PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents American Strategic Investment Co.'s unaudited consolidated financial statements and detailed notes for Q2 2025 and FY 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) | ASSETS (In thousands) | June 30, 2025 | December 31, 2024 | | :---------------------- | :------------ | :---------------- | | Total real estate investments, net | $362,030 | $398,759 | | Cash and cash equivalents | $5,313 | $9,776 | | Restricted cash | $7,525 | $9,159 | | Total assets | $463,994 | $507,066 | | LIABILITIES AND STOCKHOLDERS' EQUITY (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------------- | :------------ | :---------------- | | Mortgage notes payable, net | $348,223 | $347,384 | | Total liabilities | $428,476 | $421,480 | | Total equity | $35,518 | $85,586 | | Total liabilities and equity | $463,994 | $507,066 | - Total assets decreased by **$43.072 million** from December 31, 2024, to June 30, 2025, primarily driven by a reduction in net real estate investments and cash[10](index=10&type=chunk) - **Total equity** significantly decreased by **$50.068 million**, from **$85.586 million** to **$35.518 million**, indicating substantial losses or distributions exceeding earnings[10](index=10&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) | Metric (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue from tenants | $12,222 | $15,754 | $24,530 | $31,235 | | Total operating expenses | $46,036 | $102,413 | $62,859 | $120,814 | | Operating loss | $(33,814) | $(86,659) | $(38,329) | $(89,579) | | Interest expense | $(7,850) | $(5,201) | $(11,933) | $(9,898) | | Net loss | $(41,660) | $(91,851) | $(50,252) | $(99,459) | | Net loss per share (Basic and Diluted) | $(16.39) | $(36.48) | $(19.80) | $(41.09) | - **Net loss significantly improved** for both the three and six months ended June 30, 2025, compared to the same periods in 2024, primarily due to a substantial decrease in impairment of real estate investments[11](index=11&type=chunk) - **Revenue from tenants decreased by 22.4%** for the three months and **21.5%** for the six months ended June 30, 2025, year-over-year[11](index=11&type=chunk) - **Interest expense increased by 50.9%** for the three months and **20.6%** for the six months ended June 30, 2025, year-over-year[11](index=11&type=chunk) [Consolidated Statement of Changes in Equity](index=5&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) | Equity Component (In thousands) | Balance, Dec 31, 2024 | Equity-based compensation | Net loss | Balance, Jun 30, 2025 | | :------------------------------ | :-------------------- | :------------------------ | :------- | :-------------------- | | Total Stockholders' Equity | $85,586 | $184 | $(50,252) | $35,518 | | Equity Component (In thousands) | Balance, Dec 31, 2023 | Common stock issued to Advisor | Equity-based compensation | Net loss | Other comprehensive loss | Balance, Jun 30, 2024 | | :------------------------------ | :-------------------- | :----------------------------- | :------------------------ | :------- | :----------------------- | :-------------------- | | Total Stockholders' Equity | $224,794 | $1,610 | $240 | $(99,459) | $(406) | $126,779 | - **Total stockholders' equity decreased significantly** from **$85.586 million** at December 31, 2024, to **$35.518 million** at June 30, 2025, primarily due to the net loss incurred[14](index=14&type=chunk) - In the six months ended June 30, 2024, common stock was issued to the Advisor in lieu of cash for **$1.610 million**, which did not occur in the same period of 2025[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Activity (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $(5,539) | $739 | | Net cash used in investing activities | $(558) | $(568) | | Net cash (used in) provided by financing activities | $0 | $150 | | Net change in cash, cash equivalents and restricted cash | $(6,097) | $321 | | Cash, cash equivalents and restricted cash, end of period | $12,838 | $13,129 | - The company experienced a **significant shift from positive to negative operating cash flow**, with **net cash used in operating activities totaling $(5.539) million** for the six months ended June 30, 2025, compared to **$739 thousand** provided in the prior year[20](index=20&type=chunk) - Cash, cash equivalents, and restricted cash **decreased by $6.097 million** in the first half of 2025, contrasting with an **increase of $321 thousand** in the same period of 2024[20](index=20&type=chunk) [Note 1 — Organization](index=8&type=section&id=Note%201%20%E2%80%94%20Organization) - American Strategic Investment Co. is an externally managed company owning a portfolio of **six commercial real estate properties**, primarily office and retail spaces, in New York City, totaling **1.0 million rentable square feet** as of June 30, 2025[22](index=22&type=chunk) - The company's day-to-day operations are managed by New York City Advisors, LLC (the "Advisor") and New York City Properties, LLC (the "Property Manager"), both under common control with AR Global Investments, LLC, receiving compensation and reimbursements for their services[23](index=23&type=chunk) [Note 2 — Going Concern](index=8&type=section&id=Note%202%20%E2%80%94%20Going%20Concern) - The Company incurred **recurring losses and negative operating cash flows**, with current liabilities exceeding current assets, and **defaulted on loans for three of its six properties**, raising **substantial doubt about its ability to continue as a going concern**[25](index=25&type=chunk) - Management's plan to alleviate going concern doubt includes paying related party fees in shares, selling a performing asset within twelve months, and the Advisor's willingness to provide liquidity loans[26](index=26&type=chunk) - As of June 30, 2025, cash and cash equivalents and restricted cash totaled **$12.8 million**, a **$6.1 million decrease** from December 31, 2024, with **$7.5 million** being restricted cash related to defaulted loans[27](index=27&type=chunk) - The Company faces **significant liquidity constraints** due to sustained declines in rental income, constrained cash flow, and ongoing debt service obligations, exacerbated by the adverse impact of the COVID-19 pandemic on Manhattan office properties[31](index=31&type=chunk) [Note 3 — Summary of Significant Accounting Policies](index=9&type=section&id=Note%203%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) - The financial statements are prepared in accordance with GAAP for interim financial information, and the results for the interim periods are not necessarily indicative of the full year[33](index=33&type=chunk) - The consolidated financial statements include the accounts of the Company, the OP, and its subsidiaries, with inter-company transactions eliminated[35](index=35&type=chunk) - The New York City office market continues to face challenges post-COVID-19, with slowed leasing and occupancy trends, leading to increased unreimbursed property operating expenses and potential long-term negative impacts[38](index=38&type=chunk) - Revenue from tenants is recognized on a straight-line basis over the lease term, and collectability is continually assessed based on tenant payment history, financial condition, and economic conditions[40](index=40&type=chunk)[42](index=42&type=chunk) [Note 4 — Real Estate Investments](index=12&type=section&id=Note%204%20%E2%80%94%20Real%20Estate%20Investments) - No real estate assets were acquired or disposed of during the six months ended June 30, 2025, or 2024[52](index=52&type=chunk) | Amortization/Accretion (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | In-place leases | $341 | $574 | $721 | $1,155 | | Other intangibles | $0 | $177 | $0 | $354 | | Total included in depreciation and amortization | $341 | $751 | $721 | $1,509 | | Above-market lease intangibles | $29 | $142 | $64 | $287 | | Below-market lease liabilities | $(171) | $(213) | $(343) | $(424) | | Total included in revenue from tenants | $(142) | $(71) | $(279) | $(137) | - The Company recorded **impairment charges totaling $30.5 million** for the three and six months ended June 30, 2025, across its 1140 Avenue, 400 E. 67th Street/200 Riverside, and 196 Orchard Street properties[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - In the prior year, the Company recorded a **significant impairment charge of $84.7 million** on its 9 Times Square property, which was subsequently sold in December 2024[61](index=61&type=chunk) [Note 5 — Mortgage Notes Payable, Net](index=14&type=section&id=Note%205%20%E2%80%94%20Mortgage%20Notes%20Payable%2C%20Net) | Portfolio Property | Outstanding Loan Amount (Jun 30, 2025) (In thousands) | Outstanding Loan Amount (Dec 31, 2024) (In thousands) | Effective Interest Rate | Maturity | | :----------------- | :------------------------------------- | :------------------------------------- | :---------------------- | :------- | | 123 William Street | $140,000 | $140,000 | 4.74% | Mar. 2027 | | 1140 Avenue of the Americas | $99,000 | $99,000 | 9.11% | Jun. 2025 | | 400 E. 67th Street / 200 Riverside Blvd. | $50,000 | $50,000 | 8.52% | May 2028 | | 8713 Fifth Avenue | $10,000 | $10,000 | 5.05% | Nov. 2028 | | 196 Orchard Street | $51,000 | $51,000 | 3.85% | Aug. 2029 | | **Mortgage notes payable, gross** | **$350,000** | **$350,000** | **6.39%** | | - The loan for 1140 Avenue of the Americas (**$99.0 million**) was accelerated on April 7, 2025, due to default, and foreclosure proceedings were initiated in June 2025[69](index=69&type=chunk)[72](index=72&type=chunk) - The 400 E. 67th Street/200 Riverside Blvd. property loan (**$50.0 million**) is in a lease sweep period and has received multiple default notices, with default interest accruing since March 2025[75](index=75&type=chunk)[78](index=78&type=chunk) - The 8713 Fifth Avenue loan (**$10.0 million**) has breached a debt service coverage ratio covenant for **20 consecutive quarters**, triggering an