Part I [Business Overview](index=4&type=section&id=Item%201.%20Business) New York City REIT, Inc. is a Maryland REIT focused on acquiring and managing office properties in NYC, with a portfolio of eight properties totaling 1.16 million square feet as of December 31, 2019, and is externally managed - The company primarily invests in office properties within New York City's five boroughs, focusing on Manhattan[14](index=14&type=chunk) Portfolio Overview as of December 31, 2019 | Metric | Value | | :--- | :--- | | Number of Properties | 8 | | Rentable Square Feet | 1,163,061 | | Aggregate Purchase Price | $790.7 million | - The board approved an **Estimated Per-Share NAV of $20.26** as of June 30, 2019[15](index=15&type=chunk) - The company is externally managed by New York City Advisors, LLC, with the Advisor and its affiliates receiving fees and expense reimbursements[16](index=16&type=chunk)[38](index=38&type=chunk) - Key investment goals include NYC focus, acquiring properties with **over 80% occupancy**, limiting leverage to **40-50%**, and diversifying tenants, with distributions suspended since March 1, 2018[18](index=18&type=chunk) - As of year-end 2019 and 2018, no single tenant accounted for **more than 10% of total annualized rental income**[23](index=23&type=chunk) [Risk Factors](index=9&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks including high geographic and asset concentration in NYC, illiquid stock, suspended distributions, and significant conflicts of interest with its external Advisor, alongside general real estate and debt financing risks [Risks Related to an Investment in New York City REIT, Inc.](index=9&type=section&id=Risks%20Related%20to%20an%20Investment%20in%20New%20York%20City%20REIT%2C%20Inc.) Significant investment risks stem from the portfolio's exclusive NYC location, limited stockholder liquidity due to non-traded stock and suspended SRP, halted distributions, high asset and tenant concentration, and potential impacts from a pandemic - All company properties are located in the New York MSA, leading to high dependency on the local economy and lack of geographic diversification[43](index=43&type=chunk) - The common stock is not traded on a national exchange, and the Share Repurchase Program (SRP) is suspended, severely limiting stockholder liquidity[46](index=46&type=chunk) - The company is not currently paying distributions, with no assurance of resumption[47](index=47&type=chunk) - The two largest assets, 123 William Street and 1140 Avenue of the Americas, represent approximately **68% of total rentable square footage** and **63% of annualized straight-line rent**, posing significant asset concentration risk[57](index=57&type=chunk) Major Tenant Concentration (as of Dec 31, 2019) | Tenant | % of Annualized Straight-Line Rent | | :--- | :--- | | City National Bank | 6.9% | | Knotel | 6.3% | | Planned Parenthood | 5.3% | - A pandemic, such as the novel coronavirus, is a cited risk that could adversely affect company operations and tenants[64](index=64&type=chunk)[65](index=65&type=chunk) [Risks Related to Conflicts of Interest](index=16&type=section&id=Risks%20Related%20to%20Conflicts%20of%20Interest) Significant conflicts of interest arise from the external management structure, as the Advisor and its affiliates manage other programs, creating competition for opportunities and potentially incentivizing riskier investments through performance-based fees - The Advisor and its affiliates face conflicts of interest in allocating investment opportunities between the company and other AR Global-advised programs[83](index=83&type=chunk) - Executive officers hold positions across the Advisor, Property Manager, and other affiliated entities, leading to conflicting duties and competing demands on their time[87](index=87&type=chunk)[88](index=88&type=chunk) - The Advisor's compensation structure, including performance-based distributions upon a liquidity event, may incentivize riskier or more speculative investments[90](index=90&type=chunk) [Risks Related to Our Corporate Structure](index=17&type=section&id=Risks%20Related%20to%20Our%20Corporate%20Structure) The company's corporate structure, including a 9.8% share ownership limit, Maryland anti-takeover statutes, and a classified board, could deter potential acquisitions and delay a change in control - The company's charter limits individual stock ownership to **9.8%**, potentially delaying or preventing a change in control[92](index=92&type=chunk) - Maryland law prohibits certain business combinations with interested stockholders for five years, potentially hindering acquisitions[97](index=97&type=chunk)[98](index=98&type=chunk) - The classified board of directors, divided into three classes, may delay or prevent a change in control[99](index=99&type=chunk) [General Risks Related to Investments in Real Estate](index=20&type=section&id=General%20Risks%20Related%20to%20Investments%20in%20Real%20Estate) The company faces general real estate risks including economic downturns, illiquid assets, tenant bankruptcies, uninsured losses from catastrophic events, climate change impacts, reduced office demand from telecommuting, and challenges in the retail sector - Operating results are subject to general real estate risks, including economic conditions, vacancies, and interest rate fluctuations[107](index=107&type=chunk) - Financing agreements may contain lock-out provisions restricting property sales or refinancing for years[110](index=110&type=chunk) - The company faces risks from uninsured losses, particularly from terrorism, as TRIA is set to expire[120](index=120&type=chunk)[121](index=121&type=chunk) - Trends like increased telecommuting and flexible work schedules could erode overall office space demand[129](index=129&type=chunk) - Properties with retail tenants, accounting for **15.9% of annualized straight-line rental income** as of December 31, 2019, are subject to retail sector risks[130](index=130&type=chunk) [Risks Associated with Debt Financing](index=25&type=section&id=Risks%20Associated%20with%20Debt%20Financing) The company's approximately **$395.0 million** debt as of year-end 2019 poses significant risks, including operational limitations, vulnerability to economic downturns, potential impacts from LIBOR discontinuation, and increased default risk due to interest-only mortgage debt - As of December 31, 2019, total outstanding indebtedness was approximately **$395.0 million**, potentially hindering market adjustments and capital access[137](index=137&type=chunk) - The planned discontinuation of LIBOR after 2021 creates uncertainty and could increase future variable-rate borrowing costs[143](index=143&type=chunk)[144](index=144&type=chunk) - As of December 31, 2019, all outstanding mortgage indebtedness was interest-only, increasing default risk due to principal or balloon payments at maturity[148](index=148&type=chunk) [U.S. Federal Income Tax Risks](index=27&type=section&id=U.S.%20Federal%20Income%20Tax%20Risks) Risks to maintaining REIT status include potential corporate income tax, reduced distributable earnings, forced borrowing or asset sales to meet the 90% distribution requirement, and a **100% prohibited transaction tax** on certain property sales - Failure to maintain REIT qualification would subject the company to U.S. federal corporate income tax, reducing net earnings and eliminating distribution requirements[151](index=151&type=chunk)[152](index=152&type=chunk) - To qualify as a REIT, the company must annually distribute at least **90% of its REIT taxable income**, potentially forcing unfavorable borrowing or asset sales[155](index=155&type=chunk) - Sales of properties deemed dealer properties could be subject to a **100% prohibited transaction tax**[156](index=156&type=chunk) - To maintain REIT status, five or fewer individuals may not own **more than 50%** of outstanding stock value, and at least **100 persons** must be beneficial owners[169](index=169&type=chunk) [Properties](index=32&type=section&id=Item%202.%20Properties) As of December 31, 2019, the company's portfolio included eight properties totaling **1.16 million rentable square feet** with **89.6% occupancy**, **$450.2 million** in future minimum lease payments, and **$405.0 million** in gross mortgage debt, with four properties identified as significant Portfolio Summary (as of Dec 31, 2019) | Property | Rentable Square Feet | Occupancy | Remaining Lease Term (Years) | | :--- | :--- | :--- | :--- | | **Total/Weighted Avg.** | **1,163,061** | **89.6%** | **6.8** | Future Minimum Base Rent Payments | Year | Amount (in thousands) | | :--- | :--- | | 2020 | $59,793 | | 2021 | $57,465 | | 2022 | $53,679 | | 2023 | $45,639 | | 2024 | $41,162 | | Thereafter | $54,194 | | **Total** | **$450,152** | - Four properties are significant, each representing **over 10%** of the portfolio's rentable square feet or annualized rental income: 123 William Street, 9 Times Square, 1140 Avenue of the Americas, and 196 Orchard Street[183](index=183&type=chunk) Property Financing Summary (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Encumbered Properties | 7 | | Outstanding Loan Amount | $405.0 million | | Weighted-Average Effective Interest Rate | 4.35% | [Legal Proceedings](index=35&type=section&id=Item%203.%20Legal%20Proceedings) The company reports no material legal proceedings - The company had no legal proceedings to report[191](index=191&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) No established public market exists for the company's common stock, limiting liquidity, with both the Share Repurchase Program and Distribution Reinvestment Plan currently suspended, and an Estimated Per-Share NAV of **$20.26** as of June 30, 2019 - No established public market exists for the company's common stock, with no current plans for national exchange listing[195](index=195&type=chunk) - The board approved an **Estimated Per-Share NAV of $20.26** as of June 30, 2019, determined with assistance from Duff & Phelps[196](index=196&type=chunk)[203](index=203&type=chunk) - Distributions to common stockholders were suspended effective March 1, 2018, rendering the Distribution Reinvestment Plan (DRIP) inactive[195](index=195&type=chunk)[205](index=205&type=chunk) - The Share Repurchase Program (SRP) is currently suspended, with no shares repurchased during the year ended December 31, 2019[212](index=212&type=chunk)[214](index=214&type=chunk) [Selected Financial Data](index=38&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five years of financial data (2015-2019), showing increasing assets and liabilities, consistent net losses, declining stockholders' equity, and no distributions declared in 2019 Selected Financial Data (2017-2019) | (In thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Total revenues | $70,530 | $62,399 | $58,384 | | Net loss | $(21,890) | $(24,112) | $(23,073) | | Total assets | $901,356 | $773,742 | $760,450 | | Mortgage notes payable, net | $395,031 | $291,653 | $233,517 | | Total stockholders' equity | $420,549 | $443,680 | $481,484 | Selected Per Share Data (2017-2019) | | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | Basic and diluted net loss per common share | $(0.71) | $(0.77) | $(0.74) | | Distributions declared per common share | $— | $0.25 | $1.51 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses 2019 financial performance, highlighting revenue growth from acquisitions and leasing, a net loss of **$21.9 million**, decreased occupancy to **89.6%**, and strategic cash preservation through suspended distributions and share repurchases, supplemented by non-GAAP measures like FFO and MFFO [Results of Operations](index=43&type=section&id=Results%20of%20Operations) For 2019, revenue from tenants increased by **$8.1 million** to **$70.5 million** due to acquisitions and leasing, while property operating expenses rose by **$2.8 million**, general and administrative expenses decreased by **$2.6 million**, interest expense increased by **$3.9 million**, and portfolio occupancy declined to **89.6%** - Overall portfolio occupancy decreased to **89.6%** as of December 31, 2019, from **93.7%** in 2018[256](index=256&type=chunk) - Revenue from tenants increased by **$8.1 million** to **$70.5 million** in 2019, driven by property acquisitions and leasing activity[261](index=261&type=chunk) - General and administrative expenses decreased by **$2.6 million** in 2019, primarily due to lower reimbursed fees to the Advisor[264](index=264&type=chunk) - Interest expense increased by **$3.9 million** to **$17.2 million** in 2019, due to new debt for acquisitions and general corporate purposes[267](index=267&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2019, the company held **$51.2 million** in cash, with distributions and the SRP suspended to preserve capital for acquisitions and improvements, and aggregate borrowings at **$405.0 million**, with future funding expected from cash flow and new financing - The company held **$51.2 million** in cash and cash equivalents as of December 31, 2019[276](index=276&type=chunk) - The suspension of distributions and the SRP is a strategic decision to enhance funding for future acquisitions and property