DEFM14A 1 v455216_defm14a.htm DEFM14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



 

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934



 
Filed by the Registrant x
Filed by a Party other than the Registrant o

Check the appropriate box:

o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12

New York REIT, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[GRAPHIC MISSING]

December 21, 2016

Dear Stockholder:

On behalf of the board of directors, I cordially invite you to attend a special meeting of the stockholders of New York REIT, Inc., a Maryland corporation (the “Company,” “we,” “us,” “our,” or “our company”), to be held on Tuesday, January 3, 2017, at 2:30 p.m., local time, at The Core Club, located at 66 E. 55th Street, New York, NY.

At the special meeting, we will ask you to consider and vote upon a proposal to approve a plan of liquidation and dissolution (the “plan of liquidation”) for the Company. You will also be asked to approve a proposal to adjourn the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the plan of liquidation.

The principal purpose of the plan of liquidation is to provide our stockholders with what our board of directors believes, at this time, is the best alternative to maximize stockholder value within a reasonable period of time. The plan of liquidation involves:

selling our real estate and real estate related assets,
paying our liabilities,
distributing our current cash and the net proceeds of our liquidation to our stockholders,
winding up our operations, and
dissolving the Company.

The Company has estimated that the net proceeds that will be distributed to stockholders over time from the plan of liquidation and taking into account estimated transaction costs, will be between $8.49 and $11.26 per share. This range is solely an estimate and we cannot guarantee at this time the exact amount that you will receive.

Once a quorum is present or represented by proxy at the special meeting, the affirmative vote of at least a majority of the outstanding shares of our common stock is required to approve the plan of liquidation.

Our board of directors believes that the plan of liquidation is advisable and in the best interests of the Company, has approved the plan of liquidation, and recommends that you vote “FOR” the plan of liquidation. You should carefully read the plan of liquidation, a copy of which is attached as Exhibit A to the accompanying proxy statement. Our board of directors also recommends that you vote “FOR” the proposal to adjourn the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the plan of liquidation.

Your vote is important. Regardless of whether you plan to attend the special meeting, we urge you to submit your proxy as soon as possible. You may do this by completing, signing and dating the enclosed proxy card and returning it to us in the accompanying postage paid return envelope. You may also authorize a proxy to vote your shares via the internet or by telephone. Please follow the directions provided in your proxy card or your voting instructions form. This will not prevent you from voting in person at the special meeting, but will assure that your vote will be counted if you are unable to attend the special meeting.

THANK YOU FOR YOUR ATTENTION TO THIS MATTER AND FOR YOUR CONTINUED SUPPORT OF AND INTEREST IN THE COMPANY.

Sincerely,

[GRAPHIC MISSING]
Randolph C. Read
Non-Executive Chairman of the Board of Directors


 
 

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[GRAPHIC MISSING]



 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on January 3, 2017



 

NOTICE IS HEREBY GIVEN that a special meeting of the stockholders of New York REIT, Inc., a Maryland corporation (the “Company,” “we,” “us,” or “our,” or “our company”), will be held on Tuesday, January 3, 2017, at 2:30 p.m., local time, at The Core Club, located at 66 E. 55th Street, New York, NY. The proxy solicitation materials were mailed to stockholders on or about December 21, 2016. At the special meeting, stockholders will be asked to consider and vote upon the following proposals:

1. a proposal to approve a plan of liquidation and dissolution (the “plan of liquidation”) for the Company pursuant to which we will undertake the following, among other things:
sell or otherwise dispose of all or substantially all of our assets (including, without limitation, any assets held by our operating partnership, New York Recovery Operating Partnership, L.P. (the “OP”), and its and our subsidiaries) in exchange for cash or such other assets as may be conveniently liquidated or distributed;
pay or provide for our liabilities and expenses, which may include the establishment of a reserve fund to provide for payment of contingent or unknown liabilities;
distribute our current cash and the remaining proceeds of the liquidation to you after the payment of or provision for our liabilities and expenses, and take all necessary or advisable actions to wind up our affairs;
if we cannot sell our assets and pay our debts within 24 months of the date you approve the plan of liquidation we intend, for tax purposes, to transfer and assign our remaining assets and liabilities to a liquidating trust and distribute beneficial interests in the liquidating trust equivalent to our stockholders’ ownership interests in the Company to our stockholders; and
wind up our operations and dissolve the Company, all in accordance with the plan of liquidation attached to the accompanying proxy statement as Exhibit A; and
2. a proposal to adjourn the special meeting to a later date or dates, if necessary, to solicit additional proxies in favor of the proposal to approve the plan of liquidation proposal.

Any action may be taken on the foregoing matters at the special meeting on the date specified above, or on any date or dates to which, by original or later adjournment, the special meeting may be adjourned, or to which the special meeting may be postponed.

Our board of directors believes that the plan of liquidation is advisable and in the best interests of the Company, has approved the plan of liquidation, and recommends that you vote “FOR” the plan of liquidation. You should carefully read the plan of liquidation, a copy of which is attached as Exhibit A to the accompanying proxy statement. Our board of directors also recommends that you vote “FOR” the proposal to adjourn the special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the special meeting to approve the plan of liquidation.

Our board of directors has fixed the close of business on November 10, 2016 as the record date for determining the stockholders entitled to notice of, and to vote at, the special meeting, and at any postponements or adjournments thereof. Only stockholders of record of our common stock at the close of business on that date will be entitled to notice of, and to vote at, the special meeting and at any postponements or adjournments thereof.


 
 

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Regardless of whether you plan to attend the special meeting, please complete, sign, date and promptly return the enclosed proxy card in the postage-prepaid envelope provided. You may also authorize a proxy to vote your shares electronically via the internet at or by telephone. For specific instructions on voting, please refer to the instructions on your proxy card or your voting instructions form. Any proxy may be revoked by delivery of a later dated proxy. If you attend the special meeting, you may vote in person if you wish, even if you have previously signed and returned your proxy card. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote in person at the meeting, you must obtain a proxy issued in your name from such broker, bank or other nominee.

By Order of the Board of Directors,
 
[GRAPHIC MISSING]
Nicholas Radesca
Interim Chief Financial Officer, Treasurer and Secretary

New York, New York
December 21, 2016


 
 

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  Page
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING     1  
SUMMARY     13  
Our Business     13  
Our Management     13  
New Financing and Exercise of WWP Option     13  
The Special Meeting     14  
The Plan of Liquidation     14  
Background of the Plan of Liquidation     14  
Reasons for the Plan of Liquidation     16  
Recommendation of Our Board of Directors     17  
Interests in the Liquidation That Differ from Your Interests     17  
Estimated Liquidating Distributions     19  
Material U.S. Federal Income Tax Consequences of the Plan of Liquidation     20  
No Appraisal Rights     20  
Risk Factors     20  
RISK FACTORS     23  
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS     36  
THE SPECIAL MEETING     38  
Date, Time and Purpose of the Special Meeting     38  
Recommendations of the Board of Directors     38  
Record Date, Notice and Quorum     38  
Required Vote     38  
Inspector of Elections     38  
Proxies and Revocation     39  
Solicitation of Proxies     39  
Adjournments     39  
Your Vote is Important     40  
BUSINESS     41  
Overview     41  
Our Management     41  
Our Properties     46  
New Financing and Exercise of WWP Option     47  
SELECTED FINANCIAL DATA     48  
PROPOSAL ONE: PLAN OF LIQUIDATION AND DISSOLUTION     50  
General     50  
Background of the Plan of Liquidation     51  
Reasons for the Plan of Liquidation     64  
Recommendation of Our Board of Directors     68  

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  Page
Estimated Liquidating Distributions     68  
Timing and Amount of Liquidating Distributions     68  
Calculation of Estimated Liquidating Distributions     69  
Uncertainties Relating to Estimated Liquidating Distributions     70  
Interests of Certain Persons in the Plan of Liquidation     71  
Fees and Expenses to the Advisor     71  
Restricted Shares     72  
LTIP Units     73  
Liquidating Distributions     74  
The Plan of Liquidation     74  
Purpose of the Plan of Liquidation; Certain Effects of the Liquidation     74  
Principal Terms of the Plan of Liquidation     75  
Liquidating Distributions and Procedures     75  
Liquidating Trust     76  
Dissolution     77  
Vote Required     77  
Abandonment or Modification of Plan of Liquidation     77  
Termination of the Registration of Common Stock     77  
Cancellation of Shares of Common Stock     77  
MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES     78  
Tax Consequences to Our Company     79  
Tax Consequences to U.S. Stockholders     80  
Tax Consequences to Tax-Exempt U.S. Stockholders     81  
Tax Consequences to Non-U.S. Stockholders     81  
Tax Consequences of the Liquidating Trust     82  
Other Tax Considerations     83  
State and Local Income Tax     83  
Transfer Taxes     83  
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT     84  
PROPOSAL TWO: ADJOURNMENT OF SPECIAL MEETING     86  
ADDITIONAL INFORMATION     87  
WHERE YOU CAN FIND MORE INFORMATION     88  
STOCKHOLDER PROPOSALS FOR THE 2017 ANNUAL MEETING     90  
Stockholder Proposals in the Proxy Statement     90  
Stockholder Proposals and Nominations for Directors to Be Presented at Meetings     90  
OTHER BUSINESS     91  
Exhibit A — New York Reit, Inc. Plan of Liquidation and Dissolution     A-1  

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

The following are some questions that you, as a stockholder of the Company, may have regarding the special meeting, voting and the plan of liquidation, and brief answers to those questions. We urge you to read carefully the remainder of this proxy statement because the information in this section may not provide all the information that might be important to you with respect to the proposals being considered at the special meeting. Additional important information is also contained in the exhibits to, and the documents incorporated by reference in, this proxy statement. In this section and elsewhere in this proxy statement, references to “you” refers to the holders of our common stock to whom the notice of special meeting and this proxy statement are addressed.

Q: What am I being asked to vote upon?
A: At the special meeting, we will ask you to consider and vote upon a proposal to approve the plan of liquidation and authorize our board of directors to cause the Company to take all actions necessary and advisable to implement and conclude the plan of liquidation, in accordance with the plan of liquidation attached to this proxy statement as Exhibit A. You will also be asked to approve a proposal to adjourn the special meeting to a later date or dates, if necessary, to solicit additional proxies in favor of the proposal to approve the plan of liquidation.
Q: Why is the plan of liquidation being proposed?
A: On September 30, 2015, our board of directors, after discussions with stockholders of the Company, determined to consider potential strategic alternatives to maximize stockholder value within a reasonable period of time and engaged in a strategic review process pursuant to which, with assistance and input from our outside advisors and other representatives of the Company, our board of directors sought to identify potential purchasers for the Company’s assets or the Company as a whole and to evaluate other alternative transactions.

From October 2015 through May 2016, upon direction of our board of directors, over 100 parties were contacted, including foreign investors, publicly traded real estate investment trusts for U.S. federal income tax purposes (“REITs”), private equity funds and other real estate investors, regarding their potential interest in a strategic transaction at an asset or entity level, 85 of which signed a non-disclosure agreement at the asset or entity level or both.

After a thorough review of the alternatives reasonably available to us, our board of directors concluded that, at this time, pursuing a plan of liquidation is the best alternative to maximize stockholder value within a reasonable period of time.

Q: What are the recommendations of our board of directors with respect to the proposals?
A: Our board of directors determined that the terms of the plan of liquidation are advisable and in the best interests of the Company and approved the sale of all of our assets and our dissolution in accordance with the plan of liquidation, subject to stockholder approval. Therefore, our board of directors recommends that you vote “FOR” the plan of liquidation proposal. Our board of directors recommends that you also vote “FOR” the adjournment proposal.
Q: What are the key provisions of the plan of liquidation?
A: The plan of liquidation provides, in pertinent part, that, among other things:
We will be authorized to sell all of our assets, liquidate and dissolve the Company and its subsidiaries, and distribute the net proceeds of such liquidation in accordance with the provisions of our charter, our bylaws and the laws of the State of Maryland.

We will not engage in any business activities, except (i) to exercise the option (the “WWP Option”) to purchase additional equity interests in WWP Holdings, LLC, the joint venture that holds the property known as Worldwide Plaza, subject to the joint venture partner’s right to retain up to 1.2% of our joint partner’s membership interest, or (ii) to the extent otherwise necessary to preserve the

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value of our assets, wind up our business, pay or establish a reserve fund for our debts and distribute our assets to our stockholders, all in accordance with our charter and our bylaws, and the plan of liquidation.

We will be authorized to satisfy any existing contractual obligations (including any capital call requirements), pay for required tenant improvements and capital expenditures at our real estate properties (including real estate properties owned by joint ventures in which the Company owns an interest) if our board of directors so chooses and make protective acquisitions or advances with respect to our existing assets.
We will be authorized to provide for the payment of any and all claims and obligations of ours, including all contingent, conditional or contractual claims known to us. We may do so through the creation of a reserve fund or in other ways.
Once we make our final distribution, other than a final distribution made as an in kind distribution of beneficial interests in a liquidating trust, and dissolve, all of our outstanding shares of common stock will be cancelled and we will cease to exist.
If we cannot sell our assets and pay our debts within 24 months of the date you approve the plan of liquidation we intend, for tax purposes, to transfer and assign our remaining assets and liabilities to a liquidating trust. This would be necessary in order for us, assuming we remain qualified as a REIT, to be eligible to deduct amounts distributed pursuant to the plan of liquidation as dividends paid and thereby meet our annual distribution requirement and not be subject to U.S. federal income tax on such amounts. Upon transfer and assignment, our stockholders will receive beneficial interests in the liquidating trust equivalent to our stockholders’ ownership interests in the Company as represented by the shares of our common stock held by our stockholders prior to the transfer and assignment. The liquidating trust will pay or provide for all of our liabilities and distribute any remaining net proceeds from the sale of its assets to the holders of beneficial interests in the liquidating trust. The amounts that you would receive from the liquidating trust are included in our estimates of the total amount of cash that you will receive in the liquidation described in the section entitled “Estimated Liquidating Distributions.” The transfer of our assets to a liquidating trust is a taxable event to our stockholders notwithstanding that our stockholders may not currently receive a distribution of cash or any other assets with which to satisfy the resulting tax liability. Your interests in a liquidating trust will be generally non-transferable except by will, intestate succession or operation of law.
Until we are dissolved, our board of directors may terminate the plan of liquidation without stockholder approval only (i) if the plan of liquidation is not approved by our stockholders or (ii) (A) if our board of directors approves the Company entering into an agreement involving the sale or other disposition of all or substantially all of our assets or common stock by merger, consolidation, share exchange, business combination, sale or other transaction involving the Company or (B) if our board of directors determines, in exercise of its duties under Maryland law, after consultation with its advisor and its financial advisor (if applicable) or other third party experts familiar with the market for Manhattan office properties, that there is an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely affect proceeding with the plan of liquidation. Notwithstanding approval of the plan of liquidation by our stockholders, our board of directors may modify or amend the plan of liquidation without further action by our stockholders to the extent permitted under then current law.
Q: Who will oversee the liquidation?
A: The sale of the Company’s assets will be administered by our board of directors and Winthrop REIT Advisors LLC (“Service Provider”), in accordance with the plan of liquidation and our services agreement with the Service Provider (the “Services Agreement”), and subject to the Company’s governing documents. Our current external advisor, New York Recovery Advisors, LLC (the “Advisor”), will continue as advisor to us with respect to matters not primarily related to the plan of liquidation until the “Transition Date,” which will be the earlier of (i) three business days after written notice from our

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independent directors to the Advisor following the filing of our Annual Report on Form 10-K for the year ended December 31, 2016, but not earlier than March 3, 2017, and (ii) April 1, 2017. In accordance with our announcement on September 7, 2016, we issued a Request For Proposals for all interested, qualified parties to serve as our external advisor upon expiration of the existing advisory agreement with the Advisor (as amended to date, the “Advisory Agreement”) on December 26, 2016. On December 19, 2016, we entered into a series of agreements with the Service Provider, the Advisor and New York Recovery Properties, LLC (the “Property Manager”), which is under common control with the Advisor, pursuant to which, among other things, we: (i) amended the Advisory Agreement to extend the term to March 31, 2017, subject to five one-month extension options that may be exercised by our independent directors and to provide that the Advisor will not be responsible for implementing the plan of liquidation, (ii) amended our agreement with the Property Manager (as so amended, the “Property Manager Agreement) so that it will terminate on the expiration or termination of the Advisory Agreement, and (iii) entered into the Services Agreement pursuant to which the Service Provider will serve as (x) exclusive advisor to us with respect to all matters primarily related to the plan of liquidation (and as a consultant to us on other matters) during the period from January 3, 2017 through the Transition Date, and (y) as our advisor from and after the Transition Date. Our agreements with the Service Provider, the Advisor and the Property Manager are described in more detail in “Business — Our Management.”

We are an externally managed company and have no employees of our own. Personnel and services that we require are provided to us under contracts with an external advisor, and we are dependent on an external advisor to manage our operations and manage our real estate assets, including sale of our real estate assets. These responsibilities also include arranging financings, providing accounting services, providing information technology services, preparing and filing all reports required to be filed by it with the Securities and Exchange Commission (the “SEC”), the Internal Revenue Service (the “IRS”) and other regulatory agencies, maintaining our REIT status, and maintaining our compliance with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”). The Service Provider will replace the Advisor as the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and as the external advisor to us with respect to all other matters on the Transition Date. See “Risk Factors — Our ability to implement the plan of liquidation depends upon the participation of our executive officers, and other key personnel of our Advisor and the Service Provider, and there is no assurance such officers and personnel will remain in place” and “— There can be no assurance that the transition of advisory services from the Advisor to the Service Provider will not adversely affect our ability to execute the plan of liquidation as efficiently and effectively as we have anticipated, or at all.”

Q: What will I receive in the liquidation?
A: It is currently estimated that the net proceeds that will be distributed to stockholders over time from the plan of liquidation and taking into account debt repayment and estimated transaction costs, will be between $8.49 and $11.26 per share (our “Total Liquidating Distributions Range”). The Total Liquidating Distributions Range included in this proxy statement reflects a decrease of $0.24 per share from each of the low end and high end of the initial total liquidating distributions range estimated by the Company in August 2016 at the time our board of directors approved the plan of liquidation and previously announced by the Company. This adjustment reflects changes during the period of time between our board of directors’ approval of the plan of liquidation and the mailing of this proxy statement seeking stockholder approval of the plan of liquidation as described in more detail under “Proposal One: Plan of Liquidation and Distribution — Estimated Liquidating Distributions — Calculation of Estimated Liquidating Distributions.”

Our Total Liquidating Distributions Range is an estimate and does not necessarily reflect the actual amount that our stockholders will receive in liquidating distributions, and the actual amount may be more or less than the Total Liquidating Distributions Range, for various reasons discussed in this proxy statement, including in the section entitled “Risk Factors.” Amounts available for distribution to stockholders are dependent on a number of factors, including actual proceeds from the sale of our assets, fees and expenses incurred in connection with the sale of our assets, expenses incurred in the administration of our properties prior to disposition, general administrative expenses of the Company,

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including fees and expense reimbursements paid to the Service Provider, the Advisor and the Property Manager and other liabilities that may be incurred by the Company.

We will make liquidating distributions in one or more payments. However, we cannot be sure how many liquidating distributions will be made, or when they will be made. The actual timing of the liquidating distributions we pay under the plan of liquidation depends on a number of factors outside of our control discussed in this proxy statement, including in the section entitled “Risk Factors.”

You may also receive an interest in a liquidating trust that we may establish under the circumstances discussed below. Distributions that you may receive from the liquidating trust, if any, are included in our estimates of the Total Liquidating Distributions Range. Further, if we establish a reserve fund to pay for liabilities following the liquidation, the timing and amount of your distributions in the liquidation may be adversely impacted.

Q: When will I receive my liquidating distributions?
A: If the plan of liquidation is implemented, we will seek to sell most or all of our assets and make most or all of the liquidating distributions within six to 12 months after the plan of liquidation is approved by our stockholders, although there is no assurance such sales and such distributions will be made within that time. We expect to make liquidating distributions to our stockholders throughout the period of the liquidation process and to make the final liquidating distribution after we sell all of our assets, make reasonable provisions for all known claims and obligations, including all contingent, conditional or contractual claims, as well as provisions that are reasonably likely to be sufficient to provide compensation for any claim against us, our operating partnership, New York Recovery Operating Partnership, L.P. (the “OP”), or its or our subsidiaries in connection with any pending action, suit or proceeding to which any of the Company, the OP or any of their respective subsidiaries is a party. We will be unable to pay liquidating distributions until we repay the release amounts required to be paid upon property sales under a new mortgage and mezzanine loan we obtained secured by 12 of our properties in December 2016 (the “New Financing”), which may delay the timing of liquidating distributions.

If we have not sold all of our assets and paid all of our liabilities within 24 months after stockholder approval of the plan of liquidation, or if our board of directors otherwise determines that it is advantageous to do so, we intend, for tax purposes, to transfer and assign our remaining assets and liabilities to a liquidating trust. This is necessary in order for us, assuming we remain qualified as a REIT, to be eligible to deduct amounts distributed pursuant to the plan of liquidation as dividends paid and thereby meet our annual distribution requirement and not be subject to U.S. federal income tax on such amounts. Upon transfer and assignment, our stockholders will receive beneficial interests in the liquidating trust equivalent to the ownership interests in the Company as represented by the shares of our common stock prior to the transfer and assignment. The liquidating trust will pay or provide for all of our liabilities and distribute any remaining net proceeds from the sale of its assets to the holders of beneficial interests in the liquidating trust.

If we establish a reserve fund, we may make a final distribution of any funds remaining in the reserve fund after we determine that all of our liabilities have been paid.

The actual amounts and times of the liquidating distributions will be determined by our board of directors or, if a liquidating trust is formed, by the trustees of the liquidating trust, in their discretion. If you transfer your shares during the liquidation, the right to receive liquidating distributions will transfer with those shares.

Q: What will happen to my shares of common stock?
A: If our stockholders approve the plan of liquidation and we complete the liquidation and dissolution, all shares of our common stock owned by you will be cancelled at the end of the liquidation and dissolution process.

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Q: What is a liquidating trust?
A: A liquidating trust is a trust organized for the primary purpose of liquidating and distributing the assets transferred to it. Pursuant to applicable rules relating to entities that qualify as a REIT, in order to be able to deduct liquidating distributions as dividends, we must complete our liquidation within 24 months of the date the plan of liquidation is approved by you. If we are unable to do so, we may satisfy this requirement by transferring and assigning our remaining assets and liabilities to a liquidating trust prior to the end of the 24-month period. This is necessary in order for us, assuming we remain qualified as a REIT, to be eligible to deduct amounts distributed pursuant to the plan of liquidation as dividends paid and thereby meet our annual distribution requirement and not be subject to U.S. federal income tax on such amounts. If we form a liquidating trust, we will transfer to our stockholders beneficial interests in the liquidating trust. Your interests in a liquidating trust will be generally non-transferable except by will, intestate succession or operation of law.
Q: How was the Total Liquidating Distributions Range calculated?
A: Our estimated Total Liquidating Distributions Range was derived from estimated total gross real estate sale proceeds, including an estimated value range for the additional interest in the Worldwide Plaza property we expect to acquire upon exercise of the WWP Option, less total debt, the price of exercising the WWP Option, estimated asset sale transaction costs and estimated liquidation costs, but adjusted upwards for estimated interim operating cash flows, as well as existing cash and working capital (estimated as of September 30, 2016). Amounts available for distribution to stockholders are dependent on a number of factors, including actual proceeds from the sale of our assets, fees and expenses incurred in connection with the sale of our assets, expenses incurred in the administration of our properties prior to disposition, general administrative expenses of the Company, including fees and expense reimbursements paid to the Service Provider, the Advisor and the Property Manager and other liabilities that may be incurred by the Company.
Q: Will I continue to receive regular monthly dividends during the implementation of the plan of liquidation?
A: No. In October 2016, we announced that, in light of the plan of liquidation, our board of directors had determined that we will not pay a regular dividend for the month of November 2016 and do not currently expect to pay a regular monthly dividend for the month of December 2016 or thereafter.

If the plan of liquidation is approved by our stockholders and implemented, we thereafter expect to make periodic liquidating distributions out of net proceeds of asset sales, subject to satisfying our liabilities and obligations, in lieu of regular monthly dividends.

Q: What alternatives to liquidation have you considered?
A: We engaged in a strategic review process pursuant to which, at the direction of our board of directors and with input from the Company’s outside advisors and other representatives of the Company, we sought to identify potential purchasers for the Company’s assets or the Company as a whole and to evaluate other alternative transactions. As part of this process, we considered a number of potential alternatives including:
a sale or merger of the Company;
other entity-level transactions, including proposals received during the strategic alternatives process which involved an investment and contribution of property from a third-party investor combined with an internalization of our management and changes to the composition of our board of directors;
the series of transactions (the “JBG Combination Transactions”) contemplated by the Master Combination Agreement (the “JBG Combination Agreement”) with JBG Properties, Inc. and JBG/Operating Partners, L.P. (collectively “JBG Management Entities”), and certain pooled investment funds that are affiliates of the JBG Management Entities (collectively with the JBG Management Entities and certain affiliated entities, “JBG”) under which the real estate interests

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and management business interests of JBG would be contributed to the Company and the OP in exchange for newly issued units of limited partner interests in the OP entitled “OP Units” (“OP Units”) and newly issued shares of our common stock;
seeking to dispose of one or more of our assets through individual asset sales or portfolio sales; and
continuing to operate our business.

However, following the termination of the JBG Combination Agreement and after reviewing the alternatives reasonably available to us, we concluded, and our board of directors believes, that, at this time, pursuing a plan of liquidation is the best alternative to maximize stockholder value within a reasonable period of time. For further information, please see the section entitled “Proposal One: Plan of Liquidation — Background of the Plan of Liquidation.”

Q: What are the U.S. federal income tax consequences of the liquidation to stockholders?
A: In general, if the plan of liquidation is approved and the Company is liquidated, distributions to you under the plan of liquidation, including your pro rata share of the fair market value of any assets that are transferred to a liquidating trust, should not be taxable to you for U.S. federal income tax purposes until the aggregate amount of liquidating distributions to you exceeds your adjusted tax basis in your shares of common stock, and then should be taxable to you as capital gain (assuming you hold your shares as a capital asset). To the extent the aggregate amount of liquidating distributions to you is less than your adjusted tax basis in your shares of common stock, you generally will recognize a capital loss (assuming you hold your shares as a capital asset) in the year the final distribution is received by you. The transfer of our assets to a liquidating trust is a taxable event to our stockholders notwithstanding that the stockholders may not currently receive a distribution of cash or any other assets with which to satisfy the resulting tax liability. Please see the sections entitled “Material U.S. Federal Income Tax Consequences” for a more detailed summary of the possible U.S. federal income tax consequences to you. You should consult your tax advisor as to the tax effect of your particular circumstances.
Q: Will we continue to maintain our status as a REIT?
A: We anticipate that we will continue to satisfy the requirements necessary to qualify as a REIT until such time, if at all, as we transfer any remaining assets and liabilities to a liquidating trust, and that we will make distributions sufficient to ensure that we will not be required to pay U.S. federal income tax. Nevertheless, due to the changes in the nature of our assets and our sources of income that may result during this period, and the need to retain assets to meet liabilities, we can neither assure you that we will continue to qualify as a REIT nor that we will not become subject to U.S. federal income tax during the liquidation process. Any taxes imposed on us (because we are unable to retain our status as a REIT or we become subject to U.S. federal income tax during the liquidation process) could materially reduce the amount of cash available for distribution to our stockholders.
Q. What will happen if the plan of liquidation is not approved by our stockholders?
A: If the plan of liquidation is not approved by our stockholders, our board of directors will determine what other reasonably available alternatives to pursue are in the best interests of the Company, including, without limitation, potentially continuing to operate the business.
Q: Can the plan of liquidation be abandoned to pursue a strategic alternative (or for any other reason)?
A: Yes. Our board of directors may terminate the plan of liquidation without stockholder approval only (i) if the plan of liquidation is not approved by our stockholders or (ii) (A) if our board of directors approves the Company entering into an agreement involving the sale or other disposition of all or substantially all of our assets or common stock by merger, consolidation, share exchange, business combination, sale or other transaction involving the Company or (B) if our board of directors determines, in exercise of its duties under Maryland law, after consultation with its advisor and its financial advisor (if applicable) or other third party experts familiar with the market for Manhattan office properties, that there is an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely

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affect proceeding with the plan of liquidation. Notwithstanding approval of the plan of liquidation by our stockholders, our board of directors may modify or amend the plan of liquidation without further action by our stockholders to the extent permitted under then current law.
Q: Do you currently have agreements to sell your assets?
A: As of the date of this proxy statement, we have not entered into any binding agreements to sell any of our assets. Under Maryland law, we are not permitted to sell all or substantially all of our assets before receiving stockholder approval, but we have retained third party brokers to begin marketing some or all of our assets before such approval is obtained and could potentially close on some asset sales prior to such stockholder approval.
Q: Are there any interests in the liquidation that differ from my own?
A: Yes. In considering the recommendation of our board of directors to approve the plan of liquidation, our stockholders should be aware that our Advisor and our directors and executive officers, including all of our executive officers and one of our directors in their capacity as executives or members of the Advisor, may be deemed to have interests in the liquidation that are in addition to, or different from, your interests as a stockholder, including the following:
The following fees and expenses are payable to our Advisor and its affiliates under existing agreements with us until the Advisory Agreement expires:
If our Advisor provides a substantial amount of services as determined by our independent directors in connection with a sale of one or more properties, our Advisor may receive a brokerage commission in an amount not to exceed the lesser of 2% of the contract sales price of the property and one-half of the total brokerage commission paid if a third-party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission.
Our Advisor is entitled to receive asset management fees and may receive reimbursement of expenses.
Our Property Manager, which is under common control and ownership with the Advisor, is entitled to receive fees and may receive reimbursement of expenses.

