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First Winthrop Corporation and The Witkoff Group Offer to Become External Advisor to New York REIT, Inc.

BOSTON, June 18, 2015 (GLOBE NEWSWIRE) -- First Winthrop Corporation, a private real estate management and investment company whose executive management team has served as external advisor to multiple real estate investment trusts, and The Witkoff Group today released two letters previously sent to the Board of Directors and Chief Executive Officer and President of New York REIT, Inc. (NYSE:NYRT), outlining an offer to be engaged as NYRT's external advisor.

Michael L. Ashner, the Chief Executive Office of First Winthrop Corporation stated, "We were hopeful that NYRT's Board would engage us in conversation. Unfortunately, the response received from their counsel to our first letter stating 'the Board has determined that pursuing the proposal outlined in the letter is not in the best interests of [NYRT] and its stockholders and is not interested in in further discussions', followed by a lack of response to our second letter necessitated the disclosure of our proposal to the public."

The full text of both letters and the proposal can be found below

First Letter

June 10, 2015

VIA E-MAIL AND
FEDEX

The Board of Directors of New York REIT, Inc.
405 Park Avenue
14th Floor
New York, New York 10022

Attention: Michael A. Happel
Chief Executive Officer and President

Dear Messrs. Kahane, Burns and Read and Ms. Perrotty:

First Winthrop Corp. ("Winthrop"), which is an affiliate of FUR Advisors LLC, the external advisor to Winthrop Realty Trust together with the Witkoff Group (collectively "Winthrop/Witkoff") are pleased to provide you with this proposal. According to the press releases issued by New York REIT, Inc. ("NYRT"), NYRT recently retained an investment banker to seek a potential acquirer of NYRT or its assets. It is further our understanding that in connection with this process suitable pricing was not achieved. These press releases indicated that NYRT may still be considering various other strategic issues.

In this regard, Winthrop/Witkoff hereby proposes that in lieu of NYRT continuing to retain its existing advisor, NYRT retain a newly formed entity controlled by Winthrop/Witkoff (the "New Advisor") pursuant to which the New Advisor will become the external advisor to NYRT for an initial period of five years together with a substantial reduction to the existing fee structure. The principal financial terms of the proposed advisory agreement (the "New Agreement") to which Winthrop/Witkoff would be willing to enter into are outlined on Exhibit A attached hereto. A review of our proposed terms demonstrates its clear economic superiority to the existing agreement.

We strongly believe that an external advisor whose interests are aligned with the company's shareholders is best for all parties. To this end, we are further offering to acquire from NYRT 8,333,000 newly-issued common shares of NYRT for a purchase price of $12.00 per share. This price is a 32% premium to the current trading price for NYRT's common shares. The acquisition of the shares would occur simultaneously with the entering into of the New Agreement with Winthrop/Witkoff. Not only would such acquisition give Winthrop/Witkoff an ownership stake in NYRT, thereby aligning its interests with that of the NYRT shareholders, but it will provide NYRT with $100 million of equity capital for future investment and growth. Such purchase would be in addition to the common shares Winthrop/Witkoff currently owns in NYRT.

To further enhance alignment, principals and affiliates of the New Advisor would enter into an exclusivity arrangement with NYRT pursuant to which all future real estate investment opportunities within the metropolitan New York market would be offered to NYRT. Among other benefits, this arrangement would address current conflicts of interest between the existing advisor and NYRT.

We recognize that certain payments may be sought or required in connection with a transition of the external advisor from the current advisor to Winthrop/Witkoff. In order to provide additional funds to pay such transactional costs, if requested by the Board of Directors of NYRT, Winthrop/Witkoff would acquire up to an additional 1,000,000 shares at a price of $12.00 per share. The proceeds from these additional shares would be used solely to fund any termination payments to the existing advisor and any severance obligations to NYRT's existing executive officers.