repositioning[276](index=276&type=chunk)[277](index=277&type=chunk) - In July 2019, the company secured a **$51.0 million loan** to partially fund the 196 Orchard Street acquisition[280](index=280&type=chunk) - In April 2019, a **$55.0 million loan** secured by 9 Times Square was obtained for general corporate purposes, including funding a portion of the 196 Orchard Street acquisition[282](index=282&type=chunk) - Capital expenditures for 2019 totaled **$7.7 million**, primarily for tenant improvements at three key properties[287](index=287&type=chunk) [Non-GAAP Financial Measures](index=48&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like FFO, MFFO, and Cash NOI for supplemental performance insight, reporting 2019 FFO of **$9.3 million**, MFFO of **$2.6 million**, and Cash NOI of **$32.7 million**, all showing improvement over 2018 FFO and MFFO Reconciliation (2018-2019) | (In thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Net loss (in accordance with GAAP) | $(21,890) | $(24,112) | | Depreciation and amortization | 31,161 | 29,690 | | **FFO** | **$9,271** | **$5,578** | | Adjustments for MFFO | (6,659) | (6,072) | | **MFFO** | **$2,612** | **$(494)** | Cash NOI Reconciliation (2018-2019) | (In thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Net loss (in accordance with GAAP) | $(21,890) | $(24,112) | | Adjustments | 54,571 | 51,654 | | **Cash NOI** | **$32,681** | **$27,542** | [Contractual Obligations](index=51&type=section&id=Contractual%20Obligations) As of December 31, 2019, total contractual obligations were **$761.6 million**, primarily comprising **$405.0 million** in mortgage principal, **$125.7 million** in interest, and **$231.0 million** in ground lease payments, with most due after 2024 Summary of Contractual Obligations | (In thousands) | Total | 2020 | 2021-2022 | 2023-2024 | Thereafter | | :--- | :--- | :--- | :--- | :--- | :--- | | Mortgage notes payable (Principal) | $405,000 | $— | $— | $55,000 | $350,000 | | Mortgage notes payable (Interest) | $125,656 | $17,595 | $35,104 | $33,750 | $39,207 | | Ground lease payments | $230,976 | $4,746 | $9,492 | $9,492 | $207,246 | | **Total** | **$761,632** | **$22,341** | **$44,596** | **$98,242** | **$596,453** | [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate changes, mitigated by **$405.0 million** in fixed-rate or swapped debt as of December 31, 2019, with a **100 basis point** interest rate increase projected to decrease fixed-rate debt fair value by **$22.9 million** - The company's main market risk stems from adverse changes in interest rates[316](index=316&type=chunk) - As of December 31, 2019, all debt, with an aggregate carrying value of **$405.0 million**, consisted of fixed-rate or swapped to fixed-rate secured mortgage notes[317](index=317&type=chunk) - A hypothetical **100 basis point** increase in market interest rates would decrease the fair value of fixed-rate debt by **$22.9 million**, while a decrease would increase it by **$24.9 million**[317](index=317&type=chunk) [Controls and Procedures](index=53&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that both disclosure controls and internal control over financial reporting were effective as of December 31, 2019, with no material changes reported for the fourth quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2019[322](index=322&type=chunk) - Management assessed internal control over financial reporting using the COSO framework, concluding it was effective as of December 31, 2019[325](index=325&type=chunk) - No material changes were made to internal control over financial reporting during the fourth quarter of 2019[327](index=327&type=chunk) Part III Items 10 through 14, covering directors, executive compensation, security ownership, related party transactions, and principal accounting fees, are incorporated by reference from the company's definitive 2020 proxy statement [Items 10-14](index=54&type=section&id=Items%2010-14) Information for Items 10 through 14, including directors, executive compensation, security ownership, related party transactions, and accounting fees, is incorporated by reference from the company's definitive 2020 proxy statement - Disclosures for Items 10 through 14 are incorporated by reference from the definitive proxy statement to be filed within 120 days of fiscal year-end[331](index=331&type=chunk)[332](index=332&type=chunk)[333](index=333&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=54&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, Schedule III – Real Estate and Accumulated Depreciation, and all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and Sarbanes-Oxley Act certifications - This item includes the Index to Consolidated Financial Statements and Schedule III – Real Estate and Accumulated Depreciation[337](index=337&type=chunk) - An extensive list of exhibits is provided, including the Second Amended and Restated Advisory Agreement, various loan agreements, and required CEO/CFO certifications[340](index=340&type=chunk)[342](index=342&type=chunk) Financial Statements and Supplementary Data [Consolidated Financial Statements](index=63&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position, operations, and cash flows for 2017-2019, reporting 2019 total assets of **$901.4 million**, liabilities of **$480.8 million**, and a net loss of **$21.9 million**, reflecting the adoption of ASC 842 Consolidated Balance Sheet Summary (as of Dec 31, 2019) | (In thousands) | Amount | | :--- | :--- | | Total real estate investments, net | $748,286 | | Total assets | $901,356 | | Mortgage notes payable, net | $395,031 | | Total liabilities | $480,807 | | Total stockholders' equity | $420,549 | Consolidated Statement of Operations Summary (Year Ended Dec 31, 2019) | (In thousands) | Amount | | :--- | :--- | | Revenue from tenants | $70,530 | | Total operating expenses | $76,110 | | Operating loss | $(5,580) | | Net loss | $(21,890) | | Basic and diluted net loss per share | $(0.71) | [Notes to Consolidated Financial Statements](index=67&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes supplement financial statements with details on new accounting standards (ASC 842), 2019 property acquisition, mortgage debt, suspended Share Repurchase Program, related-party transactions, commitments, and equity-based compensation [Note 2 — Summary of Significant Accounting Policies](index=67&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting policies, including straight-line revenue recognition, asset acquisition treatment for real estate, impairment testing, and the adoption of ASU 2016-02 (Leases) on January 1, 2019, which led to the recognition of a right-of-use asset and lease liability - The company adopted ASU 2016-02 (Topic 842) on January 1, 2019, resulting in a **$54.9 million** right-of-use asset and lease liability for its ground lease[447](index=447&type=chunk)[455](index=455&type=chunk) - The company elected a practical expedient to account for lease and non-lease components as a single lease component, simplifying revenue recognition[448](index=448&type=chunk) - The company adopted ASU 2017-01, leading to property acquisitions in 2019 and 2018 being treated as asset acquisitions and capitalization of transaction costs[444](index=444&type=chunk) [Note 4 — Mortgage Notes Payable, Net](index=84&type=section&id=Note%204%20%E2%80%94%20Mortgage%20Notes%20Payable%2C%20Net) As of December 31, 2019, the company had **$405.0 million** in gross mortgage notes payable secured by seven properties, including new **$51.0 million** and **$55.0 million** loans in 2019, all of which are interest-only with no principal payments until 2024 Mortgage Notes Payable Summary (as of Dec 31, 2019) | Metric | Value | | :--- | :--- | | Gross Mortgage Notes Payable | $405.0 million | | Deferred financing costs, net | $(9.97) million | | **Mortgage notes payable, net** | **$395.03 million** | | Weighted-Average Effective Interest Rate | 4.35% | - In July 2019, the company obtained a **$51.0 million loan** with a fixed rate of **3.85%** to partially fund the 196 Orchard Street acquisition[471](index=471&type=chunk) - In April 2019, the company entered into a **$55.0 million loan** with an interest rate fixed at **3.67%** via a swap agreement, secured by the 9 Times Square property[475](index=475&type=chunk) - No principal payments are scheduled on any mortgage notes until 2024[479](index=479&type=chunk) [Note 9 — Related Party Transactions and Arrangements](index=98&type=section&id=Note%209%20%E2%80%94%20Related%20Party%20Transactions%20and%20Arrangements) This note details fee arrangements with the Advisor and affiliates, including a new advisory agreement effective November 16, 2018, which eliminated certain fees, established a new base asset management fee, set limits on expense reimbursements, and resulted in **$7.3 million** in asset/property management fees and **$3.2 million** in other reimbursements for 2019 - A new advisory agreement effective November 16, 2018, eliminated acquisition and financing coordination fees[535](index=535&type=chunk)[537](index=537&type=chunk)[540](index=540&type=chunk) - The new agreement established a fixed base asset management fee of **$0.5 million per month**, plus a variable component tied to future equity proceeds[546](index=546&type=chunk) - The agreement introduced specific annual caps on administrative/overhead expenses (e.g., **$0.4 million**) and personnel costs (e.g., **$2.6 million**) reimbursed to the Advisor[557](index=557&type=chunk)[567](index=567&type=chunk) Related Party Fees Incurred (Year Ended Dec 31, 2019) | (In thousands) | Amount Incurred | | :--- | :--- | | Asset and property management fees | $7,328 | | Professional fees and other reimbursements | $3,210 | | **Total** | **$10,538** | - Upon a change of control, the Advisor is entitled to a termination fee of **$15.0 million** plus a multiple of certain prior fees[575](index=575&type=chunk) [Schedule III - Real Estate and Accumulated Depreciation](index=109&type=section&id=Schedule%20III%20-%20Real%20Estate%20and%20Accumulated%20Depreciation) This schedule provides a property-by-property breakdown of real estate costs and accumulated depreciation as of December 31, 2019, showing total gross real estate assets of **$759.5 million** and accumulated depreciation of **$72.7 million**, along with reconciliation of changes during 2019 Real Estate Portfolio Cost Summary (as of Dec 31, 2019) | (In thousands) | Amount | | :--- | :--- | | Initial & Subsequent Costs (Land, Building & Improvements) | $759,487 | | Accumulated Depreciation | $(72,656) | | **Net Book Value (excluding intangibles)** | **$686,831** | Reconciliation of Real Estate Investments, at Cost (2019) | (In thousands) | Amount | | :--- | :--- | | Balance at beginning of year | $671,210 | | Additions - acquisitions | $79,872 | | Capital expenditures | $8,405 | | **Balance at end of year** | **$759,487** |

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for New York City REIT, Inc. as of September 30, 2019, and for the three and nine-month periods then ended [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (Unaudited, In millions) | (In millions) | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Total Assets** | **$909.3** | **$773.7** | | Total real estate investments, net | $755.5 | $684.3 | | Cash and cash equivalents | $53.8 | $48.0 | | **Total Liabilities** | **$482.7** | **$330.1** | | Mortgage notes payable, net | $394.6 | $291.7 | | **Total Stockholders' Equity** | **$426.6** | **$443.7** | - Total assets increased by approximately **$135.6 million**, primarily driven by a **$71.2 million** increase in net real estate investments and the addition of a **$55.6 million** operating lease right-of-use asset[9](index=9&type=chunk) - Total liabilities increased by approximately **$152.6 million**, mainly due to a **$103.0 million** increase in net mortgage notes payable and a new operating lease liability of **$54.9 million**[9](index=9&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Statement of Operations Highlights (Unaudited, In millions) | | Three Months Ended Sep 30, | Nine Months Ended Sep 30, | | :--- | :--- | :--- | | | **2019** | **2018** | **2019** | **2018** | | **Revenue from tenants** | **$18.6** | **$15.7** | **$52.2** | **$46.2** | | Total operating expenses | $19.0 | $18.2 | $55.8 | $55.7 | | Operating loss | $(0.3) | $(2.5) | $(3.6) | $(9.5) | | **Net loss** | **$(4.8)** | **$(5.9)** | **$(15.2)** | **$(19.0)** | | **Comprehensive loss** | **$(5.4)** | **$(5.9)** | **$(17.1)** | **$(19.0)** | | Net loss per share | $(0.16) | $(0.19) | $(0.49) | $(0.61) | - Revenue from tenants increased by **18.4%** for the third quarter and **13.1%** for the nine-month period year-over-year, primarily due to property acquisitions and leasing activity[11](index=11&type=chunk)[202](index=202&type=chunk)[210](index=210&type=chunk) - Net loss improved for both the three-month and nine-month periods in 2019 compared to 2018, driven by higher revenue and lower general and administrative expenses, which offset increased interest and property operating costs[11](index=11&type=chunk) [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) - Total stockholders' equity decreased from **$443.7 million** at December 