American Strategic Investment Co (NYC) 2023 Q3 法說會逐字稿

Good morning, and welcome to the American Strategic Investment Company's Third Quarter Earnings Call. (Operator Instructions) I would now turn today's call over to Curtis Parker, Senior Vice President. Please go ahead.

早安，歡迎參加美國戰略投資公司第三季財報電話會議。 （操作員指示）我現在將今天的電話轉給資深副總裁 Curtis Parker。請繼續。

Thank you. Good morning, everyone, and thank you for joining us for our third quarter 2023 earnings call. This event is also being webcast in the Investor Relations section of our website. Joining me today on the call to discuss the quarter's results are Michael Anderson, American Strategic Investment Company's Chief Executive Officer and Joe Marnikovic, the Chief Financial Officer.

謝謝。大家早安，感謝您參加我們的 2023 年第三季財報電話會議。該活動也在我們網站的投資者關係部分進行網路直播。今天與我一起參加電話討論本季業績的有美國戰略投資公司首席執行官邁克爾·安德森 (Michael Anderson) 和首席財務官喬·馬尼科維奇 (Joe Marnikovic)。

The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the Form 10-K filed for the year ended December 31, 2022, filed on March 16, 2023, and all subsequent SEC filings for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this conference call are only made as of the date of this call.

以下資訊包含前瞻性陳述，這些陳述存在風險和不確定性。如果這些風險或不確定性中的一項或多項成為現實，實際結果可能與前瞻性陳述明示或暗示的結果有重大差異。我們建議大家參閱我們向SEC 提交的文件，包括截至2022 年12 月31 日提交的10-K 表格、於2023 年3 月16 日提交的表格以及所有後續向SEC 提交的文件，以更詳細地討論可能導致這些差異。本次電話會議期間提供的任何前瞻性陳述僅截至本次電話會議之日作出。

As stated in our SEC filings, the company disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. Also, during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release, which is posted on our website at www.americanstrategicinvestment.com. Please also refer to our earnings release for more detailed information about what we consider to be implied investment-grade tenants, a term we will use throughout today's call.

正如我們在美國證券交易委員會提交的文件中所述，除法律要求外，該公司不承擔任何更新或修改這些前瞻性陳述的意圖或義務。此外，在今天的電話會議中，我們將討論非公認會計準則財務指標，我們認為這些指標有助於評估公司的財務表現。這些措施不應被孤立地考慮，也不應取代我們根據公認會計準則編制的財務表現。這些指標與最直接可比較的 GAAP 指標的調整可在我們的收益報告中找到，該報告發佈在我們的網站 www.americanstrategicinvestment.com 上。另請參閱我們的收益報告，以了解有關我們認為的隱含投資等級租戶的更多詳細信息，我們將在今天的電話會議中使用該術語。

I will now turn the call over to Michael Anderson, Chief Executive Officer. Please go ahead, Michael.

我現在將把電話轉給執行長邁克爾安德森 (Michael Anderson)。請繼續，邁克爾。

Thanks, Curtis. Good morning and thank you all for joining us today. Joe and I are very happy to be hosting our first American Strategic Investment Co. earnings call this morning to discuss the third-quarter results. Across our portfolio, we continue to realize the benefits of our ongoing leasing and tenant retention initiatives. Through the end of the third quarter, we have completed 10 new leases this year that have contributed to a 2.4% increase in occupancy to 85.1% across our portfolio, up from 82.7% at the end of 2022.

謝謝，柯蒂斯。早安，感謝大家今天加入我們。喬和我很高興今天早上主持我們的第一次美國戰略投資公司財報電話會議，討論第三季業績。在我們的投資組合中，我們繼續認識到我們正在進行的租賃和租戶保留計劃的好處。截至第三季末，我們今年已完成 10 個新租賃，使我們整個投資組合的入住率從 2022 年底的 82.7% 增長 2.4% 至 85.1%。

In addition to the leases we have completed, we have a forward leasing pipeline totalling almost 60,000 square feet rent. If all leases are executed on their contemplated terms would generate $2.5 million in straight-line rent. This forward leasing pipeline will also increase portfolio occupancy to 86.3% net of terminations, representing a 3.6% increase in occupancy since December 31, 2022. Our successful leasing volume, combined with ongoing expense management resulted in year-over-year increases in revenue, NOI, and adjusted EBITDA and improvements over the second quarter of 2023. We are beginning to see the benefit of our long-term focus on leasing through improved leasing spreads across the company and believe this will continue into 2024.

