Business Context and Reporting Period
This Form 8-K was filed by American Realty Capital New York City REIT, Inc. on November 10, 2014, reporting an event that occurred on November 5, 2014. The filing details the completion of an asset acquisition by the Company through a wholly-owned subsidiary of its operating partnership.
Key Financial Metrics and Transaction Details
- Asset Acquired: 570 Seventh Avenue, an institutional-quality office building in Times Square, Manhattan.
- Purchase Price: $170.3 million (exclusive of closing costs).
- Funding Source: Proceeds from the Company's ongoing initial public offering.
- Property Size: Approximately 170,000 rentable square feet.
- Occupancy: 76% leased as of the acquisition date.
- Major Tenant: The Carlyle Group occupies 43,126 rentable square feet, representing approximately 66% of annualized cash base rent.
- Debt and Liquidity: The filing does not provide specific debt or liquidity figures for the Company. The Company may seek financing on the Property after closing, but no assurance of favorable terms or success is given.
Material Changes and Lease Information
The primary material change is the addition of the 570 Seventh Avenue property to the Company's portfolio. A one-year lease with The Carlyle Group was executed as a condition to closing. The lease details are as follows:
| Tenant | Commencement | Termination | Rentable Sq. Ft. | Annualized Cash Base Rent |
|---|---|---|---|---|
| The Carlyle Group | November 2014 | November 2015 | 43,126 | $7,920,000 |
Note: The Carlyle Group will occupy 33,058 square feet until January 2015, expanding to 43,126 square feet thereafter.
Guidance, Risks, and Contingencies
- Financing Risk: The Company intends to seek financing for the Property but explicitly states there is no assurance it will secure financing on favorable terms or at all.
- Financial Statements: Audited and unaudited financial statements for the Property required by Rule 3-14 of Regulation S-X are not included in this filing. They will be filed within 71 calendar days.
- Related Party Transactions: The Seller (570 7th Avenue Property Owner, L.L.C.) has no material relationship with the Company, its sponsor, or advisor.
Investor Verification Checklist
- Verify the final closing costs and total capital deployed beyond the $170.3 million purchase price.
- Monitor the upcoming filing (within 71 days) for the Property's audited financial statements and historical performance data.
- Confirm the status of the Company's ongoing initial public offering and the remaining capital available for future acquisitions.
- Track the Company's progress in securing debt financing for the 570 Seventh Avenue property.
- Review the lease terms for the remaining 24% of unleased space to assess future leasing risk.