QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Securities registered pursuant to section 12(b) of the Act: None. | ||||||||||||||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
☒ | Smaller reporting company | |||||||||||||
Emerging growth company |
Page | |||||
September 30, 2020 | December 31, 2019 | |||||||||||||
ASSETS | (Unaudited) | |||||||||||||
Real estate investments, at cost: | ||||||||||||||
Land | $ | $ | ||||||||||||
Buildings and improvements | ||||||||||||||
Acquired intangible assets | ||||||||||||||
Total real estate investments, at cost | ||||||||||||||
Less accumulated depreciation and amortization | ( | ( | ||||||||||||
Total real estate investments, net | ||||||||||||||
Cash and cash equivalents | ||||||||||||||
Restricted cash | ||||||||||||||
Operating lease right-of-use asset | ||||||||||||||
Prepaid expenses and other assets (includes amounts due from related parties of $ | ||||||||||||||
Straight-line rent receivable | ||||||||||||||
Deferred leasing costs, net | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Mortgage notes payable, net | $ | $ | ||||||||||||
Accounts payable, accrued expenses and other liabilities (including amounts due to related parties of $ | ||||||||||||||
Operating lease liability | ||||||||||||||
Below-market lease liabilities, net | ||||||||||||||
Derivative liability, at fair value | ||||||||||||||
Deferred revenue | ||||||||||||||
Total liabilities | ||||||||||||||
Preferred stock, $ | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Distributions in excess of accumulated earnings | ( | ( | ||||||||||||
Total stockholders’ equity | ||||||||||||||
Non-controlling interests | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Revenue from tenants | $ | $ | $ | $ | ||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Asset and property management fees to related parties | ||||||||||||||||||||||||||
Property operating | ||||||||||||||||||||||||||
Acquisition, transaction and other costs | ||||||||||||||||||||||||||
Listing expenses | ||||||||||||||||||||||||||
Vesting and conversion of Class B Units | ||||||||||||||||||||||||||
Equity-based compensation | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | ||||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Other income | ||||||||||||||||||||||||||
Total other expense | ( | ( | ( | ( | ||||||||||||||||||||||
Net loss attributable to common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||
Change in unrealized gain (loss) on derivative | ( | ( | ( | |||||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||
Comprehensive income (loss) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted-average shares outstanding — Basic and Diluted (1) | ||||||||||||||||||||||||||
Net loss per share attributable to common stockholders — Basic and Diluted (1) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Nine Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings | Total Stockholders’ Equity | Non-controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | (1) | $ | (1) | $ | (1) | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Redemption of fractional shares of common stock and restricted shares | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Vesting and conversion of Class B Units | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Redemption of Class A Units | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Three Months Ended September 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | Par Value | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings | Total Stockholders’ Equity | Non-controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | (1) | $ | (1) | $ | (1) | $ | ( | $ | ( | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Redemption of fractional shares of common stock and restricted shares | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Vesting and conversion of Class B Units | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Redemption of Class A Units | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance, September 30, 2020 | $ | $ | $ | ( | $ | ( | $ | $ | $ |
Nine Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Number of Shares (1) | Par Value(1) | Additional Paid-in Capital (1) | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
Balance, December 31, 2018 | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | ||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | ( | $ | ( | $ |
Three Months Ended September 30, 2019 | |||||||||||||||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||||||||||||||
Number of Shares (1) | Par Value(1) | Additional Paid-in Capital (1) | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings | Total Stockholders' Equity | ||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||
Balance, September 30, 2019 | $ | $ | $ | ( | $ | ( | $ |
Nine Months Ended September 30, | ||||||||||||||
2020 | 2019 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Amortization of deferred financing costs | ||||||||||||||
Accretion of below- and amortization of above-market lease liabilities and assets, net | ( | ( | ||||||||||||
Equity-based compensation | ||||||||||||||
Vesting and conversion of Class B Units | ||||||||||||||
Changes in assets and liabilities: | ||||||||||||||
Straight-line rent receivable | ( | ( | ||||||||||||
Straight-line rent payable | ||||||||||||||
Prepaid expenses, other assets and deferred costs | ( | |||||||||||||
Accounts payable, accrued expenses and other liabilities | ( | ( | ||||||||||||
Deferred revenue | ( | |||||||||||||
Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Investments in real estate | ( | |||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from mortgage note payable | ||||||||||||||
Payments of financing costs | ( | |||||||||||||
Redemption of fractional shares of common stock and restricted shares | ( | |||||||||||||
Net cash used in financing activities | ( | |||||||||||||
Net change in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||
Non-Cash Investing and Financing Activities: | ||||||||||||||
Accrued capital expenditures | ||||||||||||||
Proceeds from mortgage notes payable used to fund acquisition of real estate | ||||||||||||||
Mortgage notes payable released in connection with acquisition of real estate | ( | |||||||||||||
(Dollar amounts in thousands) | Nine Months Ended September 30, 2019 | |||||||
Real Estate investments, at cost: | ||||||||
Land | $ | |||||||
Buildings and improvements | ||||||||
Total tangible assets | ||||||||
Acquired intangible assets (1) : | ||||||||
In-place leases and other intangible assets | ||||||||
Market lease intangibles | ||||||||
Total intangible assets | ||||||||
Total assets acquired | ||||||||
Mortgage note payable used to acquire real estate investment | ( | |||||||
Cash paid for acquired real estate investment | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
In-place leases (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Other intangibles | ||||||||||||||||||||||||||
Total included in depreciation and amortization | $ | $ | $ | $ | ||||||||||||||||||||||
Above-market lease intangibles (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Below-market lease liabilities (1) | ( | ( | ( | ( | ||||||||||||||||||||||
Total included in revenue from tenants | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Below-market ground lease, included in property operating expenses | $ | $ | $ | $ |
(In thousands) | 2020 (remainder) | 2021 | 2022 | 2023 | 2024 | |||||||||||||||||||||||||||
In-place leases | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Other intangibles | ||||||||||||||||||||||||||||||||
Total to be included in depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Above-market lease assets | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Below-market lease liabilities | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||
Total to be included in revenue from tenants | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( |
Outstanding Loan Amount | ||||||||||||||||||||||||||||||||||||||
Portfolio | Encumbered Properties | September 30, 2020 | December 31, 2019 | Effective Interest Rate | Interest Rate | Maturity | ||||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||
123 William Street (1) | $ | $ | % | Fixed | Mar. 2027 | |||||||||||||||||||||||||||||||||
1140 Avenue of the Americas | % | Fixed | Jul. 2026 | |||||||||||||||||||||||||||||||||||
400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | % | Fixed | May 2028 | |||||||||||||||||||||||||||||||||||
8713 Fifth Avenue | % | Fixed | Nov. 2028 | |||||||||||||||||||||||||||||||||||
9 Times Square | % | Fixed | (2) | Apr. 2024 | ||||||||||||||||||||||||||||||||||
196 Orchard Street | % | Fixed | Aug. 2029 | |||||||||||||||||||||||||||||||||||
Mortgage notes payable, gross | % | |||||||||||||||||||||||||||||||||||||
Less: deferred financing costs, net (3) | ( | ( | ||||||||||||||||||||||||||||||||||||
Mortgage notes payable, net | $ | $ |
(In thousands) | Future Minimum Principal Payments | |||||||
2020 (remainder) | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
Total | $ |
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. |
(In thousands) | Quoted Prices in Active Markets Level 1 | Significant Other Observable Inputs Level 2 | Significant Unobservable Inputs Level 3 | Total | ||||||||||||||||||||||
September 30, 2020 | ||||||||||||||||||||||||||
Interest rate “Pay - Fixed” swaps - liabilities | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
December 31, 2019 | ||||||||||||||||||||||||||
Interest rate “Pay - Fixed” swaps - liabilities | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||
(In thousands) | Level | Gross Principal Balance | Fair Value | Gross Principal Balance | Fair Value | |||||||||||||||||||||||||||
Mortgage note payable — 123 William Street | 3 | $ | $ | $ | $ | |||||||||||||||||||||||||||
Mortgage note payable — 1140 Avenue of the Americas | 3 | |||||||||||||||||||||||||||||||
Mortgage note payable — 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | 3 | |||||||||||||||||||||||||||||||
Mortgage note payable — 8713 Fifth Avenue | 3 | |||||||||||||||||||||||||||||||
Mortgage note payable — 9 Times Square | 3 | |||||||||||||||||||||||||||||||
Mortgage note payable — 196 Orchard Street | 3 | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
(In thousands) | Balance Sheet Location | September 30, 2020 | December 31, 2019 | |||||||||||||||||
Derivatives designated as hedging instruments: | ||||||||||||||||||||
Interest Rate “Pay-fixed” Swap | Derivative liability, at fair value | $ | ( | $ | ( |
September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||
Interest Rate Derivative | Number of Instruments | Notional Amount | Number of Instruments | Notional Amount | ||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||
Interest Rate “Pay-fixed” Swap | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Amount of loss recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Total interest expense recorded in consolidated statements of operations and comprehensive loss | $ | $ | $ | $ |
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 | |||||||||||||||||||||||||||||||||||||
September 30, 2020 | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
December 31, 2019 | $ | $ | ( | $ | $ | ( | $ | $ | ( |
(In thousands) | Future Base Rent Payments | |||||||
2020 (remainder) | $ | |||||||
2021 | ||||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
Thereafter | ||||||||
Total lease payments | $ | |||||||
Less: Effects of discounting | ( | |||||||
Total present value of lease payments | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | Payable (receivable) as of | |||||||||||||||||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | September 30, 2020 | December 31, 2019 | |||||||||||||||||||||||||||||||||||
