American Strategic Investment Co.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
NYC$5.91-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-19.
0001628280-25-013880
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001628280-26-025292
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 174 previous paragraphs and 173 current paragraphs.
100 unchanged; 41 reworded; 30 added; 30 removed; 3 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
In furtherance of this strategy, we disposed of our 1140 Avenue of the Americas property in 2025. We pursued a cooperative consensual foreclosure with the lender and in connection with this, we removed the related assets and liabilities from our consolidated balance sheet and recognized a gain of $47.9 million that is reflected in the consolidated statements of operations for the year ended December 31, 2025. See “Item 2. Properties.”
Current report
Our Portfolio
Current report
As of December 31, 2025, two of our mortgages encumbering three of our properties aggregating $60.0 million in principal are in either default and/or remained in a cash trap events. See the Liquidity and Capital Resources section elsewhere in this Annual Report on Form 10-K for more information. The lenders holding one of such mortgages in default, which is in respect of our 1140 Avenue of the Americas property, have accelerated the debt outstanding under the applicable loan agreement and in June 2025 initiated foreclosure litigation as a result of alleged defaults. In September 2025, the Company and the lender agreed to pursue a cooperative consensual foreclosure. On September 11, 2025, the court overseeing the foreclosure appointed a receiver, and the Company ceased managing the property. As a result of the consensual foreclosure and the appointment of the receiver, the Company removed its related assets and liabilities from the consolidate balance sheet as of September 30, 2025. In addition, the 400 E. 67th Street/200 Riverside Blvd. properties are also in default and the lenders have accelerated the debt outstanding under the applicable loan agreement. See also Note 5 – Mortgage Notes Payable, Net — Debt Covenant Non-Compliance, Cash Sweep Events, Notices of Defaults and of Acceleration and Foreclosure Litigation to our condensed consolidated financial statements in this Annual Report on Form 10-K for further discussion.
Current report
Our portfolio is primarily comprised of office and retail tenants. We have collected 98% of cash rent due across our entire portfolio for the year ended December 31, 2025. We expect our cash rent collections will stay at that level, however there can be no assurance that we will be able to collect cash rent due in the future.
Current report
We intend to continue focusing on selling performing properties, entering into new leases, and divesting from underperforming assets. However, we cannot predict with certainty the outcome of these actions in terms of generating liquidity.
Current report
We face significant liquidity constraints due to a combination of factors, including sustained declines in rental income, constrained cash flow from operations, and ongoing debt service obligations. Our portfolio consists primarily of office properties located in Manhattan, which have been adversely impacted by shifts in market demand following the COVID-19 pandemic. While we have successfully executed lease transactions to mitigate vacancy risk, new leases have been signed at market rental rates below prior contractual rates, resulting in decreased revenue compared to historical levels.
Current report
Our cash outlays consist principally of professional fees, consultant fees, legal fees, insurance costs, auditing costs, general and administrative expenses, principal and interest payments on debts, property maintenance, property taxes, and other property-related expenses not covered by tenants. To the extent we need to raise additional capital to meet our obligations, there can be no assurance that financing will be available when needed. If we are unable to sell certain assets as anticipated or at expected prices, we may not have sufficient cash to fund operations and commitments. Although there can be no assurance that external financing will be available on favorable terms when needed, our Advisor has indicated both the ability and willingness to lend us funds pursuant to promissory notes to address liquidity requirements, if necessary.
Current report
Derivative Instruments
Current report
Revenue from tenants decreased $18.3 million to $43.3 million for the year ended December 31, 2025, compared to $61.6 million for the year ended December 31, 2024, primarily due to the dispositions of our 1140 Avenue of the Americas and 9 Times Square properties during the years ended December 31, 2025 and December 31, 2024, respectively, resulting in a $18.3 million decrease in revenue from tenants.
Current report
During the year ended December 31, 2025, we recorded an impairment charge of $7.1 million on our 1140 Avenue property. This charge was recognized to reduce the property's carrying value to its estimated fair value.
Current report
During the year ended December 31, 2025, we recorded impairment charges totaling $13.1 million, related to our 400 E. 67th Street/200 Riverside Blvd. properties. These charges were recognized to reduce the carrying value of the property to its estimated fair value.
Current report
During the year ended December 31, 2025, we recorded impairment charges totaling $10.3 million, related to our 196 Orchard Street property. These charges were recognized to reduce the carrying value of the property to its estimated fair value.
Current report
Gain (loss) on Disposition of Real Estate Investments
Current report
During the year ended December 31, 2025, we recorded a gain on disposition of real estate investments of $47.9 million related to our 1140 Avenue of Americas property after the receiver took control of the Property. During the year ended December 31, 2024, we recorded a loss on disposition of real estate investments of $0.3 million related to our 9 Times Square property. See Note 6 — Property Dispositions to our 2025 Financial Statements for further details.
Current report
General and administrative expenses decreased $0.9 million to $8.3 million for the year ended December 31, 2025 compared to $9.2 million for the year ended December 31, 2024. The decrease in expenses is primarily related to the consensual foreclosure of 1140 Avenue of the Americas during the year ended December 31, 2025.
Current report
Interest Expense Associated with Property in Receivership
Current report
Interest expense increased to $10.3 million for the year ended December 31, 2025 as compared to $0.0 for the year ended December 31, 2024. The increase in interest expense associated with property in receivership is due to the court appointment of a receiver for 1140 Avenue of Americas.
Current report
Debt Covenant Non-Compliance, Cash Sweep Events, Notices of Defaults and of Acceleration and Foreclosure Litigation
Current report
On June 27, 2025, the trustee appointed to act on behalf of the lenders filed a complaint with the Supreme Court of the State of New York in the County of New York (the “New York County Court”), naming the OP and our subsidiary borrower under such loan agreement as defendants, requesting the New York County Court initiate foreclosure proceedings on the mortgage on the property and that the OP and such borrower pay the lenders the amount of the debt, inclusive of certain accrued fees and expenses, remaining unsatisfied after the sale of the property. On July 21, 2025, the trustee filed a motion with the New York County Court to appoint a receiver with respect to the property. On August 6, 2025, we filed our answer to such complaint, which admitted in part, denied in part the material allegations and stated that we have insufficient knowledge and information upon which to form a belief as to whether we have, as of yet, unstated affirmative defenses available. Notwithstanding the OP being named as defendant in the complaint, the complaint does not allege events giving rise to a recourse obligation by the OP under the guaranty agreement related to the loan agreement, and we do not believe that any of the allegations against the OP are sufficient to trigger any such recourse obligation of the OP under the guaranty agreement.
Current report
In September 2025, we agreed with the lender to pursue a consensual foreclosure. On September 11, 2025, the New York County Court appointed a receiver and we ceased managing the property. As a result of the consensual foreclosure and the appointment of the receiver, we removed our related assets and liabilities from the consolidated balance sheet as of December 31, 2025 and recognized a gain of $47.9 million which is reflected in the consolidated statements of operations for the year ended December 31, 2025.
Current report
We also recorded a contract asset of $108.6 million and the related debt associated with property under receivership and accrued interest associated with property under receivership of $99.0 million and $9.6 million, respectively, are included in our consolidated balance sheet as of December 31, 2025. This contract asset represents our right to debt extinguishment once the foreclosure process on the 1140 Avenue of the Americas property is completed.