除了我們已完成的租賃外，我們還有總計近 60,000 平方英尺租金的遠期租賃管道。如果所有租賃均按預期條款執行，將產生 250 萬美元的直線租金。該遠期租賃管道還將把投資組合的入住率提高到淨終止率的86.3%，自2022 年12 月31 日以來入住率增加了3.6%。我們成功的租賃量，加上持續的費用管理，導致收入同比增長， NOI，調整後的 EBITDA 和 2023 年第二季度的改善。我們開始看到透過整個公司租賃利差的改善長期關注租賃的好處，並相信這種情況將持續到 2024 年。

Our portfolio weighted average remaining lease term was 6.6 years as over 40% of our leases extend beyond the year 2030 based on annualized straight-line rent, which we believe enhances the stability of the real estate we have. Of our top 10 tenants, 79% are investment grade or implied investment grade, showing the quality of our tenant roster. These tenants had a remaining lease term of 8.9 years, providing further stability in our portfolio.

我們的投資組合加權平均剩餘租賃期限為 6.6 年，根據年化直線租金計算，我們超過 40% 的租賃期限延長至 2030 年之後，我們相信這增強了我們擁有的房地產的穩定性。在我們的前 10 名租戶中，79% 為投資等級或隱含投資等級，顯示了我們租戶名冊的品質。這些租戶的剩餘租期為 8.9 年，為我們的投資組合提供了進一步的穩定性。

Our continued proactive asset management approach contributes to the long-term strength of our $828 million, 1.2 million square foot portfolio of New York City real estate. At the end of the third quarter, our portfolio consisted of eight office and retail assets, all located in New York City, primarily in Manhattan. We have built a New York City-centric portfolio, featuring a number of large investment-grade tenants, including Weill Cornell Medical, CVS and government agencies. We continue to focus our leasing efforts of securing tenants in resilient industries such as well-capitalized financial services companies and medical institutions.

我們持續的積極主動的資產管理方法有助於我們 8.28 億美元、120 萬平方英尺的紐約市房地產投資組合的長期實力。截至第三季末，我們的投資組合包括八個辦公室和零售資產，全部位於紐約市，主要位於曼哈頓。我們建立了以紐約市為中心的投資組合，擁有許多大型投資等級租戶，包括威爾康奈爾醫療、CVS 和政府機構。我們繼續專注於租賃工作，以確保資本充足的金融服務公司和醫療機構等有彈性產業的租戶。

Our core office properties are located in desirable submarkets with close proximity to major transportation hubs. As we continue to see a return to office, we believe we are well situated for continued leasing growth as a result of our close proximity to major transportation. The recent addition of service for the Long Island Railroad in Grand Central makes the Midtown South submarket a very desirable area for office leasing, which we believe will continue the positive momentum we are experiencing in leasing at 200 West 41st Street and 1140 Avenue of the Americas.

我們的核心辦公物業位於理想的子市場，靠近主要交通樞紐。隨著我們繼續看到辦公室的回歸，我們相信，由於我們靠近主要交通設施，我們處於有利地位，可以實現租賃的持續成長。最近在中央車站增加了長島鐵路的服務，使中城南子市場成為非常理想的辦公室租賃區域，我們相信這將繼續我們在西 41 街 200 號和美洲大道 1140 號的租賃方面所經歷的積極勢頭。

We also continue to proactively monetize our portfolio by selling noncore properties. To that point, subsequent to quarter end, we disposed of the Hit Factory, a small unoccupied asset for which we have long been exploring strategic options. Not only did this sale generate $4.2 million in cash proceeds for the company, but importantly, it eliminated annual carrying costs of approximately $300,000 associated with owning a vacant property. While this asset was small in terms of our overall portfolio, our team was able to find a suitable buyer and was able to consummate this transaction in a challenging New York City commercial real estate market, illustrating our relentless effort when pursuing transactions that we believe will strategically benefit the company and its shareholders.