ongoing excess cash flow sweep period, though no cash has been trapped[73](index=73&type=chunk) [Note 6 — Fair Value of Financial Instruments](index=18&type=section&id=Note%206%20%E2%80%94%20Fair%20Value%20of%20Financial%20Instruments) - The fair value of short-term financial instruments approximates their carrying value due to their short-term nature[84](index=84&type=chunk) | Mortgage Note Payable (In thousands) | Gross Principal Balance (Jun 30, 2025) | Fair Value (Jun 30, 2025) | Gross Principal Balance (Dec 31, 2024) | Fair Value (Dec 31, 2024) | | :----------------------------------- | :------------------------------------- | :------------------------ | :------------------------------------- | :------------------------ | | 1140 Avenue of the Americas | $99,000 | $60,521 | $99,000 | $69,238 | | 123 William Street | $140,000 | $135,086 | $140,000 | $132,474 | | 400 E. 67th Street / 200 Riverside Blvd. | $50,000 | $28,239 | $50,000 | $31,671 | | 8713 Fifth Avenue | $10,000 | $9,446 | $10,000 | $9,181 | | 196 Orchard Street | $51,000 | $46,513 | $51,000 | $44,896 | | **Total** | **$350,000** | **$279,805** | **$350,000** | **$287,460** | - Impairment charges were recognized on 1140 Avenue of the Americas, 400 East 67th Street, 200 Riverside, and 196 Orchard Street properties, reducing their carrying values to estimated fair values using discounted cash flow models (**7.0% cap rate, 8.5% discount rate**) or a sales comparison approach[89](index=89&type=chunk) [Note 7 — Stockholders' Equity](index=19&type=section&id=Note%207%20%E2%80%94%20Stockholders%27%20Equity) - As of June 30, 2025, and December 31, 2024, the Company had **2.6 million shares** of Class A common stock outstanding, including unvested restricted shares[90](index=90&type=chunk) - No shares were issued to the Advisor in lieu of cash for asset and property management services during the three and six months ended June 30, 2025, unlike the **$1.6 million** issued in the six months ended June 30, 2024[91](index=91&type=chunk) - The Stockholder Rights Plan's expiration date has been extended to **August 18, 2025**, entitling holders to purchase Series A Preferred Stock[93](index=93&type=chunk) [Note 8 — Commitments and Contingencies](index=20&type=section&id=Note%208%20%E2%80%94%20Commitments%20and%20Contingencies) - The Company has a ground lease for 1140 Avenue of the Americas with a remaining term of **41.5 years** and a discount rate of **8.6%**, resulting in an ROU asset and liability of approximately **$54.4 million** and **$54.6 million**, respectively, as of June 30, 2025[98](index=98&type=chunk) | Future Base Rent Payments (In thousands) | Amount | | :--------------------------------------- | :----- | | 2025 (remainder) | $2,373 | | 2026 | $4,746 | | 2027 | $4,746 | | 2028 | $4,746 | | 2029 | $4,746 | | Thereafter | $183,516 | | **Total lease payments** | **$204,873** | | Less: Effects of discounting | $(150,318) | | **Total present value of lease payments** | **$54,555** | - No material legal or regulatory proceedings are pending or contemplated against the Company as of June 30, 2025, other than the foreclosure litigation related to the 1140 Avenue of Americas property[100](index=100&type=chunk) [Note 9 — Related Party Transactions and Arrangements](index=21&type=section&id=Note%209%20%E2%80%94%20Related%20Party%20Transactions%20and%20Arrangements) - Entities wholly owned by AR Global held **536,252 shares** of the Company's Class A common stock, and Bellevue owned approximately **59.0%** of outstanding shares as of June 30, 2025[103](index=103&type=chunk) - The Advisory Agreement, with an initial term ending **July 2030**, outlines asset management fees (base fee of **$0.5 million** plus a variable amount) and incentive variable management fees, payable in cash, shares, or OP units[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) | Related Party Fees (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Asset and property management fees | $1,681 | $1,927 | $3,550 | $3,830 | | Professional fees and other reimbursements | $995 | $1,078 | $2,629 | $2,470 | | **Total related party operation fees and reimbursements** | **$2,676** | **$3,005** | **$6,179** | **$6,300** | - The Company incurred **$0.2 million** and **$0.5 million** in property management fees for the three and six months ended June 30, 2025, respectively, paid in cash[114](index=114&type=chunk) - Professional fees and other reimbursements to the Advisor for administrative, overhead, and personnel services were **$1.0 million** (Q2 2025) and **$2.6 million** (YTD Q2 2025), subject to annual limits[119](index=119&type=chunk) [Note 10 — Economic Dependency](index=24&type=section&id=Note%2010%20%E2%80%94%20Economic%20Dependency) - The Company is **economically dependent on its Advisor and affiliates** for essential services, including asset management, property management, acquisitions, dispositions, and administrative responsibilities[127](index=127&type=chunk)[128](index=128&type=chunk) [Note 11 — Equity-Based Compensation](index=24&type=section&id=Note%2011%20%E2%80%94%20Equity-Based%20Compensation) - The 2020 Equity Plan, which succeeded the RSP, permits awards of restricted stock units, stock options, and other equity awards, with a term of **10 years** and a limit of **20.0%** of outstanding Class A common stock on a fully diluted basis[132](index=132&type=chunk) | Restricted Share Activity | Number of Restricted Shares | Weighted-Average Issue Price | | :------------------------ | :-------------------------- | :--------------------------- | | Unvested, December 31, 2024 | 101,197 | $14.19 | | Granted | — | — | | Vested | (25,995) | $9.04 | | Forfeitures | — | — | | Unvested, June 30, 2025 | 75,202 | $15.97 | - As of June 30, 2025, **$0.8 million** of unrecognized compensation cost related to unvested restricted share awards is expected to be recognized over a weighted-average period of **2.6 years**[139](index=139&type=chunk) [Note 12 — Income Taxes](index=26&type=section&id=Note%2012%20%E2%80%94%20Income%20Taxes) - The Company has a **100% valuation allowance** against its net deferred tax assets as of June 30, 2025, and December 31, 2024, due to a history of taxable losses and continuing adverse economic impacts[140](index=140&type=chunk) - The effective tax rate was **zero** for the six months ended June 30, 2025, and 2024, with no income tax expense or benefit recorded[141](index=141&type=chunk) [Note 13 — Net Loss Per Share](index=26&type=section&id=Note%2013%20%E2%80%94%20Net%20Loss%20Per%20Share) | Metric (In thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to common stockholders | $(41,660) | $(91,851) | $(50,252) | $(99,459) | | Weighted average shares outstanding — Basic and Diluted | 2,541,402 | 2,518,176 | 2,537,501 | 2,420,385 | | Net loss per share — Basic and Diluted | $(16.39) | $(36.48) | $(19.80) | $(41.09) | - Net loss per share significantly improved to **$(16.39)** for Q2 2025 from **$(36.48)** for Q2 2024, and to **$(19.80)** for YTD Q2 2025 from **$(41.09)** for YTD Q2 2024[142](index=142&type=chunk) | Anti-Dilutive Common Share Equivalents | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Unvested restricted shares | 90,826 | 56,590 | 95,784 | 45,807 | | Total weighted-average anti-dilutive common share equivalents | 90,826 | 56,590 | 95,784 | 45,807 | [Note 14 — Segment Reporting](index=28&type=section&id=Note%2014%20%E2%80%94%20Segment%20Reporting) - The Company manages and evaluates its operations as a **single reportable segment**, based on consolidated financial statements, as its Chief Operating Decision Maker (CEO) does not distinguish operations by geography, size, or type[148](index=148&type=chunk) - Key metrics reviewed by the CODM include net earnings (loss), revenue from tenants, total operating expenses, and real estate investments, net, to assess overall financial performance and strategic direction[150](index=150&type=chunk) [Note 15 — Subsequent Events](index=29&type=section&id=Note%2015%20%E2%80%94%20Subsequent%20Events) - Debt service payments for July and August were not fully met by rental income for the 1140 Avenue of the Americas and 400 E. 67th Street/200 Riverside Blvd. properties[152](index=152&type=chunk) - Foreclosure litigation for the 1140 Avenue of the Americas property, initiated in June 2025, continued with a motion to appoint a receiver in July 2025, and the Company filed its answer in August 2025[153](index=153&type=chunk)[72](index=72&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, condition, and outlook, addressing COVID-19 impacts, liquidity, debt, and non-GAAP measures [Overview](index=30&type=section&id=Overview) - The Company is an externally managed entity owning **six commercial real estate properties** in New York City, primarily Manhattan, totaling **1.0 million rentable square feet** with an **82.0% occupancy rate** as of June 30, 2025[157](index=157&type=chunk) - The New York City office market continues to face challenges post-COVID-19, with slowed leasing and occupancy trends, leading to proposals for repositioning office assets with high vacancy rates[159](index=159&type=chunk) - As of June 30, 2025, **two mortgages totaling $149.0 million** are in default, and **three mortgages totaling $159.0 million** are in cash trap events, with foreclosure litigation initiated for the 1140 Avenue of Americas property[161](index=161&type=chunk) - The Company collected **98% of cash rent** due across its portfolio for the six months ended June 30, 2025, and plans to focus on selling performing properties, entering new leases, and divesting underperforming assets to address liquidity constraints[162](index=162&type=chunk)[163](index=163&type=chunk) [Properties](index=31&type=section&id=Properties) | Portfolio Property | Acquisition Date | Number of Properties | Rentable Square Feet | Occupancy | Remaining Lease Term (years) | | :----------------- | :--------------- | :------------------- | :------------------- | :-------- | :--------------------------- | | 