0 February 2014 Investor Presentation May 2015
1 Forward Looking Statements Certain statements included in this presentation are forward-looking statements. Those statements include statements regarding the intent, belieforcurrentexpectationsofNewYorkREIT,Inc.(the"Company,""we,""our"or"us")andmembersofourmanagementteam,aswellas the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will", "seeks," "anticipates,""believes,""estimates,""expects,""plans,""intends,""should"orsimilarexpressions.Actualresultsmaydiffermateriallyfrom thosecontemplatedbysuchforward-lookingstatements,includingthosesetforthintheRiskFactorssectionofNYRT'sAnnualReporton Form10-KfiledwiththeU.S.SecuritiesandExchangeCommission.Further,forward-lookingstatementsspeakonlyasofthedatetheyare made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipatedeventsorchangestofutureoperatingresultsovertime,unlessrequiredbylaw.
2 Thefollowingaresomeoftherisksanduncertainties,althoughnotallrisksanduncertainties,thatcouldcauseouractualresultstodiffer materiallyfromthosepresentedinourforward-lookingstatements: •Allofourexecutiveofficersarealsoofficers,managersand/orholdersofadirectorindirectinterestinourAdvisorandotherAmerican RealtyCapital-affiliatedentities;asaresult,ourexecutiveofficers,ourAdvisoranditsaffiliatesfaceconflictsofinterest,including significantconflictscreatedbyourAdvisor’scompensationarrangementswithusandotherinvestorentitiesadvisedbyAmerican RealtyCapitalaffiliates,andconflictsinallocatingtimeamongtheseentitiesandus,whichcouldnegativelyimpactouroperatingresults; •BecauseinvestmentopportunitiesthataresuitableforusmayalsobesuitableforotherAmericanRealtyCapital-advisedprogramsor investors,ourAdvisoranditsaffiliatesfaceconflictsofinterestrelatingtothepurchaseofpropertiesandotherinvestmentsandsuch conflictsmaynotberesolvedinourfavor,meaningthatwecouldinvestinlessattractiveassets,whichcouldreducetheinvestment returntoourstockholders; •Wedependontenantsforourrevenue,and,accordingly,ourrevenueisdependentuponthesuccessandeconomicviabilityofour tenants; •Wemaynotbeabletoachieveourrentalrateincentivesandourexpensescouldbegreater,whichmayimpactourresultsofoperations; •Increasesininterestratescouldincreasetheamountofourdebtpaymentsandlimitourabilitytopaydividends; •Wehavenotgeneratedcashflowssufficienttopayreturnstostockholders,assuch,wemaybeforcedtoborrowathigherrates ordependonourAdvisororourPropertyManager,NewYorkRecoveryProperties,LLC,towaivereimbursementofcertainexpensesand feestofundouroperations; •Wemaybeunabletopayormaintaincashdividendsorincreasedividendsovertime.Amountspaidtoourstockholdermaybeareturnofcapitaland notareturnonastockholder'sinvestment. •Weareobligatedtopayfees,whichmaybesubstantial,toourAdvisoranditsaffiliates,includingfeespayableuponthesaleof properties; •Wearesubjecttorisksassociatedwiththesignificantdislocationsandliquiditydisruptionsthatrecentlyexistedoroccurredinthecredit marketsoftheUnitedStates; •WemayfailtocontinuetoqualifytobetreatedasarealestateinvestmenttrustforU.S.federalincometaxpurposes(“REIT”); •OurpropertiesmaybeadverselyaffectedbyeconomiccyclesandrisksinherenttotheNewYorkmetropolitanstatisticalarea(“MSA”), especiallyNewYorkCity;and •Wemaybeadverselyaffectedbychangesingeneraleconomic,businessandpoliticalconditions,includingthepossibilityofintensifiedinternational hostilities,actsof terrorism,andchangesinconditionsofUnitedStatesorinternationallending,capitalandfinancingmarkets. Forward-Looking Statements (cont’d)
3 Projections This presentation includes estimated projections of future operating results. These projections were not prepared in accordance with published guidelines of the SEC or the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial projections. This information is not fact and should not be relied upon as being necessarily indicative of future results; the projections were prepared in good faith by management and are based on numerous assumptions that may prove to be wrong. Important factors that may affect actual results and cause the projections to not be achieved include, but are not limited to, risks and uncertainties relating to the company and other factors described under “Risk Factors” section of the Company’s Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K and “Forward-Looking Statements.” The projections also reflect assumptions as to certain business decisions that are subject to change. As a result, actual results may differ materially from those contained in the estimates. Accordingly, there can be no assurance that the estimates will be realized. This presentation also contains estimates and information concerning our industry, including market position, market size, and growth rates of the markets in which we participate, that are based on industry publications and reports. This information involves a number of assumptions and limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or completeness of the data contained in these industry publications and reports. The industry in which we operate is subject to a high degree of uncertainty and risk due to variety of factors, including those described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. These and other factors could cause results to differ materially from those expressed in these publications and reports.
