New York City REIT Delivers Q1 Earnings Beat

Real estate investment trust New York City REIT, Inc. (NYC) posted a better-than-expected first-quarter performance on the bottom line. NYC owns commercial properties within the five boroughs of New York City.

Revenue increased by $ 500,000 year-over-year to $ 15.6 million, in line with estimates. Adjusted funds from operations (AFFO) at – $ 0.15 came in narrower than consensus by $ 0.09. Notably, the net loss of the company decreased to $ 11.1 million from $ 13.5 million in the year-ago period.

Further, funds from operations witnessed an improvement of $ 900,000 to – $ 2 million from – $ 2.9 million for the year-ago period. While portfolio occupancy increased to 84.4% from 82.9%, total returns of the company, including dividends, were 71.8%.

Management Weighs In

The CEO of the company, Michael Weil, commented, “With year-over-year growth in revenue, EBITDA, and core FFO and a strong balance sheet with 100% fixed-rate debt, we are well-positioned to continue to build on that momentum as a pure-play NYC portfolio this year. ”

The company’s portfolio, including eight properties with 1.2 million rentable square feet, is 84.4% leased and has 71% annualized straight-line rent from the top ten tenants.

At the end of March, it had a net debt of $ 389.2 million at a weighted-average fixed rate of 4.4%.

Analyst’s Take

B.Rile Financial’s Bryan Maher has reiterated a Hold rating on the stock and increased the price target to $ 11 from $ 10, implying a potential upside of 8% for the stock, at the time of writing.

Potential Risks

Let’s have a look at the potential avenues where the company faces risks. TipRanks data highlights that NYC faces a total of 76 risks, with over half the risks (57%) falling under the Finance & Corporate category, followed by Legal & Regulatory (17%).

Closing Note

While shares of the company have declined 19.1% over the past month, this first-quarter performance should shore up investor confidence. Further, a portfolio of prime commercial real estate provides the company with a distinct advantage.

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