American Strategic Investment Co. Reports $140.6 Million Net Loss for Fiscal Year 2024

American Strategic Investment Co. (formerly New York City REIT, Inc.) reported a net loss attributable to common stockholders of $140.6 million for the fiscal year ending December 31, 2024, compared to a net loss of $105.9 million in the previous year. Revenue from tenants decreased by $1.1 million to $61.6 million, primarily due to bad debt expenses linked to a lease renegotiation at 123 William Street. Operating expenses rose to $182.5 million, up from $149.8 million in 2023, largely driven by a significant increase in impairment charges, which totaled $112.5 million for the year, compared to $66.6 million in 2023.

The company’s portfolio consisted of six properties, totaling approximately 1 million rentable square feet, with an overall occupancy rate of 80.8% as of December 31, 2024, down from 86.7% the previous year. The decline in occupancy was attributed to lease expirations and tenant turnover, particularly at 400 E. 67th Street, which saw occupancy drop to 44.3% from 100%. The company has focused on increasing occupancy through tenant incentives, including free rent periods and tenant improvements, but faces ongoing challenges in the New York City real estate market, which has been slow to recover from the impacts of the COVID-19 pandemic.

In a strategic shift, American Strategic Investment Co. terminated its REIT election effective January 1, 2023, allowing for a broader investment strategy that includes non-REIT qualifying assets. This change was part of a broader effort to diversify income sources and reduce reliance on a single asset class. The company sold the 9 Times Square property for $63.5 million in December 2024, a move aimed at reducing leverage and generating capital for diversification efforts. The sale was part of a strategy to reposition its portfolio amid ongoing market challenges.

As of December 31, 2024, the company had cash and cash equivalents of $9.8 million, up from $5.3 million a year earlier, but still faced liquidity challenges due to cash trap events triggered by breaches of mortgage covenants on several properties. The company is currently operating under cash traps at three properties, which restrict access to excess cash flows. The management has indicated that future liquidity will depend on the successful execution of leasing initiatives and the overall recovery of the New York City real estate market.

Looking ahead, American Strategic Investment Co. plans to continue focusing on increasing occupancy and managing expenses while navigating the challenges posed by the current economic environment. The company has suspended its dividend policy since March 2022 and will reevaluate its ability to resume dividends based on future financial performance and cash flow generation. The ongoing geopolitical tensions and inflationary pressures may also impact the company's operations and financial results in the coming periods.