NYC Office REIT Faces Going Concern Doubt on $249M Debt
The New York City Office REIT, American Strategic Investment, is facing doubts about its ability to remain a going concern due to a $249 million debt load. The company's largest remaining asset, a 27-story building at 123 William St., carries an underwater mortgage that matures in March. This debt, along with a $137.7 million valuation of the property, leaves no equity to refinance against.
Despite losing $16 million in the first half of the year, American Strategic Investment continues to pay $500,000 monthly to AR Global affiliates, regardless of performance. The REIT's occupancy rate has dropped to 72%, while its revenue for the past six months was $14.7 million. The company has already had to foreclosure on two properties and is now facing additional legal battles over parking rents and tax disputes.
The situation highlights the thin margins of Class-B New York office properties, where even a slight misstep can lead to financial distress.
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