Q4 2024 American Strategic Investment Co Earnings Call

Operator: Good morning and welcome to the American Strategic Investment Co.'s fourth quarter and year-end 2024 earnings call. All lines have been placed on mute to prevent any background noise.

Good morning, and welcome to the American strategic investment Corps fourth quarter and year end of 'twenty 'twenty four earnings call. All lines have been placed on mute to prevent any background noise I would now like to turn the conference over to you Curtis Parker Senior Vice President. Please go ahead.

Curtis Parker: I would now like to turn the conference over to Curtis Parker, Senior Vice President. Please go ahead. Thank you, Operator.

Thank you operator, good morning, everyone and thank you for joining us for Asics fourth quarter and year end earnings call. This event is also being webcast in the Investor Relations section of our website joining me today on the call to discuss the quarters results are Michael Anderson American strategic investment company's Chief Executive Officer, and Michael The Santo the Chief Financial Officer.

Curtis Parker: Good morning, everyone, and thank you for joining us for ASIC's fourth quarter and year-end earnings call. This event is also being webcast in the Investor Relations section of our website.

Curtis Parker: Joining me today on the call to discuss the quarter's results are Michael Anderson, American Strategic Investment Company's Chief Executive Officer, and Mike LeSanto, the Chief Financial Officer.

Curtis Parker: The following information contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. Please review the forward-looking and cautionary statements section at the end of our fourth quarter 2024 earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statement.

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The following information contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995, which are subject to risks and uncertainties. Please review the forward looking and cautionary statements section at the end of our fourth quarter 2024 earnings release for various factors that could cause actual results to differ materially from forward looking.

Made during our call today.

Should one or more of these risks or uncertainties materialize actual results may differ materially from those expressed or implied by the forward looking statements. We refer all of you to our SEC filings, including the Form 10-K filed for the year ended December 31, 2024 to be filed March 19th 2025 for a more detailed discussion of the risks.

Curtis Parker: We refer all of you to our SEC filings, including the Form 10-K, filed for the year ended December 31, 2024, to be filed March 19, 2025, for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this call are only made as of the date of this call. As stated in our SEC filings, ASIC disclaims any intent or obligation to update or revise these forward-looking statements except it's required to do so by law.

Factors that could cause these differences.

Any forward looking statements provided during this call are only made as of the date of this call as stated in our SEC filings to ASIC disclaims any intent or obligation to update or revise these forward looking statements except as required to do so by law. Please note that all fourth quarter 2024 financial information is unaudited.

Curtis Parker: Please note that all fourth quarter 2024 financial information is unaudited. Also during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial and operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release, which is posted on our website.

Also during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial and operating performance.

These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.

A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release, which is posted on our website.

Curtis Parker: Please also refer to our earnings release for more detailed information about what we consider to be implied investment grade tenants, a term we will use throughout today's call.

Please also refer to our earnings release for more detailed information about what we consider to be implied investment grade tenants a term we will use throughout today's call.

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

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

Michael Anderson: Good morning and thank you for joining us. Today we will discuss the results for the fourth quarter and full year of 2020. As part of our ongoing diversification strategy, as previously communicated, we completed the disposition of nine times square for $63.5 million. The sale of this property improved the leverage on our balance sheet and generated net proceeds of approximately $13.5 million, strengthening our cash position. We've also relaunched the marketing efforts to sell 123 William Street and 196 Orchard as we continue to pursue our strategy of diversifying beyond real estate in Manhattan through the strategic sale of properties and the acquisition of higher yielding assets.

Michael Anderson: Thanks, Curtis and good morning, and thank you for joining US today, we will discuss the results for the fourth quarter and full year 2024.

Michael Anderson: Part of our ongoing diversification strategy as previously communicated we completed the disposition of nine times square for $63 $5 million.

Michael Anderson: Sales of this property improved the leverage on our balance sheet and generated net proceeds of approximately $13 5 million strengthening our cash position.

Michael Anderson: We have also relaunched the marketing efforts to sell 123 billion Street and 196 Orchard as you continue to pursue our strategy of diversifying beyond real estate in Manhattan.

Michael Anderson: Strategic sale of properties and the acquisition of higher yielding assets.

Michael Anderson: Our existing portfolio consists of six real estate assets throughout New York City, primarily in Manhattan. At year-end, our $470.8 million, 1 million square foot portfolio had occupancy of 80.8% and a weighted average remaining lease term of 6.3 years. Our New York City-centric portfolio features a mix of large investment-grade tenants, of whom the top ten tenants are 77% investment-grade or implied investment-grade, based on straight-line rent, with a weighted average remaining lease term of eight years. Investment-grade tenants in our portfolio include Citi National Bank, CVS, and government agents. We also continue to focus our leasing efforts on securing tenants in resilient industries, such as well-capitalized financial services companies and medical institutions.

Our existing portfolio consists of six real estate assets throughout New York City, primarily in Manhattan at year end, our $478 million 1 million square foot portfolio had occupancy of 88% and a weighted average remaining lease term of six three years, Our New York City centric portfolio features of the mix of large investment grade 10.

Michael Anderson: <unk> of whom the top 10 tenants are 77% investment grade or implied investment grade based on straight line rent with a weighted average remaining lease term of eight years.

Michael Anderson: Investment grade tenants in our portfolio includes city National Bank, CBS and government agencies.

Michael Anderson: We also continue to focus our leasing efforts on securing tenants in resilient industries, such as well capitalized financial services companies and medical institutions are core office properties are located in Submarkets with close proximity to major transportation hubs.

