NYC

Business Context and Reporting Period

American Strategic Investment Co. (formerly New York City REIT, Inc.) filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The Company is an externally managed real estate investment firm owning a portfolio of commercial properties primarily in New York City. In 2023, the Company revoked its REIT election and is now taxed as a C corporation. As of December 31, 2025, the portfolio consisted of five properties totaling approximately 0.7 million rentable square feet, with an overall occupancy rate of 80.3%.

Key Financial Metrics

Note: The 2025 Net Loss includes a significant non-cash gain of $47.9 million from the consensual foreclosure of the 1140 Avenue of the Americas property.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased by $18.3 million (29.7%) primarily due to the disposition of the 1140 Avenue of the Americas property and the prior-year sale of 9 Times Square.
• Improved Net Loss: Net loss narrowed significantly from $140.6 million in 2024 to $21.2 million in 2025. This improvement was driven by a $47.9 million gain on the disposition of 1140 Avenue of the Americas and a reduction in impairment charges ($30.6 million in 2025 vs. $112.5 million in 2024).
• Portfolio Reduction: The Company disposed of the 1140 Avenue of the Americas property via consensual foreclosure in September 2025. The property was removed from the balance sheet, and a $99.0 million debt associated with it remains classified as "debt associated with property in receivership."
• Liquidity Constraints: Cash and cash equivalents dropped from $9.8 million to $1.3 million. The Company reported negative operating cash flows of $7.8 million for the year.

Guidance, Outlook, Risks, and Contingencies

• Going Concern Warning: The independent auditor issued an explanatory paragraph regarding "Going Concern," citing significant working capital deficiencies, recurring losses, and the need to raise additional funds. Management has not alleviated substantial doubt about the Company's ability to continue as a going concern for one year from the report date.
• Debt Covenant Breaches and Foreclosures:
  • 1140 Avenue of the Americas: Subject to consensual foreclosure; a receiver was appointed in September 2025.
  • 400 E. 67th Street/200 Riverside Blvd: The lender accelerated the $50.0 million debt in November 2025 due to alleged defaults. Foreclosure litigation was filed in January 2026. The property is subject to a cash sweep.
  • 8713 Fifth Avenue: In breach of debt service coverage covenants for 21 consecutive quarters, triggering a cash sweep (though no excess cash has been generated).
• NYSE Listing Compliance: The Company received notice from the NYSE in August 2025 of non-compliance with minimum market capitalization ($34.3 million vs. $50 million required) and stockholders' equity ($35.5 million vs. $50 million required). A business plan was accepted with a deadline of February 26, 2027, to regain compliance.
• Internal Controls: Management identified material weaknesses in internal control over financial reporting, including lack of segregation of duties and insufficient review controls.
• Tax Status: As a C corporation, the Company is subject to federal and state income taxes. It maintains a 100% valuation allowance on deferred tax assets due to recent operating losses.

Investor Verification Checklist

• Debt Resolution: Verify the status of the foreclosure litigation and debt acceleration for the 400 E. 67th Street/200 Riverside Blvd properties and the potential for further asset loss.
• Liquidity Runway: Assess the sufficiency of the $1.3 million unrestricted cash balance against upcoming debt service obligations and operating expenses.
• NYSE Compliance: Monitor progress on the business plan to regain NYSE listing standards by the February 2027 deadline.
• Going Concern Status: Review subsequent filings for any updates on the auditor's going concern qualification and management's ability to secure additional financing.
• Internal Control Remediation: Confirm the implementation of remediation measures for the identified material weaknesses in financial reporting.