31, 2018, to **$426.6 million** at September 30, 2019, primarily due to a net loss of **$15.2 million** and an other comprehensive loss of **$1.9 million** related to a derivative instrument[14](index=14&type=chunk) - In contrast to 2018, there were no distributions paid or common stock repurchases in the first nine months of 2019, whereas in the same period of 2018, the company paid **$7.7 million** in distributions and repurchased **$10.3 million** of common stock[17](index=17&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statement of Cash Flows Highlights (Unaudited, In millions) | | Nine Months Ended Sep 30, | | :--- | :--- | | | **2019** | **2018** | | **Net cash used in operating activities** | **$(0.5)** | **$(4.2)** | | **Net cash used in investing activities** | **$(43.8)** | **$(6.1)** | | **Net cash provided by financing activities** | **$51.1** | **$32.9** | | Net change in cash, cash equivalents and restricted cash | $6.8 | $22.6 | | Cash, cash equivalents and restricted cash, end of period | $61.6 | $69.8 | - Cash used in investing activities significantly increased to **$43.8 million** in 2019 from **$6.1 million** in 2018, primarily due to the **$38.3 million** net cash paid for the acquisition of the 196 Orchard Street property[21](index=21&type=chunk)[221](index=221&type=chunk) - Cash from financing activities increased to **$51.1 million** in 2019, driven by **$55.0 million** in proceeds from a new mortgage note, while in 2018, financing activities provided **$32.9 million**, which was offset by **$7.5 million** in distributions and **$7.3 million** in stock repurchases, neither of which occurred in 2019[21](index=21&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) - **Organization**: As of September 30, 2019, the Company owned eight properties in New York City with **1.2 million** rentable square feet, and has no employees, being managed by its Advisor, New York City Advisors, LLC[24](index=24&type=chunk)[28](index=28&type=chunk) - **Accounting Changes**: The Company adopted ASU 2016-02 (Leases) on January 1, 2019, resulting in the recognition of a right-of-use asset of **$55.6 million** and a lease liability of **$54.9 million** related to a ground lease[50](index=50&type=chunk)[57](index=57&type=chunk)[122](index=122&type=chunk) - **Real Estate Acquisition**: On July 17, 2019, the Company acquired three condominium units at 196 Orchard Street for a total of **$89.3 million** in assets, funded by **$51.0 million** in new mortgage debt and **$38.3 million** in cash[65](index=65&type=chunk)[66](index=66&type=chunk) - **Debt**: The Company's gross mortgage notes payable increased from **$299.0 million** at year-end 2018 to **$405.0 million** as of September 30, 2019, following new loans totaling **$106.0 million** related to the 9 Times Square and 196 Orchard Street properties[72](index=72&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - **Derivatives**: The Company entered into an interest rate swap in 2019 to hedge interest rate risk on its **$55.0 million** term loan for the 9 Times Square property, which had a fair value liability of **$1.9 million** as of September 30, 2019[93](index=93&type=chunk)[95](index=95&type=chunk)[100](index=100&type=chunk) - **Common Stock & Distributions**: The Company suspended its Share Repurchase Program (SRP) in September 2018 and did not pay distributions during the first nine months of 2019, a change from 2018 when distributions were paid until March 1[110](index=110&type=chunk)[114](index=114&type=chunk)[116](index=116&type=chunk) - **Related Party Transactions**: Effective November 2018, the advisory agreement was amended, eliminating acquisition and financing coordination fees and changing the asset management fee to a fixed monthly amount plus a variable component based on new equity proceeds[130](index=130&type=chunk)[135](index=135&type=chunk)[142](index=142&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance for the three and nine months ended September 30, 2019, covering revenue, expenses, liquidity, and strategic initiatives Q3 2019 vs Q3 2018 Results Comparison (In millions) | | Q3 2019 | Q3 2018 | Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Revenue from tenants | $18.6 | $15.7 | +$2.9 | Acquisitions of 8713 Fifth Ave & 196 Orchard Street ($1.7M) and leasing activity ($1.0M) | | Property operating expenses | $8.0 | $7.3 | +$0.7 | Costs from new acquisitions and higher non-reimbursable expenses | | G&A expenses | $1.2 | $2.3 | -$1.1 | Lower legal, proxy, and Advisor professional fees | | Interest expense | $4.7 | $3.5 | +$1.2 | New loans taken in Oct 2018, Apr 2019, and Jul 2019 | - **Liquidity & Capital**: As of September 30, 2019, the company had **$53.8 million** in cash, and believes cash flow and retained cash from suspended distributions will be sufficient for operating needs over the next year[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) - **Debt Strategy**: The company's gross borrowings reached **$405.0 million**, aligning with its strategy to target leverage of **40-50%** of asset fair market value, with no anticipated additional debt secured by existing properties[233](index=233&type=chunk) - **Leasing & Occupancy**: Portfolio occupancy increased to **92.4%** as of Sep 30, 2019, from **90.3%** a year prior, largely due to leasing at 9 Times Square, with ongoing focus on leasing vacant space[198](index=198&type=chunk)[235](index=235&type=chunk) Non-GAAP Financial Measures (In millions) | | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net Loss | $(15.2) | $(19.0) | | FFO | $7.6 | $3.4 | | MFFO | $2.0 | $(1.3) | | Cash NOI | $24.0 | $20.5 | [Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes in its exposure to market risk during the nine months ended September 30, 2019 - There has been no material change in the company's exposure to market risk during the nine months ended September 30, 2019[270](index=270&type=chunk) [Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2019, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[271](index=271&type=chunk) - No changes occurred in the company's internal control over financial reporting during the third quarter of 2019 that materially affected, or are reasonably likely to materially affect, internal controls[272](index=272&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not a party to any material pending legal proceedings as of the end of the quarter - As of September 30, 2019, the company is not a party to any material pending legal proceedings[274](index=274&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company states there have been no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2018 - There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2018[275](index=275&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section discloses the issuance of unregistered securities, specifically the award of 1,481 restricted shares to each independent director on June 5, 2019 - On June 5, 2019, the company awarded **1,481 restricted shares** to each of its independent directors under its incentive plan, which awards were exempt from registration under Section 4(a)(2) of the Securities Act of 1933[276](index=276&type=chunk) - The company made no purchases of its equity securities during the period[278](index=278&type=chunk) [Defaults Upon Senior Securities](index=52&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon its senior securities during the period - None[278](index=278&type=chunk) [Mine Safety Disclosures](index=52&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[279](index=279&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) The company reports no other information that is required to be disclosed in this section - None[280](index=280&type=chunk) [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits that are included or incorporated by reference in the Form 10-Q filing, including certifications - The exhibits listed include loan agreements, articles of amendment, bylaws, and certifications pursuant to the Sarbanes-Oxley Act of 2002[281](index=281&type=chunk)[289](index=289&type=chunk)

[PART I - FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited consolidated financial statements and detailed notes for New York City REIT, Inc. for the periods ended June 30, 2019 and December 31, 2018 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Presents consolidated balance sheets, detailing assets, liabilities, and equity as of June 30, 2019, and December 31, 2018 Consolidated Balance Sheet Summary (In thousands) | Metric | June 30, 2019 | December 31, 2018 | | :--------------------------------- | :-------------- | :---------------- | | **ASSETS** | | | | Total real estate investments, net | $672,510 | $684,259 | | Cash and cash equivalents | $93,876 | $47,952 | | Total assets | $867,297 | $773,742 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Mortgage notes payable, net | $344,517 | $291,653 | | Total liabilities | $435,318 | $330,062 | | Total stockholders' equity | $431,979 | $443,680 | | Total liabilities and stockholders' equity | $867,297 | $773,742 | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Details consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2019 and 2018 Consolidated Statements of Operations and Comprehensive Loss (In thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue from tenants | $16,525 | $15,196 | $33,576 | $30,425 | | Total operating expenses | $18,594 | $18,409 | $36,823 | $37,483 | | Operating loss | $(2,069) | $(3,213) | $(3,247) | $(7,058) | | Interest expense | $(4,069) | $(3,380) | $(7,629) | $(6,183) | | Net loss | $(5,827) | $(6,529) | $(10,411) | $(13,113) | | Comprehensive loss | $(7,087) | $(6,529) | $(11,741) | $(13,113) | | Net loss per share (Basic and Diluted) | $(0.19) | $(0.21) | $(0.34) | $(0.42) | [Consolidated Statements of Changes in Equity](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Outlines consolidated statements of changes in equity for the six months ended June 30, 2019 and 2018, including stock and capital adjustments Consolidated Statements of Changes in Equity (Six Months Ended June 30, 2019, In thousands) | Metric | Common Stock (Number of Shares) | Common Stock (Par Value) | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Distributions in excess of accumulated earnings | Total Stockholders' Equity | | :-------------------------- | :------------------------------ | :----------------------- | :------------------------- | :----------------------------------- | :-------------------------------------------- | :------------------------- | | Balance, December 31, 2018 | 30,990,448 | $310 | $685,758 | $— | $(242,388) | $443,680 | | Share-based compensation | 4,443 | $— | $40 | $— | $— | $40 | | Net loss | — | $— | $— | $— | $(10,411) | $(10,411) | | Other comprehensive loss | — | $— | $— | $(1,330) | $— | $(1,330) | | Balance, June 30, 2019 | 30,994,891 | $310 | $685,798 | $(1,330) | $(252,799) | $431,979 | Consolidated Statements of Changes in Equity (Six Months Ended June 30, 2018, In thousands) | Metric | Common Stock (Number of Shares) | Common Stock (Par Value) | Additional Paid-in Capital | Distributions in excess of accumulated earnings | Total Stockholders' Equity | | :-------------------------- | :------------------------------ | :----------------------- | :------------------------- | :-------------------------------------------- | :------------------------- | | Balance, December 31, 2017 | 31,382,120 | $314 | $691,775 | $(210,605) | $481,484 | | Common stock issued through distribution reinvestment plan | 208,836 | $1 | $4,230 | $— | $4,231 | | Common stock repurchases | (249,307) | $(2) | $(4,598) | $— | $(4,600) | | Share-based compensation | 4,440 | $— | $33 | $— | $33 | | Distributions declared | — | $— | $— | $(7,672) | $(7,672) | | Net loss | — | $— | $— | $(13,113) | $(13,113) | | Balance, June 30, 2018 | 31,346,089 | $313 | $691,440 | $(231,390) | $460,363 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Provides consolidated statements of cash flows, categorizing activities for the six months ended June 30, 2019 and 2018 Consolidated Statements of Cash Flows (Six Months Ended June 30, In thousands) | Cash Flow Activity | 2019 | 2018 | | :------------------------------------ | :----- | :----- | | Net cash provided by (used in) operating activities | $1,329 | $(2,861) | | Net cash used in investing activities | $(7,212) | $(2,258) | | Net cash provided by financing activities | $51,253 | $35,592 | | Net change in cash, cash equivalents and restricted cash | $45,370 | $30,473 | | Cash, cash equivalents and restricted cash, end of period | $100,171 | $77,689 | [Note 1 — Organization](index=8&type=section&id=Note%201%20%E2%80%94%20Organization) Describes the Company's organization, investment focus in New York City, REIT status, and reliance on external management - New York City REIT, Inc. invests in properties within New York City, primarily Manhattan, owning seven properties totaling **1.1 million rentable square feet** acquired for **$702.0 million** as of June 30, 2019, with an additional property acquired for **$88.8 million** subsequently[22](index=22&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - The Company