Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 09, 2021 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-39448 | |
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., | |
Entity Address, Address Line Two | 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 | 13,093,744 | |
Entity Central Index Key | 0001595527 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Common Class A | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Class A common stock, $0.01 par value per share | |
Trading Symbol | NYC | |
Security Exchange Name | NYSE | |
Preferred Class A | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Class A Preferred Stock Purchase Rights | |
Security Exchange Name | NYSE | |
No Trading Symbol Flag | true |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Real estate investments, at cost: | ||
Land | $ 193,658 | $ 193,658 |
Buildings and improvements | 570,132 | 568,861 |
Acquired intangible assets | 98,118 | 98,118 |
Total real estate investments, at cost | 861,908 | 860,637 |
Less accumulated depreciation and amortization | (153,793) | (139,666) |
Total real estate investments, net | 708,115 | 720,971 |
Cash and cash equivalents | 23,875 | 30,999 |
Restricted cash | 10,135 | 8,995 |
Operating lease right-of-use asset | 55,272 | 55,375 |
Prepaid expenses and other assets (includes amounts due from related parties of $89 and $435 at June 30, 2021 and December 31, 2020, respectively) | 11,952 | 12,953 |
Straight-line rent receivable | 23,126 | 22,050 |
Deferred leasing costs, net | 8,967 | 10,503 |
Total assets | 841,442 | 861,846 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Mortgage notes payable, net | 397,345 | 396,574 |
Accounts payable, accrued expenses and other liabilities (including amounts due to related parties of $0 and $0 at June 30, 2021 and December 31, 2020, respectively) | 6,717 | 6,916 |
Operating lease liability | 54,796 | 54,820 |
Below-market lease liabilities, net | 13,003 | 14,006 |
Derivative liability, at fair value | 2,583 | 3,405 |
Deferred revenue | 4,943 | 4,558 |
Total liabilities | 479,387 | 480,279 |
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued and outstanding at June 30, 2021 and December 31, 2020 | 0 | 0 |
Common stock, $0.01 par value, 300,000,000 shares authorized, 13,065,696 and 12,802,690 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 132 | 129 |
Additional paid-in capital | 689,653 | 686,715 |
Accumulated other comprehensive loss | (2,582) | (3,404) |
Distributions in excess of accumulated earnings | (333,111) | (305,882) |
Total stockholders’ equity | 354,092 | 377,558 |
Non-controlling interests | 7,963 | 4,009 |
Total equity | 362,055 | 381,567 |
Total liabilities and equity | $ 841,442 | $ 861,846 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Amounts due from related parties | $ 89 | $ 435 |
Amounts due to related parties | $ 0 | $ 0 |
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) | 13,065,696 | 12,802,690 |
Common stock, shares outstanding (in shares) | 13,065,696 | 12,802,690 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Revenue from tenants | $ 14,977 | $ 18,562 | $ 30,163 | $ 36,039 |
Operating expenses: | ||||
Asset and property management fees to related parties | 1,847 | 1,844 | 3,754 | 3,842 |
Property operating | 8,323 | 7,217 | 17,059 | 15,233 |
Equity-based compensation | 2,120 | 24 | 4,235 | 47 |
General and administrative | 1,984 | 2,497 | 4,716 | 4,493 |
Depreciation and amortization | 7,023 | 7,912 | 15,549 | 15,431 |
Total operating expenses | 21,297 | 19,494 | 45,313 | 39,046 |
Operating loss | (6,320) | (932) | (15,150) | (3,007) |
Other income (expense): | ||||
Interest expense | (4,763) | (4,995) | (9,476) | (9,827) |
Other income | 31 | 641 | 39 | 760 |
Total other expense | (4,732) | (4,354) | (9,437) | (9,067) |
Net loss | (11,052) | (5,286) | (24,587) | (12,074) |
Net loss attributable to non-controlling interests | 0 | 0 | 0 | 0 |
Net loss attributable to common stockholders | (11,052) | (5,286) | (24,587) | (12,074) |
Other comprehensive income (loss): | ||||
Change in unrealized gain (loss) on derivative | 233 | (68) | 822 | (2,659) |
Other comprehensive income (loss) | 233 | (68) | 822 | (2,659) |
Comprehensive loss | $ (10,819) | $ (5,354) | $ (23,765) | $ (14,733) |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||||
Weighted-average shares outstanding — Basic (in shares) | 12,799,703 | 12,750,066 | 12,789,919 | 12,749,895 |
Weighted-average shares outstanding — Diluted (in shares) | 12,799,703 | 12,750,066 | 12,789,919 | 12,749,895 |
Net loss per share attributable to common stockholders - basic (in dollars per share) | $ (0.87) | $ (0.41) | $ (1.93) | $ (0.95) |
Net loss per share attributable to common stockholders - diluted (in dollars per share) | $ (0.87) | $ (0.41) | $ (1.93) | $ (0.95) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Total Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings | Non-controlling Interests |
Beginning Balance (in shares) at Dec. 31, 2019 | 12,755,099 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 420,549 | $ 128 | $ 686,026 | $ (1,327) | $ (264,278) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation (in shares) | 1,828 | ||||||
Equity-based compensation | 47 | 47 | |||||
Net loss | $ (12,074) | (12,074) | (12,074) | ||||
Other comprehensive income (loss) | (2,659) | (2,659) | (2,659) | ||||
Ending Balance (in shares) at Jun. 30, 2020 | 12,756,927 | ||||||
Ending Balance at Jun. 30, 2020 | 405,863 | $ 128 | 686,073 | (3,986) | (276,352) | ||
Beginning Balance (in shares) at Mar. 31, 2020 | 12,755,099 | ||||||
Beginning Balance at Mar. 31, 2020 | 411,193 | $ 128 | 686,049 | (3,918) | (271,066) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Equity-based compensation (in shares) | 1,828 | ||||||
Equity-based compensation | 24 | 24 | |||||
Net loss | (5,286) | (5,286) | |||||
Other comprehensive income (loss) | (68) | (68) | (68) | ||||
Ending Balance (in shares) at Jun. 30, 2020 | 12,756,927 | ||||||
Ending Balance at Jun. 30, 2020 | 405,863 | $ 128 | 686,073 | (3,986) | (276,352) | ||
Beginning Balance (in shares) at Dec. 31, 2020 | 12,802,690 | ||||||
Beginning Balance at Dec. 31, 2020 | 381,567 | 377,558 | $ 129 | 686,715 | (3,404) | (305,882) | $ 4,009 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from sale of common stock, net (in shares) | 254,602 | ||||||
Proceeds from sale of common stock, net | 2,843 | 2,843 | $ 3 | 2,840 | |||
Repurchase and cancellation of common stock (in shares) | (26,236) | ||||||
Repurchase and cancellation of common stock | (183) | (183) | (183) | ||||
Redemption of fractional shares of common stock and restricted shares (in shares) | (6) | ||||||
Redemption of class A units (in shares) | 13,100 | ||||||
Redemption of Class A Units | 0 | 230 | 230 | (230) | |||
Equity-based compensation (in shares) | 21,546 | ||||||
Equity-based compensation | 4,235 | 51 | 51 | 4,184 | |||
Dividends | (2,562) | (2,562) | (2,562) | ||||
Distributions paid to non-controlling interest holders | (80) | (80) | (80) | ||||
Net loss | (24,587) | (24,587) | (24,587) | ||||
Other comprehensive income (loss) | 822 | 822 | 822 | ||||
Ending Balance (in shares) at Jun. 30, 2021 | 13,065,696 | ||||||
Ending Balance at Jun. 30, 2021 | 362,055 | 354,092 | $ 132 | 689,653 | (2,582) | (333,111) | 7,963 |
Beginning Balance (in shares) at Mar. 31, 2021 | 12,776,448 | ||||||
Beginning Balance at Mar. 31, 2021 | 369,233 | 363,132 | $ 129 | 686,555 | (2,815) | (320,737) | 6,101 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Proceeds from sale of common stock, net (in shares) | 254,602 | ||||||
Proceeds from sale of common stock, net | $ 2,843 | 2,843 | $ 3 | 2,840 | |||
Repurchase and cancellation of common stock (in shares) | 0 | ||||||
Redemption of class A units (in shares) | 13,100 | ||||||
Redemption of Class A Units | $ 0 | 230 | 230 | (230) | |||
Equity-based compensation (in shares) | 21,546 | ||||||
Equity-based compensation | 2,120 | 28 | 28 | 2,092 | |||
Dividends | (1,282) | (1,282) | (1,282) | ||||
Distributions paid to non-controlling interest holders | (40) | (40) | (40) | ||||
Net loss | (11,052) | (11,052) | (11,052) | ||||
Other comprehensive income (loss) | 233 | 233 | 233 | ||||
Ending Balance (in shares) at Jun. 30, 2021 | 13,065,696 | ||||||
Ending Balance at Jun. 30, 2021 | $ 362,055 | $ 354,092 | $ 132 | $ 689,653 | $ (2,582) | $ (333,111) | $ 7,963 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.04889 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||||
Net loss | $ (11,052) | $ (24,587) | $ (12,074) | |
Adjustments to reconcile net loss to net cash (used in) operating activities: | ||||
Depreciation and amortization | 7,023 | $ 7,912 | 15,549 | 15,431 |
Amortization of deferred financing costs | 771 | 771 | ||
Accretion of below- and amortization of above-market lease liabilities and assets, net | (440) | (2,252) | ||
Equity-based compensation | 2,120 | 24 | 4,235 | 47 |
Changes in assets and liabilities: | ||||
Straight-line rent receivable | (1,078) | (1,475) | ||
Straight-line rent payable | 54 | 54 | ||
Prepaid expenses, other assets and deferred costs | 70 | (4,585) | ||
Accounts payable, accrued expenses and other liabilities | (356) | (624) | ||
Deferred revenue | 385 | 580 | ||
Net cash used in operating activities | (5,397) | (4,127) | ||
Cash flows from investing activities: | ||||
Capital expenditures | (1,114) | (1,451) | ||
Net cash used in investing activities | (1,114) | (1,451) | ||
Cash flows from financing activities: | ||||
Common stock issuance proceeds, net | 3,352 | 0 | ||
Dividends paid on common stock | (2,562) | 0 | ||
Repurchase of common stock | (183) | 0 | ||
Distributions to non-controlling interest holders | (80) | 0 | ||
Net cash provided by financing activities | 527 | 0 | ||
Net change in cash, cash equivalents and restricted cash | (5,984) | (5,578) | ||
Cash, cash equivalents and restricted cash, beginning of period | 39,994 | 58,297 | ||
Cash, cash equivalents and restricted cash, end of period | 34,010 | 52,719 | 34,010 | 52,719 |
Cash and cash equivalents | 23,875 | 44,655 | 23,875 | 44,655 |
Restricted cash | 10,135 | 8,064 | 10,135 | 8,064 |
Cash, cash equivalents and restricted cash, end of period | $ 34,010 | $ 52,719 | 34,010 | 52,719 |
Non-Cash Investing and Financing Activities: | ||||
Accrued capital expenditures | $ 158 | $ 523 |
Organization
Organization | 6 Months Ended |
Jun. 30, 2021 | |
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”) is an externally managed real estate investment trust for United States (“U.S.”) federal income tax purposes (“REIT”) that invests primarily in office properties located exclusively within the five boroughs of New York City, primarily Manhattan. The Company has also purchased certain real estate assets that accompany office properties, including retail spaces and amenities, and may purchase hospitality assets, residential assets and other property types also located exclusively within the five boroughs of New York City. As of June 30, 2021, the Company owned eight properties consisting of 1.2 million rentable square feet, acquired for an aggregate purchase price of $790.7 million. On August 18, 2020 (the “Listing Date”), the Company listed shares of Class A common stock on the New York Stock Exchange (“NYSE”) under the symbol “NYC” (the “Listing”). In anticipation of the Listing, the Company implemented a series of corporate actions which resulted in the bifurcation of the Company’s common stock into Class A common stock and Class B common stock and in a net reduction of 2.43 shares for every one share of common stock outstanding prior to these corporate actions (the “Reverse Stock Split”). All references made to share or per share amounts as of dates prior to August 5, 2020 in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the Reverse Stock Split on that date. To effect the Listing, and to address the potential for selling pressure that may have existed at the outset of the Listing, the Company listed only shares of Class A common stock, which represented approximately 25% of the Company’s outstanding shares of common stock, on the NYSE when trading commenced. The Company’s other class of outstanding stock is Class B common stock, which comprised approximately 75% of its outstanding shares of common stock at that time . The first of three equal tranches of shares of Class B common stock that were not listed on the NYSE on the Listing Date converted into 3,189,204 shares of Class A common stock and the shares were listed on the NYSE on December 16, 2020. On February 26, 2021, the Company’s board of directors approved an advancement of the automatic conversion date for the second tranche of shares of Class B common stock from April 15, 2021 to March 1, 2021. Accordingly, the second tranche of shares of Class B common stock converted into 3,176,127 shares of Class A common stock and were listed on the NYSE on March 1, 2021. The remaining tranche of shares of Class B common stock will convert into shares of Class A common stock to be listed on the NYSE on August 13, 2021. For additional information, see Note 7 – Stockholders’ Equity. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and 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, 2020, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2021. 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 June 30, 2021. 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. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and fair value measurements, as applicable. Non-controlling Interests The non-controlling interests represent the portion of the equity in the OP that is not owned by the Company. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and presented as net loss attributable to non-controlling interests on the consolidated statements of operations and comprehensive loss. Non-controlling interests are allocated a share of net loss based on their share of equity ownership. Prior to the Listing, the Advisor held 37 units of limited partnership designated as “Class A Units” (“Class A Units”), after giving effect to the Reverse Stock Split, which represented a nominal percentage of the aggregate OP ownership. These Class A Units were redeemed for an equal number of shares of Class A common stock on the Listing Date. As of December 31, 2020, 13,100 Class A Units held by a third party were still outstanding and represented a non-controlling interest in the OP. During the second quarter of 2021, the 13,100 Class A Units that were held by a third party were redeemed for an equal number of shares of Class A common stock. In addition, under the multi-year outperformance agreement with the Advisor (the “2020 OPP”), the OP issued a new class of units of limited partnership designated as LTIP Units (“LTIP Units”) during 2020, which are also reflected as part of non-controlling interest as of June 30, 2021. See Note 7 - Stockholders’ Equity and Note 11 - Equity-Based Compensation for additional information on amounts recorded in non-controlling interests during the first quarter of 2021. 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, the global COVID-19 pandemic that has spread around the world and to every state in the United States commenced. The pandemic has had and could continue to have an adverse impact on economic and market conditions and triggered a period of global economic slowdown. The ongoing vaccine hesitancy and resistance in certain segments of the population and the recent spread of more transmissible COVID -19 variants could result in restrictions being re-imposed or otherwise disrupt the reopening plans of some offices and businesses. The continued 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 considered the impact of COVID-19 on the assumptions and estimates underlying its consolidated financial statements and believes the estimates and assumptions are reasonable and supportable based on the information available as of June 30, 2021. However, given the rapid evolution of the COVID-19 pandemic and the global response to curb its spread, these estimates and assumptions as of June 30, 2021 are inherently less certain than they would be absent the actual and potential impacts of the COVID-19 pandemic. 