Acquisition fees and reimbursements: | |||||||||||||||||||||||||||||||||||||||||
Acquisition fees and related cost reimbursements | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Financing coordination fees and leasing commissions (1) | |||||||||||||||||||||||||||||||||||||||||
Ongoing fees: | |||||||||||||||||||||||||||||||||||||||||
Asset and property management fees to related parties (2) | ( | (4) | |||||||||||||||||||||||||||||||||||||||
Professional fees and other reimbursements (3) | (4) | ||||||||||||||||||||||||||||||||||||||||
Professional fee credit due from the Advisor (3) | ( | ( | ( | (5) | |||||||||||||||||||||||||||||||||||||
Total related party operation fees and reimbursements | $ | $ | $ | $ | $ | ( | $ |
Number of Restricted Shares | Weighted-Average Issue Price | |||||||||||||
Unvested, December 31, 2019 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Fractional share redemption (1) | ( | |||||||||||||
Unvested September 30, 2020 |
Performance Level | Absolute TSR | Percentage of LTIP Units Earned | ||||||||||||||||||
Below Threshold | Less than | % | ||||||||||||||||||
Threshold | % | |||||||||||||||||||
Target | % | |||||||||||||||||||
Maximum | or higher | % |
Performance Level | Relative TSR Excess | Percentage of LTIP Units Earned | ||||||||||||||||||
Below Threshold | Less than | - | basis points | % | ||||||||||||||||
Threshold | - | basis points | % | |||||||||||||||||
Target | basis points | % | ||||||||||||||||||
Maximum | + | basis points | % |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Net loss attributable to common stockholders (in thousands) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Basic and diluted weighted average shares outstanding | ||||||||||||||||||||||||||
Basic and diluted net loss per share | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Unvested restricted shares (1) | ||||||||||||||||||||||||||
Class A Units (2) | ||||||||||||||||||||||||||
Class B Units (3) | ||||||||||||||||||||||||||
LTIP Units (4) | ||||||||||||||||||||||||||
Total weighted-average anti-dilutive common share equivalents |
Third Quarter 2020 Cash Rent Status | Total Portfolio | |||||||
Third quarter cash rent paid (1) | 85 | % | ||||||
Approved agreements (2) | 8 | % | ||||||
Agreement negotiation (3) | 6 | % | ||||||
Other (4) | 1 | % | ||||||
100 | % |
Portfolio | Acquisition Date | Number of Properties | Rentable Square Feet | Occupancy | Remaining Lease Term (1) | |||||||||||||||||||||||||||
421 W. 54th Street - Hit Factory | Jun. 2014 | 1 | 12,327 | — | % | 0 | ||||||||||||||||||||||||||
400 E. 67th Street - Laurel Condominium | Sept. 2014 | 1 | 58,750 | 100.0 | % | 5.6 | ||||||||||||||||||||||||||
200 Riverside Boulevard - ICON Garage | Sept. 2014 | 1 | 61,475 | 100.0 | % | 17 | ||||||||||||||||||||||||||
9 Times Square | Nov. 2014 | 1 | 167,390 | 81.0 | % | 7.9 | ||||||||||||||||||||||||||
123 William Street | Mar. 2015 | 1 | 542,676 | 91.0 | % | 6.2 | ||||||||||||||||||||||||||
1140 Avenue of the Americas | Jun. 2016 | 1 | 242,646 | 84.0 | % | 6.8 | ||||||||||||||||||||||||||
8713 Fifth Avenue | Oct. 2018 | 1 | 17,500 | 100.0 | % | 4.7 | ||||||||||||||||||||||||||
196 Orchard Street | Jul. 2019 | 1 | 60,297 | 100.0 | % | 14.3 | ||||||||||||||||||||||||||
8 | 1,163,061 | 88.6 | % | 7.5 |
Q1 2020 | Q2 2020 | Q3 2020 | ||||||||||||||||||
Leasing activity: | ||||||||||||||||||||
New leases: (1) | ||||||||||||||||||||
New leases commenced | 4 | 4 | 5 | |||||||||||||||||
Total square feet leased | 4,227 | 15,349 | 56,454 | |||||||||||||||||
Annualized straight-line rent per square foot (2) | $ | 160.44 | $ | 104.35 | $ | 108.31 | ||||||||||||||
Weighted-average lease term (years) (3) | 6.7 | 6.2 | 11.8 | |||||||||||||||||
Replacement leases: (4) | ||||||||||||||||||||
Replacement leases commenced | 3 | 3 | 4 | |||||||||||||||||
Square feet | 4,227 | 15,349 | 43,796 | |||||||||||||||||
Annualized straight-line rent per square foot (2) | $ | 162.64 | $ | 104.44 | $ | 116.02 | ||||||||||||||
Weighted-average lease term (years) (3) | 6.8 | 6.2 | 12.1 | |||||||||||||||||
Terminated leases: (5) | ||||||||||||||||||||
Number of leases terminated | 2 | 3 | 5 | |||||||||||||||||
Square feet | 8,376 | 17,127 | 37,274 | |||||||||||||||||
Annualized straight-line rent per square foot (2) | $ | 39.27 | $ | 52.79 | $ | 48.20 | ||||||||||||||
Tenant improvements on replacement leases per square foot (6) | $ | — | $ | — | $ | — | ||||||||||||||
Leasing commissions on replacement leases per square foot (6) | $ | — | $ | 22.93 | $ | 23.14 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 (1) | 2019 | ||||||||||||||||||||||
Net loss attributable to common stockholders (in accordance with GAAP) | $ | (12,288) | $ | (4,809) | $ | (24,362) | $ | (15,220) | ||||||||||||||||||
Depreciation and amortization | 8,639 | 7,804 | 24,070 | 22,771 | ||||||||||||||||||||||
FFO (As defined by NAREIT) attributable to common stockholders | (3,649) | 2,995 | (292) | 7,551 | ||||||||||||||||||||||
Acquisition and transaction related | — | — | — | 18 | ||||||||||||||||||||||
Listing expenses (2) | 1,299 | — | 1,299 | — | ||||||||||||||||||||||
Vesting and conversion of Class B Units | 1,153 | — | 1,153 | — | ||||||||||||||||||||||
Equity-based compensation | 1,711 | 24 | 1,758 | 64 | ||||||||||||||||||||||
Loss on extinguishment of debt | — | — | — | — | ||||||||||||||||||||||
Core FFO attributable to common stockholders | $ | 514 | $ | 3,019 | $ | 3,918 | $ | 7,633 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
(In thousands) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
Net loss (in accordance with GAAP) | $ | (12,288) | $ | (4,809) | $ | (24,362) | $ | (15,220) | ||||||||||||||||||
Other income | (19) | (221) | (779) | (686) | ||||||||||||||||||||||
General and administrative | 1,234 | 1,176 | 5,727 | 4,929 | ||||||||||||||||||||||
Asset and property management fees to related parties | 1,879 | 1,962 | 5,721 | 5,382 | ||||||||||||||||||||||
Acquisition and transaction related | — | — | — | 18 | ||||||||||||||||||||||
Listing expenses | 1,299 | — | 1,299 | — | ||||||||||||||||||||||
Vesting and conversion of Class B Units | 1,153 | — | 1,153 | — | ||||||||||||||||||||||
Equity-based compensation | 1,711 | 24 | 1,758 | 64 | ||||||||||||||||||||||
Depreciation and amortization | 8,639 | 7,804 | 24,070 | 22,771 | ||||||||||||||||||||||
Interest expense | 5,089 | 4,681 | 14,915 | 12,310 | ||||||||||||||||||||||
Accretion of below- and amortization of above-market lease liabilities and assets, net | (555) | (566) | (2,807) | (1,459) | ||||||||||||||||||||||
Straight-line rent (revenue as a lessor) | (2,107) | (1,267) | (3,582) | (4,207) | ||||||||||||||||||||||
Straight-line ground rent (expense as lessee) | 28 | 28 | 82 | 82 | ||||||||||||||||||||||
Cash NOI | $ | 6,063 | $ | 8,812 | $ | 23,195 | $ | 23,984 |
NEW YORK CITY REIT, INC. | ||||||||
By: | /s/ Edward M. Weil, Jr. | |||||||
Edward M. Weil, Jr. | ||||||||
Executive Chairman, Chief Executive Officer, President and Secretary (Principal Executive Officer) | ||||||||
By: | /s/ Christopher J. Masterson | |||||||
Christopher J. Masterson | ||||||||
Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) |
Exhibit No. | Description | |||||||
Articles of Amendment and Restatement | ||||||||
3.2 (2) | Articles of Amendment relating to corporate name change | |||||||
3.3 (1) | Amended and Restated Bylaws of New York City REIT, Inc. | |||||||
Amendment to Amended and Restated Bylaws of New York City REIT, Inc. | ||||||||
Articles of Amendment relating to reverse stock split | ||||||||
Articles of Amendment relating to par value decrease and common stock name change | ||||||||
Articles Supplementary classifying and designating Class B common stock | ||||||||
Articles Supplementary classifying and designating Series A Preferred Stock | ||||||||
Amended and Restated Agreement of Limited Partnership of New York City Operating Partnership, L.P., dated as of August 18, 2020 | ||||||||
Amended and Restated Distribution Reinvestment Plan of New York City REIT, Inc. | ||||||||
Amended and Restated Rights Agreement, dated as of August 17, 2020, between New York City REIT, Inc. and Computershare Trust Company, N.A., as Rights Agent | ||||||||
Listing Note Agreement, dated as of August 18, 2020, between New York City Operating Partnership, L.P. and New York City Special Limited Partnership, LLC | ||||||||
First Amendment, dated as of August 18, 2020, to Second Amended and Restated Advisory Agreement among New York City REIT, Inc., New York City Operating Partnership, L.P. and New York City Advisors, LLC | ||||||||
Advisor Multi-Year Outperformance Award Agreement, dated as of August 18, 2020, among New York City REIT, Inc., New York City Operating Partnership, L.P. and New York City Advisors, LLC | ||||||||
2020 Advisor Omnibus Incentive Compensation Plan of New York City REIT, Inc. | ||||||||
2020 Omnibus Incentive Compensation Plan of New York City REIT, Inc. | ||||||||
Equity Distribution Agreement, dated October 1, 2020, among New York City REIT, Inc., New York City Operating Partnership, L.P., Truist Securities, Inc. and B. Riley Securities, Inc. | ||||||||
Amended and Restated Code of Business Conduct and Ethics of New York City REIT, Inc. | ||||||||
31.1 * | Certification of the Principal Executive Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
31.2 * | Certification of the Principal Financial Officer of the Company pursuant to Securities Exchange Act Rule 13a-14(a) or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
32 * | Written statements of the Principal Executive Officer and Principal Financial Officer of the Company pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
101.INS * | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH * | Inline XBRL Taxonomy Extension Schema Document. | |||||||
101.CAL * | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
101.DEF * | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
101.LAB * | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||
101.PRE * | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
104 * | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
Dated this 12th day of November, 2020 | /s/ Edward M. Weil, Jr. | |||||||
Edward M. Weil, Jr. | ||||||||
Executive Chairman, Chief Executive Officer, President and Secretary | ||||||||
(Principal Executive Officer) |
Dated this 12th day of November, 2020 | /s/ Christopher J. Masterson | |||||||
Christopher J. Masterson | ||||||||
Chief Financial Officer and Treasurer | ||||||||
(Principal Financial Officer and Principal Accounting Officer) |
/s/ Edward M. Weil, Jr. | |||||
Edward M. Weil, Jr. | |||||
Executive Chairman, Chief Executive Officer, President and Secretary | |||||
(Principal Executive Officer) | |||||
/s/ Christopher J. Masterson | |||||
Christopher J. Masterson | |||||
Chief Financial Officer and Treasurer | |||||
(Principal Financial Officer and Principal Accounting Officer) |
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Amounts due from related parties | $ 407 | $ 0 |
Amounts due to related parties | $ 167 | $ 222 |
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) | 12,802,690 | 12,755,099 |
Common stock, shares outstanding (in shares) | 12,802,690 | 12,755,099 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Income Statement [Abstract] | ||||||
Revenue from tenants | $ 16,997 | $ 18,643 | $ 53,035 | $ 52,219 | ||
Operating expenses: | ||||||
Asset and property management fees to related parties | 1,879 | 1,962 | 5,721 | 5,382 | ||
Property operating | 8,300 | 8,026 | 23,533 | 22,651 | ||
Acquisition, transaction and other costs | 0 | 0 | 0 | 18 | ||
