American Strategic Investment Posts $35.8M Gain on 1140 Ave. of Americas Foreclosure

American Strategic Investment Co. (NYSE: NYC) announced its third quarter 2025 financial results on November 19, 2025, highlighting a strategic shift through property dispositions and cost management. The company reported a GAAP net gain of $35.8 million, largely driven by a $44.3 million non-cash gain from the foreclosure at 1140 Avenue of the Americas. The move is part of a broader strategy to reduce debt and focus on higher-yielding assets.

The company has entered into a cooperative consensual foreclosure for 1140 Avenue of the Americas, expected to close in the fourth quarter of 2025. This transaction will eliminate a $99 million liability that was set to mature in July 2026, aligning with the firm's proactive balance sheet management approach. The deal is also expected to free up capital for reinvestment.

In addition to the Avenue of the Americas, American Strategic Investment continues to market two other properties-123 William Street and 196 Orchard-for sale. The company plans to use the proceeds from these transactions to retire debt and invest in more profitable real estate opportunities. Management emphasized that these actions are key to unlocking long-term portfolio value.

Strategic Moves and Financial Outcomes

The third quarter saw American Strategic Investment Co. focus on operational efficiency and portfolio optimization. CEO Nicholas Schorsch highlighted a major lease renewal at 196 Orchard, which increased the weighted average remaining lease term to 6.2 years. This extension provides greater stability to the company's revenue stream and reduces short-term volatility.

Q3 2025 revenue dropped to $12.3 million from $15.4 million in the same period last year, primarily due to the prior-year sale of 9 Times Square. Adjusted EBITDA also fell to $1.9 million from $4.2 million in Q3 2024. However, the company's cash net operating income was $5.3 million, a slight improvement from the previous quarter.

Risks to the Outlook

Despite the strategic gains, American Strategic Investment faces several challenges. The company has ongoing lease expirations that account for 8% of its annualized straight-line rent. Management will need to secure renewals or attract new tenants to maintain occupancy levels and rental income. The company is also navigating near-term liquidity concerns, including a debt-to-equity ratio of 11.34 and a current ratio of 0.33 according to financial analysis.

The strategic disposition of properties like 1140 Avenue of the Americas involves significant upfront and ongoing expenses. These costs include tenant retention efforts and property operations, which can strain short-term cash flow. Additionally, the company recently changed its audit partner to CBIZ CPAs, reducing professional fees and streamlining its cost structure.

What This Means for Investors

The company's strategic actions are designed to improve long-term value and reduce leverage. By eliminating the $99 million liability through the Avenue of the Americas deal, American Strategic Investment strengthens its balance sheet and provides more flexibility for future reinvestment. These moves align with investor expectations for capital efficiency and risk mitigation.

However, investors should also be mindful of the company's ongoing liquidity risks and its ability to execute property sales on favorable terms. The real estate market in New York City remains competitive, and securing strong returns on reinvestment is critical to sustaining growth. Management's focus on tenant retention and cost control will be key indicators of their ability to navigate these challenges.

The company plans to present full-year 2025 results, with no new guidance numbers provided in the current quarter's report. As the company continues to streamline its portfolio and reduce debt, investors will closely watch its progress in deploying capital into higher-yielding assets.