我們也繼續透過出售非核心資產積極地將我們的投資組合貨幣化。到那時，在季度末之後，我們處置了Hit Factory，這是我們長期以來一直在探索策略選擇的小型閒置資產。這次出售不僅為該公司帶來了 420 萬美元的現金收益，而且重要的是，它消除了與擁有空置房產相關的每年約 30 萬美元的持有成本。雖然該資產在我們的整體投資組合中規模較小，但我們的團隊能夠找到合適的買家，並能夠在充滿挑戰的紐約市商業房地產市場中完成這筆交易，這說明了我們在追求我們相信能夠實現的交易時所付出的不懈努力。為公司及其股東帶來策略利益。

Touching on the quarterly results before Joe discusses them in more detail, the efforts of our asset and property management teams resulted in an 18% increase in adjusted EBITDA and cash NOI growth of 4.9% compared to the prior year. The growth was achieved through a reduction in G&A and operating expenses, coupled with our ongoing leasing success. Compared to the second quarter, adjusted EBITDA grew by 14% and core FFO increased by $0.26 per share.

在 Joe 更詳細地討論季度業績之前，我們的資產和物業管理團隊的努力導致調整後 EBITDA 增長 18%，現金 NOI 增長 4.9%，與前一年相比。這一增長是透過減少一般管理費用和營運費用以及我們持續的租賃成功來實現的。與第二季相比，調整後 EBITDA 成長 14%，核心 FFO 每股成長 0.26 美元。

Our third quarter results once again demonstrated the effectiveness of our consistent focus on portfolio management. Our leasing success this year has driven consistent incremental improvement in many of our key metrics. As a result of this leasing momentum and our continued focus on proactive expense management, we expect losses to narrow again in the fourth quarter and core FFO to turn positive in 2024 as pipeline leases commence and momentum continues.

我們第三季的業績再次證明了我們一貫注重投資組合管理的有效性。今年我們租賃業務的成功推動了我們許多關鍵指標的不斷進步。由於這種租賃勢頭以及我們對主動費用管理的持續關注，我們預計第四季度虧損將再次收窄，隨著管道租賃的開始和勢頭的持續，核心 FFO 將在 2024 年轉正。

We are committed to strengthening our existing portfolio of real estate assets as we explore additional income-generating investments. In recent years, we have taken advantage of opportunities to invest in the long-term future of our portfolio, and we believe that expanding the scope of our assets is the next step forward for the company.

我們致力於加強現有的房地產資產組合，同時探索更多創收投資。近年來，我們利用機會對投資組合的長期未來進行投資，我們相信擴大資產範圍是公司的下一步。

With that, I'll turn it over to Joe Marnikovic to go over the third quarter results. Joe?

接下來，我將把它交給喬·馬尼科維奇（Joe Marnikovic）檢查第三季度的業績。喬？

Thank you, Michael. Third quarter 2020 revenue was $16 million, compared to $15.9 million in the third quarter of 2022. The company's third quarter GAAP net loss attributable to common stockholders was $9.4 million, compared to a net loss of $11.1 million in the third quarter of 2022, representing a year-over-year improvement of $1.7 million. GAAP net loss also improved compared to the second quarter of 2023, which was $10.9 million.

謝謝你，麥可。 2020 年第三季營收為1,600 萬美元，而2022 年第三季為1,590 萬美元。該公司第三季GAAP 歸屬於普通股股東的淨虧損為940 萬美元，而2022 年第三季淨虧損為1,110 萬美元，相當於年增 170 萬美元。與 2023 年第二季的 1,090 萬美元相比，GAAP 淨虧損也有所改善。

For the third quarter of 2023, adjusted EBITDA increased by $0.5 million or 18% to $3.4 million, compared to $2.9 million in 2022 and up 14% compared to second quarter 2023's adjusted EBITDA of $3 million. Cash net operating income increased by $0.3 million or 4.9% to $6.5 million compared to $6.2 million in the third quarter of 2022.

2023 年第三季度，調整後 EBITDA 成長 50 萬美元，即 18%，達到 340 萬美元，而 2022 年為 290 萬美元，與 2023 年第二季調整後 EBITDA 300 萬美元相比，成長 14%。現金淨營業收入增加 30 萬美元，即 4.9%，達到 650 萬美元，而 2022 年第三季為 620 萬美元。

While we are no longer a REIT, our portfolio remains unchanged, and we will, therefore, continue to provide comparable FFO metrics for the time being. Our FFO attributable to common stockholders was a negative $2.5 million, compared to a negative $4.1 million in the third quarter of 2022 and negative $4 million in the second quarter of this year. Core FFO improved to negative $1.1 million or negative $0.48 per share, compared to negative $1.12 in the third quarter of 2022 and negative $0.74 in the second quarter of 2023.