Winthrop's executive management team consists of myself, Michael Ashner, as well as Carolyn Tiffany, John Alba and John Garilli. As noted above, our entity, FUR Advisors LLC currently provides the external advisory services to Winthrop Realty Trust and we serve as Winthrop Realty Trust's executive officers. I personally have over 30 years of experience owning, operating and serving as the Chief Executive Officer of both public and private real estate companies including five public real estate investment trusts. Ms. Tiffany and Messrs. Alba and Garilli each have over 20 years of experience operating real estate companies.

My affiliates and myself have successfully externally advised five publicly traded real estate investment trusts as well as approximately 40 publicly registered limited partnerships over the past 20 years. In addition, we have provided similar services to approximately 500 private limited partnerships which collectively together with the public entities managed have provided external advisory services to approximately 400,000 shareholders and limited partners. Assets managed by these entities comprised in excess of 50 million square feet of office space, 3 million square feet of retail space, 10,000 hotel rooms and more than 100,000 multifamily apartments. The value of assets historically overseen and managed exceeds $20 billion. We have consistently been substantial equity investors in the partnerships and assets which we have overseen.

As you may be aware, Winthrop Realty Trust was among the ten best performing REITs from 2004 to 2006 and was the best performing REIT in 2014. Winthrop Realty Trust is currently in the process of an orderly liquidation of its assets and is consequently barred from making new investments. As a result, our management team stands ready to provide the same quality services and financial commitment to NYRT that it has provided to Winthrop Realty Trust and other real estate companies over the past 20+ years.

For the past 28 years, Witkoff, led by Steven C Witkoff and an executive management team including Scott Alper, Jim Stomber, Craig Murphy and Sherri White, has grown to become one of New York's most successful owner/developer of real estate projects. In so doing, Witkoff has acquired and or developed in the New York metropolitan market approximately 15 office buildings comprising ten million square feet, 50 multifamily rental properties that comprise thousands of units and over one million square feet of retail space. In addition, Witkoff is in the process of developing a variety of projects in New York city that in the aggregate comprise seven billion dollars of value. Like Winthrop, Witkoff has invested substantial equity capital in all of its projects.

We would be pleased to share with you any background information you may require including ownership interests, historic investment returns and related material to assist your due diligence. We understand and will respect the confidential nature of the proposed transaction. Our team and I look forward to discussing this proposal with NYRT's Board and its advisors as soon as possible.

Please feel free to contact me at 516-822-0022 with any questions or comments regarding the above.

FIRST WINTHROP CORPORATION.

Michael L. Ashner
Chief Executive Officer

Exhibit A

PRIMARY TERMS OF ADVISORY AGREEMENT

New Advisor: An entity controlled by Winthrop/Witkoff.
Term: 5 years with successive automatic 3 year renewals unless terminated by either party on not less than 6 months' notice.
Advisory Fees:















The Asset Management Fee and expense reimbursement shall be the same as currently provided in the Sixth Amended and Restated Advisory Agreement between NYRT and New York Recovery Advisors, LLC (the "Existing Advisory Agreement") except that the total of such amounts shall not exceed the lesser of (i) 0.75% of the Cost of Assets; and (ii) 1.5% of the imputed equity value of NYRT. For purposes of determining the imputed equity value multiply the number of existing issued and outstanding shares by $9.15 (approximately $1,486,543,321) increased by $100,000,000 (8,333,000 x $12.00), and then further increased or decreased as the case may be by the price of future common and/or preferred share issuances less the price paid for common and/or preferred share redemptions or liquidating distributions.

The New Advisor and its affiliates will not be entitled to the following fees currently being paid by NYRT:

· Acquisition Fee
· Financing Coordination Fee
· Property Disposition Fee
· Dealer Manager Fee

The New Advisor would be entitled to incentive compensation as determined by the Compensation Committee of the newly-restructured Board, as described below, which would be based on current REIT industry standards and practices. Such compensation may include one or a combination of a promoted interest, restricted securities, option and/or other types of compensation.
Property Management Fees:





Will be modified as follows:

For office properties and retail properties the fee will be reduced from 4% to 3%.

All hotel properties will be third party managed.

The Oversight Fee, where applicable, will be reduced from 1% to 65 basis points.