See “Business — Our Management — Advisory Agreement” and “— Property Management Agreement” for a more detailed description of these fees and expense reimbursements.

The Property Manager waived property management fees from the time we commenced active operations in June 2010 until the third quarter of 2016, at which point the Property Manager began to not waive the property management fee. Since we commenced active operations in June 2010 until the third quarter of 2015, the Advisor declined to request general and administrative expense reimbursements. The Advisor also has, at other times, waived certain other fees and declined to request certain other expense reimbursements. During the period since we commenced active operations in June 2010 through September 30, 2016, the aggregate amount of all fees and expense reimbursements waived or not requested was approximately $13.7 million.

On December 19, 2016, we entered into a series of agreements, including the Services Agreement and amendments to the Advisory Agreement and the Property Management Agreement, pursuant to which the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to our board of directors with respect to matters relating to our investment program, consistent with our investment objectives and policies, and leases or renewals of leases at our properties. None of our executive officers or directors are affiliated with the Service Provider or any of its affiliates.

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See “Business — Our Management — Services Agreement” for a more detailed description of these fees and expense reimbursements the Service Provider is entitled to pursuant to the Services Agreement.

All outstanding and unvested restricted shares of common stock issued under the Company’s employee and director incentive restricted share plan (“restricted shares”), including 141,135 unvested restricted shares held by our directors and executive officers in the aggregate as of the record date and any restricted shares granted to our directors in connection with our 2016 annual meeting, scheduled to occur on December 30, 2016 (the “2016 annual meeting”), will vest upon the sale of all or substantially all of our assets.
Outstanding and unvested limited partnership units of the OP entitled “LTIP Units” (“LTIP Units”) issued under the Company’s 2014 Second Amended and Restated 2014 Advisor Multi-Year Outperformance Agreement (the “OPP”) that were previously earned will vest automatically on December 26, 2016 and will be converted on a one-for-one basis into shares of our common stock. There are currently 1,172,738 LTIP Units that have been earned but have not yet vested, 24,170 of which are held by Nicholas Radesca, our interim chief financial officer, and the remainder of which are held by the individual members of American Realty Capital III, LLC (our “Sponsor”), which owns and controls our Advisor, including 229,714 earned LTIP Units held by Michael A. Happel, our chief executive officer and president, and 124,198 earned LTIP Units held by William Kahane, a member of our board of directors and a control person of the Advisor.
Additional LTIP Units issued under the OPP to the Advisor are eligible to be earned in the third and final year of the OPP on April 15, 2017 (the “Year 3 LTIP Units”) and, if earned, will be converted on a one-for-one basis into shares of our common stock. If a change of control of the Company (as defined in the OPP) occurs prior to April 15, 2017, the calculation of the Year 3 LTIP Units will be made as of the day immediately preceding the close of the change of control and the value of such Year 3 LTIP Units will be paid to the Advisor in cash at the closing. In either event, the number of Year 3 LTIP Units earned will be calculated based on the achievement of certain absolute and relative performance criteria related to the total return to our stockholders (share price appreciation plus dividends and other distributions).
Our board of directors has adopted resolutions authorizing us to file a Registration Statement on Form S-3 registering the resale of the shares of our common stock issuable in exchange for the previously earned LTIP Units and the Year 3 LTIP Units on or prior to December 26, 2016.
The OPP provides that if a liquidation in the good faith judgment of the compensation committee of our board of directors necessitates action by way of equitable or proportionate adjustment in the terms of these LTIP Units to avoid distortion in the value of the LTIP Units, the compensation committee shall make equitable or proportionate adjustments and take such other action as it deems necessary to maintain the LTIP Unit rights under the OPP so that they are substantially proportionate to the rights of LTIP Units existing prior to the liquidation.
For the purposes of calculating the estimated Total Liquidating Distributions Range, we have estimated that 239,000 Year 3 LTIP Units will be earned. The actual number of Year 3 LTIP Units that will be earned is difficult to accurately forecast and could be higher or lower than this estimate. The estimate of the Year 3 LTIP Units that will be earned was made, assuming that the calculation occurred on the final valuation date on April 15, 2017, with input from a third party consultant that also provides input in connection with the valuation of LTIP Units for purposes of our financial statements using a Monte Carlo simulation method. See “Proposal One: Plan of Liquidation and Distribution — Estimated Liquidating Distributions — Calculation of Estimated Liquidating Distributions.”

Our board of directors was aware of these interests and considered them in making its recommendations. For further information regarding these and other interests that differ from your interests, please see the section entitled “Proposal One: Plan of Liquidation — Interests of Certain Persons in the Plan of Liquidation.”

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Q: Who is entitled to vote at the meeting?
A: If our records show that you were a holder of shares of our common stock at the close of business on November 10, 2016, which is referred to in this proxy statement as the “record date,” you are entitled to receive notice of the meeting and to vote the shares of common stock that you held on the record date.
Q: How many shares can vote?
A: As of the close of business on the record date, 165,856,770 shares of our common stock were issued and outstanding and entitled to vote. There is no other class of voting securities outstanding. You are entitled to one vote for each share of common stock you held as of the close of business on the record date. The proxy card shows the number of shares of our common stock you are entitled to vote.
Q: What constitutes a quorum?
A: A quorum refers to the number of shares that must be in attendance at a meeting to lawfully conduct business. The presence in person or by proxy of stockholders entitled to cast a majority of all of the votes entitled to be cast will constitute a quorum for the transaction of business at the meeting. If a share is represented for any purpose at the special meeting it is deemed to be present for quorum purposes and for all other matters as well. Abstentions and broker non-votes, if any, will be counted for purposes of determining the existence of a quorum.
Q: What vote of stockholders is required to approve the proposals?
A: Approval of the plan of liquidation proposal will require the affirmative vote of the holders of at least a majority of the shares of our common stock then outstanding and entitled to vote thereon. Approval of the adjournment proposal requires the affirmative vote of a majority of the votes cast on the proposal.
Q: What effect will abstentions have on the vote approval for the liquidation proposal and for the adjournment proposal?
A: Approval of the plan of liquidation proposal will require the affirmative vote of the holders of at least a majority of the shares of our common stock. As a result, an abstention will have the same effect as a vote against the plan of liquidation proposal. An abstention will have no effect on the outcome of the vote on the adjournment proposal.
Q: What is a “broker non-vote”?
A: A broker non-vote occurs when stockholders who hold their shares of common stock through a broker, bank or other nominee (i.e., in “street name”) fail to provide such brokers with specific instructions on how to vote the shares, and the brokers do not have discretion to vote the shares under applicable stock exchange rules.
Q: What effect will broker non-votes have on the vote approval for the liquidation proposal and the adjournment proposal?
A: Because approval of the plan of liquidation is a matter for which brokers are prohibited from exercising their discretion and will require the affirmative vote of the holders of at least a majority of the shares of our common stock, a broker non-vote will have the same effect as a vote against the plan of liquidation proposal. A broker non-vote will have no effect on the outcome of the vote on the adjournment proposal.
Q: What happens if I do not vote?
A: If you do not vote, it will have the same effect as a vote against the plan of liquidation proposal, but will have no effect on the adjournment proposal.
Q: If my shares are held in “street name” by my broker, will my broker vote my shares for me?
A: Your broker will not have discretion to vote your shares unless you provide your broker with instructions on how to vote. You should follow the procedures provided by your broker regarding how to instruct them to vote your shares.

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Q: How may I vote?
A: You may vote in person at the special meeting or by authorizing a proxy to vote your shares. Stockholders may submit their votes by authorizing a proxy by mail by completing, signing, dating and returning their proxy card in the enclosed envelope. Stockholders also have the following two options for authorizing a proxy to vote their shares:
via the internet at any time prior to 11:59 p.m. Eastern Time on January 2, 2017, please refer to the instructions on your proxy card or your voting instructions form; or
by telephone at any time prior to 11:59 p.m. Eastern Time on January 2, 2017, please refer to the instructions on your proxy card or your voting instructions form.

For those stockholders with internet access, we encourage you to authorize a proxy to vote your shares via the internet, a convenient means of authorizing a proxy that also provides cost savings to us. In addition, when you authorize a proxy to vote your shares via the internet or by telephone prior to the special meeting date, your proxy authorization is recorded immediately and there is no risk that postal delays will cause your vote by proxy to arrive late and, therefore, not be counted. For further instructions on authorizing a proxy to vote your shares, see your proxy card. You may also vote your shares at the special meeting. If you attend the special meeting, you may vote in person, and any proxies that you authorized by mail or by internet or telephone will be superseded by the vote that you cast at the special meeting.

By casting your vote in any of the ways listed above, you are authorizing the individuals listed on the proxy to vote your shares in accordance with your instructions.

Voting in Person

Stockholders of record may vote in person by ballot at the special meeting. Instructions for in person voting, including directions to the special meeting, can be obtained by calling our proxy solicitor, D.F. King & Co., Inc. (“D.F. King”) toll-free at (877) 674-6273 or by email: nyreit@dfking.com. Please note that even if you plan to attend the special meeting in person, we encourage you to submit a proxy in advance to ensure your shares are represented. Your vote in person at the special meeting will revoke any previously submitted proxy.

If you own common stock in “street name,” you must provide voting instructions in accordance with the instructions on the voting instruction card that your broker, bank or other nominee provides to you, as brokers, banks and other nominees do not have discretionary voting authority with respect to any of the proposals described in this proxy statement. You should instruct your broker, bank or other nominee as to how to vote your shares of our common stock following the directions contained in such voting instruction card. If you have not received such voting instructions or require further information regarding such voting instructions, contact your broker, bank or other nominee who can give you directions on how to vote your shares of our common stock. If you hold your shares of our common stock through a broker, bank or other nominee and wish to vote in person at the special meeting, you must obtain a “legal proxy,” executed in your favor, from the broker, bank or other nominee (which may take several days).

Q: How will proxies be voted?
A: Shares represented by valid proxies will be voted at the special meeting in accordance with the directions given. If the enclosed proxy card is signed and returned without any directions given, your shares will be “FOR” the plan of liquidation proposal and “FOR” the adjournment proposal.

No other business will be presented at the special meeting other than as set forth in the attached Notice of Special Meeting of Stockholders.

Q: Who is paying for this proxy solicitation?
A: We are soliciting the proxy on behalf of our board of directors, and we will pay all costs of preparing, assembling and mailing the proxy materials. We will request banks, brokers, custodians, nominees, fiduciaries and other record holders to make available copies of this proxy statement to people on whose

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behalf they hold shares of our common stock and to request authority for the exercise of proxies by the record holders on behalf of those people. In compliance with the regulations of the SEC, we will reimburse such persons for reasonable expenses incurred by them in making available proxy materials to the beneficial owners of shares of our common stock. In addition to soliciting proxies by mail, directors, officers and employees of the Advisor may solicit proxies on behalf of our board of directors, without additional compensation, personally or by telephone.

We have also retained D.F. King to act as proxy solicitor. Under our agreement with D.F. King, D.F. King will receive a fee of $45,000 plus the reimbursement of reasonable expenses. In addition, we have retained Broadridge Investor Communication Solutions, Inc. (“Broadridge”) to act as proxy tabulator. Under our agreement with Broadridge, Broadridge will receive a fee of $16,000 plus the reimbursement of reasonable expenses.

Q: How can I change my vote or revoke a proxy?
A: You may revoke your proxy or change your vote at any time before your proxy is voted at the special meeting. If you are a holder of record, you can do this in any of the three following ways:
by sending a written notice to the Secretary of the Company at the address set forth under “Where You Can Find More Information,” in time to be received before the special meeting, stating that you would like to revoke your proxy;
by completing, signing and dating another proxy card and returning it by mail in time to be received before the special meeting, or by completing a later dated proxy over the internet or by telephone, in which case your later dated proxy will be recorded and your earlier proxy revoked; or
if you are a holder of record, you can attend the special meeting and vote in person, which will automatically cancel any proxy previously given, or you may revoke your proxy in person, but your attendance alone at the special meeting will not revoke any proxy that you have previously given.

If you are a holder of record and you choose either of the first two methods, you must submit your notice of revocation or your new proxy to the Secretary of the Company no later than the beginning of the special meeting. If your shares are held in street name by your broker, bank or other nominee, you should contact them to change your vote.

Q: Do I have appraisal rights?
A: No. Objecting stockholders are not entitled under Maryland law or our charter to appraisal rights or to any similar rights of dissenters in connection with the transactions contemplated by the plan of liquidation.
Q: What does it mean if I receive more than one proxy card?
A: Some of your shares may be registered differently or held in a different account. You should authorize a proxy to vote the shares in each of your accounts by mail, by telephone or via the internet. If you mail proxy cards, please sign, date and return each proxy card to guarantee that all of your shares are voted. If you hold your shares in registered form and wish to combine your stockholder accounts in the future, you should call our Investor Relations department at (866) 902-0063. Combining accounts reduces excess printing and mailing costs, resulting in cost savings to us that benefit you as a stockholder.
Q: How do I submit a stockholder proposal for next year’s annual meeting or proxy materials, and what is the deadline for submitting a proposal?
A: In order for a stockholder proposal to be properly submitted for presentation at our 2017 annual meeting and included in the proxy material for next year’s annual meeting, we must receive written notice of the proposal at our executive offices during the period beginning on July 12, 2017 and ending at 5:00 p.m., Eastern Time, on August 11, 2017. Any proposal received after the applicable time in the previous sentence will be considered untimely. All proposals must contain the information specified in, and otherwise comply with, our bylaws. Proposals should be sent via registered, certified or express mail to: 405 Park Avenue, 14th Floor, New York, New York 10022, Attention: Nicholas Radesca, Interim Chief

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Financial Officer, Treasurer and Secretary. For additional information, see the section in this proxy statement entitled “Stockholder Proposals for the 2017 Annual Meeting.”
Q: What should I do now?
A: You should complete, date and sign your proxy card and return it promptly in the enclosed postage-prepaid envelope, or authorize a proxy to vote your shares by internet or telephone (please refer to the instructions on your proxy card or your voting instructions form), as soon as possible so that your shares may be represented at the special meeting, even if you plan to attend the special meeting in person.
Q: Whom should I call with other questions?
A: If you have additional questions about this proxy statement or the special meeting or would like additional copies of this proxy statement, please contact our proxy solicitor, D.F. King, at:

D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Toll-free: (877) 674-6273
Email: nyreit@dfking.com

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SUMMARY

This summary highlights selected information from this proxy statement and may not contain all of the information that is important to you. For additional information concerning the plan of liquidation, you should read this entire proxy statement, including the exhibit, and the other documents incorporated by reference in this proxy statement. A copy of the plan of liquidation is included as Exhibit A to this proxy statement. The following summary should be read in conjunction with, and is qualified in its entirety by, the more detailed information appearing elsewhere in this proxy statement.

Our Business

We were incorporated on October 6, 2009 as a Maryland corporation that qualified as a REIT beginning with our taxable year ended December 31, 2010. On April 15, 2014, we listed our common stock on the New York Stock Exchange (“NYSE”) under the symbol “NYRT.”

We purchased our first property and commenced active operations in June 2010. As of September 30, 2016, we owned 19 properties located in New York City aggregating 3.3 million rentable square feet with occupancy of 93.4% and a weighted-average remaining lease term of 9.0 years. Our portfolio primarily consists of office and retail properties, which, as of September 30, 2016, represented 83% and 9%, respectively, of rentable square feet. We have acquired hotel and other types of real properties to diversify our portfolio. Properties other than office and retail spaces represented 8% of rentable square feet.

Substantially all of our business is conducted through the OP. Our only significant asset is the general partnership interests we own in the OP and assets held by us for the use and benefit of the OP.

Our Management

We are an externally managed company and have no employees. We have retained the Advisor as our external advisor to manage our affairs on a day-to-day basis pursuant to the Advisory Agreement. The Property Manager serves as our property manager, unless services are performed by a third party for specific properties. The Advisor and Property Manager are under common control with AR Global Investment, LLC (the successor business to AR Capital, LLC, “AR Global”), the parent of our Sponsor.

Personnel and services that we require are provided to us under contracts with an external advisor, and we are dependent on an external advisor to manage our operations and manage our real estate assets, including sale of our real estate assets. These responsibilities also include arranging financings, providing accounting services, providing information technology services, preparing and filing all reports required to be filed by it with the SEC, the IRS and other regulatory agencies, maintaining our REIT status, and maintaining our compliance with the Sarbanes-Oxley Act.

On December 19, 2016, we entered into a series of agreements, including the Services Agreement and amendments to the Advisory Agreement and the Property Management Agreement, pursuant to which the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation (or any other plan of liquidation) on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to our board of directors with respect to matters relating to our investment program, consistent with our investment objectives and policies, and leases or renewals of leases at our properties.

New Financing and Exercise of WWP Option

In December 2016, we obtained the New Financing in the amount of $760 million. A portion of the net proceeds after closing costs was used: (i) to repay the $485 million principal amount then outstanding under our revolving credit facility and term loan with Capital One, National Association (the “Credit Facility”); and (ii) to deposit $260 million in a reserve account that may be used by us to exercise the WWP Option. The New Financing is secured by the 12 properties that previously comprised the borrowing base of the Credit Facility and permits these properties to be sold with a predetermined release amount applied to prepay the outstanding principal amount.

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We have the right to exercise the WWP Option starting in January 2017 and intend to do so using, in part, the proceeds from the New Financing.

The plan of liquidation generally prohibits us from engaging in any business activities, except for exercising the WWP Option.

The Special Meeting

The special meeting will be held Tuesday, January 3, 2017, at 2:30 p.m., local time, at The Core Club, located at 66 E. 55th Street, New York, NY. For more information on the special meeting, see the section entitled “The Special Meeting.”

The close of business on November 10, 2016 is the record date for determining eligibility to vote at the special meeting. Each holder of our common stock on the record date will be entitled to one vote per share on all matters coming before the special meeting. On the record date, there were 165,856,770 shares of our common stock outstanding and entitled to vote at the special meeting. Approval of the plan of liquidation proposal will require the affirmative vote of the holders of at least a majority of the shares of our common stock then outstanding and entitled to vote thereon. Approval of the adjournment proposal requires the affirmative vote of a majority of the votes cast on the proposal.

The Plan of Liquidation

The principal purpose of the plan of liquidation is to maximize stockholder value within a reasonable period of time. In the liquidation, we expect to sell or otherwise dispose of all or substantially all of our assets (including, without limitation, any assets held by the OP and its and our subsidiaries), and the purchasers of each of our assets will be the sole beneficiaries of any earnings and growth of that asset following the sale of such asset. Accordingly, we and our stockholders will neither benefit from any potential increase in the value of our assets, nor will we or our stockholders bear the risk of any potential decrease in the earnings or value of these assets following the sale of such assets.

Following the completion of the sale or transfer of all of our assets in accordance with the plan of liquidation, we will pay or provide for our liabilities and expenses, distribute the remaining proceeds of the liquidation of our assets to our stockholders, wind up our operations and dissolve.

Our common stock is currently registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In connection with implementing our plan of liquidation, we expect to terminate registration of our common stock under the Exchange Act after we have sold all our assets or transferred them to a liquidating trust.

Background of the Plan of Liquidation

In the summer of 2015, representatives of the Company received feedback from various stockholders of the Company expressing concern regarding the Company’s ability to fund continued growth given its stock price, capital availability and cost of capital and expressing a preference for the Company to consider and potentially pursue strategic alternatives to enhance stockholder value, including a sale or merger of the Company, as compared to recapitalizing certain assets as part of a going concern strategy. On September 30, 2015, our board of directors determined to consider potential strategic alternatives in order to maximize stockholder value within a reasonable period of time and approved the engagement of Wells Fargo Securities LLC (“Wells Fargo Securities”) to assist our board of directors in evaluating a potential strategic transaction at the asset or entity level.

From October 2015 through May 2016, in accordance with our board of directors’ direction, Wells Fargo Securities contacted over 100 parties, including foreign investors, publicly traded REITs, private equity funds and other real estate investors, to solicit potential interest in a strategic transaction at an asset or entity level, 85 of which signed a non-disclosure agreement at the asset or entity level or both.

In December 2015, our board of directors authorized us to enter into an exclusivity agreement with a publicly traded REIT (referred to herein as “Party A”) to negotiate the definitive terms of the sale of all shares of our common stock for consideration payable predominantly in cash, but Party A withdrew from these negotiations shortly afterwards and informed us in January 2016 that it was no longer interested in pursuing a potential transaction.

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On May 25, 2016, the Company entered into a JBG Combination Agreement with JBG under which the real estate interests and management business interests of JBG would be contributed to the Company and the OP in exchange for approximately 319.9 million newly issued shares of common stock of the Company and newly issued OP Units in a series of transactions referred to herein as the JBG Combination Transactions.

Following the announcement of the JBG Combination Agreement, both the Company and JBG received negative feedback regarding the JBG Combination Transactions. The Company and JBG met with a number of stockholders of the Company in the weeks following the announcement, who generally indicated that they would not support a vote for the JBG Combination Transactions. Among the concerns voiced by stockholders and considered by our board of directors were the value ascribed to the assets to be contributed by JBG to the Company and the lack of consideration in cash or liquid securities payable to the Company’s stockholders. With a view towards addressing these stockholder concerns, the Company and JBG held discussions during July 2016 concerning revisions to the terms of the JBG Combination Transactions. Ultimately, our board of directors concluded that a mutually agreeable revision to the terms of the JBG Combination Transactions could not be reached, and, on August 2, 2016, we entered into an agreement with JBG terminating the JBG Combination Agreement.

During the period in which it had considered strategic alternatives, including potential transactions with Party A and JBG, our board of directors had also considered selling all or substantially all of the Company’s assets pursuant to a plan of liquidation as an alternative, although it also considered potential impediments to doing so, including restrictions in the Credit Facility and the need to secure financing in order to exercise the WWP Option.

Our board of directors discussed liquidation as a potentially attractive alternative given the potential disadvantages of continuing to operate the Company as a stand-alone entity, including the Company’s relatively small scale compared to other publicly traded REITs focused primarily on New York City, its limited internal growth prospects, its external management structure, the difficulty the Company faced in raising new capital and the difficulty of making accretive acquisitions relative to its cost of capital at the time at multiple meetings, including:

on November 15 and 17, 2015, when our board of directors was first considering the steps to take in connection with indications of interest received in the third-party solicitation process;
on January 20, 2016, following formal termination of the discussions with Party A;
on March 28, 2016, prior to our board of directors authorizing entry into an exclusivity agreement with JBG; and
on May 8, 2016, prior to our board of directors authorizing a further extension of exclusivity with JBG.

During the period in which our board of directors considered a potential termination of the JBG Combination Agreement or revisions to the JBG Combination Transactions, our board of directors also discussed and ultimately approved, concurrently with approving the termination of the JBG Combination Agreement, a plan to begin the process of selling assets to the extent permitted under its Credit Facility and Maryland law, with the proceeds distributed to stockholders, and concurrently seeking to obtain new financing.

On August 17, 2016, we entered into an amendment to the Credit Facility modifying a representation in the Credit Facility, which previously prohibited the contemplation of a liquidation, so that the modified representation would permit the Company to contemplate, and ultimately adopt, a plan of liquidation if the Company so desired.

On August 21, 2016, our board of directors determined that the plan of liquidation was advisable and in the best interests of the Company, approved the plan of liquidation and recommended that our stockholders vote to approve the plan of liquidation. This approval was by a vote of five directors voting for and one director voting against.

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Reasons for the Plan of Liquidation

In evaluating the plan of liquidation, our board of directors consulted with management and the Advisor, as well as outside legal and financial advisors. In reaching its determination that the plan of liquidation is advisable and in the best interests of the Company and approving the plan of liquidation and recommending that our stockholders vote to approve the plan of liquidation, our board of directors considered a number of factors, including, in our board of directors view, the following material factors:

our board of directors believed that the Company, with the assistance of Wells Fargo Securities, had checked the market for a sale of the entire Company or other entity-level transactions through the strategic review process conducted from October 2015 through May 2016, contacting over 100 parties;
our board of directors determined, based upon discussions with certain of our stockholders, that many of our stockholders preferred a liquidation of the Company’s assets or another transaction that provided our stockholders with cash or liquid securities for their shares of our common stock rather than having the Company operate as a going concern;
the tax benefits to certain of our stockholders from the fact that liquidating distributions will be non-taxable to a U.S. stockholder until cumulative liquidating distributions to that stockholder exceed the tax basis in the stockholder’s shares and then would be taxable at capital gains rates, rather than a portion of each distribution potentially being taxable at ordinary income rates if distributions were made in the ordinary course of business rather than as liquidating distributions;
our board of directors considered the fact that the Company could still, if the opportunity arose, consider and pursue an entity-level transaction for consideration payable in cash or liquid securities during the course of implementing a plan of liquidation; and
following this review and consideration, our board of directors believes that the liquidating distributions that the Company will make to stockholders in connection with the plan of liquidation would likely maximize stockholder value within a reasonable period of time.

In the course of its deliberations, our board of directors also considered a variety of risks and other countervailing factors related to the plan of liquidation. The risks and other countervailing factors relating to the plan of liquidation include, but are not limited to, the following:

the need to complete a refinancing of, or amend, the Credit Facility (which was repaid in full out of the proceeds of the New Financing) to enable the Company to proceed with the sale of all or substantially all the Company’s assets without breaching the Credit Facility;
the fact that the Credit Facility limited our ability to sell the 12 assets included in the borrowing base of the Credit Facility pursuant to a plan of liquidation or otherwise, unless the Credit Facility was repaid or amended or the Company substituted additional unencumbered collateral with equal or greater value and equal or greater net operating income;
the existing loans encumbering the Worldwide Plaza property include provisions which could limit the Company’s ability to assume those loans without lender consent upon the exercise of the WWP Option and could also indirectly limit the Company’s ability to sell assets prior to the exercise of the WWP Option due to the risk that the Company’s sale of assets prior to exercising the WWP Option could cause the Company not to meet the requirements for assuming the loans encumbering the Worldwide Plaza property without lender consent;
repayment of the existing loans encumbering the Worldwide Plaza property could result in a substantial defeasance cost, which, as of December 1, 2016, we estimate to be approximately $137.0 million;
that the Company would need to raise additional capital to exercise the WWP Option;
if the WWP Option is exercised, we may be liable for New York State and New York City real property transfer taxes on the sale of that portion of the Worldwide Plaza property that we would not have liability for had we sold the WWP Option directly;

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it is possible we could become subject to the 100% excise tax on “prohibited transactions” if we are unable to avail ourselves of the safe harbor provided in the Code on the sales of our assets pursuant to the plan of liquidation or otherwise structure our property sales so that such tax would not be applicable;
we intend, for tax purposes, to transfer our remaining unsold properties to a liquidating trust if we are unable to sell all of our assets and distribute the net proceeds to our stockholders within 24 months of the plan of liquidation being approved by stockholders, which may cause stockholders to recognize taxable gain at the time of such transfer, prior to the receipt of cash, and may have adverse tax consequences on tax-exempt and non-U.S. stockholders; and
the costs incurred by the Company in connection with implementing the plan of liquidation would be significant and may be greater than estimated.