operates as a REIT since December 31, 2014, conducting business through New York City Operating Partnership L.P. (OP)[22](index=22&type=chunk)[185](index=185&type=chunk) - The Company has no employees, relying on New York City Advisors, LLC and New York City Properties, LLC for management services, both under common control with AR Global Investments, LLC[25](index=25&type=chunk)[188](index=188&type=chunk) [Note 2 — Summary of Significant Accounting Policies](index=9&type=section&id=Note%202%20%E2%80%94%20Summary%20of%20Significant%20Accounting%20Policies) Summarizes significant accounting policies, including GAAP compliance, lease accounting adoption, and revenue recognition from tenants - Financial statements are prepared in accordance with GAAP for interim financial information, with ASU No. 2016-02 (Leases) adopted on January 1, 2019, resulting in a right-of-use (ROU) asset and lease liability of **$54.9 million** for its ground lease[29](index=29&type=chunk)[48](index=48&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) - Revenue from tenants is recognized on a straight-line basis over the lease term, with leases accounted for on a cash basis if collectability is not probable[40](index=40&type=chunk)[45](index=45&type=chunk) Future Base Rent Payments (In thousands) | Year | As of June 30, 2019 | As of December 31, 2018 | | :--- | :------------------ | :---------------------- | | 2019 (remainder) / 2019 | $27,533 | $53,347 | | 2020 | $53,669 | $51,404 | | 2021 | $49,587 | $47,237 | | 2022 | $46,786 | $44,018 | | 2023 | $38,709 | $35,920 | | Thereafter | $164,456 | $150,226 | | **Total** | **$380,740** | **$382,152** | [Note 3 — Real Estate Investments](index=16&type=section&id=Note%203%20%E2%80%94%20Real%20Estate%20Investments) Details real estate investments, including amortization expenses, revenue adjustments, and tenant concentration analysis - No real estate assets were acquired or liabilities assumed during the three and six months ended June 30, 2019 or 2018[64](index=64&type=chunk) Amortization Expense and Revenue Adjustments (In thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :---------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Amortization of in-place leases and other intangibles | $2,519 | $3,014 | $5,056 | $6,278 | | Amortization and (accretion) of above- and below market leases, net | $(438) | $(476) | $(917) | $(1,098) | | Amortization of below-market ground lease | $12 | $13 | $24 | $25 | - As of June 30, 2019 and December 31, 2018, no single tenant represented greater than **10%** of total annualized rental income[66](index=66&type=chunk) [Note 4 — Mortgage Notes Payable, Net](index=17&type=section&id=Note%204%20%E2%80%94%20Mortgage%20Notes%20Payable%2C%20Net) Provides details on mortgage notes payable, including gross amounts, financing costs, interest rates, and collateral pledges Mortgage Notes Payable, Net (In thousands) | Metric | June 30, 2019 | December 31, 2018 | | :-------------------------- | :-------------- | :---------------- | | Mortgage notes payable, gross | $354,000 | $299,000 | | Less: deferred financing costs, net | $(9,483) | $(7,347) | | Mortgage notes payable, net | $344,517 | $291,653 | | Weighted-average effective interest rate | 4.41% | N/A (not provided for Dec 31, 2018 in this table) | - On April 26, 2019, the Company secured a new **$55.0 million** loan with Capital One, fixed at **3.6725%** interest, maturing April 26, 2024, secured by the 9 Times Square property[72](index=72&type=chunk)[225](index=225&type=chunk) - On April 13, 2018, the Company secured a **$50.0 million** loan with Société Générale, fixed at **4.516%** interest, maturing May 1, 2028, secured by two properties[73](index=73&type=chunk)[226](index=226&type=chunk) - As of June 30, 2019, real estate assets and intangible assets totaling **$738.5 million** (at cost, net of below-market lease liabilities) were pledged as collateral for mortgage notes payable[77](index=77&type=chunk) Scheduled Aggregate Principal Payments (In thousands) | Year | Future Minimum Principal Payments | | :---------------- | :------------------------------ | | 2019 (remainder) | $— | | 2020 | $— | | 2021 | $— | | 2022 | $— | | 2023 | $— | | Thereafter | $354,000 | | **Total** | **$354,000** | [Note 5 — Fair Value of Financial Instruments](index=18&type=section&id=Note%205%20%E2%80%94%20Fair%20Value%20of%20Financial%20Instruments) Explains fair value hierarchy for financial instruments and presents their fair values as of June 30, 2019 and December 31, 2018 - The Company uses a three-level hierarchy for fair value measurements: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[80](index=80&type=chunk) Financial Instruments Carried at Fair Value (June 30, 2019, In thousands) | Instrument | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :------ | :------ | :------ | :------ | | Interest rate "Pay - Fixed" swaps - liabilities | $— | $(1,330) | $— | $(1,330) | Financial Instruments Not Carried at Fair Value (In thousands) | Mortgage Note Payable | June 30, 2019 (Gross Principal Balance) | June 30, 2019 (Fair Value) | December 31, 2018 (Gross Principal Balance) | December 31, 2018 (Fair Value) | | :-------------------------------------------------------------------- | :-------------------------------------- | :------------------------- | :---------------------------------------- | :----------------------------- | | 123 William Street | $140,000 | $151,474 | $140,000 | $142,874 | | 1140 Avenue of the Americas | $99,000 | $103,192 | $99,000 | $97,448 | | 400 E. 67th Street - Laurel Condominium / 200 Riverside Boulevard - ICON Garage | $50,000 | $53,857 | $50,000 | $50,424 | | 8713 Fifth Avenue | $10,000 | $11,038 | $10,000 | $10,446 | | 9 Times Square | $55,000 | $54,771 | $— | $— | [Note 6 — Derivatives and Hedging Activities](index=19&type=section&id=Note%206%20%E2%80%94%20Derivatives%20and%20Hedging%20Activities) Discusses the Company's use of derivative financial instruments for hedging interest rate risk and their fair value - The Company uses derivative financial instruments, specifically an interest rate swap, to hedge interest rate risk on borrowings, aiming to minimize risks and costs, not for speculative purposes[85](index=85&type=chunk) - On March 28, 2019, the Company entered into a forward starting five-year interest rate swap, effective May 1, 2019, to fix the floating interest rate on its 9 Times Square property term loan[86](index=86&type=chunk) Fair Value of Derivative Financial Instruments (In thousands) | Derivative | Balance Sheet Location | June 30, 2019 | December 31, 2018 | | :-------------------------- | :----------------------- | :-------------- | :---------------- | | Interest Rate "Pay-fixed" Swap | Derivative liability, at fair value | $1,330 | $— | - The Company estimates **$0.2 million** will be reclassified from accumulated other comprehensive income as an increase to interest expense over the next 12 months due to cash flow hedges[92](index=92&type=chunk) [Note 7 — Common Stock](index=22&type=section&id=Note%207%20%E2%80%94%20Common%20Stock) Details common stock outstanding, distribution suspension, estimated NAV, and the status of the Share Repurchase Program - As of June 30, 2019, the Company had **31.0 million** shares of common stock outstanding, with distributions to common stockholders suspended effective March 1, 2018[102](index=102&type=chunk)[103](index=103&type=chunk) - The Company's board of directors approved an Estimated Per-Share NAV of **$20.26** as of June 30, 2018, published on October 25, 2018[104](index=104&type=chunk)[187](index=187&type=chunk) - The Share Repurchase Program (SRP) was suspended effective September 25, 2018, with no repurchases made through the SRP for the three and six months ended June 30, 2019[108](index=108&type=chunk)[110](index=110&type=chunk)[256](index=256&type=chunk) Cumulative Share Repurchases | Period | Numbers of Shares Repurchased | Weighted-Average Price per Share | | :-------------------------------- | :---------------------------- | :----------------------------- | | Cumulative as of December 31, 2018 | 1,259,734 | $22.03 | | Six months ended June 30, 2019 | — | — | | Cumulative as of June 30, 2019 | 1,259,734 | $22.03 | [Note 8 — Commitments and Contingencies](index=24&type=section&id=Note%208%20%E2%80%94%20Commitments%20and%20Contingencies) Outlines commitments and contingencies, including ground lease liabilities, and confirms no material legal or environmental issues - As of June 30, 2019, the Company's balance sheet includes an ROU asset of **$55.7 million** and a lease liability of **$54.9 million** related to a ground lease for 1140 Avenue of the Americas, with a weighted-average remaining lease term of **47.5 years**[116](index=116&type=chunk)[117](index=117&type=chunk) Ground Lease Rent Payments (In thousands) | Year | Future Base Rent Payments (June 30, 2019) | Future Base Rent Payments (December 31, 2018) | | :---------------- | :-------------------------------------- | :---------------------------------------- | | 2019 (remainder) / 2019 | $2,373 | $4,746 | | 2020 | $4,746 | $4,746 | | 2021 | $4,746 | $4,746 | | 2022 | $4,746 | $4,746 | | 2023 | $4,746 | $4,746 | | Thereafter | $211,992 | $211,992 | | **Total** | **$233,349** | **$235,722** | | Less: Effects of discounting | $(178,461) | N/A | | Total present value of lease payments | $54,888 | N/A | - The Company is not a party to any material pending legal or regulatory proceedings and is not aware of any environmental conditions that would materially adversely affect operations[121](index=121&type=chunk)[122](index=122&type=chunk) [Note 9 — Related Party Transactions and Arrangements](index=26&type=section&id=Note%209%20%E2%80%94%20Related%20Party%20Transactions%20and%20Arrangements) Describes transactions and arrangements with related parties, including advisory agreements, fees, and subordinated distributions - AR Global, through a wholly-owned entity, owned **8,888 shares** of the Company's common stock as of June 30, 2019 and December 31, 2018[123](index=123&type=chunk) - The Second Advisory Agreement, effective November 16, 2018, eliminated acquisition fees and financing coordination fees payable to the Advisor, with no acquisition fees incurred after this date and financing coordination fees of **$0.4 million** incurred for the three and six months ended June 30, 2018[126](index=126&type=chunk)[127](index=127&type=chunk)[131](index=131&type=chunk) - The base asset management fee calculation changed to a fixed amount of **$0.5 million** monthly plus a variable amount based on equity proceeds, with the Advisor also entitled to a variable management fee based on Core Earnings Per Adjusted Share[134](index=134&type=chunk)[135](index=135&type=chunk) Related Party Operation Fees and Reimbursements (In thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Acquisition fees and related cost reimbursements | $— | $— | $— | $— | | Financing coordination fees and leasing commissions | $— | $375 | $6 | $375 | | Asset and property management fees to related parties | $1,872 | $1,618 | $3,420 | $3,101 | | Professional fees and other reimbursements | $922 | $1,264 | $1,955 | $2,425 | | Distributions on Class B units | $— | $— | $— | $39 | | **Total related party operation fees and reimbursements** | **$2,794** | **$3,257** | **$5,381** | **$5,940** | - The Second Advisory Agreement eliminated annual subordinated performance fees and brokerage commissions to the Advisor after November 16, 2018[156](index=156&type=chunk)[157](index=157&type=chunk) - The Special Limited Partner (a subsidiary of AR Global) is entitled to a subordinated distribution of **15.0%** of remaining net sale proceeds upon liquidation or sale of assets, after investors receive capital contributions plus a **6.0%** cumulative annual return[160](index=160&type=chunk) [Note 10 — Economic Dependency](index=34&type=section&id=Note%2010%20%E2%80%94%20Economic%20Dependency) Highlights the Company's economic dependence on its Advisor and affiliates for essential management and operational services - The Company is economically dependent on its Advisor and affiliates for essential services including asset management, property management, acquisitions, and administrative responsibilities[168](index=168&type=chunk)[169](index=169&type=chunk) [Note 11 — Share-Based Compensation](index=34&type=section&id=Note%2011%20%E2%80%94%20Share-Based%20Compensation) Explains the Restricted Share Plan, details award activity, and reports unrecognized compensation costs for unvested shares - The Restricted Share Plan (RSP) provides for automatic grants of restricted shares to directors, vesting annually over five years (**20% per annum**), with total shares granted not exceeding **5.0%** of outstanding common stock or **1.5 million shares**[170](index=170&type=chunk)[171](index=171&type=chunk) Restricted Share Award Activity (Six Months Ended June 30, 2019) | Metric | Number of Restricted Shares | Weighted-Average Issue Price | | :------------------------ | :-------------------------- | :-------------------------- | | Unvested, December 31, 2018 | 12,626 | $21.48 | | Granted | 4,443 | $20.26 | | Vested | (2,221) | $21.60 | | Forfeited | — | — | | Unvested, June 