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 only recently had lifted most COVID-19 restrictions on businesses. The Company’s properties remain accessible to all tenants, although, even as operating restrictions have expired, not all tenants have resumed operations. 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 but others will be borne by the Company. In addition, one of the Company’s tenants, Knotel, Inc. (“Knotel”), which was a tenant at the Company’s 123 William Street and 9 Times Square properties, declared bankruptcy in early 2021 and its leases with the Company were terminated. In the fourth quarter of 2020, the Company put Knotel on a cash basis of accounting and fully reserved all receivables from Knotel with the exception of security deposits held, which was reflected as a reduction in revenue from tenants during the period ended December 31, 2020. Management has already re-leased all of the vacant space formerly occupied by Knotel at its 123 William Street building and is working on securing additional new leases to replace Knotel’s former space at it 9 Times Square building. There can be no assurance, however, that the Company will be able to lease all or any portion of the currently vacant space at any property on acceptable or favorable terms, or at all. 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. During the year ended December 31, 2020, the Company reduced revenue from tenants by $8.5 million for reserves recorded during the period on receivables for which the related tenants have been put on a cash basis. The Company has continued to experience delays in rent collections during 2021. In the first six months of 2021, there has been no rental income received from any of the tenants that were previously placed on a cash basis. The Company has taken a proactive approach to achieve mutually agreeable solutions with its tenants and in some cases, in 2020 and 2021, the Company executed different types of lease amendments. These agreements included deferrals and abatements and, in some cases, extensions to the term of the leases. In the first and second quarters of 2021, the Company executed lease amendments with multiple tenants, which include deferrals, abatements, extensions to the terms of the lease, and in one instance, a reduction of the lease term. As a result of the financial difficulties of the Company’s tenants and early lease terminations, the Company is in breach of debt covenants on mortgages secured by its 1140 Avenue of Americas, 9 Times Square, Laurel/Riverside and 8713 Fifth Avenue properties under the non-recourse mortgages for those properties. These breaches caused cash trap events, but not events of default. Refer to Note 4 - Mortgage Notes Payable, Net for further details regarding these breaches. For accounting purposes, in accordance with ASC 842: Leases, normally a company would be required to assess a lease 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 (including leases for which the prior classification under ASC 840 was retained as part of the election to apply the package of practical expedients allowed upon the adoption of ASC 842, which does not apply to leases subsequently modified). However, in light of the COVID-19 pandemic in which many leases are being modified, the FASB and SEC have provided relief that allows 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. For COVID-19 relief qualified changes, there are two methods to potentially account for such rent deferrals or abatements under the relief, (1) as if the changes were originally contemplated in the lease contract or (2) as if the deferred payments are variable lease payments contained in the lease contract. For all other lease changes that did not qualify for FASB relief, the Company would be required to apply modification accounting including assessing classification under ASC 842. Some, but not all of the Company’s lease modifications qualify for the FASB relief. In accordance with the relief provisions, instead of treating these qualifying leases as modifications, the Company has elected to treat the modifications as if previously contained in the lease and recast rents receivable prospectively (if necessary). Under that accounting, for modifications that were deferrals only, there would be no impact on overall rental revenue and for any abatement amounts that reduced total rent to be received, the impact would be recognized ratably over the remaining life of the lease. For leases not qualifying for this relief, the Company applied modification accounting and determined that there were no changes in the current classification of its 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 June 30, 2021, these leases had a weighted-average remaining lease ter m of 6.7 years. B ecause 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 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 the leasing standard adopted on January 1, 2019, the Company is required to assess, based on credit risk, if it is probable that the Company will collect virtually all of the lease payments at the 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 and 2021, this assessment has included consideration of the impacts of the COVID-19 pandemic on the Company’s 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 is probable that 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 is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and the straight line rent receivable accrued will be written off where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants in accordance with current 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 lease accounting rules the Company records uncollectable amounts as reductions in revenue from tenants. During the six months ended June 30, 2021, the Company had no such reductions in revenue. During the three months and six months ended June 30, 2020, the Company reduced revenue from tenants by $0.1 million for reserves recorded during the period on receivables for which the related tenants have been put on a cash basis (see accounting policy above). During the year ended December 31, 2020, the Company reduced revenue from tenants by $8.5 million for reserves recorded during the period on receivables for which the related tenants have been put on a cash basis. In the first six months of 2021, no rental income was received from any of the tenants that were previously placed on a cash basis. 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 . Recently Issued Accounting Pronouncements Adopted as of January 1, 2020 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. 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. Pending Adoption as of March 31, 2021 In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815) . The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard allows for either modified or full retrospective transition methods. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to (i) the assertion that the Company’s hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of the Company’s derivatives, which will be consistent with the Company’s past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur. |
Real Estate Investments
Real Estate Investments | 6 Months Ended |
Jun. 30, 2021 | |
Real Estate Investments, Net [Abstract] | |
Real Estate Investments | Real Estate InvestmentsThere were no real estate assets acquired or liabilities assumed during the three and six months ended June 30, 2021 or 2020. Also, there were no dispositions of real estate during the three and six months ended June 30, 2021 or 2020. However, the Company is evaluating its options for its 421 W. 54th Street - Hit Factory property, which includes marketing the property for sale. As no buyer has been identified for the property, it does not qualify to be classified as held for sale on the consolidated balance sheet as of June 30, 2021. There have also not been any impairment charges recorded for this property as the estimated fair value exceeds its carrying value at June 30, 2021. Significant Tenants As of June 30, 2021 and December 31, 2020, 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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 In-place leases $ 1,361 $ 2,145 $ 2,866 $ 3,998 Other intangibles 291 291 583 583 Total included in depreciation and amortization $ 1,652 $ 2,436 $ 3,449 $ 4,581 Above-market lease intangibles $ 273 $ 285 $ 538 $ 570 Below-market lease liabilities (488) (2,187) (1,003) (2,847) Total included in revenue from tenants $ (215) $ (1,902) $ (465) $ (2,277) Below-market ground lease, included in property operating expenses $ 12 $ 12 $ 25 $ 25 The following table provides the projected amortization expense and adjustments to revenues for the next five years as of June 30, 2021: (In thousands) 2021 (remainder) 2022 2023 2024 2025 In-place leases $ 2,652 $ 4,665 $ 3,427 $ 2,676 $ 1,559 Other intangibles 392 708 708 708 708 Total to be included in depreciation and amortization $ 3,044 $ 5,373 $ 4,135 $ 3,384 $ 2,267 Above-market lease assets $ 525 $ 974 $ 825 $ 495 $ 206 Below-market lease liabilities (970) (1,677) (1,452) (1,422) (1,049) Total to be included in revenue from tenants $ (445) $ (703) $ (627) $ (927) $ (843) Write-off of Deferred Leasing Commissions |
Mortgage Notes Payable, Net
Mortgage Notes Payable, Net | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Mortgage Notes Payable, Net | Mortgage Notes Payable, Net The Company’s mortgage notes payable, net as of June 30, 2021 and December 31, 2020 are as follows: Outstanding Loan Amount Portfolio Encumbered Properties June 30, December 31, Effective Interest Rate Interest Rate Maturity (In thousands) (In thousands) 123 William Street (1) 1 $ 140,000 $ 140,000 4.73 % Fixed Mar. 2027 1140 Avenue of the Americas (2) 1 99,000 99,000 4.17 % Fixed Jul. 2026 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage (2) 2 50,000 50,000 4.58 % Fixed May 2028 8713 Fifth Avenue (2) 1 10,000 10,000 5.04 % Fixed Nov. 2028 9 Times Square (2) 1 55,000 55,000 3.72 % Fixed (3) Apr. 2024 196 Orchard Street 1 51,000 51,000 3.90 % Fixed Aug. 2029 Mortgage notes payable, gross 7 405,000 405,000 4.35 % Less: deferred financing costs, net (4) (7,655) (8,426) Mortgage notes payable, net $ 397,345 $ 396,574 _____________________ (1) As of June 30, 2021, $3.0 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) Due to covenant breaches resulting in cash traps for these properties, all cash generated from operating these properties is being held in a segregated account, and the Company no longer has access to the excess cash flows. See “ Collateral and Interest Payments ” section below for additional details. (3) 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 June 30, 2021 (see Note 6 — Derivatives and Hedging Activities ). (4) 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. Collateral and Principal Payments Real estate assets and intangible assets of $829.5 million, at cost (net of below-market lease liabilities), at June 30, 2021 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 June 30, 2021: (In thousands) Future Minimum Principal Payments 2021 (remainder) $ — 2022 — 2023 — 2024 55,000 2025 — Thereafter 350,000 Total $ 405,000 The Company has breached both a debt service coverage and a debt yield covenant under the non-recourse mortgage loan secured by 9 Times Square for each of the last three quarters. The principal amount of the loan was $55.0 million as of June 30, 2021. The breaches that have already occurred for the prior three quarters (including the quarter ended June 30, 2021), while not events of default, have required the Company to enter into a cash management period whereby all rents and other revenue of the property, if any, are held in a segregated account as additional collateral under the loan. If the Company breaches the covenants during the quarter ending September 30, 2021, as the Company anticipates, the quarter ending September 30, 2021 would be the fourth consecutive quarter the Company has been in breach, and an event of default would occur if the Company does not “right size” the loan by either (i) prepaying a portion of the loan or (ii) providing the lenders with additional collateral in the form of cash or a letter of credit, in each case in an amount sufficient to cure the covenant breaches when applied as a reduction of the loan balance. The Company intends, in the third quarter of 2021, to engage in discussions with the lender in an effort to reach a satisfactory agreement that would avoid an event of default under the loan. There is no assurance the Company will be able to reach a satisfactory agreement with the lender or right size the loan by making a significant repayment of principal (the exact amount of which cannot be estimated presently) which could result in the lender accelerating the principal amount due under the loan and exercising other remedies including foreclosing on the property. Further, funding any substantial principal repayment to right size this loan would significantly impact the Company’s capital resources which could have a material adverse effect on the Company’s ability to fund its operating expenses (including debt service obligations), acquisitions, capital expenditures and dividends to the holders of shares of the Company’s Class A common stock. The Company has breached both a debt service coverage provision and a reserve fund reserve provision under its non-recourse mortgage secured by the 1140 Avenue of the Americas property in each of the last four quarters. The principal amount of the loan was $99.0 million as of June 30, 2021. These breaches are not events of default, rather they require excess cash, if any, (after paying operating costs, debt service and capital/tenant replacement reserves) to be held in a segregated account as additional collateral under the loan. The covenants for this loan may be cured after achieving two consecutive quarters when the required debt service coverage for the property is maintained, whereupon the additional collateral will be released. The Company can remain subject to this reserve requirement through maturity of the loan without further penalty or ramifications. As of June 30, 2021, the Company has $3.7 million cash retained by the lender and maintained in restricted cash associated with this event. The Company has also breached a debt service coverage covenant under the non-recourse mortgage loan secured by 400 E. 67th Street - Laurel Condominium/200 Riverside Boulevard - Icon Garage in the first and second quarters of 2021. The principal amount of the loan was $50.0 million as of June 30, 2021. The two parking garage tenants at this property have not paid rent in accordance with their lease agreements for 15 months and were placed on a cash basis in the fourth quarter of 2020. These breaches are not events of default but rather require the Company to enter into a cash management period whereby all rents and other revenue of the property, if any, are to be held in a segregated account as additional collateral under the loan. The covenant may be cured after achieving two consecutive quarters when the required debt service coverage for the property is maintained. The Company can remain subject to this reserve requirement through maturity of the loan without further penalty or ramifications. The Company breached a debt service coverage ratio covenant under the non-recourse mortgage secured by 8713 Fifth Avenue during the second quarter of 2021. However, the breach of this covenant did not result in an event of default but rather triggered an excess cash flow sweep period. The Company has the ability to avoid the excess cash flow sweep period by electing to fund a reserve in the amount of $125,000 of additional collateral in cash or as a letter of credit. The Company has not yet determined whether it will exercise this ability. The Company also has the ability to continue to avoid an excess cash flow sweep period by funding an additional $125,000 each quarter until the covenant breaches are cured in accordance with the terms of the loan agreement. If the Company does not elect to continue to fund the $125,000 additional collateral in a subsequent quarter, then the excess flow sweep period would commence in such quarter and continue until the covenant breaches are cured in accordance with the terms of the loan