4 Overview xCertain assets not yet stabilized xIn-place rents 10-15% below market xProven acquisition capabilities x100% New York City / 96% Manhattan xOver 90% office & retail x95.2% occupied xAverage lease term of ~10 years xLow cap ex requirements x~41% combined debt/enterprise value x3.1x combined interest coverage xShares trading at a discount to NAV New York City Focus High Quality Portfolio Solid Balance Sheet Strong Growth Prospects Attractive Valuation Note: All metrics as of March 31, 2015
5 Total SF (mm) 3 31 10 10 55 41 Manhattan Real Estate Exposure (% SF) “Pure Play” on New York City 96% 82% NYRT’s portfolio has the highest concentration of Manhattan- based real estate of all public REITs 81% 49% 22% Source: SNL Financial and company filings for Q1 2015. Note: All metrics for NYRT shown represent the company’s proportionate ownership as of Q1 2015, including proportionate ownership of unconsolidated joint ventures. All other companies based on reported square footage. Amounts also include properties under development. 69%
6 Portfolio Mix by Cash Rent (1) Includes retail at office buildings (2) Includes parking, hotel, and multifamily - All calculations are based on March 31, 2015 annualized cash rents, excluding Viceroy Hotel and 416 Washington Street parking garage which are third party managed and based on March 31, 2015 annualized Cash NOI Property Type by Cash Rent 96% 3.4% 0.6% Manhattan Brooklyn Queens Borough by Cash Rent NYRT is: » 100% New York City » 98% Office/Retail Office Retail (1) Other (2) 83% 15% 2%
7 Major Assets Note: All metrics are as of 3/31/2015 (1) Square footage represents 48.9% of building total which is NYRT’s pro rata share of its Joint Venture investment in Worldwide Plaza Top 5 properties account for more than 70% of portfolio Cash NOI Property Square Footage Occupancy (as of 3/31/15) Average Remaining Lease Term Borough Worldwide Plaza (1) 1,003,249 93% 12.4 Manhattan 1440 Broadway 748,502 92% 4.9 Manhattan Twitter Building 281,294 99% 12.7 Manhattan 333 West 34th Street 346,728 100% 9.2 Manhattan Red Bull Building 165,670 100% 8.5 Manhattan Total 5 Major Assets 2,545,443 95% 9.9
8 7.2% 3.4% 3.4% 1.5% 1.1% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2015 2016 2017 2018 2019 (1) As of March 31, 2015. Excludes Hotel and Multifamily properties. (2) Approximately 171,000 SF is attributed to Rent Path, Inc.(formerly Primedia) at 1440 Broadway Well-Staggered Lease Maturity Schedule Office & Retail Portfolio (1) (2) Less than 20% lease rollover in the next five years
9 » Reasons for lower recurring capex needs (tenant improvements, leasing commissions, and building maintenance) include: • Over 66% of office portfolio is LEED Gold Certified (1) , based on square footage • Long average lease term of ~10 years reduces short term and intermediate term recurring cap ex needs • Recurring cap ex for retail properties is generally much lower than for office » Total trailing 12 month recurring capex for the portfolio is ~1% of cash NOI (2) » Expect long term recurring capex to be 5-10% of cash NOI Low Recurring Cap Ex (1) Excludes standalone retail and other assets from calculation; LEED is a rating system governed by the United States Green Building Council, which stands for Leadership and Environmental/Energy Design (2) Based on the period from Q2 2014-Q1 2015
10 Internal Growth Potential » Key drivers: o Elimination of free rent abatements at 50 VarickStreet, the Twitter Building, and Worldwide Plaza o Ramp-up of the recently opened Viceroy Hotel o Repositioning of retail space at 1440 Broadway » Expect 4-5% long-term growth in same store property cash NOI once portfolio is stabilized o Contractual rent increases of ~3% per year o Additional growth from vacant space lease up and increased income from below market lease rollover o In-place rents are 10-15% below market
11 Stabilized Cash NOI (1) • Management currently believes cash NOI for its portfolio should stabilize at $140 to $150 million in the next 12 to 24 months • Key factors that will influence stabilized cash NOI include: o Burn off of contractual free rent in place today o Stabilization of Viceroy hotel (opened December 2013) o Completing retail repositioning project at 1440 Broadway o Maintaining portfolio occupancy at 95-96% (1) Cash net operating income (“Cash NOI”) is a non-GAAP metric and is further defined in the “Non-GAAP Metrics” section of this presentation. Note: There is no guarantee that this targeted stabilized Cash NOI will be achieved or that it will be achieved within the targeted time frame
