New York REIT: Near-Term Liquidation of NYC Commercial Real Estate Portfolio

Peter Lupoff presented his in-depth investment thesis on New York REIT (NYSE: NYRT) at Best Ideas 2017.

New York REIT has a clear catalyst, with near-term liquidation of its NYC commercial real estate portfolio. NYRT recently traded at $9.85 per share a significant discount to NAV of $13+ per share. NYRT safely generates $132 million NOI on nineteen properties — all NYC commercial office “A” and “B” buildings. ~70% of NOI comes from five buildings representing 2.55 million square feet of their 3.3 million square feet. Cap rates in NYC on “A” and “B” commercial office space run between 3.875-4.25%. At assumed cap rates, the commercial real estate NOI is worth $11-13 per share, net of debt. Management believes that current rents (93% occupancy) are 10-15% below market on an average lease term of 9.3 years. Revaluation catalyst: On December 30, shareholders approved the planned liquidation and hiring of Winthrop REIT Advisors as agent to commence a liquidation of the entire real estate portfolio. Peter anticipates a one-year resolution.

About the instructor:

Peter Lupoff is the founder and Chief Investment Officer of Tiburon Capital Management, LLC. He is Co-Portfolio Manager of the Tiburon Event-Driven strategies and funds, including the mutual fund, Balter Event-Driven Fund (“BEVIX”). Mr. Lupoff has run event-driven, credit and distressed investment portfolios as Portfolio Manager for Millennium Management, LLC, Robeco Weiss Peck + Greer and MJ Whitman, LLC. Funds Mr. Lupoff have managed or co-managed have achieved awards such as GAIM’s Top Performing Emerging Distressed Manager, MARHedge’s Event-Driven Manager and an Institutional Investor nomination as Hedge Fund House of the Year. Mr. Lupoff’s BRACE methodology, is a unique and differentiating investment protocol, coupling a deep value sensibility learned when a partner of famed value investor, Marty Whitman, with Lupoff’s own game theory/probabilistic weighting of events, and risk management learned from portfolio management with Izzy Englander’s Millennium Management. Mr. Lupoff is a frequent speaker and writing regarding his investment philosophies and is a regular Federal Reserve Bank Discussant and consultant on shocks and illiquid markets.

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