雖然我們不再是房地產投資信託基金，但我們的投資組合保持不變，因此我們將暫時繼續提供可比較的 FFO 指標。我們歸屬於普通股股東的 FFO 為負 250 萬美元，而 2022 年第三季為負 410 萬美元，今年第二季為負 400 萬美元。核心 FFO 改善至負 110 萬美元，即每股負 0.48 美元，而 2022 年第三季為負 1.12 美元，2023 年第二季為負 0.74 美元。

As always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release and quarterly supplemental and on our website. At quarter end, we had a relatively conservative balance sheet based on our net leverage of 42%, a weighted average interest rate of 4.4% and 3.4 years of weighted average debt maturity, not maturing this year. As we've previously discussed, all of our debt is fixed rate or swapped to fixed rate after we locked in interest rates while they were broadly at historic lows.

與往常一樣，公認會計準則淨利潤與非公認會計準則指標的對帳可以在我們的收益發布和季度補充以及我們的網站上找到。截至季末，我們的資產負債表相對保守，淨槓桿比率為 42%，加權平均利率為 4.4%，加權平均負債期限為 3.4 年，今年尚未到期。正如我們之前所討論的，我們所有的債務都是固定利率，或者在我們鎖定利率後轉換為固定利率，而利率普遍處於歷史低點。

I'll now turn the call back to Michael for some closing remarks.

現在我將把電話轉回給邁克爾，讓他做一些結束語。

Thanks, Joe, and thank you all for joining us on our first ASIC earnings call. The adjusted EBITDA and cash NOI growth we accomplished this quarter can be attributed to our ongoing commitment to portfolio management and our focus on maximizing the value of the properties that we have.

謝謝 Joe，也謝謝大家參加我們的第一次 ASIC 財報電話會議。我們本季實現的調整後 EBITDA 和現金 NOI 成長可歸因於我們對投資組合管理的持續承諾以及我們對最大化我們擁有的房產價值的關注。

As we look to 2024 and the year of positive performance, we continue to focus on the proactive asset management of our portfolio that has grown our occupancy by 2.4% this year, while also looking towards the growth of ASIC through expanded investment opportunities that we believe will be accretive.

展望 2024 年和積極績效的一年，我們繼續專注於投資組合的主動資產管理，今年我們的入住率增長了 2.4%，同時也透過我們認為擴大的投資機會來期待 ASIC 的增長將會有增值作用。

Operator, please open the line for questions.

接線員，請開通提問線。

(Operator Instructions) Bryan Maher, B. Riley Securities.

（操作員指示）Bryan Maher，B. Riley Securities。

Great. Thank you. And welcome, Michael and Joseph. Look forward to working with you on this name. Just a few for me this morning, I think, Michael, you talked about the forward leasing pipeline and the incremental $2.5 million of SLR. Can you give us any indication as to what the timing of that is? I mean, is it lumpy all going to come in at once? Or do you expect that to happen over the next two or three quarters?

偉大的。謝謝。歡迎邁克爾和約瑟夫。期待與您就這個名字進行合作。今天早上我想談談幾個問題，邁克爾，您談到了遠期租賃管道和增量 250 萬美元的 SLR。您能否告訴我們具體的時間安排？我的意思是，所有的塊狀物都會立刻進來嗎？或者您預計這種情況會在未來兩三個季度發生嗎？

Sure Bryan, and thanks for joining us this morning. I'm happy to be speaking with you and with our investors for the first time this quarter. As it relates to the forward leasing pipeline, I believe that is made up of five separate transactions, all of which are in active negotiations for definitive leases and license agreements. So, we would expect those to be executed likely this year and start to see those come online over the following months.

當然，布萊恩，感謝您今天早上加入我們。我很高興本季首次與您和我們的投資者交談。由於它與遠期租賃管道相關，我認為它由五項單獨的交易組成，所有這些交易都在積極談判最終租賃和許可協議。因此，我們預計這些可能會在今年執行，並在接下來的幾個月內開始看到它們上線。

Okay. And then it doesn't seem like you really did anything in the third quarter. Is that a fair characterization? Or did you actually have some tenancy, small -- may it be come in and come out or was just no movement in the third quarter?

好的。然後看起來你在第三季並沒有真正做任何事情。這是一個公平的描述嗎？或者您實際上是否有一些小型租賃——可能會進來又出去，或者只是在第三季度沒有變動？

I believe it was a quiet quarter in terms of new leases. We had one new lease signed. It was a former subtenant that went direct in a new space at one of our properties, 123 William Street and then another license agreement was signed during the quarter. But we do -- we saw a lot of uptick in traffic and interest in the quarter, which is what has led to the current leasing pipeline.