Listing expenses | 1,299 | 0 | 1,299 | 0 | ||
Vesting and conversion of Class B Units | 1,153 | 0 | 1,153 | 0 | ||
Equity-based compensation | 1,711 | 24 | 1,758 | 64 | ||
General and administrative | 1,234 | 1,176 | 5,727 | 4,929 | ||
Depreciation and amortization | 8,639 | 7,804 | 24,070 | 22,771 | ||
Total operating expenses | 24,215 | 18,992 | 63,261 | 55,815 | ||
Operating loss | (7,218) | (349) | (10,226) | (3,596) | ||
Other income (expense): | ||||||
Interest expense | (5,089) | (4,681) | (14,915) | (12,310) | ||
Other income | 19 | 221 | 779 | 686 | ||
Total other expense | (5,070) | (4,460) | (14,136) | (11,624) | ||
Net loss attributable to common stockholders | (12,288) | (4,809) | (24,362) | (15,220) | ||
Other comprehensive income (loss): | ||||||
Change in unrealized gain (loss) on derivative | 264 | (547) | (2,395) | (1,877) | ||
Other comprehensive income (loss) | 264 | (547) | (2,395) | (1,877) | ||
Comprehensive income (loss) | $ (12,024) | $ (5,356) | $ (26,757) | $ (17,097) | ||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | ||||||
Weighted-average shares outstanding — Basic and Diluted (in shares) | [1] | 12,772,176 | 12,749,456 | 12,757,376 | 12,748,674 | |
Net loss per share attributable to common stockholders — Basic and Diluted (in dollars per share) | [1] | $ (0.96) | $ (0.38) | $ (1.91) | $ (1.19) | |
|
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands |
Total |
Common Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Loss |
Distributions in excess of accumulated earnings |
Total Stockholders’ Equity |
Non-controlling Interests |
||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Beginning Balance (in shares) at Dec. 31, 2018 | [1] | 12,753,271 | |||||||||||
Beginning Balance at Dec. 31, 2018 | $ 128 | [1] | $ 685,940 | [1] | $ 0 | $ (242,388) | $ 443,680 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Equity-based compensation (in shares) | [1] | 1,828 | |||||||||||
Equity-based compensation | 64 | [1] | 64 | ||||||||||
Net loss | $ (15,220) | (15,220) | (15,220) | ||||||||||
Other comprehensive income (loss) | (1,877) | (1,877) | (1,877) | ||||||||||
Ending Balance (in shares) at Sep. 30, 2019 | [1] | 12,755,099 | |||||||||||
Ending Balance at Sep. 30, 2019 | $ 128 | [1] | 686,004 | [1] | (1,877) | (257,608) | 426,647 | ||||||
Beginning Balance (in shares) at Jun. 30, 2019 | [1] | 12,755,099 | |||||||||||
Beginning Balance at Jun. 30, 2019 | $ 128 | [1] | 685,980 | [1] | (1,330) | (252,799) | 431,979 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Equity-based compensation | 24 | [1] | 24 | ||||||||||
Net loss | (4,809) | (4,809) | |||||||||||
Other comprehensive income (loss) | (547) | (547) | (547) | ||||||||||
Ending Balance (in shares) at Sep. 30, 2019 | [1] | 12,755,099 | |||||||||||
Ending Balance at Sep. 30, 2019 | $ 128 | [1] | 686,004 | [1] | (1,877) | (257,608) | 426,647 | ||||||
Beginning Balance (in shares) at Dec. 31, 2019 | [2] | 12,755,099 | |||||||||||
Beginning Balance at Dec. 31, 2019 | 420,549 | $ 128 | [2] | 686,026 | [2] | (1,327) | (264,278) | 420,549 | $ 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Redemption of fractional shares of common stock and restricted shares (in shares) | (6,672) | ||||||||||||
Redemption of fractional shares of common stock and restricted shares | (328) | (328) | (328) | ||||||||||
Vesting and conversion of Class B Units (in shares) | 52,398 | ||||||||||||
Vesting and conversion of Class B Units | 1,153 | $ 1 | 921 | 922 | 231 | ||||||||
Redemption of class A units (in shares) | 37 | ||||||||||||
Equity-based compensation (in shares) | 1,828 | ||||||||||||
Equity-based compensation | 1,758 | 71 | 71 | 1,687 | |||||||||
Net loss | (24,362) | (24,362) | (24,362) | ||||||||||
Other comprehensive income (loss) | (2,395) | (2,395) | (2,395) | ||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 12,802,690 | ||||||||||||
Ending Balance at Sep. 30, 2020 | 396,375 | $ 129 | 686,690 | (3,722) | (288,640) | 394,457 | 1,918 | ||||||
Beginning Balance (in shares) at Jun. 30, 2020 | [2] | 12,756,927 | |||||||||||
Beginning Balance at Jun. 30, 2020 | 405,863 | $ 128 | [2] | 686,073 | [2] | (3,986) | (276,352) | 405,863 | 0 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Redemption of fractional shares of common stock and restricted shares (in shares) | 6,672 | ||||||||||||
Redemption of fractional shares of common stock and restricted shares | (328) | (328) | (328) | ||||||||||
Vesting and conversion of Class B Units (in shares) | 52,398 | ||||||||||||
Vesting and conversion of Class B Units | 1,153 | $ 1 | 921 | 922 | 231 | ||||||||
Redemption of class A units (in shares) | 37 | ||||||||||||
Equity-based compensation | 1,711 | 24 | 24 | 1,687 | |||||||||
Net loss | (12,288) | (12,288) | (12,288) | ||||||||||
Other comprehensive income (loss) | 264 | 264 | 264 | ||||||||||
Ending Balance (in shares) at Sep. 30, 2020 | 12,802,690 | ||||||||||||
Ending Balance at Sep. 30, 2020 | $ 396,375 | $ 129 | $ 686,690 | $ (3,722) | $ (288,640) | $ 394,457 | $ 1,918 | ||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Cash flows from operating activities: | |||
Net loss | $ (12,288) | $ (24,362) | $ (15,220) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||
Depreciation and amortization | 8,639 | 24,070 | 22,771 |
Amortization of deferred financing costs | 1,157 | 919 | |
Accretion of below- and amortization of above-market lease liabilities and assets, net | (2,807) | (1,459) | |
Equity-based compensation | 1,711 | 1,758 | 64 |
Vesting and conversion of Class B Units | 1,153 | 1,153 | 0 |
Changes in assets and liabilities: | |||
Straight-line rent receivable | (3,582) | (4,207) | |
Straight-line rent payable | 82 | 82 | |
Prepaid expenses, other assets and deferred costs | (4,232) | 198 | |
Accounts payable, accrued expenses and other liabilities | (496) | (3,060) | |
Deferred revenue | 1,240 | (544) | |
Net cash used in operating activities | (6,019) | (456) | |
Cash flows from investing activities: | |||
Investments in real estate | 0 | (38,265) | |
Capital expenditures | (3,162) | (5,567) | |
Net cash used in investing activities | (3,162) | (43,832) | |
Cash flows from financing activities: | |||
Proceeds from mortgage note payable | 0 | 55,000 | |
Payments of financing costs | 0 | (3,948) | |
Redemption of fractional shares of common stock and restricted shares | (328) | 0 | |
Net cash used in financing activities | (328) | 51,052 | |
Net change in cash, cash equivalents and restricted cash | (9,509) | 6,764 | |
Cash, cash equivalents and restricted cash, beginning of period | 58,297 | 54,801 | |
Cash, cash equivalents and restricted cash, end of period | 48,788 | 48,788 | 61,565 |
Cash, cash equivalents and restricted cash, end of period | $ 48,788 | 48,788 | 61,565 |
Non-Cash Investing and Financing Activities: | |||
Accrued capital expenditures | 294 | 837 | |
Proceeds from mortgage notes payable used to fund acquisition of real estate | 0 | 51,000 | |
Mortgage notes payable released in connection with acquisition of real estate | $ 0 | $ (51,000) |
Organization |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
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 a real estate investment trust that owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City, primarily Manhattan. The Company was formed to invest in office properties and 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 located exclusively in New York City. As of September 30, 2020, the Company owned eight properties consisting of 1.2 million rentable square feet, acquired for an aggregate purchase price of $790.7 million. The Company was incorporated on December 19, 2013 as a Maryland corporation and elected to be taxed as a real estate investment trust for U.S. federal income tax purposes (“REIT”) beginning with its taxable year ended December 31, 2014. Substantially all of the Company’s business is conducted through the OP. The Company has no employees. New York City Advisors, LLC (the “Advisor”) manages the Company’s affairs on a day-to-day basis and New York City Properties, LLC (the “Property Manager”) manages the Company’s properties. The Advisor and Property Manager are under common control with AR Global Investments, LLC (the successor business to AR Capital, LLC, “AR Global”), and these entities receive compensation, fees and expense reimbursements for services related to the investment and management of the Company’s assets. On August 5, 2020, in anticipation of the listing of the Company’s Class A common stock on the New York Stock Exchange (”NYSE”) under the symbol “NYC” (the “Listing”), the Company implemented a series of corporate actions involving a 9.72-to-1 reverse stock split, renamed its common stock as Class A common stock and paid a stock dividend of three shares of Class B common stock for every one share of Class A common stock outstanding after the reverse stock split, which resulted 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. For additional information related to these corporate actions, see Note 7 – Stockholders’ Equity. On August 18, 2020 (the “Listing Date”), the Company completed the Listing. To effect the Listing, and to address the potential for selling pressure that may have existed at the outset of listing, the Company listed only shares of Class A common stock, which represented approximately 25% of its outstanding shares of common stock, on the NYSE on the Listing Date. The Company’s other class of outstanding stock is Class B common stock, which comprised approximately 75% of the Company’s outstanding shares of common stock at that time. The outstanding shares of Class B common stock will automatically convert into shares of Class A common stock to be listed on the NYSE in three equal tranches on December 16, 2020, April 15, 2021 and August 13, 2020, unless earlier converted in accordance with their terms. For additional information, see Note 7 – Stockholders’ Equity. In connection with the Listing, the Company incurred expenses of $1.3 million for the three and nine months ended September 30, 2020 for financial advisory and other professional fees and expenses. In addition, various other impacts to the Company’s financial statements occurred in connection with the Listing which are discussed throughout these financial statements, including: •The vesting, conversion and redemption of partnership units in the OP designated as “Class B Units” (“Class B Units”) held by the Advisor for shares of Class A common stock (see Note 7 – Stockholders’ Equity and Note 9 – Related Party Transactions). •The redemption of units of limited partnership in the OP designated as “Class A Units,” which were formerly known as OP Units (”Class A Units”), held by the Advisor, for shares of Class A common stock (see Note 7 – Stockholders’ Equity and Note 9 – Related Party Transactions). •The Company entered into the Listing Note (as defined herein) with the Advisor (see Note 9 – Related Party Transactions). •The advisory agreement with the Advisor was amended to lower the quarterly thresholds the Company must reach on a quarterly basis for the Advisor to receive a variable management fee (see Note 9 – Related Party Transactions – “Asset Management Fees and Variable Management/Incentive Fees”). •The issuance of an equity award to the Advisor under the 2020 OPP (as defined herein) (see Note 11 - Equity-Based Compensation, and Note 12 - Net Loss Per Share). •The amendment and restatement of the Company’s distribution reinvestment plan (see Note 7 – Stockholders’ Equity). •The amendment and restatement of the limited partnership agreement of the OP (as so amended and restated, the “A&R OP Agreement”) (see Note 9 – Related Party Transactions).
