MacKenzie Capital Management LP has launched an unsolicited tender offer to purchase up to 65,000 Class B shares of New York City REIT Inc. (NYSE: NYC) for $6.50 per share. The offer expires February 5, 2021.
New York City REIT Inc. was a publicly registered non-traded REIT sponsored by AR Global that partially listed its shares of Class A common stock on the New York Stock Exchange on August 18, 2020. Every 120 days after the listing, an additional 25 percent of its common stock, represented by Class B common stock, would convert into Class A shares until all shares were listed within 360 days.
Thus, conversion of the Class B shares was to occur at equal intervals on December 16, 2020, April 15, 2021 and August 13, 2021. MacKenzie is offering to buy the unlisted Class B shares.
Prior to the initial listing, New York City REIT implemented a 2.43-1 reverse stock split that would cause the total number of shares to decrease 2.43 times as compared to the total number of shares outstanding, which was roughly 31 million as of June 30th.
The non-traded REIT’s most recent net asset value per share was $20.26, as of June 30, 2019 (or $49.23 taking into account the 2.43-1 reverse stock split). Shares were originally priced at $25.00 each.
In a letter to New York City REIT investors, MacKenzie noted that since the August 18th NYSE listing, the company’s Class A shares had closing prices ranging from $9.12 to $17.60 per share. Class B shares are not tradeable until they are converted into Class A shares.
MacKenzie and its affiliates currently own 131,285 shares of New York City REIT (32,821 Class A shares and 98,464 Class B shares), or 1.03 percent of the outstanding.
On Monday, December 28th, the New York City REIT’s Class A shares closed at $7.75.
New York City REIT, formerly American Realty Capital New York City REIT Inc., invests in properties located in the five boroughs of New York City, with a focus on Manhattan. The company closed its offering in May 2015 and raised a total of $769.9 million in investor equity, including DRIP proceeds. As of the third quarter of 2020, the REIT owned eight properties purchased for $790.7 million.
Based in Orinda, California, MacKenzie has specialized in the area of discounted real estate securities and asset management since its formation in 1982.