400 E. 67th Street - Laurel Condominium | Sept. 2014 | 1 | 58,750 | 44.3% | 5.8 | | 200 Riverside Boulevard - ICON Garage | Sept. 2014 | 1 | 61,475 | 100.0% | 12.0 | | 123 William Street | Mar. 2015 | 1 | 544,610 | 84.4% | 4.2 | | 1140 Avenue of the Americas | Jun. 2016 | 1 | 245,821 | 74.1% | 6.3 | | 8713 Fifth Avenue | Oct. 2018 | 1 | 17,500 | 100.0% | 9.4 | | 196 Orchard Street | Jul. 2019 | 1 | 60,297 | 100.0% | 9.6 | | **Total portfolio** | | **6** | **988,453** | **82.0%** | **6.0** | - Overall portfolio occupancy decreased to **82.0%** as of June 30, 2025, from **85.9%** as of June 30, 2024, primarily due to declines at 1140 Avenue of the Americas and 400 E. 67th Street[172](index=172&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) | Leasing Activity (Q1 2025) | New and replacement leases commenced | Total square feet leased | Annualized straight-line rent per square foot | Weighted-average lease term (years) | | :------------------------- | :----------------------------------- | :----------------------- | :-------------------------------------------- | :---------------------------------- | | New and replacement leases | 1 | 11,521 | $9.5 | 0.1 | | Terminated or expired leases | — | — | $— | — | | Leasing Activity (Q2 2025) | New and replacement leases commenced | Total square feet leased | Annualized straight-line rent per square foot | Weighted-average lease term (years) | | :------------------------- | :----------------------------------- | :----------------------- | :-------------------------------------------- | :---------------------------------- | | New and replacement leases | 6 | 72,016 | $252.93 | 13.85 | | Terminated or expired leases | 2 | 32,356 | $6.51 | | | Financial Performance (in thousands) | Q2 2025 | Q2 2024 | Change ($) | | :----------------------------------- | :----------- | :----------- | :----------- | | Revenue from tenants | $12,222 | $15,754 | $(3,532) | | Total operating expenses | $46,036 | $102,413 | $(56,377) | | Operating loss | $(33,814) | $(86,659) | $52,845 | | Interest expense | $(7,850) | $(5,201) | $(2,649) | | Net loss | $(41,660) | $(91,851) | $50,191 | | Financial Performance (in thousands) | YTD Q2 2025 | YTD Q2 2024 | Change ($) | | :----------------------------------- | :----------- | :----------- | :----------- | | Revenue from tenants | $24,530 | $31,235 | $(6,705) | | Total operating expenses | $62,859 | $120,814 | $(57,955) | | Operating loss | $(38,329) | $(89,579) | $51,250 | | Interest expense | $(11,933) | $(9,898) | $(2,035) | | Net loss | $(50,252) | $(99,459) | $49,207 | - **Net loss significantly decreased by $50.191 million** for Q2 2025 and **$49.207 million** for YTD Q2 2025 compared to the prior year, primarily due to a substantial reduction in real estate impairment charges[175](index=175&type=chunk)[190](index=190&type=chunk) - Revenue from tenants decreased by **$3.5 million** for Q2 2025 and **$6.7 million** for YTD Q2 2025, mainly due to the sale of the 9 Times Square property in Q4 2024[178](index=178&type=chunk)[192](index=192&type=chunk) - Interest expense increased by **$2.6 million** for Q2 2025 and **$2.0 million** for YTD Q2 2025, primarily due to the accrual of default interest on the 1140 Avenue of the Americas and 400 E. 67th Street/200 Riverside properties[188](index=188&type=chunk)[202](index=202&type=chunk) [Cash Flows from Operating Activities](index=37&type=section&id=Cash%20Flows%20from%20Operating%20Activities) | Cash Flow Item (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Increase (Decrease) | | :---------------------------- | :----------------------------- | :----------------------------- | :------------------ | | Net loss | $(50,252) | $(99,459) | $49,207 | | Depreciation and amortization | $7,136 | $10,412 | $(3,276) | | Impairments of real estate investments | $30,558 | $84,724 | $(54,166) | | Net cash provided by (used in) operating activities | $(5,539) | $739 | $(6,278) | - Net cash used in operating activities was **$(5.539) million** for the six months ended June 30, 2025, a significant decrease from **$739 thousand** provided in the same period of 2024, primarily due to changes in working capital and lower non-cash adjustments[204](index=204&type=chunk) [Cash Flows from Investing Activities](index=37&type=section&id=Cash%20Flows%20from%20Investing%20Activities) | Cash Flow Item (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Increase (Decrease) | | :---------------------------- | :----------------------------- | :----------------------------- | :------------------ | | Capital expenditures | $(558) | $(568) | $10 | | Net cash used in investing activities | $(558) | $(568) | $10 | - Net cash used in investing activities remained consistent at approximately **$(0.6) million** for both periods, primarily for capital expenditures[205](index=205&type=chunk) [Cash Flows from Financing Activities](index=37&type=section&id=Cash%20Flows%20from%20Financing%20Activities) | Cash Flow Item (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Increase (Decrease) | | :---------------------------- | :----------------------------- | :----------------------------- | :------------------ | | Proceeds from notes payable to related parties | — | $150 | $(150) | | Net cash provided by (used in) financing activities | — | $150 | $(150) | - No cash was provided by or used in financing activities for the six months ended June 30, 2025, compared to **$150 thousand** provided in the prior year from notes payable to related parties[206](index=206&type=chunk)[207](index=207&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, cash and cash equivalents were **$5.3 million**, down from **$9.8 million** at December 31, 2024, while restricted cash was **$7.5 million**, down from **$9.2 million**[209](index=209&type=chunk)[210](index=210&type=chunk) - The Company's leverage ratio was **63.6%** as of June 30, 2025, calculated as net debt (**$344.7 million**) divided by gross asset value (**$542.1 million**)[213](index=213&type=chunk) - All six properties are encumbered by mortgage notes payable totaling **$350.0 million**, with a weighted-average effective interest rate of **6.39%** and a weighted-average maturity of **1.8 years** as of June 30, 2025[214](index=214&type=chunk)[216](index=216&type=chunk) - Three properties (1140 Avenue of the Americas, 400 E. 67th Street, 8713 Fifth Avenue), representing **33% of rentable square feet**, are under cash trap events due to loan covenant breaches, restricting access to excess cash flow[212](index=212&type=chunk) - The Company suspended its dividend policy for Class A common stock beginning **Q2 2022**, with no assurance of future dividends[227](index=227&type=chunk) - Capital expenditures for the six months ended June 30, 2025, totaled **$0.6 million**, primarily for tenant and building improvements at 123 William Street and 1140 Avenue of the Americas[228](index=228&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) - **EBITDA and adjusted EBITDA** are non-GAAP metrics used to evaluate performance, excluding factors like depreciation, interest expense, and impairment charges to facilitate comparisons[233](index=233&type=chunk) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(41,660) | $(91,851) | $(50,252) | $(99,459) | | EBITDA | $(30,265) | $(81,499) | $(31,183) | $(79,149) | | Adjusted EBITDA | $381 | $4,479 | $(451) | $7,407 | - **Adjusted EBITDA decreased significantly** from **$4.479 million** to **$381 thousand** for the three months ended June 30, 2025, and from **$7.407 million** to **$(451) thousand** for the six months ended June 30, 2025, year-over-year[236](index=236&type=chunk) [Previous Election as a REIT](index=42&type=section&id=Previous%20Election%20as%20a%20REIT) - The Company terminated its REIT election effective **January 1, 2023**, having qualified as a REIT from **2014 through 2022**[237](index=237&type=chunk) - As a REIT, the Company was generally not subject to U.S. federal corporate income tax on distributed REIT taxable income, and a tax loss in **2022** eliminated the distribution requirement for that year[237](index=237&type=chunk) [Inflation](index=42&type=section&id=Inflation) - Approximately **80%** of the Company's leases include rent escalation provisions, increasing cash rent by an average cumulative of **0.4%** per year, mitigating adverse impacts from inflation[238](index=238&type=chunk) - The 12-month CPI for all items was **2.7%** as of June 30, 2025, and while inflation has had an immaterial impact on operating costs, rising general goods and services costs could increase general and administrative expenses[238](index=238&type=chunk)[239](index=239&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material change in market risk exposure occurred during the six months ended June 30, 2025, referring to the 2024 Annual Report - No material change in market risk exposure occurred during the six months ended June 30, 2025[242](index=242&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control - Disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2025[243](index=243&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2025[244](index=244&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) As of June 30, 2025, the Company is not a party to any material pending legal proceedings - No material legal proceedings are pending against the Company as of June 30, 2025[245](index=245&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) New material risk factors include litigation and potential foreclosure for 1140 Avenue of the Americas, risking taxable income without cash and OP recourse obligations - The 1140 Avenue of the Americas property faces **litigation and potential foreclosure**, which could lead to **taxable income without cash proceeds** and significant management attention and expenses[247](index=247&type=chunk) - There is a **risk that the OP could be held liable** for any deficit between foreclosure sale proceeds and outstanding debt, which would materially adversely affect the Company's financial position[247](index=247&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchase of Equity Securities](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%20and%20Issuer%20Purchase%20of%20Equity%20Securities) No unregistered sales of equity securities, use of proceeds, or issuer purchases occurred during the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities occurred[249](index=249&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - No defaults upon senior securities occurred[249](index=249&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are not applicable to the Company[250](index=250&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 trading plans during Q2 2025 - No officers or directors adopted or terminated Rule 10b5-1 trading plans during Q2 2025[251](index=251&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) This section lists exhibits for the Form 10-Q, including certifications, XBRL documents, and corporate governance filings - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32)[253](index=253&type=chunk) - XBRL interactive data files (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104) are furnished[253](index=253&type=chunk) - Composite Articles of Amendment and Restatement and Second Amended and Restated Bylaws are incorporated by reference[253](index=253&type=chunk)