|
Summary of Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
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 and nine months ended September 30, 2020 and 2019 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, 2019, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2020. 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 and nine months ended September 30, 2020. 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. 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 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. See Note 7 - Stockholders’ Equity for additional information on amounts recorded in non-controlling interests during the third quarter of 2020. Reclassifications Certain amounts have been reclassified to conform to the current period presentation: •The Company currently presents equity-based compensation on its own line item in the consolidated statements of operations, which was previously presented in general and administrative expenses. •In the third quarter of 2020, the Company reclassified professional fees related to the Listing of $0.1 million, which were previously recorded in general and administrative expenses in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, to listing expenses in the Company’s consolidated statements of operations. For additional information on total listing expenses, see Note 1 — Organization. •In the third quarter of 2020, the Company reclassified professional fees related to potential equity offerings of $0.2 million, which were previously recorded in general and administrative expenses in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, to prepaid expenses and other assets in the Company’s consolidated balance sheets. For additional information on potential equity offerings, see Note 7 — Stockholders’ Equity. •The Company currently presents straight-line rent receivable and straight-line rent payable on its own line items in the consolidated statement of cash flows and consolidated balance sheets, which was previously included within prepaid expenses and other assets. 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, there was a global outbreak of COVID-19, which became a global pandemic that has spread around the world and to every state in the United States. 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 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 September 30, 2020. However, given the rapid evolution of the COVID-19 pandemic and the global response to curb its spread, these estimates and assumptions as of September 30, 2020 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 has not yet fully reopened. The Company’s properties remain accessible to all tenants, although, even as operating restrictions expire, 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. 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. The Company has experienced delays in rent collections in the second and third quarters of 2020. The Company has taken a proactive approach to achieve mutually agreeable solutions with its tenants and in some cases, in the second and third quarters of 2020, the Company has executed different types of lease amendments. These agreements include deferrals and abatements and also may include extensions to the term of the leases. 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 has 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 September 30, 2020, these leases had a weighted-average remaining lease term of 7.5 years. Because 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 it will collect virtually all of the lease payments at 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, 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 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 the lease accounting rules the Company records uncollectable amounts as reductions in revenue from tenants. During the three and nine months ended September 30, 2020, the Company reduced lease income by $0.4 million and $0.5 million, respectively, for amounts deemed uncollectable during the period. There were no such reductions recorded during the three or nine months ended September 30, 2019. 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. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“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 derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. 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 standard 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.
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Real Estate Investments |
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Real Estate Investments | Real Estate InvestmentsThere were no real estate assets acquired or liabilities assumed during the three or nine months ended September 30, 2020. In July 2019, the Company acquired the property commonly known as “196 Orchard Street.” The following table presents allocation of real estate assets acquired and liabilities assumed during the nine months ended September 30, 2019.
(1) Weighted-average remaining amortization periods for in-place leases and market lease and other intangible assets acquired during the nine months ended September 30, 2019 were 13.4 years and 13.4 years, respectively, as of the acquisition date. Included in other income for the nine month period ended September 30, 2020, is approximately $0.6 million in income related to the retention of a deposit forfeited by the buyer in the potential sale of the property commonly known as the “HIT Factory” under a purchase agreement which expired in April 2020. Significant Tenants As of September 30, 2020 and December 31, 2019, 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:
(1)During the three months ended September 30, 2020, in connection with three leases that were terminated during the third quarter of 2020, the Company wrote off approximately $3.2 million of in-place lease intangibles, which was included in depreciation and amortization expense in the consolidated statement of operations. Additionally, in connection with the same lease terminations, the Company wrote off approximately $1.9 million of below-market lease intangibles and $0.2 million of above-market lease intangibles during the three months ended September 30, 2020, which was included in revenue from tenants in the consolidated statement of operations. During the nine months ended September 30, 2020, in connection with a lease that was terminated during the second quarter of 2020, the Company also wrote off approximately $0.6 million of in-place lease intangibles, which was included in depreciation and amortization expense in the consolidated statement of operations, and $2.3 million of below-market lease intangibles, which was included in revenue from tenants in the consolidated statement of operations. The following table provides the projected amortization expense and adjustments to revenues for the next five years as of September 30, 2020:
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Mortgage Notes Payable, Net |
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Mortgage Notes Payable, Net | Mortgage Notes Payable, Net The Company’s mortgage notes payable, net as of September 30, 2020 and December 31, 2019 are as follows:
_____________________ (1)As of September 30, 2020, $2.5 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)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 September 30, 2020 (see Note 6 — Derivatives and Hedging Activities). (3)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. Nationwide Life Insurance Company Loan On July 17, 2019, the Company, through the OP, entered into a loan agreement with Nationwide Life Insurance Company for a $51.0 million loan in connection with the acquisition of 196 Orchard Street. The loan bears interest at a fixed rate of 3.85% and matures on August 1, 2029. The loan requires monthly interest-only payments, with the principal balance due on the maturity date, and is secured by, among other things, a first mortgage on the property. The Company has guaranteed, (i) at all times, certain enumerated recourse liabilities of the borrower under the agreement, and (ii) from and after certain events of defaults and other breaches under the agreement and other loan documents (including bankruptcies or similar events), payment of all amounts due to the lender in respect of the loan. Capital One Loan On April 26, 2019, the Company, through the OP, entered into a term loan agreement with Capital One, National Association, as administrative agent, and the other lenders party thereto for a $55.0 million loan with an interest rate fixed at 3.67% by a swap agreement. The loan has a maturity date of April 26, 2024, and requires monthly interest-only payments, with the principal balance due on the maturity date. The loan is secured by, among other things, a mortgage lien on the Company’s previously unencumbered 9 Times Square property. The Company has guaranteed certain enumerated recourse liabilities of the borrower under the agreement and the guaranty requires the Company to maintain a minimum net worth in excess of $175.0 million and minimum liquid assets of $10.0 million. Collateral and Principal Payments Real estate assets and intangible assets of $827.8 million, at cost (net of below-market lease liabilities), at September 30, 2020 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 September 30, 2020:
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Fair Value of Financial Instruments |
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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:
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 Carried at Fair Value The following table presents information about the Company’s assets and liabilities measured at fair value as of September 30, 2020 and December 31, 2019.
Financial Instruments Not Carried 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 may differ from its carrying value due to widening of credit spreads during the current period. The fair values of the Company’s financial instruments that are not reported at fair value on the consolidated balance sheet are reported below:
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Derivatives and Hedging Activities |
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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. On March 28, 2019, the Company entered into a forward starting five-year interest rate swap which became effective on May 1, 2019. The Company entered into this derivative in order to lock-in and swap the floating rate interest on its term loan encumbering the Company’s 9 Times Square property to a fixed rate. Upon entering into the swap, the Company paid a deposit of $0.8 million which was refunded at the closing of the new financing for the 9 Times Square property effective as of April 26, 2019. 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 September 30, 2020 and December 31, 2019.
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 and nine months ended September 30, 2020 and year ended December 31, 2019, 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 September 30, 2020 and December 31, 2019, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk.
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.
Offsetting Derivatives The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2020 and December 31, 2019. 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.
Credit-risk-related Contingent Features 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 September 30, 2020, 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 $3.7 million. As of September 30, 2020, 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 $3.7 million.
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Stockholders’ Equity |
9 Months Ended |
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Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders’ Equity | Stockholders’ Equity As of September 30, 2020 and December 31, 2019, the Company had 12.8 million shares of common stock outstanding, after giving effect to the Reverse Stock Split (see Note 1 — Organization for additional details), including unvested restricted shares and shares issued pursuant to the DRIP. As of September 30, 2020, following a series of corporate actions during August 2020 as described in more detail below, the Company’s shares of common stock outstanding was comprised of 3.2 million shares of Class A common stock, including unvested restricted shares and 9.6 million shares of Class B common stock, including unvested restricted shares. 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 year ended December 31, 2019 or the three or nine months ended September 30, 2020. In connection with the Listing, the Company announced its board of directors’ intention to reinstate distributions to the Company’s common stockholders in the amount of $0.40 per share of common stock per year. The reinstated distributions are to be payable as dividends in arrears on a quarterly basis 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 (see Note 13 — Subsequent Events). 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 still held by a third party and not redeemed as of September 30, 2020. The remaining Class A Units were subsequently submitted for redemption for an equal number of shares of Class A common stock in October 2020 that are scheduled to be issued in November 2020. •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”). Under SEC rules, as long as the aggregate market value of outstanding Class A common stock held by non-affiliates, or public float, remains below $75.0 million, the maximum aggregate offering amount of the shares sold pursuant to the Common Stock ATM Program will be $18.7 million. The Company will be able to offer and sell shares in excess of $18.7 million once the Company’s public float has increased or the Company is no longer subject to this limit. The Company has not yet sold any shares of Class A common stock through the Common Stock ATM Program, however, during the nine months ended September 30, 2020, the Company incurred $0.8 million in costs related to the establishment of the Common Stock ATM Program. Since no proceeds have been received under the Common Stock ATM Program as of September 30, 2020, these costs are currently being deferred, and are recorded in prepaid expenses and other assets in the Company’s consolidated balance sheet as of September 30, 2020. The Company will assess the probability of receiving proceeds under the Common Stock ATM Program each reporting period and will reclass the prepaid balance to additional paid in capital in the Company’s consolidated statement of changes equity, in the period in which proceeds are received, as a reduction of the gross proceeds received under the Common Stock ATM Program. Authorized Repurchase Program The Company’s directors has 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 during the three and nine months ended September 30, 2020. Terminated Share Repurchase Program The Company had a share repurchase program (the “SRP”) that enabled qualifying stockholders, subject to certain conditions and limitations, to sell their shares to the Company. The Company suspended the SRP effective September 25, 2018. In connection with the Listing, the SRP automatically terminated in accordance with its terms. The Company had repurchased 518,409 shares (adjusted for the Reverse Stock Split) at a weighted-average price per share of $53.53 (adjusted for the Reverse Stock Split) on a cumulative basis under the SRP. 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. Distribution Reinvestment Plan Until August 28, 2020, the Company had a distribution reinvestment plan (“DRIP”), pursuant to which, stockholders could 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 issued pursuant to the DRIP or the A&R DRIP are recorded within stockholders’ equity in the consolidated balance sheets in the period dividends or other distributions are declared. During the three nine months ended September 30, 2020, no shares were issued by the Company as there were no dividends or other distributions paid during the periods.
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Commitments and Contingencies |
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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 September 30, 2020, the Company’s operating ground lease has a weighted-average remaining lease term, including assumed renewals, of 46.3 years and a discount rate of 8.6%. As of September 30, 2020, the Company’s balance sheet includes an ROU asset and liability of $55.4 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 nine months ended September 30, 2020, the Company paid cash of $1.2 million and $3.6 million for amounts included in the measurement of lease liabilities and recorded expense of $1.2 million and $3.6 million, respectively, on a straight-line basis in accordance with the standard. The Company paid cash of $1.2 million and $3.6 million and incurred ground rent expense of $1.2 million and $3.6 million during the three and nine months ended September 30, 2019, respectively. 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 three and nine months ended September 30, 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 September 30, 2020:
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 September 30, 2020, 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.