Neither the New Advisor nor its affiliates will be entitled to any leasing commissions
Termination Fee/Severance:

If the Advisory Agreement is terminated by NYRT without Cause (as defined in the Existing Advisory Agreement), the New Advisor will be entitled to a termination fee equal to the Asset Management Fee paid for the prior twelve month period. Upon expiration of the initial term, if the Advisory Agreement is not extended, the New Advisor will be entitled to a termination fee equal to the greater of (i) the Asset Management Fee paid for the prior nine month period or (ii) remaining term of the Advisory Agreement.
Employees and Existing Advisor:








The New Advisor will not involuntarily terminate any current personnel providing services on behalf of the existing advisor for a period of not less than 90 days on their current terms and conditions.

The New Advisor will be responsible for severance costs of all employees other than those that have provisions addressing termination rights under their existing employment contracts with NYRT and any termination payments to the current advisor.

To the extent severance costs may be due to employees pursuant to existing employment contracts, NYRT may fund such payments from the sale of the additional 2,000,000 common shares that may be purchased by Winthrop/Witkoff.

To the extent NYRT determines a termination fee to the current advisor is due, such fee may be paid from the remaining proceeds of the sale of such additional 2,000,000 common shares.
Fiduciary Relationship:
The New Advisor would agree that it is a fiduciary of NYRT similar to the existing advisor.
Exclusivity:
Winthrop/Witkoff shall offer to NYRT all new real estate investment opportunities which are REIT tax compliant within the five boroughs of New York City, extending to a radius of 20 miles from Times Square during the term of the New Agreement.
Board Structure:


The Board of Directors shall be expanded from four directors to not less than seven directors with a majority meeting the independence standards under NYSE rules. The Board will maintain customary committees for public companies including an audit committee, compensation committee and corporate governance committee, the members of which will consist of independent directors The revised board structure would not be classified.
Other Terms: To be consistent where relevant with the Existing Advisory Agreement and as disclosed in NYRT's most recent proxy statement

Second Letter

June 16, 2015

VIA E-MAIL AND FEDEX

The Board of Directors of New York REIT, Inc.
405 Park Avenue
14th Floor
New York, New York 10022

Attention: Michael A. Happel
Chief Executive Officer and President

Dear Messrs. Kahane, Burns and Read and Ms. Perrotty:

We have received your response rejecting our proposal and indicating no basis for further discussion. We are somewhat surprised particularly in view of yesterday's REIT Zone article which indicated that the holding company for the advisor of a number of AR Capital sponsored REITs was in the process of seeking to extend its advisory agreements to 20 year terms. We inferred from the article that NYRT might be among those companies in which such an extension was being sought. If this be the case, it occurs to us that our proposal is particularly timely in view of the consideration NYRT may be giving to modifying its advisory agreement.

We have just become aware of the Sorin Capital letter to the CEO and we assume the Board of Trustees indicating its displeasure with the management and direction of NYRT. In view of this letter and the upcoming shareholders meeting on Monday, we hope that you would reconsider your decision not to review and discuss with us our proposal. If I do not receive a response from you by close of business Wednesday, I will assume that you continue to believe it unnecessary to enter into any discussion with us and we should proceed accordingly.

Sincerely,

Michael L. Ashner

Important Disclosures:

Any views expressed in the above letter represent the opinion of First Winthrop Corporation and The Witkoff Group, whose analysis is based solely on publicly available information. No representation or warranty, express or implied, is made as to the accuracy or completeness of any information contained in the letter, and First Winthrop Corporation and The Witkoff Group expressly disclaims any and all liability based, in whole or in part, on such information or any errors therein or omissions therefrom. The letter is not intended to be, and should not be construed as, investment, legal or tax advice. First Winthrop Corporation and The Witkoff Group reserves the right to modify or change its views, conclusions and/or investment positions for any reason or no reason at any time, without notice.

CONTACT: Contact at First Winthrop Corporation Michael L. Ashner Investor or Media Inquiries Phone: (516) 822-0022; e-mail: mashner@firstwinthrop.comSource:First Winthrop Corporation