Michael L. Ashner and Winthrop Strategic Real Estate Fund
JERICHO, NY, May 16, 2022 (GLOBE NEWSWIRE) — Michael L. Ashner on behalf of Winthrop Strategic Real Estate Fund, currently a less than 1% shareholder of New York City REIT, Inc. (NYSE: NYC) (“NYC REIT or the “Company”), today issued the following statement in response to the Company’s open letter to its shareholders on April 28 and May 16 regarding the candidacy of Elizabeth Tuppeny and the overall performance of NYC REIT .
We are saddened by the nonsense NYC REIT and its board members expressed to our fellow shareholders regarding the upcoming disputed election between their nominee, Elizabeth Tuppeny, and Comrit nominee, Sharon Stern, particularly in regarding the company’s past performance. Regarding the company’s recent performance:
- The stock price is below $10.00, a 61% discount or loss to the stock’s book value of $25.84 per share. This loss represents the true performance of the NYC Board of Directors during his tenure.
- In 2021, the Company incurred a cash loss of nearly ($8 million) but paid the outside advisor nearly $25 million in fees and reimbursements. This quarter, the Company generated meager operating cash flow of $2.7 million while paying its outside advisor nearly $6.5 million in fees and reimbursements. Talk about feeding at the trough.
- Four of the Company’s eight properties are currently in some form of financial difficulty due to breaches of covenants under their respective loan agreements.
- The disparity between the book value of $25.84 and the share price of $10 means that any issuance of shares would be very dilutive for you as shareholders. No meaningful plan has been suggested by the board to deal with this impending crisis.
- As for the board itself, almost all of the board members sit on the boards of other companies controlled by Nick Schorsch, who is the beneficiary of these huge and abusive outside advisory fees. Elizabeth Tuppeny is one such director who serves at the request of Nick Schorsch and entities affiliated with Nick Schorsch.
- Sharon Stern, to her credit, would be a much-needed, independent director. Ms. Stern was largely responsible for the final sale of Cedar Realty Trust (“Cedar”), which resulted in Cedar shareholders gaining 22% over the prevailing share price. Since joining the board in April 2021, Cedar shares are up 76%.
We see no alternative. The current board continues to serve only Nick Schorsch-related entities to the detriment and loss of NYC REIT shareholders, a practice that has continued for too many years. Their misplaced loyalty resulted in a startling loss of book value and real value with no plan to prevent further loss. We vote strongly for Sharon Stern because we see no other way to effect reasonable change here.
We urge shareholders to vote on the WHITE proxy card to elect Sharon Stern, a highly qualified and independent nominee, at the company’s next annual meeting of shareholders on May 31, 2022.
About Winthrop Strategic Real Estate Fund
Winthrop Strategic Real Estate Fund is a private equity and debt investment fund focused on distressed real estate opportunities and investments in real estate securities.
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