30, 2019 | 14,848 | $21.10 | - As of June 30, 2019, unrecognized compensation cost related to unvested restricted share awards was **$0.2 million**, expected to be recognized over a weighted-average period of **3.0 years**[175](index=175&type=chunk) [Note 12 — Net Loss Per Share](index=35&type=section&id=Note%2012%20%E2%80%94%20Net%20Loss%20Per%20Share) Presents the computation of basic and diluted net loss per share, including anti-dilutive common share equivalents Net Loss Per Share Computation | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (in thousands) | $(5,827) | $(6,529) | $(10,411) | $(13,113) | | Basic and diluted weighted average shares outstanding | 30,978,662 | 31,330,799 | 30,978,310 | 31,380,899 | | Basic and diluted net loss per share | $(0.19) | $(0.21) | $(0.34) | $(0.42) | Weighted-Average Anti-Dilutive Common Share Equivalents | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Unvested restricted shares | 14,848 | 14,272 | 14,848 | 14,272 | | OP units | 90 | 90 | 90 | 90 | | Class B units | 159,159 | 159,159 | 159,159 | 159,159 | | **Total weighted-average anti-dilutive common share equivalents** | **174,097** | **173,521** | **174,097** | **173,521** | [Note 13 — Subsequent Events](index=35&type=section&id=Note%2013%20%E2%80%94%20Subsequent%20Events) Reports significant events occurring after June 30, 2019, including a property acquisition and related new loan financing - Subsequent to June 30, 2019, the Company acquired three condominium units at 196 Orchard Street, New York, NY, for approximately **$88.8 million**, funded by a new **$51.0 million** loan and **$37.8 million** from cash on hand[178](index=178&type=chunk)[234](index=234&type=chunk) - A new **$51.0 million** loan with Nationwide Life Insurance Company was secured on July 17, 2019, bearing a fixed interest rate of **3.85%** and maturing on August 1, 2029, to fund the 196 Orchard Street acquisition[179](index=179&type=chunk)[229](index=229&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, liquidity, capital, and non-GAAP measures for periods ended June 30, 2019 and 2018 [Forward-Looking Statements](index=37&type=section&id=Forward-Looking%20Statements) Highlights forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially - The report contains forward-looking statements regarding the Company's intent, belief, or current expectations, which are subject to risks and uncertainties that could cause actual results to differ materially[184](index=184&type=chunk) [Overview](index=37&type=section&id=Overview) Provides an overview of the Company's formation, REIT status, investment focus, property portfolio, and estimated per-share NAV - New York City REIT, Inc. was incorporated on December 19, 2013, and elected REIT taxation status effective December 31, 2014, focusing on investing in properties in New York City, particularly Manhattan[185](index=185&type=chunk)[186](index=186&type=chunk) - As of June 30, 2019, the Company owned seven properties with **1.1 million rentable square feet**, acquired for **$702.0 million**, with an additional property acquired post-June 30, 2019, for **$88.8 million**[186](index=186&type=chunk)[187](index=187&type=chunk) - The Company's Estimated Per-Share NAV as of June 30, 2018, was **$20.26**, published on October 25, 2018[187](index=187&type=chunk) [Significant Accounting Estimates and Critical Accounting Policies](index=38&type=section&id=Significant%20Accounting%20Estimates%20and%20Critical%20Accounting%20Policies) States no material changes to significant accounting estimates or critical accounting policies, except for new pronouncements - There have been no material changes to significant accounting estimates and critical accounting policies, except for those required by new accounting pronouncements, since the 2018 Annual Report on Form 10-K[190](index=190&type=chunk) [Recently Issued Accounting Pronouncements](index=38&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Refers to Note 2 for a detailed discussion of recently issued accounting pronouncements and their impact - Refer to Note 2 – Summary of Significant Accounting Policies for a detailed discussion of recently issued accounting pronouncements[191](index=191&type=chunk) [Properties](index=38&type=section&id=Properties) Presents a summary of investment properties, including acquisition dates, square footage, occupancy, and remaining lease terms Investment Properties as of June 30, 2019 | Portfolio | Acquisition Date | Number of Properties | Rentable Square Feet | Occupancy | Remaining Lease Term (Years) | | :------------------------------------------ | :--------------- | :------------------- | :------------------- | :-------- | :--------------------------- | | 421 W. 54th Street - Hit Factory | Jun. 2014 | 1 | 12,327 | —% | 0 | | 400 E. 67th Street - Laurel Condominium | Sept. 2014 | 1 | 58,750 | 100.0% | 6.9 | | 200 Riverside Boulevard - ICON Garage | Sept. 2014 | 1 | 61,475 | 100.0% | 18.3 | | 9 Times Square | Nov. 2014 | 1 | 167,390 | 92.3% | 7.7 | | 123 William Street | Mar. 2015 | 1 | 542,676 | 97.7% | 6.7 | | 1140 Avenue of the Americas | Jun. 2016 | 1 | 242,466 | 91.4% | 3.8 | | 8713 Fifth Avenue | Oct. 2018 | 1 | 17,500 | 100.0% | 6.0 | | **Total/Weighted Average** | | **7** | **1,102,584** | **94.7%** | **6.1** | [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Analyzes the Company's financial performance, comparing revenues, expenses, and net loss for the periods presented - Overall portfolio occupancy increased to **94.7%** as of June 30, 2019, from **89.8%** as of June 30, 2018[194](index=194&type=chunk) Quarterly Leasing Activity Summary | Leasing Activity | Q1 2019 | Q2 2019 | | :------------------------------------------ | :------ | :------ | | New leases commenced | 4 | 5 | | Total square feet leased (New leases) | 28,612 | 35,121 | | Annualized straight-line rent per square foot (New leases) | $57.79 | $70.27 | | Weighted-average lease term (years) (New leases) | 8.3 | 8 | | Replacement leases commenced | 3 | 4 | | Square feet (Replacement leases) | 22,962 | 26,621 | | Annualized straight-line rent per square foot (Replacement leases) | $47.72 | $49.31 | | Weighted-average lease term (years) (Replacement leases) | 7.0 | 6.5 | | Number of leases terminated | 2 | 4 | | Square feet (Terminated leases) | 5,581 | 21,747 | | Annualized straight-line rent per square foot (Terminated leases) | $282.10 | $60.85 | | Tenant improvements on replacement leases per square foot | $21.61 | $30.36 | | Leasing commissions on replacement leases per square foot | $19.35 | $24.55 | [Comparison of Three Months Ended June 30, 2019 and 2018](index=39&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030%2C%202019%20and%202018) Compares financial performance for the three months ended June 30, 2019 and 2018, detailing changes in revenue and expenses - Revenue from tenants increased by **$1.3 million** to **$16.5 million**, driven by the acquisition of 8713 Fifth Avenue and changes in leasing activity[198](index=198&type=chunk) - Asset and property management fees to related parties increased by **$0.3 million** to **$1.9 million**[199](index=199&type=chunk) - Property operating expenses increased by **$0.6 million** to **$7.3 million**, mainly due to the 8713 Fifth Avenue acquisition, new leases, and higher maintenance costs[200](index=200&type=chunk) - General and administrative expenses decreased by **$0.6 million** to **$1.9 million**, primarily due to lower legal, proxy, and professional fees[203](index=203&type=chunk) - Interest expense increased by **$0.7 million** to **$4.1 million**, due to new loans in April 2018 and April 2019[205](index=205&type=chunk) [Comparison of Six Months Ended June 30, 2019 and 2018](index=41&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202019%20and%202018) Compares financial performance for the six months ended June 30, 2019 and 2018, detailing changes in revenue and expenses - Revenue from tenants increased by **$3.2 million** to **$33.6 million**, primarily due to increased occupancy[207](index=207&type=chunk) - Asset and property management fees to related parties increased by **$0.3 million** to **$3.4 million**[208](index=208&type=chunk) - Property operating expenses increased by **$1.1 million** to **$14.6 million**, mainly due to new lease commencements and higher property maintenance costs[209](index=209&type=chunk) - General and administrative expenses decreased by **$1.7 million** to **$3.8 million**, primarily due to lower legal, proxy, and professional fees[211](index=211&type=chunk) - Interest expense increased by **$1.4 million** to **$7.6 million**, due to new loans in April 2018 and April 2019[213](index=213&type=chunk) [Cash Flows from Operating Activities](index=42&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Analyzes net cash from operating activities, highlighting key drivers for the six months ended June 30, 2019 and 2018 - Net cash provided by operating activities was **$1.3 million** for the six months ended June 30, 2019, a significant improvement from net cash used of **$2.9 million** in the prior year period[215](index=215&type=chunk)[216](index=216&type=chunk) - The 2019 operating cash flow was primarily driven by a net loss of **$10.4 million** offset by **$11.8 million** in non-cash depreciation and amortization, and a **$2.5 million** decrease in prepaid expenses[215](index=215&type=chunk) [Cash Flows from Investing Activities](index=42&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Examines net cash used in investing activities, primarily for capital expenditures and acquisition deposits, for the periods presented - Net cash used in investing activities was **$7.2 million** for the six months ended June 30, 2019, primarily for capital expenditures (**$2.8 million**) and a **$4.4 million** deposit for an acquisition[217](index=217&type=chunk) - In the prior year, net cash used in investing activities was **$2.3 million**, mainly for capital expenditures at 9 Times Square, 123 William Street, and 1140 Avenue of the Americas[218](index=218&type=chunk) [Cash Flows from Financing Activities](index=42&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Reviews net cash provided by financing activities, including mortgage note proceeds, financing costs, and distributions - Net cash provided by financing activities was **$51.3 million** for the six months ended June 30, 2019, primarily from **$55.0 million** in mortgage note proceeds, offset by **$3.8 million** in financing costs[219](index=219&type=chunk) - In the prior year, net cash provided by financing activities was **$35.6 million**, mainly from **$50.0 million** in mortgage note proceeds, partially offset by **$7.5 million** in distributions paid and **$4.6 million** in common stock repurchases[220](index=220&type=chunk) [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses the Company's liquidity position, cash and equivalents, distribution policy, and funding strategy for future operations - Cash and cash equivalents increased to **$93.9 million** as of June 30, 2019, from **$48.0 million** as of December 31, 2018, primarily due to proceeds from the April 2019 loan[221](index=221&type=chunk) - The Company suspended distributions effective March 1, 2018, to enhance its ability to fund future acquisitions and execute repositioning/leasing efforts[221](index=221&type=chunk) - The Company expects to fund future acquisitions and operations through property operations and financings, believing it has sufficient cash flow for the next year[223](index=223&type=chunk) [Mortgage Loans](index=43&type=section&id=Mortgage%20Loans) Details gross aggregate borrowings, weighted-average interest rates, and future principal payment schedules for mortgage loans - As of June 30, 2019, gross aggregate borrowings were **$354.0 million** with a weighted-average effective interest rate of **4.41%**, aiming for aggregate borrowings closer to **40% to 50%** of the aggregate fair market value of its assets[227](index=227&type=chunk) - Subsequent to June 30, 2019, borrowings increased by an additional **$51.0 million** for a new property acquisition, with no additional indebtedness secured by existing properties currently anticipated[227](index=227&type=chunk) - No future scheduled principal payments on mortgage notes payable for the remainder of 2019 or for the year ended December 31, 2020[228](index=228&type=chunk) [Repositioning and Leasing Initiatives](index=44&type=section&id=Repositioning%20and%20Leasing%20Initiatives) Outlines efforts to increase portfolio occupancy and property value through repositioning and leasing initiatives - Portfolio occupancy increased to **94.7%** as of June 30, 2019, from **93.7%** as of December 31, 2018, with 9 Times Square occupancy rising to **92.3%** from **84.3%**[231](index=231&type=chunk) - Repositioning efforts at 9 Times Square, including retail frontage, new lobby, and pre-built office suites, are intended to drive occupancy and property value[232](index=232&type=chunk) - The Company is evaluating strategic alternatives for its 421 W. 54th Street property, which became vacant in Q2 2018[233](index=233&type=chunk) [Acquisitions](index=44&type=section&id=Acquisitions) Reports on property