American Strategic Investment Co. · NYSE:NYC
American Strategic Investment — New York City REIT — Proxy Contest (May 2022)
35 slides from American Strategic Investment's proxy contest presentation, May 24, 2022
Slide 1: Investor Presentation Comrit Investments 1, LP May 2022
Investor Presentation Comrit Investments 1, LP May 2022 This Investor Presentation has been amended and refiled to reflect certain revisions to the slides that were originally filed on May 5, 2022, including the removal of two slides that contained quotes from other shareholders regarding their view
Slide 2: The materials contained herein (the “Materials”) represent the opinions of Comrit Investments 1, LP
The materials contained herein (the “Materials”) represent the opinions of Comrit Investments 1, LP and the other participants named in this proxy solicitation (collectively, “Comrit”) and are based on publicly available information with respect to New York City REIT, Inc. (the “Company”). Comrit re
Slide 3: Table of Contents
Executive Summary The Case for Boardroom Change Our Solution: Comrit’s Highly Qualified, Independent Nominee TABLE OF CONTENTS
Slide 4: Executive Summary
EXECUTIVE SUMMARY REBUILD ip NYC REIT
Slide 5: About Comrit
Comrit has been a stockholder of NYC REIT since June 2015 Comrit has consistently engaged with NYC REIT’s management since its investment in 2015 Comrit possesses a deep knowledge of the Company’s assets, financials, governance and strategy Comrit Investments 1, LP (“Comrit” or “we”) is an investmen
Slide 6: About NYC REIT
ABOUT NYC REIT NYC REIT owns a portfolio of high-quality commercial real estate located within the five boroughs of New York City, particularly Manhattan NYC REIT’s Strategic Focus and Core Assets NYC REIT specializes in purchasing and owning high-quality commercial real estate in New York City NYC
Slide 7: History of Our Engagement with NYC REIT
HISTORY OF OUR ENGAGEMENT WITH NYC REIT Despite our efforts to avoid a costly election contest and reach a mutually agreed upon resolution that would benefit all stockholders, the Company rebuffed us and said it was “prepared to fight” As a stockholder since 2015, Comrit holds annual calls with mana
Slide 8: Where NYC REIT Stands Today
WHERE NYC REIT STANDS TODAY It is time to reverse NYC REIT’s trajectory of underperformance, strategic issues and poor governance under the incumbent Board The Company has lost 60% of its equity market value since publicly listing The Company trades at an 86% discount to its net asset value (“NAV”)
Slide 9: Anti-Stockholder Corporate Governance
ANTI-STOCKHOLDER CORPORATE GOVERNANCE The incumbent Board has fostered abysmal governance and failed to effectively oversee management and the Company’s performance Allowing Interlocking Director & Executive Connections Failing to Align Compensation to Financial Results Inking an Egregious Advisory
Slide 10: Concerning Boardroom Connectivity
CONCERNING BOARDROOM CONNECTIVITY Every member of the Company’s Board, including Elizabeth Tuppeny (the incumbent director up for reelection at the 2022 Annual Meeting), also serves as a director of other companies managed by AR Global – NYC REIT’s advisor – and its affiliates Abby Wenzel Michael We
Slide 11: The Incumbent Board Appears Beholden to AR Global
THE INCUMBENT BOARD APPEARS BEHOLDEN TO AR GLOBAL We believe the Board has prioritized the interests of AR Global over creating value for stockholders Mr. Weil is both Chairman and Chief Executive Officer of NYC REIT, a practice that is antithetical to good corporate governance Mr. Weil is also CEO
Slide 12: The Incumbent Board Has Attempted to Mislead Stockholders
THE INCUMBENT BOARD HAS ATTEMPTED TO MISLEAD STOCKHOLDERS NYC REIT has misrepresented several key facts related to its performance and our campaign for boardroom change NYC REIT touts its 2021 total stockholder return, calling it “exceptional” NYC REIT calls our critique of the Company “generic” and
Slide 13: Our Solution: A Highly Qualified, Independent Nominee
OUR SOLUTION: A HIGHLY QUALIFIED, INDEPENDENT NOMINEE We are seeking to replace one current director with Sharon Stern, a highly qualified individual with real estate industry experience, relevant expertise and much-needed independence Currently serves as President of Eastmore Management and Metro I
Slide 14: The Case for Boardroom Change
THE CASE FOR BOARDROOM CHANGE
Slide 15: Sustained Value Destruction
SUSTAINED VALUE DESTRUCTION Under the incumbent Board, stockholders have suffered significant losses over several relevant time periods Source: Bloomberg. TSR runs through 11/30/21, the day before Comrit announced its nomination. % Returns Since NYC REIT listed publicly on the NYSE in August 2020, s
Slide 16: Persistent Underperformance
PERSISTENT UNDERPERFORMANCE NYC REIT’s incumbent Board presided over dismal total stockholder returns versus relevant peers and indices leading up to our nomination FTSE NAREIT U.S. Real Estate Index Bloomberg REIT Small Cap Index Company Peer Average NYC REIT Source: Bloomberg. TSR runs through 11/
Slide 17: NYC REIT Cannot Hide Its Poor Performance
NYC REIT CANNOT HIDE ITS POOR PERFORMANCE NYC REIT continues to tout misleading claims regarding its terrible stock performance in 2021 From 1/1/21 to 12/30/21, NYC REIT had delivered a negative 17% return Within a two-day period, Company insiders and affiliates purchased thousands of shares when th
Slide 18: Staggering Discount to NAV
STAGGERING DISCOUNT TO NAV The Board has not only presided over a 56% – 86% trading price discount to NAV, but it has also failed to deliver a credible plan to stop the destruction of NAV Stock Price Company-Stated Nav Linear (Company-Stated NAV) $49.23 $27.92 $28.10 Source: Company presentations da
Slide 19: Balance Sheet Erosion
BALANCE SHEET EROSION The incumbent Board has overseen rising operating expenses while the Company’s losses continue to grow In fiscal year 2021, the Company’s operating expenses accounted for 129% of its total revenue The Company’s operating expenses have risen 865% since fiscal year 2014 and 19% s
Slide 20: NYC REIT's Scandal-Ridden History
NYC REIT’S SCANDAL-RIDDEN HISTORY NYC REIT has a concerning history of financial issues and stockholder-unfriendly behavior Founded and initially led by Mr. Scorsch, NYC REIT – then called American Realty Capital (“ARC”) – delivered 60% losses to certain investors in the secondary market In 2019, AR
Slide 21: Numerous Boardroom Issues
NUMEROUS BOARDROOM ISSUES The incumbent Board is plagued by serious governance issues, which we believe prevent stockholders from realizing the true value of their investment CONCERNING DIRECTOR CONNECTIVITY WE BELIEVE THE FOLLOWING BOARDROOM ISSUES PLAGUE NYC REIT TO THE DETRIMENT OF STOCKHOLDERS:
Slide 22: Boardroom Issue #1: Concerning Director Connectivity
BOARDOOM ISSUE #1: CONCERNING DIRECTOR CONNECTIVITY Among NYC REIT’s current directors, there is a troubling amount of interconnectedness and overlap in board service at other AR Global-affiliated companies; we believe this threatens Board independence and effective oversight Abby Wenzel Michael Wei
Slide 23: Boardroom Issue #2: Non-Independent, Ineffective Chairman
BOARDROOM ISSUE #2: NON-INDEPENDENT, INEFFECTIVE CHAIRMAN Given Mr. Weil’s dual CEO-Chairman role and ties to NYC REIT’s advisor’s parent company, AR Global, it is no wonder why the Board has failed to hold management accountable for underperformance Mr. Weil is both Executive Chairman and Chief Exe
Slide 24: Boardroom Issue #3: Onerous Advisory Agreement