agreement. Additionally, in the event that the debt service coverage ratio covenant remains in breach at or below the current level for two consecutive calendar quarters and the lender reasonably determines that such breach is due to the property not being prudently managed by the current manager, the lender has the right, but not the obligation, to require that the Company replace the current manager with a third party manager chosen by the Company. The Company was in compliance with the remaining covenants under its other mortgage notes payable as of June 30, 2021, however, it continues to monitor compliance with those provisions. If the Company experiences additional lease terminations, due to tenant bankruptcies or otherwise, it is possible that certain of the covenants on other loans may be breached and the Company may also become restricted from accessing excess cash flows from those properties. Similar to the loans discussed above, the Company’s other mortgages also contain cash management provisions that are not considered events of default, and as such, acceleration of principal would only occur upon an eve nt of default. LIBOR Transition In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to LIBOR in derivatives and other financial contracts. On March 5, 2021, the Financial Conduct Authority confirmed a partial extension of this deadline, announcing that it will cease the publication of the one-week and two-month USD LIBOR settings immediately following December 31, 2021. The remaining USD LIBOR settings will continue to be published through June 30, 2023. The Company is not able to predict when there will be sufficient liquidity in the SOFR market. The Company is monitoring and evaluating the risks related to changes in LIBOR availability, which include potential changes in interest paid on debt and amounts received and paid on interest rate swaps. In addition, the value of debt or derivative instruments tied to LIBOR will also be impacted as LIBOR is limited and discontinued and contracts must be transitioned to a new alternative rate. While the Company expects LIBOR to be available in substantially its current form until at least the end of 2021, it is possible that LIBOR will become unavailable prior to that time. This could occur, for example, if a sufficient number of banks decline to make submissions to the LIBOR administrator. The Company has a mortgage loan agreement and a related derivative agreement for a “pay-fixed” swap that have terms based on LIBOR. Those agreements have alternative rates already contained in the agreements, and the Company anticipates that it will either utilize the alternative rates contained in the agreements or negotiate a replacement reference rate for LIBOR with the lenders and derivative counterparties. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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 Measured at Fair Value on a Recurring Basis Derivative Instruments The Company’s derivative instruments are measured at fair value on a recurring basis. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with this derivative utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparty. However, as of March 31, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivatives valuation in its entirety is classified in Level 2 of the fair value hierarchy. The valuation of derivative instruments is determined using a discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and implied volatilities. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the counterparties. (In thousands) Quoted Prices Significant Other Significant Total June 30, 2021 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (2,583) $ — $ (2,583) Total $ — $ (2,583) $ — $ (2,583) December 31, 2020 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (3,405) $ — $ (3,405) Total $ — $ (3,405) $ — $ (3,405) Financial Instruments that are not Reported 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 is deemed to be equivalent to its carrying value because it bears interest at a variable rate that fluctuates with the market and there has been no significant change in the credit risk or credit markets since origination. The fair values of the Company’s financial instruments that are not reported at fair value on the consolidated balance sheet are reported below: June 30, 2021 December 31, 2020 (In thousands) Level Gross Principal Balance Fair Value Gross Principal Balance Fair Value Mortgage note payable — 123 William Street 3 $ 140,000 $ 147,515 $ 140,000 $ 149,733 Mortgage note payable — 1140 Avenue of the Americas 3 99,000 101,713 99,000 102,849 Mortgage note payable — 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage 3 50,000 52,166 50,000 53,087 Mortgage note payable — 8713 Fifth Avenue 3 10,000 10,723 10,000 10,937 Mortgage note payable — 9 Times Square 3 55,000 53,162 55,000 52,504 Mortgage note payable — 196 Orchard Street 3 51,000 50,512 51,000 49,250 Total $ 405,000 $ 415,791 $ 405,000 $ 418,360 |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 6 Months Ended |
Jun. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | 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. 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 June 30, 2021 and December 31, 2020. (In thousands) Balance Sheet Location June 30, December 31, 2020 Derivatives designated as hedging instruments: Interest Rate “Pay-fixed” Swap Derivative liability, at fair value $ (2,583) $ (3,405) 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 three months ended June 30, 2021 and year ended December 31, 2020, 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 $1.1 million will be reclassified from other comprehensive loss as an increase to interest expense. As of June 30, 2021 and December 31, 2020, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk. June 30, 2021 December 31, 2020 Interest Rate Derivative Number of Notional Amount Number of 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 periods indicated. Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2021 2020 2021 2020 Amount of gain (loss) recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) $ (54) $ (300) $ 253 $ (2,960) Amount of gain (loss) reclassified from accumulated other comprehensive loss into income as interest expense $ (287) $ (231) $ (568) $ (301) Total interest expense recorded in consolidated statements of operations and comprehensive loss $ 4,763 $ 4,995 $ 9,476 $ 9,827 Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2021 and December 31, 2020. 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 June 30, 2021 $ — $ (2,583) $ — $ (2,583) $ — $ — (2,583) December 31, 2020 $ — $ (3,405) $ — $ (3,405) $ — $ — (3,405) 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 June 30, 2021, 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 $2.8 million. As of June 30, 2021, 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 $2.8 million. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity As of June 30, 2021 and December 31, 2020, the Company had 13.1 million and 12.8 million shares of common stock outstanding, respectively, including unvested restricted shares. As of June 30, 2021, the Company’s shares of common stock outstanding was comprised of 9.9 million shares of Class A common stock, including unvested restricted shares and 3.2 million shares of Class B common stock, including unvested restricted shares. On August 13, 2021, the then outstanding shares of Class B common stock will convert into shares of Class A common stock and be listed on the NYSE. Except with respect to listing and conversion as described in Note 1 - Organization, shares of Class B common stock have identical preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms and conditions of redemption as the shares of Class A common stock. Accordingly, the shares of Class A common stock and the Class B common stock are reflected collectively as “common stock” on a combined basis in the financial statements. 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. As a result, the Company did not pay distributions during the six months ended June 30, 2020. Following the Listing, the Company reinstated distributions to the Company’s common stockholders in the amount of $0.40 per share ($0.10 per share, per quarter) of common stock per year, payable to holders of record on a single quarterly record date. The first dividend was declared on October 1, 2020 and paid on October 15, 2020 in a partial quarterly amount equal to $0.04889 per share of common stock covering the period from the Listing Date through September 30, 2020. Subsequent dividends have been declared and paid in the quarterly amount of $0.10 per share. Corporate Actions In order to effect the Listing, the Company took the following corporate actions on August 5, 2020, which resulted in a net reduction of 2.43 for every one share of common stock: • amended its charter to effect a 9.72-to-1 reverse stock split combining every 9.72 shares of the Company’s common stock, par value $0.01 per share, into one share of common stock, par value $0.0972 per share; • amended its charter to reduce the par value of the shares of common stock outstanding after the reverse stock split from $0.0972 per share to $0.01 per share and rename the common stock “Class A common stock;” • reclassified 9,750,000 authorized but unissued shares of Class A common stock (equal to approximately three times the number of shares of Class A common stock then issued and outstanding) into shares of Class B common stock, par value $0.01 per share; and • declared and paid a stock dividend of three shares of Class B common stock to every holder of record of Class A common stock In connection with the Listing, the Company repurchased 6,672 fractional shares of common stock for $0.3 million. Listing Impacts On the Listing Date, the following events impacted the Company’s common shares outstanding: • 65,498 Class B Units were converted into Class A Units, of which 52,398 of these Class A Units then held by the Advisor, were subsequently redeemed for an equal number of shares of Class A common stock (see Note 9 — Related Party Transactions and Arrangements for additional information on the Class B Units). As a result, the Company recorded expense of $1.2 million, resulting in an increase to total stockholders’ equity of $0.9 million and an increase to non-controlling interests of $0.2 million with respect to the remaining 13,100 Class A Units that were still held by a third party and not redeemed as of December 31, 2020. The remaining Class A Units were redeemed for an equal number of shares of Class A common stock during the second quarter of 2021, resulting in a decrease to non-controlling interests of $0.2 million. • 37 Class A Units, which were held by the Advisor, were redeemed for an equal number of shares of Class A common stock. Equity Offerings Class A Common Stock On October 1, 2020, the Company entered into an Equity Distribution Agreement, under which the Company may, from time to time, offer, issue and sell to the public, through its sales agents, shares of Class A common stock having an aggregate offering price of up to $250.0 million in an “at the market” equity offering program (the “Common Stock ATM Program”). During the three and six months ended June 30, 2021, the Company sold 254,602 shares of Class A common stock through the Co mmon Stock ATM Program for gross proceeds of $3.4 million, before commissions paid of $34,000 and issuance costs of $0.5 million. In total, the Company had incurred $1.0 million in costs related to the establishment of the Common Stock ATM Program which were all initially recorded in prepaid expenses and other assets on our consolidated balance sheet. Upon receiving proceeds under the Common Stock ATM Program in the second quarter of 2021, the Company reclassified $0.5 million of these prepaid costs to additional paid in capital in the Company’s consolidated statement of changes in equity as a reduction of the gross proceeds received under the Common Stock ATM Program. The Company will continue to assess the probability of receiving proceeds under the Common Stock ATM Program each reporting period and if it becomes probable that no proceeds will be received, it will expense the remaining amounts deferred. Repurchase Program The Company’s directors adopted a resolution authorizing consideration of share repurchases of up to $100 million of shares of Class A common stock over a long-term period following the Listing. Actual repurchases would be reviewed and approved by the Company’s board of directors based on management recommendations taking into consideration all information available at the specific time including the Company’s available cash resources (including the ability to borrow), market capitalization, trading price and alternative uses such as acquisitions. Repurchases would typically be made on the open market in accordance with SEC rules creating a safe harbor for issuer repurchases but may also occur in privately negotiated transactions. No shares have been repurchased since the Company’s directors adopted the resolution. Tender Offer On December 28, 2020, in response to an unsolicited offer to the Company’s stockholders, the Company commenced a tender offer, (as amended, the “December Offer”) to purchase up to 65,000 shares of Class B common stock for cash at a purchase price equal to $7.00 per share. The December Offer expired on January 27, 2021 and, in accordance with the terms of the December offer, the Company purchased 26,236 shares of Class B common stock for a total cost of approximately $0.2 million, including fees and expenses relating to the tender offer, with cash on hand in February 2021. Stockholder Rights Plan In May 2020, the Company announced that its board of directors had approved a stockholder rights plan, but did not take actions to declare a dividend for the plan to become effective. In August 2020, in connection with the Listing and the related bifurcation of common stock into Class A and Class B common stock, the Company entered into an amended and restated rights agreement, which amended and restated the stockholders rights plan approved in May 2020 and declared a dividend payable in August 2020, of one Class A right for and on each share of Class A common stock and one Class B right for and on each share of Class B common stock, in each case, outstanding on the close of business on August 28, 2020 to the stockholders of record on that date. Each right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”), of the Company at a price of $55.00 per one one-thousandth of a share of Series A Preferred Stock, represented by a right, subject to adjustment. On August 12, 2021 the expiration date of these rights was extended from August 16, 2021 to August 16, 2022. See Note 13 — Subsequent Events for additional information. Distribution Reinvestment Plan Until August 28, 2020, the Company had a distribution reinvestment plan (“DRIP”), pursuant to which, stockholders may elect to reinvest distributions paid in cash in additional shares of common stock. The Company had the right to amend any aspect of the DRIP or terminate the DRIP with ten days’ notice to participants. An amendment and restatement of the DRIP (the “A&R DRIP”) in connection with the Listing became effective on August 28, 2020. The A&R DRIP allows stockholders who have elected to participate to have dividends paid with respect to all or a portion of their shares of Class A common stock and Class B common stock reinvested in additional shares of Class A common stock. Shares received by participants in the A&R DRIP will represent shares that are, at the election of the Company, either (i) acquired directly from the Company, which would issue new shares, at a price based on the average of the high and low sales prices of Class A common stock on the NYSE on the date of reinvestment, or (ii) acquired through open market purchases by the plan administrator at a price based on the weighted-average of the actual prices paid for all of the shares of Class A common stock purchased by the plan administrator with proceeds from reinvested dividends to participants for the related quarter, less a per share processing fee. Shares issue d by the Company pursuant to the DRIP or the A&R DRIP were or are recorded within stockholders’ equity in the consolidated balance sheets in the period dividends or other distributions are declared. During the three months ended June 30, 2021 , any DRIP transactions were settled through open market transactions and no shares were issued by the Company. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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 term of the Company’s ground lease is significantly longer than the term of borrowings available to the Company on a fully-collateralized basis. The Company’s estimate of the incremental borrowing rate required significant judgment. As of June 30, 2021, the Company’s ground lease has a weighted-average remaining lease term of 45.5 years and a discount rate of 8.6%. As of June 30, 2021, the Company’s balance sheet includes an ROU asset and liability of $55.3 million and $54.8 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 and six months ended June 30, 2021, the Company paid cash of $1.2 million and $2.4 million, respectively, for amounts included in the measurement of lease liabilities and recorded expense of $1.2 million and $2.4 million, respectively, on a straight-line basis in accordance with the standard. For the three and six months ended June 30, 2020, the Company paid cash of $1.2 million and $2.4 million, respectively, for amounts included in the measurement of lease liabilities and recorded expense, on a straight-line basis in accordance with the standard.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 six months ended June 30, 2021 and 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 June 30, 2021: (In thousands) Future Base Rent Payments 2021 (remainder) $ 2,373 2022 4,746 2023 4,746 2024 4,746 2025 4,746 Thereafter 202,500 Total lease payments 223,857 Less: Effects of discounting (169,061) Total present value of lease payments $ 54,796 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 June 30, 2021, 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 | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Arrangements | Related Party Transactions and Arrangements As of June 30, 2021 and December 31, 2020, entities wholly owned by AR Global owned 56,091 shares of the Company’s outstanding common stock. Fees and Participations Incurred in Connection with the Operations of the Company Summary of Advisory Agreement Pursuant to the advisory agreement with the Advisor (as amended from time to time, the “Advisory Agreement”), the Advisor manages the Company’s day-to-day operations. The initial term of the 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 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 Advisory Agreement) is payable if the Company makes this election. Asset Management Fees and Variable Management/Incentive Fees The Company pays the Advisor a base asset management fee on the first business day of each month equal to (x) $0.5 million 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, shares of common stock, units of limited partnership interest in the OP, 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, (which occurred in October 2020), any cumulative Core Earnings (as defined in the Advisory Agreement) in excess of cumulative distributions paid on the Company’s common stock since November 16, 2018, the effective date of the most recent amendment and restatement of the Advisory Agreement. The Advisory Agreement also entitles the Advisor to an incentive variable management fee. In August 2020, the Company entered into an amendment to the Advisory Agreement to adjust the quarterly thresholds of Core Earnings Per Adjusted Share (as defined in the Advisory Agreement) the Company must reach on a quarterly basis for the Advisor to receive the variable management fee to reflect the Reverse Stock Split. Prior to this amendment, the variable management fee was 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 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. Following the August 2020 amendment, the quarterly thresholds of Core Earnings Per Adjusted Share increased from $0.06 and $0.08 to $0.1458 and $0.1944 . The variable management fee is payable quarterly in arrears in cash, shares of common stock, units of limited partnership interest in the OP or a combination thereof, at the Advisor’s election. No incentive variable management fees were earned during the three months ended June 30, 2021 or June 30, 2020. The Compan y paid $1.5 million in cash asset management fees during each of the three months ended June 30, 2021 and 2020, and $3.0 million during each of the six months ended June 30, 2021 and 2020. There were no variable management fees incurred in either of these periods. Prior to October 1, 2015, for its asset management services provided under the advisory agreement, the Company caused the OP to issue to the Advisor 65,498 Class B Units (52,398 of which were still held by the Advisor at the time of the Listing), after giving effect to the Reverse Stock Split (see Note 1 — Organization for additional details). The Class B Units were intended to be profits interests that would vest, and 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 equaled or exceeded the total amount of capital contributed by investors plus a 6.0% cumulative, pretax, non-compounded annual return thereon, (the “Economic Hurdle”); (b) any one of the following events occurred concurrently with or subsequently to the achievement of the Economic Hurdle: (i) a listing of the Company’s common stock on a national securities exchange; (ii) a transaction to which the Company or the OP was a party, as a result of which OP units or the Company’s common stock were 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 had been met; and (c) the Advisor pursuant to the advisory agreement was providing services to the Company immediately prior to the occurrence of an event of the type described in clause (b) above (the “performance condition”). Pursuant to the limited partnership agreement of the OP, the Advisor was entitled to receive 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, were expensed in the consolidated statements of operations and comprehensive loss until the performance condition was considered probable to occur. As a result of the Listing, which satisfied the performance condition, and the prior determination by the Company’s independent directors that the Economic Hurdle, had been satisfied, the Class B Units vested in accordance with their terms and were converted into an equal number of Class A Units. In addition, effective at the Listing following this conversion and as approved by the Company’s independent directors, 52,398 Class A Units, which were then held by the Advisor, were redeemed for an equal number of newly issued shares of Class A common stock consistent with redemption provisions contained in the A&R OP Agreement. As a result of the conversion of all 65,498 Class B Units into Class A Units, the Company recorded a non-cash expense of approximately $1.2 million which was recorded in vesting and conversion of Class B Units in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2020. The remaining Class A Units were redeemed for an equal number of shares of Class A common stock during the second quarter of 2021. Property Management Fees Pursuant to the Property Management and Leasing Agreement, dated as of April 24, 2014 (the “PMA”), except in certain cases where the Company contracts with a third party, the Company pays the Property Manager a property management fee equal to: (i) for non-hotel properties, 3.25% 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. The term of the PMA is coterminous with the term of the Advisory Agreement. Pursuant to the PMA, the Company reimburses the Property Manager for property-level expenses. These reimbursements are not limited in amount and may include reasonable salaries, bonuses, and benefits of individuals employed by the Property Manager, except for the salaries, bonuses, and benefits of individuals who also serve as one of the Company’s executive officers or as an executive officer of the Property Manager or any of its affiliates. 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 a 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 property management fee for non-hotel properties is 4.0% of gross revenues from the properties managed, plus market-based leasing commissions. The April 2018 PMA has an initial term of one year that is automatically extended for an unlimited number of successive one-year terms at the end of each year unless any party gives 60 days’ written notice to the other parties of its intention to terminate. The Company incurred approximately $0.3 million and $0.3 million in property management fees during the three months ended June 30, 2021 and June 30, 2020, respectively, and $0.8 million and $0.8 million during the six months ended June 30, 2021 and June 30, 2020, respectively. Professional Fees and Other Reimbursements The Company pays directly or reimburses the Advisor monthly in arrears, for all the expenses paid or incurred by the Advisor or its affiliates in connection with the services it provides to the Company under the Advisory Agreement, subject to the following limitations: • 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, these costs may not exceed in any fiscal year, (i) $0.4 million, or (ii) if the Asset Cost (as defined in the 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%. Professional fees and other reimbursements for the three months ended June 30, 2021 and June 30, 2020 were $1.0 million and $1.2 million, respectively, and $2.4 million and $2.2 million for the six months ended June 30, 2021 and June 30, 2020, respectively. These amounts include reimbursements to the Advisor for administrative, overhead and personnel services, which are subject to the limits noted above, as well as costs associated with directors and officers insurance which are not subject to those limits. The amount of expenses included within professional fees and other reimbursements related to administrative, overhead and personnel services provided by and reimbursed to the Advisor for the three and six months ended June 30, 2021 were $0.7 million and $1.9 million, respectively, of which $0.1 million and $0.4 million related to administrative and overhead expenses and $0.7 million and $1.6 million were for salaries, wages, and benefits. Total reimbursement expenses for administrative and personnel services provided by and reimbursed to the Advisor during the three and six months ended June 30, 2020 were $1.0 million and $1.9 million, respectively, of which $0.1 million and $0.4 million related to administrative and overhead expenses and $0.9 million and $1.5 million related to salaries, wages, and benefits. As part of this reimbursement, with respect to the salaries, wages, and benefits of all employees of the Advisor or its affiliates, the Company paid approximately $0.9 million in 2019 to the Advisor or its affiliates as reimbursement for bonuses of employees of the Advisor or its affiliates who provided administrative services during such calendar year, prorated for the time spent working on matters relating to the Company. The Company does not reimburse the Advisor or its affiliates for any bonus amounts relating to time dedicated to the Company by Edward M. Weil, Jr., the Company’s Chief Executive Officer. The Advisor formally awarded 2019 bonuses to employees of the Advisor or its affiliates in September 2020 (the “2019 Bonus Awards”). The original $0.9 million estimate for bonuses recorded and paid to the Advisor in 2019 exceeded the cash portion of the 2019 Bonus Awards to be paid to employees of the Advisor or its affiliates by $0.4 million and that were to be reimbursed by the Company. As a result, during the three months ended September 30, 2020, the Company recorded a receivable from the Advisor of $0.4 million in prepaid expenses and other assets on the consolidated balance sheet and a corresponding reduction in general and administrative expenses. Pursuant to authorization by the Company’s board of directors, the $0.4 million receivable is payable to the Company over a 10-month period from January 2021 through October 2021. During the six months ended June 30, 2021, approximately $0.2 million was received. Reimbursements for the cash portion of 2020 bonuses to employees of the Advisor or its affiliates were expensed and reimbursed on a monthly basis during 2020, and 2021 bonuses continue to be expensed and reimbursed on a monthly basis during 2021 in accordance with the cash bonus estimates provided by the Advisor. Generally, prior to the 2019 Bonus Awards, employee bonuses have been formally awarded to employees of the Advisor or its affiliates in March as an all-cash award and paid out by the Advisor in the year subsequent to the year in which services were rendered to the Company. Summary of Fees, Expenses and Related Payables 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 June 30, Six Months Ended June 30, Payable (receivable) as of (In thousands) 2021 2020 2021 2020 June 30, 2021 December 31, 2020 Ongoing fees: Asset and property management fees to related parties $ 1,847 $ 1,844 3,754 3,842 $ 74 (2) $ (28) (3) Professional fees and other reimbursements (1) 975 1,186 2,367 2,228 — (2) — Professional fee credit due from the Advisor — — — — (163) (4) (407) (4) Total related party operation fees and reimbursements $ 2,822 $ 3,030 $ 6,121 $ 6,070 $ (89) $ (435) ________ (1) Amounts for the six months ended June 30, 2021 and 2020 are included in general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss. (2) Included in accounts payable, accrued expense and other liabilities on the consolidated balance sheet. (3) Included in prepaid expenses and other assets on the consolidated balance sheet. (4) Included in general and administrative expenses. The $0.4 million relates to overpayment of the 2019 Bonus Awards, of which $0.2 million was received during the six months ended June 30, 2021. Listing Arrangements Listing Note Pursuant to the limited partnership agreement of the OP, which was amended and restated in connection with the effectiveness of the Listing on the Listing Date (as so amended and restated, the “A&R OP Agreement”), in the event the Company’s shares of common stock was listed on a national exchange, the OP was obligated to distribute to the Special Limited Partner a promissory note in an aggregate amount (the “Listing Amount”) equal to 15.0% of the difference (to the extent the result is a positive number) between: • the sum of (i) (A) the average closing price of the shares of Class A common stock over the Measurement Period (as defined below) multiplied by the number of shares of common stock issued and outstanding as of the Listing, plus (B) the sum of all distributions or dividends (from any source) paid by the Company to its stockholders prior to the Listing; and (ii) (X) the aggregate purchase price (without deduction for organization and offering expenses or any other underwriting discount, commissions or offering expenses) of the initial public offering of the Company’s common stock, plus (Y) the total amount of cash that, if distributed to the stockholders who purchased shares of the Company’s common stock in the initial public offering, would have provided those stockholders with a 6.0% cumulative, non-compounded, pre-tax annual return on the aggregate purchase price of shares sold in the initial public offering through the listing, minus any distributions of net sales proceeds made to the Special Limited Partner prior to the end of the Measurement Period (as defined below). Effective at the Listing, the OP entered into a listing note agreement with respect to this obligation (the “Listing Note”) with the Special Limited Partner. The Listing Note evidences the OP’s obligation to distribute to the Special Limited Partner the Listing Amount, which will be calculated based on the Market Value of the Company’s common stock. Until the end of the 30 consecutive trading dates commencing on February 9, 2022 (the “Measurement Period”), which will be the 180th day after August 13, 2021, which will be the day all of the shares of the Company’s Class B common stock have fully converted into shares of Class