12 Internal Growth Potential Case Study –Worldwide Plaza • Acquired 48.9% interest in Worldwide Plaza in October 2013 for $648 million ($220 million of equity and $428 million of assumed debt) • NYRT is executing on its strategy to lease up vacant office space – ~139,000 square feet of office space has been leased since acquisition – Under LOI to lease an additional ~33,000 square feet of office space • Potential increase in Cash NOI (1) due to vacant space lease up is ~$5 million (1) Cash net operating income (“Cash NOI”), incremental cash net operating income (“Incremental Cash NOI”), and pro forma cash net operating income (“Pro Forma Cash NOI”) are non-GAAP metrics and are further defined in the “Non-GAAP Metrics” section of this presentation (2) Assumes existing LOI on the 29 th floor is executed (3) Based on Q1 2014 annualized (4) Based on 167.6 mm shares outstanding Worldwide Plaza Incremental NOI $ in millions ShankenCommunications -33rd Floor $1,101 CBS -30th Floor $972 Rubenstein –34th & 35th Floors $2,075 Pending LOI -29th Floor $937 Total $5,085 $ in millions Occupancy At Acquisition 91.2% Current Occupancy (as of Q1) 93.2% Pro Forma Occupancy 98.1 (2) Cash NOI At Acquisition (3) $31,708 Pro Forma Cash NOI (1) $36,793 Incremental Cash NOI (1) $5,085 Incremental Capital Expenditures $9,572 Incremental Value At 4.0% Cap Rate $117,553 Incremental Value Per Share (4) $0.70 Incremental Value At 5.0% Cap Rate $92,128 Incremental Value Per Share (4) $0.55
13 Internal Growth Potential Case Study –1440 Broadway • Acquired 1440 Broadway in December 2013 for $529 million • Executing a retail repositioning strategy by: – Increasing retail rents as leases expire – Creating additional retail space through (1) converting the Broadway lobby to retail (2) leasing the basement as retail and (3) leasing a portion of the second floor as retail • Potential pickup in Cash NOI (2) due to retail repositioning is ~$4 million Retail At Time of Acquisition Pro Forma Retail Tenant Square Footage In-Place Annualized Cash Rent (Q1 2015) Rent Per Square Foot Tenant Square Footage Market Rent Rent Per Square Foot Tenant A 11,533 $1,224 $106 CVS –Broadway 7,535 $2,548 $338 Tenant B 1,206 $197 $163 CVS -Second Floor 14,650 $949 $ 65 Tenant C 4,242 $747 $176 Broadway Lobby Recapture 858 $360 $420 Total 16,981 2,168 $128 New TenantB–Broadway 4,044 $1,717 $425 New Tenant B -Basement 15,652 $783 $ 50 Total 42,739 6,360 $149 (1) Based on Q1 2014 Annualized (2) Cash net operating income (“Cash NOI”), incremental cash net operating income (“Incremental Cash NOI”), and pro forma cash net operating income (“Pro Forma Cash NOI”) are non-GAAP metrics and are further defined in the “Non-GAAP Metrics” section of this presentation (3) Based on 167.6 mm shares outstanding $ in millions Cash NOI at Purchase (1) $28,234 Pro Forma CashNOI w/ Retail Value (2) $32,424 Incremental Cash NOI (2) $4,190 Incremental EstimatedCapital Expenditures $11,457 Incremental Value At 4.0% Cap Rate $93,293 Incremental Value Per Share (3) $0.56 Incremental Value At 5.0% Cap Rate $72,343 Incremental Value Per Share (3) $0.43
14 External Growth Opportunity » Proven acquisition capabilities: • Acquired over $2 billion of Manhattan real estate prior to listing • Acquired Twitter’s Manhattan headquarters location in August, 2014 for $335 million (“Twitter Building”) » Fixed price option to acquire remaining interest in Worldwide Plaza at $669 per square foot beginning in January, 2017: • Believe option price represents a discount to estimated Fair Market Value of the asset • Would represent ~31% increase in square footage from current portfolio 1.) Based on 6/30/14 Closing Price of $11.06, and 6/30/14 Share Count and Combined Debt Balances