Current report
In addition, the 1140 Avenue of the Americas property includes a ground lease agreement, for more information on the ground lease please see Note 10 — Commitments and Contingencies. Upon disposition of the 1140 Avenue of the Americas property, we removed the related ROU asset and lease liability from the condensed consolidated balance sheet.
Current report
On November 6, 2025, we received a notice from the a special servicer on behalf of the lender identifying certain additional events of default, specifically incurrence of indebtedness that does not constitute permitted indebtedness and incurrence of liens that are not in favor of the lender or permitted encumbrances, subject to certain exceptions, as a result of our alleged failure to make certain additional payments and certain liens filed on the property as a result thereof. In such notice, the lender notified us that, due to the alleged events of default under the loan agreement, the loan had been accelerated, and all amounts under the loan agreement were due and payable, together with interest at the default rate set forth in the loan agreement, which is a rate annum equal to the lesser of (i) the maximum rate permitted by applicable law, or (ii) four percent (4%) above the interest rate of 4.516% per annum, compounded monthly. Such amounts include, but are not limited to, the $50.0 million principal amount of the promissory notes evidencing the loan agreement. We are evaluating our options with respect to the property and there can be no assurance as to the resolution of these matters with the lender.
Current report
On January 21, 2026, the trustee appointed to act on behalf of the lenders filed a complaint with the New York County Court, naming the OP and our subsidiary borrowers under such loan agreement as defendants, requesting the New York County Court initiate foreclosure proceedings on the mortgage on the property and that the OP and such borrower pay the lenders the amount of the debt, inclusive of certain accrued fees and expenses, remaining unsatisfied after the sale of the property.
Current report
March 16, 2026, we filed our answer to such complaint, which admitted in part and denied in part the material allegations and asserted certain affirmative defenses. While the OP is named as a defendant in the complaint and the complaint alleges facts that under certain circumstances could give rise to limited recourse obligation by the OP under the guaranty agreement related to the loan agreement, we do not believe that any of the allegations against the OP are sufficient to trigger any such recourse obligation of the OP under the guaranty agreement.
Current report
The loan agreements for 123 William Street, 8713 Fifth Avenue and 196 Orchard do not contain cross-default provisions such that the default matters related to 1140 Avenue of the Americas or 400 E. 67th Street/200 Riverside Blvd., and the acceleration of the outstanding obligation under the loan agreement related to the 1140 Avenue of the Americas or the 400 E. 67th/200 Riverside Blvd. properties, is not expected to have an impact on those properties under such loan agreements.
Current report
We had no acquisitions during the year ended December 31, 2025. During the year ended December 31, 2025, we lost our economic interest and control therefore disposed of our 1140 Avenue of the Americas property. In September 2025, we and the lender pursued a cooperative consensual foreclosure. On September 11, 2025, the New York County Court appointed a receiver and we ceased managing the property. In connection with this, we removed its related assets and liabilities from the consolidated balance sheet effective September 11, 2025, the date the New York County Court appointed receiver took control of the property (excluding accounts payable and accrued expenses totaling approximately $2.0 million, retained by us), and recognized a gain of $47.9 million that is reflected in the consolidated statements of operations for the year ended December 31, 2025.
Current report
We also recorded a contract asset of $108.6 million and the related debt associated with property under receivership and accrued interest associated with property under receivership of $99.0 million and $9.6 million, respectively, are included in the consolidated balance sheet as of December 31, 2025. This contract asset represents our right to debt extinguishment once the foreclosure process on the 1140 Avenue of the Americas property is completed.
Current report
In addition, the 1140 Avenue of the Americas property includes a ground lease agreement, for more information on the ground lease please see Note 10 — Commitments and Contingencies. Upon disposition of the 1140 Avenue of the Americas property, we removed the related ROU asset and lease liability from the consolidated balance sheet.
Current report
(1)During the year ended December 31, 2025 the Company recognized a gain of $47.9 million related to the disposition of 1140 Avenue of the Americas. During the year ended December 31, 2024, the Company recognized a loss of $0.3 million related to the disposition of 9 Times Square.
Removed paragraphs (30)
Previous report
Management Update on the Continuing Adverse Economic Impacts Since the COVID-19 Pandemic
Previous report
Cash Collection and Mortgage Covenant Breaches
Previous report
In prior periods, the COVID-19 pandemic caused certain of our tenants to be unable to make rent payments to us timely, or at all. With the exception of one minor lease deferral during the third quarter of 2022, rent collections from our tenants have generally been timely in the years ended December 31, 2024 and 2023 and no other deferral or abatement agreements were entered into.
Previous report
Beginning in the third and fourth quarters of 2020, the operating results at (i) 1140 Avenue of the Americas, (ii) 9 Times Square (which we sold in December 2024), (iii) 400 E. 67th Street - Laurel Condominium/200 Riverside Boulevard Garage and (iv) 8713 Fifth Avenue properties were negatively impacted, causing covenant non-compliance or cash trap events under the respective non-recourse mortgages for those properties to be triggered. Thus, we have not been able to use excess cash flows, if any, from these properties while the cash trap events are active to fund operating expenses at our other properties and other capital requirements.
Previous report
As of December 31, 2024, our 1140 Avenue of the Americas, 400 E. 67th Street/200 Riverside Boulevard, and 8713 Fifth Avenue mortgages, aggregating $159.0 million in principal amounts, remained in cash trap events, as described in detail further below in the Liquidity and Capital Resources section and “Item 1A. Risk Factors” in this Annual Report on Form 10-K. While the Company has no corporate-level revolving credit facility or other committed liquidity sources, it successfully repaid its most imminent debt maturity and has no other mortgage obligation due until June 2026. However, each loan includes cash management provisions that have resulted in ongoing lender-imposed cash constraints, restricting the Company’s ability to access rental cash flows for general corporate purposes. These restrictions, combined with declining rental revenue and increasing accounts payable balances have exacerbated liquidity challenges.
Previous report
We own certain properties with leases that include provisions for the tenant to pay contingent rental income based on a percent of the tenant’s sales upon the achievement of certain sales thresholds or other targets which may be monthly, quarterly or annual targets. As the lessor to the aforementioned leases, we defer the recognition of contingent rental income, until the specified target that triggered the contingent rental income is achieved, or until such sales upon which percentage rent is based are known. For the years ended December 31, 2024, 2023 and 2022, approximately $0.1 million, $0.1 million and $0.5 million, respectively, in contingent rental income is included in revenue from tenants in the consolidated statements of operations and comprehensive loss.
Previous report
•Occupancy at 1140 Avenues of the Americas decreased to 74.1% as of December 31, 2024, compared to 77.1% as of December 31, 2023.
Previous report
Revenue from tenants decreased $1.1 million to $61.6 million for the year ended December 31, 2024, compared to $62.7 million for the year ended December 31, 2023. The decrease in revenue was primarily due to bad debt expense as a result of a lease renegotiation with a tenant at 123 William Street.
Previous report
During the year ended December 31, 2024, we recorded total impairment charges of $112.5 million as compared to $66.6 million impairment charges recorded during the year ended December 31, 2023.
Previous report
We recorded $0.5 million of impairment charges related to our 421 W. 54th Street - Hit Factory property during the year ended December 31, 2023. This property was sold in October 2023 for a contract sales price of $4.5 million. We recorded the impairment charges on this property because we determined that the carrying value exceeded the sales price of the asset, less the costs to sell the property.