A common stock and are eligible for trading on the NYSE (the “Measurement Period”), the final value of the Listing Note will not be determinable. Until the amount of the Listing Note can be determined, the Listing Note will be considered a liability which will be marked to fair value at each reporting date, with changes in the fair value recorded in the consolidated statements of operations and comprehensive loss. The fair value of the Listing Note at issuance on the Listing Date (August 18, 2020) and at June 30, 2021 was nominal and was determined using a Monte Carlo simulation, which uses a combination of observable and unobservable inputs. The fair value of the Listing Note, if any, will be paid at the end of the Measurement Period. The Special Partner has the right to receive distributions of Net Sales Proceeds (as defined in the Listing Note), until the Listing Note is paid in full; provided that, the Special Limited Partner has the right, but not the obligation, to convert its entire special limited partnership interest in the OP into Class A Units. Multi-Year Outperformance Agreement The amendments effected to the limited partnership agreement of the OP pursuant to the A&R OP Agreement generally reflect provisions more consistent with the agreements of limited partnership of other operating partnerships controlled by real estate investment trusts with securities that are publicly traded and listed and make other changes in light of the transactions entered into by the Company in connection with the Listing. The A&R OP Agreement sets forth the terms of the LTIP Units, which includes the Master LTIP Unit (the “Master LTIP Unit”) issued to the Advisor on August 18, 2020 pursuant to a multi-year outperformance award agreement entered into with the Advisor (the “2020 OPP”). In addition, the A&R OP Agreement describes the procedures pursuant to which holders of Class A Units may redeem all or a portion of their Class A Units on a one-for-one basis for, at the Company’s election, shares of Class A common stock or the cash equivalent thereof. The A&R OP Agreement also requires the Company, upon the request of a holder of Class A Units but subject to certain conditions and limitations, to register under the Securities Act, the issuance or resale of the shares of Class A common stock issuable upon redemption of Class A Units in accordance with the A&R OP Agreement. On the Listing Date, the Company, the OP and the Advisor entered into the 2020 OPP pursuant to which a performance-based equity award was granted to the Advisor. Initially, the award under the 2020 OPP was in the form of a single Master LTIP Unit. On September 30, 2020, the Master LTIP Unit automatically converted into 4,012,841 LTIP Units in accordance with its terms. For additional information on the 2020 OPP, see Note 11 – Equity-Based Compensation. Termination Fees Payable to the Advisor The Advisory Agreement requires the Company to pay a termination fee to the Advisor in the event the 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 Advisory Agreement in connection with the consummation of the first change of control (as defined in the Advisory Agreement). The termination fee is equal to • $15 million plus an amount equal to the product of (i) three (if the termination was 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 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 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 Advisory Agreement is terminated. In connection with the termination or expiration of the 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 | 6 Months Ended |
Jun. 30, 2021 | |
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 | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Equity Plans Restricted Share Plan Prior to the Listing, the Company had an employee and director incentive restricted share plan (as amended, the “RSP”). The RSP provided for the automatic grant of the number of restricted shares equal to $30,000 divided by the then-current Estimated Per-Share NAV, which were 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 also provided 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. 2020 Equity Plan Effective at the Listing, the Company’s independent directors approved an equity plan for the Advisor (the “Advisor Plan”) and an equity plan for individuals (the “Individual Plan” and together with the Advisor Plan, the “2020 Equity Plan”). The Advisor Plan is substantially similar to the Individual Plan, except with respect to the eligible participants. Awards under the Individual Plan are open to the Company’s directors, officers and employees (if the Company ever has employees), employees, officers and directors of the Advisor and as a general matter, employees of affiliates of the Advisor that provide services to the Company. Awards under the Advisor Plan may only be granted to the Advisor and its affiliates (including any person to whom the Advisor subcontracts substantially all of responsibility for directing or performing the day-to-day business affairs of the Company). The 2020 Equity Plan succeeded and replaced the existing RSP. Following the effectiveness of the 2020 Equity Plan at the Listing, no further awards will be granted under the RSP; provided, however, any outstanding awards under the RSP, such as unvested restricted shares held by the Company’s independent directors, will remain in effect in accordance with their terms and the terms of the RSP, until all those awards are exercised, settled, forfeited, canceled, expired or otherwise terminated. The Company accounts for forfeitures when they occur. While the RSP provided only for awards of restricted shares, the 2020 Equity Plan has been e xpanded to also permit awards of restricted stock units, stock options, stock appreciation rights, stock awards, LTIP Units and other equity awards. In addition, the 2020 Equity Plan eliminates the “automatic grant” provisions of the RSP that dictated the terms and amount of the annual award of restricted shares to independent directors. Going forward, grants to independent directors will be made in accordance with the Company’s new director compensation program, as described below under “—Director Compensation.” The 2020 Equity Plan has a term of 10 years, expiring August 18, 2030. The number of shares of the Company’s capital stock that may be issued or subject to awards under the 2020 Equity Plan, in the aggregate, is equal to 20.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time. Shares subject to awards under the Individual Plan reduce the number of shares available for awards under the Advisor Plan on a one-for-one basis and vice versa. Director Compensation Effective on the Listing Date, the Company’s independent directors approved a change to the Company’s director compensation program. Starting with the annual award of restricted shares to be made in connection with the Company’s 2021 annual meeting of stockholders, the amount of the annual award was increased from $30,000 to $65,000. No other changes have been made to the Company’s director compensation program. Restricted Shares 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 that have been granted to the Company’s directors 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. There have not been any grants of restricted shares to other individuals as permitted under the 2020 Equity Plan. 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 dividends on the same basis as dividends paid on shares of common stock, if any, prior to the time that the restrictions on the restricted shares have lapsed and thereafter. Any dividends 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 six months ended June 30, 2021: Number of Weighted-Average Issue Price Unvested, December 31, 2020 5,516 $ 50.20 Granted 21,546 9.05 Vested (110) 54.68 Fractional share redemption (1) (6) 9.81 Unvested June 30, 2021 26,946 17.29 (1) Represents fractional shares redeemed in connection with the conversion of the second tranche of shares of Class B common stock to shares of Class A common stock that occurred on March 1, 2021. As of June 30, 2021, the Company ha d $0.4 million of unrecognized compensation cost related to unvested restricted share awards granted and is expected to be recognized over a weighted-average period of 4.1 years. Restricted share awar ds are expensed in accordance with the service period required. Compensation expense related to restricted share awards was approximat ely $27,843 and $24,478 for the three months ended June 30, 2021 and 2020, respectively, and $51,035 and $46,971 for the six months ended June 30, 2021 and 2020, respectively. Compensation expense related to restricted share awards is recorded as equity-based compensation in the accompanying unaudited consolidated statements of operations and comprehensive loss. Multi-Year Outperformance Award On the Listing Date, the Company, the Company, the OP and the Advisor entered into the 2020 OPP pursuant to which a performance-based equity award was granted to the Advisor. The award was based on the recommendation of the Company’s compensation consultant, and approved by the Company’s independent directors, acting as a group. Initially, the award under the 2020 OPP was in the form of a single Master LTIP Unit. On September 30, 2020, the 30th trading day following the Listing Date, in accordance with its terms, the Master LTIP Unit automatically converted into 4,012,841 LTIP Units, the quotient of $50.0 million divided by $12.46, representing the average closing price of one share of one share of Class A common stock over the ten consecutive trading days immediately prior to September 30, 2020. This number of LTIP Units represents the maximum number of LTIP Units that may be earned by the Advisor during a performance period ending on the earliest of (i) August 18, 2023, (ii) the effective date of any Change of Control (as defined in the 2020 OPP) and (iii) the effective date of any termination of the Advisor’s service as advisor of the Company. For accounting purposes, July 19, 2020 is treated as the grant date (the “Grant Date”), because the Company’s independent directors approved the 2020 OPP and the award made thereunder on that date. The Company engaged third party specialists, who used a Monte Carlo simulation, to calculate the fair value as of the date the Master LTIP Unit converted (September 30, 2020), on which date the fair value was also fixed. The total fair value of the LTIP Units of $25.8 million is being recorded over the requisite service period of 3.07 years beginning on the Grant Date and ending on the third anniversary of the Listing Date (August 18, 2023). As a result, during the three and six months ended June 30, 2021, the Company recorded equity-based compensation expense related to the LTIP Units of $2.1 million and $4.2 million, which is recorded in equity-based compensation in the consolidated statements of operations and comprehensive loss. As of June 30, 2021, the Company had $17.8 million of unrecognized compensation expense related to the LTIP Units, which is expected to be recognized over a period of 2.1 years. LTIP Units/Distributions/Redemption The rights of the Advisor as the holder of the LTIP Units are governed by the terms of the LTIP Units set forth in the agreement of limited partnership of the OP. Holders of LTIP Units are entitled to distributions on the LTIP Units equal to 10% of the distributions made per Class A Unit (other than distributions of sale proceeds) until the LTIP Units are earned. Distributions paid on a Class A Unit are equal to dividends paid on a share of Class A common stock. Distributions paid on LTIP Units are not subject to forfeiture, even if the LTIP Units are ultimately forfeited. The Advisor is entitled to a priority catch-up distribution on each earned LTIP Unit equal to 90% of the aggregate distributions paid on Class A Units during the applicable performance period. Any LTIP Units that are earned become entitled to receive the same distributions paid on the Class A Units. If and when the Advisor’s capital account with respect to an earned LTIP Unit is equal to the capital account balance of a Class A Unit, the Advisor, as the holder of the earned LTIP Unit, in its sole discretion, is entitled to convert the LTIP Unit into a Class A Unit, which may in turn be redeemed on a one-for-one basis for, at the Company’s election, a share of Class A common stock or the cash equivalent thereof. For the six months ended June 30, 2021, the Company paid $80,000 of distributions related to the LTIP units. For the three months period ended June 30, 2021, the Company paid $40,000 of distributions related to the LTIP Units. Performance Measures With respect to one-half of the LTIP Units granted under the 2020 OPP, the number of LTIP Units that become earned (if any) will be determined as of the last day of the performance period based on the Company’s achievement of absolute total stockholder return (“TSR”) levels as shown in the table below. Performance Level Absolute TSR Percentage of LTIP Units Earned Below Threshold Less than 12% 0 % Threshold 12% 25 % Target 18 % 50 % Maximum 24 % or higher 100 % If the Company’s absolute TSR is more than 12% but less than 18%, or more than 18% but less than 24%, the percentage of the Absolute TSR LTIP Units earned is determined using linear interpolation as between those tiers, respectively. With respect to the remaining one-half of the LTIP Units granted under the 2020 OPP, the number of LTIP Units that become earned (if any) will be determined as of the last day of the performance period base on the difference (expressed in terms of basis points, whether positive or negative, as shown in the table below) between the Company’s absolute TSR on the last day of the performance period relative to the average TSR of a peer group consisting of Empire State Realty Trust, Inc., Franklin Street Properties Corp., Paramount Group, Inc. and Clipper Realty Inc. as of the last day of the performance period. Performance Level Relative TSR Excess Percentage of LTIP Units Earned Below Threshold Less than -600 basis points 0 % Threshold -600 basis points 25 % Target 0 basis points 50 % Maximum +600 basis points 100 % If the relative TSR excess is more than -600 basis points but less than zero basis points, or more than zero basis points but less than +600 basis points, the number of LTIP Units that become earned is determined using linear interpolation as between those tiers, respectively. Other Terms In the case of a Change of Control or a termination of the Advisor without Cause (as defined in the Advisory Agreement), the number of LTIP Units that become earned will be calculated based on actual performance through the last trading day prior to the effective date of the Change of Control or termination (as applicable), with the hurdles for calculating absolute TSR prorated to reflect a performance period of less than three years but without prorating the number of LTIP Units that may become earned to reflect the shortened performance period. In the case of a termination of the Advisor for Cause, the number of LTIP Units that become earned will be calculated based on actual performance through the last trading day prior to the effective date of the termination, with the hurdles for calculating absolute TSR and the number of LTIP Units that may become earned each prorated to reflect a performance period of less than three years. The award of LTIP Units under the 2020 OPP is administered by the Company’s compensation committee, provided that any of the compensation committee’s powers can be exercised instead by the Company’s board of directors if the board of directors so elect. Promptly following the performance period, the compensation committee will determine the number of LTIP Units earned, (if any) based on a calculations prepared by an independent consultant engaged by the Committee and as approved by the compensation committee in its reasonable and good faith discretion. The compensation committee also must approve the transfer of any LTIP Units or any Class A Units into which LTIP Units may be converted in accordance with the terms of the A&R OP Agreement. Any LTIP Units that are not earned will automatically be forfeited effective as of the end of the performance period and neither the Company nor the OP will be required to pay any future consideration in respect thereof. 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 six months ended June 30, 2021 or June 30, 2020. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2021 | |