In addition, our board of directors was aware of and considered the interests of its directors and executive officers, including all of our executive officers and one of our directors in their capacity as executives or members of the Advisor, that are different from, or in addition to, the interests of our stockholders generally.

Recommendation of Our Board of Directors

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE PLAN OF LIQUIDATION AND “FOR” THE ADJOURNMENT PROPOSAL.

Interests in the Liquidation That Differ from Your Interests

Our Advisor and our directors and executive officers, including all of our executive officers and one of our directors in their capacity as executives or members of the Advisor, may be deemed to have interests in the liquidation that are in addition to, or different from, your interests as a stockholder, including the following:

The following fees and expenses are payable to our Advisor and its affiliates under existing agreements with us until the Advisory Agreement expires:
If our Advisor provides a substantial amount of services as determined by our independent directors in connection with a sale of one or more properties, our Advisor may receive a brokerage commission in an amount not to exceed the lesser of 2% of the contract sales price of the property and one-half of the total brokerage commission paid if a third-party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission.
Our Advisor is entitled to receive asset management fees and may receive reimbursement of expenses.
Our Property Manager, which is under common control and ownership with the Advisor, is entitled to receive fees and may receive reimbursement of expenses.

See “Business — Our Management — Advisory Agreement” and “— Property Management Agreement” for a more detailed description of these fees and expense reimbursements.

The Property Manager waived property management fees from the time we commenced active operations in June 2010 until the third quarter of 2016, at which point the Property Manager began to not waive the property management fee. Since we commenced active operations in June 2010 until the third quarter of 2015, the Advisor declined to request general and administrative expense reimbursements. The Advisor also has, at other times, waived certain other fees and declined to request certain other expense reimbursements. During the period since we commenced active operations in June 2010 through September 30, 2016, the aggregate amount of all fees and expense reimbursements waived or not requested was approximately $13.7 million.

On December 19, 2016, we entered into a series of agreements, including the Services Agreement and amendments to the Advisory Agreement and the Property Management Agreement, pursuant to

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which the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to our board of directors with respect to matters relating to our investment program, consistent with our investment objectives and policies, and leases or renewals of leases at our properties. None of our executive officers or directors are affiliated with the Service Provider or any of its affiliates.

See “Business — Our Management — Services Agreement” for a more detailed description of these fees and expense reimbursements the Service Provider is entitled to pursuant to the Services Agreement.

All outstanding and unvested restricted shares, including 141,135 unvested restricted shares held by our directors and executive officers in the aggregate as of the record date and any restricted shares granted to our directors in connection with the 2016 annual meeting, will vest upon the sale of all or substantially all of our assets.
Outstanding and unvested LTIP Units issued under the OPP that were previously earned will vest automatically on December 26, 2016 and will be converted on one-for-one basis into shares of our common stock. There are currently 1,172,738 LTIP Units that have been earned but have not yet vested, 24,170 of which are held by Nicholas Radesca, our interim chief financial officer, and the remainder of which are held by the individual members of our Sponsor, which owns and controls our Advisor, including 229,714 earned LTIP Units held by Michael A. Happel, our chief executive officer and president, and 124,198 earned LTIP Units held by William Kahane, a member of our board of directors and a control person of the Advisor.
Additional LTIP Units, which we refer to as Year 3 LTIP Units, issued under the OPP to the Advisor are eligible to be earned in the third and final year of the OPP on April 15, 2017 and, if earned, will be converted on a one-for-one basis into shares of our common stock. If a change of control of the Company (as defined in the OPP) occurs prior to April 15, 2017, the calculation of the Year 3 LTIP Units will be made as of the day immediately preceding the close of the change of control and the value of such Year 3 LTIP Units will be paid to the Advisor in cash at the closing. In either event, the number of Year 3 LTIP Units earned will be calculated based on the achievement of certain absolute and relative performance criteria related to the total return to our stockholders (share price appreciation plus dividends and other distributions).
Our board of directors has adopted resolutions authorizing us to file a Registration Statement on Form S-3 registering the resale of the shares of our common stock issuable in exchange for the previously earned LTIP Units and the Year 3 LTIP Units on or prior to December 26, 2016.
The OPP provides that if a liquidation in the good faith judgment of the compensation committee of our board of directors necessitates action by way of equitable or proportionate adjustment in the terms of these LTIP Units to avoid distortion in the value of the LTIP Units, the compensation committee shall make equitable or proportionate adjustments and take such other action as it deems necessary to maintain the LTIP Unit rights under the OPP so that they are substantially proportionate to the rights of LTIP Units existing prior to the liquidation.
For the purposes of calculating the estimated Total Liquidating Distributions Range, we have estimated that 239,000 Year 3 LTIP Units will be earned. The actual number of Year 3 LTIP Units that will be earned is difficult to accurately forecast and could be higher or lower than this estimate. The estimate of the Year 3 LTIP Units that will be earned was made, assuming that the calculation occurred on the final valuation date on April 15, 2017, with input from a third party consultant that also provides input in connection with the valuation of LTIP Units for purposes of our financial statements using a Monte Carlo simulation method. See “Proposal One: Plan of Liquidation and Distribution — Estimated Liquidating Distributions —  Calculation of Estimated Liquidating Distributions.”

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Our board of directors is aware of these interests and considered them in making its recommendations. For further information regarding these and other interests that differ from your interests please see the section entitled “Proposal One: Plan of Liquidation — Interests of Certain Persons in the Plan of Liquidation.”

Estimated Liquidating Distributions

If the plan of liquidation is implemented, we will seek to sell most or all of our assets and make most or all of the liquidating distributions within six to 12 months after the plan of liquidation is approved by our stockholders, although there is no assurance such distributions will be made within that time period. Our board of directors has not established a specific timetable for paying liquidating distributions to stockholders under the plan of liquidation. Under the terms of the plan of liquidation and Maryland law, we may make one or more distributions from time to time, after providing or reserving for the payment of our obligations and liabilities, as we sell or otherwise liquidate our assets. We will be unable to pay liquidating distributions until we repay the release amounts required to be paid upon property sales under the New Financing, which may delay the timing of liquidating distributions. All distributions will be paid to stockholders of record at the close of business on the record dates to be determined by our board of directors, pro rata based on the number of shares owned by each stockholder.

The Company, with input from the Eastdil Secured group of Wells Fargo Securities, has estimated that the net proceeds that will be distributed to stockholders over time from the plan of liquidation taking into account debt repayment and estimated transaction costs, will be between $8.49 and $11.26 per share, which we refer to herein as the Total Liquidating Distributions Range. Our Total Liquidating Distributions Range is an estimate and does not necessarily reflect the actual amount that our stockholders will receive in liquidating distributions, and the actual amount may be more or less than the Total Liquidating Distributions Range, for various reasons discussed in this proxy statement, including in the section entitled “Risk Factors.”

The actual amounts that we will distribute to you in the liquidation will depend upon the actual amount of our liabilities, the actual proceeds from the sale of our properties, the actual fees and expenses incurred in connection with the sale of our properties, the actual expenses incurred in the administration of our properties prior to disposition, the actual general and administrative expenses of the Company, including fees and expense reimbursements paid to the Service Provider, the Advisor and the Property Manager and other liabilities that may be incurred by the Company, our ability to continue to meet the requirements necessary to retain our status as a REIT throughout the period of the liquidation process, our ability to avoid U.S. federal income and excise taxes throughout the period of the liquidation process, and other factors.

We will make liquidating distributions in one or more payments. However, we cannot be sure how many liquidating distributions will be made, or when they will be made. The actual timing of the liquidating distributions we pay under the plan of liquidation depends on a number of factors outside of our control discussed in this proxy statement, including in the section entitled “Risk Factors.”

You may also receive an interest in a liquidating trust that we may establish under the circumstances discussed below. Distributions that you may receive from the liquidating trust, if any, are included in our estimates of the Total Liquidating Distributions Range. Further, if we establish a reserve fund to pay for liabilities following the liquidation, the timing and amount of your distributions in the liquidation may be adversely impacted.

In estimating our Total Liquidating Distributions Range, we have relied on management’s estimate, with input from the Eastdil Secured group of Wells Fargo Securities, of the value of our assets and the costs we will incur as a result of and during the liquidation process. Our estimated Total Liquidating Distributions Range was derived from estimated total gross real estate sales prices, including an estimated value range for the additional interest in the Worldwide Plaza property we expect to acquire upon exercise of the WWP Option, less total debt, the price of exercising the WWP Option, estimated asset sale transaction costs and estimated liquidation costs, but adjusted upwards for estimated interim operating cash flows, as well as existing cash and working capital (estimated as of September 30, 2016).

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Material U.S. Federal Income Tax Consequences of the Plan of Liquidation

Generally, distributions to our stockholders (including distributions to a liquidating trust) will be taxable to our stockholders. You will recognize gain or loss equal to the difference between your adjusted tax basis in your shares of our common stock and the amount of cash and the fair market value, net of any accompanying liabilities, of property distributed to you (including your share of the fair market value of any property, net of any accompanying liabilities, distributed to a liquidating trust). The taxation of such gain or loss will depend on the circumstances of each stockholder, among other things. See “Material U.S. Federal Income Tax Consequences.”

No Appraisal Rights

Objecting stockholders are not entitled under Maryland law or our charter to appraisal rights or to any similar rights of dissenters for their shares of our common stock in connection with the transactions contemplated by the plan of liquidation.

Risk Factors

The actual amount of liquidating distributions we pay to you may be more or less than our Total Liquidating Distributions Range. Factors that could cause actual payments to be lower than our Total Liquidating Distributions Range include, among others, the risks set forth below:

We cannot assure you of the actual amount you will receive in liquidating distributions or when you will receive them.
If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our liquidating distributions may be delayed or reduced.
We may require additional capital to implement the plan of liquidation.
The existing loans encumbering the Worldwide Plaza property include provisions which could restrict our ability to assume those loans without lender consent upon exercise of the WWP Option and indirectly could limit our ability to sell assets prior to exercising the WWP Option.
We would need our joint venture partner’s consent in order to sell our existing 48.9% ownership interest in the joint venture that owns the Worldwide Plaza property or to sell the WWP Option, and, if we are able to exercise the WWP Option, our ability to sell the Worldwide Plaza property or our interests in Worldwide Plaza may be delayed by a right of first offer held by one of the tenants of the Worldwide Plaza property.
If we are unable to satisfy all of our obligations to creditors, or if we have underestimated our future expenses, the amount of liquidation proceeds will be reduced.
Decreases in property values may reduce the amount we receive upon a sale of our assets, which would reduce the amount you receive in liquidating distributions.
If our liquidation costs or unpaid liabilities are greater than we expect, our liquidating distributions may be delayed or reduced.
Defaults under future sale agreements may delay or reduce liquidating distributions.
If we are unable to maintain the occupancy rates of currently leased space and lease currently available space or if tenants default under their leases or other obligations to us during the liquidation process our cash flow will be reduced, and our liquidating distributions may be reduced.
If the plan of liquidation is approved by our stockholders, we will not resume paying monthly dividends.
Our failure to remain qualified as a REIT would reduce the amount of our liquidating distributions.
Pursuing the plan of liquidation may increase the risk that we will become liable for U.S. federal income and excise taxes.

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The sale of our assets may cause us to be subject to a 100% excise tax on the net income from “prohibited transactions,” which would reduce the amount of our liquidating distributions.
Distributing interests in a liquidating trust may cause you to recognize taxable gain prior to the receipt of cash.
Our entity value may be adversely affected by adoption of the plan of liquidation.
Our board of directors may terminate the plan of liquidation without stockholder approval if the plan of liquidation is not approved by our stockholders, we enter into a merger or other transaction involving the sale or other disposition of all or substantially all of our assets or common stock or in connection with an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely affect proceeding with the plan of liquidation, and may also otherwise modify or amend the plan of liquidation at any time before or after it is approved by our stockholders.
Because liquidating distributions may be made in multiple tax years, if we were to abandon the plan of liquidation in a tax year subsequent to one in which we already made liquidating distributions, the timing and character of your taxation with respect to liquidating distributions made to you in the prior tax year could change, which may subject you to tax liability (which tax liability could be at ordinary income rather than capital gains rates) in the prior tax year that you would not otherwise have been subject to, and we could lose our REIT status as of the beginning of such prior tax year.
Our board of directors will have the authority to cause us to sell our assets under terms less favorable than those assumed for the purpose of estimating our Total Liquidating Distributions Range.
Stockholder litigation related to the plan of liquidation could result in substantial costs and distract our management.
Our directors and executive officers may have conflicts of interest that may influence their support of the plan of liquidation.
There can be no assurance that the transition of advisory services from the Advisor to the Service Provider will not adversely affect our ability to execute the plan of liquidation as efficiently and effectively as we have anticipated, or at all.
We will need the consent of the lenders under certain of our indebtedness in order to replace the Advisor, which may adversely affect our ability to complete the transition of advisory services from the Advisor to the Service Provider on the Transition Date.
Our ability to implement the plan of liquidation depends upon the participation of our executive officers, and other key personnel of our Advisor and the Service Provider, and there is no assurance such officers and personnel will remain in place.
The Service Provider will be subject to certain conflicts of interests in connection with the services provided.
Approval of the plan of liquidation will cause our basis of accounting to change, which could require us to write-down our assets.
Stockholders could be liable to creditors to the extent of liquidating distributions received if contingent reserves are insufficient to satisfy our liabilities.
If our plan of liquidation is approved, our common stock may be delisted from the NYSE.
If our plan of liquidation is approved, we will continue to incur the expenses of complying with public company reporting requirements during the implementation of the plan of liquidation.
As a result of the plan of liquidation, certain institutional stockholders may be required to sell their shares of our common stock or shares of our common stock may fail to meet the requirements to be on certain indexes.

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There can be no assurance that our adoption of the plan of liquidation will result in greater returns to you on your investment within a reasonable period of time than you would receive through other alternatives at this time.

For more information on the risks associated with our proposed plan of liquidation, see the section entitled “Risk Factors.”

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RISK FACTORS

There are many risks associated with our business, the conflicts of interests that arise out of our relationship with the Advisor and its affiliates, the real estate industry and the New York metropolitan statistical area in general, our properties and assets in particular and our tax status as a REIT. These risks are described in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2015, in subsequently filed Quarterly Reports on Form 10-Q and in certain of our Current Reports on Form 8-K, each of which are incorporated herein by reference. In addition to these risks, you should consider the following additional risks associated with our plan of liquidation when deciding how to vote on that proposal.

We cannot assure you of the actual amount you will receive in liquidating distributions or when you will receive them.

Our Total Liquidating Distributions Range is an estimate and does not necessarily reflect the actual amount that our stockholders will receive in liquidating distributions. The preparation of these estimates involved judgments and assumptions with respect to the liquidation process and may not be realized. We cannot assure you that actual results will not vary materially from the estimates. The actual amount that we will distribute to you in the liquidation will depend upon the actual amount of our liabilities, the actual proceeds from the sale of our properties, the actual fees and expenses incurred in connection with the sale of our properties, the actual expenses incurred in the administration of our properties prior to disposition, the actual general and administrative expenses of the Company, including fees and expense reimbursements paid to the Service Provider, the Advisor and the Property Manager and other liabilities that may be incurred by the Company, our ability to continue to meet the requirements necessary to retain our status as a REIT throughout the period of the liquidation process, our ability to avoid U.S. federal income and excise taxes throughout the period of the liquidation process and other factors. If our liabilities (including, without limitation, tax liabilities and compliance costs) are greater than we currently expect or if the sales prices of our assets are less than we expect, you will receive less than the Total Liquidating Distributions Range for each share of our common stock that you currently own.

If the plan of liquidation is implemented, we will seek to sell most or all of our assets and make most or all of the liquidating distributions within six to 12 months after the plan of liquidation is approved by our stockholders, although there is no assurance such sales and such distributions will be made within that time period. We will be unable to pay liquidating distributions until we repay the release amounts required to be paid upon property sales under the New Financing, which may delay the timing of liquidating distributions. Additionally, our board of directors has discretion as to the timing of distributions of net sales proceeds. See “Proposal One: Plan of Liquidation and Dissolution — Estimated Liquidating Distributions — Calculation of Estimated Liquidating Distributions” for further details.

Our expectations about the amount of liquidating distributions that we will make and when we will make them are based on many estimates and assumptions, one or more of which may prove to be incorrect. As a result, the actual amount of liquidating distributions we pay to you may be more or less than the Total Liquidating Distributions Range. In addition, the liquidating distributions may be paid later than we predict.

If we are unable to find buyers for our assets on a timely basis or at our expected sales prices, our liquidating distributions may be delayed or reduced.

As of the date of this proxy statement, none of our assets are subject to a binding sale agreement providing for their sale. In calculating our Total Liquidating Distributions Range, we assumed that we will be able to find buyers for all of our assets at amounts based on our estimated range of gross real estate sales prices. However, we may have overestimated the sales prices that we will ultimately be able to obtain for these assets. For example, in order to find buyers in a timely manner, we may be required to lower our asking price below the low end of our current estimate of the asset’s market value. If we are not able to find buyers for these assets in a timely manner or if we have overestimated the sales prices we will receive, our liquidating distributions to our stockholders would be delayed or reduced. Furthermore, real estate sales prices are constantly changing and fluctuate with changes in interest rates, supply and demand dynamics, occupancy percentages, lease rates, the availability of suitable buyers, the perceived quality and dependability of income flows from tendencies and a number of other factors, both local and national. Our liquidation

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proceeds may also be affected by the terms of prepayment or assumption costs associated with debt encumbering our real estate assets. In addition, transactional fees and expenses or unknown liabilities, if any, may adversely impact the net liquidation proceeds from our assets.

We may require additional capital to implement the plan of liquidation.

We have entered into the New Financing to repay the Credit Facility in full and provide the estimated $270 million in additional capital required to exercise the WWP Option when we have the right to do so, commencing on January 1, 2017 and extending through June 30, 2017. The net proceeds from New Financing also may be used to fund capital expenditures, working capital and other expenses related to our properties, as well as other general corporate purposes, but there is no assurance that the amount available will be a sufficient for all required purposes. We also may require additional capital to fund our other capital needs, including funds that will be needed to implement the plan of liquidation effectively. For example, we may be required to invest capital to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct these defects or to make these improvements. Any reduction in the value of our assets would make it more difficult for us to sell those assets for the amounts that we have estimated. Reductions in the amounts that we receive when we sell our assets could decrease the payment of distributions to stockholders. Our failure to meet our capital needs with financing that is on favorable terms could reduce and delay the liquidating distributions we make to our stockholders.

The existing loans encumbering the Worldwide Plaza property include provisions which could restrict our ability to assume those loans without lender consent upon exercise of the WWP Option and indirectly could limit our ability to sell assets prior to exercising the WWP Option.

In order to be a “qualified transferee” eligible to assume the existing loans encumbering the Worldwide Plaza property without lender consent, we would be required to meet a minimum net worth requirement of $750.0 million and a minimum value of real estate assets controlled (through ownership or management) requirement of $2.0 billion (exclusive of our interest in the Worldwide Plaza property and exclusive of cash). Selling some of our assets prior to exercising the WWP Option could result in us failing to meet the requirement as to real estate assets controlled. In addition, even if we do not sell assets, there can be no assurance that we will meet the requirements to be a “qualified transferee” at the time that we desire to exercise the WWP Option. Repayment of the existing loans encumbering the Worldwide Plaza property would result in a substantial defeasance cost, which we estimated would be approximately $137.0 million as of December 1, 2016, and, to the extent we do not meet the requirements to be a “qualified transferee,” we may not be able to obtain lender consent on commercially reasonable terms, or at all. These provisions and circumstances may limit our ability to complete the sale of any properties before the WWP Option is exercised.

We would need our joint venture partner’s consent in order to sell our existing 48.9% ownership interest in the joint venture that owns the Worldwide Plaza property or to sell the WWP Option, and, if we are able to exercise the WWP Option, our ability to sell the Worldwide Plaza property or our interests in Worldwide Plaza may be delayed by a right of first offer held by one of the tenants of the Worldwide Plaza property.

Consent of our joint venture partner is not required to exercise the WWP Option, but consent is required to sell our existing 48.9% ownership interest in the joint venture that owns the Worldwide Plaza property or to sell the WWP Option instead of exercising it. There can be no assurance that our joint venture partner will consent if we seek to sell our existing 48.9% ownership interest in the joint venture that owns the Worldwide Plaza property or to sell the WWP Option or, if consent is given, whether it will be given on commercially reasonable terms. Any amounts we are required to pay to our joint venture partner to induce it to consent would reduce the proceeds from the sale of the asset and the amount of liquidating distributions we make to our stockholders.

In addition, the lease with one of the tenants at the Worldwide Plaza property contains a right of first offer requiring us to offer that tenant the option to purchase all of the Worldwide Plaza property, at a price (and on other material terms) proposed by us prior to our selling the Worldwide Plaza property to a third party. If, after a 45-day period, that tenant rejects our offer or fails to deliver the purchase contract accompanying our offer, we may then sell the Worldwide Plaza property to a third party, provided that we will

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be required to re-offer the property to that tenant if we desire to sell the Worldwide Plaza property for a purchase price (and other economic consideration) less than 92.5% of the initial purchase price contained in our offer to that tenant. The existence of this right of first offer may delay our ability to sell the Worldwide Plaza property on terms and in the timeframe of our choosing and may diminish the price other potential purchasers may be willing to pay for the Worldwide Plaza property, which may reduce or delay the liquidating distributions that will be paid to our stockholders.

If we are unable to satisfy all of our obligations to creditors, or if we have underestimated our future expenses, the amount of liquidation proceeds will be reduced.

If the plan of liquidation is approved by our stockholders and fully implemented, we intend to file articles of dissolution with the State Department of Assessments and Taxation of Maryland (“SDAT”) promptly after the sale of all of our remaining assets or at such time as we have transferred our company’s remaining assets, subject to its liabilities, into a liquidating trust. Pursuant to Maryland law, our company will continue to exist for the purpose of paying, satisfying and discharging any debts or obligations, collecting and distributing its assets, and doing all other acts required to liquidate and wind up its business and affairs. We intend to pay for all liabilities and distribute all of our remaining assets, which may be accomplished by the formation of a liquidating trust, before we file our articles of dissolution.

Under Maryland law, certain obligations or liabilities imposed by law on our stockholders, directors, or officers cannot be avoided by the dissolution. For example, if we make distributions to our stockholders without making adequate provisions for payment of creditors’ claims, our stockholders could be liable to the creditors to the extent of the distributions in excess of the amount of any payments due to creditors. The liability of any stockholder is, however, limited to the amounts previously received by such stockholder from us (and from any liquidating trust). Accordingly, in such event, a stockholder could be required to return all liquidating distributions previously made to such stockholder and a stockholder could receive nothing from us under the plan of liquidation. Moreover, in the event a stockholder has paid taxes on amounts previously received as a liquidating distribution, a repayment of all or a portion of such amount could result in a stockholder incurring a net tax cost if the stockholder’s repayment of an amount previously distributed does not cause a commensurate reduction in taxes payable. Therefore, to the extent that we have underestimated the size of our contingency reserve and distributions to our stockholders have already been made, our stockholders may be required to return some or all of such distributions.

Decreases in property values may reduce the amount we receive upon a sale of our assets, which would reduce the amount you receive in liquidating distributions.

The plan of liquidation provides for the sale of all or substantially all of our assets, all of which are real estate investments, and we cannot predict whether we will be able to do so at a price or on terms and conditions acceptable to us. Investments in real properties are relatively illiquid. The amount we receive upon sale of our assets depends on the underlying value of our assets, and the underlying value of our assets may be reduced by a number of factors that are beyond our control, including, without limitation, the following:

changes in general economic or local conditions;
changes in supply of or demand for similar or competing properties in an area;
changes in interest rates and availability of mortgage funds that may render the sale of a property difficult or unattractive;
increases in operating expenses;
the financial performance of our tenants, and the ability of our tenants to satisfy their obligations under their leases;
vacancies and inability to lease or sublease space;
potential major repairs which are not presently contemplated or other contingent liabilities associated with the assets;
competition;

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changes in tax, real estate, environmental and zoning laws; and
periods of high interest rates and tight money supply.

If our liquidation costs or unpaid liabilities are greater than we expect, our liquidating distributions may be delayed or reduced.

Before making the final liquidating distribution, we will need to pay or arrange for the payment of all of our transaction costs in the liquidation, all other costs and all valid claims of our creditors. Our board of directors may also decide to acquire one or more insurance policies covering unknown or contingent claims against us, for which we would pay a premium which has not yet been determined. Our board of directors may also decide to establish a reserve fund to pay these contingent claims. The amounts of transaction costs that we will incur in the liquidation are not yet final, so we have used estimates of these costs in calculating our Total Liquidating Distributions Range. To the extent that we have underestimated these costs in calculating our Total Liquidating Distributions Range, our actual liquidating distributions may be lower than our estimated. In addition, if the claims of our creditors are greater than we have anticipated or we decide to acquire one or more insurance policies covering unknown or contingent claims against us, our liquidating distributions may be delayed or reduced. Further, if a reserve fund is established, payment of liquidating distributions to our stockholders may be delayed or reduced.

Defaults under future sale agreements may delay or reduce liquidating distributions.

If you approve the plan of liquidation and it is implemented, we will seek to enter into binding sale agreements for each of our properties. The consummation of the potential sales for which we will enter into sale agreements in the future will be subject to satisfaction of closing conditions. If any of the transactions contemplated by these future sale agreements do not close because of a buyer default, failure of a closing condition or for any other reason, we may not be able to enter into a new agreement on a timely basis or on terms that are as favorable as the original sale agreement. Any delay in the completion of asset sales could delay our payment of liquidating distributions to our stockholders. We will also incur additional costs involved in locating a new buyer and negotiating a new sale agreement for this asset. These additional costs are not included in our estimated Total Liquidating Distributions Range. If we incur these additional costs, our liquidating distributions to our stockholders would be reduced.

If we are unable to maintain the occupancy rates of currently leased space and lease currently available space or if tenants default under their leases or other obligations to us during the liquidation process, our cash flow will be reduced and our liquidating distributions may be reduced.

We depend on tenants for revenue, and, accordingly, our revenue is dependent upon the success and economic viability of our tenants. In calculating the Total Liquidating Distributions Range, we assumed that we would maintain the occupancy rates of currently-leased space, that we would be able to rent certain currently available space and that we would not experience any significant tenant defaults during the liquidation process that were not subsequently cured. Negative trends in one or more of these factors during the liquidation process may adversely affect the sales price of the impacted assets, which would reduce our liquidating distributions. Moreover, to the extent that we receive less rental income than we expect during the liquidation process, our liquidating distributions will be reduced. We may also decide in the event of a tenant default to restructure the lease, which could require us to substantially reduce the rent payable to us under the lease, or make other modifications that are unfavorable to us. Any reduction in our operating cash flow could cause the payment of liquidating distributions to our stockholders to be delayed or reduced.

If the plan of liquidation is approved by our stockholders, we will not resume paying monthly dividends.

In October 2016, we announced that, in light of the plan of liquidation, which is subject to stockholder approval, our board of directors had determined that we will not pay a regular dividend for the month of November 2016 and do not currently expect to pay a regular monthly dividend for the month of December 2016 or thereafter.

If the plan of liquidation is approved by our stockholders and implemented, we thereafter expect to make periodic liquidating distributions out of net proceeds of assets sales, subject to satisfying our liabilities and

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obligations, in lieu of regular monthly dividends. We cannot assure you of the actual amount you will receive in liquidating distributions or when you will receive them.

Our failure to remain qualified as a REIT would reduce the amount of our liquidating distributions.