Previous report
In addition, we recorded an impairment charge of $66.1 million during the year ended December 31, 2023 for our 1140 Avenues of the Americas property. Our 1140 Avenue of the Americas property is encumbered by a non-recourse, secured mortgage note with a principal balance of $99.0 million, which matures in July 2026. At December 31, 2023 we determined that it was more likely than not that we would be unable to extend or refinance the mortgage note encumbering the property and the property could be sold or otherwise disposed of before the end of its previously estimated useful life. Accordingly, for purposes of assessing recoverability, we considered the period through debt maturity in July 2026 to be the period over which it had both intent and ability to hold the property. After estimating the projected future cash flows from the property through the maturity of the mortgage, we determined that the estimated future cash flows did not recover the carrying value of the property. Accordingly, we recorded an impairment charge to reduce the value of the property to its current fair value.
Previous report
General and administrative expenses remained flat at $9.2 million for both the years ended December 31, 2024 and 2023.
Previous report
During the year ended December 31, 2024, we issued shares of our common stock to the Advisor in lieu of cash for the February 2024 general and administrative reimbursement expenses. For additional information on these and other subsequent activities, please see Note 10 — Related Party Transactions and Arrangements to our consolidated financial statements in this Annual report on Form 10-K.
Previous report
We do not currently have a commitment for a corporate-level revolving credit facility or any other corporate-level indebtedness, and there can be no assurance we would be able to obtain corporate-level financing on favorable terms, or at all.
Previous report
There are no future scheduled principal payments on our mortgage notes payable for the remainder of 2025. The next future scheduled principal payments on our mortgage notes payable are in July 2026. In October 2024 we exercised the option in the 9 Times Square mortgage note to extend the maturity of this mortgage note payable to January 2025. This loan had a principal balance of $49.5 million at the time. On December 18, 2024, we sold the 9 Times Square property. For additional information please see Note 3 - Real Estate Investments to our 2024 Financial Statements.
Previous report
Debt Covenant Non-Compliance
Previous report
Cash Sweep Events
Previous report
On April 29, 2024, we entered a cash sweep period under the non-recourse mortgage secured by the 9 Times Square asset pursuant to an amendment which, among other things, extended the maturity of the loan to October 31, 2024, which we further extended to January 31, 2025, pursuant to an option contained in such agreement. The amendment provided that Excess Cash Flow (as defined in the Amendment) shall be deposited to an account maintained by the Administrative Agent within ten (10) calendar days of the end of each month. As of December 31, 2024 we had no cash retained by the lender in a restricted cash account on our consolidated balance sheet. The 9 Times Square loan was paid off during the quarter ended December 31, 2024 in connection with the closing of the sale of that property.
Previous report
Notes Payable to Related Parties
Previous report
Pursuant to the terms of a promissory note executed during the three months ended June 30, 2024 between us and the Advisor, we borrowed $0.15 million from the Advisor for working capital needs. We recorded this borrowing as a note payable to related parties as of June 30, 2024 on our consolidated balance sheet. The promissory note bore interest at an annual rate of 9.39% and would have been callable on or after September 26, 2024. In July 2024, we fully repaid the promissory note with cash on hand including interest, which was immaterial. Amounts repaid under the promissory note may not be reborrowed.
Previous report
Additionally, pursuant to the terms of a promissory note executed during the three months ended September 30, 2024 between us and the Advisor, we borrowed $0.575 million from the Advisor for working capital needs. We recorded this borrowing as a note payable to related parties as of September 30, 2024 on our consolidated balance sheet. The promissory note bore interest at an annual rate of 8.63% and would have been callable on or after December 29, 2024. Amounts repaid under the promissory note may not be reborrowed. During the fourth quarter of 2024, we repaid all amounts outstanding under this promissory note with the Advisor with cash on hand including interest, which was immaterial.
Previous report
Rights Offering
Previous report
In February 2023, we raised gross proceeds of $5.0 million ($4.1 million of net proceeds) from our non-transferrable rights offering (the “Rights Offering”), which entitled holders of rights to purchase 0.20130805 of a share of our Class A common stock for every right held at a subscription price of $12.95 per whole share. As a result, we issued 386,100 shares of our Class A common stock subscribed for in our Rights Offering on February 27, 2023. The net proceeds were used for general corporate purposes.
Previous report
(1)Retroactively adjusted for the effects of the Reverse Stock Split (see Note 1 for additional information).
Previous report
Dividend Policy
Previous report
Through the six months ended June 30, 2022, we paid dividends to our common stockholders at our current annual rate of $3.20 per share of Class A common stock (adjusted for the Reverse Stock Split), or $0.80 per share (adjusted for the Reverse Stock Split) on a quarterly basis. The board subsequently decided not to declare any further dividends for the subsequent periods through December 31, 2024. There is no assurance as to when or if the board will declare future dividends or the amount of any future dividends that may be declared.
Previous report
•Occupancy at 1140 Avenue of the Americas decreased to 74.1% as of December 31, 2024 as compared to 77.1% as of December 31, 2023. The decrease in occupancy was the result of lease expirations and amendments during the year ended December 31, 2024.
Previous report
Through the six months ended June 30, 2022 and for the year ended December 31, 2021 we paid dividends to our common stockholders at the annual rate of $0.40 per share of Class A common stock ($3.20 per share adjusted for the Reverse Stock Split), or $0.10 per share ($0.80 per share adjusted for the Reverse Stock Split)on a quarterly basis. On July 1, 2022, we announced that we suspended our policy regarding dividends paid on our Class A common stock, beginning with the dividend that would have been payable for the quarter ended June 30, 2022 (see full discussion in Liquidity and Capital Resources section above).
Previous report
We have not paid dividends to stockholders since those that were declared and paid through the six months ended June 30, 2022.
Previous report
Decisions regarding the frequency and amount of any future dividends we pay on our common stock will remain at all times entirely at the discretion of our Board, which reserves the right to change our dividend policy at any time and for any reason. Our ability to pay dividends in the future depends on our ability to operate profitably and to generate sufficient cash flows from the operations of our existing properties and any properties we may acquire. We may acquire assets such as hotels and seek to expand our co-working office space business as well as acquire, invest in and operate businesses such as hotel or parking lot management companies including assets or businesses located outside of New York City. We cannot guarantee that we will be able to pay dividends on a regular basis on our common stock or any other class or series of stock we may issue in the future. Our Board previously suspended and then reinstituted dividends. As of December 31, 2024, our dividend program remains suspended. There is no assurance we will continue to pay dividends at the current rate, or at all. The amount of dividends payable to our stockholders is determined by our Board and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our loans and any agreement we are party to that may restrict our ability to pay dividends or repurchase shares, capital expenditure requirements, as applicable, and requirements of Maryland law. For the year ended December 31, 2024, our cash flows provided by operations were $4.0 million.
Reworded paragraphs (41)
Previous wording
We are an externally managed company that currently owns a portfolio of commercial real estate located within the five boroughs of New York City, primarily Manhattan. Our real estate assets consist of office properties and certain real estate assets that accompany office properties, including retail spaces and amenities and parking garages that do not accompany office spaces. As of December 31, 2024, we owned six properties consisting of approximately 1 million rentable square feet acquired for an aggregate purchase price of $621.2 million.