15 External Growth Opportunity Worldwide Plaza Option Sensitivity Analysis Year NOI (100%) Option Price (100%) 1,387,592 2014A 66,816 Option Price PSF $676 2015E 70,846 Option Date 1/1/2017 2016E 79,072 Total RSF (100%) 2,051,634 2017E 82,032 Management's Assumed Asset Value PSF $900 $1,000 $1,100 - Fixed Price Option PSF (1) 676 676 676 = Gain PSF $224 $324 $424 Asset Value (51.1%) $943,546 $1,048,385 $1,153,223 - Option Price (51.1%) 709,059 709,059 709,059 = Gain (51.1%) $234,487 $339,325 $444,164 Discount Rate 7% 7% 7% Years (2) 1.7 1.7 1.7 Discounted Gain ($) $209,283 $302,853 $396,423 Shares 166.7 166.7 166.7 Gain/Share $1.26 $1.82 $2.38 (1) Includes modest adjustment for future leasing costs estimated as of 3/31/2015 (2) Years remaining between March 31, 2015 and earliest call option date of January 1, 2017
16 Debt Strategy » Strong balance sheet consistent with investment grade metrics. » Management’s goal is to: • Target combined debt/enterprise value less than 50% • Maintain interest coverage in excess of 2.5 times • Target 40% -60% unencumbered assets as a percentage of total assets • Maintain well-staggered debt maturities
17 $22 $358 $103 $314 12 $0 $200 $400 $600 $800 $1,000 2015 2016 2017 2018 2019 Balance Sheet Snapshot (1) Includes $330 million on the revolving credit facility for which two 1-year extension options are available (2) Based on March 31, 2015 closing price of $10.48 per share; and March 31, 2015 debt balances and share count (3) Actual availability is based on certain coverage ratios for the borrowing base properties and may be less than total undrawn commitments (dollarsinthousands) As of 3/31/15 Interest Rate Consolidated Mortgage Debt $172,121 3.6% Credit Facility -Fixed $80,000 3.4% Credit Facility -Floating $555,000 1.9% Consolidated Debt $807,121 2.4% Company’s Share of Unconsolidated Mortgage Debt $427,875 4.6% Combined Debt $1,234,996 3.2% Credit Facility: Capacity $705,000 Credit Facility: Drawn $635,000 Credit Facility:Undrawn Commitments (3) $70,000 Combined Debt Maturity Schedule (millions) • Staggered debt maturities • 4.3 years weighted average debt term • ~41% Combined Debt/Enterprise Value (2) • 3.1x Combined Interest Coverage (1)
18 Dividend With Depreciation Shield Dividend Without Depreciation Shield Dividend Per Common Share $0.46 $0.46 Pre-Tax Dividend Yield 4.39% 4.39% Tax Shield 100% 0% Times: % Taxable 0% 100% Times: Individual Tax Rate 50% 50% Equals: Taxes 0.00% 2.19% Pre-Tax Dividend Yield 4.39% 4.39% Less: Taxes 0.00% 2.19% Equals: After Tax Dividend Yield 4.39% 2.19% Divided by: Individual Tax Rate 50% 50% Pre Tax Equivalent Yield 8.78% 4.39% Not All Dividends Are Created Equal (1) Based on March 31, 2015 closing share price (2) 100% of 2014 NYRT dividend was a return of capital (not currently taxable) (3) Pre tax equivalent yield (assuming 50% tax rate) would need to be 8.78% (2) (3) (1) NYRT’s dividends are taxed less than its peers due to recently acquired assets with higher tax shields
19 External Management » NYRT is externally managed at an annual fee of 50 basis points on assets (1) o External management creates a lower cost structure for the benefit of NYRT shareholders o Allows NYRT to retain services of full management team that built the company o Enables NYRT to access numerous resources available at the American Realty Capital platform » American Realty Capital, the initial sponsor of NYRT, has also sponsored two additional New York City focused non-traded REITS o Under the supervision of it’s independent Board of Directors, NYRT actively manages the allocation of investment opportunities to avoid potential conflicts of interest (1) Asset management fee of 50 basis points on portfolio for total assets up to $3 billion, and 40 basis points for total assets inexcess of $3 billion. The fee may be paid in cash or stock at the election of the advisor. Additional Services From Advisor and its Affiliates Operations IT Marketing Accounting Legal Human Resources Originations Due Diligence Investment Banking Investor Relations Financing
20 Experienced NYRT Management Team and Board of Directors Michael Ead Senior V.P. and Counsel Michael Happel CEO Judi Stillman Controller Greg Sullivan CFO & COO Robert Burns Independent Director P. Sue Perrotty Independent Director Zachary Pomerantz V.P. Asset Management Patrick O’Malley (1) Chief Investment Officer William Kahane Chairman Randolph C. Read Independent Director (1) Patrick O’Malley is currently CIO of the advisor American Realty Capital not the New York REIT; he will become CIO of the NewYork REIT upon completion of the annual meeting