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $12.2 million, down from $15.8 million in Q2 2024, primarily due to the sale of 9 Times Square in 2024 [8] - GAAP net loss attributable to common stockholders was $41.7 million in Q2 2025, an improvement from a net loss of $91.9 million in Q2 2024, mainly due to an impairment related to the sale of Nine Times Square [8] - Adjusted EBITDA for Q2 2025 was $400,000, compared to $4.5 million in Q2 2024 [8] - Cash net operating income decreased to $4.2 million in Q2 2025 from $7.4 million in Q2 2024 [8] Business Line Data and Key Metrics Changes - Occupancy remained flat at 82%, with a focus on leasing available space [6] - Near-term lease expirations were reduced to 7% of annualized straight-line rent from 12% at the end of the previous quarter [7] - 54% of leases now extend beyond February 2030, up from 51% last quarter [7] Market Data and Key Metrics Changes - The company's real estate portfolio consists of approximately 1,000,000 square feet located primarily in Manhattan, with six office and retail properties [7] Company Strategy and Development Direction - The company is focused on tenant retention, property improvements, and cost efficiency [6] - A strategy to unlock value includes marketing 123 William Street and 196 Orchard for sale, with proceeds expected to be used for debt retirement and reinvestment in higher-yielding assets [7][10] - The company aims to maximize shareholder returns through repositioning its portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of reducing debt burden through the sale of select properties [10] - The ongoing sale process is viewed as a deliberate strategy to unlock substantial capital [10] Other Important Information - Foreclosure proceedings were initiated by the lender for 1140 Avenue Of The Americas during the quarter [9] Q&A Session Summary - No specific questions or answers were provided in the transcript, as the call concluded without a Q&A segment [11]

Portfolio Highlights - The company's Manhattan-focused real estate portfolio features a tenant base in core commercial businesses, with the top 10 tenants being 77% Investment Grade rated[5, 9] - Portfolio occupancy is at 82.0%, with a weighted-average remaining lease term of 6.0 years[9] - Over 53% of the company's leases expire after 2030[9, 17] - The real estate investments are valued at $432.4 million, spread across 6 properties with a total square footage of 1.0 million[14] - Annualized Straight-line Rent is $45.1 million[14] Financial Highlights - The company has a 100% fixed-debt capital structure with a weighted-average interest rate of 6.4%[9, 38] - Total debt amounts to $350.0 million[38] - Net Leverage is at 63.8%[9, 38, 46] - Revenue from tenants for the quarter was $12.2 million, while the net loss was $41.7 million[38] - Cash NOI decreased year-over-year from $7.4 million in Q2'24 to $4.2 million in Q2'25[42, 38] Strategic Initiatives - The company continued marketing efforts for the sale of 123 William Street ($269.5 million at cost, 84% occupancy) and 196 Orchard Street ($66.6 million at cost, 100% occupancy)[9, 10, 24]

Report Overview [General Information](index=1&type=section&id=General%20Information) This report details American Strategic Investment Co.'s unaudited Q2 2025 results, including forward-looking statements and risks related to REIT status, acquisitions, and market factors - The report provides **unaudited supplemental information** for American Strategic Investment Co. for the **quarter ended June 30, 2025**[1](index=1&type=chunk) - Forward-looking statements involve **multiple risks and uncertainties**, including expected benefits from **terminating REIT status**, ability to successfully acquire new assets or businesses, **geopolitical instability** (Russia-Ukraine conflict, Israel-Hamas conflict), **inflationary and high interest rate environments**, market conditions and capital availability for potential future acquisitions or dispositions, and the risk that the company may not continue to meet **NYSE continued listing requirements** and rules[3](index=3&type=chunk) [Non-GAAP Definitions](index=3&type=section&id=Non-GAAP%20Definitions) This section defines non-GAAP metrics like EBITDA and NOI, used for performance evaluation despite REIT status termination, emphasizing their comparative utility over GAAP accuracy - The company uses non-GAAP metrics such as **EBITDA**, **Adjusted EBITDA**, **NOI**, **Cash NOI**, and **Cash Paid for Interest** to evaluate performance[4](index=4&type=chunk) - The company terminated its REIT tax status on **January 1, 2023**, but business and operations did not materially change in Q1 2023, thus historical non-GAAP metrics remain unchanged[5](index=5&type=chunk) - Non-GAAP metrics should be considered **not more relevant or accurate than GAAP measures**, but they **facilitate comparison of operating performance** across different periods and companies by excluding factors like depreciation, amortization, and interest expense[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) Financial Performance [Key Metrics](index=5&type=section&id=Key%20Metrics) As of June 30, 2025, the company reported $12,222 thousand in revenue, a net loss of $41,660 thousand, and a basic and diluted net loss per share of $16.39, with a real estate portfolio of 6 properties and 83 tenants at 82.0% leased Financial Results (Amounts in thousands, except per share data) | Financial Results (Amounts in thousands, except per share data) | Value | | :---------------------------------------------------- | :---- | | Revenue from tenants | $12,222 | | Net loss attributable to common stockholders | $(41,660) | | Basic and diluted net loss per share attributable to common stockholders | $(16.39) | | Cash NOI | $4,196 | | Adjusted EBITDA | $381 | Balance Sheet and Capitalization (Amounts in thousands, except ratios and percentages) | Balance Sheet and Capitalization (Amounts in thousands, except ratios and percentages) | Value | | :------------------------------------------------------------------- | :---- | | Gross asset value | $542,096 | | Net debt | $344,687 | | Total consolidated debt | $350,000 | | Total assets | $463,994 | | Cash and cash equivalents | $5,313 | | Common shares outstanding as of June 30, 2025 | 2,634 | | Net debt to gross asset value | 63.6 % | | Net debt to annualized adjusted EBITDA (annualized based on quarterly results) | 226.2 x | | Weighted-average interest rate cost | 6.4 % | | Weighted-average debt maturity (years) | 1.8 | Real Estate Portfolio | Real Estate Portfolio | Value | | :-------------------- | :---- | | Number of properties | 6 | | Number of tenants | 83 | | Square footage (millions) | 1.0 | | Leased | 82.0 % | | Weighted-average remaining lease term (years) | 6 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets decreased to $463,994 thousand from $507,066 thousand, while total liabilities slightly increased to $428,476 thousand, and stockholders' equity significantly declined to $35,518 thousand due to accumulated losses ASSETS (Amounts in thousands) | ASSETS (Amounts in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :---------------------------- | :------------------------ | :---------------- | | Total real estate investments, net | $362,030 | $398,759 | | Cash and cash equivalents | $5,313 | $9,776 | | Total assets | $463,994 | $507,066 | LIABILITIES AND STOCKHOLDERS' EQUITY (Amounts in thousands) | LIABILITIES AND STOCKHOLDERS' EQUITY (Amounts in thousands) | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------------------------- | :------------------------ | :---------------- | | Mortgage notes payable, net | $348,223 | $347,384 | | Total liabilities | $428,476 | $421,480 | | Total stockholders' equity | $35,518 | $85,586 | - Stockholders' equity significantly decreased from **$85,586 thousand** as of December 31, 2024, to **$35,518 thousand** as of June 30, 2025, primarily due to an increase in 'Distributions in excess of accumulated earnings' from **$(645,870) thousand** to **$(696,122) thousand**[15](index=15&type=chunk) [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) For the quarter ended June 30, 2025, rental revenue was $12,222 thousand, with a significant $30,558 thousand impairment of real estate investments leading to an operating loss and a net loss of $41,660 thousand, or $16.39 per share (Amounts in thousands, except share and per share data) | (Amounts in thousands, except share and per share data) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended December 31, 2024 | Three Months Ended September 30, 2024 | | :---------------------------------------------------- | :------------------------------- | :-------------------------------- | :----------------------------------- | :------------------------------------ | | Revenue from tenants | $12,222 | $12,308 | $14,889 | $15,447 | | Impairment of real estate investments | $30,558 | — | — | $27,817 | | Total expenses | $46,036 | $16,823 | $17,037 | $44,659 | | Operating loss | $(33,814) | $(4,515) | $(2,424) | $(29,212) | | Interest expense | $(7,850) | $(4,083) | $(4,311) | $(5,279) | | Net loss attributable to common stockholders | $(41,660) | $(8,592) | $(6,650) | $(34,482) | | Net loss per share attributable to common stockholders — Basic and Diluted | $(16.39) | $(3.39) | $(2.60) | $(13.52) | - Impairment of real estate investments of **$30,558 thousand** in the quarter ended June 30, 2025, was the primary driver for the significant increase in total expenses and net loss, compared to no such expense in the prior quarter (March 31, 2025)[16](index=16&type=chunk) [Non-GAAP Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Measures%20Reconciliation) For the quarter ended June 30, 2025, Adjusted EBITDA improved to $381 thousand from a prior quarter loss, but Cash NOI remained stable at $4,196 thousand, though lower than the previous year (Amounts in thousands) | (Amounts in thousands) | Three Months Ended June 30, 2025 | Three Months Ended March 31, 2025 | Three Months Ended December 31, 2024 | Three Months Ended September 30, 2024 | | :--------------------- | :------------------------------- | :-------------------------------- | :----------------------------------- | :------------------------------------ | | Net loss | $(41,660) | $(8,592) | $(6,650) | $(34,482) | | EBITDA | $(30,265) | $(918) | $1,243 | $(24,789) | | Adjusted EBITDA | $381 | $(832) | $1,252 | $3,104 | | NOI | $4,235 | $4,171 | $5,868 | $6,860 | | Cash NOI | $4,196 | $4,234 | $6,395 | $6,770 | | Total cash paid for interest | $7,774 | $4,593 | $4,286 | $4,906 | - Adjusted EBITDA turned positive to **$381 thousand** in the quarter ended June 30, 2025, from **negative $832 thousand** in the prior quarter, but still represents a significant decrease compared to the same period in 2024[17](index=17&type=chunk) - Cash NOI for the quarter ended June 30, 2025, was **$4,196 thousand**, largely consistent with **$4,234 thousand** in the quarter ended March 31, 2025, but a decrease from **$6,770 thousand** in the same period of 2024[17](index=17&type=chunk) Debt and Lease Information [Debt Overview](index=9&type=section&id=Debt%20Overview) As of June 30, 2025, the company's total debt was $350,000 thousand, with a weighted-average maturity of 1.8 years and a weighted-average interest rate cost of 6.4%, predominantly fixed-rate Debt Maturity Schedule | Year of Maturity | Number of Encumbered Properties | Weighted Average Debt Maturity (Years) | Weighted-Average Interest Rate | Total Outstanding Balance (In thousands) | | :--------------- | :------------------------------ | :------------------------------------- | :----------------------------- | :--------------------------------------- | | 2025 (remainder) | 1 | — | 8.1 % | — | | 2026 | — | — | 4.2 % | 99,000 | | 2027 | 1 | 1.7 | 4.2 % | 140,000 | | 2028 | 3 | 2.9 | 4.7 % | 60,000 | | 2029 | 1 | 4.1 | 3.9 % | 51,000 | | Thereafter | — | — | — % | — | | Total Debt | 6 | 1.8 | 6.4 % | $350,000 | - As of June 30, 2025, all company debt is at **fixed interest rates**, with the exception of one floating rate loan[19](index=19&type=chunk) [Future Minimum Lease Rents](index=10&type=section&id=Future%20Minimum%20Lease%20Rents) As of June 30, 2025, the company's total future minimum base rent payments amount to $313,845 thousand, with $44,245 thousand due in the remainder of 2025 and $40,964 thousand in 2026, decreasing thereafter Future Minimum Base Rent Payments | Year | Future Minimum Base Rent Payments (In thousands) | | :--------------- | :----------------------------------------------- | | 2025 (remainder) | $44,245 | | 2026 | $40,964 | | 2027 | $37,256 | | 2028 | $32,510 | | 2029 | $30,448 | | 2030 | $28,075 | | Thereafter | $100,347 | | Total | $313,845 | - These amounts do not include contingent rent payments that may be collected from certain tenants based on sales thresholds and economic index growth terms[21](index=21&type=chunk) Portfolio Diversification [Top Ten Tenants](index=11&type=section&id=Top%20Ten%20Tenants) As of June 30, 2025, the top ten tenants contribute 53% of total annualized straight-line rent, with City National Bank being the largest at 10%, and a significant portion of these tenants holding investment-grade ratings Top Ten Tenants by Annualized SL Rent | Tenant / Lease Guarantor | Property Type | Tenant Industry | Annualized SL Rent (In thousands) | Percent | Remaining Lease Term (Years) | Investment Grade | | :----------------------- | :------------ | :------------------------ | :-------------------------------- | :------ | :--------------------------- | :--------------- | | City National Bank | Office / Retail | Financial Services | $4,356 | 10 % | 8.0 | Yes | | Planned Parenthood Federation of America, Inc. | Office | Non-Profit | $3,384 | 8 % | 6.0 | Yes | | Equinox | Retail | Fitness | $2,897 | 6 % | 13.4 | No | | The City of New York - Dept. of Youth & Community Development | Office | Government/Public Administration | $2,215 | 5 % | 12.5 | Yes | | CVS | Retail | Retail | $2,161 | 5 % | 9.2 | Yes | | USA General Services Administration | Office | Government/Public Administration | $2,050 | 4 % | 2.0 | Yes | | NYS Licensing | Office | Government/Public Administration | $1,833 | 5 % | 2.1 | Yes | | Marshalls | Retail | Retail | $1,641 | 4 % | 3.3 | Yes | | Edgewood Partners Insurance Center | Office | Office Space | $1,264 | 3 % | 9.1 | No | | 1140 Office Suites, LLC | Office | Office Space | $1,158 | 3 % | 5.8 | No | | Subtotal | | | $22,959 | 53 % | 7.5 | | | Remaining portfolio | | | $22,121 | 47 % | | | | Total Portfolio | | | $45,080 | 100 % | | | - **55%** of the top ten tenants have an actual investment grade rating, while **22%** have an implied investment grade rating[25](index=25&type=chunk) [Diversification by Property Type](index=12&type=section&id=Diversification%20by%20Property%20Type) As of June 30, 2025, the company's portfolio is primarily concentrated in office properties, accounting for 71% of annualized straight-line rent and 77% of total square footage, with retail properties as the second largest segment Portfolio Diversification by Property Type | Property Type | Annualized SL Rent (In thousands) | SL Rent Percent | Square Feet (In thousands) | SqFt. Percent | | :------------ | :-------------------------------- | :-------------- | :------------------------- | :------------ | | Office | $32,061 | 71 % | 626 | 77 % | | Retail | $12,133 | 27 % | 159 | 20 % | | Other | $886 | 2 % | 24 | 3 % | | Total | $45,080 | 100 % | 809 | 100 % | [Diversification by Tenant Industry](index=13&type=section&id=Diversification%20by%20Tenant%20Industry) As of June 30, 2025, the company's tenant base is broadly diversified, with financial services contributing the largest share at 24% of annualized straight-line rent, followed by government/public administration and office space industries Portfolio Diversification by Tenant Industry | Industry Type | Annualized SL Rent (In thousands) | SL Rent Percent | Square Feet (In thousands) | Sq. ft. Percent | | :---------------------------- | :-------------------------------- | :-------------- | :------------------------- | :-------------- | | Financial Services | $10,792 | 24 % | 123 | 15 % | | Government / Public Administration | $7,722 | 17 % | 173 | 21 % | | Office Space | $5,303 | 12 % | 130 | 16 % | | Retail | $4,834 | 11 % | 45 | 6 % | | Non-profit | $4,316 | 10 % | 88 | 11 % | | Fitness | $2,897 | 6 % | 30 | 4 % | | Services | $2,059 | 5 % | 36 | 4 % | | Parking | $1,833 | 4 % | 87 | 11 % | | Professional Services | $1,050 | 2 % | 20 | 2 % | | Technology | $944 | 2 % | 18 | 2 % | | Other | $3,330 | 7 % | 59 | 8 % | | Total | $45,080 | 100 % | 809 | 100 % | [Lease Expirations](index=14&type=section&id=Lease%20Expirations) As of June 30, 2025, nine leases are set to expire in the remainder of 2025, representing $3,375 thousand in annualized straight-line rent and 60 thousand square feet, with peak expirations anticipated in 2027 and 2031 Lease Expiration Schedule | Year of Expiration | Number of Leases Expiring | Annualized SL Rent (In thousands) | Annualized SL Rent Percent | Leased Rentable Square Feet (In thousands) | Percent of Rentable Square Feet Expiring | | :----------------- | :------------------------ | :-------------------------------- | :------------------------- | :----------------------------------------- | :--------------------------------------- | | 2025 (Remaining) | 9 | $3,375 | 7.5 % | 60 | 7.3 % | | 2026 | 7 | $2,155 | 4.8 % | 42 | 5.2 % | | 2027 | 10 | $6,305 | 14.0 % | 137 | 16.9 % | | 2028 | 10 | $4,264 | 9.5 % | 90 | 11.1 % | | 2029 | 4 | $1,785 | 4.0 % | 32 | 4.0 % | | 2030 | 5 | $2,919 | 6.5 % | 55 | 6.7 % | | 2031 | 9 | $6,736 | 14.9 % | 124 | 15.2 % | | 2032 | 2 | $352 | 0.8 % | 6 | 0.7 % | | 2033 | 9 | $5,417 | 12.0 % | 57 | 7.0 % | | 2034 | 4 | $3,425 | 7.6 % | 30 | 3.7 % | | 2035 | 3 | $640 | 1.4 % | 4 | 0.5 % | | 2036 | 2 | $365 | 0.8 % | 10 | 1.2 % | | 2037 | 4 | $4,048 | 9.0 % | 128 | 15.8 % | | 2038 | 3 | $2,897 | 6.4 % | 30 | 3.7 % | | 2039 | — | — | — % | — | — % | | 2040 | — | — | — % | — | — % | | Thereafter (>2040) | 2 | $397 | 1.1 % | 4 | 0.8 % | | Total | 83 | $45,080 | 100 % | 809 | 100 % | - Lease expiration data includes tenant concessions, such as free rent periods[31](index=31&type=chunk)