Current wording
We are an externally managed company that currently owns a portfolio of commercial real estate located within the five boroughs of New York City, primarily Manhattan. Our real estate assets consist of office properties and certain real estate assets that accompany office properties, including retail spaces and amenities and parking garages that do not accompany office spaces. As of December 31, 2025, we owned five properties consisting of 0.7 million rentable square feet acquired for an aggregate purchase price of $442.7 million.
Previous wording
New York City, where all of our properties are located, was among the hardest hit locations in the country and fully reopened from relevant restrictions and lockdowns on March 7, 2022. The pace of recovery in the New York City office market from the COVID-19 pandemic continues to be challenged as leasing and occupancy trends for the broader market have slowed, leading political, community, and business leaders to propose repositioning plans for many New York City office assets that are experiencing high vacancy rates. While the COVID-19 pandemic subsided, some businesses continue to maintain hybrid or all work-from-home arrangements in response to employee desire for more flexibility, which may lead to a downturn in the commercial real estate market and potentially represent a long-term negative impact on the New York City real estate market.
Current wording
Management Update on the New York City Real Estate Market
Previous wording
The adverse economic impacts since the onset of the COVID-19 pandemic have caused us to experience challenges in leasing up available space and maintaining occupancy in our properties. These challenges with leasing activity have negatively impacted, and continue to impact, our results of operations, cash flows, and ability to comply with certain mortgage debt covenants. For additional information on our leasing activity for the years ended December 31, 2024, please see Results of Operations — Leasing Activity below.
Current wording
The adverse economic impacts since the onset of the COVID-19 pandemic have caused us to experience challenges in leasing up available space and maintaining occupancy in our properties. These challenges with leasing activity have negatively impacted, and continue to impact, our results of operations, cash flows, and ability to comply with certain mortgage debt covenants. For additional information on our leasing activity for the year ended December 31, 2025 and 2024, please see Results of Operations — Leasing Activity below.
Previous wording
Significant Accounting Estimates and Critical Accounting Policies
Current wording
Significant and Critical Accounting Policies and Estimates
Previous wording
Our revenue from tenants, which are derived primarily from lease contracts, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of December 31, 2024, these leases had a weighted-average remaining lease term of 6.3 years. Because many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires that we record a receivable for, and include in revenue from tenants, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When we acquire a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed. We defer the revenue related to lease payments received from tenants in advance of their due dates. Pursuant to certain of our lease agreements, tenants are required to reimburse us for certain property operating expenses (recorded in total revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. To the extent such costs exceed the tenants base year, some of our leases require the tenant to pay its allocable share of increases in operating expenses, which may include common area maintenance costs, real estate taxes and insurance. Under ASC 842, we have elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, we have reflected them on a net basis.
Current wording
Our revenue from tenants, which are derived primarily from lease contracts, include rents that each tenant pays in accordance with the terms of each lease reported on a straight-line basis over the initial term of the lease. As of December 31, 2025, these leases had a weighted-average remaining lease term of 6.1 years. Because many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires that we record a receivable for, and include in revenue from tenants, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease. When we acquire a property, the acquisition date is considered to be the commencement date for purposes of this calculation. For new leases after acquisition, the commencement date is considered to be the date the tenant takes control of the space. For lease modifications, the commencement date is considered to be the date the lease modification is executed. We defer the revenue related to lease payments received from tenants in advance of their due dates. Pursuant to certain of our lease agreements, tenants are required to reimburse us for certain property operating expenses (recorded in total revenue from tenants), in addition to paying base rent, whereas under certain other lease agreements, the tenants are directly responsible for all operating costs of the respective properties. To the extent such costs exceed the tenants base year, some of our leases require the tenant to pay its allocable share of increases in operating expenses, which may include common area maintenance costs, real estate taxes and insurance. Under ASC 842, we have elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, we have reflected them on a net basis.
Previous wording
We are the lessee under a land leases which was previously classified as an operating lease prior to adoption of lease accounting and will continue to be classified as an operating lease under transition elections unless subsequently modified. These lease is reflected on our consolidated balance sheets and the rent expense is reflected on a straight-line basis over the lease term.
Current wording
We are the lessee under a land leases which was previously classified as an operating lease prior to adoption of ASC 842 and will continue to be classified as an operating lease under transition elections unless subsequently modified. These lease is reflected on our consolidated balance sheets and the rent expense is reflected on a straight-line basis over the lease term.
Previous wording
If an impairment exists, due to the inability to recover the carrying value of a property, we would recognize an impairment loss in the consolidated statement of operations and comprehensive (loss) to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. For properties to be held and used, we estimate the fair value of the property’s asset group by developing a discounted cash flow analysis, which considers factors such as lease up period, expected future operating income, market and other applicable trends, residual value, and discount rate. These assessments have a direct impact on earnings because recording an impairment loss results in an immediate negative adjustment to net earnings. We recorded impairment charges on two properties for $112.5 million and $66.6 million during the years ended December 31, 2024 and 2023, respectively. For additional information, please see Note 3 — Real Estate Investmentsto our 2024 Financial Statements.
Current wording
If an impairment exists, due to the inability to recover the carrying value of a property, we would recognize an impairment loss in the consolidated statement of operations and comprehensive (loss) to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss recorded would equal the adjustment to fair value less estimated cost to dispose of the asset. For properties to be held and used, we estimate the fair value of the property’s asset group by developing a discounted cash flow analysis, which considers factors such as lease up period, expected future operating income, market and other applicable trends, residual value, and discount rate. These assessments have a direct impact on earnings because recording an impairment loss results in an immediate negative adjustment to net earnings. We recorded impairment charges on three properties for $30.6 million and two properties for $112.5 million during the years ended December 31, 2025 and 2024, respectively. For additional information, please see Note 4 — Real Estate Investments to our 2025 Financial Statements.
Previous wording
As of December 31, 2024 and 2023, our overall portfolio occupancy was 80.8% and 86.7%, respectively. The following table is a summary of our quarterly leasing activity for the year ended December 31, 2024:
Current wording
As of December 31, 2025 and 2024, our overall portfolio occupancy was 80.3% and 80.8%, respectively. The following table is a summary of our quarterly leasing activity for the year ended December 31, 2025:
Previous wording
Our total portfolio occupancy decreased during the year ended December 31, 2024 to 80.8% from a total portfolio occupancy of 86.7% as of December 31, 2023 from the following:
Current wording
Our total portfolio occupancy decreased during the year ended December 31, 2025 to 80.3% from a total portfolio occupancy of 80.8% as of December 31, 2024 from the following:
Previous wording
•Occupancy at 400 E. 67th Street decreased to 44.3% as of the year ended December 31, 2024 compared to 100% as of December 31, 2023.
Current wording
•Occupancy at 400 E. 67th Street remained the same at 44.3% as of the year ended December 31, 2025 and December 31, 2024.
Previous wording
As of December 31, 2024, we owned six properties, all of which were acquired prior to January 1, 2024. Our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023 primarily reflect changes due to leasing activity and occupancy.
Current wording
As of December 31, 2025, we owned five properties, all of which were acquired prior to January 1, 2025. Our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024 primarily reflect changes due to leasing activity and occupancy.