21 Michael A. Happel, Chief Executive Officer Mr.Happelhasover25yearsofexperienceinvestinginrealestateincludingacquisitionsofoffice,retail,multifamily,industrialandhotel properties as well as acquisitions of real estate companies and real estate debt. From 1988-2002, he worked at Morgan Stanley & Co., specializinginrealestateandbecomingco-headofacquisitionsfortheMorganStanleyRealEstateFunds,or MSREF,in1994.Whileat MSREF,hewasinvolvedinacquiringover$10billionofrealestateandrelatedassetsinMSREFIandMSREFII.Asstatedinareport preparedbyWurts&AssociatesfortheFresnoCountyEmployees’RetirementAssociationfortheperiodendingSeptember30,2008,MSREF Igeneratedapproximatelya48%grossIRRforinvestorsandMSREFIIgeneratedapproximatelya27%grossIRRforinvestors.In2002,Mr. HappelleftMorganStanley&Co.tojoinWestbrookPartners,alargerealestateprivateequityfirmwithover$5billionofrealestateassets undermanagementatthetime.In2004,hejoinedAtticusCapital,amulti-billiondollarhedgefund,astheheadofrealestatewithresponsibility forinvestingprimarilyinREITsandotherpubliclytradedrealestatesecurities. Gregory W. Sullivan, Chief Financial Officer and Chief Operating Officer Mr.Sullivan’scareerinrealestateandcorporatefinancespansover30years.PriortojoiningNYRT,Mr.SullivanwasChiefFinancialOfficer, ExecutiveVicePresidentandTreasurerofSTAGCapitalPartners,aNYSE-listed REIT,andservedon theboardof STAG’spredecessor companiesfrom2003.HealsoservedasExecutiveVicePresidentforCorporateDevelopmentforNewEnglandDevelopmentLLC(NED)from 2002to2011,wherehisrolewastoexpandanddiversifyNED'srealestateandnon-realestateprivateequityactivities.PriortojoiningNEDin 2002,Mr.SullivanwasExecutiveVicePresidentandChiefFinancialOfficerofTrizecHahnCorporationfrom1994to2001,a$9billion, NYSE-listedrealestatecompanyheadquarteredinToronto. From1987to1994,Mr.SullivanservedinvariouscapacitiesatAEWCapitalManagementinBoston,thena$13billioninvestmentadvisor, includingoverseeinginvestmentsforthecompany'srealestateopportunityfundandheadingthecapitalmarketsgroup.Inaddition,from1982 to1987,heservedasaseniorfinanceofficeratM/A-COM,Inc.,aBostonbasedtelecommunicationscompanyand,from1980to1982,he servedasaninvestmentbankeratSmithBarneyinNewYork.Mr.SullivanreceivedhisBachelorofSciencesdegreefromtheUniversityof VermontandhisMasterofBusinessAdministrationdegreefromTheWhartonSchooloftheUniversityofPennsylvania. Senior Management Team
22 Appendix –Market Data
23 NYC EMPLOYMENT Source: U.S. Bureau of Labor Statistics / Cushman & Wakefield, February 2015 Market Overview Financial Services Still Lagging NYC Employment
24 The Financial sector is still a cornerstone of the New York economy at 34% of jobs, but is down from 45% in 1990. Professional Services and TAMI industries continue to fill the gap, further diversifying the economy. Source: Cushman & Wakefield, February 2015 Market Overview. NYC Changing Employment Structure (1990 vs. 2014) 1990 SHARE OF OFFICE-USING EMPLOYMENT 2014 SHARE OF OFFICE-USING EMPLOYMENT TAMI, 21% Professional Services, 34% Financial, 45% TAMI, 26% Professional Services, 40% Financial, 34%
25 0 100,000,000 200,000,000 300,000,000 400,000,000 1990 2000 2010 S q u a r e F e e t Manhattan Office Market -Asking Rents R e n t ( $ ) p e r S q u a r e F o o t Rising Rents Supply-Constrained Market with Long-Term Growth Source: Cushman & Wakefield and Bureau of Labor Statistics as of Q3 2014 Manhattan Office Market -Existing Office Space 400.2 Million Sq.Ft. No Net New Supply 393.9 Million Sq.Ft. $20 $30 $40 $50 $60 $70 $80 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (26.3%) 10% Current asking rents need to increase 10% to meet ‘08 peak
