American Strategic Investment Co. (NYC)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was operationally mixed: revenue declined year over year due to the prior sale of 9 Times Square, adjusted EBITDA turned negative, but occupancy improved 120 bps q/q to 82.0% .
• No formal quantitative guidance was issued; management reiterated portfolio optimization via asset sales (actively marketing 123 William Street and 196 Orchard) and redeployment into higher-yielding assets to reduce leverage and diversify cash flows .
• Balance sheet remained fully fixed-rate (except one variable loan) with a 4.4% weighted-average interest rate; net debt/GAV rose slightly to 57.9% (from 56.9% in Q4) as cash declined post year-end, while weighted-average debt maturity shortened to 2.3 years .
• Near-term stock catalysts: execution on announced asset sale processes (pricing and timing), leasing conversions from pipeline, and updates on capital deployment into higher-return opportunities (and any NYSE compliance developments) .

What Went Well and What Went Wrong

What Went Well

• Occupancy increased 120 bps q/q to 82.0% with a WALT of 5.4 years; CEO emphasized active leasing and renewals driving the improvement: “We remain focused on leasing up available space… demonstrated by the 120 basis point occupancy increase” .
• Tenant quality remains solid: 77% of annualized straight-line rent from top 10 tenants is investment grade or implied investment grade; WALT for top 10 is 7.8 years as of March 31, 2025 .
• Debt profile is largely fixed-rate with a 4.4% weighted-average interest rate; balance sheet metrics disclosed clearly with interest coverage tracked via non-GAAP reconciliation .

What Went Wrong

• Revenue fell to $12.3M from $15.5M YoY, principally due to the sale of 9 Times Square; adjusted EBITDA swung to -$0.8M (from $2.9M YoY) and Cash NOI decreased q/q to $4.2M (from $6.4M) .
• Net loss widened YoY to -$8.6M (EPS -$3.39 vs -$3.28), reflecting lower revenue and decreased operating leverage post asset sale .
• Net debt/GAV increased to 57.9% as cash fell sequentially and WADM shortened to 2.3 years, modestly tightening the maturity profile versus Q4 .

Financial Results

Quarterly Trend (oldest → newest)

Key comparisons:

• Revenue: down 13.1% q/q and 20.5% vs Q1 2024 on asset sale impact .
• Adjusted EBITDA: turned negative from $1.25M q/q and $2.93M YoY; Cash NOI fell q/q by ~$2.2M (≈34%), a notable deterioration in property-level cash performance even as occupancy improved q/q .
• EPS: loss widened to -$3.39 from -$2.60 q/q and -$3.28 YoY .

YoY Comparison (Q1 2024 vs Q1 2025)

Drivers: lower revenue from the sale of 9 Times Square and weaker operating leverage; management explicitly cites asset sale as primary driver of revenue decline .

Segment/Portfolio Mix (Annualized Straight-Line Rent distribution)

KPIs and Balance Sheet

Guidance Changes

Note: No quantitative guidance ranges were issued in Q1 2025 materials or call .

Earnings Call Themes & Trends

Management Commentary

• CEO (Q1): “We remain focused on leasing up available space… demonstrated by the 120 basis point occupancy increase… Our focus remains on opportunistically divesting certain Manhattan assets consistent with our initiative to diversify our portfolio by acquiring higher-yielding assets.”
• CEO (Q1 call): “We are actively marketing 123 William Street and 196 Orchard for sale… use the net proceeds… retire debt and diversify our portfolio into higher-yielding assets.”
• CFO (Q1 call): “Revenue was $12.3 million… principally due to the sale of 9 Times Square… adjusted EBITDA was negative $0.8 million… Cash NOI was $4.2 million.”
• Prior CEO (Q4 call): “We completed the disposition of 9 Times Square for $63.5 million… net proceeds of approximately $13.5 million… relaunched the marketing efforts to sell 123 William Street and 196 Orchard.”

Q&A Highlights

• Q3 2024: Buyer interest and sale process details—brokers engaged; 196 Orchard attracting family offices; 123 William institutional interest; leasing progress expected to drive value .
• Redeployment strategy: looking at iconic real estate with operating business mix in New England; REIT status termination provides flexibility to own/operate underlying businesses .
• Leasing trends: return-to-office, conversion of subtenants to direct leases, expansion of tenant footprints in target submarkets .

Estimates Context

• Wall Street consensus (S&P Global) coverage for Q1 2025 EPS and revenue was not available; therefore, formal “vs. estimates” comparisons cannot be made. Based on S&P Global data retrieval, no consensus EPS/revenue was returned for Q1 2025.
• Implication: In absence of consensus anchors, investor focus should shift to sequential/YoY trends and execution milestones (asset sales, lease-up, cash NOI stabilization).

*Estimates availability and consensus sourced from S&P Global; consensus coverage unavailable for this period.

Key Takeaways for Investors

• Asset sale execution is pivotal: pricing and timing of 123 William/196 Orchard dispositions will drive leverage reduction and capital redeployment; monitor announcements and closing schedules .
• Leasing momentum is a near-term stabilizer: 120 bps occupancy gain q/q with expected Q2 closures supports cash NOI recovery, though Q1 property-level cash performance was weak; watch conversion of pipeline into signed leases .
• Balance sheet risk contained but maturities shortened: fixed-rate structure at 4.4% is favorable, yet WADM dropped to 2.3 years—refinancing and sale proceeds deployment are critical in 2025 .
• Earnings power impacted by prior asset sale: revenue/Adjusted EBITDA declines reflect portfolio resizing; plan to diversify into higher-yielding assets is key to rebuilding run-rate cash generation .
• Tenant quality remains a buffer: 77% IG/implied IG among top tenants with long WALT supports rent durability despite macro and NYC office headwinds .
• Trading setup: stock likely reacts to concrete milestones—signed LOIs, executed dispositions, and measurable cash NOI uplift; absent guidance/consensus, quarter-to-quarter operational prints and strategic updates drive narrative -.
• Medium-term thesis: transition from Manhattan-centric office/retail into diversified, higher-return assets (potentially with operating components) post REIT status change could reduce cyclicality and improve cash yields if executed prudently .

Bolded highlights:

• Revenue down ~13% q/q and ~20% YoY; Adjusted EBITDA turned negative; Cash NOI fell ~34% q/q despite occupancy increase .
• Occupancy improved 120 bps q/q to 82.0%—a positive operational signal .