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Related Party Transactions and Arrangements |
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Related Party Transactions and Arrangements | Related Party Transactions and Arrangements As of September 30, 2020 and December 31, 2019, an entity wholly owned by AR Global owned 61,286 shares of the Company’s outstanding common stock. Fees and Participations Incurred in Connection with the Operations of the Company Summary of Advisory Agreement On November 16, 2018, the members of a special committee of the Company’s board of directors approved an amendment and restatement of the Company’s advisory agreement with the Advisor (the “Advisory Agreement”). The Company also entered into a related amendment (the “November 2018 PMA Amendment”) to the Company’s Property Management and Leasing Agreement with the Property Manager. The Advisory Agreement and the November 2018 PMA Amendment both took effect on November 16, 2018. 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 Advisory Agreement changed the calculation of the base asset management fee to a fixed amount of (x) $0.5 million payable on the first business day of each month 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, however the Advisor may elect to receive OP units or common stock of the Company, 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. The Advisory Agreement also entitles the Advisor to a variable management fee, payable quarterly in arrears. 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 impact of 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 amendments, 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 in cash, shares of the Company’s common stock, OP units or a combination thereof, at the Advisor’s election. The Company paid cash of $1.5 million and $1.5 million for asset management fees during the three months ended September 30, 2020 and September 30, 2019, respectively, and $4.5 million and $4.5 million during the nine months ended September 30, 2020 and September 30, 2019, respectively. Prior to October 1, 2015, for its asset management services provided under the advisory agreement, the Company caused the OP to issue 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), in connection with the arrangement. 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 terms of the limited partnership agreement to 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 of these 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 the 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 is recorded in vesting and conversion of Class B Units in the consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2020. The remaining Class A Units, which were still held by a third party and not redeemed as of September 30, 2020, were subsequently submitted for redemption for an equal number of shares of Class A common stock in October 2020 that are scheduled to be issued in November 2020. Property Management Fees Pursuant to the Property Management and Leasing Agreement, dated as of April 24, 2014 (the “PMA”) and prior to the November 2018 PMA Amendment effective on November 16, 2018, except in certain cases where the Company contracted with a third party, the Company paid the Property Manager a property management fee equal to: (i) for non-hotel properties, 4.0% 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. Pursuant to the PMA, the Company reimburses the Property Manager for property-level expenses. 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 the 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 April 2018 PMA does not include provisions related to the management of hotels. On April 13, 2018, concurrently with entering into the April 2018 PMA, the Company and the Property Manager entered into an amendment to the PMA (the “April 2018 PMA Amendment”). Prior to this amendment, the Property Manager had been retained by the Company, pursuant to the PMA, to manage, operate and maintain all the Company’s properties. Following the April 2018 PMA Amendment, any of the Company’s properties that are or become subject to a separate property management agreement with the Property Manager (including the properties secured by the loan, which are subject to the April 2018 PMA) are not subject to the PMA. On November 16, 2018, the effective date of the November 2018 PMA Amendment, the property management fees the Company pays the Property Manager for non-hotel properties decreased to 3.25% of gross revenues from the properties managed, plus market-based leasing commissions. The November 2018 PMA Amendment also amended the term of the PMA to make it coterminous with the term of the Advisory Agreement. The Company incurred approximately $0.4 million and $0.5 million in property management fees during the three months ended September 30, 2020 and September 30, 2019, respectively, and $1.2 million and $0.9 million during the nine months ended September 30, 2020 and September 30, 2019, respectively. Professional Fees and Other Reimbursements Prior to the effectiveness of the Advisory Agreement on November 16, 2018, the Company reimbursed the Advisor’s costs of providing administrative services, subject to the limitation that the Company would not reimburse the Advisor for any amount by which the Company’s operating expenses at the end of the four preceding fiscal quarters exceeded the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income other than any additions to reserves for depreciation, bad debt, impairments or other similar non-cash expenses and excluding any gain from the sale of assets for that period, unless the Company’s independent directors determined that such excess was justified based on unusual and nonrecurring factors which they deemed sufficient, in which case the excess amount would have been reimbursed to the Advisor in subsequent periods. This reimbursement included reasonable overhead expenses for employees of the Advisor or its affiliates directly involved in the performance of services on behalf of the Company, including the reimbursement of rent expense at certain properties that are both occupied by employees of the Advisor or its affiliates and owned by affiliates of the Advisor. Additionally, prior to the effectiveness of the Advisory Agreement, the Company reimbursed the Advisor for personnel costs in connection with other services; however, the Company did not reimburse the Advisor for personnel costs in connection with services for which the Advisor received acquisition fees, acquisition expense reimbursements or real estate commissions and no reimbursement was made for salaries, bonuses or benefits paid to the Company’s executive officers. The Advisory Agreement eliminated the previously existing limits on reimbursement by the Company of the Advisor’s expenses and costs based on total operating expenses and added new administrative expense reimbursement limits as follows: •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 (which may not exceed comparable market rates), 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%. The Company began implementing the limits above in the month of December 2018. Total reimbursement expenses for administrative and personnel services provided by the Advisor during the three months ended September 30, 2020 were $0.5 million, which were all related to salaries, wages, and benefits. For the three months ended September 30, 2019, total reimbursement expenses for administrative and personnel services provided by the Advisor were $0.6 million, which were all related to salaries, wages and benefits. Total reimbursement expenses for administrative and personnel services provided by the Advisor during the nine months ended September 30, 2020 were $2.5 million, of which $0.4 million related to administrative and overhead expenses and $2.1 million were for salaries, wages, and benefits. As a result, the Company has met the administrative and overhead expenses limit as described above. For the nine months ended September 30, 2019, total reimbursement expenses for administrative and personnel services provided by the Advisor were $2.4 million, of which $0.4 million were related to administrative and overhead expenses and $2.0 million were related to salaries, wages, and benefits. As part of this reimbursement, 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 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 independent directors, the $0.4 million receivable is payable to the Company over a 10-month period from November 2020 through August 2021. Reimbursements for the cash portion of 2020 bonuses to employees of the Advisor or its affiliates continue to be expensed and reimbursed on a monthly basis during 2020 in accordance with 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:
________ (1)Financing coordination fees are included as deferred financing costs within mortgage notes payable, net and leasing commissions are included within deferred leasing costs, net on the consolidated balance sheets, respectively. (2)Beginning on April 1, 2019, property management fees due to the Property Manager are no longer adjusted for reimbursable expenses paid by the Company to third-party property managers. (3)Amounts for the three and nine months ended September 30, 2020 and 2019 are included in general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss. (4)Included in accounts payable, accrued expense and other liabilities on the consolidated balance sheet. (5) Included in prepaid expenses and other assets on the consolidated balance sheet. Listing Arrangements Listing Note Pursuant to the A&R OP Agreement, as defined below, 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 the 180th day after 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 September 30, 2020 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 On the Listing Date, the limited partnership agreement of the OP was amended and restated in connection with the effectiveness of the Listing (as so amended and restated, the “A&R OP 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 a new class of units of limited partnership designated as “LTIP Units” (“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 units of limited partnership designated as “Class A Units” (“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.
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Economic Dependency |
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Sep. 30, 2020 | |
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.
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Equity-Based Compensation |
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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 acting as a group adopted 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 is 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 expanded 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 will be increased from $30,000 to $65,000. No other changes were 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 nine months ended September 30, 2020 and has been retroactively adjusted to reflect the Reverse Stock Split (see Note 1 — Organization for additional details):
(1) Represents fractional shares redeemed in connection with the Reverse Stock Split (see Note 7 – Stockholders’ Equity for additional information). As of September 30, 2020, the Company had $0.3 million of unrecognized compensation cost related to unvested restricted share awards granted and is expected to be recognized over a weighted-average period of 3.3 years. Restricted share awards are expensed in accordance with the service period required. Compensation expense related to restricted share awards was approximately $24,383 and $22,494 for the three months ended September 30, 2020 and September 30, 2019, respectively, and $71,354 and $63,546 for the nine months ended September 30, 2020 and September 30, 2019, 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 (the “Effective 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 Class A common stock over the ten consecutive trading days immediately prior to September 30, 2020. The number of LTIP Units represent 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 Effective Date, 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 nine months ended September 30, 2020, the Company recorded equity-based compensation expense related to the LTIP Units of $1.7 million, which is recorded in equity-based compensation in the consolidated statements of operations and comprehensive loss. As of September 30, 2020, the Company had $24.1 million of unrecognized compensation expense related to the LTIP Units, which is expected to be recognized over a period of 2.87 years. Half of the LTIP Units (the “Absolute TSR LTIP Units”) are eligible to be earned as of the last day of the performance period if the Company achieves total stockholder return (“TSR”) measured on an absolute basis for the performance period as follows:
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. Half of the LTIP Units (the “Relative TSR LTIP Units”) are eligible to be earned as of the last day of the performance period if the amount, expressed in terms of basis points, whether positive or negative, by which the Company’s absolute TSR for the performance period exceeds the average TSR for the performance period of a peer group consisting of Empire State Realty Trust, Inc., Franklin Street Properties Corp., Paramount Group, Inc. and Clipper Realty Inc. as follows:
If the relative TSR excess is more than -600 bps but less than 0 bps, or more than 0 bps but less than +600 bps, the percentage of the Relative TSR LTIP Units earned is determined using linear interpolation as between those tiers, respectively. Until an LTIP Unit is earned in accordance with the provisions of the 2020 OPP, the holder of the LTIP Unit will be entitled to distributions on the LTIP Unit equal to 10% of the distributions made per Class A Unit (other than distribution of sale proceeds). Distributions paid with respect to an LTIP Unit are not subject to forfeiture, even if the LTIP Unit is ultimately forfeited because it is not earned in accordance with the 2020 OPP. In light of the automatic conversion feature of the Master LTIP Unit, the Advisor was entitled to receive a distribution equal to the product of 10% of the distributions made per Class A Unit during the period from the Listing Date (August 18, 2020) to September 30, 2020 (if any) multiplied by the number of LTIP Units issued when the Master LTIP Unit automatically converted into LTIP Units, however no distributions were paid on Class A Units during this period. For the three and nine months ended September 30, 2020, the Company did not record any distributions related to the LTIP Units. After an LTIP Unit is earned, the holder will be entitled to a priority catch-up distribution per earned LTIP Unit equal to the aggregate distributions paid on a Class A Unit during the performance period, less the aggregate distributions paid on the LTIP Unit during the performance period. As of the last day of the performance period, the earned LTIP Units will become entitled to receive the same distributions as are paid on Class A Units. At the time the Advisor’s capital account with respect to an LTIP Unit that is earned and vested is economically equivalent to the average capital account balance of a Class A Unit, the Advisor, as the holder of the LTIP Unit in its sole discretion, will, in accordance with the A&R OP Agreement, be 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. If the last day of the performance period is the effective date of a Change of Control or a termination of the Advisor without Cause (as defined in the Advisory Agreement), then calculations relating to the number of LTIP Units earned pursuant to the 2020 OPP will be performed based on actual performance as of (and including) the effective date of the Change of Control or termination (as applicable), with the hurdles for calculating absolute TSR pro-rated to reflect that the performance period lasted less than three years but without pro-rating the number of Absolute TSR LTIP Units or Relative TSR LTIP Units the Advisor would be eligible to earn to reflect the shortened period. If the last day of the performance period is the effective date of a termination of the Advisor with Cause, then calculations relating to the number of LTIP Units earned pursuant to the 2020 OPP will also be performed based on actual performance as of (and including) the effective date of the termination based on the performance through the last trading day prior to the effective date of the termination, with the hurdles for calculating absolute TSR pro-rated to reflect that the performance period lasted less than three years and with the number of Absolute TSR LTIP Units or Relative TSR LTIP Units the Advisor would be eligible to earn also pro-rated to reflect the shortened period. The award of LTIP Units under the 2020 OPP is administered by the 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 elects. Following the last day of the performance period, the Compensation Committee is responsible for determining the number of Absolute TSR LTIP Units and Relative TSR LTIP Units earned, as calculated by an independent consultant engaged by the compensation committee and as approved by the compensation committee in its reasonable and good faith discretion. The valuation model used to calculate the fair value utilizes several significant assumptions, such as stock price volatility, dividend yield, and correlation estimate. The compensation committee also must approve the transfer of any Absolute TSR LTIP Units and Relative TSR LTIP Units (or Class A Units into which they may be converted in accordance with the terms of the A&R OP Agreement). LTIP Units earned as of the last day of the performance period will also become vested as of the last day of the performance period. Any LTIP Units that are not earned and vested after the compensation committee makes the required determination will automatically and without notice be forfeited without the payment of any consideration by the Company or the OP, effective as of the last day of the performance period. 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 three and nine months ended September 30, 2020 or September 30, 2019.