26 # City Rent (US$/SF) 1 London –Central(West End), U.K. $273.63 2 Hong Kong(Central), Hong Kong 250.61 3 Beijing (Finance Street), China 197.75 4 Beijing (CBD), China 189.39 5 Moscow, Russian Federation 165.05 6 NewDelhi (Connaught Place –CBD), India 158.47 7 HongKong (West Kowloon), Hong Kong 153.65 8 London –Central (City), U.K. 152.67 9 Tokyo (MarunouchiOtemachi),Japan 136.46 10 Shanghai (Pudong), China 127.89 11 New York (Midtown Manhattan), U.S. 120.65 12 San Francisco (Downtown), U.S. 114.00 13 Paris, France 113.95 14 Singapore, Singapore 112.91 15 Shanghai (Puxi),China 112.14 # City Rent (US$/SF) 16 Mumbai (BandraKurlaComplex), India $103.52 17 Seoul (CBD), South Korea 102.55 18 Rio de Janeiro,Brazil 101.34 19 Sydney, Australia 99.06 20 Boston (Downtown),U.S. 96.25 21 Geneva, Switzerland 93.83 22 Seoul (Yeouido), South Korea 92.84 23 Dubai, United Arab Emirates 92.56 24 Sao Paulo, Brazil 91.78 25 Washington, D.C.(Downtown), U.S. 87.61 26 Zurich, Switzerland 84.10 27 Los Angeles (Suburban),U.S. 83.62 28 New York (Downtown Manhattan),U.S. 82.55 29 Jakarta, Indonesia 81.81 30 Istanbul, Turkey 81.44 Source: CB Richard Ellis Global Research and Consulting as of Q3 2014 NYC Midtown Office Rents are 11 th Highest Internationally with Room for Rent Growth
27 Appendix –Additional Information
28 218 West 18 th Street 50 Varick Street 256 West 38 th Street 306 East 61 st Street 229 West 36 th Street 1440 Broadway Worldwide Plaza 333 West 34 th Street Manhattan Office Portfolio Snapshot The Twitter Building
29 350 Bleecker Street 350 West 42 nd Street 382 BleeckerStreet 122 Greenwich Avenue Manhattan Retail Portfolio Snapshot * BleeckerStreet Retail Portfolio consists of 3 properties and 5 retail tenants. Bleecker Street Retail Portfolio*
30 NYRT 1Q Metrics 1Q Operating Results Cash NOI (1) $26.6 CoreFFO (1) $19.6 per share $0.12 AFFO (1) $17.0 per share $0.10 Dividend Yield 4.4% Pro Forma Payout Ratio (1) (2) Core FFO 98% AFFO 113% Leverage Information CombinedDebt to Enterprise Value (3)(4) 41% Weighted AverageInterest Rate 3.2% WeightedAverage Term 4.3 years Interest Coverage (1) 3.1x As of 3/31/15 ($ in Millions except share and per share information) (1) Cash net operating income (“Cash NOI”), Core Funds From Operations (“Core FFO ”), and Adjusted Funds From Operations are non-GAAP metrics and are further defined in the “Non-GAAP Metrics” section of this presentation. (2)Based on annual dividend of $.46 (3) Based on March 31, 2015 closing price of $10.48 per share; and March 31, 2015 debt balances and share count (4) Combined metrics include pro-rata share of unconsolidated debt Equity Information Equity Market Capitalization (3) $1.8 billion Combined Enterprise Value (3)(4) $3.0 billion
31 Non-GAAP Metrics This presentation uses certain non-GAAP metrics, including Funds from Operations (“FFO”), Adjusted Funds from Operations (“AFFO”), Core Funds From Operations (“CFFO”), Net Operating Income (“NOI”), Cash Net Operating Income (“Cash NOI”) and Incremental Net Operating Income (“Incremental NOI”) . We believe that, since real estate values historically rise and fall with market conditions, including inflation, interest rates, the business cycle, unemployment and consumer spending, presentations of operating results for a REIT using historical accounting may be something less informative than such non-GAAP financial metrics. However, these non-GAAP metrics should be read in conjunction with our reported GAAP financial statements. Note that our computation of these non-GAAP performance metrics may not be comparable to similarly-named performance metrics reported by other REITs or real estate companies, limiting their usefulness as a comparative measure. We compensate for these limitations by relying primarily on ou r GAAP results and using the non-GAAP measures only for supplemental purposes. Please see our consolidated financial statements and the related notes thereto. We use these non-GAAP metrics as an important part of our report and planning processes to, among other things,: • Monitor and evaluate the performance of our business operations; • Facilitate management’s internal comparisons of the historical operating performance of our business operations; • Facilitate management’s external comparisons of the results of our overall business to the historical operating performance other companies that may have different capital structures and debt levels; • Analyze and evaluate financial and strategic planning decisions regarding future operating investments; • Provide useful information to