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 and has been retroactively adjusted to reflect the Reverse Stock Split (see Note 1 — Organization for additional details): Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2021 2020 2021 2020 Net loss attributable to common stockholders (in thousands) $ (11,052) $ (5,286) $ (24,587) $ (12,074) Adjustments to net loss attributable to common stockholders (40) — (80) — Adjusted net loss attributable to common stockholders $ (11,092) $ (5,286) $ (24,667) $ (12,074) Basic and diluted weighted average shares outstanding 12,799,703 12,750,066 12,789,919 12,749,895 Basic and diluted net loss per share $ (0.87) $ (0.41) $ (1.93) $ (0.95) Diluted net loss per share assumes the vesting or conversion of restricted shares and Class A Units into an equivalent number of unrestricted shares of Class A common stock, unless the effect is antidilutive. Conditionally issuable shares relating to the 2020 OPP (see Note 11 — Equity-Based Compensation for additional information) would be included in the computation of fully diluted EPS on a weighted-average basis for the three months ended June 30, 2021 and 2020 based on shares that would be issued if the balance sheet date were the end of the measurement period. No LTIP Unit share equivalents were included in the computation for the three and six months ended June 30, 2021 because no LTIP Units would have been earned based on the trading price of Class A common stock including any cumulative dividends paid (since inception of the 2020 OPP) at June 30, 2021. There was also no impact from any of the Company’s potentially dilutive securities during the three months ended June 30, 2021 or 2020 due to the net losses in both periods. The Company had the following weighted-average common share equivalents for the periods indicated, which were excluded from the calculation of diluted net loss per share attributable to stockholders as the effect would have been anti-dilutive. The amounts in the table below have been retroactively adjusted to reflect the Reverse Stock Split (see Note 1 — Organization for additional details): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Unvested restricted shares (1) 15,107 5,835 10,311 5,604 Class A Units (2) 8,205 37 10,639 37 Class B Units (3) — 65,498 — 65,498 LTIP Units (4) 4,012,841 — 4,012,841 — Total weighted-average anti-dilutive common share equivalents 4,036,153 71,370 4,033,791 71,139 __________ (1) There were 26,946 and 6,201 unvested restricted shares outstanding as of June 30, 2021 and June 30, 2020, respectively. (2 ) Formerly known as OP Units. There were 0 and 37 Class A Units outstanding as of June 30, 2021 and June 30, 2020, respectively (see Note 7 — Stockholders’ Equity for additional information). (3) There were 0 and 65,498 Class B Units outstanding as of June 30, 2021 and June 30, 2020, respectively (see Note 7 — Stockholders’ Equity for additional information). (4) There were 4,012,841 and 0 LTIP Units outstanding as of June 30, 2021 and June 30, 2020, respectively (see Note 11 — Equity-Based Compensation for additional information). |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Quarterly Dividend On July 1, 2021, the Company declared a dividend of $0.10 per share on each share of its Class A common stock and Class B common stock. This dividend was paid on July 15, 2021 in the aggregate amount of approximately $1.3 million. Stockholder Rights Plan On August 12, 2021, the Company amended the rights agreement related to its stockholder rights plan to extend the expiration date of the rights under the plan from August 16, 2021 to August 16, 2022, unless earlier exercised, exchanged, amended, redeemed or terminated. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and 2020 are not necessarily indicative of the results for the entire year or any subsequent interim period. |
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 |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management makes significant estimates regarding revenue recognition, purchase price allocations to record investments in real estate, and fair value measurements, as applicable. |
Non-controlling interests | Non-controlling Interests The non-controlling interests represent the portion of the equity in the OP that is not owned by the Company. Non-controlling interests are presented as a separate component of equity on the consolidated balance sheets and presented as net loss attributable to non-controlling interests on the consolidated statements of operations and comprehensive loss. Non-controlling interests are allocated a share of net loss based on their share of equity ownership. Prior to the Listing, the Advisor held 37 units of limited partnership designated as “Class A Units” (“Class A Units”), after giving effect to the Reverse Stock Split, which represented a nominal percentage of the aggregate OP ownership. These Class A Units were redeemed for an equal number of shares of Class A common stock on the Listing Date. As of December 31, 2020, 13,100 Class A Units held by a third party were still outstanding and represented a non-controlling interest in the OP. During the second quarter of 2021, the 13,100 Class A Units that were held by a third party were redeemed for an equal number of shares of Class A common stock. In addition, under the multi-year outperformance agreement with the Advisor (the “2020 OPP”), the OP issued a new class of units of limited partnership designated as LTIP Units (“LTIP Units”) during 2020, which are also reflected as part of non-controlling interest as of June 30, 2021. See Note 7 - Stockholders’ Equity and Note 11 - Equity-Based Compensation for additional information on amounts recorded in non-controlling interests during the first quarter of 2021. |
Revenue Recognition | 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 June 30, 2021, these leases had a weighted-average remaining lease ter m of 6.7 years. B ecause 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 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 the leasing standard adopted on January 1, 2019, the Company is required to assess, based on credit risk, if it is probable that the Company will collect virtually all of the lease payments at the 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 and 2021, this assessment has included consideration of the impacts of the COVID-19 pandemic on the Company’s 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 is probable that 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 is not probable that it will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and the straight line rent receivable accrued will be written off where it was subsequently concluded that collection was not probable. Cost recoveries from tenants are included in operating revenue from tenants in accordance with current accounting rules, on the accompanying consolidated statements of operations and comprehensive loss in the period the related costs are incurred, as applicable. |
Lessor Accounting | 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 | 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 . |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Adopted as of January 1, 2020 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. 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. Pending Adoption as of March 31, 2021 In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Topic 470) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Topic 815) . The new standard reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and amends the guidance for the derivatives scope exception for contracts in an entity's own equity. The standard also amends and makes targeted improvements to the related earnings per share guidance. The ASU is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The standard allows for either modified or full retrospective transition methods. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur. During the year ended December 31, 2020, the Company elected to apply the hedge accounting expedients related to (i) the assertion that the Company’s hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of the Company’s derivatives, which will be consistent with the Company’s past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections, as applicable, as additional changes in the market occur. |
Fair Value Measurement | 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. |
Real Estate Investments (Tables
Real Estate Investments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, Six Months Ended June 30, 2021 2020 2021 2020 In-place leases $ 1,361 $ 2,145 $ 2,866 $ 3,998 Other intangibles 291 291 583 583 Total included in depreciation and amortization $ 1,652 $ 2,436 $ 3,449 $ 4,581 Above-market lease intangibles $ 273 $ 285 $ 538 $ 570 Below-market lease liabilities (488) (2,187) (1,003) (2,847) Total included in revenue from tenants $ (215) $ (1,902) $ (465) $ (2,277) Below-market ground lease, included in property operating expenses $ 12 $ 12 $ 25 $ 25 |
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 June 30, 2021: (In thousands) 2021 (remainder) 2022 2023 2024 2025 In-place leases $ 2,652 $ 4,665 $ 3,427 $ 2,676 $ 1,559 Other intangibles 392 708 708 708 708 Total to be included in depreciation and amortization $ 3,044 $ 5,373 $ 4,135 $ 3,384 $ 2,267 Above-market lease assets $ 525 $ 974 $ 825 $ 495 $ 206 Below-market lease liabilities (970) (1,677) (1,452) (1,422) (1,049) Total to be included in revenue from tenants $ (445) $ (703) $ (627) $ (927) $ (843) |
Mortgage Notes Payable, Net (Ta
Mortgage Notes Payable, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The Company’s mortgage notes payable, net as of June 30, 2021 and December 31, 2020 are as follows: Outstanding Loan Amount Portfolio Encumbered Properties June 30, December 31, Effective Interest Rate Interest Rate Maturity (In thousands) (In thousands) 123 William Street (1) 1 $ 140,000 $ 140,000 4.73 % Fixed Mar. 2027 1140 Avenue of the Americas (2) 1 99,000 99,000 4.17 % Fixed Jul. 2026 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage (2) 2 50,000 50,000 4.58 % Fixed May 2028 8713 Fifth Avenue (2) 1 10,000 10,000 5.04 % Fixed Nov. 2028 9 Times Square (2) 1 55,000 55,000 3.72 % Fixed (3) Apr. 2024 196 Orchard Street 1 51,000 51,000 3.90 % Fixed Aug. 2029 Mortgage notes payable, gross 7 405,000 405,000 4.35 % Less: deferred financing costs, net (4) (7,655) (8,426) Mortgage notes payable, net $ 397,345 $ 396,574 _____________________ (1) As of June 30, 2021, $3.0 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) Due to covenant breaches resulting in cash traps for these properties, all cash generated from operating these properties is being held in a segregated account, and the Company no longer has access to the excess cash flows. See “ Collateral and Interest Payments ” section below for additional details. (3) 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 June 30, 2021 (see Note 6 — Derivatives and Hedging Activities ). (4) 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 June 30, 2021: (In thousands) Future Minimum Principal Payments 2021 (remainder) $ — 2022 — 2023 — 2024 55,000 2025 — Thereafter 350,000 Total $ 405,000 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial instruments measured on a non-recurring basis | (In thousands) Quoted Prices Significant Other Significant Total June 30, 2021 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (2,583) $ — $ (2,583) Total $ — $ (2,583) $ — $ (2,583) December 31, 2020 Interest rate “Pay - Fixed” swaps - liabilities $ — $ (3,405) $ — $ (3,405) Total $ — $ (3,405) $ — $ (3,405) |
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: June 30, 2021 December 31, 2020 (In thousands) Level Gross Principal Balance Fair Value Gross Principal Balance Fair Value Mortgage note payable — 123 William Street 3 $ 140,000 $ 147,515 $ 140,000 $ 149,733 Mortgage note payable — 1140 Avenue of the Americas 3 99,000 101,713 99,000 102,849 Mortgage note payable — 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage 3 50,000 52,166 50,000 53,087 Mortgage note payable — 8713 Fifth Avenue 3 10,000 10,723 10,000 10,937 Mortgage note payable — 9 Times Square 3 55,000 53,162 55,000 52,504 Mortgage note payable — 196 Orchard Street 3 51,000 50,512 51,000 49,250 Total $ 405,000 $ 415,791 $ 405,000 $ 418,360 |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021 and December 31, 2020. (In thousands) Balance Sheet Location June 30, December 31, 2020 Derivatives designated as hedging instruments: Interest Rate “Pay-fixed” Swap Derivative liability, at fair value $ (2,583) $ (3,405) |
Schedule of notional amounts of outstanding derivative positions | As of June 30, 2021 and December 31, 2020, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk. June 30, 2021 December 31, 2020 Interest Rate Derivative Number of Notional Amount Number of 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 periods indicated. Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2021 2020 2021 2020 Amount of gain (loss) recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) $ (54) $ (300) $ 253 $ (2,960) Amount of gain (loss) reclassified from accumulated other comprehensive loss into income as interest expense $ (287) $ (231) $ (568) $ (301) Total interest expense recorded in consolidated statements of operations and comprehensive loss $ 4,763 $ 4,995 $ 9,476 $ 9,827 |
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 June 30, 2021 and December 31, 2020. 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 June 30, 2021 $ — $ (2,583) $ — $ (2,583) $ — $ — (2,583) December 31, 2020 $ — $ (3,405) $ — $ (3,405) $ — $ — (3,405) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, 2021: (In thousands) Future Base Rent Payments 2021 (remainder) $ 2,373 2022 4,746 2023 4,746 2024 4,746 2025 4,746 Thereafter 202,500 Total lease payments 223,857 Less: Effects of discounting (169,061) Total present value of lease payments $ 54,796 |
Related Party Transactions an_2
Related Party Transactions and Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 June 30, Six Months Ended June 30, Payable (receivable) as of (In thousands) 2021 2020 2021 2020 June 30, 2021 December 31, 2020 Ongoing fees: Asset and property management fees to related parties $ 1,847 $ 1,844 3,754 3,842 $ 74 (2) $ (28) (3) Professional fees and other reimbursements (1) 975 1,186 2,367 2,228 — (2) — Professional fee credit due from the Advisor — — — — (163) (4) (407) (4) Total related party operation fees and reimbursements $ 2,822 $ 3,030 $ 6,121 $ 6,070 $ (89) $ (435) ________ (1) Amounts for the six months ended June 30, 2021 and 2020 are included in general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss. (2) Included in accounts payable, accrued expense and other liabilities on the consolidated balance sheet. (3) Included in prepaid expenses and other assets on the consolidated balance sheet. (4) Included in general and administrative expenses. The $0.4 million relates to overpayment of the 2019 Bonus Awards, of which $0.2 million was received during the six months ended June 30, 2021. |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of equity based compensation | The following table displays restricted share award activity during the six months ended June 30, 2021: Number of Weighted-Average Issue Price Unvested, December 31, 2020 5,516 $ 50.20 Granted 21,546 9.05 Vested (110) 54.68 Fractional share redemption (1) (6) 9.81 Unvested June 30, 2021 26,946 17.29 (1) Represents fractional shares redeemed in connection with the conversion of the second tranche of shares of Class B common stock to shares of Class A common stock that occurred on March 1, 2021. Performance Level Absolute TSR Percentage of LTIP Units Earned Below Threshold Less than 12% 0 % Threshold 12% 25 % Target 18 % 50 % Maximum 24 % or higher 100 % With respect to the remaining one-half of the LTIP Units granted under the 2020 OPP, the number of LTIP Units that become earned (if any) will be determined as of the last day of the performance period base on the difference (expressed in terms of basis points, whether positive or negative, as shown in the table below) between the Company’s absolute TSR on the last day of the performance period relative to the average TSR of a peer group consisting of Empire State Realty Trust, Inc., Franklin Street Properties Corp., Paramount Group, Inc. and Clipper Realty Inc. as of the last day of the performance period. Performance Level Relative TSR Excess Percentage of LTIP Units Earned Below Threshold Less than -600 basis points 0 % Threshold -600 basis points 25 % Target 0 basis points 50 % Maximum +600 basis points 100 % |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 and has been retroactively adjusted to reflect the Reverse Stock Split (see Note 1 — Organization for additional details): Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share data) 2021 2020 2021 2020 Net loss attributable to common stockholders (in thousands) $ (11,052) $ (5,286) $ (24,587) $ (12,074) Adjustments to net loss attributable to common stockholders (40) — (80) — Adjusted net loss attributable to common stockholders $ (11,092) $ (5,286) $ (24,667) $ (12,074) Basic and diluted weighted average shares outstanding 12,799,703 12,750,066 12,789,919 12,749,895 Basic and diluted net loss per share $ (0.87) $ (0.41) $ (1.93) $ (0.95) |
