What is the status and expected timing of the 9 Times Square sale proceeds and how will they affect future earnings? | NYC (Aug 08, 2025) | Candlesense
NYC

What is the status and expected timing of the 9 Times Square sale proceeds and how will they affect future earnings?

Short answer:

The 9 Times Square transaction has already been completed, but the cash proceeds have not yet been fully received. American Strategic Investment Co. (ASIC) expects the proceeds to be distributed to the company in the next reporting period (likely Q3 2025). When the cash is received, it will be recognized as a non‑operating gain that should lift net income (or reduce the net loss) in the quarter in which the proceeds are booked, improving the company’s earnings profile going forward.

Detailed explanation

Item What the release tells us Why it matters for earnings
Sale status The press release refers to the “sale of 9 Times Square in the prior year.” This language indicates that the transaction has already closed (the asset has been transferred to the buyer). A closed sale means the company has a contractual right to receive the purchase price, even if the cash has not yet been collected.
Timing of cash receipt The release does not state that the proceeds have already been received; instead it highlights a revenue decline for Q2 2025 because the large cash infusion from that sale was accounted for in the prior year’s results. The typical practice for ASIC (and similar REIT‑style real‑estate portfolios) is to receive the cash after closing, often in the subsequent quarter when the buyer’s financing is finalized. The most logical expectation, given the filing date (early August) and the fact that Q2 2025 ended on June 30, is that the cash will arrive in Q3 2025 (July‑September). Once the cash is actually received, ASIC will record a gain on disposal (the difference between the sale price and the book value of the property). That gain is booked as non‑operating income, which directly improves the bottom line for the quarter in which it is recognized.
Impact on future earnings • Revenue for Q2 2025 fell to $12.2 million from $15.8 million YoY, largely because the “sale of 9 Times Square in the prior year” removed a large‑ticket asset that previously contributed rental income.
• Net loss for the quarter is therefore higher than it would have been if the asset were still owned and generating rent.		 • When the proceeds are finally recognized, ASIC will book a one‑time disposal gain (the sale price less the carrying amount). This gain will offset operating losses in that quarter, potentially turning the net loss into a net profit or at least reducing the loss magnitude.
• The cash infusion also strengthens the balance sheet, giving the company more flexibility for new acquisitions, debt repayment, or dividend/distribution payments to shareholders.
• Because the asset is no longer in the portfolio, future recurring rental revenue will be lower, meaning the company’s core operating earnings (EBITDA, NOI) will be permanently reduced by the amount of rent that 9 Times Square used to generate. The disposal gain therefore does not replace the lost recurring cash flow; it is a one‑off boost.
Bottom‑line expectation • Q3 2025 (or the first quarter after the cash is received) should show a significant positive adjustment to earnings attributable to the 9 Times Square proceeds.
• Q4 2025 and beyond will reflect the lower baseline operating earnings (because the property is no longer earning rent), but the company will have additional cash to redeploy, which could offset the loss if new acquisitions or higher‑margin projects are pursued.		 The net effect on annual earnings will be a large upside from the disposal gain offsetting the lower operating income, resulting in a more favorable FY 2025 earnings picture than a simple year‑over‑year revenue comparison would suggest.

How the proceeds will be reflected in the financial statements

  1. Balance‑sheet impact – Cash (or cash equivalents) will increase by the net cash received from the buyer, while the property asset will be removed from the “Real Estate” line‑item.
  2. Income‑statement impact –
    • Gain on disposal (non‑operating income) = Sale price – Net book value of 9 Times Square. This appears below the operating income line and boosts net income.
    • Operating income (rental revenue) will stay lower because the property’s lease cash flows are gone.
  3. Cash‑flow statement impact – The cash received will appear in Cash Flows from Investing Activities (sale of property) and will be reflected as a positive cash inflow in the period the proceeds are collected.

What investors should watch

Indicator Why it matters
Announcement of the exact receipt date (usually in the next quarterly filing or a supplemental press release) Confirms the timing of the gain and cash flow.
Disclosure of the disposal gain amount (sale price vs. carrying value) Determines how much the earnings line will be boosted.
Management commentary on redeployment of cash (new acquisitions, debt reduction, or shareholder distributions) Gives insight into whether the one‑off cash will create sustainable earnings upside.
Guidance updates (Q3 2025 earnings guidance, FY 2025 adjusted EPS) Shows how management expects the proceeds to affect overall profitability.

Bottom line

  • Status: The 9 Times Square sale is closed; ASIC now has a contractual right to the proceeds, but the cash has not yet been recorded in its books.
  • Expected timing: Proceeds are anticipated in the next reporting period (Q3 2025), shortly after the August 8 announcement.
  • Effect on future earnings: When the cash is received, ASIC will book a one‑time gain on disposal, which will substantially improve net income (or reduce the net loss) for that quarter. However, the recurring rental revenue from the asset will be gone, meaning operating earnings will remain lower going forward. The net effect on the full‑year picture should be positive, assuming the gain is sizable relative to the lost operating cash flow and the company can redeploy the cash efficiently.

Other Questions About This News

Are there any planned asset acquisitions, dispositions, or capital improvements that could offset the revenue decline? What guidance is the company providing for revenue and earnings in the upcoming quarters? What is the current occupancy rate across the portfolio and are there any anticipated lease renewals or vacancies? How does this performance compare to other NYC-focused commercial real estate companies and REITs? How does the company's leverage and debt maturity profile look after reporting the net loss? How will the net loss impact the company's cash flow and capital allocation plans? How will the reported results affect the stock's valuation metrics such as price-to-earnings and net asset value multiples? What is the impact of the revenue shortfall on the company's dividend policy or share repurchase plans? What is driving the decline in revenue compared to the same quarter last year?