York City Reit Advisors, LLC | Advisor | |||
Related Party Transaction [Line Items] | |||
Financing coordination fees earned by related party | 0.75% |
Related Party Transactions an_6
Related Party Transactions and Arrangements (Asset Management Fees and Variable Management/Incentive Fees) (Details) - New York City Reit Advisors, LLC - Advisor - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2015 | Sep. 30, 2015 | |
Asset Management Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amount | $ 1.5 | $ 1.5 | ||
Contract sales price | ||||
Related Party Transaction [Line Items] | ||||
Unearned class B units (in shares) | 159,159 | |||
Pre-tax Non-compounded Return on Capital Contribution | ||||
Related Party Transaction [Line Items] | ||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | |||
Pre-tax Non-compounded Return on Capital Contribution | Annual Targeted Investor Return | ||||
Related Party Transaction [Line Items] | ||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | 6.00% | ||
Contract Purchase Price | ||||
Related Party Transaction [Line Items] | ||||
Unearned class B units (in shares) | 159,159 | |||
Monthly asset management fee | 0.0625% | |||
The Second Advisory Agreement | ||||
Related Party Transaction [Line Items] | ||||
Asset management fee, percentage of benchmark | 0.10416% | |||
Base asset management fee as a percentage of benchmark | $ 0.5 | |||
Variable management fee as a percentage of benchmark | 10.00% | |||
The Second Advisory Agreement | Core Earnings Per Adjusted Share | ||||
Related Party Transaction [Line Items] | ||||
Variable management fee as a percentage of benchmark | 8.00% | |||
Minimum | The Second Advisory Agreement | ||||
Related Party Transaction [Line Items] | ||||
Dividend to common stockholders | $ 0.05 | |||
Performance Shares | The Second Advisory Agreement | ||||
Related Party Transaction [Line Items] | ||||
Variable management fee as a percentage of benchmark | 15.00% | |||
Performance Shares | The Second Advisory Agreement | Core Earnings Per Adjusted Share | ||||
Related Party Transaction [Line Items] | ||||
Variable management fee as a percentage of benchmark | 6.00% |
Related Party Transactions an_7
Related Party Transactions and Arrangements (Property Management Fees) (Details) - New York City Reit Advisors, LLC - Advisor - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Nov. 16, 2018 | Apr. 24, 2014 | |
Property Management Fees | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction, amount | $ 500,000 | $ 48,562 | ||
Gross Revenue, Stand-alone Single-tenant Net Leased Properties | ||||
Related Party Transaction [Line Items] | ||||
Property management fees earned by related party | 3.25% | 4.00% |
Related Party Transactions an_8
Related Party Transactions and Arrangements (Professional Fees and Other Reimbursements) (Details) - USD ($) | Nov. 16, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Related Party Transaction [Line Items] | ||||
Expenses incurred | $ 3,040,000 | $ 2,587,000 | ||
Payable (receivable) as of | 339,000 | $ 222,000 | ||
New York City Reit Advisors, LLC | Advisor | Reimbursement of Costs and Expenses | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction related to administrative and overhead expenses | 300,000 | 300,000 | ||
Related party transactions related to salaries, wages and benefits | 700,000 | 700,000 | ||
Related party transaction, amount | 1,000,000 | 1,000,000 | ||
New York City Reit Advisors, LLC | Advisor | Acquisition fees and related cost reimbursements | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | 0 | |||
New York City Reit Advisors, LLC | Advisor | Financing coordination fees and leasing commissions | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | $ 0 | 0 | ||
Maximum | New York City Reit Advisors, LLC | Advisor | Reimbursement of Costs and Expenses | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction related to administrative and overhead expenses | 400,000 | |||
Asset cost | 1,250,000,000 | |||
Related party transactions related to salaries, wages and benefits | $ 2,600,000 | |||
Average Invested Assets | Maximum | New York City Reit Advisors, LLC | Advisor | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses as a percentage of benchmark | 2.00% | |||
Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Maximum | New York City Reit Advisors, LLC | Advisor | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses as a percentage of benchmark | 25.00% | |||