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The company reported an increased net loss and negative operating cash flow for Q1 2025, with declining assets and rising liabilities [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) This section presents the company's financial position, detailing assets, liabilities, and equity as of March 31, 2025, and December 31, 2024 Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total real estate investments, net | $395,573 | $398,759 | | Cash and cash equivalents | $7,083 | $9,776 | | Total assets | $499,377 | $507,066 | | **Liabilities & Equity** | | | | Mortgage notes payable, net | $347,637 | $347,384 | | Total liabilities | $422,291 | $421,480 | | Total equity | $77,086 | $85,586 | | Total liabilities and equity | $499,377 | $507,066 | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines the company's financial performance, including revenue, operating expenses, and net loss for the three months ended March 31, 2025 and 2024 Consolidated Statement of Operations Summary (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue from tenants | $12,308 | $15,481 | | Total operating expenses | $16,823 | $18,401 | | Operating loss | $(4,515) | $(2,920) | | Interest expense | $(4,083) | $(4,697) | | Net loss | $(8,592) | $(7,608) | | Net loss per share — Basic and Diluted | $(3.39) | $(3.28) | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2025 and 2024 Consolidated Statement of Cash Flows Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(3,037) | $1,655 | | Net cash used in investing activities | $(72) | $(364) | | Net cash (used in) provided by financing activities | $— | $— | | **Net change in cash, cash equivalents and restricted cash** | **$(3,109)** | **$1,291** | [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail the company's real estate operations, significant accounting policies, and critical issues including mortgage covenant non-compliance, liquidity constraints, and related-party transactions - As of March 31, 2025, the company owned six properties in New York City totaling **1.0 million rentable square feet**[25](index=25&type=chunk) - The company is experiencing non-compliance with mortgage debt covenants at its 1140 Avenue of Americas and 8713 Fifth Avenue properties, and a cash sweep event at its 400 E. 67th Street property due to occupancy and operating result challenges post-pandemic[33](index=33&type=chunk) - The company received a notice of default and subsequent notice of acceleration on its **$99.0 million loan** for the 1140 Avenue of the Americas property, making the full principal balance due and payable as of April 7, 2025[57](index=57&type=chunk)[70](index=70&type=chunk)[150](index=150&type=chunk) - The company faces significant liquidity constraints due to declining rental income, constrained cash flow, and debt service obligations, leading to the suspension of the corporate dividend and plans to market certain assets for sale[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the increased net loss, declining tenant revenue and occupancy, severe liquidity challenges including mortgage defaults, and strategic responses like dividend suspension and asset sales [Overview](index=29&type=section&id=Overview) This overview details the company's property portfolio, the challenging New York City office market, and significant mortgage defaults and cash trap events - As of March 31, 2025, the company owned six properties with **1.0 million rentable square feet** and an overall occupancy of **82.0%**[154](index=154&type=chunk) - The New York City office market recovery continues to be challenged, negatively impacting the company's leasing activity, results of operations, and ability to comply with mortgage covenants[156](index=156&type=chunk)[157](index=157&type=chunk) - As of March 31, 2025, two mortgages totaling **$149.0 million** are in default, and three mortgages totaling **$159.0 million** are subject to cash trap events[158](index=158&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the company's operational performance, highlighting changes in portfolio occupancy, tenant revenue, operating expenses, and net loss - Total portfolio occupancy decreased to **82.0%** as of March 31, 2025, from **87.2%** as of March 31, 2024, primarily due to a significant drop in occupancy at the 400 E. 67th Street property[166](index=166&type=chunk) Comparison of Operations (in thousands) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue from tenants | $12,308 | $15,481 | | Total operating expenses | $16,823 | $18,401 | | Operating loss | $(4,515) | $(2,920) | | Interest expense | $(4,083) | $(4,697) | | Net loss | $(8,592) | $(7,608) | - Revenue from tenants decreased by **$3.2 million** year-over-year, primarily due to the sale of the 9 Times Square property in December 2024[172](index=172&type=chunk) - Depreciation and amortization expense decreased to **$3.6 million** from **$5.3 million**, also primarily due to the sale of the 9 Times Square property[179](index=179&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section examines the company's cash position, restricted cash, leverage, mortgage cash traps, loan acceleration events, and dividend policy - As of March 31, 2025, the company had **$7.1 million** in cash and cash equivalents and **$8.7 million** in restricted cash[185](index=185&type=chunk)[186](index=186&type=chunk) - The company is operating under three cash traps at 1140 Avenue of the Americas, 400 E. 67th Street, and 8713 Fifth Avenue, restricting access to excess cash flow from these properties[188](index=188&type=chunk) - The company's leverage (net debt divided by gross asset value) was **57.9%** as of March 31, 2025[189](index=189&type=chunk) - On April 7, 2025, the lender for the 1140 Avenue of the Americas property accelerated the **$99.0 million loan**, making the entire balance due and payable[195](index=195&type=chunk)[202](index=202&type=chunk) - The company's board has suspended dividends since Q2 2022 and has not declared any for the period through March 31, 2025[204](index=204&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) This section provides a reconciliation of non-GAAP financial measures, specifically Adjusted EBITDA, for the three months ended March 31, 2025 and 2024 Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net loss (GAAP) | $(8,592) | $(7,608) | | EBITDA | $(918) | $2,350 | | **Adjusted EBITDA** | **$(832)** | **$2,928** | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposure during Q1 2025, referencing prior disclosures in its 2024 Annual Report - There was no material change in the company's market risk exposure during Q1 2025[219](index=219&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[220](index=220&type=chunk) - No material changes occurred in the company's internal control over financial reporting during Q1 2025[221](index=221&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no involvement in any material pending legal proceedings as of the end of the quarter - The company is not currently involved in any material pending legal proceedings[223](index=223&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its 2024 Annual Report on Form 10-K - No material changes to the risk factors disclosed in the 2024 Annual Report have occurred[225](index=225&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) This section incorporates disclosures on the 1140 Avenue of Americas loan default and confirms no Rule 10b5-1 trading plan activity by officers or directors - The disclosure regarding the default and acceleration of the loan on the 1140 Avenue of the Americas property is incorporated by reference into this item[228](index=228&type=chunk) - No officers or directors adopted or terminated Rule 10b5-1 trading plans during the quarter ended March 31, 2025[229](index=229&type=chunk)

Financial Data and Key Metrics Changes - First quarter 2025 revenue was $12.3 million, down from $15.5 million in the first quarter of 2024, primarily due to the sale of Nine Times Square in Q4 2024 [10] - GAAP net loss attributable to common stockholders was $8.6 million in Q1 2025, compared to a net loss of $7.6 million in Q1 2024 [10] - Adjusted EBITDA for Q1 2025 was negative $800,000, down from $2.9 million in Q1 2024 [10] - Cash net operating income was $4.2 million in Q1 2025, compared to $7 million in Q1 2024 [10] - At quarter end, net leverage was approximately 58%, with a weighted average interest rate of 4.4% and a weighted average debt maturity of 2.3 years [11] Business Line Data and Key Metrics Changes - The company focused on leasing available space and extending leases, achieving 120 basis points of occupancy growth to 82% compared to the previous quarter [6] - The portfolio's weighted average remaining lease term was 5.4 years, with 51% of leases extending beyond February 2030 [8] Market Data and Key Metrics Changes - The real estate portfolio is valued at $488 million, primarily located in Manhattan, consisting of six office and retail properties [8] - The tenant base includes large investment-grade firms, with 77% of the top 10 tenants being investment grade or implied investment grade [8] Company Strategy and Development Direction - The company is actively marketing 123 William Street and 196 Orchard for sale to unlock value and diversify holdings [7] - Proceeds from sales will be used to retire debt and invest in higher-yielding assets, aimed at increasing long-term value [7] - The strategy includes divesting select Manhattan assets to reduce leverage and pursue more profitable ventures [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing pipeline and expects to close additional leasing and renewals in Q2 2025 [6] - The divestiture of certain Manhattan assets is anticipated to generate significant cash and decrease leverage, which is vital for expanding into new opportunities [12] Other Important Information - The company will hold its virtual annual meeting of shareholders on May 29, 2025 [4] Q&A Session Summary - No specific questions and answers were provided in the content.

