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Subsequent Events
 6 Months Ended
Jun. 30, 2022
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Quarterly Dividend
On July 1, 2022, the Company announced that it suspended its policy regarding dividends paid on its Class A common stock, beginning with the dividend that would have been payable for the quarter ended June 30, 2022.
Side Letter to the Advisory Agreement
In accordance with the Side Letter, the Advisor reinvested base management fees, aggregating $0.5 million, in shares of the Company’s Class A common stock in July 2022. As a result, the Company issued 47,393 shares of its Class A common stock using the $10.55 minimum price in July 2022 in connection with the monthly base management fee earned by the Advisor (see Note 9 — Related Party Transactions and Arrangements).
August 2022 Asset Management Fees
In August 2022, the compensation committee of the Company’s board of directors approved the issuance 124,685 shares of the Company’s Class A common stock in lieu of cash for the August 2022 management fee using the 10-day average price of $4.01 per share which was greater than the minimum price under NYSE rules. This issuance was completed at the Advisor’s request as permitted under Advisory Agreement.
New Leases - 400 E. 67th Street - Laurel Condominium/200 Riverside Boulevard
In July 2022, the Company terminated the six-month license agreements which were set to expire in October 2022 at the parking garages at its 400 E. 67th Street - Laurel Condominium/200 Riverside Boulevard properties and commenced new leases that expire in June 2037.
Cash Management Plan
To potentially enhance the Company’s cash resources to fund operating and capital needs, Bellevue has expressed a desire to invest additional capital in the Company. Although no agreement exists, the Shares would likely be purchased by Bellevue from time to time at its discretion directly from the Company through block trades executed under the Company’s Common Stock ATM Program. The Company’s board of directors has authorized the issuance of up to 1,000,000 shares its Class A common stock for these purposes although there is no assurance as to the number of shares of the Company’s Class A common stock, if any, that Bellevue may seek to purchase. The Advisor and Property Manager likewise have told the Company that one or both of them, each in their sole discretion, may be willing to accept shares of the Company’s Class A common stock in lieu of cash as payment for certain fees or expense reimbursements. To facilitate the potential investments, Bellevue, the Advisor and the Property Manager (referred to collectively as the “AR Parties”) proposed, and the Company agreed, to amend the Waiver Agreements as discussed below and the Company decided to lower the ownership limit applicable to all other stockholders as discussed below.
As part of the discussions, the Company advised the AR Parties, that any shares of its Class A common stock purchased directly from the Company by Bellevue through block trades executed under the Company’s Common Stock ATM Program would be sold at a per share price equal to the greater of (i) the closing market price of the shares on the NYSE on the most recent trading day prior to an issuance or (ii) the “Minimum Price” as defined in Section 312.04(h) of the Listed Company Manual; provided, however, that the Company would not sell any shares of its Class A common stock to Bellevue if doing so would otherwise require the Company to seek shareholder approval under Section 312 of the Listed Company Manual or any subsequent rules and regulations of the NYSE. Additionally, the Company agreed to (1) amend the Charter Ownership Limit Waiver Agreements to (i) immediately increase the Excepted Holder Limit (as defined therein) to 21%, and (ii) prospectively increase the Excepted Holder Limit to up to 25% if the Company is advised by Proskauer Rose LLP, outside counsel to the
Company, that Proskauer Rose LLP is prepared to render an opinion that, among other things, the Company’s actual and proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a real estate investment trust under Sections 856 through 860 of the Code notwithstanding the increase in the Excepted Holder Limit to up to 25%, there being no assurance, however, that an opinion will be rendered (the “Charter Waiver Agreement Amendments”), and (2) amend the Rights Plan Waiver Agreement to implement corresponding changes. Concurrent with these amendments, the Company’s board of directors reduced the Series Limit and the Overall Limit (each as defined in the Charter Ownership Limit Waiver Agreements) to 6% for all stockholders of the Company that are not otherwise Bellevue, the Advisor, their respective affiliates or persons who would be treated as Beneficially Owning or Constructively Owning (each as defined in the Company’s charter) shares of the Company’s Class A common stock held by either or both of Bellevue and the Advisor (the “Excluded Persons”). As of the date of this Quarterly Report on Form 10-Q, the Excluded Persons owned 13.7% of the outstanding Class A common shares in the aggregate, which includes Class A common shares issued to the Advisor in July 2022 pursuant to the Side Letter and Shares issued to the Advisor in August 2022 in lieu of cash payments for advisory fees.
The Company also advised the AR Parties that to the extent that the Advisor or the Property Manager decided to accept shares of its Class A common stock in lieu of cash payments for fees or the reimbursement of expenses, the Company would not issue shares of its Class A common stock exceeding the number permitted to be Beneficially Owned or Constructively Owned by the Excluded Persons pursuant to the Charter Waiver Agreement Amendments (as may be amended from time to time) and any issuance would be at a per share price equal to the greater of (i) the price as determined in accordance with Section 10(c)(iii) of the Advisory Agreement or (ii) the Minimum Price; provided, that no issuance would be permitted if the issuance of shares of Class A common stock in lieu of fees due to the Advisor or the Property Manager, as applicable, would not be permitted under that certain 2020 Advisor Omnibus Incentive Compensation Plan of the Company (the “Advisor Plan”); provided further that, in the event that any shares of the Company’s Class A common stock to be issued in lieu of cash for reimbursement of operating expenses or in lieu of advisory or property management fees are not so issuable under the Advisor Plan, the Company may issue shares of its Class A common stock but only after complying with all NYSE requirements including, but not limited to, the filing with, and approval by, the NYSE of a supplemental listing application or applications, as the case may be, and only if the issuance would not otherwise require the Company to seek shareholder approval under Section 312 of the Listed Company Manual or any subsequent rules and regulations of the NYSE.