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Net Loss Per Share |
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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):
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 and nine months ended September 30, 2020 and 2019 based on shares that would be issued if the balance sheet date were the end of the measurement period, unless the effect is antidilutive. There was no impact from any of the Company’s potentially dilutive securities during the three and nine months ended September 30, 2020 due to 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):
__________ (1) There were 5,516 and 5,433 unvested restricted shares outstanding as of September 30, 2020 and September 30, 2019, respectively. (2) Formerly known as OP Units. There were 13,100 and 37 Class A Units outstanding as of September 30, 2020 and September 30, 2019, respectively. (3) There were 0 and 65,498 Class B Units outstanding as of September 30, 2020 and September 30, 2019, respectively (see Note 7 — Stockholders’ Equity, for additional information). (4) There were 4,012,841 and 0 LTIP Units outstanding as of September 30, 2020 and September 30, 2019, respectively (see Note 11 — Equity-Based Compensation for additional information).
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Subsequent Events |
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Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Dividend Declaration On October 1, 2020, the Company declared a dividend equal to $0.04889 per share on each share of the Company’s Class A common stock and Class B common stock. The dividend was calculated to cover the period from August 18, 2020, the date on which shares of Class A common stock commenced trading on the NYSE, through September 30, 2020, based on the previously-announced cash dividend rate equal to $0.40 per share per year. The dividend was paid on October 15, 2020 to holders of record of shares of the Company’s Class A common stock and Class B common stock as of the close of business on October 12, 2020.
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Summary of Significant Accounting Policies (Policies) |
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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 and nine months ended September 30, 2020 and 2019 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, 2019, which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2020. 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 and nine months ended September 30, 2020.
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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 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.
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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 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. See Note 7 - Stockholders’ Equity for additional information on amounts recorded in non-controlling interests during the third quarter of 2020.
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Reclassifications | Reclassifications Certain amounts have been reclassified to conform to the current period presentation: •The Company currently presents equity-based compensation on its own line item in the consolidated statements of operations, which was previously presented in general and administrative expenses. •In the third quarter of 2020, the Company reclassified professional fees related to the Listing of $0.1 million, which were previously recorded in general and administrative expenses in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, to listing expenses in the Company’s consolidated statements of operations. For additional information on total listing expenses, see Note 1 — Organization. •In the third quarter of 2020, the Company reclassified professional fees related to potential equity offerings of $0.2 million, which were previously recorded in general and administrative expenses in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, to prepaid expenses and other assets in the Company’s consolidated balance sheets. For additional information on potential equity offerings, see Note 7 — Stockholders’ Equity. •The Company currently presents straight-line rent receivable and straight-line rent payable on its own line items in the consolidated statement of cash flows and consolidated balance sheets, which was previously included within prepaid expenses and other assets.
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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 September 30, 2020, these leases had a weighted-average remaining lease term of 7.5 years. Because 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 it will collect virtually all of the lease payments at 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, 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 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 the lease accounting rules the Company records uncollectable amounts as reductions in revenue from tenants. During the three and nine months ended September 30, 2020, the Company reduced lease income by $0.4 million and $0.5 million, respectively, for amounts deemed uncollectable during the period. There were no such reductions recorded during the three or nine months ended September 30, 2019.
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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.
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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.
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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. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU 2020-04 contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future London Interbank Offered Rate (“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 derivatives consistent with past presentation. We will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. 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 standard 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.
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Fair Value Measurement, Policy | 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:
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.
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Real Estate Investments (Tables) |
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Real Estate Investments, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of asset acquisition | The following table presents allocation of real estate assets acquired and liabilities assumed during the nine months ended September 30, 2019.
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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:
(1)During the three months ended September 30, 2020, in connection with three leases that were terminated during the third quarter of 2020, the Company wrote off approximately $3.2 million of in-place lease intangibles, which was included in depreciation and amortization expense in the consolidated statement of operations. Additionally, in connection with the same lease terminations, the Company wrote off approximately $1.9 million of below-market lease intangibles and $0.2 million of above-market lease intangibles during the three months ended September 30, 2020, which was included in revenue from tenants in the consolidated statement of operations. During the nine months ended September 30, 2020, in connection with a lease that was terminated during the second quarter of 2020, the Company also wrote off approximately $0.6 million of in-place lease intangibles, which was included in depreciation and amortization expense in the consolidated statement of operations, and $2.3 million of below-market lease intangibles, which was included in revenue from tenants in the consolidated statement of operations.
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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 September 30, 2020:
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Mortgage Notes Payable, Net (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt instruments | The Company’s mortgage notes payable, net as of September 30, 2020 and December 31, 2019 are as follows:
_____________________ (1)As of September 30, 2020, $2.5 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)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 September 30, 2020 (see Note 6 — Derivatives and Hedging Activities). (3)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.
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Schedule of maturities of long-term debt | The following table summarizes the scheduled aggregate principal payments subsequent to September 30, 2020:
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Fair Value of Financial Instruments (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial instruments measured on a non-recurring basis | The following table presents information about the Company’s assets and liabilities measured at fair value as of September 30, 2020 and December 31, 2019.
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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:
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Derivatives and Hedging Activities (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 September 30, 2020 and December 31, 2019.
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Schedule of notional amounts of outstanding derivative positions | As of September 30, 2020 and December 31, 2019, the Company had the following derivatives that were designated as cash flow hedges of interest rate risk.
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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.
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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 September 30, 2020 and December 31, 2019. 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.
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Commitments and Contingencies (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 September 30, 2020:
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Related Party Transactions and Arrangements (Tables) |
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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:
________ (1)Financing coordination fees are included as deferred financing costs within mortgage notes payable, net and leasing commissions are included within deferred leasing costs, net on the consolidated balance sheets, respectively. (2)Beginning on April 1, 2019, property management fees due to the Property Manager are no longer adjusted for reimbursable expenses paid by the Company to third-party property managers. (3)Amounts for the three and nine months ended September 30, 2020 and 2019 are included in general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss. (4)Included in accounts payable, accrued expense and other liabilities on the consolidated balance sheet. (5) Included in prepaid expenses and other assets on the consolidated balance sheet.
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Equity-Based Compensation (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of equity based compensation | The following table displays restricted share award activity during the nine months ended September 30, 2020 and has been retroactively adjusted to reflect the Reverse Stock Split (see Note 1 — Organization for additional details):
(1) Represents fractional shares redeemed in connection with the Reverse Stock Split (see Note 7 – Stockholders’ Equity for additional information). Half of the LTIP Units (the “Absolute TSR LTIP Units”) are eligible to be earned as of the last day of the performance period if the Company achieves total stockholder return (“TSR”) measured on an absolute basis for the performance period as follows:
Half of the LTIP Units (the “Relative TSR LTIP Units”) are eligible to be earned as of the last day of the performance period if the amount, expressed in terms of basis points, whether positive or negative, by which the Company’s absolute TSR for the performance period exceeds the average TSR for the performance period of a peer group consisting of Empire State Realty Trust, Inc., Franklin Street Properties Corp., Paramount Group, Inc. and Clipper Realty Inc. as follows:
|
Net Loss Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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):
__________ (1) There were 5,516 and 5,433 unvested restricted shares outstanding as of September 30, 2020 and September 30, 2019, respectively. (2) Formerly known as OP Units. There were 13,100 and 37 Class A Units outstanding as of September 30, 2020 and September 30, 2019, respectively. (3) There were 0 and 65,498 Class B Units outstanding as of September 30, 2020 and September 30, 2019, respectively (see Note 7 — Stockholders’ Equity, for additional information). (4) There were 4,012,841 and 0 LTIP Units outstanding as of September 30, 2020 and September 30, 2019, respectively (see Note 11 — Equity-Based Compensation for additional information).