Financial Data and Key Metrics Changes - First quarter 2025 revenue was $12.3 million, down from $15.5 million in the first quarter of 2024, primarily due to the sale of Nine Times Square in Q4 2024 [11] - GAAP net loss attributable to common stockholders was $8.6 million in Q1 2025, compared to a net loss of $7.6 million in Q1 2024 [11] - Adjusted EBITDA for Q1 2025 was negative $800,000, down from $2.9 million in Q1 2024 [11] - Cash net operating income was $4.2 million in Q1 2025, compared to $7 million in Q1 2024 [11] - At quarter end, net leverage was approximately 58%, with a weighted average interest rate of 4.4% and a weighted average debt maturity of 2.3 years [12] Business Line Data and Key Metrics Changes - The company focused on leasing available space and extending leases, achieving 120 basis points of occupancy growth to 82% compared to the previous quarter [6] - The portfolio's weighted average remaining lease term was 5.4 years, with 51% of leases extending beyond February 2030 [8] Market Data and Key Metrics Changes - The real estate portfolio is valued at $488 million and consists of 1 million square feet primarily located in Manhattan, benefiting from a strong tenant base including large investment-grade firms [8][9] Company Strategy and Development Direction - The company is actively marketing 123 William Street and 196 Orchard for sale to unlock value and diversify holdings, with plans to use proceeds to retire debt and invest in higher-yielding assets [7] - The strategy to divest select Manhattan assets aims to reduce leverage and pursue more profitable ventures, enhancing shareholder value [10][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the leasing pipeline and expects to close additional leasing and renewals in Q2 2025 [6] - The focus on resilient industries and transit-oriented locations is believed to position the portfolio well for maximizing shareholder value [10] Other Important Information - The company will hold its annual meeting of shareholders virtually on May 29, 2025 [4] Q&A Session Summary - No specific questions and answers were provided in the content.

Portfolio Overview - The company's Manhattan-focused real estate portfolio features an underlying tenant base in core commercial businesses, with 77% Investment Grade rated among the top 10 tenants[4] - Portfolio Occupancy is at 82% with a weighted-average Remaining Lease Term of 5.4 years[4] - Over 51% of leases expire after 2030, based on Annualized Straight-Line Rent as of March 31, 2025[4] Property Details - Real Estate Investments are valued at $470.9 million at cost, comprising 6 properties with a total of 1.0 million square feet[12] - The portfolio generates $45.5 million in Annualized Straight-line Rent[12] - 123 William Street accounts for $269.4 million in real estate assets, 84% occupancy, 3.4 years remaining lease term, 46% of Annualized Straight-Line Rent, and 55% of Portfolio Square Feet[23] Tenant Profile - Top 10 tenants are 77% Investment Grade rated, with a Remaining Lease Term of 7.8 years[4] - The top 10 tenants contribute to 50.5% of Portfolio SLR and 42.4% of Portfolio SF[27] - Financial Services represent 26% of tenant industry diversity, followed by Government/Public Administration at 17%[15] Financial Highlights - Total Debt amounts to $350.0 million, with a weighted-average interest rate of 4.4%[36] - Net Leverage stands at 57.9%[36] - Revenue from Tenants is $12.3 million, while the Net Loss is ($8.6) million for Q1'25[36]

[Forward-looking Statements](index=2&type=section&id=Forward-looking%20Statements) This section highlights inherent risks and uncertainties that may cause actual results to differ from forward-looking statements - This report contains forward-looking statements involving risks and uncertainties that could cause actual results to differ materially. Key risks include the benefits of terminating REIT status, success in acquiring new assets, geopolitical instability (Russia/Ukraine, Israel/Hamas), inflation, interest rates, and the ability to meet NYSE listing requirements[3](index=3&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Definitions) This section outlines the company's non-GAAP financial measures and their application for performance evaluation [Definitions and Usage of Non-GAAP Measures](index=3&type=section&id=Non-GAAP%20Definitions) This section defines key non-GAAP metrics like EBITDA, Adjusted EBITDA, NOI, and Cash NOI, explaining their purpose and limitations - The company uses **EBITDA**, **Adjusted EBITDA**, **NOI**, and **Cash NOI** as key performance indicators[4](index=4&type=chunk) - Despite terminating its REIT status effective January 1, 2023, the company has not changed the non-GAAP metrics used to evaluate performance[5](index=5&type=chunk) - **Adjusted EBITDA** is defined as EBITDA adjusted for acquisition expenses, listing costs, non-cash items, and equity-based compensation, and is considered a measure of the ability to service debt[9](index=9&type=chunk) - **NOI** reflects property-level income and expenses on an unleveraged basis, excluding items like interest expense and depreciation to better show a property's operational results[10](index=10&type=chunk) - **Cash NOI** is defined as NOI excluding non-cash items like amortization of lease intangibles and straight-line rent adjustments, intended to reflect the current financial performance of properties[11](index=11&type=chunk) [Key Metrics](index=5&type=section&id=Key%20Metrics) This section summarizes the company's financial and operational performance for Q1 2025, including key portfolio statistics [Q1 2025 Key Metrics Summary](index=5&type=section&id=Key%20Metrics) Q1 2025 results show a net loss of $8.6 million, negative Adjusted EBITDA, and a portfolio of 6 properties with $350 million in debt Financial & Capitalization Highlights (Q1 2025) | Metric | Value (in thousands, except where noted) | | :--- | :--- | | Revenue from tenants | $12,308 | | Net loss attributable to common stockholders (in thousands) | $(8,592) | | Basic and diluted net loss per share ($) | $(3.39) | | Cash NOI | $4,234 | | Adjusted EBITDA | $(832) | | Total consolidated debt (in thousands) | $350,000 | | Net debt (in thousands) | $342,917 | | Net debt to gross asset value | 57.9% | | Weighted-average interest rate cost (%) | 4.4% | | Weighted-average debt maturity (years) | 2.3 | Real Estate Portfolio Snapshot (Q1 2025) | Metric | Value | | :--- | :--- | | Number of properties | 6 | | Number of tenants | 83 | | Square footage (millions) | 1.0 | | Leased Percentage (%) | 82.0% | | Weighted-average remaining lease term (years) | 5.4 | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's balance sheets and statements of operations, highlighting key financial trends [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to $499.4 million by Q1 2025, while liabilities slightly increased and equity declined Balance Sheet Comparison (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total real estate investments, net (in thousands) | $395,573 | $398,759 | | Cash and cash equivalents (in thousands) | $7,083 | $9,776 | | **Total assets (in thousands)** | **$499,377** | **$507,066** | | Mortgage notes payable, net (in thousands) | $347,637 | $347,384 | | **Total liabilities (in thousands)** | **$422,291** | **$421,480** | | **Total stockholders' equity (in thousands)** | **$77,086** | **$85,586** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) Q1 2025 saw a net loss of $8.6 million, or ($3.39) per share, with declining revenue from tenants Quarterly Operating Results (in thousands, except per share data) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | | :--- | :--- | :--- | :--- | | Revenue from tenants (in thousands) | $12,308 | $14,889 | $15,447 | | Total expenses (in thousands) | $16,823 | $17,037 | $44,659 | | Operating loss (in thousands) | $(4,515) | $(2,424) | $(29,212) | | Net loss (in thousands) | $(8,592) | $(6,650) | $(34,482) | | Net loss per share — Basic and Diluted ($) | $(3.39) | $(2.60) | $(13.52) | - Revenue from tenants has shown a consistent decline over the last four quarters[16](index=16&type=chunk) [Non-GAAP Measures Reconciliation](index=8&type=section&id=Non-GAAP%20Measures) This section provides a reconciliation of GAAP net loss to key non-GAAP performance metrics, including Adjusted EBITDA and Cash NOI [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Non-GAAP%20Measures) Q1 2025 Adjusted EBITDA turned negative at $(832) thousand, while Cash NOI declined to $4.2 million Quarterly Non-GAAP Performance (in thousands) | Metric | Q1 2025 | Q4 2024 | Q3 2024 | | :--- | :--- | :--- | :--- | | Net loss (in thousands) | $(8,592) | $(6,650) | $(34,482) | | EBITDA (in thousands) | $(918) | $1,243 | $(24,789) | | **Adjusted EBITDA (in thousands)** | **$(832)** | **$1,252** | **$3,095** | | NOI (in thousands) | $4,171 | $5,868 | $6,851 | | **Cash NOI (in thousands)** | **$4,234** | **$6,395** | **$6,761** | | Total cash paid for interest (in thousands) | $4,593 | $4,286 | $4,906 | [Debt & Lease Overview](index=9&type=section&id=Debt%20%26%20Lease%20Overview) This section details the company's debt structure and future minimum lease rent obligations [Debt Overview](index=9&type=section&id=Debt%20Overview) As of Q1 2025, total debt is $350 million with a 2.3-year weighted-average