Previous wording
Net loss attributable to common stockholders was $140.6 million for the year ended December 31, 2024, as compared to $105.9 million for the year ended December 31, 2023. The following table shows our results of operations for the years ended December 31, 2024 and December 31, 2023 and the year to year change by line item of the consolidated statements of operations:
Current wording
Net loss attributable to common stockholders was $21.2 million for the year ended December 31, 2025, as compared to $140.6 million for the year ended December 31, 2024. The following table shows our results of operations for the years ended December 31, 2025 and December 31, 2024 and the year to year change by line item of the consolidated statements of operations:
Previous wording
Fees for asset and property management services to our Advisor and Property Manager were $7.8 million for the year ended December 31, 2024 and $7.7 million for the year ended December 31, 2023, respectively. For additional information on fees incurred from our Advisor and Property Manager, please see Note 10 — Related Party Transactions and Arrangements to our 2024 Financial Statements.
Current wording
Fees for asset and property management services to our Advisor and Property Manager were $7.3 million for the year ended December 31, 2025 and $7.8 million for the year ended December 31, 2024, respectively. For additional information on fees incurred from our Advisor and Property Manager, please see Note 11 — Related Party Transactions and Arrangements to our 2025 Financial Statements.
Previous wording
Property operating expenses increased by $0.4 million to $34.2 million for the year ended December 31, 2024, compared to $33.8 million for the year ended December 31, 2023.
Current wording
Property operating expenses decreased by $(6.7) million to $27.5 million for the year ended December 31, 2025, compared to $34.2 million for the year ended December 31, 2024. The decrease in expenses is primarily related to the sale of 9 Times Square during the year ended December 31, 2024.
Previous wording
We recorded $86.6 million of impairment charges during 2024 related to our 9 Times Square property, as the carrying value exceeded the sales price of the asset, less costs to sell the property. This property was sold in December 2024 for a contract sales price of $63.5 million. We recorded the impairment charges on this property because we determined that the carrying value exceeded the sales price of the asset, less the costs to sell the property.
Current wording
During the year ended December 31, 2024, we recorded an impairment charges of $86.6 million related to our 9 Times Square property. We recorded impairment charges for this property because we determined that the carrying value exceeded our estimate of the net sale price of the property as of June 30, 2023. This property was sold in December 2024.
Previous wording
In addition, we recorded an impairment charge of $25.8 million during the year ended December 31, 2024 for our 400 E. 67th Street property. The impairment was triggered as a result of leasing activity at the property. One major tenant’s lease expired in the second quarter of 2024 and they signed a month to month lease with us, which then expired in the fourth quarter of 2024. In addition, during the quarter ended September 30, 2024, we had an additional tenant vacate its current space in this property. Per their agreement with us, the tenant is required to pay rent for the remainder of term of their existing lease which is set to expire in the third quarter of 2025 and the tenant has continued to pay monthly rent. We determined that the carrying value exceeded the fair market value of the asset as of September 30, 2024 based on our discounted cash flow model for the property.
Current wording
In addition, we recorded impairment charges of $25.8 million for the year ended December 31, 2024 on our 400 E. 67th Street property. We determined that the carrying value exceeded the fair market value of the asset as of September 30, 2024.
Previous wording
Equity-based compensation decreased to $0.4 million for the year ended December 31, 2024 from $5.9 million for the year ended December 31, 2023. These amounts are comprised of restricted share amortization expense and the amortization of our multi-year outperformance award granted under the 2020 OPP. The 2020 OPP expired on August 18, 2023. The year ended December 31, 2023 contained $5.3 million of equity-based compensation expenses related to the 2020 OPP, whereas the year ended December 31, 2024 did not contain any amortization related to the 2020 OPP. See Note 12 — Equity-Based Compensation to our 2024 Financial Statements for further details on the 2020 OPP and restricted shares of common stock.
Current wording
Equity-based compensation remained consistent at $0.4 million for the year ended December 31, 2025 from $0.4 million for the year ended December 31, 2024. These amounts are comprised of restricted share amortization expense.
Previous wording
Total reimbursement expenses for administrative and personnel services provided by the Advisor during the years ended December 31, 2024 and 2023 were $4.4 million. Pursuant to the Advisory Agreement, reimbursement for administrative and overhead expenses and reimbursements for salaries, wages, and benefits are subject to an annual limit. During the years ended December 31, 2024 and 2023 the annual limits on reimbursement for administrative and overhead expenses on and for salaries, wages, and benefit were reached. See Note 10 — Related Party Transactions and Arrangementsto our 2024 Financial Statements for further details.
Current wording
Pursuant to the Advisory Agreement, reimbursement for administrative and overhead expenses and reimbursements for salaries, wages, and benefits are subject to an annual limit. During the years ended December 31, 2025 and 2024 the annual limits on reimbursement for administrative and overhead expenses on and for salaries, wages, and benefit were reached. See Note 11 — Related Party Transactions and Arrangements to our 2025 Financial Statements for further details.
Previous wording
Depreciation and amortization expense decreased $8.1 million to $18.4 million for the year ended December 31, 2024, compared to $26.5 million for the year ended December 31, 2023. The decrease was the result of a lower depreciable/amortizable asset base during the year ended December 31, 2024 due to 1140 Avenue of Americas being impaired in the prior year, 9 Times Square being classified as an Asset Held for Sale during September 2024, impairments, write-offs of lease intangibles and write off of tenant improvements recorded between periods as well as accelerated depreciation/amortization in the prior year. See Note 3 —Real Estate Investments to our 2024 Financial Statements for further details. There have been no new property acquisitions since January 1, 2023 that would increase the depreciable base during the periods presented.
Current wording
Depreciation and amortization expense decreased $5.6 million to $12.8 million for the year ended December 31, 2025, compared to $18.4 million for the year ended December 31, 2024. The decrease was primarily due to a lower depreciable asset base between periods primarily relating to the disposals of our 1140 Avenue of the Americas and 9 Times Square properties in the third quarter of 2025 and fourth quarter of 2024, respectively. For more information, please see our 2024 Annual Report. There have been no new property acquisitions since January 1, 2023 that would increase the depreciable base during the periods presented.
Previous wording
Interest expense increased $0.6 million to $19.5 million for the year ended December 31, 2024 compared to $18.9 million for the year ended December 31, 2023. The increase in interest expense can partially be attributed to the maturity of our $49.5 million notional, SOFR based “pay-fixed” interest rate swap in April 2024, offset by amortization of deferred mortgage financing costs. During the year ended December 31, 2024 and 2023, our weighted-average outstanding debt balance was $350.0 million and $399.5 million, respectively, with a weighted-average effective interest rate of 4.43% in each period.
Current wording
Interest expense decreased $4.2 million to $15.3 million for the year ended December 31, 2025 compared to $19.5 million for the year ended December 31, 2024. The decrease in interest expense can primarily be attributed to the interest expense related to the 1140 Avenue of the Americas property in court appointed receivership. During the year ended December 31, 2025 and 2024, our weighted-average outstanding debt balance was $251.0 million and $350.0 million, respectively, with a weighted-average effective interest rate of 4.56% in each period.
