American Strategic Investment Co. Enters Into Letter of Intent to Sell 9 Times Square for $63.5 Million

Rhea-AI Summary

American Strategic Investment Co. (NYSE: NYC) has entered into a term sheet to sell its 9 Times Square property in Midtown Manhattan for $63.5 million.

The sale is expected to close within 120 days of signing a definitive purchase and sale agreement.

The company had recently amended the loan on 9 Times Square, extending its maturity date to October 2024, with an option to extend further to year-end 2024, to facilitate the sale.

The sale is projected to generate approximately $13.5 million in net proceeds, which ASIC plans to use for asset acquisition and diversification into higher-yielding assets.

CEO Michael Anderson stated that the sale would also strengthen the company's balance sheet. However, there is no assurance that the sale will be completed as outlined.

Positive

• Expected net proceeds of approximately $13.5 million from the sale.
• Proceeds to be used for asset acquisition and diversification into higher-yielding assets.
• Strengthening of the company's balance sheet.

Negative

• No assurance that the sale will be completed as outlined.

Financial Analyst

American Strategic Investment Co.’s (ASIC) decision to sell 9 Times Square for $63.5 million has significant financial implications. For retail investors, it suggests the company is actively managing its portfolio, aiming to unlock value from its property assets. The expected net proceeds of $13.5 million will provide liquidity, helping ASIC pursue higher-yield investment opportunities and potentially improve its overall return on investment (ROI).

Investors should note that the sale could strengthen the company's balance sheet by reducing debt levels and increasing accessible cash. This aligns with ASIC's broader strategy to diversify into higher-yield assets, which, if successful, could enhance long-term profitability.

However, it’s important to recognize the uncertainty surrounding the transaction; the sale is contingent on finalizing a definitive agreement. This means there is a risk the sale may not proceed as planned, which could impact short-term liquidity and strategy execution.

Key terms: Net proceeds are the amount of money remaining after all expenses and costs are deducted from the total sale price. A portfolio in this context refers to the collection of investments held by a company.

Real Estate Market Analyst

The sale of 9 Times Square at $63.5 million highlights the current valuation trends in the commercial real estate market of Midtown Manhattan. This area is known for high property values due to its prime location. The agreement suggests that despite broader market fluctuations, there remains strong demand for well-located, high-quality properties in New York City.

For retail investors, this sale is indicative of ASIC's strategy to capitalize on favorable market conditions to reposition its portfolio. The sale can also be interpreted as the company anticipating potential market shifts or aiming to mitigate risks associated with holding a single high-value asset.

Further, the extension of the loan maturity and its conditions imply a strategic financial maneuver to ensure the transaction's feasibility and potentially avoid any liquidity crunch. This move indicates careful planning by ASIC’s management.

Key terms: The term valuation refers to the process of determining the current worth of an asset. Liquidity denotes how easily an asset can be converted into cash.

– Closing Expected Within 120 days of Signing Definitive Agreement –

NEW YORK--(BUSINESS WIRE)-- American Strategic Investment Co. (NYSE: NYC) (“ASIC” or the “Company”) announced today that it has agreed to a term sheet to sell its 9 Times Square Midtown Manhattan property (“9 Times Square”) for $63.5 million. It is expected that the closing of the transaction will occur within 120 days of the execution of a definitive purchase and sale agreement between the parties.

The Company previously announced that it had secured an amendment of the loan on 9 Times Square, which extended the maturity date of the loan to October 2024, with the option of an additional extension of the loan to year-end 2024 subject to certain conditions, to facilitate the proposed sale of the property.

Michael Anderson, Chief Executive Officer of ASIC stated, “We expect this sale to generate approximately $13.5 million in net proceeds at closing, which we intend to use to pursue the expanded asset acquisition and diversification strategy into higher yielding assets that was announced last year. Additionally, if completed, we expect that this strategic disposition will strengthen our balance sheet.”

There can be no assurance that the Company will enter into a definitive agreement for the sale of 9 Times Square on the terms set forth in the term sheet or at all.

About the Company

American Strategic Investment Co. owns a portfolio of commercial real estate. Additional information about ASIC can be found on its website at AmericanStrategicInvestment.com.

Forward-Looking Statements

The statements in this press release that are not historical facts may be forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to be materially different. The words “may,” “will,” “seeks,” “anticipates,” “believes,” “expects,” “estimates,” “projects,” “plans,” “intends,” “should” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements are subject to a number of risks, uncertainties and other factors, many of which are outside of the Company’s control, which could cause actual results to differ materially from the results contemplated by the forward-looking statements. These risks and uncertainties include (a) the anticipated benefits of the Company’s election to terminate its status as a real estate investment trust, (b) whether the Company will be able to successfully acquire new assets or businesses, (c) the ability of the Company to enter into a definitive agreement for the sale of 9 Times Square on the contemplated terms and consummate such sale; (d) the ability of the Company to execute its business plan and sell certain of its properties on commercially practicable terms, if at all; (e) the potential adverse effects of the geopolitical instability due to the ongoing military conflict between Russia and Ukraine and Israel and Hamas, including related sanctions and other penalties imposed by the U.S. and European Union, and the related impact on the Company, the Company’s tenants, and the global economy and financial markets, (f) the potential adverse effects of inflationary conditions and higher interest rate environment, (g) that any potential future acquisition or disposition is subject to market conditions and capital availability and may not be completed on favorable terms, or at all, and (h) the Company may not be able to continue to meet the New York Stock Exchange's (“NYSE”) continued listing requirements and rules, and the NYSE may delist the Company's common stock, which could negatively affect the Company, the price of the Company's common stock and the Company's shareholders' ability to sell the Company's common stock, as well as those risks and uncertainties set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed on April 1, 2024 and all other filings with the Securities and Exchange Commission after that date including but not limited to the subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as such risks, uncertainties and other important factors may be updated from time to time in the Company’s subsequent reports. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results, unless required to do so by law.

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Investor Relations

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Source: American Strategic Investment Co.

FAQ

What is American Strategic Investment Co.'s plan for 9 Times Square?

American Strategic Investment Co. plans to sell 9 Times Square for $63.5 million, with the closing expected within 120 days of signing a definitive agreement.

How will the sale of 9 Times Square affect American Strategic Investment Co.'s finances?

The sale is expected to generate approximately $13.5 million in net proceeds, which the company plans to use for asset acquisition and diversification into higher-yielding assets, and to strengthen its balance sheet.

What is the timeline for the sale of 9 Times Square?

The sale is expected to close within 120 days of signing a definitive purchase and sale agreement.

What are the terms of the loan on 9 Times Square?

The loan on 9 Times Square has been amended to extend the maturity date to October 2024, with an option to extend further to year-end 2024, to facilitate the sale.

What is the stock symbol for American Strategic Investment Co.?

The stock symbol for American Strategic Investment Co. is NYC.