Business Context and Reporting Period
This Form 8-K was filed by American Realty Capital New York City REIT, Inc. on March 6, 2017. The filing reports the entry into a material definitive agreement involving a new mortgage loan secured by the Company's property at 123 William Street, New York, New York.
Key Financial Metrics
- New Loan Amount: $140.0 million
- Lender: Barclays Bank PLC
- Interest Rate: 4.666% (monthly interest payments)
- Maturity Date: March 6, 2027
- Previous Debt Repaid: Approximately $96.0 million
- Financing Fee: Approximately $1.1 million paid to the advisor
- Covenant Requirements: Minimum consolidated net worth of $100,000,000 and minimum liquidity of $5,000,000
Material Changes
The Company refinanced its existing mortgage on the 123 William Street property. The new loan increased the principal balance from approximately $96.0 million to $140.0 million. The filing does not provide comparative revenue, profit, or cash flow metrics for the period.
Outlook, Risks, and Unusual Items
- Recourse Structure: The loan is non-recourse, except for a limited recourse guaranty by the Operating Partnership covering fraud, willful misrepresentation, intentional acts, misapplication of funds, physical waste, and failure to pay taxes.
- Prepayment Penalty: Prepayment prior to December 6, 2026, is subject to a yield maintenance penalty of not less than 1.0% of the principal amount being repaid.
- Environmental Indemnity: The Company delivered an environmental indemnification agreement to Barclays.
- Acceleration: The loan may be accelerated only in the event of a default.
Investor Verification Checklist
- Verify the current occupancy and rental income status of the 123 William Street property to ensure coverage of the new debt service.
- Confirm the Company's consolidated net worth and liquidity levels meet the $100 million and $5 million covenant thresholds.
- Review the full Loan Agreement (Exhibit 10.1) for specific affirmative and negative covenants not detailed in the summary.
- Assess the impact of the $1.1 million financing fee on immediate cash flow.