Good morning, and welcome to the New York City REIT Fourth Quarter and Full Year 2021 Earnings Call. [Operator Instructions]. I would now like to turn the conference over to Louisa Quarto, Executive Vice President. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for the NYC's Fourth Quarter and Full Year 2021 Earnings Call. This event is being webcast in the Investor Relations section of NYC's website at www.newyorkcityreit.com. Joining me today on the call to discuss the quarter's results are Mike Weil, NYC's Chief Executive Officer; and Chris Masterson, NYC's Chief Financial Officer. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. We refer all of you to our SEC filings, including the 10-K filed for the year ended December 31, 2020, filed on March 29, 2021, and all subsequent SEC filings for a more detailed discussion of the risk factors that could cause these differences. Any forward-looking statements provided during this call are made only as of the date of this call. As stated in our SEC filings, NYC disclaims any intent or obligation to update or revise these forward-looking statements, except as required by law. Also during today's call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company's financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available in our earnings release. Please also refer to our earnings release for more detailed information about what we consider to be implied investment-grade tenants, a term we will use throughout today's call. I'll now turn the call over to Michael Weil, Chief Executive Officer of New York City REIT. Please go ahead, Mike.

Thanks, Louisa. Good morning, and thank you for joining us. Today, we'll discuss the strong return that NYC achieved for shareholders in 2021 and how our proactive asset and property management initiatives have helped us successfully navigate 2 years of pandemic impacts. Thankfully, it appears that New York has turned another corner as COVID positivity rates drops and vaccination rates soar. The statewide rollback of pandemic-related regulations and mandates paves the way for workers to return to offices in mass and for the vibrancy of New York City to return to normal. Because we've long been preparing for it, New York City REIT is well positioned to benefit as New Yorkers return to their offices and tourists return in significant numbers. For the period between the beginning of 2021 through March 1, 2022, we delivered an exceptional total return to shareholders of 55% based on stock price appreciation and dividends paid. This outperformed the S&P 500 by over 36% and a group of New York City focused peer REITs by over 31%. Through these unprecedented times, NYC has continued to outperform the market and our peers. Nonetheless, we believe that there remains significant potential for our pure-play New York City portfolio, which is marked by investment grade and government agency tenants and which has proven resilience over the last 2 years to create meaningful value for years to come. Over the last year, we recorded growing rent collection across our portfolio. In the fourth quarter, we collected 96% of the original cash rent due for the period, a 4% increase from 92% of the amount due in the third quarter and a 14% improvement from an amount due in the fourth quarter of 2020. In addition, we collected 100% of the deferred rent that was due in the third and…

Thanks, Mike. Revenue was $70.2 million for the year ended December 31, 2021. Revenue for the fourth quarter was $24.2 million compared to $9.9 million in the fourth quarter of 2020 and $15.8 million in the third quarter of 2021. Revenue for the fourth quarter and full year 2021 includes income from the accelerated amortization of the remaining unamortized balance of below-market lease liabilities of approximately $7.7 million and $7.9 million, respectively, which is recorded in Revenue from tenants in the consolidated statements of operations. Revenue for the fourth quarter and full year 2021 also includes $1.4 million and $1.5 million in termination fees, respectively. The company's full year GAAP net loss attributable to common stockholders was $39.5 million compared to a net loss of $41 million in 2020. Net loss for the quarter was $3.8 million compared to net losses of $16.6 million in the fourth quarter 2020 and $11.1 million in the prior quarter. Cash NOI for the fourth quarter was $7.1 million, a 74% increase compared to $4.1 million in the fourth quarter of 2020 and a 24% increase over last quarter. For the fourth quarter of 2021, our FFO attributable to common stockholders was $4.9 million compared to negative $8.9 million in the same quarter of 2020, a negative $2.9 million in the third quarter 2021. Core FFO was $7.1 million in the fourth quarter or $0.53 per share from negative $6.8 million or negative $0.53 per share in the fourth quarter 2020, and it increased from negative $0.7 million or negative $0.06 per share in the third quarter. As always, a reconciliation of GAAP net income to non-GAAP measures can be found in our earnings release, supplemental and Form 10-K. NYC maintains a conservative balance sheet with no debt maturity scheduled within the next 3 years and prudent net leverage at 40.1%. We ended the fourth quarter with net debt of $393.3 million at a weighted average effective interest rate of 4.4% and a weighted average remaining debt term of 5.1 years. With that, I'll turn the call back to Mike for some closing remarks.