acquisitions, including the 196 Orchard Street condominium units, and their funding sources - Subsequent to June 30, 2019, the Company acquired three condominium units at 196 Orchard Street for approximately **$88.8 million**, funded by a new loan and cash on hand[234](index=234&type=chunk) [Capital Expenditures](index=44&type=section&id=Capital%20Expenditures) Summarizes capital expenditures for property improvements during the six months ended June 30, 2019 and 2018 - Capital expenditures for the six months ended June 30, 2019, totaled **$2.8 million**, primarily for improvements at 123 William Street and 9 Times Square[235](index=235&type=chunk) - Capital expenditures for the six months ended June 30, 2018, were **$2.3 million**, mainly for 9 Times Square, 123 William Street, and 1140 Avenue of the Americas[235](index=235&type=chunk) [Non-GAAP Financial Measures](index=44&type=section&id=Non-GAAP%20Financial%20Measures) Explains the use of non-GAAP financial measures like FFO, MFFO, and Cash NOI to assess the Company's performance - The Company uses non-GAAP financial measures including Funds from Operations (FFO), Modified Funds from Operations (MFFO), and Cash Net Operating Income (Cash NOI) to provide a more complete understanding of performance[237](index=237&type=chunk)[239](index=239&type=chunk)[243](index=243&type=chunk)[250](index=250&type=chunk) FFO and MFFO Reconciliation (In thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :-------------------------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (in accordance with GAAP) | $(5,827) | $(6,529) | $(10,411) | $(13,113) | | Depreciation and amortization | $7,553 | $7,562 | $14,967 | $15,293 | | **FFO (As defined by NAREIT)** | **$1,726** | **$1,033** | **$4,556** | **$2,180** | | Acquisition and transaction related | $18 | $1 | $18 | $1 | | Accretion of below- and amortization of above-market lease liabilities and assets, net | $(426) | $(463) | $(893) | $(1,073) | | Straight-line rent (revenues as lessor) | $(1,529) | $(929) | $(2,940) | $(2,055) | | Straight-line ground rent (expenses as lessee) | $27 | $27 | $54 | $54 | | **MFFO** | **$(184)** | **$(331)** | **$795** | **$(893)** | Cash NOI Reconciliation (In thousands) | Metric | Three Months Ended June 30, 2019 | Three Months Ended June 30, 2018 | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss (in accordance with GAAP) | $(5,827) | $(6,529) | $(10,411) | $(13,113) | | Other income | $(311) | $(64) | $(465) | $(128) | | General and administrative | $1,862 | $2,540 | $3,793 | $5,544 | | Asset and property management fees to related parties | $1,872 | $1,618 | $3,420 | $3,101 | | Acquisition and transaction related | $18 | $1 | $18 | $1 | | Depreciation and amortization | $7,553 | $7,562 | $14,967 | $15,293 | | Interest expense | $4,069 | $3,380 | $7,629 | $6,183 | | Accretion of below- and amortization of above-market lease liabilities and assets, net | $(426) | $(463) | $(893) | $(1,073) | | Straight-line rent (revenue as a lessor) | $(1,529) | $(929) | $(2,940) | $(2,055) | | Straight-line ground rent (expense as lessee) | $27 | $27 | $54 | $54 | | **Cash NOI** | **$7,308** | **$7,143** | **$15,172** | **$13,807** | [Distributions](index=47&type=section&id=Distributions) Discusses the suspension of common stock distributions and REIT distribution requirements in light of expected tax loss - The Company suspended monthly distributions to common stockholders effective March 1, 2018, to support future growth and acquisitions[254](index=254&type=chunk)[255](index=255&type=chunk) - REITs are required to distribute at least **90%** of their taxable income annually, with a tax loss in 2019 expected to eliminate the need for distributions to meet this requirement[254](index=254&type=chunk)[260](index=260&type=chunk) [Share Repurchase Program](index=47&type=section&id=Share%20Repurchase%20Program) Provides an update on the Share Repurchase Program, its suspension, and cumulative repurchase data - The Share Repurchase Program (SRP) has been suspended since September 25, 2018, and will remain suspended until regular cash distributions resume[256](index=256&type=chunk) Cumulative Share Repurchases | Period | Numbers of Shares Repurchased | Weighted-Average Price per Share | | :-------------------------------- | :---------------------------- | :----------------------------- | | Cumulative as of December 31, 2018 | 1,259,734 | $22.03 | | Six months ended June 30, 2019 | — | — | | Cumulative as of June 30, 2019 | 1,259,734 | $22.03 | [Contractual Obligations](index=47&type=section&id=Contractual%20Obligations) States no material changes to contractual obligations compared to the 2018 Annual Report on Form 10-K, except for a new loan - No material changes to contractual obligations as of June 30, 2019, compared to the 2018 Annual Report on Form 10-K, other than the new loan for 9 Times Square[258](index=258&type=chunk) [Election as a REIT](index=47&type=section&id=Election%20as%20a%20REIT) Confirms the Company's REIT election and intent to maintain qualification, noting a tax loss may waive distribution requirements - The Company elected to be taxed as a REIT effective December 31, 2014, and intends to maintain this qualification, with a tax loss in 2019 expected to prevent the need for distributions to meet the **90%** distribution requirement[259](index=259&type=chunk)[260](index=260&type=chunk) [Inflation](index=48&type=section&id=Inflation) Explains how lease provisions, such as fixed increases and tenant-covered expenses, mitigate the impact of inflation - Many leases include provisions for fixed or indexed rental rate increases to mitigate inflation's impact, and net leases require tenants to cover operating expenses, further reducing inflation exposure[261](index=261&type=chunk) [Related-Party Transactions and Agreements](index=48&type=section&id=Related-Party%20Transactions%20and%20Agreements) Refers to Note 9 for a detailed discussion of related-party transactions and arrangements - Refer to Note 9 – Related Party Transactions and Arrangements for a detailed discussion of related-party transactions[262](index=262&type=chunk) [Off-Balance Sheet Arrangements](index=48&type=section&id=Off-Balance%20Sheet%20Arrangements) Confirms the absence of material off-balance sheet arrangements impacting the Company's financial condition or results - The Company has no off-balance sheet arrangements that are material to its financial condition or results of operations[263](index=263&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material change in market risk exposure during the six months ended June 30, 2019, referring to the Annual Report on Form 10-K - No material change in market risk exposure during the six months ended June 30, 2019[264](index=264&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and procedures as of June 30, 2019, with no material changes to internal controls - Disclosure controls and procedures were evaluated and deemed effective as of June 30, 2019[265](index=265&type=chunk) - No material changes occurred in internal control over financial reporting during the three months ended June 30, 2019[266](index=266&type=chunk) [PART II - OTHER INFORMATION](index=43&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) Presents other information including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not involved in any material pending legal proceedings as of the reporting period - The Company is not involved in any material pending legal proceedings[268](index=268&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) Reports no material changes to risk factors previously disclosed in the 2018 Annual Report on Form 10-K - No material changes to risk factors since the 2018 Annual Report on Form 10-K[269](index=269&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds of Registered Securities](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds%20of%20Registered%20Securities) Reports no unregistered equity sales, no use of registered security proceeds, and no equity purchases by the issuer or affiliates - No unregistered sales of equity securities[270](index=270&type=chunk) - No use of proceeds from sales of registered securities[271](index=271&type=chunk) - No purchases of equity securities by the issuer or affiliated purchasers[272](index=272&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reports no defaults upon senior securities during the reporting period - No defaults upon senior securities[273](index=273&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company's operations - Not applicable[274](index=274&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) The Company reports no other information required for disclosure under this item - No other information to report[275](index=275&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Indicates that exhibits listed in the Exhibit Index are included or incorporated by reference in this Quarterly Report on Form 10-Q - Exhibits listed in the Exhibit Index are included or incorporated by reference[276](index=276&type=chunk) [Signatures](index=50&type=section&id=Signatures) Details the executive officers who signed the report and the date of signing - The report is signed by Edward M. Weil, Jr., Executive Chairman, Chief Executive Officer, President and Secretary, and Katie P. Kurtz, Chief Financial Officer, Treasurer and Secretary, on August 14, 2019[280](index=280&type=chunk) [EXHIBITS INDEX](index=51&type=section&id=EXHIBITS%20INDEX) Lists various documents included or incorporated by reference in the Quarterly Report on Form 10-Q - The Exhibit Index lists various documents included or incorporated by reference in the Quarterly Report on Form 10-Q, such as Articles of Amendment, Bylaws, Term Loan Agreements, Guaranties, and Certifications[282](index=282&type=chunk)[283](index=283&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to __________ Commission file number: 000-55393 New York City REIT, Inc. (Exact name of registrant as specified in its charter) Maryland 46-4380248 ...

Part I [Business](index=4&type=section&id=Item%201.%20Business) New York City REIT, Inc. is a Maryland REIT that acquires and manages income-producing commercial real estate, primarily office properties, in New York City, with a portfolio of seven properties as of December 31, 2018, and is externally managed - The company's primary business is investing in commercial properties within the five boroughs of New York City, with a focus on Manhattan[16](index=16&type=chunk) - The company is externally managed by New York City Advisors, LLC and has no employees; the Advisor and its affiliates receive fees for their services[20](index=20&type=chunk)[42](index=42&type=chunk) - Key investment objectives include a focus on NYC, investing in properties with at least **80% occupancy**, limiting borrowings to **40-50% of asset value**, and maximizing total returns; the company suspended monthly distributions in February 2018[22](index=22&type=chunk)[27](index=27&type=chunk) - The company elected to be taxed as a REIT beginning with the taxable year ended December 31, 2014, and intends to maintain this status[15](index=15&type=chunk)[34](index=34&type=chunk) Portfolio Summary as of December 31, 2018 | Metric | Value | | :--- | :--- | | Number of Properties | 7 | | Rentable Square Feet | 1,102,584 | | Aggregate Purchase Price | $702.0 million | [Risk Factors](index=8&type=section&id=Item%201A.