New York Mortgage Trust Announces Repositioning Away from Multi-Family Joint Venture Equity Portfolio
New York Mortgage Trust (Nasdaq: NYMT) has announced a strategic repositioning of its business, planning to dispose of its joint venture equity interests in multi-family properties. The company held $265 million in these interests as of June 30, 2022, which constituted 5.7% of its total investment portfolio. As of September 22, 2022, it had $336.6 million in cash. The CEO indicated that historical rent increases in the multi-family sector present an opportunity to unlock value for stockholders, suggesting a shift towards investments in a higher rate environment while continuing to invest in multi-family mezzanine lending.
- Strategic decision to exit multi-family joint ventures could unlock significant value for shareholders.
- Possession of $336.6 million in cash provides liquidity for future investments.
- Dependence on market conditions for successful disposal of multi-family equity assets may pose risks.
- Potential for value loss if the market for multi-family properties declines.
NEW YORK, Sept. 23, 2022 (GLOBE NEWSWIRE) -- New York Mortgage Trust, Inc. (Nasdaq: NYMT) (the “Company”) announced today that its Board of Directors (the “Board”) has approved a strategic repositioning of its business by opportunistically disposing of the Company’s joint venture equity interests in multi-family properties over time and reallocating its capital away from such assets to its targeted assets.
The Company held
“Beginning in 2020, we saw an exciting opportunity within the multi-family property sector to utilize our sourcing network and add equity exposure to over 20 properties through joint ventures,” said Jason Serrano, the Chief Executive Officer and President of the Company. “Due to various factors, the multi-family property sector recorded historical increases in per unit rent in several targeted markets resulting in opportunities that we believe will unlock value for our stockholders on an accelerated timeline. Thus, we are considering various opportunities to monetize what we believe is appreciated value within our portfolio of multi-family joint venture equity investments. We believe that through a well-navigated disposition process and discontinuing capital allocations to multi-family joint venture equity, we can rotate the portfolio over time to investments in a higher rate environment. While we will continue to invest in multi-family mezzanine lending, we see these dispositions as an appropriate step in the evolution of our portfolio positioning. We are excited about the opportunity to simplify our business and take advantage of other market dynamics that provide compelling risk-adjusted returns.”
About New York Mortgage Trust
New York Mortgage Trust, Inc. is a Maryland corporation that has elected to be taxed as a real estate investment trust (“REIT”) for federal income tax purposes. NYMT is an internally managed REIT in the business of acquiring, investing in, financing and managing primarily mortgage-related single-family and multi-family residential assets.
Forward-Looking Statements
When used in this press release, in future filings with the Securities and Exchange Commission (the “SEC”) or in other written or oral communications, statements which are not historical in nature, including those containing words such as “will,” “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “could,” “would,” “should,” “may” or similar expressions, are intended to identify “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and, as such, may involve known and unknown risks, uncertainties and assumptions. Statements regarding the following subject, among others, may be forward-looking: strategic repositioning away from the Company’s multi-family joint venture equity portfolio, unlocking value for stockholders and rotating the portfolio to investments in a higher rate environment.
Forward-looking statements are based on estimates, projections, beliefs and assumptions of management of the Company at the time of such statements and are not guarantees of future performance. Forward-looking statements involve risks and uncertainties in predicting future results and conditions. Actual results and outcomes could differ materially from those projected in these forward-looking statements due to a variety of factors, including, without limitation: changes in the Company’s business and investment strategy; changes in interest rates and the fair market value of the Company’s assets, including negative changes resulting in margin calls relating to the financing of the Company’s assets; changes in credit spreads; changes in the long-term credit ratings of the U.S., Fannie Mae, Freddie Mac, and Ginnie Mae; general volatility of the markets in which the Company invests; changes in prepayment rates on the loans the Company owns or that underlie the Company’s investment securities; increased rates of default or delinquency and/or decreased recovery rates on the Company’s assets; the Company’s ability to identify and acquire targeted assets, including assets in its investment pipeline; changes in relationships with the Company’s financing counterparties and the Company’s ability to borrow to finance its assets and the terms thereof; changes in the Company’s relationships with and/or the performance of its operating partners; the Company’s ability to predict and control costs; changes in laws, regulations or policies affecting the Company’s business, including actions that may be taken to contain or address the impact of the COVID-19 pandemic; the Company’s ability to make distributions to its stockholders in the future; the Company’s ability to maintain its qualification as a REIT for federal tax purposes; the Company’s ability to maintain its exemption from registration under the Investment Company Act of 1940, as amended; risks associated with investing in real estate assets, including changes in business conditions and the general economy, the availability of investment opportunities and the conditions in the market for Agency RMBS, non-Agency RMBS, ABS and CMBS securities, residential loans, structured multi-family investments and other mortgage-, residential housing- and credit-related assets, including changes resulting from the ongoing spread and economic effects of COVID-19; and the impact of COVID-19 on the Company, its operations and its personnel.
These and other risks, uncertainties and factors, including the risk factors described in the Company’s reports filed with the SEC pursuant to the Exchange Act, could cause the Company’s actual results to differ materially from those projected in any forward-looking statements the Company makes. All forward-looking statements speak only as of the date on which they are made. New risks and uncertainties arise over time and it is not possible to predict those events or how they may affect the Company. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For Further Information
AT THE COMPANY
Investor Relations
Phone: 212-792-0107
Email: InvestorRelations@nymtrust.com
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