Michael Anderson: Our core office properties are located in submarkets with close proximity to major transportation. Our asset management team continues to drive our leasing efforts. To that point, by leveraging relationships with existing tenants and the brokerage community, they're able to secure five new leases totaling over 37,000 square feet and $2 million of straight line rent during 2024. As we look ahead, we are proactively building a pipeline of new and renewal leases to increase occupancy in our portfolio. We remain committed to strengthening our existing portfolio of real estate assets as we explore additional income-generating investments. We believe with the completion of past sales and the reinvigorated effort to sell two additional properties, we will be better positioned to take advantage of opportunities to invest in the long-term future of our portfolio.

Michael Anderson: Our asset management team continues to drive our leasing efforts to that point by leveraging relationships with existing tenants in the brokerage community. They are able to secure five new leases totaling over 37000 square feet and $2 million of straight line rent during 2024.

Michael Anderson: As we look ahead, we are proactively building, our pipeline of new and renewal leases to increase occupancy in our portfolio.

Michael Anderson: We remain committed to strengthening our existing portfolio of real estate assets as we explore additional income generating investments.

Michael Anderson: We believe with the completion of pass sales and the reinvigorated effort to sell two additional properties, we will be better positioned to take advantage of opportunities to invest in the long term future of our portfolio.

Michael Anderson: It is our intention to build a portfolio that we believe will be accretive to shareholders.

Michael Anderson: Our intention to build a portfolio that we believe will be accretive to shareholders.

Michael LeSanto: With that, I'll turn it over to Michael LeSanto to go over the fourth quarter and full year 2024 results, Mike. Thanks, Michael. Revenue was $61.6 million for the year ended December 31st, 2024, compared to $62.7 million in 2023. Revenue for the fourth quarter 2024 was $14.9 million compared to $15.4 million in the fourth quarter of 2023.

Michael Fans: That I will turn it over to Michael fans out to go over the fourth quarter and full year 2024 results Mike.

Speaker Change: Thanks, Michael.

Speaker Change: Revenue was $61 6 million for the year ended December 31, 2024, compared to $62 7 million in 2023.

Speaker Change: Revenue for the fourth quarter, 2024 was $14 9 million compared to $15 4 million in the fourth quarter of 2023.

Michael LeSanto: The company's full year gap net loss attributable to common stockholders was $140.6 million compared to a net loss of $105.9 million in 2023. Net loss for the quarter was $6.7 million compared to $73.9 million for the fourth quarter in 2023. Adjusted EBITDA for 2024 was $11.9 million and was $1.3 million for the fourth quarter. We made good progress improving cash NOI, which for the full year was $27.6 million compared to $27.3 million in 2023, and which was $6.4 million in the fourth quarter compared to $6.3 million in the fourth quarter of 2023.

Speaker Change: The company's full year GAAP net loss attributable to common stockholders was $140 6 million compared to a net loss of $105 9 million in 2023.

Speaker Change: Net loss for the quarter was $6 7 million compared to $73 9 million for the fourth quarter in 2023.

Speaker Change: Adjusted EBITDA for 2024 was $11 9 million and was $1 3 million for the fourth quarter. We made good progress improving cash NOI for the full year was $27 6 million compared to $27 3 million in 2023, and which was $6 4 million in the fourth quarter compared.

Speaker Change: To $6 3 million in the fourth quarter of 2023.

Michael LeSanto: As always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release, supplemental, and Form 10-K. The company maintains a relatively conservative balance sheet with 100% fixed rate debt and prudent net leverage of 56.9%. We ended the fourth quarter with net debt of $340.2 million at a weighted average effective interest rate of 4.4% and a weighted average remaining debt term of 3.6 years. Importantly, all of our debt is fixed rate or swapped to fixed rate after we locked in interest rates while they were broadly at historic lows.

Speaker Change: As always a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release supplemental and Form 10-K.

Speaker Change: The company maintains a relatively conservative balance sheet with 100% fixed rate debt and prudent net leverage of 56, 9%.

Speaker Change: We ended the fourth quarter with net debt of $340 2 million at a weighted average effective interest rate of four 4% and a weighted average remaining debt term of three six years importantly, all of our debt is fixed rate or swapped to fixed rate. After we locked in interest rates, while they were broadly at.

Michael LeSanto: With that, I'll turn the call back to Michael for some closing remarks. Great. Thank you, Mike.

Speaker Change: I'll close with that I'll turn the call back to Michael for some closing remarks.

Michael: Great. Thank you Mike.

Michael Anderson: One final note, on March 7th, we announced that I would be resigning my position as CEO of ASIC. As such, this will be the last time I get to discuss the company's results.

Speaker Change: One final note on March 7th we announced that I will be resigning my position as CEO of basic as such this will be the last time I get to discuss the company's results with you I'd like to thank you for your insight support and ownership of basic over the years and I take great comfort, leaving the company in the hands of Nixdorf Junior who was recently approved by the board to the position of CEO Nick.

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

Speaker Change: There's been a longtime employee of our advisor are global starting in 2011 and is able to fulfill numerous roles. During his tenure here I believe I speak for the leadership team when I say that we are excited about the opportunities ahead of us for the company to unlock future value for our shareholders. Thank you for joining us today.

Michael Anderson: Thank you for joining us. That will conclude today's call. Thank you all for joining. You may now disconnect.

That will conclude today's call. Thank you all for joining you may now disconnect.

Speaker Change: [music].