%20Risk%20Factors) The company faces diverse risks including geographic concentration in New York City, stock illiquidity, suspended distributions, conflicts of interest with its external Advisor, anti-takeover corporate provisions, general real estate market downturns, debt financing, and complex REIT tax compliance [Risks Related to an Investment in New York City REIT, Inc.](index=8&type=section&id=Risks%20Related%20to%20an%20Investment%20in%20New%20York%20City%20REIT%2C%20Inc.) Investment in the company carries specific risks, including a high concentration of all properties in the New York MSA, making it vulnerable to local economic downturns, and significant illiquidity for stockholders due to non-traded stock and suspended share repurchase program and distributions - All company properties are located in the New York MSA, creating a dependency on the local economic climate and a lack of geographic diversification[47](index=47&type=chunk) - The common stock is not traded on a national exchange, and the Share Repurchase Program (SRP) is suspended, limiting stockholders' ability to sell their shares[51](index=51&type=chunk) - The company suspended dividend payments to stockholders effective March 1, 2018, with no assurance of when or if they will resume[52](index=52&type=chunk) - The portfolio has significant asset concentration, with two properties (123 William Street and 1140 Avenue of the Americas) accounting for approximately **71% of total square footage** and **73% of annualized straight-line rent** as of December 31, 2018[64](index=64&type=chunk) [Risks Related to Conflicts of Interest](index=13&type=section&id=Risks%20Related%20to%20Conflicts%20of%20Interest) Significant conflicts of interest exist due to the company's relationship with its external Advisor, AR Global, and its affiliates, creating competition for investment opportunities and personnel time, conflicting fiduciary duties for executive officers, and a compensation structure that may incentivize riskier investments - The Advisor and its affiliates face conflicts of interest in allocating suitable investment opportunities between the company and other AR Global-advised programs[82](index=82&type=chunk) - Executive officers and directors hold positions with the Advisor and other related entities, creating conflicting fiduciary duties that could be detrimental to the company's business[87](index=87&type=chunk)[88](index=88&type=chunk) - The Advisor's compensation structure, including substantial fees and performance-based distributions upon a liquidity event, may incentivize actions that are riskier or more speculative[90](index=90&type=chunk) [Risks Related to Our Corporate Structure](index=15&type=section&id=Risks%20Related%20to%20Our%20Corporate%20Structure) The company's corporate structure presents several risks, including charter limits on individual stock ownership, the board's ability to issue additional stock without stockholder approval, Maryland corporate law anti-takeover provisions, and reduced public reporting requirements as an "emerging growth company" - The company's charter limits any person from owning more than **9.8%** of its stock, which may discourage a change in control[92](index=92&type=chunk) - Maryland law prohibits certain business combinations with interested stockholders for five years, potentially making acquisitions more difficult[95](index=95&type=chunk) - The company has a classified board of directors, which may delay or prevent a change in control[98](index=98&type=chunk) - As an "emerging growth company," the company is subject to reduced public company reporting requirements, such as not needing an auditor's attestation on internal controls[101](index=101&type=chunk)[102](index=102&type=chunk) [General Risks Related to Investments in Real Estate](index=18&type=section&id=General%20Risks%20Related%20to%20Investments%20in%20Real%20Estate) The company is subject to general risks inherent in real estate investment, including adverse impacts from economic changes, tenant bankruptcies, illiquidity of assets, inability to renew leases, uninsured losses from catastrophic events, and significant costs from compliance with governmental regulations - Operating results are affected by general real estate market risks, including changes in economic conditions, tenant demand, and operating expenses[110](index=110&type=chunk) - The bankruptcy or insolvency of a tenant could result in the inability to collect rent and may delay or preclude full collection of balances due[116](index=116&type=chunk) - The company faces risks of uninsured losses, particularly from catastrophic events like terrorism, as the Terrorism Risk Insurance Act (TRIA) is set to expire[125](index=125&type=chunk)[126](index=126&type=chunk) - The portfolio is subject to risks from natural disasters and climate change, such as rising sea levels and increased storm intensity in the New York MSA[131](index=131&type=chunk) - Compliance with environmental laws and the Americans with Disabilities Act (Disabilities Act) could require substantial expenditures[135](index=135&type=chunk)[139](index=139&type=chunk) [Risks Associated with Debt Financing](index=23&type=section&id=Risks%20Associated%20with%20Debt%20Financing) The company's use of debt financing introduces significant risks, including hindering adjustments to market conditions, limiting access to capital, increasing vulnerability to economic downturns, exposure to rising interest rates from future variable-rate debt, uncertainty from the LIBOR transition, and increased default risk from interest-only loans with large balloon payments - As of December 31, 2018, the company had approximately **$291.7 million** in total outstanding indebtedness, which increases business risks such as vulnerability to economic downturns and limits financial flexibility[143](index=143&type=chunk) - The planned discontinuation of LIBOR after 2021 creates uncertainty and could increase the cost of future variable-rate debt[146](index=146&type=chunk) - The use of interest-only indebtedness, which comprised all outstanding mortgage debt at year-end 2018, increases the risk of default, as principal is not reduced and large balloon payments will be required at maturity[149](index=149&type=chunk) [U.S. Federal Income Tax Risks](index=25&type=section&id=U.S.%20Federal%20Income%20Tax%20Risks) Maintaining REIT status involves complex U.S. federal income tax risks, including the potential for corporate income tax if REIT qualification is lost, the requirement to distribute at least 90% of taxable income annually, exposure to a 100% tax on prohibited transactions, and strict ownership limitations and asset/income tests that may force the company to forgo attractive investment opportunities - Failure to maintain REIT qualification would subject the company to U.S. federal income tax at corporate rates and disqualify it from REIT treatment for four subsequent years[153](index=153&type=chunk)[154](index=154&type=chunk) - To qualify as a REIT, the company must distribute at least **90%** of its REIT taxable income annually, which may require borrowing funds or selling assets under unfavorable conditions[156](index=156&type=chunk) - The company may be subject to a **100%** tax on net income from the sale of properties deemed to be held primarily for sale to customers in the ordinary course of business (prohibited transactions)[157](index=157&type=chunk) - To help maintain REIT status, the company's charter restricts ownership by any single person to **9.8%** and requires compliance with the "five or fewer" rule, which may inhibit market activity and business combinations[174](index=174&type=chunk)[175](index=175&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the SEC - Not applicable[180](index=180&type=chunk) [Properties](index=30&type=section&id=Item%202.%20Properties) As of December 31, 2018, the company's portfolio consisted of seven properties totaling 1,102,584 rentable square feet with an overall occupancy of **93.7%** and a weighted-average remaining lease term of **6.3 years**, with future minimum base rent payments from existing leases totaling **$382.2 million**, and **$299.0 million** in gross mortgage notes payable secured by five properties Property Portfolio Overview (as of December 31, 2018) | Property | Rentable Square Feet | Occupancy | Remaining Lease Term (Years) | | :--- | :--- | :--- | :--- | | 421 W. 54th Street - Hit Factory | 12,327 | —% | — | | 400 E. 67th Street - Laurel Condominium | 58,750 | 100.0% | 7.4 | | 200 Riverside Boulevard - ICON Garage | 61,475 | 100.0% | 18.8 | | 9 Times Square | 167,390 | 84.3% | 8.1 | | 123 William Street | 542,676 | 98.3% | 7.1 | | 1140 Avenue of the Americas | 242,466 | 91.3% | 3.7 | | 8713 Fifth Avenue | 17,500 | 100.0% | 6.5 | | **Total** | **1,102,584** | **93.7%** | **6.3** | Future Minimum Base Rent Payments (in thousands) | Year | Amount | | :--- | :--- | | 2019 | $53,347 | | 2020 | $51,404 | | 2021 | $47,237 | | 2022 | $44,018 | | 2023 | $35,920 | | Thereafter | $150,226 | | **Total** | **$382,152** | Property Financing (as of December 31, 2018) | Encumbered Properties | Outstanding Loan Amount (thousands) | Interest Rate | Maturity | | :--- | :--- | :--- | :--- | | 123 William Street | $140,000 | 4.73% Fixed | Mar. 2027 | | 1140 Avenue of the Americas | $99,000 | 4.17% Fixed | Jul. 2026 | | Laurel Condominium / ICON Garage | $50,000 | 4.58% Fixed | May 2028 | | 8713 Fifth Avenue | $10,000 | 5.04% Fixed | Nov. 2028 | | **Total Gross Mortgage Notes** | **$299,000** | **4.54%** | | [Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) The company states that it is not a party to, and none of its properties are subject to, any material pending legal proceedings as of the end of the reporting period - As of the end of the period covered by this report, the company is not a party to any material pending legal proceedings[195](index=195&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[196](index=196&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=33&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) There is no public trading market for the company's common stock, with the Estimated Per-Share NAV approved at **$20.26** as of June 30, 2018, and both distributions and the Share Repurchase Program (SRP) suspended as of March 1, 2018, and September 25, 2018, respectively, while the company repurchased a total of **350,007 shares** for approximately **$5.1 million** in 2018 through two tender offers - No established public market exists for the company's common stock, and there are no current plans to list the shares on a national exchange[198](index=198&type=chunk) - The board of directors approved an Estimated Per-Share NAV of **$20.26** as of June 30, 2018[206](index=206&type=chunk) - Distributions to common stockholders were suspended effective March 1, 2018[209](index=209&type=chunk) - The Share Repurchase Program (SRP) has been suspended since September 25, 2018, and will remain so until regular cash distributions resume[216](index=216&type=chunk) - In 2018, the company conducted two tender offers in response to unsolicited bids, purchasing **139,993 shares** at **$17.03** and **210,014 shares** at **$12.95**[218](index=218&type=chunk)[220](index=220&type=chunk) [Selected Financial Data](index=36&type=section&id=Item%206.%20Selected%20Financial%20Data) This section provides a five-year summary of the company's key financial data, showing total assets growing to **$773.7 million** in 2018, total revenues reaching **$62.4 million** in 2018, but consistent net losses, widening to **$24.1 million** in 2018, with negative cash flows from operations of **$(7.1) million** in 2018, and distributions declared per share decreasing to **$0.25** in 2018 before suspension Selected Balance Sheet Data (in thousands) | | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total real estate investments, at cost | $774,494 | $753,793 | $744,945 | $550,369 | $270,083 | | Total assets | $773,742 | $760,450 | $773,604 | $726,415 | $458,565 | | Mortgage notes payable, net | $291,653 | $233,517 | $191,328 | $93,176 | $— | | Total liabilities | $330,062 | $278,966 | $233,413 | $130,276 | $21,159 | | Total stockholders' equity | $443,680 | $481,484 | $540,191 | $596,139 | $437,406 | Selected Operating Data (in thousands, except per share data) | | 2018 | 2017 | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenues | $62,399 | $58,384 | $47,607 | $26,436 | $2,851 | | Operating loss | $(11,262) | $(12,112) | $(12,705) | $(12,413) | $(6,535) | | Net loss | $(24,112) | $(23,073) | $(19,765) | $(15,785) | $(6,519) | | Cash flows (used in) provided by operations | $(7,080) | $2,282 | $4,128 | $(5,194) | $(4,965) | | Basic and diluted net loss per common share | $(0.77) | $(0.74) | $(0.64) | $(0.57) | $(0.95) | | Distributions declared per common share | $0.25 | $1.51 | $1.51 | $1.51 | $0.84 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operational results, highlighting key accounting policies and estimates, year-over-year performance where revenue growth was offset by rising expenses and interest leading to continued net losses, negative operating cash flow in 2018, and a liquidity strategy relying on cash from operations, debt financing, and retained cash from suspended distributions to fund capital expenditures and potential acquisitions, while also providing definitions and reconciliations for non-GAAP measures like FFO, MFFO, and Cash NOI [Results of Operations](index=38&type=section&id=Results%20of%20Operations) For 2018 compared to 2017, rental income increased by **$3.2 million** to **$57.1 million** due to increased occupancy and an acquisition, but total operating expenses rose by **$3.2 million** to **$73.7 million** and interest expense increased by **$2.1 million**, resulting in a net loss of **$24.1 million** for 2018, an increase from the **$23.1 million** loss in 2017, with a similar trend observed in the 2017 vs 2016 comparison Comparison of Results: 2018 vs. 2017 (in millions) | Metric | 2018 | 2017 | Change | | :--- | :--- | :--- | :--- | | Rental Income | $57.1 | $53.9 | +$3.2 | | Total Revenues | $62.4 | $58.4 | +$4.0 | | Total Operating Expenses | $73.7 | $70.5 | +$3.2 | | Interest Expense | $13.3 | $11.2 | +$2.1 | | Net Loss | $(24.1) | $(23.1) | +$1.0 | Comparison of Results: 2017 vs. 2016 (in millions) | Metric | 2017 | 2016 | Change | | :--- | :--- | :--- | :--- | | Rental Income | $53.9 | $44.2 | +$9.7 | | Total Revenues | $58.4 | $47.6 | +$10.8 | | Total Operating Expenses | $70.5 | $60.3 | +$10.2 | | Interest Expense | $11.2 | $7.4 | +$3.8 | | Net Loss | $(23.1) | $(19.8) | +$3.3 | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2018, the company had **$48.0 million** in cash and cash equivalents, with primary liquidity sources being cash from property operations and debt financing, and the suspension of distributions in March 2018 intended to enhance liquidity for future acquisitions and repositioning efforts, while principal cash demands include operating