Previous wording
Our principal demands for cash are to fund operating and administrative expenses, capital expenditures, tenant improvement and leasing commission costs related to our properties and our debt service obligations. We expect to fund these cash demands in the short term through a combination of current cash on hand, net cash provided by our property operations and net cash provided by potential property dispositions. However, there remains significant uncertainty regarding our longer-term liquidity position if market conditions do not improve, or if we are unable to execute on planned liquidity initiatives, in which case we may face challenges in meeting future obligations, which could have a material adverse effect on our business, financial condition, and results of operations. See Note 5 — Liquidity Risk to our 2024 Financial Statements.
Current wording
Our principal demands for cash are to fund operating and administrative expenses, capital expenditures, tenant improvement and leasing commission costs related to our properties and our debt service obligations. We expect to fund these cash demands in the short term through a combination of current cash on hand, net cash provided by our property operations and net cash provided by potential property dispositions. However, there remains significant uncertainty regarding our longer-term liquidity position if market conditions do not improve, or if we are unable to execute on planned liquidity initiatives, in which case we may face challenges in meeting future obligations, which could have a material adverse effect on our business, financial condition, and results of operations. See Note 2 — Going Concern to our 2025 Financial Statements.
Previous wording
As of December 31, 2024, we had cash and cash equivalents of $9.8 million as compared to $5.3 million as of December 31, 2023. Under the guarantee of certain enumerated recourse liabilities of the borrower under one of our mortgage loans, we are required to maintain a minimum net worth in excess of $175.0 million and minimum liquid assets (i.e., cash, cash equivalents and restricted cash) of $10.0 million, which totaled $18.9 million as of December 31, 2024.
Current wording
As of December 31, 2025, we had cash and cash equivalents of $1.3 million as compared to $9.8 million as of December 31, 2024. Under certain covenants of our mortgage loans, we are required to maintain a minimum net worth in excess of $100.0 million and minimum liquid assets (i.e., cash, cash equivalents and restricted cash) of $5.0 million, which totaled $8.0 million as of December 31, 2025.
Previous wording
We had restricted cash of $9.2 million as of December 31, 2024 as compared to $7.5 million as of December 31, 2023, respectively. Our restricted cash balance includes cash sweeps for 1140 Avenue of the Americas of $1.6 million and $2.5 million, and for 400 E. 67th Street for $4.2 million and $0.0 million, both as of December 31, 2024 and December 31, 2023, respectively, and the remaining balance of restricted cash is comprised of various escrow accounts and other cash accounts with restricted uses. We are able to use a portion of our restricted cash for certain property operating expenses and capital expenditures. For certain property operating expenses and capital expenditures specifically related to our 1140 Avenue of the Americas property, lender approval is required to use any of the cash that is held in restricted cash accounts resulting from the breach of covenants on the loan secured by that property (see below). As a result, some of the property operating expenses and capital expenditures that will be paid with restricted cash may reside in accounts payable and accrued expenses on our consolidated balance sheet as of December 31, 2024.
Current wording
We had restricted cash of $6.8 million as of December 31, 2025 as compared to $9.2 million as of December 31, 2024, respectively. Our restricted cash balance includes a cash sweep for 400 E. 67th Street for $3.7 million and $4.2 million, as of December 31, 2025 and December 31, 2024, respectively, and the remaining balance of restricted cash is comprised of various escrow accounts and other cash accounts with restricted uses. We are able to use a portion of our restricted cash for certain property operating expenses and capital expenditures.
Previous wording
The New York City real estate market continues to be challenged as a result of the impacts of the COVID-19 pandemic and the related changing nature of in-office working arrangements, which previously caused, and may in the future cause certain of our tenants to be unable to make rent payments to us timely, or at all, and could continue to have, an adverse effect on the amount of cash we receive from our operations and therefore our ability to fund operating expenses and other capital requirements. Beginning in the third and fourth quarters of 2020, the operating results at some of our properties, including our 1140 Avenue of the Americas, 400 E. 6th Street and 8713 Fifth Avenue properties, were negatively impacted by the COVID-19 pandemic causing cash trap events under the non-recourse mortgages, where excess operating cash flow from the property, if any, after debt service was held in restricted cash as additional collateral for the loan, for those properties to be triggered. Thus, we were not able to use excess cash flow, if any, from the properties (while the cash trap events were active - see below), to fund operating expenses at our other properties and other capital requirements during the year ended December 31, 2024.
Current wording
The New York City real estate market continues to be challenged as a result of the impacts of the COVID-19 pandemic and the related changing nature of in-office working arrangements, which previously caused, and may in the future cause certain of our tenants to be unable to make rent payments to us timely, or at all, and could continue to have, an adverse effect on the amount of cash we receive from our operations and therefore our ability to fund operating expenses and other capital requirements. Beginning in the third and fourth quarters of 2020, the operating results at some of our properties, including our 1140 Avenue of the Americas, 400 E. 67th Street/200 Riverside Blvd. and 8713 Fifth Avenue properties, were negatively impacted by the COVID-19 pandemic causing cash trap events under the non-recourse mortgages, where excess operating cash flow from the property, if any, after debt service was held in restricted cash as additional collateral for the loan, for those properties to be triggered. Thus, we were not able to use excess cash flow, if any, from the properties (while the cash trap events were active - see below), to fund operating expenses at our other properties and other capital requirements during the year ended December 31, 2025.
Previous wording
As of December 31, 2024, we are operating under three cash traps at 1140 Avenue of the Americas, 400 E. 67th Street and 8713 Fifth Avenue, which together, represent 33% of the rentable square feet in our portfolio as of December 31, 2024. Also, as of December 31, 2024, we still had $1.6 million of cash maintained in a segregated and restricted cash account resulting from the breach of covenants on the loan secured by our 1140 Avenue of the Americas property. However, our 8713 Fifth Avenue property has not generated excess cash after debt service and as of December 31, 2024 there is no related cash maintained in a segregated and restricted cash account for that property. We may not access the cash from the 1140 Avenue of the Americas property without lender approval unless and until the various breaches have been cured. Excess cash generated by the 1140 Avenue of the Americas property continues to be deposited in a separate cash management account until the borrower under the loan is able to comply with all of the applicable covenants. Additionally, as of December 31, 2024, we are operating under one cash sweep at our 400 E. 67th Street/200 Riverside Blvd. properties. Under these lease sweep periods, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. This swept cash is classified as restricted cash on our consolidated balance sheet. As of December 31, 2024, we had $4.2 million retained by the lender in a restricted cash account for our 400 E. 67th Street/200 Riverside Blvd. property. For additional information please see Note 4 — Mortgage Notes Payable to our 2024 Financial Statements.
Current wording
As of December 31, 2025, we are operating under three cash traps at 400 E. 67th Street/200 Riverside Blvd. and 8713 Fifth Avenue, which together, represent 19% of the rentable square feet in our portfolio as of December 31, 2025. However, our 8713 Fifth Avenue property has not generated excess cash after debt service and as of December 31, 2025 there is no related cash maintained in a segregated and restricted cash account for that property. Additionally, as of December 31, 2025, we are operating under one cash sweep at our 400 E. 67th Street/200 Riverside Blvd. properties. Under these lease sweep periods, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. This swept cash is classified as restricted cash on our consolidated balance sheet. As of December 31, 2025, we had $3.7 million retained by the lender in a restricted cash account for our 400 E. 67th Street/200 Riverside Blvd. properties. For additional information please see Note 5 — Mortgage Notes Payable to our 2025 Financial Statements.