Although our board of directors does not presently intend to terminate our REIT status prior to the final distribution of our assets and our dissolution, our board of directors may take actions pursuant to the plan of liquidation which would result in such a loss of REIT status. Upon the final distribution of our assets and our dissolution, our existence and our REIT status will terminate. However, there is a risk that our actions in pursuit of the plan of liquidation may cause us to fail to meet one or more of the requirements that must be met in order to qualify as a REIT prior to completion of the plan of liquidation. For example, to qualify as a REIT, at least 75% of our gross income must come from real estate sources and 95% of our gross income must come from real estate sources and certain other sources that are itemized in the REIT provisions in the Internal Revenue Code of 1986, as amended (the “Code”), mainly interest and dividends. We may encounter difficulties satisfying these requirements as part of the liquidation process. In addition, in selling our assets, we may recognize ordinary income in excess of the cash received. The REIT provisions in the Code require us to pay out a large portion of our ordinary income in the form of a dividend to stockholders. However, to the extent that we recognize ordinary income without any cash available for distribution, and if we are unable to borrow to fund the required dividend or find another way to meet the REIT distribution requirements, we may cease to qualify as a REIT. While we expect to comply with the requirements necessary to qualify as a REIT in any taxable year, if we are unable to do so, we will, among other things (unless entitled to relief under certain statutory provisions):

not be allowed a deduction for dividends paid to stockholders in computing our taxable income;
be subject to U.S. federal income tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates;
be subject to increased state and local taxes; and
be disqualified from treatment as a REIT for the taxable year in which we lose our qualification and for the four following taxable years.

As a result of these consequences, our failure to qualify as a REIT could cause the amount of the liquidating distributions to our stockholders to be reduced.

Pursuing the plan of liquidation may increase the risk that we will become liable for U.S. federal income and excise taxes.

We generally are not subject to U.S. federal income tax to the extent that we distribute to our stockholders during each taxable year (or, under certain circumstances, during the subsequent taxable year) dividends equal to our taxable income for the year (determined without regard to the deduction for dividends paid and by excluding any net capital gain). However, we are subject to U.S. federal income tax to the extent that our taxable income exceeds the amount of dividends distributed to our stockholders for the taxable year. In addition, we are subject to a 4% nondeductible excise tax on the amount, if any, by which certain distributions paid by us with respect to any calendar year are less than the sum of 85% of our ordinary income for that year, plus 95% of our capital gain net income for that year, plus 100% of our undistributed taxable income from prior years. While we intend to make distributions to our stockholders sufficient to avoid the imposition of any U.S. federal income tax on our taxable income and the imposition of the excise tax, differences in timing between our actual cash flow and the recognition of our taxable income, could cause us to have to either borrow funds on a short-term basis to meet the REIT distribution requirements, find another alternative for meeting the REIT distribution requirements, or pay U.S. federal income and excise taxes. In addition (and as discussed in more detail below), net income from the sale of properties that are “dealer” properties (a “prohibited transaction” under the Code) would be subject to a 100% excise tax. The cost of borrowing or the payment of U.S. federal income and excise taxes would reduce the amount of liquidating distributions to our stockholders.

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The sale of our assets may cause us to be subject to a 100% excise tax on the net income from “prohibited transactions,” which would reduce the amount of our liquidating distributions.

REITs are subject to a 100% excise tax on any net income from “prohibited transactions,” which include sales or other dispositions of property held for sale to customers in the ordinary course of the REIT’s trade or business which is not a foreclosure property. The determination of whether property is held for sale to customers in the ordinary course of our trade or business is inherently factual in nature and, thus, cannot be predicted with certainty. The Code provides a “safe harbor” which, if all its conditions are met, would protect a REIT’s property sales from being considered prohibited transactions. The conditions include, among other things, that the property be held by us for at least two years for the production of rental income and that we do not have more than seven property sales in any taxable year (there are alternative conditions to this seven sales condition, but those alternatives could not be met in the context of our complete liquidation). Each of the properties we currently own has been held by us for at least two years for the production of rental income, and we may attempt to manage the timing of the sales of our properties so that we are able to meet the safe harbor in connection with our plan of liquidation. However, if we were to exercise the WWP Option (or were to acquire an additional real estate asset in order to preserve the value of our existing assets during the liquidation process) and if we are to completely liquidate within 24 months of approval of the plan of liquidation by our stockholders, we could not satisfy the safe harbor with respect to the portion of the Worldwide Plaza property we acquired through the exercise of the WWP Option (and any additional real estate asset acquired). Regardless of whether a transaction qualifies for the safe harbor, we believe, but cannot assure you, that all of our properties are held for investment, should not be considered to be held for sale to customers in the ordinary course of our trade or business (including our interest in the Worldwide Plaza property and any additional interest acquired through the exercise of the WWP Option and any additionally acquired real estate asset) and we intend to structure our property sales pursuant to the plan of liquidation in a manner that none of these sales will be subject to this tax. However, because of the number of properties that would have to be sold and the inability to meet the safe harbor with respect to at least a portion of the Worldwide Plaza property (and any additionally acquired real estate asset), there is a risk that the IRS could seek to treat some or all of the property sales as prohibited transactions resulting in the payment of taxes by us, in which case the amount of liquidating distributions to our stockholders could be significantly reduced.

Distributing interests in a liquidating trust may cause you to recognize taxable gain prior to the receipt of cash.

The REIT provisions of the Code generally require that each year we distribute as a dividend to our stockholders at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding net capital gain). Liquidating distributions we make pursuant to a plan of liquidation will qualify for the dividends paid deduction, provided that they are made within 24 months of the adoption of such plan. Conditions may arise which cause us not to be able to liquidate within such 24-month period. For instance, it may not be possible to sell our assets at acceptable prices during such period. In such event, rather than retain our assets and risk losing our status as a REIT, we intend, for tax purposes, to transfer our remaining assets and liabilities to a liquidating trust in order to meet the 24-month requirement. We may also elect to transfer our remaining assets and liabilities to a liquidating trust within such 24-month period to avoid the costs of operating as a public company. Such a contribution would be treated for U.S. federal income tax purposes as a distribution of our remaining assets to our stockholders, followed by a contribution of the assets to the liquidating trust. As a result, you would recognize gain to the extent your share of the cash and the fair market value of any assets received by the liquidating trust was greater than your tax basis in your stock (reduced by the amount of all prior liquidating distributions made to you during the liquidation period) prior to the subsequent sale of such assets and the distribution to you of the net cash proceeds, if any. Pursuant to IRS guidance, the liquidating trust generally could have up to three years to complete the sale of our assets and distribute the net proceeds to you. Such transfer also may have adverse tax consequences for tax-exempt and non-U.S. stockholders, including with respect to the on-going activity of the liquidating trust.

In addition, it is possible that the fair market value of the assets received by the liquidating trust, as estimated for purposes of determining the extent of the stockholder’s gain at the time interests in the liquidating trust are distributed to the stockholders, will exceed the cash or fair market value of property

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received by the liquidating trust on a sale of the assets. In this case, the stockholder would recognize a loss in a taxable year subsequent to the taxable year in which the gain was recognized, which loss may be limited under the Code.

Our entity value may be adversely affected by adoption of the plan of liquidation.

Once our stockholders approve the plan of liquidation and we commence implementing the plan of liquidation, we will begin the process of winding-up our operations. This may dissuade parties that might have an interest in acquiring our company from pursuing such an acquisition and may, especially as the liquidation process progresses and draws closer to completion, also preclude other possible courses of action not yet identified by our board of directors.

Our board of directors may terminate the plan of liquidation without stockholder approval if the plan of liquidation is not approved by our stockholders, we enter into a merger or other transaction involving the sale or other disposition of all or substantially all of our assets or common stock or in connection with an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely affect proceeding with the plan of liquidation, and may also otherwise modify or amend the plan of liquidation at any time before or after it is approved by our stockholders.

Our board of directors has adopted and approved the plan of liquidation. Nevertheless, our board of directors may terminate the plan of liquidation without stockholder approval only (i) if the plan of liquidation is not approved by our stockholders or (ii) (A) if our board of directors approves the Company entering into an agreement involving the sale or other disposition of all or substantially all of our assets or common stock by merger, consolidation, share exchange, business combination, sale or other transaction involving the Company or (B) if our board of directors determines, in exercise of its duties under Maryland law, after consultation with its advisor and its financial advisor (if applicable) or other third party experts familiar with the market for Manhattan office properties, that there is an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely affect proceeding with the plan of liquidation. This power of termination may be exercised up to the time that the articles of dissolution have been accepted for record by the SDAT. Notwithstanding approval of the plan of liquidation by our stockholders, our board of directors may modify or amend the plan of liquidation without further action by our stockholders to the extent permitted under then current law. Subject to the conditions described above, our board of directors may conclude either that its duties under applicable law require it to pursue business opportunities that present themselves or that abandoning the plan of liquidation is otherwise in the best interests of the Company. If our board of directors elects to pursue any alternative to the plan of liquidation, our stockholders may not receive any liquidating distributions.

Because liquidating distributions may be made in multiple tax years, if we were to abandon the plan of liquidation in a tax year subsequent to one in which we already made liquidating distributions, the timing and character of your taxation with respect to liquidating distributions made to you in the prior tax year could change, which may subject you to tax liability (which tax liability could be at ordinary income rather than capital gains rates) in the prior tax year that you would not otherwise have been subject to, and we could lose our REIT status as of the beginning of such prior tax year.

The U.S. federal income tax consequences of abandoning a plan of liquidation are not entirely clear once we have begun making liquidating distributions, in particular because liquidating distributions could be made in multiple tax years during the 24 months we have for U.S. federal income tax purposes to complete our liquidation after the plan of liquidation has been approved by our stockholders. In general, distributions to you under the plan of liquidation, including your pro rata share of the fair market value of any assets that are transferred to a liquidating trust, should not be taxable to you for U.S. federal income tax purposes until the aggregate amount of liquidating distributions to you exceeds your adjusted tax basis in your shares of common stock, and then should be taxable to you as capital gain (assuming you hold your shares as a capital asset). However, if we abandon the plan of liquidation, the U.S. federal income tax treatment of any liquidating distributions already made pursuant to the plan of liquidation would change because they would no longer be treated as having been made as part of our complete liquidation. Instead, any such distributions would be treated as either a distribution made with respect to the shares you hold, subject to the normal rules

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of U.S. federal income tax the distributions you currently receive are subject to, or as payment to you for the sale or exchange of your shares in partial redemption of them. Whether sale or distribution treatment would apply to you depends on your particular circumstances and we cannot predict which would apply; however, regardless of which treatment would apply, each distribution likely would be at least be partially taxable to you. Accordingly, if we had made liquidating distributions in the tax year we adopted the plan of liquidation which did not exceed your tax basis in your shares (and therefore were not taxable to you), and we abandoned the plan of liquidation in the subsequent tax year, you may now have a tax liability with respect to the distributions made to you in the prior tax year, and, if they are treated as distributions rather than a sale or exchange, whether you are taxed at ordinary income or capital gains rates may depend on whether we had declared any portion of such distributions as capital gain dividends. In addition, liquidating distributions we make pursuant to a plan of liquidation qualify for the dividends paid deduction (which helps us ensure we meet our annual distribution requirement during our liquidation process), provided that they are made within 24 months of the adoption of such plan; however, if such distributions were no longer made pursuant to our complete liquidation within 24 months of the adoption of our plan of liquidation, whether any part of such distributions qualify for the dividends paid deduction will depend on different criteria. If we had made some liquidating distributions in one tax year and we abandoned the plan of liquidation in the subsequent tax year, it is possible that we may not have made sufficient distributions in that first tax year to satisfy our annual distribution requirement for that tax year which, if we are unable to cure such failure, could result in the loss of our REIT status effective as of the beginning of that first tax year.

Our board of directors will have the authority to cause us to sell our assets under terms less favorable than those assumed for the purpose of estimating our Total Liquidating Distributions Range.

If the plan of liquidation proposal is approved, our board of directors will have the authority to cause us to sell any and all of our assets on such terms and to such parties as our board of directors determines in its sole discretion. Notably, you will have no subsequent opportunity to vote on such matters and will, therefore, have no right to approve or disapprove the terms of such sales.

Stockholder litigation related to the plan of liquidation could result in substantial costs and distract our management.

Historically, extraordinary corporate actions by a company, such as our proposed plan of liquidation, often lead to securities class action lawsuits being filed against that company. We are already subject to a stockholder lawsuit that includes claims related to the strategic alternatives process that led to the approval of the plan of liquidation and may become subject to more of this type of litigation as a result of our proposal of the plan of liquidation, which risk may be increased if stockholders approve the plan of liquidation. This litigation may be expensive and, even if we ultimately prevail, the process of defending against lawsuits will divert management’s attention from implementing the plan of liquidation and otherwise operating our business. If we do not prevail in any lawsuit, we may be liable for damages. We cannot predict the amount of any such damages, however, if applicable, they may be significant and may cause liquidating distributions to our stockholders to be delayed.

Our directors and executive officers may have conflicts of interest that may influence their support of the plan of liquidation.

Our directors and executive officers, including all of our executive officers and one of our directors in their capacity as executives or members of the Advisor, may be deemed to have interests in the liquidation that are in addition to, or different from, your interests as a stockholder, including the following:

The following fees and expenses are payable to our Advisor and its affiliates under existing agreements with us until the Advisory Agreement expires:
If our Advisor provides a substantial amount of services as determined by our independent directors in connection with a sale of one or more properties, our Advisor may receive a brokerage commission in an amount not to exceed the lesser of 2% of the contract sales price of the property and one-half of the total brokerage commission paid if a third-party broker is

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also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission.
Our Advisor is entitled to receive asset management fees and may receive reimbursement of expenses.
Our Property Manager, which is under common control and ownership with the Advisor, is entitled to receive fees and may receive reimbursement of expenses.

See “Business — Our Management — Advisory Agreement” and “— Property Management Agreement” for a more detailed description of these fees and expense reimbursements.

The Property Manager waived property management fees from the time we commenced active operations in June 2010 until the third quarter of 2016, at which point the Property Manager began to not waive the property management fee. Since we commenced active operations in June 2010 until the third quarter of 2015, the Advisor declined to request general and administrative expense reimbursements. The Advisor also has, at other times, waived certain other fees and declined to request certain other expense reimbursements. During the period since we commenced active operations in June 2010 through September 30, 2016, the aggregate amount of all fees and expense reimbursements waived or not requested was approximately $13.7 million.

On December 19, 2016, we entered into a series of agreements, including the Services Agreement and amendments to the Advisory Agreement and the Property Management Agreement, pursuant to which the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to our board of directors with respect to matters relating to our investment program, consistent with our investment objectives and policies, and leases or renewals of leases at our properties. None of our executive officers or directors are affiliated with the Service Provider or any of its affiliates.

See “Business — Our Management — Services Agreement” for a more detailed description of these fees and expense reimbursements the Service Provider is entitled to pursuant to the Services Agreement.

All outstanding and unvested restricted shares, including 141,135 unvested restricted shares held by our directors and executive officers in the aggregate as of the record date and any restricted shares granted to our directors in connection with the 2016 annual meeting, will vest upon the sale of all or substantially all of our assets.
Outstanding and unvested LTIP Units issued under the OPP that were previously earned will vest automatically on December 26, 2016 and will be converted on a one-for-one basis into shares of our common stock. There are currently 1,172,738 LTIP Units that have been earned but have not yet vested, 24,170 of which are held by Nicholas Radesca, our interim chief financial officer, and the remainder of which are held by the individual members of our Sponsor, which owns and controls our Advisor, including 229,714 earned LTIP Units held by Michael A. Happel, our chief executive officer and president, and 124,198 earned LTIP Units held by William Kahane, a member of our board of directors and a control person of the Advisor.
Additional LTIP Units, which we refer to as Year 3 LTIP Units, issued under the OPP to the Advisor are eligible to be earned in the third and final year of the OPP on April 15, 2017 and, if earned, will be converted on a one-for-one basis into shares of our common stock. If a change of control of the Company (as defined in the OPP) occurs prior to April 15, 2017, the calculation of the Year 3 LTIP Units will be made as of the day immediately preceding the close of the change of control and the value of such Year 3 LTIP Units will be paid to the Advisor in cash at the closing. In either event,

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the number of Year 3 LTIP Units earned will be calculated based on the achievement of certain absolute and relative performance criteria related to the total return to our stockholders (share price appreciation plus dividends and other distributions).
The OPP provides that if a liquidation in the good faith judgment of the compensation committee of our board of directors necessitates action by way of equitable or proportionate adjustment in the terms of these LTIP Units to avoid distortion in the value of the LTIP Units, the compensation committee shall make equitable or proportionate adjustments and take such other action as it deems necessary to maintain the LTIP Unit rights under the OPP so that they are substantially proportionate to the rights of LTIP Units existing prior to the liquidation.
For the purposes of calculating the estimated Total Liquidating Distributions Range, we have estimated that 239,000 Year 3 LTIP Units will be earned. The actual number of Year 3 LTIP Units that will be earned is difficult to accurately forecast and could be higher or lower than this estimate. The estimate of the Year 3 LTIP Units that will be earned was made, assuming that the calculation occurred on the final valuation date on April 15, 2017, with input from a third party consultant that also provides input in connection with the valuation of LTIP Units for purposes of our financial statements using a Monte Carlo simulation method. See “Proposal One: Plan of Liquidation and Distribution — Estimated Liquidating Distributions — Calculation of Estimated Liquidating Distributions.”

There can be no assurance that the transition of advisory services from the Advisor to the Service Provider will not adversely affect our ability to execute the plan of liquidation as efficiently and effectively as we have anticipated, or at all.

On December 19, 2016, we entered into a series of agreements, including the Services Agreement and amendments to the Advisory Agreement and the Property Management Agreement, pursuant to which the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to our board of directors with respect to matters relating to our investment program, consistent with our investment objectives and policies, and leases our properties. Until the Transition Date, the Advisor and not the Service Provider will be responsible for maintaining our accounting, tax, regulatory and other records and taking actions all necessary to file any reports required to be filed by us with the SEC, the Internal Revenue Service and other regulatory agencies or any applicable stock exchange.

The Services Agreement and the Advisory Agreement include certain agreements with respect to the transition of services from the Advisor to the Service Provider. There can be no assurance, however, that these agreements will be sufficient to prevent any disruption to our business from occurring and that our business, administration and results of operations, or our ability to execute the plan of liquidation as efficiently and effectively as we have anticipated, or at all, will not be adversely affected as a result of the transition of advisory services from the Advisor to the Service Provider.

We will need the consent of the lenders under certain of our indebtedness in order to replace the Advisor, which may adversely affect our ability to complete the transition of advisory services from the Advisor to the Service Provider on the Transition Date.

Replacement or termination of the Advisor without lender consent would also be an event of default under certain of our indebtedness, not including the New Financing. If we are not able to obtain required lender consents or repay this indebtedness prior to the Transition Date, our ability to complete the transition of advisory services from the Advisor to the Service Provider could be adversely affected. Any failure to complete this transition could have an adverse effect on our business and operations, as well as our ability to implement the plan of liquidation effectively and efficiently.

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Our ability to implement the plan of liquidation depends upon the participation of our executive officers, and other key personnel of our Advisor and the Service Provider, and there is no assurance such officers and personnel will remain in place.

We are an externally managed company and have no employees of our own, and our ability to implement the plan of liquidation depends to a significant degree upon the contributions of our executive officers, and other key personnel of our Advisor and the Service Provider. Personnel and services that we require are provided to us under contracts with an external advisor, and we are dependent on an external advisor to manage our operations and manage our real estate assets, including sale of our real estate assets. These responsibilities also include arranging financings, providing accounting services, providing information technology services, preparing and filing all reports required to be filed by it with the SEC, the IRS and other regulatory agencies, maintaining our REIT status, and maintaining our compliance with the Sarbanes-Oxley Act. The Service Provider will replace the Advisor as the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and as the external advisor to us with respect to all other matters on the Transition Date.

On December 19, 2016, in connection with our entry into the Services Agreement, we also entered into a letter agreement with the Advisor requiring us to fund, and the Advisor to pay, certain amounts to incentivize and retain certain personnel of the Advisor and its affiliates during the term of the Advisory Agreement. However, there still can be no assurance that all, or any, of these key personnel will continue to provide services to us or our Advisor, particularly in light of the transition of advisory services from the Advisor to the Service Provider, and the loss of any of these key personnel could adversely affect our business and cause our ability to successfully implement the plan of liquidation to suffer.

The loss of, or inability to retain, any key personnel of the Service Provider could also adversely affect our business or cause our ability to successfully implement the plan of liquidation to suffer. Under the Services Agreement, we have agreed that, on the Transition Date, we will appoint Wendy Silverstein as our chief executive officer and John Garilli as our chief financial officer, but there can be no assurance that these individuals, or suitable replacements, will be available to serve in these capacities or that the Service Provider will otherwise be able to retain the executive officers and other key personnel needed to successfully implement the plan of liquidation. Moreover, the Services Agreement may be terminated if Ms. Silverstein resigns or is otherwise unavailable to serve as our chief executive officer for any reason and the Service Provider has not identified a replacement chief executive officer who is acceptable to a majority of our independent directors, and any termination of the Services Agreement on this basis could have an adverse effect on our ability to implement the plan of liquidation and our business.

The Service Provider will face conflicts of interest as a result of ownership of interests in other properties, which could affect the services it provides to us, including with respect to the plan of liquidation.

The Service Provider and its affiliates or entities that they advise own properties, or may seek to acquire properties, in the New York metropolitan area. Some of these properties may compete with our properties for tenants. Thus, a conflict could arise with respect to the lease vacant space or renewal of existing leases between us and the Service Provider and its affiliates in connection with one or more of the properties owned or operated by the Service Provider and its affiliates. In addition, conflicts of interests could arise in connection with sales of properties pursuant to the plan of liquidation if the Service Provider or its affiliates or entities advised by them are seeking to sell properties at the same time, which could affect the timing or the amount realized on the sale and the timing or amount of liquidation distributions.

Employees of the Service Provider, including employees who will be our executive officers, face conflicts of interest related to the positions they hold with the Service Provider and its affiliates which could hinder our ability to successfully implement our business strategy, including the plan of liquidation.

Employees of the Service Provider who will provide services to us, including employees who will serve as our officers, also hold or may hold positions with the Service Provider and its affiliates and provide services with respect to other entities or with respect to other properties or businesses of the Service Provider and its affiliates, which could result in conflicts of interest. For example, none of these persons are required to dedicate their full time and effort to our affairs.

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The Service Provider and its affiliates face conflicts of interest relating to the structure of the fees they receive, which could result in actions that are not necessarily in the long-term best interests of our stockholders.

Under the Services Agreement, the Service Provider is entitled to certain fees and other compensation which may result in its interests not being wholly aligned with those of our stockholders. For example, the Service Provider could be motivated to recommend certain actions that could increase the potential that it will earn incentive fees, but which may not be consistent with actions desired by shareholders.

Approval of the plan of liquidation will cause our basis of accounting to change, which could require us to write-down our assets.

Once the stockholders approve the proposed plan of liquidation or adoption of the plan of liquidation appears imminent, we must change our basis of accounting from the going-concern basis to the liquidation basis of accounting. In order for our financial statements to be in accordance with generally accepted accounting principles under the liquidation basis of accounting, all of our assets must be stated at the amount of consideration the entity expects to collect, and all of our liabilities must be recorded at the estimated amounts at which the liabilities are expected to be settled. Based on the most recent available information, if the plan of liquidation is adopted, we currently expect to make liquidating distributions that exceed the amount of our net assets as reported in our September 30, 2016 financial statements which were prepared in accordance with generally accepted accounting principles for a going concern. However, we cannot assure you what the ultimate amounts of such liquidating distributions will be. Therefore, there is a risk that the liquidation basis of accounting may entail write-downs of certain of our assets to values substantially less than their respective current carrying amounts, and may require that certain of our liabilities be increased or certain other liabilities be recorded to reflect the anticipated effects of an orderly liquidation.

Until the plan of liquidation is approved by our stockholders, we will continue to use the going-concern basis of accounting. If our stockholders do not approve the plan of liquidation, we will continue to account for our assets and liabilities under the going-concern basis of accounting. Under the going-concern basis, assets and liabilities are expected to be realized in the normal course of business. However, long-lived assets to be sold or disposed of should be reported at the lower of carrying amount or estimated fair value less cost to sell. For long-lived assets to be held and used, when a change in circumstances occurs, our management must assess whether we can recover the carrying amounts of our long-lived assets. If our management determines that, based on all of the available information, we cannot recover those carrying amounts, an impairment of value of our long-lived assets has occurred and the assets should be written down to their estimated fair value.

In addition, write-downs in our assets could reduce the price that a third party would be willing to pay to acquire your shares or our assets.

Stockholders could be liable to creditors to the extent of liquidating distributions received if contingent reserves are insufficient to satisfy our liabilities.

If a court holds at any time that we have failed to make adequate provision for our expenses and liabilities or if the amount ultimately required to be paid in respect of such liabilities exceeds the amount available from the contingency reserve and the assets of the liquidating trust, our creditors could seek an injunction to prevent us from making distributions under the plan of liquidation on the grounds that the amounts to be distributed are needed to provide for the payment of our expenses and liabilities. Any such action could delay or substantially diminish the cash distributions to be made to stockholders and/or holders of beneficial interests of the liquidating trust under the plan of liquidation.

If our plan of liquidation is approved, our common stock may be delisted from the NYSE.

Under the rules of the NYSE, the exchange has discretionary authority to delist our common stock if we proceed with a plan of liquidation. In addition, the exchange may commence delisting proceedings against us if (i) the average closing price of our common stock falls below $1.00 per share over a 30-day consecutive trading period, (ii) our average market capitalization falls below $15 million over a 30-day consecutive trading period, or (iii) we lose our REIT qualification. Even if the NYSE does not move to delist our common stock, we may voluntarily delist our common stock from the NYSE in an effort to reduce our operating expenses

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and maximize our liquidating distributions. If our common stock is delisted, you may have difficulty trading your share of our common stock on the secondary market.

If our plan of liquidation is approved, we will continue to incur the expenses of complying with public company reporting requirements during the implementation of the plan of liquidation.

Through the implementation our plan of liquidation, we will have an obligation to continue to comply with the applicable reporting requirements of the Exchange Act, even if compliance with these reporting requirements is economically burdensome. In order to curtail expenses, we may, after filing our articles of dissolution, seek relief from the SEC from the reporting requirements under the Exchange Act. We anticipate that, if such relief is granted, we would continue to file current reports on Form 8-K to disclose material events relating to our liquidation and dissolution, along with any other reports that the SEC might require, but would discontinue filing Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

As a result of the plan of liquidation, certain institutional stockholders may be required to sell their shares of our common stock or shares of our common stock may fail to meet the requirements to be on certain indexes.

Upon the adoption of the plan of liquidation, the governing documents of certain of our institutional investors may prohibit them from holding shares of our common stock. Similarly, any index of which our shares of common stock are a member, such as the Russell 2000, may have restrictions that would require our common stock to no longer be part of such index. If either or both of these were to be the case, such institutional investors and other investors who invest in stocks included on such index would be required to divest of the shares of our common stock they hold which would create downward pressure on the trading price of our common stock. If this were to occur, stockholders who sell shares of common stock prior to the completion of the liquidation may receive less than stockholders who receive all liquidating distributions ultimately made.

There can be no assurance that our adoption of the plan of liquidation will result in greater returns to you on your investment within a reasonable period of time than you would receive through other alternatives at this time.