BOARDROOM ISSUE #3: ONEROUS ADVISORY AGREEMENT The Board has wasted stockholder capital on costly advisory agreements and operating expenses related to its external advisors while investors have been forced to endure negative returns For 2019 through 2021, NYC REIT has paid approximately $33.4 milli
Slide 25: Boardroom Issue #4: Insufficient Ownership Perspectives
BOARDROOM ISSUE #4: INSUFFICIENT OWNERSHIP PERSPECTIVES The entire current Board and management collectively own less than 1% of NYC REIT’s stock This Board has not felt the severe losses that many stockholders have suffered for years We believe the incumbent directors are completely misaligned with
Slide 26: Boardroom Issue #5: Restrictive Poison Pill
BOARDROOM ISSUE #5: RESTRICTIVE POISON PILL NYC REIT's poison pill appears to be a brazen attempt by the Board and management to maintain control of the Company and insulate themselves from stockholder criticism The Company’s poison pill restricts stockholders from purchasing more than 4.9% of the C
Slide 27: Boardroom Issue #6: Classified Board Structure
BOARDROOM ISSUE #6: CLASSIFIED BOARD STRUCTURE We believe NYC REIT's troubling corporate governance demonstrates that the Board is more focused on protecting itself than unlocking value for investors The Company has a classified or “staggered” Board, meaning each director is only up for election eve
Slide 28: Boardroom Issue #7: Unjustifiable Compensation
BOARDROOM ISSUE #7: UNJUSTIFIABLE COMPENSATION We believe both the Board and management team have paid themselves handsomely while stockholders suffer NYC REIT’s stock plummets ~54% in 2020 after listing on the NYSE The Board – excluding Mr. Weil, who is compensated by AR Global – awards itself $328
Slide 29: Boardroom Issue #8: Multiple Attempts to Diminish Stockholder Rights
BOARDROOM ISSUE #8: MULTIPLE ATTEMPTS TO DIMINISH STOCKHOLDER RIGHTS These numerous limitations on stockholders’ rights suggest to us that the Board is more focused on its own entrenchment than unlocking value for investors End the stated Fiduciary Obligation of the Board to stockholders, including
Slide 30: Our Solution: Comrit's Highly Qualified, Independent Nominee
OUR SOLUTION: COMRIT’S HIGHLY QUALIFIED, INDEPENDENT NOMINEE
Slide 31: Meet Our Nominee – Sharon Stern
MEET OUR NOMINEE – SHARON STERN Comrit’s highly qualified and independent director candidate is the right solution at the right time for NYC REIT Currently serves as President of Eastmore Management and Metro Investments, two organizations focused on the acquisition, development and management of mu
Slide 32: Our Nominee vs. the Incumbent
OUR HIGHLY QUALIFIED, INDEPENDENT NOMINEE VS. THE INCUMBENT In contrast to the incumbent director up for election at the 2022 Annual Meeting, we believe our nominee brings the skills and experience necessary to help rebuild NYC REIT M&A Expertise Prior REIT Experience Capital Allocation Acumen Indep
Slide 33: Endorsements for Ms. Stern
ENDORSEMENTS FOR MS. STERN Sharon has been an outstanding and impactful director from the moment she joined the Cedar Realty Trust board. She is highly collaborative and collegial while instinctively knowing when to press on an issue or advance a critical topic for further discussion. I would enthus
Slide 34: Commitment to Stockholders
COMMITMENT TO STOCKHOLDERS If elected to the boardroom, we believe shareholders can count on our director candidate – Ms. Stern – to improve NYC REIT’s abysmal corporate governance and focus on the right initiatives, including: Ensuring Transparent Investor Communication Reprioritizing Stockholder R
Slide 35: Vote the WHITE Proxy Card for Change
VOTE THE WHITE PROXY CARD FOR CHANGE Stockholders can help inject fresh perspectives into the boardroom and rebuild NYC REIT by voting on the WHITE proxy card to elect Ms. Stern at the 2022 Annual Meeting VOTE ON THE WHITE PROXY CARD WWW.REBUILDNYCREIT.COM *** VISIT WWW.REBUILDNYCREIT.COM TO REVIEW