|
Organization (Details) $ in Thousands, ft² in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Aug. 05, 2020
shares
|
Sep. 30, 2020
USD ($)
ft²
employee
property
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
ft²
employee
property
|
Sep. 30, 2019
USD ($)
|
Aug. 18, 2020 |
|
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of real estate properties | property | 8 | 8 | ||||
Net rentable area (sqft) | ft² | 1.2 | 1.2 | ||||
Aggregate purchase price of real estate | $ | $ 790,700 | $ 790,700 | ||||
Reverse stock split | 0.4115 | |||||
Common stock dividends (in Shares) | shares | 3 | |||||
Listing expenses | $ | $ 1,299 | $ 0 | $ 1,299 | $ 0 | ||
New York City Operating Partnership, L.P. | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Number of employees | employee | 0 | 0 | ||||
Common Class A | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Reverse stock split | 0.1029 | |||||
Common stock, dividend percentage | 25.00% | |||||
Common Class B | ||||||
Subsidiary, Sale of Stock [Line Items] | ||||||
Common stock dividends (in Shares) | shares | 3 | |||||
Common stock, dividend percentage | 75.00% |
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Aug. 17, 2020 |
|
Class of Stock [Line Items] | |||||
Weighted average remaining lease term | 7 years 6 months | ||||
Bad debt expense | $ 400,000 | $ 0 | $ 500,000 | $ 0 | |
Prepaid expense and other assets | |||||
Class of Stock [Line Items] | |||||
Increase (decrease) in professional fees related to equity offerings | 200,000 | ||||
General and administrative expense | |||||
Class of Stock [Line Items] | |||||
Increase (decrease) in professional fees related to equity offerings | (200,000) | ||||
Increase (Decrease) In Professional Fees | (100,000) | ||||
Listing expenses | |||||
Class of Stock [Line Items] | |||||
Increase (Decrease) In Professional Fees | $ 100,000 | ||||
Class A Units | |||||
Class of Stock [Line Items] | |||||
Shares held (in shares) | 37 |
Real Estate Investments - Allocation of Assets (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Real Estate [Line Items] | ||
Land | $ 55,548 | |
Buildings and improvements | 24,324 | |
Total tangible assets | 79,872 | |
Total intangible assets | 9,393 | |
Total assets acquired | 89,265 | |
Mortgage note payable used to acquire real estate investment | (51,000) | |
Cash paid for acquired real estate investment | 38,265 | |
In-place leases | ||
Real Estate [Line Items] | ||
Total intangible assets | 7,852 | |
Weighted-average remaining amortization period | 13 years 4 months 24 days | |
Above-market leases | ||
Real Estate [Line Items] | ||
Total intangible assets | $ 1,541 | |
Weighted-average remaining amortization period | 13 years 4 months 24 days |
Real Estate Investments - Narrative (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Real Estate [Abstract] | |
Income from deposit that was forfeited | $ 0.6 |
Real Estate Investments - Summary of Amortization and Accretion of Market Lease Assets and Liabilities (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020
USD ($)
lease
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization and (accretion) of above- and below-market leases, net | $ (2,807) | $ (1,459) | ||
Number of leases terminated | lease | 3 | |||
Depreciation and Amortization | In-place leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | $ 2,569 | $ 2,288 | 6,567 | 6,761 |
Depreciation and Amortization | Other intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 291 | 291 | 874 | 874 |
Depreciation and Amortization | Amortization of in-place leases and other intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 2,860 | 2,579 | 7,441 | 7,635 |
Rental Income | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Below Market Lease | (936) | (922) | (3,783) | (2,511) |
Rental Income | Above-market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 369 | 344 | 939 | 1,016 |
Rental Income | Amortization and (accretion) of above- and below-market leases, net | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization and (accretion) of above- and below-market leases, net | (567) | (578) | (2,844) | (1,495) |
Property Operating Expense | Amortization of below-market ground lease | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 12 | $ 12 | 37 | $ 36 |
Termination Of Lease | Depreciation and Amortization | In-place leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 3,200 | 600 | ||
Termination Of Lease | Depreciation and Amortization | Above-market leases | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of leases and other intangibles | 200 | |||
Termination Of Lease | Rental Income | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Below Market Lease | $ (1,900) | $ (2,300) |
Real Estate Investments - Summary of Future Amortization Expense (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Depreciation and Amortization | |
Above-market lease assets | |
2020 (remainder) | $ 2,013 |
2021 | 6,804 |
2022 | 5,459 |
2023 | 4,221 |
2024 | 3,470 |
Depreciation and Amortization | In-place leases | |
Above-market lease assets | |
2020 (remainder) | 1,722 |
2021 | 5,867 |
2022 | 4,751 |
2023 | 3,513 |
2024 | 2,762 |
Depreciation and Amortization | Other intangibles | |
Above-market lease assets | |
2020 (remainder) | 291 |
2021 | 937 |
2022 | 708 |
2023 | 708 |
2024 | 708 |
Rental Income | |
Below-market lease liabilities | |
2020 (remainder) | (605) |
2021 | (2,168) |
2022 | (1,677) |
2023 | (1,452) |
2024 | (1,422) |
Total to be included in revenue from tenants | |
2020 (remainder) | (320) |
2021 | (1,089) |
2022 | (686) |
2023 | (610) |
2024 | (910) |
Rental Income | Above-market leases | |
Above-market lease assets | |
2020 (remainder) | 285 |
2021 | 1,079 |
2022 | 991 |
2023 | 842 |
2024 | $ 512 |
Mortgage Notes Payable, Net (Mortgage Note) (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
property
|
Dec. 31, 2019
USD ($)
|
---|---|---|
Debt Instrument [Line Items] | ||
Mortgage notes payable, gross | $ 405,000 | |
Mortgage notes payable, net | $ 396,188 | $ 395,031 |
Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 7 | |
Mortgage notes payable, gross | $ 405,000 | 405,000 |
Less: deferred financing costs, net | (8,812) | (9,969) |
Mortgage notes payable, net | $ 396,188 | 395,031 |
Effective Interest Rate | 4.35% | |
123 William Street | ||
Debt Instrument [Line Items] | ||
Escrow deposit | $ 2,500 | |
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 | 4.74% | |
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 | 4.18% | |
400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 2 | |
Mortgage notes payable, gross | $ 50,000 | 50,000 |
Effective Interest Rate | 4.59% | |
8713 Fifth Avenue | Mortgages note payable | ||
Debt Instrument [Line Items] | ||
Encumbered Properties | property | 1 | |
Mortgage notes payable, gross | $ 10,000 | 10,000 |
Effective Interest Rate | 5.05% | |
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 | 3.73% | |
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 | 3.91% |
Mortgage Notes Payable, Net (Narrative) (Details) - USD ($) |
Sep. 30, 2020 |
Jul. 17, 2019 |
Apr. 26, 2019 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Debt instrument, collateral amount | $ 827,800,000 | ||
Mortgages note payable | 9 Times Square | |||
Debt Instrument [Line Items] | |||
Loan amount | $ 55,000,000.0 | ||
Fixed interest rate, percent | 3.67% | ||
Debt covenant, minimum net worth requirement | $ 175,000,000.0 | ||
Debt covenant, minimum liquid assets requirement | $ 10,000,000.0 | ||
196 Orchard Street | Mortgages note payable | |||
Debt Instrument [Line Items] | |||
Loan amount | $ 51,000,000.0 | ||
Fixed interest rate, percent | 3.85% |
Mortgage Notes Payable, Net (Mortgage Principal Payments) (Details) $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2020 (remainder) | $ 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 | 55,000 |
Thereafter | 350,000 |
Total | $ 405,000 |
Fair Value of Financial Instruments (Financial Instruments Carried at Fair Value) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ (3,722) | $ (1,327) |
Fair value, measurements, nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial Liabilities Fair Value Disclosure | (3,722) | (1,327) |
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 | (3,722) | (1,327) |
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 | (3,722) | (1,327) |
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 | (3,722) | (1,327) |
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 Instruments (Financial Instruments Not Carried at Fair Value) (Details) - Mortgages note payable - Significant unobservable inputs - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
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 | 415,941 | 427,022 |
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 | 148,946 | 151,428 |
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 | 102,114 | 103,340 |
400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | 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 / 200 Riverside Boulevard - ICON Garage | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 52,876 | 53,951 |
8713 Fifth Avenue | Gross Principal Balance | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 10,000 | 10,000 |
8713 Fifth Avenue | Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Mortgage notes payable | 10,908 | 11,175 |
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 | 51,916 | 54,759 |
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 | $ 49,181 | $ 52,369 |
Derivatives and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions |
Mar. 28, 2019 |
Sep. 30, 2020 |
---|---|---|
Derivative [Line Items] | ||
Term of derivative | 5 years | |
Fair value of derivatives | $ 3.7 | |
Interest Rate “Pay-fixed” Swap | ||
Derivative [Line Items] | ||
Deposit for derivative | $ 0.8 | |
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 Activities (Schedule of Balance Sheet Location) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivatives, Fair Value [Line Items] | ||
Derivative liability, at fair value | $ 3,722 | $ 1,327 |
Designated as hedging instrument | Interest Rate “Pay-fixed” Swap | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, at fair value | $ (3,722) | $ (1,327) |
Derivatives and Hedging Activities (Schedule of Notional Amounts) (Details) - Interest Rate “Pay-fixed” Swap $ in Thousands |
Sep. 30, 2020
USD ($)
derivative
|
Dec. 31, 2019
USD ($)
derivative
|
---|---|---|
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Number of Instruments | derivative | 1 | 1 |
Notional Amount | $ | $ 55,000 | $ 55,000 |
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 | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of loss recognized in accumulated other comprehensive loss on interest rate derivatives (effective portion) | $ (18) | $ (537) | $ (2,978) | $ (1,840) |
Amount of loss reclassified from accumulated other comprehensive loss into income as interest expense | (283) | 10 | (583) | 37 |
Total interest expense recorded in consolidated statements of operations and comprehensive loss | $ 5,089 | $ 4,681 | $ 14,915 | $ 12,310 |
Derivatives and Hedging Activities (Schedule of Gross Presentation, Effects of Offsetting and Net Presentation) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Gross Amounts of Recognized Assets | $ 0 | $ 0 |
Gross Amounts of Recognized (Liabilities) | (3,722) | (1,327) |
Gross Amounts Offset on the Balance Sheet | 0 | 0 |
Net Amounts of Assets (Liabilities) Presented on the Balance Sheet | (3,722) | (1,327) |
Financial Instruments | 0 | 0 |
Cash Collateral Received (Posted) | 0 | 0 |
Net Amount | $ (3,722) | $ (1,327) |
Stockholders’ Equity (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 01, 2020 |
Aug. 05, 2020 |
Sep. 30, 2020 |
Sep. 30, 2020 |
Aug. 17, 2020 |
Dec. 31, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 12,802,690 | 12,802,690 | 12,755,099 | |||
Distributions declared per common share (in dollars per share) | $ 0.04889 | $ 0.40 | ||||
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 | |||||
Stock repurchased during period, value | $ 300,000 | $ 328,000 | $ 328,000 | |||
Stock repurchased, cumulative shares (in shares) | 518,409 | |||||
Weighted average price per share, cumulative shares repurchased (in dollars per share) | $ 53.53 | |||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common stock dividends (in Shares) | 3 | |||||
Vesting and conversion of Class B Units | $ 1,153,000 | $ 1,153,000 | ||||
Total Stockholders’ Equity | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock repurchased during period, value | 328,000 | 328,000 | ||||
Vesting and conversion of Class B Units | 922,000 | 922,000 | ||||
Non-controlling Interests | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting and conversion of Class B Units | $ 231,000 | $ 231,000 | ||||
Common Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock repurchased (in shares) | (6,672) | 6,672 | ||||
Vesting and conversion of Class B Units (in shares) | 52,398 | 52,398 | ||||
Vesting and conversion of Class B Units | $ 1,000 | $ 1,000 | ||||
Redemption of class A units (in shares) | 37 | 37 | ||||
Common Class A | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 3,200,000 | 3,200,000 | ||||
Distributions declared per common share (in dollars per share) | $ 0.40 | |||||
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 | |||||
Common stock repurchased (in shares) | 0 | 0 | ||||
Authorized amount of shares to be repurchased | $ 100,000,000 | $ 100,000,000 | ||||
Common Class A | Subsequent event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Distributions declared per common share (in dollars per share) | $ 0.04889 | |||||
Common Class A | At The Market Offering [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock issuance costs | $ 800,000 | |||||
Common Class A | At The Market Offering [Member] | Subsequent event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate offering | $ 250,000,000.0 | |||||