If our stockholders approve the plan of liquidation, you will no longer participate in any future earnings or growth of our assets or benefit from any increases in the value of our assets once such assets are sold. While our board of directors believes that a liquidation at this time will be more likely to provide you with a greater return on your investment within a reasonable period of time than you would receive through other alternatives at this time, such belief relies on certain assumptions and judgments concerning future events. Therefore, it is possible that continuing with the status quo or pursuing one or more of the other alternatives provide you with a greater return within a reasonable period of time. In that case, we will be foregoing those attractive opportunities if we implement the plan of liquidation. If the plan of liquidation is not approved by you and our other stockholders, our board of directors will evaluate other strategies or alternatives.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains, in addition to historical information, certain forward-looking statements that involve significant risks and uncertainties, which are difficult to predict, and are not guarantees of future performance. Such statements can generally be identified by words such as “anticipates,” “expects,” “intends,” “may,” “will,” “should,” “could,” “plans,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of these words and phrases or similar words or phrases which are predictions of or indicate future events or trends and which do not relate solely to historical matters. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Among many other examples, the following statements are examples of the forward-looking statements in this proxy statement:

all predictions of the amount or timing of liquidating distributions to be received by stockholders;
all statements regarding our ability to continue to qualify as a REIT;
all statements regarding the transition of advisory services from the Advisor to the Service Provider;
all statements regarding how our board of directors will interpret and comply with the terms of the plan of liquidation;
all statements regarding the timing of asset dispositions and the sales price we expect to receive for assets; and
all statements regarding future cash flows, future business prospects, future revenues, future working capital, the amount of expenses expected to be incurred, the amount or existence of future contingent liabilities, the amount of cash reserves to be established in the future, future liquidity, future capital needs, future interest costs, future income or the effects of the liquidation.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known (and unknown) risks, uncertainties and other unpredictable factors, many of which are beyond our control. Many relevant risks are described in the section entitled “Risk Factors” as well as throughout this proxy statement and in the “Risk Factors” sections included in the documents incorporated by reference (see the section entitled “Where You Can Find More Information”), and you should consider these important cautionary factors as you read this proxy statement.

The forward-looking statements contained in this proxy statement reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ significantly from those expressed or implied in any forward-looking statement. We are not able to predict all of the factors that may affect future results. For a discussion of these and other factors that could cause actual results to differ materially from any forward-looking statements, see the risk factors discussed below and in Item 1A, “Risk Factors,” and in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and other risks and uncertainties detailed in such annual report and our other reports and filings with the SEC. These risks, contingencies and uncertainties include:

uncertainties relating the exact amount or timing of our sales of assets and liquidating distributions;
uncertainties regarding our ability to continue to qualify as a REIT;
availability of qualified personnel;
uncertainties relating to our asset portfolio;
uncertainties relating to our operations;
uncertainties relating to domestic and international economic and political conditions;
uncertainties regarding the impact of regulations, changes in government policy and industry competition;

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unexpected costs or unexpected liabilities that may arise from the transactions contemplated by the plan of liquidation;
changes in general economic, business and political conditions, including the possibility of intensified international hostilities, acts of terrorism, and changes in conditions of United States or international lending, capital and financing markets, including events or circumstances that undermine confidence in the financial markets or otherwise have a broad impact on financial markets, such as the sudden instability or collapse of large financial institutions or other significant corporations;
actual or potential conflicts of interest which certain of our executive officers and our directors have in connection with the liquidation;
changes in governmental regulations, tax laws (including changes to laws governing the taxation of REITs) and rates, and similar matters; and
other risks detailed from time to time in our reports filed with the SEC.

The cautionary statements contained or incorporated by reference into in this proxy statement should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf. Except for our ongoing obligations to disclose certain information as required by the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events.

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THE SPECIAL MEETING

Date, Time and Purpose of the Special Meeting

This proxy statement is being furnished to our stockholders in connection with the solicitation of proxies by our board of directors to be exercised at the special meeting to be held on Tuesday, January 3, 2017, at 2:30 p.m., local time, at The Core Club, located at 66 E. 55th Street, New York, NY. The purpose of the special meeting is for you to consider and vote on the following matters:

1. the plan of liquidation proposal; and
2. the adjournment proposal.

Recommendations of the Board of Directors

Our board of directors determined that the terms of the plan of liquidation are advisable and in the best interests of the Company and approved the sale of all of our assets and our dissolution in accordance with the plan of liquidation, subject to stockholder approval. Therefore, our board of directors recommends that you vote “FOR” the plan of liquidation proposal. Our board of directors recommends that you also vote “FOR” the adjournment proposal.

Record Date, Notice and Quorum

All stockholders of record as of the close of business on November 10, 2016, the record date for determining stockholders entitled to notice of and to vote at the special meeting, are entitled to receive notice of and to vote at the special meeting.

As of the record date, there were 165,856,770 shares of our common stock issued and outstanding and entitled to vote at the special meeting, held by approximately 833 holders of record. Each share of our common stock is entitled to one vote on each proposal presented at the special meeting.

At the special meeting, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at the special meeting constitutes a quorum for purposes of transacting business at the special meeting. Shares of our common stock represented at the special meeting, but not voted, including shares for which a stockholder directs an “abstention” from voting or “broker non-votes,” will be counted as present for purposes of determining a quorum.

Required Vote

Approval of the plan of liquidation proposal will require the affirmative vote of the holders of at least a majority of the shares of our common stock then outstanding and entitled to vote thereon. Approval of the adjournment proposal requires the affirmative vote of a majority of the votes cast on the proposal.

For purposes of approval of the plan of liquidation, abstentions and broker non-votes, if any, will count toward the presence of a quorum but will have the same effect as votes cast against the proposal. Abstentions and broker non-votes will have no effect on the adjournment proposal. Each of our stockholders is entitled to cast one vote on each matter presented at the special meeting for each share of our common stock owned by the stockholder on the record date.

As of the record date, our directors and executive officers owned and are entitled to vote an aggregate of 372,096 shares of our common stock, entitling them to exercise less than 1% of the voting power of common stock entitled to vote at the special meeting.

Inspector of Elections

Votes cast by proxy or in person at the special meeting will be counted by the person appointed by us to act as inspector of election for the special meeting. The inspector of election will also determine whether a quorum is present at the special meeting.

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Proxies and Revocation

In order for your shares of common stock to be included in the vote, if you are a stockholder of record, you must either return the enclosed proxy card, authorize your proxy or voting instructions by telephone or internet or vote in person at the special meeting. All shares of our common stock entitled to vote and which are represented by properly completed proxies received prior to the special meeting that are not revoked, will be voted at the special meeting as instructed on the proxies. If you properly submit a proxy card, but do not indicate how your shares of common stock should be voted on a proposal, the shares of common stock represented by your proxy card will be voted as our board of directors recommends and therefore (1) “FOR” the plan of liquidation proposal and (2) “FOR” the adjournment proposal.

You may revoke your proxy or change your vote at any time before your proxy is voted at the special meeting. If you are a holder of record, you can do this in any of the three following ways:

by sending a written notice to the Secretary of the Company, at 405 Park Avenue, 14th Floor, New York, New York 10022, in time to be received before the special meeting, stating that you would like to revoke your proxy;
by completing, signing and dating another proxy card and returning it by mail in time to be received before the special meeting, or by completing a later dated proxy over the internet or by telephone, in which case your later dated proxy will be recorded and your earlier proxy revoked; or
if you are a holder of record, you can attend the special meeting and vote in person, which will automatically cancel any proxy previously given, or you may revoke your proxy in person, but your attendance alone at the special meeting will not revoke any proxy that you have previously given.

If you are a holder of record and you choose either of the first two methods, you must submit your notice of revocation or your new proxy to the Secretary of the Company no later than the beginning of the special meeting. If your shares are held in street name by your broker, bank or other nominee, you should contact them to change your vote.

Solicitation of Proxies

We are soliciting the proxy on behalf of our board of directors, and we will pay all costs of preparing, assembling and mailing the proxy materials. We will request banks, brokers, custodians, nominees, fiduciaries and other record holders to make available copies of this proxy statement to people on whose behalf they hold shares of our common stock and to request authority for the exercise of proxies by the record holders on behalf of those people. In compliance with the regulations of the SEC, we will reimburse such persons for reasonable expenses incurred by them in making available proxy materials to the beneficial owners of shares of our common stock. In addition to soliciting proxies by mail, directors, officers and employees of the Advisor may solicit proxies on behalf of our board of directors, without additional compensation, personally or by telephone.

We have also retained D.F. King to act as proxy solicitor. Under our agreement with D.F. King, D.F. King will receive a fee of $45,000 plus the reimbursement of reasonable expenses. In addition, we have retained Broadridge to act as proxy tabulator. Under our agreement with Broadridge, Broadridge will receive a fee of $16,000 plus the reimbursement of reasonable expenses.

Adjournments

The special meeting may be adjourned for the purpose of soliciting additional proxies if the holders of a sufficient number of shares of our common stock are not present at the special meeting, in person or by proxy, to constitute a quorum, or when reconvened following any adjournment. Our bylaws authorize the chair of the meeting to adjourn the meeting in the discretion of the chair and without action by stockholders regardless of whether a quorum is present.

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Your Vote is Important

Regardless of whether you plan to attend the special meeting in person, please authorize a proxy to vote your shares of common stock as promptly as possible.  To authorize a proxy, complete, sign, date and mail your proxy card in the pre-addressed postage-prepaid envelope provided or, if the option is available to you, call the toll free telephone number listed on your proxy card or use the internet as described in the instructions on the enclosed proxy card to authorize your proxy. Authorizing a proxy will assure that your vote is counted at the special meeting if you do not attend in person. If your shares of common stock are held in “street name” by your broker or other nominee, only your broker or other nominee can vote your shares and the vote cannot be cast unless you provide instructions to your broker or other nominee on how to vote or you obtain a legal proxy from your broker or other nominee. You should follow the directions provided by your broker or other nominee regarding how to instruct your broker or other nominee to vote your shares. You may revoke your proxy at any time before it is voted.

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BUSINESS

Overview

We were incorporated on October 6, 2009 as a Maryland corporation that qualified as a REIT beginning with our taxable year ended December 31, 2010. On April 15, 2014, we listed our common stock on the NYSE under the symbol “NYRT.”

We purchased our first property and commenced active operations in June 2010. As of September 30, 2016, we owned 19 properties located in New York City aggregating 3.3 million rentable square feet with occupancy of 93.4% and a weighted-average remaining lease term of 9.0 years. Our portfolio primarily consists of office and retail properties, which, as of September 30, 2016, represented 83% and 9%, respectively, of rentable square feet. We have acquired hotel and other types of real properties to diversify our portfolio. Properties other than office and retail spaces represented 8% of rentable square feet.

Substantially all of our business is conducted through the OP. Our only significant asset is the general partnership interests we own in the OP and assets held by us for the use and benefit of the OP. We are externally managed by the Advisor and have no employees of our own. We rely on the Advisor, and will rely on the Service Provider, to run our business subject to oversight from our board of directors.

Our Management

We are an externally managed company and have no employees. We have retained the Advisor as our external advisor to manage our affairs on a day-to-day basis pursuant to the Advisory Agreement. The Property Manager serves as our property manager, unless services are performed by a third party for specific properties. The Advisor and Property Manager are under common control with AR Global, the parent of our Sponsor.

On December 19, 2016, we amended the Advisory Agreement and the Property Management Agreement, and entered into the Services Agreement and other agreements providing for the transition of advisory services from the Advisor to the Service Provider. Pursuant to these agreements, the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to us with respect to matters not primarily related to the plan of liquidation.

Advisory Agreement

Services

Our Advisor manages our day-to-day operations pursuant to the Advisory Agreement. The services provided by the Advisor include: (i) serving as our investment and financial advisor; (ii) performing and supervising the various administrative functions necessary for the day-to-day management of our operations, including providing personnel necessary to perform such services; (iii) engaging and conducting business with consultants, accountants, lenders, attorneys, brokers and other service providers and overseeing the performance of services; (iv) overseeing acquisitions and dispositions of investments and recommending acquisitions and dispositions of investments to our board of directors; (v) arranging for financings and refinancings; (v) overseeing and managing our existing investments; (vi) managing accounting and other record-keeping functions; (vii) preparing and filing all reports required to be filed by it with the SEC, the IRS and other regulatory agencies; (viii) maintaining our compliance with the Sarbanes-Oxley Act; and (ix) monitoring compliance with our corporate-level and property-level indebtedness.

Prior to the Transition Date, the Advisor, and not the Service Provider, will be responsible for maintaining our accounting, tax, regulatory and other records and taking all actions necessary to file any reports required to be filed by us with the SEC, the IRS and other regulatory agencies or any applicable stock exchange. Pursuant to the amendment to the Advisory Agreement entered into as part of the arrangements providing for the transition advisory services from the Advisor to the Service Provider, the Advisor will have no responsibility (and no liability) with respect to the plan of liquidation and any liquidation accounting associated therewith.

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The Advisor has agreed to work in good faith and cooperate with the reasonable requests of us or our board of directors to enable an orderly transition of advisory services from the Advisor to any successor advisor throughout the term of the Advisory Agreement. The Advisor is also required to provide us and our board of directors necessary information, books and records (including property-level information) in the electronic form as exists as of the date requested.

Fees and Expenses

Under the Advisory Agreement, we pay our Advisor an asset management fee to our Advisor equal to 0.50% per annum of the cost of assets (as defined in the Advisory Agreement) and reimburse the Advisor for certain costs and expenses incurred by the Advisor or any affiliate of the Advisor in providing asset management services; provided that if the cost of assets exceeds $3.0 billion on the applicable determination date, then the asset management fee is equal to 0.50% per annum of the cost of assets up to $3.0 billion and 0.40% per annum of the cost of assets in excess of $3.0 billion. The cost of assets (as defined in the Advisory Agreement) was not in excess of $3.0 billion as of the date hereof. The asset management fee is payable in monthly installments on the first business day of each month.

We reimburse the Advisor for costs and expenses paid or incurred by the Advisor and its affiliates in connection with providing services to us (including reasonable salaries and wages, benefits and overhead of all employees directly involved in performing services), although we will not reimburse the Advisor for personnel costs in connection with services for which the Advisor receives a separate fee. Notwithstanding the foregoing, the amount of the expenses incurred by the Advisor that we are required to reimburse pursuant to the Advisory Agreement is limited to no more than (i) $722,000 for the Initial Extension Period (as defined below) and (ii) $240,666.66 per each Additional Extension Period (as defined below).

Disposition fees are no longer payable to the Advisor in connection with sales of properties consummated after the date of the amendment to the Advisory Agreement entered into on December 19, 2019 as part of the arrangements providing for the transition of advisory services from the Advisor to the Service Provider. Prior to the amendment to the Advisory Agreement, in connection with a sale of one or more properties in which the Advisor provided a substantial amount of services, as determined by our independent directors, a property disposition fee was required to be paid to our Advisor in an amount not to exceed the lesser of 2.0% of the contract sale price of the property and 50% of the competitive real estate commission paid if a third-party broker was also involved, subject to certain other limitations.

Executives and Personnel

Our named executive officers, Michael A. Happel, Nicholas Radesca and Patrick O’Malley, are employees of affiliates of the Advisor and Property Manager and, except for awards of restricted shares under certain limited circumstances, do not receive any compensation directly from us for serving as our executive officers. Moreover, we do not reimburse our Advisor and its affiliates that are involved in the managing our operations, including the Property Manager, for salaries, bonuses or benefits incurred by these entities and paid to our named executive officers.

Term and Termination

The current term of the Advisory Agreement extends to March 31, 2017 (the “Initial Extension Period”). In addition, we may, with approval of our independent directors, extend the term of the Advisory Agreement for up to five successive 30-day periods (each, an “Additional Extension Period”) upon at least 45 days’ notice prior to the expiration of the Initial Extension Period and upon at least 30 days’ notice prior to the expiration of any Additional Extension Period. Notwithstanding the foregoing, the Advisory Agreement also provides that, following the later of February 28, 2017 and the filing of our Annual Report on Form 10-K for the year ending December 31, 2016, the Advisory Agreement may be terminated upon three business days’ written notice from our independent directors to the Advisor.

The Advisory Agreement will also terminate automatically upon the occurrence of a change of control (as defined in the Advisory Agreement).

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transition of the advisory function. After termination, the Advisor is entitled to receive all amounts then accrued and owing to the Advisor (but not a termination fee or any other amounts).

Advisory Transition Side Letters

On December 19, 2016, as part of the arrangements providing for the transition of advisory services from the Advisor to the Service Provider, we entered into one letter agreement with the Property Manager and the Advisor (the “Personnel Side Letter”) with respect to certain personnel of the Advisor and its affiliates (the “Advisor Employees”) and another letter agreement with the Property Manager and the Advisor with respect to LTIP Units (the “OPP Side Letter”).

The Personnel Side Letter requires us to fund, and the Advisor to pay, certain amounts to incentivize and retain the Advisor Employees. Except for Patrick O’Malley, our chief investment officer, none of our named executive officers are included among the Advisor Employees.

The Personnel Side Letter provides that the 2016 bonus to be paid by the Advisor to each Advisor Employee who remains employed by the Advisor or its affiliates will be no less than 75% of such Advisor Employee’s 2015 bonus.

The Personnel Side Letter also includes provisions for payments of retention bonuses allocated among the Advisor Employees. Pursuant to an escrow agreement, we will deposit an amount equal to $683,887.50 in an escrow account on December 26, 2016. The amount in the escrow account will be used to pay the retention bonuses allocated to each Advisor Employee who remains employed by the Advisor or its affiliates as a retention bonus, with two-thirds of the bonus payable upon the filing of our Annual Report on Form 10-K for the year ending December 31, 2016 and the remainder payable on the earlier of the termination of the Advisory Agreement or the final day of the Initial Extension Period. Upon the occurrence of a change of control prior to the filing of our Annual Report on Form 10-K for the year ending December 31, 2016 or the final day of the Initial Extension Period, the entirety of the amounts to be paid will be paid to those Advisor Employees who remain employed by the Advisor or its affiliates at that time. No portion of the amount held in escrow will be refundable to us for any reason other than equitable adjustment to account for any Advisor Employees who are no longer employed by the Advisor or its affiliates as of the date of a payment.

No later than five business days prior to the beginning of each Additional Extension Period (if any), we will pay to the Advisor an additional amount equal to $227,962.50 (equitably adjusted to account for any Advisor Employee who, as of the beginning of the Additional Extension Period, is no longer employed by the Advisor or its affiliates), and the Advisor will pay the amount allocated to each Advisor Employee who remains employed by the Advisor or its affiliate on the last regularly scheduled payroll date during the applicable Additional Extension Period. No portion of these amounts paid to the Advisor will be refundable to us for any reason other than equitable adjustment to account for any Advisor Employees who are no longer employed by the or its affiliates as of the date of a payment.

The OPP Side Letter provides that all 1,172,738 issued and outstanding earned and unvested LTIP Units will vest automatically on December 26, 2016, and will be converted on a one-for-one basis into unrestricted shares of our common stock.

The OPP Side Letter also provides that the number of Year 3 LTIP Units will be calculated on April 15, 2017, the final valuation date, in accordance with the terms of the OPP and will be immediately vested and converted on a one-for-one basis into unrestricted shares of our common stock on April 15, 2017, except, if a change of control (as defined in the OPP) occurs prior to April 15, 2017, the number of Year 3 LTIP Units will be calculated as of the day immediately preceding the close of the change of control and the value of the Year 3 LTIP Units will be paid to the Advisor in cash at the closing. In accordance with the OPP Side Letter, our board of directors has authorized us to file a Registration Statement with the SEC on Form S-3 registering the resale of the shares of our common stock issuable in exchange for the previously earned LTIP Units and Year 3 LTIP Units on or prior to December 26, 2016.

Property Management Agreement

Pursuant to the Property Management Agreement, we pay the Property Manager fees equal to: (i) for non-hotel properties, 4.0% of gross revenues from the properties managed plus market-based leasing commissions; (ii) for hotel properties, a fee based on a percentage of gross revenues at a market rate in light

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of the size, type and location of the hotel property plus a customary incentive fee based on performance. Notwithstanding the foregoing, in the case of both hotel and non-hotel properties, the Property Manager may be entitled to receive higher fees if the Property Manager demonstrates to the satisfaction of a majority of the directors (including a majority of the independent directors) that a higher competitive fee is justified for the services rendered. We also reimburse the Property Manager for property-level expenses that it pays or incurs on our behalf, including reasonable salaries, bonuses and benefits of persons employed by the Property Manager except for the salaries, bonuses and benefits of persons who also serve as one of our executive officers or as an executive officer of the Property Manager or its affiliates. The Property Manager may subcontract the performance of its property management and leasing duties to third parties and pay all or a portion of its property management fee to the third parties with whom it contracts for these services. If we contract directly with third parties for such services we have agreed to pay them customary market fees and will pay the Property Manager an oversight fee equal to 1.0% of the gross revenues of the property managed. In no event are we required to pay the Property Manager or any affiliate both a property management fee and an oversight fee with respect to any particular property.

The Property Manager waived property management fees from the time we commenced active operations in June 2010 until the third quarter of 2016, at which point the Property Manager began to not waive the property management fee. Since we commenced active operations in June 2010 until the third quarter of 2015, the Advisor declined to request general and administrative expense reimbursements. The Advisor also has, at other times, waived certain other fees and declined to request certain other expense reimbursements. During the period since we commenced active operations in June 2010 through September 30, 2016, the aggregate amount of all fees and expense reimbursements waived or not requested was approximately $13.7 million

The term of the Property Manager Agreement originally expired on September 1, 2017. Pursuant to the amendment to the property management agreement entered into as part of the arrangements providing for the transition of advisory services from the Advisor to the Service Provider, the Property Management Agreement will also terminate on the expiration or termination of the Advisory Agreement, if earlier.

Services Agreement

Services

Following the Transition Date, the Service Provider will manage our day-to-day operations pursuant to the Services Agreement and provide the services currently provided by the Advisor as set forth under “— Advisory Agreement — Services.”

From January 3, 2017 until the Transition Date, the Service Provider will serve as the exclusive advisor to us with respect to implementation and oversight of, and the taking of all actions in connection with the plan of liquidation, and as a consultant to our board of directors on other matters.

From January 3, 2017 until the Transition Date, the Service Provider has agreed to use its reasonable best efforts to cooperate with us and the Advisor to enable an orderly transition of advisory services from the Advisor to the Service Provider, and, to the extent a plan of liquidation has not yet been approved and adopted, to provide advice to our board of directors with respect to an investment program consistent with our investment objectives and policies and make recommendations to our board of directors with respect to any leases, or renewals thereof, for space at any of our properties.

After the Transition Date, the Service Provider will continue to execute the plan of liquidation, and, if a plan of liquidation has not been approved and adopted by the Transition Date, the Service Provider will, commencing on the Transition Date and until a plan of liquidation is approved and adopted, use its reasonable best efforts to provide a continuing and suitable investment program consistent with our investment objectives and policies as determined and adopted from time to time by our board of directors.

Fees and Expenses

Beginning on March 1, 2017, we will pay the Service Provider an asset management fee equal to 0.325% per annum of the cost of assets (as defined in the Services Agreement); provided, however, that if the cost of assets exceeds $3.0 billion on the applicable determination date, then the asset management fee will be equal to 0.325% per annum of the cost of assets up to $3.0 billion and 0.25% per annum of the cost of assets in

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excess of $3.0 billion. The asset management fee is payable in monthly installments on the first business day of each month. The cost of assets (as defined in the Services Agreement) was not in excess $3.0 billion as of the date hereof.

In connection with the payment of (i) any distributions of money or other property by us to our stockholders during the term of the Services Agreement and (ii) any other amounts paid to our stockholders on account of their shares of common stock in connection with a merger or other change in control transaction pursuant to an agreement with us entered into after the Transition Date (such distributions and payments, the “Hurdle Payments”), in excess of $11.00 per share (the “Hurdle Amount”), when taken together with all other Hurdle Payments, we will pay an incentive fee to the Service Provider in an amount equal to 10.0% of such excess (the “Incentive Fee”). The Hurdle Amount will be increased on an annualized basis by an amount equal to the product of (a) Treasury Rate plus 200 basis points and (b) the Hurdle Amount minus all previous Hurdle Payments.

On each of January 3, 2017 and February 1, 2017, we will pay the Service Provider a fee of $500,000 in cash as compensation for consulting services rendered prior to the Transition Date.

If the Service Provider provides any property management services, we will pay the Service Provider 1.75% of gross revenues, inclusive of all third party property management fees, for any property management services provided to us by the Service Provider or any of its affiliates.

We are required to pay directly or reimburse the Service Provider for certain reasonable and documented out-of-pocket expenses paid or incurred by the Service Provider or its affiliates in connection with the services provided to us pursuant to the Services Agreement. These expenses may not exceed $100,000 for the period prior to the Transition Date.

Executives and Personnel

Under the Services Agreement, the Service Provider is required to provide us with, among other personnel, a chief executive officer and a chief financial officer. In addition, we have agreed that, on the Transition Date, we will appoint Wendy Silverstein as our chief executive officer and John Garilli as our chief financial officer. We will not reimburse either the Service Provider or any of its affiliates for any internal selling, general or administrative expense of the Service Provider or its affiliates, including the salaries and wages, benefits or overhead of personnel providing services to us, including a chief executive officer and a chief financial officer.

Term and Termination

The initial term of the Services Agreement expires on February 28, 2018 and thereafter renews automatically for successive six-month periods unless a majority of our independent directors or the Service Provider elects to terminate the Services Agreement without cause and without penalty, upon written notice thirty (30) days’prior to the end of such term. The Services Agreement may also be terminated upon thirty (30) days’ written notice by a majority of our independent directors with cause (as defined in the Services Agreement) or if Ms. Silverstein resigns or is otherwise unavailable to serve as our chief executive officer for any reason and the Service Provider has not identified a replacement chief executive officer who is acceptable to a majority of our independent directors.

In addition, the Services Agreement will terminate automatically upon: (i) the occurrence of a change of control (as defined in the Services Agreement), other than as a result of the transactions contemplated by a plan of liquidation, or (ii) at the effective time of the dissolution of the Company in accordance with a plan of liquidation or, if the assets of the Company are transferred to a liquidating trust, the final disposition of the assets transferred by the liquidating trust.

After termination, the Service Provider is entitled to receive all amounts then accrued and owing to the Service Provider, including any accrued Incentive Fee, but is not entitled to a termination fee or any other amounts.

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Our Properties

Our properties as of September 30, 2016 are described in the table below.

           
Property   Ownership   Rentable
Square
Feet(1)
  Percent
Occupied(2)
  Annualized
Cash Rent
($ in thousands)
  Annualized
Cash Rent
Per Square
Foot ($)
  Number of
Leases
Manhattan Office Properties – Office
                                                     
Design Center     100.0 %      81,082       93.9 %      4,000       52.53       17  
416 Washington Street     100.0 %      1,565       100.0 %      60       38.22       1  
256 West 38th Street     100.0 %      88,683       77.2 %      2,512       36.67       10  
229 West 36th Street     100.0 %      129,751       100.0 %      5,974       46.04       8  
218 West 18th Street     100.0 %      165,670       100.0 %      9,784       59.06       7  
50 Varick Street     100.0 %      158,574       100.0 %      7,927       49.99       1  
333 West 34th Street     100.0 %      317,040       100.0 %      15,364       48.46       3  
1440 Broadway     100.0 %      711,800       74.6 %      31,035       58.46       10  
One Worldwide Plaza     48.9 %      878,613       100.0 %      59,524       67.75       9  
245-249 West 17th Street     100.0 %      214,666       100.0 %      15,178       70.70       1  
Manhattan Office Properties – Office Total           2,747,444       92.5 %      151,358       59.56       67  
Manhattan Office Properties – Retail
                                                     
256 West 38th Street     100.0 %      28,360       100.0 %      1,199       42.28       3  
229 West 36th Street     100.0 %      20,132       100.0 %      1,065       52.91       1  
333 West 34th Street     100.0 %      29,688       100.0 %      1,490       50.19       1  
1440 Broadway     100.0 %      37,619       95.5 %      5,112       142.29       7  
One Worldwide Plaza     48.9 %      123,213       100.0 %      5,152       41.81       20  
245-249 West 17th Street     100.0 %      66,628       100.0 %      5,496       82.49       3  
Manhattan Office Properties – Retail Total           305,640       99.4 %      19,514       64.21       35  
Sub-Total/Weighted Average Manhattan Office Properties              3,053,084       93.2 %      170,872       60.05       102  
Manhattan Stand Alone Retail
                                                     
367-387 Bleecker Street     100.0 %      9,724       91.9 %      2,482       277.86       4  
33 West 56th Street     100.0 %      12,856       100.0 %      460       35.79       1  
416 Washington Street     100.0 %      7,436       100.0 %      454       61.09       2  
One Jackson Square     100.0 %      8,392       100.0 %      1,707       203.42       4  
350 West 42nd Street     100.0 %      42,774       100.0 %      1,789       41.83       4  
350 Bleecker Street     100.0 %      14,511       84.6 %      744       60.59       2  
Sub-Total/Weighted Average Manhattan Stand Alone Retail           95,693       92.8 %      7,636       82.41       17  
Outer-Borough Properties
                                                     
1100 Kings Highway, Brooklyn     100.0 %      61,318       100.0 %      2,825       46.07       5  
Sub-Total/Weighted Average Outer-Borough Properties           61,318       100.0 %      2,825       46.07       5  
Portfolio Total           3,210,095       93.4 %    $ 181,333       60.46       124  

(1) Does not include 128,612 square feet at the Viceroy Hotel, antenna leases or 15,055 square feet at the garage at 416 Washington Street, which is being operated under a management contract with a third party. Includes pro rata share of our investment in the Worldwide Plaza property.
(2) Inclusive of leases signed but not yet commenced.