investors regarding financial and business trends related to our results of operations; and • Plan for and prepare future annual operating budgets and determine appropriate levels of operating investments. These non-GAAP measures have limitations as analytical tools, and you should not consider any of these measures in isolation or as a substitute for analyses of our income or cash flows as reported under GAAP. Some these limitations are: • They do not reflect our cash expenditures, or future requirements for capital expenditures, or contractual commitments; • They do not reflect changes in, or cash requirements for, our working capital needs; • They do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on ourdebt; and depreciation, amortization and non- cash expense items that are reflected in our statements of cash flows.
32 Non-GAAP Metrics Funds from operations (FFO) PursuanttothereviseddefinitionoffundsfromoperationsadoptedbytheBoardofGovernorsoftheNationalAssociationofRealEstateInvestmentTrusts(“NAREIT”),we calculate funds from operations (FFO); a non-GAAP financial measure; by adjusting net income (loss) attributable stockholders (computed in accordance with GAAP, includingnon-recurringitems)forgains(orlosses)fromsalesofproperties,impairmentlossesondepreciablerealestateofconsolidatedrealestate,impairmentlosseson investmentsinunconsolidatedjointventuresdrivenbyameasurabledecreaseinthefairvalueofdepreciablerealestateheldbytheunconsolidatedjointventures,realestate relateddepreciationandamortization, andafteradjustment forunconsolidated partnerships andjointventures.FFOisanon-GAAP financial measure.TheuseofFFO, combined with the required primary GAAP presentations, has been fundamentally beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Management generally considers FFO to be a useful measure for reviewing our comparativeoperatingandfinancialperformancebecause,byexcludinggainsandlossesrelatedtoassetsales(landandproperty),impairmentlossesandrealestateasset depreciationandamortization(whichcanvaryamongownersofidenticalassetsinsimilarconditionbasedonhistoricalcostaccountingandusefullifeestimates),FFOcan helpone compare the operating performance of a company’s real estate between periods orascompared todifferent companies.Our computation ofFFO may notbe comparabletoFFOreportedbyotherREITsorrealestatecompaniesthatdonotdefinetheterminaccordance withthecurrentNAREITdefinitionorthatinterpretthe currentNAREITdefinitiondifferently. FFOshouldnotbeconsideredasanalternativetonetincomeattributabletostockholders(determinedinaccordancewithGAAP)as anindicationofourperformance. FFOdoesnotrepresentcashgeneratedfromoperatingactivitiesdeterminedinaccordancewithGAAP,andisnotameasureofliquidityor an indicator of our ability to make cash distributions. We believe that to further understand our performance, FFO should be compared with our reported net income attributabletostockholdersandconsideredinadditiontocashflowsdeterminedinaccordancewithGAAP,aspresentedinourconsolidatedfinancialstatements. Adjusted funds from operations (AFFO) AFFO;anon-GAAP financial measure;iscoreFFOexcluding certain income orexpense items that we consider more reflective ofinvesting activities, othernon-cash incomeandexpenseitemsandtheincomeandexpenseeffectsofotheractivitiesthatarenotafundamentalattributeofourbusinessplan.Theseitemsincludeunrealized gainsandlosses,whichmaynotultimatelyberealized,suchasgainsorlossesonderivativeinstruments,gainsorlossesoncontingentvaluationrights,gainsandlosseson investments and early extinguishment of debt. In addition, by excluding non-cash income and expense items such as amortization of above and below market leases, amortizationofdeferredfinancingcosts,straight-linerentandnon-cashequitycompensationfromAFFOwebelieveweprovideusefulinformationregardingincomeand expenseitemswhichhavenocashimpactanddonotprovideliquiditytothecompanyorrequirecapitalresourcesofthecompany. WeexcludedistributionsrelatedtoClass B units and certain interest expenses related to securities that are convertible to common stock as the shares are assumed to have converted to common stock in our calculationofweightedaveragecommonshares-fullydiluted. Furthermoreweincludecertaincashinflowandoutflowsthatarereflectiveofoperatingactivitiesincluding