我認為就新租賃而言，這是一個安靜的季度。我們簽署了一份新租約。這是一個前轉租人，直接租用了我們威廉街 123 號房產的一個新空間，然後在本季度簽署了另一份許可協議。但我們確實看到了本季的流量和興趣大幅上升，這就是導致當前租賃管道的原因。

Okay. And then from a modelling standpoint, and I think, Joseph, you touched upon this, eventually converting over to an EPS and adjusted EPS number or maybe adding that, do you have any thoughts on the timing of when we might see that additional disclosure?

好的。然後從建模的角度來看，我認為約瑟夫，您談到了這一點，最終轉換為每股收益並調整了每股收益數字，或者可能添加這一點，您對我們何時可能看到額外披露的時間有什麼想法嗎？

If we do -- when we do, Brian, if it would be in 2024 that we did mention that even though we're no longer a REIT that we will still -- we still feel the core FFO metrics are important for the valuation of the company and certainly for the rest of 2023. We'll maintain those metrics.

如果我們這樣做——布萊恩，如果我們在 2024 年確實提到，即使我們不再是房地產投資信託基金，我們仍然會——我們仍然認為核心 FFO 指標對於估值很重要公司，當然還有2023年剩餘時間。我們將維持這些指標。

Okay. And just two more for me. G&A came in, I think it was around $2 million -- we have been looking for like $2.5 million. Is $2 million the new run rate? Or was there some anomaly there in the quarter?

好的。對我來說還有兩個。 G&A 進來了，我想大約是 200 萬美元——我們一直在尋找 250 萬美元左右。 200 萬美元是新的營運費用嗎？還是本季出現了一些異常狀況？

We did experience some savings there, Brian, and it's really related to the changeover in REIT to a C corp, where the potential tax impact from converting to a C corp appears to have less bearings on earnings than initially thought.

布萊恩，我們確實在那裡節省了一些錢，這確實與房地產投資信託基金向 C 型公司的轉變有關，轉換為 C 型公司的潛在稅收影響似乎對收益的影響比最初想像的要小。

Okay. And just last for me, maybe for Michael. You did not speak much about in your prepared comments, the potential to buy assets outside of New York or maybe in a different sector. Has there been any change in thought process there? Or what are the thoughts on what you buy and where you buy it, should you make acquisitions?

好的。最後對我來說，也許對麥可來說。您在準備好的評論中沒有過多談論購買紐約以外或其他行業資產的潛力。那裡的思考過程有什麼改變嗎？或者你對購買什麼、在哪裡購買有什麼想法，是否應該進行收購？

Sure, Brian. We do actively monitor acquisition opportunities. We are looking at some opportunities within our own portfolio in terms of leasing and growth there. And I think that that's going to continue to be our immediate focus. But as we continue to grow and maximize value within the assets already owned, and we will begin looking at other acquisition opportunities, and we'll be able to share more as those opportunities present themselves.

當然，布萊恩。我們確實積極監控收購機會。我們正在我們自己的投資組合中尋找一些在租賃和成長方面的機會。我認為這將繼續成為我們目前的重點。但隨著我們不斷成長並最大化已擁有資產的價值，我們將開始尋找其他收購機會，當這些機會出現時，我們將能夠分享更多。

Okay. Thank you. That's all for me.

好的。謝謝。這就是我的全部。

There are no further questions at this time. I will now turn the call back over to Michael Anderson for any closing remarks.

目前沒有其他問題。現在，我將把電話轉回給邁克爾安德森，讓其發表結束語。

Thank you, operator. We appreciate everyone joining us today. One item that was not included in our opening remarks, we are actively monitoring, as I imagine, many of you are, the WeWork bankruptcy. For everyone's information, we have no exposure to WeWork. So, we're very pleased that, that will not impact any of our assets. And with that said, we appreciate you joining us today and hope you all have a great day. Thank you.

謝謝你，接線生。我們感謝今天加入我們的所有人。我們的開場白中沒有包含一項內容，我們正在積極監控 WeWork 破產案，我想你們中的許多人也是如此。僅供大家參考，我們沒有接觸過 WeWork。因此，我們非常高興這不會影響我們的任何資產。話雖如此，我們感謝您今天加入我們，並希望大家度過愉快的一天。謝謝。

This concludes today's conference call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連線。