expenses, debt service, capital expenditures (totaling **$9.0 million** in 2018), and tenant improvements, with plans to increase leverage to **40-50%** of asset fair market value, and aggregate borrowings of **$299.0 million** at year-end 2018 - Cash and cash equivalents were **$48.0 million** as of December 31, 2018, up from **$39.6 million** at year-end 2017[282](index=282&type=chunk) - The suspension of distributions effective March 1, 2018, is intended to enhance the company's ability to fund future acquisitions and leasing efforts[282](index=282&type=chunk) - In April 2018, the company entered into a new **$50.0 million loan**, using the proceeds for share repurchases, capital expenditures, acquisitions, and general corporate purposes[285](index=285&type=chunk) - The company's repositioning and leasing initiatives increased portfolio occupancy to **93.7%** as of Dec 31, 2018, from **88.3%** a year prior[290](index=290&type=chunk) [Non-GAAP Financial Measures](index=44&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures, including Funds from Operations (FFO), Modified Funds from Operations (MFFO), and Cash Net Operating Income (Cash NOI), to provide supplemental insight into its performance, with FFO adjusting net loss for real estate depreciation and amortization, MFFO further adjusting FFO for acquisition-related expenses and non-cash rent adjustments, and Cash NOI reflecting property-level income and expense items, resulting in FFO of **$5.6 million**, MFFO of **$(0.5) million**, and Cash NOI of **$27.5 million** for 2018 - The company uses FFO and MFFO as supplemental performance measures consistent with NAREIT and IPA guidelines, respectively, to provide a more complete understanding of operating performance by excluding items like real estate depreciation and acquisition-related costs[297](index=297&type=chunk)[301](index=301&type=chunk) Reconciliation of Net Loss to FFO and MFFO (in thousands) | | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Net loss (GAAP) | $(24,112) | $(23,073) | $(19,765) | | Depreciation and amortization | 29,690 | 29,539 | 25,586 | | **FFO** | **$5,578** | **$6,466** | **$5,821** | | MFFO Adjustments | (6,072) | (5,523) | (737) | | **MFFO** | **$(494)** | **$943** | **$5,084** | - Cash Net Operating Income (Cash NOI) is used internally to evaluate the operating performance of real estate assets on an unlevered basis, reflecting only property-level income and expense items[310](index=310&type=chunk) Cash NOI (in thousands) | | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | **Cash NOI** | **$27,542** | **$25,923** | **$22,251** | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to interest rate changes, with all of its **$299.0 million** in debt being fixed-rate as of December 31, 2018, which mitigates the impact of interest rate fluctuations on cash flows and earnings, although a hypothetical **100 basis point** increase in interest rates would decrease the fair value of this debt by **$19.5 million**, while the company does not hold derivative contracts for speculative purposes and has no foreign currency exposure - The company's main market risk is interest rate risk; as of December 31, 2018, all debt was fixed-rate, minimizing the impact of rate changes on earnings and cash flows[326](index=326&type=chunk)[327](index=327&type=chunk) - A **100 basis point** increase in market interest rates would result in a decrease in the fair value of the company's fixed-rate debt by **$19.5 million**, while a **100 basis point** decrease would increase its fair value by **$21.1 million**[327](index=327&type=chunk) [Financial Statements and Supplementary Data](index=49&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This item incorporates by reference the company's Consolidated Financial Statements and related notes, which begin on page F-1 of the Annual Report on Form 10-K - The information required by this item is incorporated by reference to the Consolidated Financial Statements beginning on page F-1 of the report[329](index=329&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=49&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[330](index=330&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of December 31, 2018, and management's annual report on internal control over financial reporting, based on the COSO framework, also concluded that internal controls were effective, with no material changes to internal control over financial reporting during the fourth quarter of 2018 - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[332](index=332&type=chunk) - Based on an evaluation using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2018[335](index=335&type=chunk) [Other Information](index=50&type=section&id=Item%209B.%20Other%20Information) On March 13, 2019, the company filed an amendment to its charter to change its corporate name from American Realty Capital New York City REIT, Inc. to New York City REIT, Inc. - Effective March 13, 2019, the company changed its name from American Realty Capital New York City REIT, Inc. to New York City REIT, Inc.[337](index=337&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=51&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding the company's directors, executive officers, and corporate governance, including its code of ethics, is incorporated by reference from its definitive proxy statement for the 2019 annual meeting of stockholders - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2019 annual meeting of stockholders[341](index=341&type=chunk) [Executive Compensation](index=51&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the company's definitive proxy statement for the 2019 annual meeting of stockholders - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2019 annual meeting of stockholders[342](index=342&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=51&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners, management, and related stockholder matters is incorporated by reference from the company's definitive proxy statement for the 2019 annual meeting of stockholders - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2019 annual meeting of stockholders[343](index=343&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=51&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the company's definitive proxy statement for the 2019 annual meeting of stockholders - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2019 annual meeting of stockholders[344](index=344&type=chunk) [Principal Accounting Fees and Services](index=51&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive proxy statement for the 2019 annual meeting of stockholders - The information required by this item is incorporated by reference from the company's definitive proxy statement for its 2019 annual meeting of stockholders[345](index=345&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=51&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the financial statement schedules and exhibits filed with the Form 10-K, including Schedule III – Real Estate and Accumulated Depreciation, and key corporate documents such as the Articles of Amendment for the name change, the Second Amended and Restated Advisory Agreement, various loan agreements, and management certifications - The filing includes the financial statement schedule: Schedule III – Real Estate and Accumulated Depreciation[347](index=347&type=chunk) - Key exhibits filed include the Articles of Amendment for the name change to New York City REIT, Inc., the Second Amended and Restated Advisory Agreement with the Advisor, and various property loan and management agreements[351](index=351&type=chunk) [Form 10-K Summary](index=53&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - Not applicable[354](index=354&type=chunk) Financial Statements and Notes [Consolidated Financial Statements](index=57&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements present the company's financial position as of December 31, 2018 and 2017, and its results of operations and cash flows for the three years ended December 31, 2018, reporting total assets of **$773.7 million**, total liabilities of **$330.1 million**, total stockholders' equity of **$443.7 million**, total revenues of **$62.4 million**, a net loss of **$24.1 million** or **$(0.77)** per share, and net cash used in operating activities of **$7.1 million** for the year ended December 31, 2018 Consolidated Balance Sheet Highlights (as of Dec 31, 2018, in thousands) | | Amount | | :--- | :--- | | Total real estate investments, net | $684,259 | | Total assets | $773,742 | | Mortgage notes payable, net | $291,653 | | Total liabilities | $330,062 | | Total stockholders' equity | $443,680 | Consolidated Statement of Operations Highlights (Year Ended Dec 31, 2018, in thousands) | | Amount | | :--- | :--- | | Total revenues | $62,399 | | Total operating expenses | $73,661 | | Operating loss | $(11,262) | | Net loss | $(24,112) | | Basic and diluted net loss per share | $(0.77) | [Notes to Consolidated Financial Statements](index=61&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosure on the company's accounting policies, real estate investments, debt, related-party transactions, and other financial matters, including specifics of its seven-property portfolio, terms of its **$299 million** in mortgage debt, complex fee structure with its external Advisor, confirmation of suspended distributions and Share Repurchase Program, and explanations of various fees payable to the Advisor and its affiliates for services and potential performance-based compensation [Note 3 — Real Estate Investments](index=71&type=section&id=Note%203%20%E2%80%94%20Real%20Estate%20Investments) This note details the company's real estate portfolio, including the acquisition of one property in 2018 for a cash payment of **$5.9 million**, funded partially by a new **$10.0 million mortgage**, and projected future minimum base rent payments from existing leases totaling **$382.2 million** as of December 31, 2018, along with amortization schedules for intangible assets and liabilities - In 2018, the company acquired one property, determined to be an asset acquisition, for a net cash payment of **$5.9 million**[443](index=443&type=chunk) - As of December 31, 2018, future minimum base rent payments due to the company total **$382.2 million**[444](index=444&type=chunk) [Note 4 — Mortgage Notes Payable, Net](index=73&type=section&id=Note%204%20%E2%80%94%20Mortgage%20Notes%20Payable%2C%20Net) As of December 31, 2018, the company had four separate fixed-rate mortgage notes payable with a gross outstanding balance of **$299.0 million** and a net balance of **$291.7 million** after deferred financing costs, with a weighted-average effective interest rate of **4.54%**, all being interest-only loans with principal due at maturity between 2026 and 2028, secured by five of the company's properties, and including a new **$50.0 million loan** entered into in April 2018 Mortgage Notes Payable Summary (as of Dec 31, 2018) | | Gross Amount (thousands) | | :--- | :--- | | Mortgage notes payable, gross | $299,000 | | Deferred financing costs, net | $(7,347) | | **Mortgage notes payable, net** | **$291,653** | - All mortgage notes require interest-only payments, with the full principal amounts due at maturity[453](index=453&type=chunk)[457](index=457&type=chunk) [Note 8 — Related Party Transactions and Arrangements](index=80&type=section&id=Note%208%20%E2%80%94%20Related%20Party%20Transactions%20and%20Arrangements) This note details the extensive financial relationship with the Advisor and its affiliates, including a new advisory agreement effective November 2018 that eliminated acquisition and financing coordination fees but established a new fixed and variable asset management fee structure, resulting in **$11.7 million** in total operations-related fees and reimbursements to related parties for 2018, and outlining potential termination fees payable to the Advisor and a subordinated **15%** participation for the Special Limited Partner in net proceeds from a sale or listing, contingent upon investors receiving a **6%** cumulative annual return - A new advisory agreement effective November 16, 2018 eliminated acquisition and financing coordination fees but changed the asset management fee to a fixed monthly amount plus a variable fee based on new equity proceeds[494](index=494&type=chunk)[501](index=501&type=chunk)[507](index=507&type=chunk) - For the year ended December 31, 2018, the company incurred **$5.6 million** in cash asset management fees and **$0.6 million** in property management fees to related parties[509](index=509&type=chunk)[514](index=514&type=chunk) - The Special Limited Partner, an affiliate of the Advisor, is entitled to a subordinated distribution of **15%** of net proceeds upon liquidation or listing, after investors receive their capital back plus a **6%** cumulative annual return[525](index=525&type=chunk)[528](index=528&type=chunk) - A termination of the advisory agreement in connection with a change of control could trigger a termination fee to the Advisor of **$15.0 million** plus three or four times the prior year's management fees[531](index=531&type=chunk)