Schedule of antidilutive securities excluded from computation of earnings per share | The Company had the following weighted-average common share equivalents for the periods indicated, which were excluded from the calculation of diluted net loss per share attributable to stockholders as the effect would have been anti-dilutive. The amounts in the table below have been retroactively adjusted to reflect the Reverse Stock Split (see Note 1 — Organization for additional details): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Unvested restricted shares (1) 15,107 5,835 10,311 5,604 Class A Units (2) 8,205 37 10,639 37 Class B Units (3) — 65,498 — 65,498 LTIP Units (4) 4,012,841 — 4,012,841 — Total weighted-average anti-dilutive common share equivalents 4,036,153 71,370 4,033,791 71,139 __________ (1) There were 26,946 and 6,201 unvested restricted shares outstanding as of June 30, 2021 and June 30, 2020, respectively. (2 ) Formerly known as OP Units. There were 0 and 37 Class A Units outstanding as of June 30, 2021 and June 30, 2020, respectively (see Note 7 — Stockholders’ Equity for additional information). (3) There were 0 and 65,498 Class B Units outstanding as of June 30, 2021 and June 30, 2020, respectively (see Note 7 — Stockholders’ Equity for additional information). (4) There were 4,012,841 and 0 LTIP Units outstanding as of June 30, 2021 and June 30, 2020, respectively (see Note 11 — Equity-Based Compensation for additional information). |
Organization (Details)
Organization (Details) ft² in Millions, $ in Millions | Aug. 18, 2020shares | Jun. 30, 2021USD ($)ft²property |
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 | $ | $ 790.7 | |
Reverse stock split | 0.4115 | |
Common Class A | ||
Subsidiary, Sale of Stock [Line Items] | ||
Reverse stock split | 0.1029 | |
Common stock, dividend percentage | 25.00% | |
Limited partners ownership interest units (in shares) | 3,189,204 | |
Common Class B | ||
Subsidiary, Sale of Stock [Line Items] | ||
Common stock, dividend percentage | 75.00% | |
Limited partners ownership interest units (in shares) | 3,176,127 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Aug. 17, 2020 | |
Class of Stock [Line Items] | ||||||
Bad debt expense | $ 0.1 | $ 0.1 | $ 8.5 | |||
Weighted average remaining lease term | 6 years 8 months 12 days | |||||
Class A Units | ||||||
Class of Stock [Line Items] | ||||||
Shares held (in shares) | 37 | |||||
Class A Units | Third Party | ||||||
Class of Stock [Line Items] | ||||||
Shares held (in shares) | 13,100 | |||||
Redemption of class A units (in shares) | 13,100 |
Real Estate Investments - Summa
Real Estate Investments - Summary of Amortization and Accretion of Market Lease Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Accretion of below- and amortization of above-market lease liabilities and assets, net | $ (440) | $ (2,252) | ||
Depreciation and Amortization | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | $ 1,652 | $ 2,436 | 3,449 | 4,581 |
Depreciation and Amortization | In-place leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 1,361 | 2,145 | 2,866 | 3,998 |
Depreciation and Amortization | Other intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 291 | 291 | 583 | 583 |
Rental Income | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Below-market lease liabilities | (488) | (2,187) | (1,003) | (2,847) |
Rental Income | Above-market lease intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 273 | 285 | 538 | 570 |
Rental Income | Amortization and (accretion) of above- and below-market leases, net | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Accretion of below- and amortization of above-market lease liabilities and assets, net | (215) | (1,902) | (465) | (2,277) |
Property Operating Expense | Amortization of below-market ground lease | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | $ 12 | $ 12 | $ 25 | $ 25 |
Real Estate Investments - Sum_2
Real Estate Investments - Summary of Future Amortization Expense (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Depreciation and Amortization | |
Finite-Lived Intangible Assets, Net [Abstract] | |
2021 (remainder) | $ 3,044 |
2022 | 5,373 |
2023 | 4,135 |
2024 | 3,384 |
2025 | 2,267 |
Depreciation and Amortization | In-place leases | |
Finite-Lived Intangible Assets, Net [Abstract] | |
2021 (remainder) | 2,652 |
2022 | 4,665 |
2023 | 3,427 |
2024 | 2,676 |
2025 | 1,559 |
Depreciation and Amortization | Other intangibles | |
Finite-Lived Intangible Assets, Net [Abstract] | |
2021 (remainder) | 392 |
2022 | 708 |
2023 | 708 |
2024 | 708 |
2025 | 708 |
Rental Income | |
Below-market lease liabilities | |
2021 (remainder) | (970) |
2022 | (1,677) |
2023 | (1,452) |
2024 | (1,422) |
2025 | (1,049) |
Below Market Lease, Amortization Income,Net Of Fnite Lived Intangible Assets, Maturity Schedule [Abstract] | |
2021 (remainder) | (445) |
2022 | (703) |
2023 | (627) |
2024 | (927) |
2025 | (843) |
Rental Income | Above-market lease intangibles | |
Finite-Lived Intangible Assets, Net [Abstract] | |
2021 (remainder) | 525 |
2022 | 974 |
2023 | 825 |
2024 | 495 |
2025 | $ 206 |
Real Estate Investments - Narra
Real Estate Investments - Narrative (Details) - Depreciation and Amortization - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Real Estate [Line Items] | |||||
Amortization of leases and other intangibles | $ 1,652 | $ 2,436 | $ 3,449 | $ 4,581 | |
In-place leases | |||||
Real Estate [Line Items] | |||||
Amortization of leases and other intangibles | $ 1,361 | $ 2,145 | $ 2,866 | $ 3,998 | |
In-place leases | Termination Of Lease | |||||
Real Estate [Line Items] | |||||
Amortization of leases and other intangibles | $ 1,300 |
Mortgage Notes Payable, Net - M
Mortgage Notes Payable, Net - Mortgage Note (Details) $ in Thousands | Jun. 30, 2021USD ($)property | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | $ 405,000 | |
Mortgage notes payable, net | $ 397,345 | $ 396,574 |
Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 7 | |
Mortgage notes payable, gross | $ 405,000 | 405,000 |
Less: deferred financing costs, net | (7,655) | (8,426) |
Mortgage notes payable, net | $ 397,345 | 396,574 |
Effective Interest Rate | 4.35% | |
123 William Street | ||
Debt Instrument [Line Items] | ||
Escrow deposit | $ 3,000 | |
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 | 4.73% | |
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 | 4.17% | |
400 E. 67th Street Laurel Condominium And 200 Riverside Boulevard | Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 2 | |
Mortgage notes payable, gross | $ 50,000 | 50,000 |
Effective Interest Rate | 4.58% | |
8713 Fifth Avenue (2) | Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Mortgage notes payable, gross | $ 10,000 | 10,000 |
Effective Interest Rate | 5.04% | |
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 | 3.72% | |
196 Orchard Street | Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Mortgage notes payable, gross | $ 51,000 | $ 51,000 |
Effective Interest Rate | 3.90% |
Mortgage Notes Payable, Net - N
Mortgage Notes Payable, Net - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | $ 405,000 | |
Debt instrument, collateral amount | 829,500 | |
Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | 405,000 | $ 405,000 |
9 Times Square | Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | 55,000 | 55,000 |
1140 Avenue of the Americas | ||
Debt Instrument [Line Items] | ||
Restricted cash | 3,700 | |
1140 Avenue of the Americas | Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | 99,000 | 99,000 |
400 E. 67th Street Laurel Condominium And 200 Riverside Boulevard | Mortgages [Member] | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | 50,000 | $ 50,000 |
8713 Fifth Avenue | ||
Debt Instrument [Line Items] | ||
Debt instrument, collateral amount | $ 125 |
Mortgage Notes Payable, Net -_2
Mortgage Notes Payable, Net - Mortgage Principal Payments (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 (remainder) | $ 0 |
2022 | 0 |
2023 | 0 |
2024 | 55,000 |
2025 | 0 |
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 | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ (2,583) | $ (3,405) |
Fair value, measurements, nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure | (2,583) | (3,405) |
Fair value, measurements, nonrecurring | Quoted Prices in Active Markets Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure | 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] | ||
Financial Liabilities Fair Value Disclosure | (2,583) | (3,405) |
Fair value, measurements, nonrecurring | Significant Unobservable Inputs Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure | 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 | (2,583) | (3,405) |
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 | (2,583) | (3,405) |
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 | Jun. 30, 2021 | Dec. 31, 2020 |
Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | $ 405,000 | $ 405,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 415,791 | 418,360 |
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 | 147,515 | 149,733 |
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 | 101,713 | 102,849 |
400 E. 67th Street Laurel Condominium And 200 Riverside Boulevard | 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 And 200 Riverside Boulevard | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 52,166 | 53,087 |
8713 Fifth Avenue (2) | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 10,000 | 10,000 |
8713 Fifth Avenue (2) | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 10,723 | 10,937 |
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 | 53,162 | 52,504 |
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 | $ 50,512 | $ 49,250 |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities - (Schedule of Balance Sheet Location) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivatives, Fair Value [Line Items] | ||
Derivative liability, at fair value | $ 2,583 | $ 3,405 |
Designated as hedging instrument | Interest Rate “Pay-fixed” Swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, at fair value | $ (2,583) | $ (3,405) |
Derivatives and Hedging Activ_4
Derivatives and Hedging Activities - (Narrative) (Details) $ in Millions | Jun. 30, 2021USD ($) |
Derivative [Line Items] | |
Fair value of derivatives | $ 2.8 |
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 | $ 1.1 |
Derivatives and Hedging Activ_5
Derivatives and Hedging Activities - (Schedule of Notional Amounts) (Details) - Interest Rate “Pay-fixed” Swap $ in Thousands | Jun. 30, 2021USD ($)derivative | Dec. 31, 2020USD ($)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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of gain (loss) recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) | $ (54) | $ (300) | $ 253 | $ (2,960) |
Amount of gain (loss) reclassified from accumulated other comprehensive loss into income as interest expense | (287) | (231) | (568) | (301) |
Total interest expense recorded in consolidated statements of operations and comprehensive loss | $ 4,763 | $ 4,995 | $ 9,476 | $ 9,827 |
Derivatives and Hedging Activ_7
Derivatives and Hedging Activities - (Schedule of Gross Presentation, Effects of Offsetting and Net Presentation) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 0 | $ 0 |
Gross Amounts of Recognized (Liabilities) | (2,583) | (3,405) |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amounts of Assets (Liabilities) Presented on the Balance Sheet | (2,583) | (3,405) |
Financial Instruments | 0 | 0 |
Cash Collateral Received (Posted) | 0 | 0 |
Net Amount | $ (2,583) | $ (3,405) |
Stockholders_ Equity - (Narrati
Stockholders’ Equity - (Narrative) (Details) - USD ($) | Dec. 28, 2020 | Oct. 01, 2020 | Aug. 18, 2020 | Aug. 05, 2020 | Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2015 | Dec. 31, 2020 | Aug. 17, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, shares outstanding (in shares) | 13,065,696 | 13,065,696 | 12,802,690 | |||||||
Common Stock, Dividends, Per Share, Declared, Annualized | $ 0.40 | |||||||||
Distributions declared per common share (in dollars per share) | $ 0.10 | 0.10 | $ 0.04889 | |||||||
Reverse stock split | 0.4115 | |||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | 300,000,000 | |||||||
Common stock repurchased (in shares) | 6,672 | 0 | ||||||||
Stock repurchased during period, value | $ 300,000 | $ 183,000 | ||||||||
Vesting and conversion of Class B Units | $ 1,200,000 | |||||||||
Proceeds from sale of common stock, net | $ 2,843,000 | $ 2,843,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||||
Termination notice period | 10 days | |||||||||
Total Stockholders’ Equity | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Stock repurchased during period, value | $ 183,000 | |||||||||
Vesting and conversion of Class B Units | $ 900,000 | |||||||||
Proceeds from sale of common stock, net | $ 2,843,000 | $ 2,843,000 | ||||||||
Non-controlling Interests | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting and conversion of Class B Units | $ 200,000 | $ 200,000 | ||||||||
Common Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock repurchased (in shares) | 26,236 | |||||||||
Redemption of class A units (in shares) | 37 | 13,100 | 13,100 | |||||||
Proceeds from sale of common stock, net | $ 3,000 | $ 3,000 | ||||||||
Common Class A | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, shares outstanding (in shares) | 9,900,000 | 9,900,000 | ||||||||
Reverse stock split | 0.1029 | |||||||||
Common stock, par value (in dollars per share) | $ 0.0972 | $ 0.01 | $ 0.01 | |||||||
Common stock, shares authorized (in shares) | 9,750,000 | |||||||||
Authorized amount of shares to be repurchased | $ 100,000,000 | $ 100,000,000 | ||||||||
Common Class A | At The Market Offering | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Proceeds from sale of common stock, net | $ 250,000,000 | |||||||||
Sale of stock, number of shares issued in transaction (in shares) | 254,602 | 254,602 | ||||||||
Sale of stock, consideration received on transaction | $ 3,400,000 | $ 3,400,000 | ||||||||
Sale of stock, commissions paid | 34,000 | 34,000 | ||||||||
Stock issuance costs | 500,000 | 500,000 | ||||||||
Payment of costs | $ 1,000,000 | |||||||||
Decrease in prepaid expense | $ 500,000 | |||||||||
Common Class B | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock, shares outstanding (in shares) | 3,200,000 | 3,200,000 | ||||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Common stock dividends (in Shares) | 3 | |||||||||
Common stock repurchased (in shares) | 26,236 | |||||||||
Stock repurchased during period, value | $ 200,000 | |||||||||
Shares repurchased tender offer shares (in shares) | 65,000 | |||||||||
Average share price (in dollars per share) | $ 7 | |||||||||
Series A preferred stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||||||
Preferred stock, value | $ 55 | $ 55 | ||||||||