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New Financing and Exercise of WWP Option

In December 2016, we obtained the New Financing in the amount of $760 million. A portion of the net proceeds after closing costs was used: (i) to repay the $485 million principal amount then outstanding under the Credit Facility; and (ii) to deposit $260 million in a reserve account that may be used by us to exercise the WWP Option. The New Financing is secured by the 12 properties that previously comprised the borrowing base of the Credit Facility and permits these properties to be sold with a predetermined release amount applied to prepay the outstanding principal amount.

We have the right to exercise the WWP Option starting in January 2017 and intend to do so using, in part, the proceeds from the New Financing.

The plan of liquidation generally prohibits us from engaging in any business activities, except for exercising the WWP Option.

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SELECTED FINANCIAL DATA

The following table presents selected financial data as of September 30, 2016 and December 31, 2015, 2014, 2013, 2012 and 2011 and for the nine months ended September 30, 2016 and the years ended December 31, 2015, 2014, 2013, 2012 and 2011. The consolidated operating data for the years ended December 31, 2015, 2014 and 2013 and the consolidated balance sheet data as of December 31, 2015 and 2014 have been derived from our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and incorporated by reference in this proxy statement. The consolidated operating data for the years ended December 31, 2012 and 2011 and the consolidated balance sheet data as of December 31, 2013, 2012 and 2011 have been derived from our audited consolidated financial statements for such periods, which have not been incorporated into this proxy statement by reference. The consolidated operating data for the nine months ended September 30, 2016 and the consolidated balance sheet data as of September 30, 2016 have been derived from our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016, which is incorporated by reference in this proxy statement.

You should read this summary of selected historical financial information together with the financial statements filed with the SEC and incorporated by reference into this proxy statement and their accompanying notes and management’s discussion and analysis of our operations and financial condition. See “Where You Can Find More Available Information.” Interim results for the nine months ended September 30, 2016 are not necessarily indicative of, and are not projections for, the results to be expected for the fiscal year ending December 31, 2016.

           
Balance sheet data
(In thousands)
  September 30,
2016
  December 31,
2015
  December 31,
2014
  December 31,
2013
  December 31,
2012
  December 31,
2011
Total real estate investments, at cost   $ 1,785,362     $ 1,822,903     $ 1,888,366     $ 1,542,805     $ 360,857     $ 125,626  
Total assets(1)     1,923,391       2,064,762       2,117,971       2,044,240       362,550       134,225  
Mortgage notes payable, net of deferred financing costs(1)     363,851       381,443       169,377       168,651       180,269       72,511  
Credit Facility     485,000       485,000       635,000       305,000       19,995        
Notes payable                                   5,933  
Total liabilities(1)     958,613       972,493       922,294       594,981       220,119       83,034  
Total equity     964,778       1,092,269       1,195,677       1,449,259       142,431       51,191  

(1) Historical figures have been adjusted to comply with new accounting guidance effective for our fiscal year ending December 31, 2016, which now requires deferred financing costs related to mortgage notes payable to be reflected as a reduction of the principal amount of the liability instead of as an asset.

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Operating data (In thousands, except share and per share data)   Nine Months
Ended
September 30,
2016
  Year Ended December 31,
  2015   2014   2013   2012   2011
Total revenues   $ 117,892     $ 174,521     $ 155,567     $ 55,887     $ 15,422     $ 7,535  
Operating expenses     156,614       195,415       227,540       65,105       16,787       6,888  
Operating income (loss)     (38,722 )      (20,894 )      (71,973 )      (9,218 )      (1,365 )      647  
Total other expenses     (19,073 )      (19,375 )      (22,312 )      (10,093 )      (5,007 )      (3,912 ) 
Net (loss)     (57,795 )      (40,269 )      (94,285 )      (19,311 )      (6,372 )      (3,265 ) 
Net loss (income) attributable to non-controlling interests     1,475       1,188       1,257       32       33       (154 ) 
Net loss attributable to stockholders   $ (56,320 )    $ (39,081 )    $ (93,028 )    $ (19,279 )    $ (6,339 )    $ (3,419 ) 
Other data:
                                                     
Cash flows provided by operations   $ (3,009 )    $ 37,725     $ 6,535     $ 9,428     $ 3,030     $ 263  
Cash flows provided by (used in) investing activities     46,959       61,907       (327,835 )      (1,309,508 )      (145,753 )      (25,736 ) 
Cash flows provided by (used in) financing activities     (82,713 )      (23,540 )      110,435       1,528,103       137,855       35,346  
Per share data:
                                                     
Net (loss) per common share –  basic and diluted   $ (0.34 )    $ (0.24 )    $ (0.56 )    $ (0.26 )    $ (0.52 )    $ (2.31 ) 
Dividends and distributions declared per common share   $ 0.35     $ 0.460     $ 0.490     $ 0.605     $ 0.605     $ 0.605  
Weighted-average number of common shares outstanding, basic     164,700,025       162,165,580       166,959,316       73,074,872       12,187,623       2,070,184  
Weighted-average number of common shares outstanding, diluted     164,700,025       162,165,580       166,959,316       73,074,872       12,187,623       2,070,184  

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PROPOSAL ONE: PLAN OF LIQUIDATION AND DISSOLUTION

General

At the special meeting, our stockholders will be asked to consider and vote upon a proposal for approval of the plan of liquidation. If our stockholders approve this proposal, we intend to begin implementing the plan of liquidation as soon as practicable. Pursuant to the plan of liquidation, our board of directors will cause us to sell, convey, transfer and deliver or otherwise dispose of any or all of our assets in one or more transactions without further approval of the stockholders. We, acting for ourselves or in our capacity as the general partner of the OP, as appropriate, will not engage in any business activities, except to exercise the WWP Option or otherwise to the extent necessary to preserve the value of our assets, including but not limited to assets held in the OP and their subsidiaries, wind up our business and affairs, discharge, pay or establish a reserve fund for all of our liabilities, including but not limited to contingent liabilities and the liabilities of the OP or its subsidiaries, distribute the net proceeds remaining to the limited and general partners of the OP in accordance with the OP’s limited partnership agreement, as amended, and distribute the net proceeds remaining to our stockholders, all in accordance with our charter, our bylaws and the plan of liquidation.

The plan of liquidation requires us to sell all of our assets for cash or such other assets as may be conveniently liquidated or distributed to our stockholders. We will make reasonable provisions for all known claims and obligations, including all contingent, conditional or contractual claims, as well as provisions that are reasonably likely to be sufficient to provide compensation for any claim against us, the OP or its or our subsidiaries in connection with any pending action, suit or proceeding to which any of us is a party.

After selling all of our assets, distributing our assets, paying off all of our known liabilities and expenses, and making reasonable provisions for any unknown or contingent liabilities, we expect to distribute the net proceeds of our liquidation to our stockholders. We, with input from the Eastdil Secured group of Wells Fargo Securities, estimate that our company has a Total Liquidating Distributions Range of between $8.49 and $11.26 per share. Our Total Liquidating Distributions Range does not necessarily reflect the actual amount that our stockholders will receive in liquidating distributions, and the actual amount may be more or less than the Total Liquidating Distributions Range, for various reasons discussed in this proxy statement, including in the section entitled “Risk Factors.” Amounts available for distribution to stockholders are dependent on a number of factors, including actual proceeds from the sale of our properties, fees and expenses incurred in connection with the sale of our properties, expenses incurred in the administration of our properties prior to disposition, general and administrative expenses of the Company, including fees and expense reimbursements paid to the Service Provider, the Advisor and the Property Manager and other liabilities that may be incurred by the Company.

Pursuant to the plan of liquidation if implemented, we will make liquidating distributions in one or more payments. However, we cannot be sure how many liquidating distributions will be paid, or when they will be paid.

In connection with implementing our plan of liquidation, we expect to terminate registration of our common stock under the Exchange Act after we have sold all our assets or transferred them to a liquidating trust, as well as cease filing reports with the SEC and file articles of dissolution with the SDAT when appropriate. Our board of directors may elect to terminate our Exchange Act registration sooner if our board believes it to be in the best interests of the Company. Furthermore, the plan of liquidation authorizes our board of directors to establish a reserve fund to pay unknown or contingent liabilities as a result of which, the final payout to our stockholders may not occur for three or more years following the filing of our articles of dissolution. If we cannot dispose of our assets and pay or provide for our liabilities within 24 months after approval by our stockholders of the plan of liquidation, or if our board of directors otherwise determines that it is advantageous to do so before the end of such 24-month period, we intend, for tax purposes, to transfer and assign our remaining assets and liabilities to a liquidating trust. This would be necessary in order for us, assuming we remain qualified as a REIT, to be eligible to deduct amounts distributed pursuant to the plan of liquidation as dividends paid and thereby meet our annual distribution requirement and not be subject to U.S. federal income tax on such amounts. Upon transfer and assignment, our stockholders will receive beneficial interests in the liquidating trust equivalent to their ownership interests in the Company as

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represented by the shares of our common stock held by our stockholders prior to the transfer and assignment. The liquidating trust will pay or provide for all of our liabilities and distribute any remaining net proceeds from the sale of its assets to the holders of beneficial interests in the liquidating trust. Shares of beneficial interest in the liquidating trust generally will not be transferable. The liquidating trust would be managed by trustees designated by our board of directors. Activities of the liquidating trust will be limited to conserving, protecting and selling the assets transferred to it and distributing the proceeds therefrom, including holding the assets for the benefit of the holders of beneficial interests in the liquidating trust, temporarily investing the proceeds and collecting income therefrom, providing for the debts, liabilities and expenses of the liquidating trust, making liquidating distributions to the holders of beneficial interests in the liquidating trust and taking other actions as may be deemed necessary or appropriate by the trustees of the liquidating trust to conserve and protect the assets of the liquidating trust and provide for the orderly liquidation of the trust.

Our board of directors may terminate the plan of liquidation without stockholder approval only (i) if the plan of liquidation is not approved by our stockholders or (ii) (A) if our board of directors approves the Company entering into an agreement involving the sale or other disposition of all or substantially all of our assets or common stock by merger, consolidation, share exchange, business combination, sale or other transaction involving the Company or (B) if our board of directors determines, in exercise of its duties under Maryland law, after consultation with its advisor and its financial advisor (if applicable) or other third party experts familiar with the market for Manhattan office properties, that there is an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely affect proceeding with the plan of liquidation. Notwithstanding approval of the plan of liquidation by our stockholders, our board of directors may modify or amend the plan of liquidation without further action by our stockholders to the extent permitted under then current law.

Background of the Plan of Liquidation

In July 2015, the Company and our board of directors determined to evaluate a potential recapitalization of certain assets of the Company on a joint venture basis with the goal of generating additional capital for investment as part of a going concern strategy and engaged Wells Fargo Securities as its financial advisor to assist the Company and our board of directors in the process. During the period the Company was involved in this evaluation, representatives of the Company received feedback from various stockholders of the Company expressing a preference for the Company to consider and potentially pursue strategic alternatives to enhance stockholder value, including a sale or merger of the Company, as compared to recapitalizing certain assets as part of a going concern strategy.

On September 30, 2015, at a meeting of our board of directors with management and representatives of Proskauer Rose LLP (“Proskauer”), outside legal counsel to the Company, and Wells Fargo Securities present, Wells Fargo Securities discussed with our board of directors certain information regarding potential strategic alternatives. Following this discussion, our board of directors decided to consider a broader range of strategic alternatives instead of the recapitalization strategy to maximize stockholder value within a reasonable period of time and unanimously approved expanding the scope of Wells Fargo Securities’ engagement to assisting our board of directors in evaluating a potential strategic transaction at the asset or entity level or both.

On November 9, 2015, Keith Locker and James Nelson were elected as directors. During October and November of 2015, in accordance with the directives of our board of directors, Wells Fargo Securities contacted over 80 parties, including foreign investors, publicly traded REITs, private equity funds and other real estate investors, to solicit potential interest in a strategic transaction with the Company at an asset or entity level. During this period, 70 parties signed either an asset-level non-disclosure agreement, an entity-level non-disclosure agreement or both. In total, from October 2015 through the announcement of the execution of the JBG Combination Agreement in May 2016, over 100 parties were contacted and 85 parties executed non-disclosure agreements, including 61 parties that executed entity-level non-disclosure agreements and 24 other parties that executed only asset-level non-disclosure agreements.

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In addition to JBG, the following parties that entered into either an entity-level non-disclosure agreement, an asset-level non-disclosure agreement or both and had significant engagement with the Company or made non-binding proposals for potential transactions, none of which resulted in a definitive agreement (except for the JBG Combination Agreement with JBG, which was ultimately terminated before the transactions contemplated thereby could be completed) as described in more detail herein:

 
Party   Description
Party A   A publicly traded REIT
Party B   An asset management company in partnership with a privately held New York-based real estate company
Party C   A real estate private equity firm that is also the external advisor to a publicly traded REIT
Party C REIT   A publicly traded REIT externally advised by Party C
Party D   A publicly traded REIT
Party E   A real estate private equity firm
Party F   A real estate private equity firm
Party G   A privately held New York-based real estate company
Party H   A privately held New York-based real estate company
Party I   A real estate private equity firm
Party J   A subsidiary of a foreign-listed public company

The parties that entered into non-disclosure agreements in October and November of 2015 (including all the parties listed in the table above except for Party F and Party H) were requested to submit indications of interest or proposals by November 12, 2015. They were also encouraged to provide indications of interest or proposals for transactions involving the entirety of the Company, but to the extent any of these parties was not interested in an entity-level transaction, they were informed that the Company would also consider proposals involving individual assets. On or around the deadline, the Company received indications of interest from three parties to engage in an entity-level transaction as follows:

Party A.  A written indication of interest received on November 13, 2015 contemplating a merger between the Company and a wholly owned subsidiary of Party A in which Party A would acquire all shares of our common stock for $11.00 per share, payable 90% in cash and 10% in Party A common stock valued at not less than a fixed price that was approximately 4% greater than the closing price of Party A common stock on the date on which the indication of interest was submitted.
Party B.  A written indication of interest received on November 13, 2015 contemplating an acquisition of all shares of our common stock for $9.75 per share payable 100% in cash. Party B’s proposal was conditioned on, among other things, raising sufficient capital to fund the purchase price. Party B verbally indicated that it would partner with a specific foreign sovereign wealth fund to finance Party B’s proposed transaction, but had not yet secured a commitment from this investor.
Party C.  A written indication of interest received on November 16, 2015 contemplating acquiring all shares of our common stock for $10.50 per share payable 100% in cash. Party C’s proposal was conditioned on, among other things, raising sufficient capital to fund the purchase price. Party C stated that it had identified (but would not name) a potential foreign investor to provide the necessary capital but had not yet secured a commitment from this investor.

Party C also provided a verbal indication of interest on November 13, 2015 contemplating Party C REIT purchasing all of the Company’s assets, other than the Worldwide Plaza property. The consideration to be paid by Party C REIT was to include cash in an amount needed to repay the Credit Facility, assumption or refinancing of existing mortgage debt, and the balance payable in Party C REIT common stock based on an unspecified value above the then current closing price of Party C REIT common stock. Party C indicated a gross asset value for all of the Company’s assets, other than the Worldwide Plaza property, of approximately $2.0 billion (inclusive of existing secured debt); however, the implied price of the proposal was indeterminate due to the lack of specificity around the amount and value of the Party C REIT common stock consideration.

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In addition, on or around the deadline for submitting indications of interest, the Company received an aggregate 15 indications of interest contemplating the purchase, through individual asset sales or portfolio sales, of all of the Company’s 16 core assets, except for the Viceroy Hotel and 245-249 West 17th Street. While the Company received non-binding indications of interest for many of its individual properties, the Company did not actively market each individual property in a process tailored to each of the Company’s individual assets given its preference for first pursuing an entity-level transaction at the time.

On November 15, 2015, at a meeting of our board of directors with management and representatives of Proskauer and Wells Fargo Securities present, Wells Fargo Securities, in addition to reviewing the terms of the asset-level and entity-level proposals, discussed with our board of directors certain preliminary financial information regarding the Company’s estimated net asset value and potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation. Our board of directors also discussed the possibility that the asset-level proposals that were received had been potentially impacted by encouraging investors to pursue entity-level transactions as a preference over individual asset sales at that time. Our board of directors noted that asset bids potentially could be improved through a more extensive and lengthy solicitation process tailored to each of the Company’s individual assets, but that it might not be feasible to maintain momentum on an entity-level transaction while also conducting a more extensive individual asset sale process at that time.

On November 17, 2015, at a meeting of our board of directors with management and representatives of Proskauer present, Michael Happel, the Company’s chief executive officer, reviewed management’s estimate of the Company’s net asset value. This estimate was consistent with the preliminary financial information discussed by the Eastdil Secured group of Wells Fargo Securities with our board of directors at the meeting two days earlier. In addition, our board of directors discussed that, based on the limited asset-level proposals received by third parties for many of the Company’s assets, the potential increased value from a prolonged asset-level solicitation process did not serve as a sufficient basis to forego the potential to secure an entity-level transaction, which could represent higher and more certain value to stockholders of the Company relative to the potential market and execution risk of an asset-by-asset sale process at that time. Our board of directors directed Mr. Happel and Wells Fargo Securities to engage with Party A, Party B and Party C in an attempt to improve the terms of their respective proposals.

Following these meetings, in accordance with the directives of our board of directors, Wells Fargo Securities contacted each of Party A, Party B and Party C. Party A requested a meeting with Mr. Happel and Wells Fargo Securities to discuss Party A’s proposal. Party B was not willing to improve its proposal. Party C indicated that it could not improve the amount of consideration contemplated by its entity-level proposal or provide additional information regarding the potential source of capital that would be required to complete an entity-level transaction, but would be willing to discuss revisions to the verbal initial indication of interest it submitted on November 13, 2015.

Over the coming weeks, Mr. Happel and Randolph C. Read, the independent non-executive chairman of our board of directors, together with representatives of Wells Fargo Securities and, in one instance, Keith Locker, another independent member of our board of directors, met with representatives of Party A and its advisors in person and by telephone and exchanged emails with respect to Party A’s proposal and subsequent revisions thereof, including a potential alternative transaction structure excluding the Company’s interest in the Worldwide Plaza property and the Viceroy Hotel. Our board of directors was kept apprised of these discussions at various meetings and through other discussions and provided guidance and direction to Messrs. Happel and Read and Wells Fargo Securities to inform the substantive parameters of their discussions with Party A. Management, together with Proskauer and Wells Fargo Securities, also continued to review and evaluate a potential liquidation of the Company’s assets pursuant to a plan of liquidation as an alternative to an entity-level transaction with the Company.

Also during this period, Messrs. Read and Happel, together with representatives of Wells Fargo Securities, discussed other publicly traded REITs, in addition to Party A and Party C REIT, that could potentially be interested in an entity-level transaction with the Company. Based on these discussions, Messrs. Read and Happel or, at the request of Messrs. Read and Happel, representatives of Wells Fargo Securities contacted representatives of five publicly traded REITs that either previously had entered into

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non-disclosure agreements with the Company or declined to do so. None of these contacts led to any oral or written indications of interest, except with respect to Party D.

On November 27, 2015, Mr. Happel called Party D’s president, which led to meetings and discussions between Messrs. Happel and Read and Party D’s president and chief executive officer during December 2015 and January 2016. Following these discussions, on January 19, 2016, Party D sent a letter to Mr. Read proposing potential structures for a transaction in which Party D would acquire all outstanding shares of our common stock for consideration payable predominantly in Party D common stock, plus either contingent value rights or tracking stock to be issued to the Company’s stockholders with respect to the portion of the Company’s assets that Party D contemplated selling post-closing as part of its proposal. The letter did not, however, include a value for the Company or any of its assets, and Party D did not provide indications of value upon further requests.

On December 2, 2015, at a meeting of our board of directors with management and representatives of Proskauer and Wells Fargo Securities present, Wells Fargo Securities reviewed and summarized the potential transaction terms and discussions with each of Party A, Party B and Party C, as well as potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation. Also at this meeting, our board of directors unanimously authorized the retention by the compensation committee and the conflicts committee of our board of directors of Debevoise & Plimpton LLP (referred to herein as “Debevoise”), as special counsel to our independent directors in connection with matters related to the Advisor and the OPP as well as any other matters that might later be identified by the independent directors.

Following this meeting, Party A’s chief executive officer proposed orally to Mr. Read that Party A acquire all outstanding shares of our common stock in a merger transaction for approximately $11.25 per share, assuming the amount required to terminate the OP Units would be $26.0 million and that the Company would continue paying dividends at the then current rate for only three additional months following signing of a merger agreement (equivalent to approximately $0.12 per share), after which the Company would be required to suspend dividends. The proposal contemplated that $250 million of the purchase price would be paid in Party A common stock valued at not less than a fixed price per share that was slightly above the closing price of Party A common stock at that time. Party A also proposed that, if the Company sold the Viceroy Hotel after signing but before closing, excess net proceeds above certain thresholds could be distributed to stockholders of the Company prior to closing without reduction to the per share merger consideration.

On December 4, 2015, at a meeting of our board of directors with management and representatives of Proskauer and Wells Fargo Securities present, Mr. Read updated our board of directors on his discussions with Party A’s chief executive officer. In addition, our board of directors discussed Party B’s proposal and Party C’s proposal, which our board of directors concluded were both inferior to Party A’s proposal for various reasons, including the limited due diligence that Party B and Party C had conducted on the Company, the lower amount of consideration reflected in their proposals and the fact that their proposals lacked a clear and certain source of capital to finance a potential transaction. With respect to Party C’s proposal involving Party C REIT, our board of directors also considered that the consideration would be payable in Party C REIT common stock at an unspecified exchange ratio based on a price for Party C REIT common stock above the current trading level of Party C REIT common stock, the small size and low trading volume of Party C REIT’s public float, the portfolio of Party C REIT including multiple geographic markets and property types and the complexity of continuing to own and/or separately monetizing the Company’s interest in the Worldwide Plaza property. At this meeting, our board of directors also discussed the alternative of selling all or substantially all of the Company’s assets pursuant to a plan of liquidation as an alternative to an entity-level transaction with the Company. Following these discussions, our board of directors unanimously authorized entering into an exclusivity agreement with Party A to pursue a merger at a price equal to $11.25 per share and on the other terms discussed between Mr. Read and Party A’s chief executive officer.

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Also on December 4, 2015, a prominent business news organization published an article reporting that Party A was engaged in discussions to acquire the Company. On the next trading day, December 7, 2015, the price of Party A common stock declined by approximately 1.6% from its closing price on December 4, 2015 as compared to a 0.3% decline in the FTSE NAREIT U.S. Real Estate Index (the “REIT Index”) during the same period.

During the period from December 4, 2015 to December 9, 2015, discussions continued among the Company, Party A and their respective advisors regarding various terms of a potential transaction. Also during this period, Party A’s counsel sent Proskauer a due diligence request list and Proskauer sent Party A’s counsel a draft merger agreement and various other terms of a potential transaction were discussed and negotiated between Party A and the Company.

On December 9, 2015, Mr. Read and Party A’s chief executive officer discussed the status of negotiations, and Party A’s chief executive officer advised Mr. Read that he believed market reaction to the December 4 news report that Party A was pursuing a transaction with the Company was negative and he was instructing Party A’s counsel to suspend work on the transaction until further notice.

On or about December 14, 2015, Party A’s chief executive officer informed Mr. Read that Party A was formally withdrawing its proposal but would consider revisiting discussions during January 2016. The price of Party A common stock had declined by approximately 5.4% as of the market close on December 14, 2015 since the report of a potential transaction between Party A and the Company was published on December 4, 2015 as compared to a 2.0% decline in the REIT Index during the same period. From November 13, 2015 (the date of Party A’s initial indication of interest) through December 14, 2015, the price of Party A common stock had declined by approximately 3.3% as compared to a 1.1% increase in the REIT Index during the same period.

As a result of Party A’s withdrawal, during the remainder of December 2015 and into January 2016, management, together with Proskauer and Wells Fargo Securities, continued to review and evaluate the potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation. Management, with the assistance of Wells Fargo Securities, also engaged with other third parties regarding potential transaction at the asset or entity level during this period.

On December 14, 2015, Party E contacted Mr. Happel and representatives of Wells Fargo Securities regarding Party E’s potential interest in acquiring 1440 Broadway.

On December 17, 2015, at a meeting of our board of directors with representatives of Proskauer present, our board of directors discussed various potential strategic alternatives, including liquidation, given Party A’s decision to withdraw its proposal. Our board of directors was also informed at this meeting that management, with the assistance of and input from the Eastdil Secured group of Wells Fargo Securities, was continuing to review a plan of liquidation, which would be discussed further at a future meeting.

Mr. Read contacted a principal of Party F to gauge Party F’s interest in acquiring the Company, following which Mr. Happel, together with representatives of Wells Fargo Securities, held discussions with representatives of Party F about a potential entity-level transaction. In the course of these discussions, which extended into early January 2016, Party F conveyed an estimated value per share of the Company net of potential transaction costs of less than $10.00 and did not make any verbal or written indication of interest for a transaction.

On January 6, 2016, a representative of Party A contacted a representative of Wells Fargo Securities to express interest in restarting discussions regarding a potential transaction with the Company.

Also on January 6, 2016, a representative of Party G contacted a representative of Wells Fargo Securities to express interest in expanding Party G’s earlier indication of interest to potentially a greater number of the Company’s assets.

On January 8, 2016, Party E submitted a written indication of interest to acquire 1440 Broadway. Later that day, at a meeting of our board of directors with representatives of Proskauer and Wells Fargo Securities present, our board of directors discussed the status of potential asset-level transactions and agreed that the Company’s management, with the assistance of Wells Fargo Securities, should continue discussions with

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Party E, and received an update on the status of management’s review and evaluation, with input from the Eastdil Secured group of Wells Fargo Securities, of the potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation.

On January 12, 2016, Party H contacted Wells Fargo Securities to express interest in a potential transaction with the Company.

On January 14, 2016, the Company and Party E entered into a non-binding letter of intent for Party E to acquire 1440 Broadway at a price that was an improvement over the price included in Party E’s previously submitted indication of interest, subject to certain conditions. The Company’s board of directors preliminarily viewed the price as acceptable, and, as a result, the Company and Party E subsequently commenced negotiations on a definitive purchase and sale agreement for 1440 Broadway.

On January 15, 2016, Mr. Happel received a call from a principal of Party I expressing interest in a potential contribution of assets and cash into the Company in exchange for common stock and OP Units.

On January 20, 2016, Party A’s chief executive officer reconfirmed with Mr. Read that Party A was no longer interested in pursuing a potential transaction with the Company. From November 13, 2015 (the date of Party A’s initial indication of interest) through January 20, 2016, the price of Party A common stock had declined by over 16% as compared to a 4.1% decline in the REIT Index during the same period.

Also on January 20, 2016, at a meeting of our board of directors with management and representatives of Proskauer and Wells Fargo Securities present, representatives of management and Wells Fargo Securities each discussed their respective views regarding the potential costs, benefits and risks and other considerations of pursuing a plan of liquidation given the lack of firm entity-level proposals, including the estimated liquidating distribution amount per share. Our board of directors also discussed the potential disadvantages of continuing to operate the Company as a stand-alone entity, including the Company’s relatively small scale compared to other publicly traded REITs focused primarily on New York City, its limited internal growth prospects, its external management structure, the difficulty the Company faced in raising new capital and the difficulty of making accretive acquisitions relative to its cost of capital at the time.

On January 20, 2016, at the direction of the Company, the Eastdil Secured group of Wells Fargo Securities commenced a process to sell the Viceroy Hotel.