Asset Cost, Administrative and Overhead Expense | Maximum | New York City Reit Advisors, LLC | Advisor | Reimbursement of Costs and Expenses | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses as a percentage of benchmark | 0.10% | |||
Asset Cost, Wage and Benefit Expense | Maximum | New York City Reit Advisors, LLC | Advisor | Reimbursement of Costs and Expenses | ||||
Related Party Transaction [Line Items] | ||||
Operating expenses as a percentage of benchmark | 0.30% | |||
Acquisition fees and reimbursements | Acquisition fees and related cost reimbursements | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | $ 0 | 0 | ||
Payable (receivable) as of | 0 | 0 | ||
Acquisition fees and reimbursements | Financing coordination fees and leasing commissions | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | 0 | 6,000 | ||
Payable (receivable) as of | 0 | 0 | ||
Recurring fees | Asset and property management fees to related parties (2) | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | 1,998,000 | 1,548,000 | ||
Payable (receivable) as of | (8,000) | (6,000) | ||
Recurring fees | Professional fees and other reimbursements | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | 1,042,000 | 1,033,000 | ||
Payable (receivable) as of | 347,000 | 228,000 | ||
Recurring fees | Distributions on Class B units | ||||
Related Party Transaction [Line Items] | ||||
Expenses incurred | 0 | $ 0 | ||
Payable (receivable) as of | $ 0 | $ 0 |
Related Party Transactions an_9
Related Party Transactions and Arrangements (Fees and Participations Paid in Connection with the Liquidation or Listing) (Details) - USD ($) | Nov. 16, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2015 | Sep. 30, 2015 |
Related Party Transaction [Line Items] | |||||
Expenses incurred | $ 3,040,000 | $ 2,587,000 | |||
Advisor | New York City Reit Advisors, LLC | The Second Advisory Agreement | |||||
Related Party Transaction [Line Items] | |||||
Base termination fee | 15,000,000 | ||||
Advisor | New York City Reit Advisors, LLC | Financing coordination fees and leasing commissions | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | $ 0 | 0 | |||
Advisor | New York City Reit Advisors, LLC | Subordinated Performance Fees | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 0 | ||||
Advisor | New York City Reit Advisors, LLC | Acquisition fees and related cost reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Expenses incurred | 0 | ||||
Advisor | New York City Reit Advisors, LLC | Real Estate Commissions | |||||
Related Party Transaction [Line Items] | |||||
Payments for brokerage fees | $ 0 | 0 | |||
Advisor | New York City Reit Advisors, LLC | Annual Targeted Investor Return | |||||
Related Party Transaction [Line Items] | |||||
Sales proceeds due to related party | 0 | 0 | |||
Incentive distribution | 0 | 0 | |||
Termination distribution | 0 | 0 | |||
Advisor | New York City Reit Advisors, LLC | Professional Fees | |||||
Related Party Transaction [Line Items] | |||||
Performance fees | $ 0 | $ 0 | |||
Advisor | New York City Reit Advisors, LLC | Maximum | Real Estate Commissions | |||||
Related Party Transaction [Line Items] | |||||
Real estate commissions as a percentage of benchmark | 6.00% | ||||
Pre-tax Non-compounded Return on Capital Contribution | Advisor | New York City Reit Advisors, LLC | |||||
Related Party Transaction [Line Items] | |||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | ||||
Subordinated performance fee as a percentage of benchmark | 15.00% | ||||
Pre-tax Non-compounded Return on Capital Contribution | Advisor | New York City Reit Advisors, LLC | Annual Targeted Investor Return | |||||
Related Party Transaction [Line Items] | |||||
Cumulative capital investment return to investors as a percentage of benchmark | 6.00% | 6.00% | |||
Pre-tax Non-compounded Return on Capital Contribution | Advisor | New York City Reit Advisors, LLC | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Subordinated performance fee as a percentage of benchmark | 10.00% | ||||
Contract sales price | Advisor | New York City Reit Advisors, LLC | |||||
Related Party Transaction [Line Items] | |||||
Unearned class B units (in shares) | 159,159 | ||||
Contract sales price | Advisor | New York City Reit Advisors, LLC | Brokerage Commission Fees | |||||
