New York REIT declares $4.85 liquidation distribution

Yesterday the New York REIT declared a $4.85 liquidation distribution. The liquidation of the company is progressing as planned and the only two assets remaining are the Viceroy Hotel and the WWP building. They are planning to sell the hotel later this year while they will hold on to the WWP building for the next couple of years while it’s being renovated and upgraded. In connection with the successfully completed sales NYRT also paid down all their mortgage debt, and their balance sheet, pro-forma for the $4.85 dividend, is now looking as follows:

Pro-forma NYRT balance sheet, based on latest 10-K and adjusted for all dividends and sales after year-end

After the $4.85 liquidation distribution is paid, there still is approximately $1.74/share in cash left, and the sale of the Viceroy Hotel later this year might fetch around $4/share. But it’s clear that what really matters is the value of the WWP building. The building itself, listed as “investment in JV” on the balance sheet is by far the biggest piece of the pie, and additionally, the restricted cash is all earmarked to be spend on upgrading the building as well.

Disclosure

Author is long NYRT

2 thoughts on “New York REIT declares $4.85 liquidation distribution

  1. Brent Barber

    Thanks for the updated spreadsheet. Was in NYC last week and walked around the buildings and they are beautiful and in a good location Feel pretty comfortable with this investment. The property did sell for $600 million in 2009, so the potential downside is high in the extreme, but realistically, the economy is doing well, New York economy seems too strong if anything, so I think this works out well. The bigger risk I see is this drags out and and the annualized return drops as opposed to the absolute return.

    Reply
    1. Alpha Vulture Post author

      Given the ~$1/share per year that the WWP building will generate in yield I think that the downside of a prolonged liquidation is sort of limited. That’s a pretty decent yield even if it’s never sold.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *