Trinity Place (US:TPHS)2020-11-06 22:17Financial Performance - Rental revenues decreased by approximately $750,000 to $196,000 for Q3 2020 from $946,000 in Q3 2019, primarily due to lower occupancy and increased concessions [148]. - Property operating expenses increased by approximately $1.5 million to $2.7 million for Q3 2020 from $1.2 million in Q3 2019, mainly due to $2.5 million in costs for repairing construction-related defects [150]. - Net loss attributable to common stockholders increased by approximately $2.8 million to $5.4 million for Q3 2020 from $2.6 million in Q3 2019 [161]. - For the nine months ended September 30, 2020, rental revenues decreased by approximately $2.7 million to $774,000 from $3.5 million in the same period in 2019 [162]. - Property operating expenses for the nine months ended September 30, 2020 increased by approximately $2.8 million to $5.5 million from $2.7 million in the same period in 2019 [164]. - General and administrative expenses remained flat at $4.0 million for the nine months ended September 30, 2020 and 2019 [167]. - Net income attributable to common stockholders increased by approximately $19.2 million to $11.9 million for the nine months ended September 30, 2020, from a loss of $7.3 million in the same period in 2019 [177]. Construction and Development - The construction of the 77 Greenwich project was temporarily suspended due to COVID-19, but has since resumed, with 100% of the building enclosure complete and residential unit framing approximately 80% complete as of September 30, 2020 [130]. - The company anticipates that the construction project for 77 Greenwich will be completed within budget, despite delays caused by COVID-19 [134]. - The company is currently in discussions with the lender to amend terms related to the sales pace covenant for the 77 Greenwich Construction Facility due to the impact of COVID-19 [134]. - The SCA has agreed to pay the company $41.5 million for the purchase of a condominium unit as part of the 77 Greenwich development, with an additional $5.0 million for construction supervision fees [131]. - The company recognized a gain of approximately $20.0 million from the sale of the school condominium unit to the SCA, along with an additional gain of $4.2 million related to the construction supervision fee [133]. Property Management - The Paramus property has a total rentable space of 77,000 square feet and achieved 100% rent collection during the third quarter ended September 30, 2020 [135]. - The 237 11th property has a current occupancy rate of 20.0% due to remediation work, with approximately 98.3% of rent collected during the third quarter ended September 30, 2020 [140]. - The Berkley, a joint venture property, is currently 96.8% leased and collected approximately 95.3% of rent due during the third quarter ended September 30, 2020 [141]. - Approximately 98.3% of rent due was collected during the third quarter ended September 30, 2020 [187]. - The occupancy rate currently stands at 20.0%, impacted by remediation work due to construction defects [187]. Cash Flow and Liquidity - As of September 30, 2020, total cash and restricted cash amounted to $18.2 million, a slight decrease from $18.7 million as of December 31, 2019 [179]. - The company expects to meet liquidity requirements through cash flow from operations, new debt financings, and proceeds from divestitures [178]. - Net cash used in operating activities increased by approximately $4.2 million to $7.0 million for the nine months ended September 30, 2020, compared to $2.8 million for the same period in 2019 [195]. - Net cash used in investing activities increased by approximately $7.6 million to $48.4 million for the nine months ended September 30, 2020, primarily due to investments in joint ventures [196]. - Net cash provided by financing activities increased by approximately $8.3 million to $54.9 million for the nine months ended September 30, 2020, compared to $46.6 million for the same period in 2019 [197]. Debt and Interest Rates - The Corporate Credit Facility has an outstanding balance of $34.0 million as of September 30, 2020, with an effective interest rate of 9.375% [183]. - The 237 11th Loan had a balance of $52.4 million as of September 30, 2020, with an effective interest rate of 2.75% [184]. - The 77 Greenwich Construction Facility has a balance of $135.2 million as of September 30, 2020, with an effective interest rate of 9.25% [188]. - The new 7-year Berkley Loan is for $33.0 million at a fixed interest rate of 2.717% and is interest-only for the first five years [192]. - The company has a variable-rate secured line of credit with a balance of $7.15 million, which is sensitive to market interest rate changes [216]. - A 100 basis point increase in interest rates could result in a change in interest expense ranging from approximately $480,000 lower to $1.8 million higher [216]. - The Corporate Credit Facility bears interest at a rate of 5.25% plus a scheduled interest of 4.0%, increasing by 0.125% every six months [215]. Risks and Future Outlook - The company has identified various risks, including political and economic uncertainty, which could materially affect future results [213]. - The company is exposed to interest rate risk as the primary market risk in its business strategies [211]. - The company may enter into interest rate hedge contracts to mitigate interest rate risk associated with its debt instruments [215]. - The fair value of the company's variable-rate debt is expected to decrease if interest rates increase, similar to bond price behavior [216]. - The company believes it can satisfy working capital needs through existing cash, debt issuances, and asset sales over the next 12 months [194]. Tax and Operating Losses - The company has approximately $227.6 million in federal net operating loss carryforwards as of September 30, 2020, which can reduce future taxable income and capital gains [127]. - The company has approximately $227.6 million in U.S. Federal net operating losses (NOLs) as of September 30, 2020 [199]. - Real estate tax expense decreased by $205,000 to $59,000 for the nine months ended September 30, 2020 from $264,000 in the same period in 2019, primarily due to the sale of the West Palm Beach property [166].