Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Adjusted EBITDA grew by nearly 50% compared to the second quarter of 2023, driven by reduced G&A and operating expenses and successful leasing activities.
- Occupancy increased by 80 basis points to 85.9% compared to the same quarter in 2023.
- The company signed a definitive agreement to sell a property at Nine Times Square for $63.5 million, which is expected to reduce leverage and strengthen the cash position.
- The portfolio's weighted average remaining lease term is 6.3 years, with 45% of leases extending beyond 2030, enhancing stability.
- 81% of the top 10 tenants are investment grade or implied investment grade, indicating a strong tenant roster.
Negative Points
- The company incurred a non-cash impairment of $84.7 million due to the sale of Nine Times Square, impacting net loss.
- Revenue remained flat at $15.8 million compared to the second quarter of 2023, indicating no growth in top-line performance.
- GAAP net loss attributable to common stockholders increased significantly to $91.9 million from $10.9 million in the second quarter of 2023.
- Cash net operating income was nearly flat at $7.4 million compared to $7.5 million in the second quarter of 2023.
- The company has not yet accepted offers for the sale of 123 Williams Street and 196 Orchard, indicating potential delays in asset divestment.
Q & A Highlights
Q: Can you provide more details on the redeployment of proceeds from the sale of 123 William and 196 Orchard?
A: Michael Anderson, CEO: We don't have specific assets identified yet, but we are considering opportunities in the New England region and real estate coupled with operating business type investments. These fit well within our portfolio and skill set.
Q: Is there any progress on the sale of 123 William and 196 Orchard?
A: Michael Anderson, CEO: We have started receiving offers and ramped up the marketing process. It's likely that both properties will be under contract by year-end.
Q: Regarding Nine Times Square, is there a non-refundable deposit from the buyer?
A: Michael Anderson, CEO: Yes, the buyer has put up approximately 10% of the purchase price as a non-refundable deposit, and we expect to close the transaction by mid-fourth quarter.
Q: Can you comment on the leasing activity at 123 William and 1140?
A: Michael Anderson, CEO: At 123 William, we see interest from existing tenants looking to expand. At 1140, we have ongoing leasing transactions and continue to see a lot of traffic.
Q: Are you seeing signs of increased interest in office leasing, particularly in New York?
A: Michael Anderson, CEO: Yes, there's more foot traffic and return-to-work policies have become standard. We're seeing tenants needing additional space and some pricing is starting to favor landlords compared to six months ago.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