On January 21, 2016, Proskauer sent a draft plan of liquidation to our board of directors.

During the morning of January 22, 2016, Party E informed Mr. Happel that it would need to materially reduce its proposed purchase price for 1440 Broadway, citing a corporate level desire to revisit all of Party E’s in-process transactions in light of the increasingly volatile public market conditions since Party E had first made its proposal to acquire 1440 Broadway. Later that day, Party E informed Mr. Happel that it would not proceed with a transaction at any price.

On January 22, 2016, a JBG managing partner contacted a representative of Wells Fargo Securities to inquire about the potential for a business combination transaction involving JBG and the Company. Wells Fargo Securities thereafter apprised management of JBG’s inquiry, and, during late January and February, discussions regarding a potential business combination transaction involving JBG and the Company continued involving Messrs. Read and Happel, together with representatives of JBG, other representatives of the Company and representatives of their respective advisors. During February 2016, our board of directors was apprised of these discussions.

On January 28, 2016, Party G sent Wells Fargo Securities a non-binding written proposal to purchase all of the Company’s assets, excluding 1440 Broadway, Worldwide Plaza, the Viceroy Hotel and 1100 Kings Highway, which proposal was expressly subject to obtaining adequate financing. There were further discussions of a potential transaction with Party G, but no additional written proposals were received from Party G prior to termination of the discussions.

On February 16, 2016, a representative of Party J sent an email to a representative of Wells Fargo Securities to express Party J’s interest in a potential strategic investment in the Company.

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On February 19, 2016, a JBG managing partner emailed a non-binding indication of interest to Mr. Read, Mr. Happel and representatives of Wells Fargo Securities proposing a series of transactions that would result in the Company acquiring real estate assets and management business assets from JBG in exchange for shares of our common stock and OP Units.

During late February 2016 and continuing throughout March 2016, the Company and JBG exchanged drafts of the non-binding preliminary indication of interest and ongoing discussions were held among Mr. Read and representatives of JBG, as well as other representatives of the Company and representatives of Proskauer, Wells Fargo Securities and JBG’s legal and financial advisors, on a range of matters relating to a potential transaction between the Company and JBG. Also during this period, representatives of the Company and JBG held multiple in-person meetings and telephonic discussions regarding JBG’s assets and financial condition, the Company’s assets and financial condition and other due diligence topics, and also exchanged related information. Representatives of the Company’s and JBG’s respective financial advisors also attended these meetings and discussions. With respect to due diligence on JBG, the Company, with the assistance of its advisors, reviewed detailed information regarding JBG’s business, with a focus on JBG’s largest operating assets, development projects and land parcels and the submarkets in which JBG operates.

Also during this period, continuing on from the point of initial contact in either January or February 2016, representatives of the Company, together with representatives of Wells Fargo Securities, held in-person meetings (including property tours) and telephone conversations, and also exchanged emails, with Party H, Party I and Party J regarding the Company’s assets and financial condition, as well as the structure and proposed terms of a potential transaction involving Party H, Party I and Party J, on the one hand, and the Company, on the other hand. Each of these three potential transactions was structured as a contribution of assets to the Company, a cash investment in the Company, together with an internalization of management, new directors, a change of control of the Company and other governance changes. The assets that were contemplated to be contributed to the Company by Party H, Party I and Party J were also discussed and reviewed from a financial perspective by the Company with input from Wells Fargo Securities as part of this process.

The following summarizes the final terms of the proposals received from JBG, Party H, Party I and Party J prior to the Company entering into exclusivity with JBG, as described below, on April 1, 2016.

JBG.  The final terms of the proposal from JBG contemplated (i) a series of transactions that would result in the Company acquiring real estate assets and management business assets from JBG in exchange for newly issued shares of our common stock and OP Units in an amount that would result in a relative ownership percentage of the Company following completion of the transaction of approximately 65% owned by equity holders of JBG and 35% owned by equity holders of the Company, (ii) a nine-member board of directors, all of whom, except for Mr. Read, would be selected by JBG, with three principals of JBG serving as members, (iii) that current principals of JBG would be appointed as the executive officers of the Company at closing, (iv) internalization of the Company’s management with employees who were predominantly expected to be the current employees of JBG, as well as certain employees of the Advisor or its affiliates who previously were involved in the day-to-day management of the Company’s assets and who would become employees of the Company, (v) that the OPP and the Company’s advisory agreement with the Advisor would both be terminated at closing on terms to be negotiated, but that the Advisor would provide certain transition services to the Company following closing on terms to be negotiated, (vi) that the Company would reimburse JBG for its expenses in an amount to be negotiated if the required Company stockholder approval was not obtained, (vii) a customary “fiduciary out” provision enabling termination by the Company under certain circumstances upon payment of a customary fee in an amount to be negotiated to JBG, and (viii) that, at closing, the Company would change its name to “JBG Realty Trust, Inc.” and its headquarters would be moved from New York, New York to Chevy Chase, Maryland.
Party H.  The final terms of the sole non-binding preliminary indication of interest received from Party H (which was submitted on March 18, 2016 and not subsequently improved) contemplated (i) the contribution by Party H of real estate assets valued at $496 million net of existing debt and

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between $300 million and $1.2 billion in cash in exchange for common stock and OP Units issued based on the then current market price per share of our common stock, which based on a price per share of $9.83 (the closing price of our common stock on the NYSE on March 16, 2016) would result in Party H owning 30% to 50% of the Company on a fully diluted basis depending on the amount of cash contributed, (ii) a change in the composition of our board of directors such that a majority of our board of directors would be designated by Party H and (iii) that Party H would appoint a new management team which was unidentified, except that Party H’s current chief executive officer would serve as chairman of our board of directors while remaining as chief executive officer of Party H’s active development and redevelopment operations, which would not be contributed to the Company.
Party I.  The final terms of proposal from Party I contemplated (i) the contribution of New York City office real estate assets valued by Party I on a gross basis at $1.05 billion (without giving effect to debt or interests of joint venture partners) at an equity value to be mutually agreed upon in exchange for our common stock and OP Units based on the trading price per share of our common stock at the time of closing, (ii) the contribution of management assets by Part F valued by Party I at $95 million in exchange for common stock and OP Units issued based on a price per unit of $12.00, (iii) an unidentified institutional investor would make a $500 million commitment in joint venture co-investment capital on terms to be negotiated, although Party I did not provide a commitment letter with respect to this proposed investment, (iv) the potential for an additional $300 million in invested capital in the Company in an unidentified form and structure (which, in prior discussions and iterations of the proposal, had been funded through the issuance of a new series of convertible preferred stock), (v) internalization of the Company’s management with personnel of Party I assuming executive roles along with Mr. Happel, (vi) that the OPP and the Company’s advisory agreement with the Advisor would both be terminated at closing on terms to be negotiated, but that the Advisor would provide certain transition services to the Company following closing on terms to be negotiated, (vii) our board of directors expanded to nine members, three of whom would be appointed by Party I and one of whom would be an independent director approved by Party I, and (viii) Party I would conduct all future real estate activities through the Company.
Party J.  The final terms of the proposal from Party J contemplated (i) the contribution of a New York City office property valued by Party J at $1.2 billion (free and clear of its existing debt but with new mortgage financing in an amount of $450 million to be incurred concurrent with the transaction closing) in exchange for common stock and OP Units issued based on a price per share of our common stock of $12.40 per share, (ii) an investment of $300 million in our common stock issued at $12.40 per share, (iii) internalization of the Company’s management with personnel of both Party J and the Advisor (including Mr. Happel) combining to manage the Company, (iv) that the OPP and the Company’s advisory agreement with the Advisor would both be terminated at closing on terms to be negotiated, but that the Advisor would provide certain transition services to the Company following closing on terms to be negotiated, (v) our board of directors would be expanded to ten members, four of whom would be appointed by Party J, (vi) the formation of an investment committee of four members empowered to monitor the overall investment activities of the Company, with two members nominated by Party J, and (vii) Party J would conduct all future real estate activities in New York through the Company. Party J’s valuation of the property at $1.2 billion represented more than a 50% premium to Party J’s purchase price for the property it acquired approximately two and a half years prior.

At various meetings during this period, at which management and representatives of Proskauer, Debevoise and Wells Fargo Securities participated, our board of directors was kept apprised of the status of this process, including the terms proposed by and discussed with JBG, Party H, Party I and Party J.

On March 2, 2016, in a letter to Mr. Read, Party D proposed to acquire the Company’s interest in the Worldwide Plaza property for an amount the Company did not find acceptable. No further discussions occurred given the low valuation ascribed to our interest in the Worldwide Plaza property.

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On March 23, 2016, the Company received “first round” indications of interest to acquire the Viceroy Hotel. The two month third party solicitation process for the Viceroy Hotel included contacting approximately 1,000 potential parties regarding interest in the property, executing approximately 200 non-disclosure agreements and conducting property tours with over 20 potential investors. Discussions continued thereafter to improve and refine the terms of potential definitive transactions. None of the indications of interest rose to a level that the Company found acceptable.

On March 28, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Venable LLP (“Venable”), Maryland counsel to the Company, Debevoise and Wells Fargo Securities present, our board of directors discussed the latest proposals received from JBG, Party H, Party I and Party J. With respect to Party I’s proposal and Party J’s proposal, our board of directors discussed issues raised by management and Wells Fargo Securities regarding the valuation of the assets to be contributed by Party I and Party J (including the fact the Party J’s valuation of the New York City office property to be contributed by Party J to the Company was more than 50% higher than Party J’s purchase price for the property made only approximately two and a half years earlier and was 30% higher than Party J’s basis in the property (i.e., purchase price plus capital invested since the date of purchase) even though occupancy at the property remained substantially unchanged since Party J’s purchase of the property), which our board of directors believed were too high, and, with respect to Party I’s proposal, the lack of commitments for the required financing. Our board of directors also discussed concerns with respect to Party H’s proposal, including the valuation of the asset to be contributed, the lack of clarity regarding financing and management arrangements, as well as potential conflicts of interest related to Party H’s current chief executive officer serving as chairman of our board of directors while remaining as chief executive officer of Party H’s active development operations. At this meeting, our board of directors also discussed updated information regarding an estimated liquidating distribution amount per share and potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation. Also at this meeting, following discussions, our board of directors unanimously authorized entry into an exclusivity arrangement with JBG and agreed that Mr. Read and Mr. Happel, together with representatives of Wells Fargo Securities, should continue to engage with Party I and Party J to seek to improve the terms of their respective proposals before an exclusivity agreement with JBG was executed.

On the morning of April 1, 2016, Mr. Read convened a teleconference with the board members who were able to attend to discuss the status of negotiations with JBG and Party I and Party J. Representatives of Proskauer and Wells Fargo Securities also participated in the teleconference. On the teleconference, the representatives of Wells Fargo were instructed to follow up with Party I and Party J regarding their respective revised proposals, which were expected by a deadline set for later that day. Prior to this deadline, revised proposals were received from Party I and Party J as described in more detail above.

During the evening on April 1, 2016, Mr. Read convened a teleconference with the board members who were able to attend to discuss the final revised proposals from Party I and Party J. Mr. Happel, as well as representatives of Proskauer and Wells Fargo Securities were present. The view of the members of our board of directors then present was that the improvements in Party I’s proposal and Party J’s proposal were not sufficient, in light of the issues with respect to both proposals discussed at previous meetings, to justify the risk that not entering into exclusivity with JBG could disrupt negotiations at a critical stage.

Following this discussion, on April 1, 2016, in accordance with the unanimous authorization of our board of directors on March 28, 2016, the Company entered into an exclusivity agreement with JBG.

During the period from the execution by JBG and the Company of the exclusivity agreement on April 1, 2016 until the execution of the JBG Combination Agreement on May 25, 2016, drafts of the JBG Combination Agreement and other documents contemplated thereby were exchanged among JBG, the Company and their respective advisors, and due diligence review and discussions regarding the potential business and strategy of the combined company were conducted. Our board of directors was kept apprised of these discussions and analysis at various meetings. In addition, on April 18, 2016, principals of JBG met with members of our board of directors at our offices in New York, with Mr. Happel and representatives of Proskauer present, to discuss JBG’s business and strategy and various elements of the proposed transaction, and the independent directors met in executive session following this meeting.

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Also during this period, at meetings of the compensation committee and the conflicts committee of our board of directors with representatives of Debevoise present, the compensation committee and the conflicts committee discussed the proposed terms of the agreements with the Advisor and its affiliates (including our chief executive officer) contemplated by the JBG Combination Agreement.

On May 4, 2016, the Company received an unsolicited proposal from Party C contemplating an acquisition of all shares of our common stock in a merger transaction with Party C REIT, at an implied price per share of $10.80 payable $3.00 per share in cash and the balance payable in Party C REIT stock based on an exchange ratio that was calculated utilizing a 15% premium to the closing price of Party C REIT’s stock on May 4, 2016. The proposal also contemplated that an affiliate of Party C, the external manager of Party C REIT, would continue as the external manager of the combined company. This unsolicited proposal was the only proposal or indication of interest the Company received during the period commencing when the exclusivity agreement with JBG was first executed on April 1, 2016 until the JBG Combination Agreement was executed on May 25, 2016.

On May 8, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise and Wells Fargo Securities present, our board of directors discussed open points in the potential transaction with JBG and updated information regarding an estimated liquidating distribution amount per share, as well as potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation. Also at this meeting, Wells Fargo Securities reviewed the May 4 proposal received from Party C and certain background information regarding Party C, including preliminary financial observations regarding the assets of Party C REIT, the form and amount of the consideration (particularly with respect to the small size of Party C REIT’s public float and the low trading volume of Party C REIT common stock) and the contemplated external management structure. Our board of directors also discussed that it would not be prudent to engage with Party C, or any other potential counterparty, at this time given the status of negotiations with JBG, which could have been materially and adversely disrupted by any such engagement. Following this discussion, our board of directors decided that negotiations should proceed with JBG and unanimously authorized a further extension of exclusivity with JBG.

The exclusivity agreement between the Company and JBG expired by its terms at midnight on May 10, 2016, but the parties continued their discussions and negotiations regarding the potential transaction without an exclusivity arrangement in effect.

On May 13, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, our board of directors directed representatives of Wells Fargo Securities and representatives of Proskauer to respond to Party C’s May 4 proposal by acknowledging its receipt.

On May 19, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, Proskauer and Wells Fargo Securities discussed the status of negotiations with JBG, and, in light of the progress made in the negotiations, our board of directors unanimously authorized reentry into an exclusivity agreement with JBG.

Between May 23, 2016 and May 25, 2016, our board of directors met, with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, and reviewed financial aspects of the proposed transaction and the terms of the JBG Combination Agreement and the agreements with the Advisor and its affiliates that would be executed in connection with the execution of the JBG Combination Agreement. Among the terms set forth in JBG’s final proposal before JBG and the Company entered into exclusivity that were clarified or changed in the final definitive form of the JBG Combination Agreement were (i) that equity holders of JBG would collectively own approximately 65.2% of the outstanding common stock of the combined company on a fully diluted basis and the existing stockholders of the Company and the existing limited partners of the OP would own approximately 34.8% of the outstanding common stock of the combined company on a fully diluted basis, (ii) that the size of the “topping fee” payable to JBG upon termination under certain circumstances, which was initially requested by JBG to be

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$70 million, would be $55 million and (iii) that the maximum amount of expenses payable to either JBG or the Company upon termination under certain circumstances, which was initial requested by the Company to be $2 million, would be $10 million.

In addition, the compensation committee and the conflicts committee of our board of directors met, with representatives of Debevoise present, and approved, and recommended that our board of directors approve, the agreements with the Advisor and its affiliates that would be executed in connection with the execution of the JBG Combination Agreement. Open points negotiated and finalized with respect to these agreements during this period included the amount and form of the consideration payable under the agreement terminating the OPP with respect to the period after April 15, 2016, which was initially requested by the Advisor to be $55 million in cash and ultimately agreed to be 2,865,916 shares of our common stock, which would be equivalent to approximately $28 million based on $9.77 per share, the closing price of our common stock on May 24, 2016, the last trading day prior to the date of the JBG Combination Agreement. The approval of the conflicts committee was unanimous and the approval of the compensation committee was not unanimous, with one member voting against. In approving these agreements, the compensation committee and the conflicts committee took into account, among other factors, (i) JBG’s requirement, which had been consistent since its initial proposal, that the OPP and the advisory agreement be terminated in connection with the JBG Combination Transactions, (ii) the belief of committee members that it was important to secure the cooperation of the Advisor in the effectuation of the JBG Combination Transactions and in the period after closing, including by the Advisor making available and waiving the non-compete restrictions on its personnel who were expected to become employees of the combined company after the closing, and (iii) the request by JBG that Mr. Happel provide post-closing assistance and the belief of committee members that Mr. Happel’s continued assistance after closing would be valuable to the combined company.

In the afternoon on May 25, 2016, our board of directors met, with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, to discuss the proposed transaction with JBG. Following this discussion, our board of directors approved the JBG Combination Agreement, the JBG Combination Transactions and the other transactions contemplated by the JBG Combination Agreement. This approval was by a vote of five directors voting for and one director voting against. All approvals by our board of directors of extensions to the exclusivity agreement between JBG and the Company, as well as the initial authorization to enter into the exclusivity agreement, had been unanimous (including the director who voted against at this meeting). The members of our board of directors voting to approve the JBG Combination Agreement took into account, among other factors, (i) their belief that the JBG Combination Transactions would enhance the value of the Company over the long term, (ii) their belief that the value of the JBG Combination Transactions was superior as compared to the net proceeds the Company would receive on liquidation based on its estimated net asset value, in the course of which our board of directors considered that the present value of the actual liquidating distributions would likely be materially less than the undiscounted estimated total gross liquidating distributions, (iii) the potential benefits to the Company that could result from the internalization of management, (iv) the strengths of JBG’s management team, (v) the opportunity for the Company’s current stockholders to participate in the enhanced internal growth opportunities of the combined company, (vi) the process and substance of the strategic alternatives review conducted by our board of directors with input from the Company’s outside advisors and (vii) the opinion of Wells Fargo Securities, based on and subject to the various matters, assumptions, qualifications and limitations set forth therein, as to the fairness, from a financial point of view and as of the date of such opinion, to the Company of the aggregate consideration to be paid by the Company in the JBG Combination Transactions.

Following this meeting, after the close of trading on the NYSE on May 25, 2016, the parties executed and delivered the JBG Combination Agreement and the other agreements contemplated thereby and issued a joint press release announcing their entry into the JBG Combination Agreement.

Following the announcement of the JBG Combination Agreement, both the Company and JBG received negative feedback regarding the JBG Combination Transactions. The Company and JBG met with a number of stockholders of the Company in the weeks following the announcement, who generally indicated that they would not support a vote for the JBG Combination Transactions. Among the concerns voiced by stockholders and considered by our board of directors were (i) the value ascribed to the assets to be contributed by JBG to the Company, (ii) the lack of consideration in cash or liquid securities payable to the Company’s stockholders,

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(iii) that the combined company would no longer be purely focused on New York City real estate, (iv) that the combined company would be more highly leveraged than the Company, and (v) that the combined company would be more heavily concentrated in land, development and construction assets, as compared to the largely stabilized assets held by the Company. At meetings of our board of directors held on June 10, 2016 and June 24, 2016, our board of directors discussed the concerns expressed by these stockholders.

Also during this period, Messrs. Read and Happel and representatives of JBG held informal discussions regarding potential changes that could be made to the JBG Combination Transactions to make them potentially more attractive to the Company’s stockholders. During this period, the parties also discussed a potential mutual termination of the JBG Combination Transactions although neither the Company nor JBG had the right to unilaterally terminate the JBG Combination Transactions.

On June 30, 2016, a JBG managing partner sent a letter proposing changes to the JBG Combination Transactions intended to make the JBG Combination Transactions potentially more attractive to the Company’s stockholders. The proposal contemplated that (i) nine of the Company’s properties (including the Worldwide Plaza property, assuming the exercise of the WWP Option) would be sold to an unidentified third party as a condition to and in connection with the closing of the JBG Combination Transactions, as amended, (ii) a distribution at closing of $3.75 per share in cash to the Company’s stockholders which represented part, but not all, of the expected net cash proceeds from the proposed sale of the nine properties to an unidentified third party, (iii) a change in the relative ownership percentage of the Company reflecting the cash distribution to approximately 78.7% owned by equity holders of JBG and 21.3% owned by equity holders of the Company, (iv) no change to the relative valuation of JBG and the Company, (v) that the OPP would not be terminated and would be paid out, if at all, in 2017 in accordance with its terms, thereby eliminating the negotiated $28 million payment to the Advisor due upon consummation of the JBG Combination Transactions, (vi) reducing the payment to the Advisor pursuant to the transition services agreement from $7 million over its term to cost plus 10% subject to a cap of $2.5 million, and (vii) changing the compensation payable to Mr. Happel after consummation of the JBG Combination Transactions from a fixed amount to an amount based on the performance of our common stock.

On July 2, 2016 and July 6, 2016, at meetings of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, our board of directors discussed JBG’s proposal, but remained concerned that the proposal did not fully address stockholder concerns. Our board of directors also discussed making a counterproposal to JBG and pursuing other alternatives such as selling all or substantially all of the Company’s assets pursuant to a plan of liquidation. Following this discussion, our board of directors asked representatives of Wells Fargo Securities and Proskauer to advise JBG that our board of directors was not interested in continuing discussions unless substantially all of the proceeds from the proposed asset sales were distributed to the Company’s stockholders and the allocation of ownership was revised to provide the Company’s stockholders with a greater interest. At the meeting held on July 6, 2016, our board of directors also reviewed and discussed an updated estimate of the range of proceeds from selling all or substantially all of the Company’s assets pursuant to a plan of liquidation.

On July 12, 2016, following several telephone calls and e-mail correspondence regarding the view of our board of directors, Messrs. Happel and Read, together with representatives of Wells Fargo Securities, met with representatives of JBG and its financial advisor. At this meeting, JBG orally proposed revisions to its proposal, including that the Company would conduct pre-closing asset sales and distribute the net proceeds to its stockholders and that JBG would provide financing to fund, in part, the exercise of the WWP Option. The terms of a potential termination of the JBG Combination Agreement were also discussed.

On July 13, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, our board of directors discussed the revisions proposed by JBG and a counterproposal to JBG contemplating that (i) the Company would identify a subset of its assets to be sold to third parties for cash and distribute the net sale proceeds to stockholders prior to the JBG Combination Transactions, (ii) the remaining assets would be valued at a premium to reflect the value to JBG of gaining access to the public markets through the JBG Combination Transactions, and (iii) JBG would offer the Corporation’s stockholders the option to receive cash at a fixed exchange ratio in

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lieu of retaining common stock in the combined company. At this meeting, the terms of a potential termination of the JBG Combination Agreement were also discussed.

Over the next few weeks, representatives of JBG and the Company and their respective legal and financial advisors discussed potential terms of amending the JBG Combination Agreement, as well as the terms of a potential termination of the JBG Combination Agreement in the event that the parties could not agree on revisions to the JBG Combination Agreement, and our board of directors was apprised of the status of these discussions at meetings held on July 20, 2016 and July 22, 2016.

On July 27, 2016, JBG delivered its final revised proposal, which did not offer the Company’s stockholders the option to receive cash at a fixed exchange ratio in lieu of retaining common stock in the combined company or lower the value ascribed to the assets to be contributed by JBG to the Company.

On July 29, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, our board of directors discussed the revised proposal received from JBG and concluded that a mutually agreeable revision to the terms of the JBG Combination Transactions could not be reached. At this meeting, our board of directors also discussed:

pursuing a strategy to begin the process of selling assets to the extent permitted under the Credit Facility and Maryland law, with the proceeds distributed to stockholders, and concurrently seeking to either amend the Credit Facility or obtain new financing to repay the Credit Facility in full, in order to provide additional capital for the Company to exercise the WWP Option, and provide the Company increased flexibility to sell assets and distribute the permitted proceeds to stockholders;
that the Company could remain open to pursuing an entity-level transaction if the opportunity arose while pursuing this asset sale and refinancing plan;
management’s estimate, with input from the Eastdil Secured group of Wells Fargo Securities, of the range of liquidating distributions if the Company were to adopt, subject to stockholder approval, a plan of liquidation to sell all or substantially all of the Company’s assets, and related considerations; and
the terms of a potential agreement (the “Termination Agreement”) with JBG to terminate the JBG Combination Agreement pursuant to which the parties would agree to release each other from claims and liabilities arising out of, or relating to, directly or indirectly, the JBG Combination Agreement or the events leading to the termination of the JBG Combination Agreement and various other related matters and the Company would pay JBG $9.5 million in cash as reimbursement for certain expenses incurred by JBG (with our board directors recognizing the Company would be obligated to pay JBG up to $10 million in expenses if the Company’s stockholders did not approve the JBG Combination Transactions).

On August 1, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, our board of directors approved the Termination Agreement and the asset sale and refinancing plan. This approval was by a vote of five directors voting for and one director (who was the same director that voted against the proposal to approve the JBG Combination Agreement) voting against. Our board of directors also unanimously approved the release of all entities (other than JBG) from their existing standstill obligations.

Before the opening of trading on the NYSE on August 2, 2016, the parties executed and delivered the Termination Agreement and the Company issued a press release announcing the entry into the Termination Agreement and the adoption by our board of directors of the asset sale and refinancing plan discussed at the July 29 meeting. In connection with the Termination Agreement, all parties (other than JBG) were released from their standstill obligations that were still effective from prior non-disclosure agreements.

Following this announcement, management, with input from the Eastdil Secured group of Wells Fargo Securities and Proskauer, continued to consider and review implementing a potential plan of liquidation.

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On August 17, 2016, the Company entered into an amendment to the Credit Facility modifying a representation in the Credit Facility, which previously prohibited the contemplation of a liquidation so that the modified representation would permit the Company to contemplate, and ultimately adopt, a plan of liquidation if the Company so desired.

On August 21, 2016, at a meeting of our board of directors with management and representatives of Proskauer, Debevoise, Venable and Wells Fargo Securities present, our board of directors received an update regarding the Company’s strategic alternatives process and a potential plan of liquidation, including the Total Liquidating Distributions Range, and related considerations. Following this discussion, our board of directors determined that the plan of liquidation was advisable and in the best interests of the Company, approved the plan of liquidation and recommended that the Company’s stockholders vote to approve the plan of liquidation. This approval was by a vote of five directors voting for and one director (who was the same director that voted against the proposal to approve the JBG Combination Agreement) voting against.

On August 22, 2016, the Company issued a press release announcing the approval of the plan of liquidation by our board of directors.

On November 20, 2016, our board of directors amended the plan of liquidation, which had initially provided that the board of directors may terminate, modify or amend the plan of liquidation at any time before or after it is approved by our stockholders, such that, following the amendment, our board of directors may terminate the plan of liquidation without stockholder approval if the plan of liquidation is not approved by our stockholders, we enter into a merger or other transaction involving the sale or other disposition of all or substantially all of our assets or common stock or in connection with an adverse change in the market for Manhattan office properties that reasonably would be expected to adversely affect proceeding with the plan of liquidation, and may also otherwise modify or amend the plan of liquidation at any time before or after it is approved by our stockholders.