Entity public float benchmark | 75,000,000.0 | |||||
Common Class A | At The Market Offering [Member] | Maximum | Subsequent event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate offering | $ 18,700,000 | |||||
Common Class B | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock, shares outstanding (in shares) | 9,600,000 | 9,600,000 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Common stock dividends (in Shares) | 3 | |||||
Common Class B | Subsequent event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Distributions declared per common share (in dollars per share) | $ 0.04889 | |||||
Series A preferred stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Right to receive shares (in shares) | 0.001 | 0.001 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||||
Preferred stock, value | $ 55.00 | $ 55.00 | ||||
Class A Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares held (in shares) | 37 | |||||
Vesting and conversion of Class B Units (in shares) | 65,498 | |||||
Class A Units | Advisor | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares held (in shares) | 52,398 | 52,398 | ||||
Class A Units | Third Party [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares held (in shares) | 13,100 | 13,100 |
Commitments and Contingencies (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Commitments and Contingencies Disclosure [Abstract] | |||||
Weighted average remaining lease term | 46 years 3 months 18 days | 46 years 3 months 18 days | |||
Weighted average discount rate | 8.60% | 8.60% | |||
Operating lease right-of-use asset | $ 55,427 | $ 55,427 | $ 55,579 | ||
Operating lease liability | 54,832 | 54,832 | $ 54,866 | ||
Cash paid for lease liabilities | 1,200 | $ 1,200 | 3,600 | $ 3,600 | |
Lease expense | $ 1,200 | $ 1,200 | $ 3,600 | $ 3,600 |
Commitments and Contingencies (Future Minimum Lease Payments Due) (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
2020 (remainder) | $ 1,187 | |
2021 | 4,746 | |
2022 | 4,746 | |
2023 | 4,746 | |
2024 | 4,746 | |
Thereafter | 207,246 | |
Total lease payments | 227,417 | |
Less: Effects of discounting | (172,585) | |
Total present value of lease payments | $ 54,832 | $ 54,866 |
Related Party Transactions and Arrangements (Details) - shares |
9 Months Ended | ||
---|---|---|---|
Nov. 16, 2018 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 12,802,690 | 12,755,099 | |
Renewal term | 5 years | ||
Period prior to expiration date needed to terminate agreement | 180 days | ||
Special limited partner | |||
Related Party Transaction [Line Items] | |||
Common stock, shares outstanding (in shares) | 61,286 | 61,286 |
Related Party Transactions and Arrangements (Asset Management Fees and Variable Management/Incentive Fees) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Aug. 17, 2020 |
Dec. 31, 2015 |
|
Related Party Transaction [Line Items] | ||||||
Vesting and conversion of Class B Units | $ 1,153 | $ 0 | $ 1,153 | $ 0 | ||
Class A Units | ||||||
Related Party Transaction [Line Items] | ||||||
Vesting and conversion of Class B Units (in shares) | 65,498 | |||||
Shares held (in shares) | 37 | |||||
Advisor | Class A Units | ||||||
Related Party Transaction [Line Items] | ||||||
Shares held (in shares) | 52,398 | 52,398 | ||||
New York City Reit Advisors, LLC | Advisor | Asset Management Fees | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transaction, amount | $ 1,500 | $ 1,500 | $ 4,500 | $ 4,500 | ||
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 | $ 500 | |||||
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 | $ 0.05 | |||||
New York City Reit Advisors, LLC | Advisor | Contract sales price | Class A Units | ||||||
Related Party Transaction [Line Items] | ||||||
Shares held (in shares) | 52,398 | 52,398 | ||||
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% | 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% |
Related Party Transactions and Arrangements (Property Management Fees) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
Nov. 16, 2018 |
Apr. 24, 2014 |
|
Related Party Transaction [Line Items] | |||||||
Amounts due to related parties | $ 167 | $ 167 | $ 222 | ||||
New York City Reit Advisors, LLC | Advisor | Property Management Fees | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction, amount | 400 | $ 500 | 1,200 | $ 900 | |||
New York City Reit Advisors, LLC | Advisor | Reimbursement of Costs and Expenses | |||||||
Related Party Transaction [Line Items] | |||||||
Related party transaction, amount | $ 500 | $ 600 | $ 2,500 | $ 2,400 | 900 | ||
Amounts due to related parties | $ 400 | ||||||
New York City Reit Advisors, LLC | Gross Revenue, Stand-alone Single-tenant Net Leased Properties | Advisor | |||||||
Related Party Transaction [Line Items] | |||||||
Percentage of management fees earned | 3.25% | 4.00% |
Related Party Transactions and Arrangements (Professional Fees and Other Reimbursements) (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Related Party Transaction [Line Items] | |||||
Amounts due from related parties | $ 407 | $ 407 | $ 0 | ||
Related party transaction expense | 2,099 | $ 2,679 | 8,169 | $ 8,060 | |
Payable (receivable) as of | (240) | (240) | 222 | ||
Acquisition fees and related cost reimbursements | Acquisition fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 0 | 0 | 0 | 0 | |
Payable (receivable) as of | 0 | 0 | 0 | ||
Financing coordination fees and leasing commissions | Acquisition fees and reimbursements | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 0 | 0 | 0 | 6 | |
Payable (receivable) as of | 0 | 0 | 0 | ||
Asset and property management fees to related parties | Recurring fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 1,879 | 1,962 | 5,721 | 5,382 | |
Payable (receivable) as of | 15 | 15 | (6) | ||
Professional fees and other reimbursements | Recurring fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction expense | 627 | 717 | 2,855 | 2,672 | |
Payable (receivable) as of | 152 | 152 | 228 | ||
Professional fee credit due from the advisor | Recurring fees | |||||
Related Party Transaction [Line Items] | |||||
Related party transaction credit due | (407) | 0 | (407) | 0 | |
Payable (receivable) as of | (407) | (407) | 0 | ||
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 | 400 | 400 | |||
Related party transactions related to salaries, wages and benefits | 2,100 | 2,000 | |||
Related party transaction, amount | 500 | $ 600 | 2,500 | $ 2,400 | $ 900 |
Amounts due from related parties | $ 400 | 400 | |||
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 | Average Invested Assets | Maximum | New York City Reit Advisors, LLC | |||||
Related Party Transaction [Line Items] | |||||
Operating expenses as a percentage of benchmark | 2.00% | 2.00% | |||
Advisor | Net Income, Excluding Additions to Non-cash Reserves and Gains on Sales of Assets | Maximum | New York City Reit Advisors, LLC | |||||
Related Party Transaction [Line Items] | |||||
Operating expenses as a percentage of benchmark | 25.00% | 25.00% | |||
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 and Arrangements (Listing Arrangements) (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 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 and Arrangements (Multi-Year Outperformance Agreement) (Details) |
Sep. 30, 2020
shares
|
---|---|
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 and Arrangements (Termination Fees Payable to the Advisor) (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
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 (Narrative) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 31, 2017 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity-based compensation expenses | $ 1,700,000 | $ 1,700,000 | |||
Equity-based compensation | $ 1,711,000 | $ 24,000 | $ 1,758,000 | $ 64,000 | |
Shares issued in period, in lieu of cash (in shares) | 0 | 0 | 0 | 0 | |
Restricted Share Plan | Unvested restricted shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Value of shares granted | $ 30,000 | $ 65,000 | |||
Restricted shares vesting period | 5 years | ||||
Nonvested awards, compensation cost not yet recognized | $ 300,000 | $ 300,000 | |||
Unrecognized compensation period | 3 years 3 months 18 days | ||||
Equity-based compensation | $ 24,383 | $ 22,494 | $ 71,354 | $ 63,546 | |
Restricted Share Plan | Unvested restricted shares | Year 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Periodic vesting percentage | 20.00% | ||||
Restricted Share Plan | Unvested restricted shares | Year 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Periodic vesting percentage | 20.00% | ||||
Restricted Share Plan | Unvested restricted shares | Year 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Periodic vesting percentage | 20.00% | ||||
Restricted Share Plan | Unvested restricted shares | Year 4 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Periodic vesting percentage | 20.00% | ||||
Restricted Share Plan | Unvested restricted shares | Year 5 | |||||
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 | 1 | ||||
2020 OPP | Performance-based equity award | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Nonvested awards, compensation cost not yet recognized | $ 24,100,000 | $ 24,100,000 | |||
Unrecognized compensation period | 2 years 10 months 13 days |
Equity-Based Compensation (Activity) (Details) - Restricted Share Plan - Unvested restricted shares |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
shares
| |
Number of Restricted Shares | |
Beginning Balance, Unvested (in shares) | shares | 5,433 |
Granted (in shares) | shares | 1,828 |
Vested (in shares) | shares | (1,738) |
Fractional share redemption (in shares) | shares | (7) |
Ending Balance, Unvested (in shares) | shares | 5,516 |
Weighted-Average Issue Price | |
Unvested Beginning Balance (in dollars per share) | $ / shares | $ 51.03 |
Granted (in dollars per share) | $ / shares | 49.23 |
Vested (in dollars per share) | $ / shares | 51.78 |
Fractional share redemption (in dollars per share) | $ / shares | 49.16 |
Unvested Ending Balance (in dollars per share) | $ / shares | $ 50.20 |
Equity-Based Compensation (Multi Year Outperformance Award) (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation | $ 1,711,000 | $ 24,000 | $ 1,758,000 | $ 64,000 |
Equity-based compensation expenses | $ 1,700,000 | $ 1,700,000 | ||
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 | 4,012,841 | ||
Value of shares available for grant | $ 50,000,000.0 | $ 50,000,000.0 | ||
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 | $ 24,100,000 | $ 24,100,000 | ||
Unrecognized compensation period | 2 years 10 months 13 days |
Equity-Based Compensation (LTIP TSR) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Distributions on the LTIP Unit | 10.00% |
Absolute TSR LTIP Units | Below Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of TSR Return | 12.00% |
Percentage of LTIP Units Earned | 0.00% |
Absolute TSR LTIP Units | Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of TSR Return | 12.00% |
Percentage of LTIP Units Earned | 25.00% |
Absolute TSR LTIP Units | Target | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of TSR Return | 18.00% |
Percentage of LTIP Units Earned | 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% |
Percentage of LTIP Units Earned | 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%) |
Percentage of LTIP Units Earned | 0.00% |
Relative TSR LTIP Units | Threshold | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of TSR Return | (600.00%) |
Percentage of LTIP Units Earned | 25.00% |
Relative TSR LTIP Units | Target | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Percentage of TSR Return | 0.00% |
Percentage of LTIP Units Earned | 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% |
Percentage of LTIP Units Earned | 100.00% |
Net Loss Per Share (Calculations for EPS) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Equity [Abstract] | ||||||
Net loss attributable to common stockholders | $ (12,288) | $ (4,809) | $ (24,362) | $ (15,220) | ||
Basic and diluted weighted average shares outstanding (in shares) | [1] | 12,772,176 | 12,749,456 | 12,757,376 | 12,748,674 | |
Basic and diluted net loss per share (in dollars per share) | [1] | $ (0.96) | $ (0.38) | $ (1.91) | $ (1.19) | |
|
Net Loss Per Share (Shares Excluded From Calculation) (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 89,770 | 71,645 | 77,394 | 71,645 |
Class A Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Shares outstanding (in shares) | 13,100 | 37 | 13,100 | 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) | 5,516 | 5,433 | 5,516 | 5,433 |
Unvested restricted shares | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 5,694 | 6,110 | 5,634 | 6,110 |
Class A Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total weighted-average anti-dilutive common share equivalents (in shares) | 6,285 | 37 | 2,135 | 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) | 34,173 | 65,498 | 54,980 | 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) | 43,618 | 0 | 14,645 | 0 |
Subsequent Events (Details) - $ / shares |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Oct. 01, 2020 |
Sep. 30, 2020 |
Sep. 30, 2020 |
|
Subsequent Event [Line Items] | |||
Distributions declared per common share (in dollars per share) | $ 0.04889 | $ 0.40 | |
Common Class A | |||
Subsequent Event [Line Items] | |||
Distributions declared per common share (in dollars per share) | $ 0.40 | ||
Subsequent event | Common Class A | |||
Subsequent Event [Line Items] | |||
Distributions declared per common share (in dollars per share) | $ 0.04889 | ||
Subsequent event | Common Class B | |||
Subsequent Event [Line Items] | |||
Distributions declared per common share (in dollars per share) | $ 0.04889 |
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