Right to receive shares (in shares) | 0.001 | 0.001 | ||||||||
Class A Units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vesting and conversion of class B units (in shares) | 65,498 | 65,498 | ||||||||
Shares held (in shares) | 37 | |||||||||
Class A Units | Advisor | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares held (in shares) | 52,398 | |||||||||
Class A Units | Third Party | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares held (in shares) | 13,100 |
Commitments and Contingencies -
Commitments and Contingencies - (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Weighted average remaining lease term | 45 years 6 months | 45 years 6 months | |||
Weighted average discount rate | 8.60% | 8.60% | |||
Operating lease right-of-use asset | $ 55,272 | $ 55,272 | $ 55,375 | ||
Operating lease liability | 54,796 | 54,796 | $ 54,820 | ||
Cash paid for lease liabilities | 1,200 | 2,400 | $ 2,400 | ||
Lease expense | $ 1,200 | $ 1,200 | $ 2,400 |
Commitments and Contingencies_2
Commitments and Contingencies - (Future Minimum Lease Payments Due) (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
2021 (remainder) | $ 2,373 | |
2022 | 4,746 | |
2023 | 4,746 | |
2024 | 4,746 | |
2025 | 4,746 | |
Thereafter | 202,500 | |
Total lease payments | 223,857 | |
Less: Effects of discounting | (169,061) | |
Total present value of lease payments | $ 54,796 | $ 54,820 |
Related Party Transactions an_3
Related Party Transactions and Arrangements (Details) - shares | Nov. 16, 2018 | Jun. 30, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 13,065,696 | 12,802,690 | |
Renewal term | 5 years | ||
Period prior to expiration date needed to terminate agreement | 180 days | ||
Renewal basis percentage | 66.00% | ||
Special limited partner | |||
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 56,091 | 56,091 |
Related Party Transactions an_4
Related Party Transactions and Arrangements - (Asset Management Fees and Variable Management/Incentive Fees) (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 18, 2020 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2015 | Dec. 31, 2020 | Aug. 17, 2020 |
Related Party Transaction [Line Items] | |||||||
Asset management fee, percentage of benchmark | 1.25% | ||||||
Vesting and conversion of Class B Units | $ 1.2 | ||||||
Class A Units | |||||||
Related Party Transaction [Line Items] | |||||||
Vesting and conversion of class B units (in shares) | 65,498 | 65,498 | |||||
Shares held (in shares) | 37 | ||||||
Advisor | Class A Units | |||||||
Related Party Transaction [Line Items] | |||||||
Shares held (in shares) | 52,398 | ||||||
New York City Reit Advisors, LLC | Advisor | Asset Management Fees | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction, amount | $ 1.5 | $ 3 | |||||
New York City Reit Advisors, LLC | Advisor | The Second Advisory Agreement | |||||||
Related Party Transaction [Line Items] | |||||||
Base asset management fee as a percentage of benchmark | $ 0.5 | ||||||
Asset management fee, percentage of benchmark | 0.10416% | ||||||
Variable management fee as a percentage of benchmark | 10.00% | ||||||
New York City Reit Advisors, LLC | Advisor | The Second Advisory Agreement | Performance-based equity award | |||||||
Related Party Transaction [Line Items] | |||||||
Variable management fee as a percentage of benchmark | 15.00% | ||||||
New York City Reit Advisors, LLC | Advisor | The Second Advisory Agreement | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Dividend to common stockholders (in dollars per share) | $ 0.05 | ||||||
New York City Reit Advisors, LLC | Advisor | 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% | |||||
New York City Reit Advisors, LLC | Advisor | Core Earnings Per Adjusted Share | The Second Advisory Agreement | Minimum | |||||||
Related Party Transaction [Line Items] | |||||||
Variable management fee as a percentage of benchmark | 8.00% | ||||||
New York City Reit Advisors, LLC | Advisor | Core Earnings Per Adjusted Share | The Second Advisory Agreement | Minimum | Performance-based equity award | |||||||
Related Party Transaction [Line Items] | |||||||
Variable management fee as a percentage of benchmark | 6.00% | ||||||
New York City Reit Advisors, LLC | Advisor | Core Earnings Per Adjusted Share | The Second Advisory Agreement | Maximum | |||||||
Related Party Transaction [Line Items] | |||||||
Variable management fee as a percentage of benchmark | 19.44% | ||||||
New York City Reit Advisors, LLC | Advisor | Core Earnings Per Adjusted Share | The Second Advisory Agreement | Maximum | Performance-based equity award | |||||||
Related Party Transaction [Line Items] | |||||||
Variable management fee as a percentage of benchmark | 14.58% | ||||||
New York City Reit Advisors, LLC | Advisor | Contract sales price | Class A Units | |||||||
Related Party Transaction [Line Items] | |||||||
Shares held (in shares) | 52,398 |
Related Party Transactions an_5
Related Party Transactions and Arrangements - (Property Management Fees) (Details) - New York City Reit Advisors, LLC - Advisor - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Nov. 16, 2018 | Apr. 24, 2014 | |
Property Management Fees | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amount | $ 0.3 | $ 0.3 | $ 0.8 | $ 0.8 | ||
Gross Revenue, Stand-alone Single-tenant Net Leased Properties | ||||||
Related Party Transaction [Line Items] | ||||||
Percentage of management fees earned | 3.25% | 4.00% | ||||
Related party initial term | 1 year | |||||
Related party extended initial term | 1 year |
Related Party Transactions an_6
Related Party Transactions and Arrangements - (Professional Fees and Other Reimbursements) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Oct. 31, 2021 | Dec. 31, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | |
Related Party Transaction [Line Items] | ||||||||
Related party transaction expense | $ 2,822 | $ 3,030 | $ 6,121 | $ 6,070 | ||||
Amounts due to related parties | 0 | 0 | $ 0 | |||||
Amounts due from related parties | 89 | 89 | 435 | |||||
Payable (receivable) as of | (89) | (89) | (435) | |||||
Asset and property management fees to related parties | Recurring fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction expense | 1,847 | 1,844 | 3,754 | 3,842 | ||||
Payable (receivable) as of | 74 | 74 | (28) | |||||
Professional fees and other reimbursements | Recurring fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction expense | 975 | 1,186 | 2,367 | 2,228 | ||||
Payable (receivable) as of | 0 | 0 | 0 | |||||
Professional fee credit due from the advisor | Recurring fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction credit due | 0 | 0 | 0 | 0 | ||||
Payable (receivable) as of | (163) | (163) | $ (407) | |||||
Advisor | Professional fees and other reimbursements | Recurring fees | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction expense | 1,000 | |||||||
Advisor | New York City Reit Advisors, LLC | Reimbursement of Costs and Expenses | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction related to administrative and overhead expenses | 100 | 100 | 400 | 400 | ||||
Related party transactions related to salaries, wages and benefits | 700 | 900 | 1,600 | 1,500 | ||||
Related party transaction, amount | 700 | $ 1,000 | 1,900 | $ 1,900 | $ 900 | |||
Amounts due to related parties | $ 400 | 400 | ||||||
Amounts due from related parties | $ 400 | |||||||
Proceeds from receivable | 200 | |||||||
Advisor | New York City Reit Advisors, LLC | Reimbursement of Costs and Expenses | Forecast | ||||||||
Related Party Transaction [Line Items] | ||||||||
Due from related parties term period | 10 months | |||||||
Advisor | Maximum | New York City Reit Advisors, LLC | Reimbursement of Costs and Expenses | ||||||||
Related Party Transaction [Line Items] | ||||||||
Related party transaction related to administrative and overhead expenses | 400 | |||||||
Asset cost | 1,250,000 | |||||||
Related party transactions related to salaries, wages and benefits | $ 2,600 | |||||||
Advisor | Asset Cost, Administrative and Overhead Expense | Maximum | New York City Reit Advisors, LLC | Reimbursement of Costs and Expenses | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expenses as a percentage of benchmark | 0.10% | 0.10% | ||||||
Advisor | Asset Cost, Wage and Benefit Expense | Maximum | New York City Reit Advisors, LLC | Reimbursement of Costs and Expenses | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating expenses as a percentage of benchmark | 0.30% | 0.30% |
Related Party Transactions an_7
Related Party Transactions and Arrangements - (Listing Arrangements) (Details) | 6 Months Ended | |
Jun. 30, 2021 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||
Consecutive trading dates commencing converted shares | 180 days | |
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% | |
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% |
Related Party Transactions an_8
Related Party Transactions and Arrangements - (Multi-Year Outperformance Agreement) (Details) | Sep. 30, 2020shares |
2020 OPP | Performance-based equity award | |
Related Party Transaction [Line Items] | |
Number of shares available for grant (in shares) | 4,012,841 |
Related Party Transactions an_9
Related Party Transactions and Arrangements - (Termination Fees Payable to the Advisor) (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Advisor | New York City Reit Advisors, LLC | The Second Advisory Agreement | |
Related Party Transaction [Line Items] | |
Related party transaction, termination fee | $ 15 |
Equity-Based Compensation - (Na
Equity-Based Compensation - (Narrative) (Details) - USD ($) | Aug. 18, 2020 | Aug. 31, 2017 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Equity-based compensation | $ 2,120,000 | $ 24,000 | $ 4,235,000 | $ 47,000 | ||
Restricted Share Plan | Unvested restricted shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Value of shares granted | $ 65,000 | $ 30,000 | ||||
Restricted shares vesting period | 5 years | |||||
Nonvested awards, compensation cost not yet recognized | 400,000 | $ 400,000 | ||||
Unrecognized compensation period | 4 years 1 month 6 days | |||||
Equity-based compensation | $ 27,843 | $ 24,478 | $ 51,035 | $ 46,971 | ||
Restricted Share Plan | Unvested restricted shares | Year 1 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Periodic vesting percentage | 20.00% | |||||
2020 Equity Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted shares vesting period | 10 years | |||||
Common stock, shares authorized for grant, percentage | 20.00% | 20.00% | ||||
Number of shares available for awards under the advisor plan (in shares) | 1 |
Equity-Based Compensation - (Ac
Equity-Based Compensation - (Activity) (Details) - Restricted Share Plan - Unvested restricted shares | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Number of Restricted Shares | |
Beginning Balance, Unvested (in shares) | shares | 5,516 |
Granted (in shares) | shares | 21,546 |
Vested (in shares) | shares | (110) |
Fractional share redemption (in shares) | shares | (6) |
Ending Balance, Unvested (in shares) | shares | 26,946 |
Weighted-Average Issue Price | |
Unvested Beginning Balance (in dollars per share) | $ / shares | $ 50.20 |
Granted (in dollars per share) | $ / shares | 9.05 |
Vested (in dollars per share) | $ / shares | 54.68 |
Fractional share redemption (in dollars per share) | $ / shares | 9.81 |
Unvested Ending Balance (in dollars per share) | $ / shares | $ 17.29 |
Equity-Based Compensation - (Mu
Equity-Based Compensation - (Multi Year Outperformance Award) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expenses | $ 2,100,000 | $ 4,200,000 | |
2020 OPP | Performance-based equity award | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | 4,012,841 | ||
Value of shares available for grant | $ 50,000,000 | $ 50,000,000 | |
Average share price (in dollars per share) | $ 12.46 | $ 12.46 | |
Fair value of units | $ 25,800,000 | $ 25,800,000 | |
Service period | 3 years 25 days | ||
Nonvested awards, compensation cost not yet recognized | $ 17,800,000 | $ 17,800,000 | |
Unrecognized compensation period | 2 years 1 month 6 days |
Equity-Based Compensation - (LT
Equity-Based Compensation - (LTIP TSR) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Distributions on the LTIP unit | 10.00% | ||
Distribution on the earned LTIP unit | 90.00% | ||
Distributions paid to non-controlling interest holders | $ 40 | $ 80 | |
Shares issued in period, in lieu of cash (in shares) | 0 | 0 | |
Distributions in excess of accumulated earnings | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Distributions paid to non-controlling interest holders | $ 40 | $ 80 | |
Absolute TSR LTIP Units | Below Threshold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | 12.00% | 12.00% | |
Percentage of LTIP Units Earned | 0.00% | 0.00% | |
Absolute TSR LTIP Units | Threshold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | 12.00% | 12.00% | |
Percentage of LTIP Units Earned | 25.00% | 25.00% | |
Absolute TSR LTIP Units | Target | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | 18.00% | 18.00% | |
Percentage of LTIP Units Earned | 50.00% | 50.00% | |
Absolute TSR LTIP Units | Maximum Threshold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | 24.00% | 24.00% | |
Percentage of LTIP Units Earned | 100.00% | 100.00% | |
Relative TSR LTIP Units | Below Threshold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | (600.00%) | (600.00%) | |
Percentage of LTIP Units Earned | 0.00% | 0.00% | |
Relative TSR LTIP Units | Threshold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | (600.00%) | (600.00%) | |
Percentage of LTIP Units Earned | 25.00% | 25.00% | |
Relative TSR LTIP Units | Target | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | 0.00% | 0.00% | |
Percentage of LTIP Units Earned | 50.00% | 50.00% | |
Relative TSR LTIP Units | Maximum Threshold | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of TSR return | 600.00% | 600.00% | |
Percentage of LTIP Units Earned | 100.00% | 100.00% |
Net Loss Per Share - (Calculati
Net Loss Per Share - (Calculations for EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Equity [Abstract] | ||||
Net loss attributable to common stockholders | $ (11,052) | $ (5,286) | $ (24,587) | $ (12,074) |
Net loss attributable to common stockholders (in thousands) | (40) | 0 | (80) | 0 |
Adjusted net loss attributable to common stockholders | $ (11,092) | $ (5,286) | $ (24,667) | $ (12,074) |
Weighted-average shares outstanding — Basic (in shares) | 12,799,703 | 12,750,066 | 12,789,919 | 12,749,895 |
Weighted-average shares outstanding — Diluted (in shares) | 12,799,703 | 12,750,066 | 12,789,919 | 12,749,895 |
Net loss per share - basic (in dollars per share) | $ (0.87) | $ (0.41) | $ (1.93) | $ (0.95) |
Net loss per share - diluted (in dollars per share) | $ (0.87) | $ (0.41) | $ (1.93) | $ (0.95) |
Net Loss Per Share - (Shares Ex
Net Loss Per Share - (Shares Excluded From Calculation) (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 4,036,153 | 71,370 | 4,033,791 | 71,139 |
Class A Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares outstanding (in shares) | 0 | 37 | 0 | 37 |
Class B Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares outstanding (in shares) | 0 | 65,498 | 0 | 65,498 |
LTIP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares outstanding (in shares) | 4,012,841 | 0 | 4,012,841 | 0 |
Unvested restricted shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Unvested restricted shares outstanding (in shares) | 26,946 | 6,201 | 26,946 | 6,201 |
Unvested restricted shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 15,107 | 5,835 | 10,311 | 5,604 |
Class A Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 8,205 | 37 | 10,639 | 37 |
Class B Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 0 | 65,498 | 0 | 65,498 |
LTIP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 4,012,841 | 0 | 4,012,841 | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 01, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2020 |
Subsequent Event [Line Items] | ||||
Dividends declared (in dollars per share) | $ 0.10 | $ 0.10 | $ 0.04889 | |
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Dividends declared (in dollars per share) | $ 0.10 | |||
Dividends common stock | $ 1.3 |