New York City REIT to List on NYSE
August 12, 2020 | Luke Schmidt | Blue Vault
On July 29, 2020, New York City REIT, Inc. (the “Company”) announced that its board of directors had unanimously approved a plan to list the Company’s common stock on the New York Stock Exchange under the symbol “NYC.” The Company anticipates the first date that the shares will be eligible to trade on the NYSE will be on or about August 18, 2020. The Company also announced that it had engaged SunTrust Robinson Humphrey, Inc. to serve as a financial advisor in connection with the potential listing.
In preparation for the potential listing, the board of directors approved a sequence of corporate actions that will be implemented prior to the commencement of trading. When trading begins on the NYSE, only 25% of the common shares will be listed. An additional 25% of the common shares will be listed 120 days after the commencement of trading, followed by a third tranche of 25% of the common shares 240 days later. The remaining 25% of common shares will be listed within 360 days of the beginning of trading.
As a part of this recapitalization sequence, the board also approved a 2.43-1 reverse stock split of the Company’s common stock where the post-reverse stock split shares will be classified as Class A common stock. Following this reverse stock split, the Company would declare a stock dividend of three shares of Class B common stock per share of Class A common stock owned. Any fractional shares of Class A common stock as a part of the reverse stock split will be redeemed for cash.
On August 5, 2020, in connection with the reverse stock split, the Company made several filings which effectively reduced the number of outstanding shares from approximately 31.0 million (as of June 30, 2020) to 12.8 million. The post-reverse stock split 12.8 million outstanding shares consist of 3.2 million Class A shares and 9.6 million Class B shares. The Class A shares will be the initial shares traded on the NYSE. The Class B shares will not be a part of the initial listing on the NYSE, but will automatically convert to Class A shares at each of the three 120-day intervals, at which point they will be eligible to be traded freely.
In connection with this listing, the Company intends to reinstate distributions to its stockholders based on an annual amount, post-reverse stock split, equal to $0.40 per share of common stock of both Class A and Class B shares. This would result in an annual distribution amount of $1.60 per share of common stock owned pre-reverse stock split. The reinstated distributions would be payable as dividends in arrears on a quarterly basis to holders of record on a single quarterly record date, with the first dividend payable in October 2020 in a partial quarterly amount covering the period from the date on which shares commence trading through September 30, 2020.
The Company previously suspended cash distributions to common shareholders on February 27, 2018. The last net asset value per share announced by the Company is $20.26, as of June 30, 2019. Giving effect to the reverse stock split, the updated net asset value would adjust to approximately $49.23 per share, resulting in an approximate dividend yield of 3.25%. After listing, the Class A shares will trade at a price determined by supply and demand and will likely sell for considerably less than the most recent net asset value. The effective dividend yield will then be determined by the declared rate of $1.60 per share annualized divided by the closing price of the Class A common shares.
New York City REIT began operations in 2014 and raised total capital of approximately $750 million during its public offering period, which closed in May of 2015. As of March 31, 2020, the Company reported total assets of approximately $897 million.
Sources: SEC, Blue Vault