Previous wording
We define our leverage as the ratio between our net debt, which is calculated as our gross debt of $350.0 million less cash and cash equivalents of $9.8 million divided by our gross asset value, which is calculated as the carrying value of our total assets of $507.1 million plus our accumulated depreciation and amortization of $91.1 million. As of December 31, 2024, our net debt was $340.2 million, our gross asset value was $598.2 million and our leverage was 56.9%.
Current wording
We define our leverage as the ratio between our net debt, which is calculated as our gross debt of $251.0 million less cash and cash equivalents of $1.3 million divided by our gross asset value, which is calculated as the carrying value of our total assets of $445.2 million plus our accumulated depreciation and amortization of $80.6 million. As of December 31, 2025, our net debt was $249.7 million, our gross asset value was $525.7 million and our leverage was 47.5%.
Previous wording
As of December 31, 2024 our gross borrowings totaled $350.0 million, which bore interest at a weighted-average annual rate of 4.43% and had a weighted-average maturity of 2.6 years. All of our properties are encumbered under mortgage notes payable, and are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied.
Current wording
As of December 31, 2025, our gross borrowings totaled $251.0 million, which bore interest at a weighted-average annual rate of 4.56% (excluding default interest) and had a weighted-average maturity of 1.5 years. All of our properties are encumbered under mortgage notes payable, and are not available to satisfy other debts and obligations, or to serve as collateral with respect to new indebtedness, as applicable, unless the existing indebtedness associated with the property is satisfied.
Previous wording
We had five mortgage loans secured by our six properties with an aggregate balance of $350.0 million as of December 31, 2024 with a weighted-average effective interest rate of 4.43%. All our mortgage loans bear interest at a fixed rate.
Current wording
We had four mortgage loans secured by our five properties with an aggregate balance of $251.0 million as of December 31, 2025 with a weighted-average effective interest rate of 4.56% (excluding default interest). All our mortgage loans bear interest at a fixed rate. This excludes our 1140 Avenue of the Americas property, which is in a consensual foreclosure process.
Previous wording
We have breached both a debt service coverage provision and a reserve fund provision under our non-recourse mortgage secured by the 1140 Avenue of the Americas property in each of the last 18 quarters ended December 31, 2024. The principal amount of the loan was $99.0 million as of December 31, 2024. These breaches are not events of default, rather, they require excess cash, if any, generated at the property (after paying operating costs, debt service and capital/tenant replacement reserves) to be held in a segregated account as additional collateral under the loan. The covenants for this loan may be cured if we satisfy the required debt service coverage ratio for two consecutive quarters, whereupon the additional collateral will be released. We can remain subject to this reserve requirement through maturity of the loan without further penalty or ramifications. As of December 31, 2024 and December 31, 2023 we had $1.6 million and $2.5 million, respectively, in cash that is retained by the lender and maintained in restricted cash on our consolidated balance sheet as of those dates.
Current wording
We have breached both a debt service coverage provision and a reserve fund provision under our non-recourse mortgage secured by the 1140 Avenue of the Americas property in each of the last 21 quarters ended December 31, 2025. The principal amount of the loan was $99.0 million as of December 31, 2025. The principal amount of the loan was $99.0 million and reflected as debt associated with property in receivership on the consolidated balance sheet as of December 31, 2025. See Note 6 — Property Dispositions to our 2025 Financial Statements.
Previous wording
We were informed by the lender on February 19, 2025 that we were in default under the loan agreement for failure to make certain scheduled interest payments. We made the payments in question in full on the same day the default notice was received by us. We believe this is a cure for the event of default. We have received no additional notices from the lender, which has neither charged us any default interest nor accelerated any portion of that debt.
Current wording
We were informed by the lender on February 19, 2025 that we were in default under the loan agreement for failure to make certain scheduled interest payments. We made the payments in question in full on the same day the default notice was received by us as a cure for the February event of default. On April 7, 2025, the lender notified us that the principal balance due under such loan agreement had been accelerated and all amounts under such loan agreement were due and payable as a result of a default described in the notice, together with interest at the default rate set forth in the loan document, which is a rate annum equal to the lesser of (i) the maximum nonusurious interest rate or (ii) five percent (5%) above the interest rate of 4.109% per annum. Such amounts include, but are not limited to, the $99.0 million principal amount of the mortgage note.
Previous wording
We have breached a debt service coverage ratio covenant under the non-recourse mortgage secured by 8713 Fifth Avenue in each of the last 18 quarters ended December 31, 2024. The principal amount for the loan was $10.0 million as of December 31, 2024. The breach of this covenant did not result in an event of default but rather triggered an excess cash flow sweep period. The excess cash flow sweep period will continue until the covenant breaches are cured in accordance with the terms of the loan agreement. This property has not generated any excess cash since the breach occurred and thus no cash has ever been trapped related to this property.
Current wording
We have breached a debt service coverage ratio covenant under the non-recourse mortgage secured by 8713 Fifth Avenue in each of the last 21 quarters ended December 31, 2025. The principal amount for the loan was $10.0 million as of December 31, 2025. The breach of this covenant did not result in an event of default but rather triggered an excess cash flow sweep period. The excess cash flow sweep period will continue until the covenant breaches are cured in accordance with the terms of the loan agreement. This property has not generated any excess cash since the breach occurred and thus no cash has ever been trapped related to this property.
Previous wording
Under the lease sweep period, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. As of December 31, 2024, we had $4.2 million, in cash swept that is retained by the lender and recorded within restricted cash on our consolidated balance sheet. We had no swept cash as of December 31, 2023.
Current wording
Under the lease sweep period, any excess cash generated, if any, is to be held in a segregated reserve account controlled by the lender as additional collateral. As of December 31, 2025 and December 31, 2024, we had $3.7 million and $4.2 million, respectively, in cash swept that is retained by the lender and recorded within restricted cash on our consolidated balance sheet.
Previous wording
On November 19, 2024, the lender sent a notice to us alleging that we were in default under the loan agreement for events that occurred in the third and fourth quarters of 2023, specifically our failure to establish a cash management account for excess cash sweeps over monthly debt service requirements. The lender had been remitting excess cash on their own accord until the period of cash sweep was put into effect in 2024 as described above. In their notice of default, the lender asserted we owe an estimated $1.0 million in excess cash to be deposited into the loan reserve account. We responded to the notice of default rejecting the assertions made by the lender, which we believe are without merit as a result of the lender's failure to implement a cash management account and our inability to take such action unilaterally due to the mechanics for receipt of lease payments provided for by the loan agreement. We have not received a response or any additional notices from the lender, which has not accelerated any portion of the loan. We have made all other required payments in accordance with the loan agreement. Beginning in March 2025, the lender has charged default interest to us, currently totaling $3.3 million. While we cannot predict the ultimate outcome of legal matters, we currently believe that it is not probable a liability has been incurred with respect to the alleged defaults and intends to challenge the charge of default interest by the lender.
Current wording
On November 19, 2024, the lender sent a notice to us alleging that we were in default under the loan agreement governing the loan secured by the non-recourse mortgage on the property for events that occurred in the third and fourth quarters of 2023, specifically our failure to establish a cash management account for excess cash sweeps over monthly debt service requirements. The lender had been remitting excess cash on their own accord until the period of cash sweep was put into effect in 2024 as described above. In that notice of default, the lender asserted we owe an estimated $1.0 million in excess cash to be deposited into the loan reserve account. We responded to such notice of default on February 20, 2025 rejecting the assertions made by the lender, which we believed were without merit as a result of the lender's failure to implement a cash management account and our inability to take such action unilaterally due to the mechanics for receipt of lease payments provided for by the loan agreement. Beginning in March 2025, the lender began charging default interest to us, currently totaling $3.3 million. On June 10, 2025, the lender sent a second notice to us alleging defaults under such loan agreement as a result of (i) our failure to pay the outstanding amount due thereunder beginning in April 2025 and (ii) our failure to cooperate with the lender to comply with the aforementioned cash management procedures. The second default notice reaffirmed that, as a result of the aforementioned defaults, interest was accruing at the default rate under the loan agreement and made a demand that all unpaid amounts due under the loan agreement be paid. As of the date of this Annual Report on Form 10-K, we have not responded to the second default notice. Further, we incurred a liability as of June 30, 2025 in relation to the June 10, 2025 default notice.
Previous wording
During the years ended December 31, 2024 and 2023, we were also able to preserve cash through an arrangement with our Advisor. Pursuant to the Advisory Agreement, the Advisor has the option to elect to receive shares of our common stock in lieu of cash for the asset management, property management, and administrative services it provides us with. For the months described below, the Company paid related party fees in shares in lieu of cash. For more information see Note 10— Related Party Transactions and Arrangements to our 2024 Financial Statements for further details.
Current wording
During the year ended December 31, 2025, there were no related party payments made with common stock issuances in lieu of cash. During the year ended December 31, 2024, we were able to preserve cash through an arrangement with our Advisor. Pursuant to the Advisory Agreement, the Advisor has the option to elect to receive shares of our common stock in lieu of cash for the asset management, property management, and administrative services it provides us with. For the months described below, the Company paid related party fees in shares in lieu of cash. For more information see Note 11 — Related Party Transactions and Arrangements to our 2025 Financial Statements for further details.
Previous wording
We had a decrease in occupancy level to 80.8% across our portfolio as of December 31, 2024, as compared to 86.7% as of December 31, 2023. The changes in occupancy were as follows:
Current wording
We had a decrease in occupancy level to 80.3% across our portfolio as of December 31, 2025, as compared to 80.8% as of December 31, 2024. The changes in occupancy were as follows:
Previous wording
•Occupancy at 123 William Street decreased to 82.3% as of December 31, 2024 compared to 91.4% as of December 31, 2023. The decrease in occupancy was due to a lease expiration during the year ended December 31, 2024.
Current wording
•Occupancy at 123 William Street decreased to 79.2% as of December 31, 2025 compared to 82.3% as of December 31, 2024. The decrease in occupancy was due to a lease expiration during the year ended December 31, 2025.
Previous wording
•Occupancy at 400 E. 67th Street was at 44.3% as of December 31, 2024 as compared to 100% as of December 31, 2023. During the year ended December 31, 2024, a tenant located at our 400 E. 67th Street property vacated its current space, however, per their agreement with us, the tenant is required to pay rent for the remainder of term of their existing lease which is set to expire in the third quarter of 2025.
Current wording
•Occupancy at 400 E. 67th Street remained flat at 44.3% as of December 31, 2025 and December 31, 2024.
Previous wording
For the years ended December 31, 2024 and 2023 we funded an aggregate of $1.3 million and $4.1 million, respectively, of capital expenditures primarily related to tenant improvements at certain of our properties.
Current wording
For the years ended December 31, 2025 and 2024 we funded an aggregate of $0.8 million and $1.3 million, respectively, of capital expenditures primarily related to tenant improvements at certain of our properties.
Previous wording
We funded our capital expenditures during the year ended December 31, 2024 with (i) cash on hand, which included proceeds from previous financings, and (ii) cash retained from the Advisor either from (a) reinvesting its base management fees in shares of our Class A common stock or (b) electing to receive shares of our Class A common stock in lieu cash for its base management fee.
Current wording
We funded our capital expenditures during the year ended December 31, 2025 with (i) cash on hand, which included proceeds from previous financings, and (ii) cash retained from the Advisor either from (a) deferring payment of related-party management fees to the Advisor as needed or (b) providing a bridge loan when necessary.
Previous wording
We had no acquisitions during the year ended December 31, 2024. We disposed of our 9 Times Square property during the year ended December 31, 2024 for a gross purchase price $63.5 million, and we determined the property was impaired by $86.6 million during the year ended December 31, 2024. We disposed of our Hit Factory property during the year ended December 31, 2023 for a contract sales price $4.5 million, and we determined the property was impaired by $0.5 million during the year ended December 31, 2023.
Current wording
We disposed of our 9 Times Square property during the year ended December 31, 2024 for a gross purchase price $63.5 million, and we determined the property was impaired by $86.6 million during the year ended December 31, 2024. We disposed of our Hit Factory property during the year ended December 31, 2023 for a contract sales price $4.5 million, and we determined the property was impaired by $0.5 million during the year ended December 31, 2023.
Showing the first 40 of 41 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The pace of recovery in the New York City office market from the COVID-19 pandemic continues to be challenged as leasing and occupancy trends for the broader market have slowed, leading political, community, and business leaders to propose repositioning plans for many New York City office assets that are experiencing high vacancy rates.
Current report — wording carried from elsewhere
•Occupancy at 123 William Street decreased to 79.2% as of December 31, 2025, compared to 82.3% as of December 31, 2024.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
In furtherance of this strategy, we initiated the sale of certain properties in 2024 to reduce the leverage and generate capital for diversification efforts. On December 18, 2024, our wholly-owned subsidiary, ARCNYC570SEVENTH, LLC, consummated the sale of the 9 Times Square Midtown Manhattan property (“9 Times Square”) to 9 Times Square Acquisitions, LLC, pursuant to that certain purchase and sale agreement, dated August 1, 2024, as amended on November 19, 2024. The 9 Times Square was sold for a gross purchase price of $63.5 million. See “Item 2. Properties.”
Previous report — wording carried elsewhere
During the quarter ended September 30, 2023, we entered into a definitive purchase and sale agreement to sell our 421 W. 54th Street - Hit Factory property for $4.5 million. On October 12, 2023 we sold the property for $4.5 million and realized net proceeds of $4.2 million.
Previous report — wording carried elsewhere
For the taxable years we elected to be taxed as a REIT (commencing with our taxable year ended December 31, 2014 through our taxable year ended December 31, 2022) we were required to distribute annually at least 90% of our REIT taxable income (which does not equal net income as calculated in accordance with GAAP), determined without regard for the deduction for dividends paid and excluding net capital gains. A tax loss for a particular year eliminated the need to distribute REIT taxable income to meet the 90% distribution requirement for that year and may have minimized or eliminated the need to pay distributions in order to meet the distribution requirement in one or more subsequent years. We had a loss for tax purposes in 2022 and therefore there was no REIT taxable income requiring distribution to maintain our qualification as a REIT during the year ended December 31, 2022. For the year ended December 31, 2022, from a U.S. federal income tax perspective, 100% of distributions, or $0.20 ($1.60 per share adjusted for the Reverse Stock Split), represented a return of capital and no part constituted a taxable dividend.