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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