maturity and 4.4% interest rate Debt Maturity Schedule (as of March 31, 2025) | Year of Maturity | Total Outstanding Balance (in thousands) | | :--- | :--- | | 2027 | $99,000 | | 2028 | $140,000 | | 2029 | $60,000 | | 2030 | $51,000 | | **Total Debt** | **$350,000** | - The weighted-average debt maturity is **2.3 years** and the weighted-average interest rate is **4.4%**[18](index=18&type=chunk) - All debt is fixed-rate except for one variable-rate loan[19](index=19&type=chunk) [Future Minimum Lease Rents](index=10&type=section&id=Future%20Minimum%20Lease%20Rents) Total future minimum base rent payments amount to $309.3 million, with $43.7 million expected in remaining 2025 Future Minimum Base Rent Schedule (in thousands) | Period | Future Minimum Base Rent (in thousands) | | :--- | :--- | | 2025 (remainder) | $43,729 | | 2026 | $40,181 | | 2027 | $36,730 | | 2028 | $32,062 | | 2029 | $29,960 | | 2030 | $27,560 | | Thereafter | $99,091 | | **Total** | **$309,313** | [Portfolio Composition](index=11&type=section&id=Portfolio%20Composition) This section details the company's real estate portfolio, including tenant diversification, property types, industry exposure, and lease expiration schedule [Top Ten Tenants](index=11&type=section&id=Top%20Ten%20Tenants) The top ten tenants contribute 51% of annualized straight-line rent, with City National Bank as the largest at 10% Top 5 Tenants by Annualized SL Rent | Tenant | Annualized SL Rent (in thousands) | Percent of Total (%) | Remaining Lease Term (Years) | | :--- | :--- | :--- | :--- | | City National Bank | $4,356 | 10% | 8.3 | | Planned Parenthood | $3,388 | 7% | 6.3 | | Equinox | $2,897 | 6% | 13.7 | | The City of New York | $2,215 | 5% | 12.8 | | CVS | $2,161 | 5% | 9.4 | - The top 10 tenants account for **51%** of total annualized straight-line rent[22](index=22&type=chunk) - Of the top 10 tenants, **55%** have actual investment grade ratings and **22%** have implied investment grade ratings[24](index=24&type=chunk) [Diversification by Property Type](index=12&type=section&id=Diversification%20by%20Property%20Type) The portfolio is heavily weighted towards office properties, comprising 71% of rent and 77% of square footage Portfolio by Property Type | Property Type | Annualized SL Rent (in thousands) | Percent of Rent (%) | Square Feet (in thousands) | Percent of SqFt (%) | | :--- | :--- | :--- | :--- | :--- | | Office | $32,292 | 71% | 626 | 77% | | Retail | $12,133 | 27% | 159 | 20% | | Other | $1,066 | 2% | 24 | 3% | | **Total** | **$45,491** | **100%** | **809** | **100%** | [Diversification by Tenant Industry](index=13&type=section&id=Diversification%20by%20Tenant%20Industry) Tenant industries are concentrated in Financial Services (26%) and Government/Public Administration (17%) Top 5 Industries by Annualized SL Rent | Industry Type | Annualized SL Rent (in thousands) | Percent of Rent (%) | | :--- | :--- | :--- | | Financial Services | $12,012 | 26% | | Government / Public Administration | $7,722 | 17% | | Retail | $4,834 | 11% | | Office Space | $4,463 | 10% | | Non-profit | $4,316 | 10% | [Lease Expirations](index=14&type=section&id=Lease%20Expirations) Significant lease expirations are scheduled for the remainder of 2025 (12.3% of rent), 2027 (13.9%), and 2031 (13.7%) Lease Expiration Schedule by Annualized SL Rent | Year of Expiration | Annualized SL Rent Percent Expiring (%) | | :--- | :--- | | 2025 (Remaining) | 12.3% | | 2026 | 4.7% | | 2027 | 13.9% | | 2028 | 7.5% | | 2029 | 3.9% | | 2030 | 6.4% | | 2031 | 13.7% | - A total of **13 leases**, representing **12.3%** of annualized rent and **14.2%** of leased square feet, will expire in the remainder of 2025[30](index=30&type=chunk)

Property Ownership and Sales - As of December 31, 2024, the company owned six properties totaling approximately 1.0 million rentable square feet[18]. - The company sold the 9 Times Square property for a gross purchase price of $63.5 million on December 18, 2024[20]. - As of December 31, 2024, the total rentable square footage of the properties owned by the company is 988,453 square feet, with an overall occupancy rate of 80.8%[169]. - The two largest assets, 123 William Street and 1140 Avenue of the Americas, represent approximately 80% of the total rentable square footage and 77% of annualized straight-line rent as of December 31, 2024[76]. - The company has not encountered material risks from cybersecurity threats during the reporting period, but it continues to monitor and manage these risks proactively[167]. Financial Performance and Condition - The company collected 100% of cash rent due across its entire portfolio for the three months ended December 31, 2024[33]. - As of December 31, 2024, the company had cash and cash equivalents of $18.9 million, up from $12.8 million in 2023[57]. - Federal net operating losses (NOLs) totaled $298.8 million as of December 31, 2024, with a portion beginning to expire in 2035[52]. - The company incurred impairment charges of $112.5 million during the year ended December 31, 2024, indicating potential permanent adverse changes in property values[69]. - The company has not paid dividends on its Class A common stock since March 2022, with past dividends being funded from available cash rather than operational cash flow[67]. Corporate Structure and Governance - The company revoked its REIT election effective January 1, 2023, and is now subject to taxation as a C corporation[35]. - The advisory agreement with the Advisor expires on July 1, 2030, and termination could incur a fee of up to $15 million plus four times the previous year's compensation[142]. - The company has a classified board structure that may discourage third-party acquisitions, potentially affecting stockholder value[139]. - The stockholder rights plan adopted by the company may discourage third parties from acquiring more than 4.9% of its outstanding common stock, which could impact stockholder premiums[141]. Market and Economic Conditions - The ongoing economic conditions, including high inflation and interest rates, may impact tenants' ability to make timely rent payments[58]. - The concentration of real estate assets in New York City makes the company particularly vulnerable to economic downturns in that area[50]. - The ongoing Russia-Ukraine conflict may adversely impact business operations and financial performance due to market disruptions and increased geopolitical tensions[78]. - Interest rates increased eleven times during 2022 and 2023, impacting the company's ability to access capital on favorable terms[123]. Lease and Tenant Information - As of December 31, 2024, 32.6% of the rentable square feet in the portfolio is affected by cash trap provisions due to the performance of three properties[60]. - Approximately 42% of the company's leases, based on annualized straight-line rent, are set to expire over the next five years, raising concerns about lease renewals[85]. - Major tenants contributing to 5% or more of total annualized rental income include City National Bank (9.6%), Planned Parenthood Federation of America, Inc. (7.5%), and Equinox (6.4%) as of December 31, 2024[77]. - The company experienced lease terminations, including the bankruptcy of Knotel, which was the second largest tenant based on annualized straight-line rent as of September 30, 2020[58]. Debt and Financing - As of December 31, 2024, the company had total outstanding indebtedness of approximately $347.4 million[114]. - The company was in breach of covenants under three separate mortgage loans aggregating $159.0 million, representing 33% of the total rentable square feet in its portfolio[116]. - The company may need to secure external funding for capital requirements if sufficient cash from operations is not generated, with no assurance of favorable terms[61]. - The company may incur additional indebtedness in the future for various purposes, which could have material adverse consequences[114]. Operational Risks and Challenges - The company has identified material weaknesses in its internal control over financial reporting, leading to restatements of financial statements for certain periods[54]. - The company relies on the Advisor and Property Manager for essential services, and any inability to provide these services could adversely affect operations[43]. - The company faces significant competition in the New York City real estate market, which may impact occupancy levels and rental rates due to competitors having greater financial resources[63]. - The company may face risks related to defaults by borrowers on loans, which could lead to losses if the underlying asset value is less than the loan amount[80]. Future Outlook and Strategy - The company aims to pay quarterly dividends, subject to capital availability, and maximize total returns to stockholders[23]. - The company announced its intention to expand the scope of assets and businesses, including hotels and co-working office spaces, which may not generate REIT-qualifying income[51]. - The company has changed its investment policies to expand into other asset types, revoking its election to be taxed as a REIT effective January 1, 2023[73]. - Future tenant improvements and capital needs may be constrained by significant amounts of restricted cash, potentially impacting property maintenance and leasing activities[68].