Great. Thank you, Chris. We believe that our Manhattan-focused New York City portfolio is resilient and well positioned to deliver significant long-term value as COVID-19 continues to abate. Our independent directors, myself and the adviser and its affiliates, have each separately demonstrated the depth of our commitment to NYC's long-term value by increasing our NYC ownership. In total, as of March 1, NYC's independent Board members owned over 57,000 shares of NYC and separately, our adviser and its affiliates owned over 1 million shares. This alignment of interest drives the proactive approach to asset management that we believe has helped us successfully navigate the last 2 years. In addition to owning a significant number of shares, we've been able to leverage the substantial resources of our adviser throughout COVID to re-lease vacant space, replace tenants and increase rent collections by utilizing the asset management and property management expertise of the platform. Despite being a micro-cap company, we have access to resources that have allowed us to be proactive on these fronts. During this time, we've worked with our tenants and licensees to sign new leases and agreements, collect over 96% of the original cash rents due in the fourth quarter and replaced tenants and operators who have surrendered their space. We believe there is significant upside potential and we have positioned the company to benefit from a full post-COVID return to normalcy. With that, operator, please open the lines for questions.

[Operator Instructions]. Your first question today comes from Bryan Maher with B. Riley Securities.

Maybe start with, Chris, on the amortization of below-market lease liabilities, can you give us some color on what triggered that? It certainly wasn't something we were expecting in our model.

So that was actually due to the termination of the parking garage lease in the fourth quarter. So when that was terminated, we accelerated all of the amortization related to the below-market lease. And now we brought in the new operator who now, going forward, we're going to continue to have the rent from that operator.

Okay. And then moving on to 123 William Street and 9 Times Square. It seems like during the quarter, occupancies had stayed pretty steady despite backfilling some of the Knotel space. Was there any notable vacancies there that we should be thinking about for our model?

And Bryan, you mean upcoming vacancies? I just want to make sure I answer the question.

Yes.

No -- I'm sorry, go ahead.

Yes. Just what's going on in those two properties as it relates to backfilling Knotel versus other existing tenants? Is there any movement there that would impact how we're thinking about occupancy as we kind of move through 2022?

Yes, we look at net positive absorption at both of those buildings.

Okay. And then Avenue of the Americas, what drove the occupancy dip there? And then maybe kind of a 2-part question. When you look out to the full year of 2022, how should we think about occupancy maybe ending the year, give or take?

As we don't give -- we don't give guidance, as you know. We see the leasing activity in the New York City market being strong in 2022 coming off of the second half of 2021 also being very active and securing a number of new tenants in the building. So we continue to see the occupancy in the portfolio increasing. And the pipeline for activity, meaning deals that are near execution, as we've talked about, represents about 1 percentage point of additional occupancy, but that pipeline is of deals. There's a lot more behind that, that is not at a point that we are discussing it in the public setting.

Got it. But kind of longer term, when you look at the portfolio as it is now, and I think you talked about this to a degree on The Necessity Retail REIT. Do you have an idea in your head where 83%, 84% occupancy can go 2, 3, 5 years out with the recovery?

Absolutely. Absolutely. This portfolio should be -- we anticipate it growing into the kind of 95%, 96% occupancy over time. It is leasable space. It's second-generation space, meaning most of it has been tenanted before. So we don't have raw build-out, which, of course, is potentially more expensive. So Chris Chao, who heads up the Asset Management Team, we feel that these assets are well positioned. We like where they are in the city and what the tenant roster looks like. And we are seeing new tenants coming into the market. We're seeing existing tenants that are renewing and expanding. So we're very positive on the fact that it may look a little bit different, but corporate tenants are coming back into their offices. We're seeing it now in 2022. The spring should be a very positive experience from that aspect as well. So we will continue to see users, and we will continue to grow the occupancy.

Great. And maybe just one last one for me. You've talked in the past to a degree about the acquisition outlook. What are you seeing? I mean you guys have a strong balance sheet. You can certainly be doing something out there. Are there deals that you're seeing that are catching your attention and do you think we might hear something in 2022?

We would like to be growing the company, and we will continue to monitor the acquisition pipeline. We haven't seen anything that we felt was a positive addition to the portfolio. We've looked at a number of assets where it was kind of a distressed seller type of situation where the impact of COVID and the required capital that they were facing. So there will definitely be great opportunities in New York City for the types of assets that we look to acquire. We will continue to be Manhattan focused, and I do look forward to identifying and talking about potential acquisitions.

There are no further questions at this time. Mr. Weil, I turn the call back over to you.

Great. Well, thank you all for joining us. As you heard from our presentation today, we really had a great 2021. The company is seeing very positive results. We continue to be focused on growth of occupancy, growth of earnings. And this is a really exciting time for the company. The outperformance that we have experienced in 2021 and coming into 2022 is something that we're very proud of, not only as we compare against the S&P, but as we also compare against our New York City peers, publicly traded REITs. And we will continue to execute, and we look forward to talking to everybody soon. So thank you very much.

This concludes today's conference call. Thank you for attending. You may now disconnect.