Related Party Transaction [Line Items] | |||||
Real estate commissions as a percentage of benchmark | 2.00% | ||||
Contract sales price | Advisor | New York City Reit Advisors, LLC | Maximum | Brokerage Commission Fees | |||||
Related Party Transaction [Line Items] | |||||
Real estate commissions as a percentage of benchmark | 50.00% | ||||
Net Sale Proceeds, after Return of Capital Contributions and Annual Targeted Investor Return | Advisor | New York City Reit Advisors, LLC | |||||
Related Party Transaction [Line Items] | |||||
Subordinated performance fee as a percentage of benchmark | 15.00% | ||||
Excess of Adjusted Market Value of Real Estate Assets Plus Distributions Over Aggregate Contributed Investor Capital | Advisor | New York City Reit Advisors, LLC | |||||
Related Party Transaction [Line Items] | |||||
Subordinated participation fees as a percentage of benchmark | 15.00% | ||||
Distribution upon nonrenewal of advisory agreement, percentage of benchmark | 15.00% |
Equity-Based Compensation (Narr
Equity-Based Compensation (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Aug. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation | $ 23,000 | $ 21,000 | |
Shares issued in period, in lieu of cash (in shares) | 0 | 0 | |
Restricted Share Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 1,500,000 | 30,000 | |
Award vesting period | 5 years | ||
Maximum authorized amount as a percentage of shares authorized | 5.00% | ||
Nonvested awards, compensation cost not yet recognized | $ 300,000 | ||
Nonvested awards, compensation cost not yet recognized, period for recognition | 3 years | ||
Equity-based compensation | $ 22,494 | $ 20,992 | |
Restricted Share Plan | Restricted Stock | Year 1 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Periodic vesting percentage | 20.00% | ||
Restricted Share Plan | Restricted Stock | Year 2 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Periodic vesting percentage | 20.00% | ||
Restricted Share Plan | Restricted Stock | Year 3 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Periodic vesting percentage | 20.00% | ||
Restricted Share Plan | Restricted Stock | Year 4 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Periodic vesting percentage | 20.00% | ||
Restricted Share Plan | Restricted Stock | Year 5 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Periodic vesting percentage | 20.00% |
Equity-Based Compensation (Acti
Equity-Based Compensation (Activity) (Details) - Restricted Share Plan - Restricted Stock | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Number of Restricted Shares | |
Beginning Balance, Unvested (in shares) | shares | 13,201 |
Granted (in shares) | shares | 0 |
Vested (in shares) | shares | (267) |
Ending Balance, Unvested (in shares) | shares | 12,934 |
Weighted-Average Issue Price | |
Unvested Beginning Balance (in dollars per share) | $ / shares | $ 21 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 22.50 |
Unvested Ending Balance (in dollars per share) | $ / shares | $ 20.97 |
Net Loss Per Share (Calculation
Net Loss Per Share (Calculations for EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Net loss | $ (6,788) | $ (4,584) |
Basic and diluted weighted average shares outstanding (in shares) | 30,981,830 | 30,977,955 |
Basic and diluted net loss per share (in dollars per share) | $ (0.22) | $ (0.15) |
Net Loss Per Share (Shares Excl
Net Loss Per Share (Shares Excluded From Calculation) (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total weighted-average anti-dilutive common share equivalents (in shares) | 172,306 | 171,608 |
Unvested restricted shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total weighted-average anti-dilutive common share equivalents (in shares) | 13,057 | 12,359 |
OP units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total weighted-average anti-dilutive common share equivalents (in shares) | 90 | 90 |
Class B units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total weighted-average anti-dilutive common share equivalents (in shares) | 159,159 | 159,159 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 1 Months Ended | |
May 13, 2020 | Mar. 31, 2020 | |
Disposed of by sale | 421 W. 54th Street | ||
Subsequent Event [Line Items] | ||
Contract price | $ 7.1 | |
Subsequent event | ||
Subsequent Event [Line Items] | ||
Security deposit retained | $ 0.7 |