New York REIT Receives 14 Proposals to Replace AR Global as Manager
New York REIT Inc. (NYSE: NYRT), a former non-traded real estate investment trust known as American Realty Capital New York Recovery REIT, received 14 management proposals to serve as the company’s external manager. As reported by The DI Wire last month, the company’s board of directors issued a proposal request for an external manager to replace New York Recovery Advisors, which is managed by AR Global Investments – the successor business to AR Capital. In August, New York REIT announced its intention to sell its 19-property portfolio after terminating a proposed merger with private real estate firm, JBG Companies.
The REIT’s independent directors contacted 31 entities to submit proposals, which board chairman Randolph Read said they are now “moving forward expeditiously” to evaluate.
He added, “We look forward to reaching a timely conclusion to the RFP process so that the board can focus on executing the plan of liquidation in the most efficient and cost effective manner possible to maximize stockholder value under and complete the plan of liquidation, if approved by stockholders.”
The company noted that in an effort to remove any potential conflicts of interest, AR Global’s William Kahane, who sits on the board of the REIT, has recused himself from all deliberations relating to the process. The existing management contract with AR Global can be terminated on December 26, 2016 with 60 days prior written notice. New York REIT expects that any new management contract would take effect December 27, 2016, and that AR Global will not receive any payments or fees upon termination.
New York REIT activist investors, Michael Ashner and Steven Witkoff – who own WW Investors LLC, submitted a proposal on behalf of their affiliate Winthrop Realty Partners to serve as the replacement advisor of the company. The pair, who were outspoken opponents of the now terminated JBG merger, are also seeking control of the board of directors.
Ashner and Witkoff propose to manage the company during its liquidation or on an ongoing basis if no plan of liquidation is adopted. They noted that Winthrop will generate savings exceeding $50 million in liquidation costs and $4 million in annual operating costs compared to the existing advisory agreement. Winthrop did not request any transitional fee or reimbursement for transitional costs in connection with its management of the company and believe a full liquidation would take a maximum of 12 months to complete.
WW Investors’ proposal also announced the inclusion of former Vornado Trust executive vice president Wendy Silverstein as chief executive officer of New York REIT.
New York REIT is a publicly traded real estate investment trust that owns office and retail properties in New York City.