preferredreturnsonjointventures,secondgenerationtenantimprovement andleasingcommissions(includedintheperiodinwhichtheleasecommences) andrecurring capitalexpenditures. AlthoughourAFFOmaynotbecomparabletothatofotherREITsandrealestatecompanies,webelieveitprovidesameaningfulindicatorofourabilitytofundcashneeds andtomakecashdistributionstostockholders.Inaddition,webelievethattofurtherunderstandourliquidity,AFFOshouldbecomparedwithourcashflowsdeterminedin accordancewithGAAP,aspresentedinourconsolidatedfinancialstatements.AFFOdoesnotrepresentcashgeneratedfromoperatingactivitiesdeterminedinaccordance with GAAP, and AFFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, as an alternativetonetcashflowsfromoperatingactivities(determinedinaccordancewithGAAP),orasameasureofourliquidity.
33 Non-GAAP Metrics Core funds from operations (Core FFO) Corefundsfromoperations(CoreFFO),isFFOexcluding acquisitionandtransaction relatedcosts,othercoststhatareconsideredtobenon-recurring, such ascharges relatingtotheListingNote,non-recurringrevenue,suchasleaseterminationormodificationfees,andothernon-recurringexpenses.Thepurchaseofproperties,andthe corresponding expenses associated with that process,is a key operational feature ofour business plantogenerate operationalincome and cash flows in orderto make dividendpaymentstoinvestors.Inevaluatinginvestmentsinrealestate,wedifferentiatethecoststoacquiretheinvestmentfromtheoperationsderivedfromtheinvestment. By excluding expensed acquisition and transaction related costs as well as non-recurring revenues and expenses, we believe Core FFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management's analysis of the investing and operating performance of our properties. Net operating income (NOI) Net operating income (NOI) is a non-GAAP financial measure equal to net income attributable to stockholders, the most directly comparable GAAP financial measure, less discontinued operations, plus corporate general and administrative expense, acquisition and transaction costs, depreciation and amortization and interest expense, income from unconsolidated joint ventures, interest and other income and gains from investments in securities. NOI is adjusted to include our pro-rata share of NOI from unconsolidated joint ventures. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only those income and expense items that are incurred at the property level. Therefore, we believe NOI is a useful measure for evaluating the operating performance of our real estate assets and to make decisions about resource allocations. Further, we believe NOI is useful to investors as a performance measure because, when compared across periods, NOI reflects the impact on operations from trends in occupancy rates,rental rates, operating costs acquisition activity on an unleveraged basis, providing perspective not immediately apparent from net income. NOI excludes certain components from net income in order to provide results that are more closely related to a property's results of operations. For example, interest expense is not necessarily linked to the operating performance of a real estate asset and is often incurred at the corporate level as opposed to the property level. In addition, depreciation and amortization,because of historical cost accounting and useful life estimates, may distort operating performance at the property level. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. We believe that in order to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions. Cash net operating income (Cash NOI) NOI, presented on a cash basis, which is equal to NOI after eliminating the effects of straight-lining of rent and fair value lease revenue. Incremental cash net operating income (Incremental Cash NOI) Incremental NOI, presented on a cash basis, which is attributed to certain specific future anticipated events; incremental Cash NOI can include but is not limited to NOI generated from future vacant lease up, future building reconfiguration, and future mark to market of expiring leases. Pro forma cash net operating income (Pro forma Cash NOI) NOI, presented on a cash basis, plus certain Incremental Cash NOI (defined above).