Cove Partners III LLC, a shareholder of American Realty Capital New York City REIT Inc. has issued an open letter to its fellow NYC REIT shareholders. The company urges them to once again vote against “the shareholder-unfriendly proposals to amend the company’s charter at the upcoming annual meeting of shareholders scheduled to be held on June 27, 2017.”
In the letter, Cove Partners said that it was unable to acquire its 100 shares before the record date for the June 27, 2017 annual meeting of shareholders so they would be unable to vote its shares at the upcoming Annual Meeting.
“We knew this at the time we acquired our shares. We also knew at the time that the shares had fallen at least 10% in value from their date of sale to you, notwithstanding during the same period one of the greatest surges in the value of New York City real estate. We also knew at the time that the quarterly distributions to shareholders which you had been receiving were NOT dividends from profits or earnings, which management has finally admitted. Rather, they consisted of your own capital investment and proceeds from borrowings being paid back to you.”
In a recent 8-K filing by the REIT, it said to investors that it had three primary objectives. Those objectives were to preserve and protect capital; pay monthly stable cash distributions; and to increase the value of assets in order to generate capital appreciation.
And in discussing Q1 highlights, the REIT said that occupancy was down slightly from 89.8% in Q4 2016 to 86.7% in Q1 2017. The REIT also said that Cash NOI was down $600,000 primarily due to a step up in ground rent expense at 1140 Avenue of the Americas.