Reasons for the Plan of Liquidation

In evaluating the plan of liquidation, our board of directors consulted with management and the Advisor, as well as outside legal and financial advisors. In reaching a determination that the plan of liquidation is advisable and in the best interests of the Company and approving the plan of liquidation and recommending that our stockholders vote to approve the plan of liquidation, our board of directors considered a number of factors, including, in the view of our board of directors, the following material factors:

our board of directors believed that the Company, with the assistance of Wells Fargo Securities, had checked the market for a sale of the entire Company or other entity-level transactions through the strategic review process conducted from October 2015 through May 2016, contacting over 100 parties, including foreign investors, publicly traded REITs, private equity funds and other real estate investors, to solicit potential interest in a strategic transaction at an asset or entity level, 85 of which signed a non-disclosure agreement at the asset or entity level or both, resulting in the following:
º the Company, at the direction of our board of directors, negotiated a definitive agreement with JBG and negotiated with other potential counterparties regarding potential alternative transactions; and
º other than the offer that led to the JBG Combination Agreement with JBG, no other offers on an entity level were received and not withdrawn on terms which our board of directors considered attractive relative to the alternatives at the time and which had a reasonable likelihood of closing;
our board of directors determined, based upon discussions with certain of our stockholders, that many of our stockholders preferred a liquidation of the Company’s assets or another transaction that provided our stockholders with cash or liquid securities for their shares of our common stock rather than having the Company operate as a going concern;
the tax benefits to certain of our stockholders from the fact that liquidating distributions will be non-taxable to a U.S. stockholder until cumulative liquidating distributions to that stockholder

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exceed the tax basis in the stockholder’s shares and then would be taxable at capital gains rates, rather than a portion of each distribution potentially being taxable at ordinary income rates if distributions were made in the ordinary course of business rather than as liquidating distributions;
our board of directors reviewed and considered pursuing a variety of potential strategic alternatives, including a sale or merger of the Company, continuing to operate the Company and transactions which would involve investments by third-party investors for minority or majority ownership of the Company with internalization of management;
discussions with JBG regarding potential changes that could be made to the JBG Combination Transactions to make them potentially more attractive to the Company’s stockholders led our board of directors to conclude that a mutually agreeable revision to the terms of the JBG Combination Transactions could not be reached and that termination of the JBG Combination Agreement was in the best interests of the Company;
during the course of its strategic alternatives review commencing in October 2015, our board of directors had extensively discussed and considered, based on review and evaluation by management and the Advisor, as well as outside legal and financial advisors, the potential costs and benefits of, and potential impediments to, selling all or substantially all of the Company’s assets pursuant to a plan of liquidation;
our board of directors discussed liquidation as a potentially attractive alternative given the potential disadvantages of continuing to operate the Company as a stand-alone entity, including the Company’s relatively small scale compared to other publicly traded REITs focused primarily on New York City, its limited internal growth prospects, its external management structure, the difficulty the Company faced in raising new capital and the difficulty of making accretive acquisitions relative to its cost of capital at the time at multiple meetings, including:
on November 15 and 17, 2015, when our board of directors was first considering the steps to take in connection with indications of interest received in the third-party solicitation process;
on January 20, 2016, following formal termination of the discussions with Party A;
on March 28, 2016, prior to our board of directors authorizing entry into an exclusivity agreement with JBG; and
on May 8, 2016, prior to our board of directors authorizing a further extension of exclusivity with JBG;
our board of directors considered the fact that if the Company were to continue to operate, the Company would require additional capital to grow its business and that raising additional capital and making accretive acquisitions relative to its cost of capital would be difficult at this time;
our board of directors considered the fact that the Company could still, if the opportunity arose, consider and pursue an entity-level transaction for consideration payable in cash or liquid securities during the course of implementing a plan of liquidation; and
following this review and consideration, our board of directors believes that the liquidating distributions that the Company will make to stockholders in connection with the plan of liquidation would likely maximize stockholder value relative to the other available strategic alternatives.

In the course of its deliberations, our board of directors also considered a variety of risks and other countervailing factors related to the plan of liquidation. The risks and other countervailing factors relating to the plan of liquidation include, but are not limited to, the following:

the need to complete a refinancing of, or amend, the Credit Facility (which was repaid in full out of the proceeds of the New Financing) to enable the Company to proceed with the sale of all or substantially all the Company’s assets without breaching the Credit Facility;

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the fact that the Credit Facility limited our ability to sell the 12 assets included in the borrowing base of the Credit Facility pursuant to a plan of liquidation or otherwise, unless the Credit Facility was repaid or amended or the Company substituted additional unencumbered collateral with equal or greater value and equal or greater net operating income;
the requirement under the existing joint venture agreement related to the Worldwide Plaza property that the Company would need its joint venture partner’s consent in order to sell its existing 48.9% ownership interest in the joint venture that owns the Worldwide Plaza property or to sell the WWP Option;
the existing loans encumbering the Worldwide Plaza property include provisions which could limit the Company’s ability to assume those loans without lender consent upon the exercise of the WWP Option and could also indirectly limit the Company’s ability to sell assets prior to the exercise of the WWP Option due to the risk that the Company’s sale of assets prior to exercising the WWP Option could cause the Company not to meet the requirements for assuming the loans encumbering the Worldwide Plaza property without lender consent;
repayment of the existing loans encumbering the Worldwide Plaza property could result in a substantial defeasance cost, which, as of December 1, 2016, we estimate to be approximately $137.0 million;
that the Company would need to raise additional capital to exercise the WWP Option;
if the WWP Option is exercised, we may be liable for New York State and New York City real property transfer taxes on the sale of that portion of the Worldwide Plaza property that we would not have liability for had we sold the WWP Option directly;
it is possible we could become subject to the 100% excise tax on “prohibited transactions” if we are unable to avail ourselves of the safe harbor provided in the Code on the sales of our assets pursuant to the plan of liquidation or otherwise structure our property sales so that such tax would not be applicable;
we intend, for tax purposes, to transfer our remaining unsold properties to a liquidating trust if we are unable to sell all of our assets and distribute the net proceeds to our stockholders within 24 months of the plan of liquidation being approved by stockholders, which may cause stockholders to recognize taxable gain at the time of such transfer, prior to the receipt of cash, and may have adverse tax consequences on tax-exempt and non-U.S. stockholders;
the costs incurred by the Company in connection with implementing the plan of liquidation would be significant and may be greater than estimated;
that the price of our common stock is likely to decline or become more volatile due to the gradual liquidation of the Company and the distribution of proceeds from asset sales;
if we establish a liquidating trust, the trust will likely provide for a prohibition on the transfer of trust interests subject to certain limited exceptions;
the fact that following the adoption of the plan of liquidation and the sale of our assets, our stockholders will no longer participate in any earnings or growth from any additional investments or from acquisitions of additional assets; and
the other potential risks described in the section titled “Risk Factors” elsewhere in this proxy statement.

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In addition, our board of directors was aware of and considered the interests of its directors and executive officers, including all of our executive officers and one of our directors in their capacity as executives or members of the Advisor, that are different from, or in addition to, the interests of our stockholders generally in effect at the time our board of directors made its decision, including:

the following fees and expenses would have been payable to our Advisor and its affiliates under the Advisory Agreement and the Property Management Agreement prior to their amendment as part of the arrangements entered into on December 19, 2016 providing for the transition of advisory services from the Advisor to the Service Provider:
if our Advisor provided a substantial amount of services as determined by our independent directors in connection with a sale of one or more properties, our Advisor would have received a brokerage commission in an amount not to exceed the lesser of 2% of the contract sales price of the property and one-half of the total brokerage commission paid if a third-party broker was also involved; provided, however, that in no event could the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission;
our Advisor is entitled to receive asset management fees and may receive reimbursement of expenses;
our Property Manager, which is under common control and ownership with the Advisor, is entitled to receive fees and may receive reimbursement of expenses;
all outstanding and unvested restricted shares, including 141,135 unvested restricted shares held by our directors and executive officers in the aggregate as of the record date and any restricted shares granted to our directors in connection with the 2016 annual meeting, will vest upon the sale of all or substantially all of our assets;
all outstanding and unvested earned LTIP Units issued under the OPP, to the extent not previously vested, would have vested upon the sale of all or substantially all of our assets, and there were then, and are currently, 1,172,738 LTIP Units that have been earned but have not yet vested, 24,170 of which are held by Nicholas Radesca, our interim chief financial officer, and the remainder of which are held by the individual members of our Sponsor, which owns and controls our Advisor, including 229,714 earned LTIP Units held by Michael A. Happel, our chief executive officer and president, and 124,198 earned LTIP Units held by William Kahane, a member of our board of directors and a control person of the Advisor; and
additional LTIP Units issued under the OPP to the Advisor are eligible to be earned on the final valuation date under the OPP scheduled on April 15, 2017, based on the achievement of certain absolute and relative performance criteria related to the total return to our stockholders (share price appreciation plus dividends and other distributions), and the OPP provides that if a liquidation in the good faith judgment of the compensation committee of our board of directors necessitates action by way of equitable or proportionate adjustment in the terms of these LTIP Units to avoid distortion in the value of the LTIP Units, the compensation committee shall make equitable or proportionate adjustments and take such other action as it deems necessary to maintain the LTIP Unit rights under the OPP so that they are substantially proportionate to the rights of LTIP Units existing prior to the liquidation.

In view of the wide variety of factors considered, our board of directors did not find it practical, and did not attempt, to quantify, rank or otherwise assign relative weights or values to any of the factors it considered in reaching its decision and did not undertake to make any specific determination as to whether any particular factor, or any aspect of any particular factor, was favorable or unfavorable to the ultimate decision. In addition, individual members of our board of directors may have given different weight to different factors. In considering the various factors, individual members of our board of directors considered all of these factors as a whole and five of the six members of our board of directors concluded, based on the totality of information presented to them and the investigation conducted by them, that, on balance, the positive factors outweighed

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the negative factors and that they supported a determination to approve the plan of liquidation, declare its advisability and recommend that our stockholders vote to approve the plan of liquidation.

Recommendation of Our Board of Directors

OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE PLAN OF LIQUIDATION.

Estimated Liquidating Distributions

Timing and Amount of Liquidating Distributions

If the plan of liquidation is implemented, we will seek to sell most or all of our assets and make most or all of the liquidating distributions within six to 12 months after the plan of liquidation is approved by our stockholders, although there is no assurance such sales and such distributions will be made within that time period. Our board of directors has not established a specific timetable for paying liquidating distributions to stockholders under the plan of liquidation. Under the terms of the plan of liquidation and Maryland law, we may make one or more distributions from time to time, after providing or reserving for the payment of our obligations and liabilities, as we sell or otherwise liquidate our assets. We will be unable to pay liquidating distributions until we repay the amount required to be repaid under the new credit facility refinancing the Credit Facility, which may delay the timing of liquidating distributions or, depending on the terms of the new credit facility, prevent liquidating distributions until we repay our indebtedness in full. All distributions will be paid to stockholders of record at the close of business on the record dates to be determined by our board of directors, pro rata based on the number of shares owned by each stockholder.

The Company, with input from the Eastdil Secured group of Wells Fargo Securities, has estimated that the net proceeds that will be distributed to stockholders over time from the plan of liquidation taking into account estimated transaction costs, will be between $8.49 and $11.26 per share, which we refer to herein as the Total Liquidating Distributions Range.

Our Total Liquidating Distributions Range is an estimate and does not necessarily reflect the actual amount that our stockholders will receive in liquidating distributions, and the actual amount may be more or less than the Total Liquidating Distributions Range, for various reasons discussed in this proxy statement, including in the section entitled “Risk Factors.” The actual amount that we will distribute to you in the liquidation will depend upon the actual amount of our liabilities, the actual proceeds from the sale of our properties, the actual fees and expenses incurred in connection with the sale of our properties, the actual expenses incurred in the administration of our properties prior to disposition, the actual general and administrative expenses of the Company, including fees and expense reimbursements paid to the Service Provider, the Advisor and the Property Manager and other liabilities that may be incurred by the Company, our ability to continue to meet the requirements necessary to retain our status as a REIT throughout the period of the liquidation process, our ability to avoid U.S. federal income and excise taxes throughout the period of the liquidation process and other factors. If our liabilities (including, without limitation, tax liabilities and compliance costs) are greater than we currently expect or if the sales prices of our assets are less than we expect, you will receive less than the estimated liquidation payment for each share of our common stock that you currently own.

Pursuant to the plan of liquidation if implemented, we will make liquidating distributions in one or more payments. However, we cannot be sure how many liquidating distributions will be made, or when they will be made. The actual timing of the liquidating distributions we pay under the plan of liquidation depends on a number of factors outside of our control depends on a number of factors outside of our control discussed in this proxy statement, including in the section entitled “Risk Factors.”

You may also receive an interest in a liquidating trust that we may establish under the circumstances discussed below. Distributions that you may receive from the liquidating trust, if any, are included in our estimates of the Total Liquidating Distributions Range. Further, if we establish a reserve fund to pay for liabilities following the liquidation, the timing and amount of your distributions in the liquidation may be adversely impacted.

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Calculation of Estimated Liquidating Distributions

In estimating our Total Liquidating Distributions Range, we have relied on management’s estimate of the value of our assets, with input from the Eastdil Secured group of Wells Fargo Securities, and the costs we will incur as a result of and during the liquidation process. The range of estimated liquidating distributions is based in part on an estimated range of gross real estate sales prices of approximately $3.5 billion to $3.9 billion (a percentage difference of approximately 11.7%), including the Worldwide Plaza property based on a sale of a 100% interest in the Worldwide Plaza property. This estimated range of gross real estate sales prices implies a capitalization rate range of 4.2% to 4.7% based on estimated annualized cash net operating income for the second quarter of 2016 of approximately $162 million, including the estimated annualized cash net operating income from Worldwide Plaza on a 100% basis. These estimates of the gross real estate sales prices of our assets are based, in part, on cash flow projections for our assets, taking into account market knowledge and experience of management and the Eastdil Secured group of Wells Fargo Securities. The reason the percentage differential shows a Total Liquidating Distributions Range of 32.6% ($8.49 and $11.26 per share), when compared to an approximately 11.7% range in estimated gross real estate sales prices, is because, after deducting debt and the costs of selling the assets and liquidating, the approximately $400 million range in gross real estate sales prices is measured against a smaller base number.

Our estimated Total Liquidating Distributions Range was derived, in part, from estimated total gross real estate sales prices as described above, less the amount required to exercise the WWP Option, total debt, estimated asset sale transaction costs and estimated liquidation costs, but adjusted upwards for estimated interim operating cash flows, as well as existing cash and working capital.

Our estimated transaction costs (ranging from $155.6 million on the low end of the Total Liquidating Distributions Range and $170.1 million on the high end) included (i) estimated asset sale transaction costs, which included, among other costs, brokerage commissions, disposition fees to the Advisor (which are no longer payable under the Advisory Agreement, as amended in connection with our entry into the Services Agreement), legal fees, transfer tax liabilities and debt prepayment and assumption costs and (ii) estimated liquidation costs which included, among other costs, costs related to refinancing the Credit Facility and legal and administrative costs related to this proxy statement, the special meeting and other steps required to practically implement the plan of liquidation, but which did not give effect to the arrangements entered into on December 19, 2016 providing for the transition of advisory services from the Advisor to the Service Provider. The changes relating to the transition of advisory services from the Advisor to the Service Provider are not expected to have a material impact on the estimated Total Liquidating Distributions Range per share.

Our estimated Total Liquidating Distributions Range per share was based on the number of shares of our common stock outstanding as of September 30, 2016 on a fully diluted basis, including all outstanding OP Units and LTIP Units earned under the OPP through the date of this proxy statement and an estimated 239,000 LTIP Units that may be earned under the OPP at the final valuation date on April 15, 2017 based on our achievement of a certain level of total return to our stockholders (share price appreciation (based on a trailing 15 trading day closing stock price average) plus dividends and other distributions) (i) a portion of which is earned based on the total return exceeding a hurdle rate of 7% per annum, and (ii) a portion of which is earned based on the total return exceeding a total return to stockholders of a peer group comprised of 20 other REITs identified in the OPP.

For the purposes of calculating the estimated Total Liquidating Distributions Range, we have estimated that an additional 239,000 LTIP Units will be earned at the final valuation date on April 15, 2017. The estimated number of LTIP Units that may be earned on April 15, 2017 was determined, with input from a third party consultant that also provides input in connection with the valuation of LTIP Units for purposes of our financial statements, using a Monte Carlo simulation. This analysis takes into account the terms of the OPP, including the performance period and total return hurdles, as well as observable market-based inputs, including interest rate curves, and unobservable inputs, such as expected volatility. Additionally, we believe that the Total Liquidating Distributions Range per share will not affect the number of LTIP Units, if any, that will be issued on April 15, 2017 as it is not expected that any liquidating distributions would be made on or before that date.

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Further, the OPP provides that if a liquidation in the good faith judgment of the compensation committee of our board of directors necessitates action by way of equitable or proportionate adjustment in the terms of these LTIP Units to avoid distortion in the value of the LTIP Units, the compensation committee shall make equitable or proportionate adjustments and take such other action as it deems necessary to maintain the LTIP Unit rights under the OPP so that they are substantially proportionate to the rights of LTIP Units existing prior to the liquidation.

Under the limited partnership agreement of the OP, the holders of LTIP Units generally are entitled to share in distributions of net sales proceeds, whether or not the LTIP Units have been earned pursuant to the OPP. As of the record date, there are 1,172,738 earned LTIP Units held by Mr. Radesca and the individual members of the Sponsor, including Messrs. Kahane and Happel, and 7,707,841 unearned LTIP Units held by the Advisor. Any of the unearned LTIP Units not earned on April 15, 2017, the final valuation date under the OPP, will be forfeited and will no longer be entitled to any distributions. However, if real estate assets were sold and net sales proceeds distributed prior to April 15, 2017, the holders of LTIP Units generally would be entitled to a portion of those net sales proceeds with respect to both the earned and unearned LTIP Units (although the amount per LTIP Unit, which would be determined in accordance with a formula in the limited partnership agreement of the OP, would be less than the amount per OP Unit until the average capital account per LTIP Unit equals the average capital account per OP Unit). Our board of directors has discretion as to the timing of distributions of net sales proceeds.

The Total Liquidating Distributions Range included in this proxy statement reflects a decrease of $0.24 per share from each of the low end and high end of the initial total liquidating distributions range estimated by the Company in August 2016 at the time our board of directors approved the plan of liquidation and previously announced by the Company. This adjustment reflects changes during the period of time between our board of directors’ approval of the plan of liquidation and the mailing of this proxy statement seeking stockholder approval of the plan of liquidation including a decrease of approximately $0.11 per share related to the payment of regular monthly dividends from August 2016 through October 2016, which were included as part of the initial estimated total liquidating distribution range, and an additional net decrease of approximately $0.13 per share resulting primarily from the following factors: (i) updated gross real estate sales prices, which reflect an increase of approximately $9.0 million; (ii) updated cash flow and general administrative expenses estimates; (iii) an update in the cash and working capital to be as of September 30, 2016 instead of as of June 30, 2016; (iv) an update of the estimated costs of liquidation; and (v) an adjustment for the estimated LTIP Units that will be earned at the final valuation date on April 15, 2017 as described in more detail above.

We believe that we will have sufficient cash to pay all of our current and accrued obligations.

Uncertainties Relating to Estimated Liquidating Distributions

The preparation of these estimates involved judgments and assumptions with respect to the liquidation process and may not be realized. We cannot assure you that actual results will not vary materially from the estimates. As we have disclosed under “Risk Factors,” certain examples of uncertainties that could cause the aggregate amount of distributions to be less or more than our estimates include the following:

the value of our assets and the time required to sell our assets may change due to a number of factors beyond our control, including market conditions;
our Total Liquidating Distributions Range is based, in part, on estimates of the costs and expenses of the liquidation and operating our company, and, if actual costs and expenses exceed or are less than such estimated amounts, aggregate distributions to stockholders from liquidation could be less or more than our Total Liquidating Distributions Range;
our Total Liquidating Distributions Range is based, in part, on assumptions regarding our ability to successfully exercise the WWP Option, and there can be no assurance we will be able to do either;
our Total Liquidating Distributions Range is based, in part, on assumptions as to the timing for completing asset sales, and we may be delayed in completing asset sales for a variety of reasons, including the assumption provisions included in the existing loans encumbering the Worldwide Plaza property that are applicable upon the exercise of the WWP Option and tax considerations;

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our Total Liquidating Distributions Range is based, in part, on the assumption that 239,000 Year 3 LTIP Units will be earned on April 15, 2017 with respect to the third and final year of the OPP, as set forth in more detail under “— Calculation of Estimated Liquidating Distributions;” and the amount of Year 3 LTIP Units that will be earned will be based on a number of factors including the price of our common stock the performance of the peer group set of REITs relative to the Company and cannot reliably be estimated;
if our assets are not sold by the times and at prices we currently expect, the liquidation may yield aggregate distributions less than or greater than the prevailing market price of our shares of common stock;
if liabilities, unknown or contingent at the time of the mailing of this proxy statement, later arise which must be satisfied or reserved for as part of the plan of liquidation, the aggregate amount of distributions to stockholders as a result of the plan of liquidation could be less than estimated; and
delays in consummating the plan of liquidation could result in additional expenses and result in actual aggregate distributions to stockholders being less than our estimated amount.

We do not anticipate updating or otherwise publicly revising the estimates presented in this proxy statement to reflect circumstances existing or developments occurring after the preparation of these estimates or to reflect the occurrence of anticipated events. The estimates have not been audited, reviewed or compiled by independent auditors.

Interests of Certain Persons in the Plan of Liquidation

In considering the recommendation of our board of directors to approve the plan of liquidation, our stockholders should be aware that our Advisor and our directors and executive officers, including all of our executive officers and one of our directors in their capacity as executives or members of the Advisor, may be deemed to have interests in the liquidation that are in addition to, or different from, your interests as a stockholder. Consequently, these individuals may be more likely to support the plan of liquidation than might otherwise be the case if they did not expect to receive those payments. Our board of directors is aware of these interests and considered them in making its recommendations.

Fees and Expenses to the Advisor

The following fees and expenses are payable to our Advisor and its affiliates under existing agreements with us until the Advisory Agreement expires:

If our Advisor provides a substantial amount of services as determined by our independent directors in connection with a sale of one or more properties, our Advisor may receive a brokerage commission in an amount not to exceed the lesser of 2% of the contract sales price of the property and one-half of the total brokerage commission paid if a third-party broker is also involved; provided, however, that in no event may the real estate commissions paid to the Advisor, its affiliates and unaffiliated third parties exceed the lesser of 6% of the contract sales price and a reasonable, customary and competitive real estate commission.
Our Advisor is entitled to receive asset management fees and may receive reimbursement of expenses.
Our Property Manager, which is under common control and ownership with the Advisor, is entitled to receive fees and may receive reimbursement of expenses.

See “Business — Our Management — Advisory Agreement” and “— Property Management Agreement” for a more detailed description of these fees and expense reimbursements.

The Property Manager waived property management fees from the time we commenced active operations in June 2010 until the third quarter of 2016, at which point the Property Manager began to not waive the property management fee. Since we commenced active operations in June 2010 until the third quarter of 2015, the Advisor declined to request general and administrative expense reimbursements. The Advisor also has, at other times, waived certain other fees and declined to request certain other expense reimbursements. During

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the period since we commenced active operations in June 2010 through September 30, 2016, the aggregate amount of all fees and expense reimbursements waived or not requested was approximately $13.7 million.

On December 19, 2016, we entered into a series of agreements, including the Services Agreement and amendments to the Advisory Agreement and the Property Management Agreement, pursuant to which the Service Provider will become the exclusive advisor to us with respect to all matters primarily related to the plan of liquidation on January 3, 2017 and will replace the Advisor as the external advisor to us with respect to all other matters on the Transition Date. During the period from January 3, 2017 to the Transition Date, the Service Provider will serve as a consultant to us with respect to matters not primarily related to the plan of liquidation. None of our executive officers or directors are affiliated with the Service Provider or any of its affiliates.

See “Business — Our Management — Services Agreement” for a more detailed description of these fees and expense reimbursements the Service Provider is entitled to pursuant to the Services Agreement.

Restricted Shares

All outstanding and unvested restricted shares, including unvested shares held by our directors and executive officers, will vest upon the sale of all or substantially all of our assets (or any transaction or series of transactions within a period of 12 months ending on the date of the last sale or disposition having a similar effect). Prior to an unvested restricted share vesting, the holder of the unvested restricted share receives liquidating distributions under the plan of liquidation at the same time and in the same amount as the holders of any other shares of our common stock.

The following table sets forth the number of unvested restricted shares held by our directors and named executive officers as of the record date, as well as the approximate value of those awards. The dollar amounts set forth below were determined based on the average closing market price of our common stock over the first five business days following the first public announcement of the plan of liquidation on August 22, 2016, or $9.77 per share, in accordance with Item 402(t) of Regulation S-K. The amounts shown are prior to reduction for tax withholding.

   
Name   Unvested
Restricted
Shares (#)
  Value ($)
William M. Kahane(1)     24,000       234,480  
Nicholas Radesca(2)     27,242       266,154  
Patrick O’Malley(3)     36,198       353,654  
Robert H. Burns(4)(9)     32,319       315,757  
P. Sue Perrotty(5)(9)     6,591       64,394  
Randolph C. Read(6)(9)     9,039       88,311  
Keith Locker(7)(9)     2,873       28,069  
James Nelson(8)(9)     2,873       28,069  
James P. Hoffmann(9)            
Gregory F. Hughes(9)            
Craig T. Bouchard(9)            

(1) Includes unvested portion of 40,000 restricted shares granted on April 15, 2014 which vest annually over a five-year period in equal installments beginning with the anniversary of the grant date.
(2) Includes unvested portion of 9,656 restricted shares granted on March 31, 2015, which vest annually over a four-year period in equal installments beginning with the anniversary of the grant date. Also includes unvested portion of 30,000 restricted shares granted on November 3, 2015, which vest annually over a three-year period in equal installments beginning with the anniversary of the grant date.
(3) Includes unvested portion of 48,264 restricted shares granted on March 31, 2015, which vest annual over a four-year period in equal installments beginning with the anniversary of the grant date.
(4) Includes unvested portion of 40,000 restricted shares granted on April 15, 2014, which vest annually over a five-year period in equal installments beginning with the anniversary of the grant date. Also includes 4,673 restricted shares granted on May 29, 2014, 7,774 restricted shares granted on July 13, 2015,

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808 restricted shares granted on September 27, 2016 and 772 restricted shares granted on October 25, 2016, all of which vest annually over a three-year period in equal installments beginning with the anniversary of the grant date.
(5) Includes unvested portion of 4,826 restricted shares granted on September 12, 2014, 6,317 restricted shares granted on July 13, 2015 and 772 restricted shares granted on October 25, 2016, all of which vest annually over a three-year period in equal installments beginning with the anniversary of the grant date.
(6) Includes unvested portion of 2,134 restricted shares granted on January 21, 2015 and 6,317 restricted shares granted on July 13, 2015, all of which vest annually over a three-year period in equal installments beginning with the anniversary of the grant date. Also includes 5,107 restricted shares issued on May 2, 2016, which vest annually over a three-year period in equal installments commencing on August 4, 2016.
(7) Includes unvested portion of 4,310 restricted shares granted on November 8, 2015, which vest annually over a three-year period in equal installments beginning with the anniversary of the grant date.
(8) Includes unvested portion of 4,310 restricted shares granted on November 8, 2015, which vest annually over a three-year period in equal installments beginning with the anniversary of the grant date.
(9) Does not include restricted shares expected to be granted in connection with the 2016 annual meeting as payment of $50,000 of the annual fee payable in restricted shares, or any cash compensation that an independent director may elect to receive in restricted shares, that we pay to independent directors in the ordinary course of business.

LTIP Units

Outstanding and unvested LTIP Units that were previously earned will vest automatically on December 26, 2016 and will be converted on a one-for-one basis into shares of our common stock. The dollar amounts set forth below were determined based on the average closing market price of our common stock over the first five business days following the first public announcement of the plan of liquidation on August 22, 2016, or $9.77 per share, in accordance with Item 402(t) of Regulation S-K. The amounts shown are prior to reduction for tax withholding.

   
Name   Earned LTIP
Units
(#)
  Value
($)
William M. Kahane     124,198       1,213,414  
Nicholas Radesca     24,170       236,141  
Michael A. Happel     229,714       2,244,305  

Additional LTIP Units, which we refer to as Year 3 LTIP Units, issued under the OPP to the Advisor are eligible to be earned in the third and final year of the OPP on April 15, 2017, and, if earned, will be converted on a one-for-one basis into shares of our common stock. If a change of control of the Company (as defined in the OPP) occurs prior to April 15, 2017, the calculation of the Year 3 LTIP Units will be made as of the day immediately preceding the close of the change of control and the value of such Year 3 LTIP Units will be paid to the Advisor in cash at the closing. In either event, the number of Year 3 LTIP Units earned will be calculated based on the achievement of certain absolute and relative performance criteria related to the total return to our stockholders (share price appreciation plus dividends and other distributions). For the purposes of calculating the estimated Total Liquidating Distributions Range, we have estimated that 239,000 Year 3 LTIP Units will be earned. The actual number of Year 3 LTIP Units that will be earned is difficult to accurately forecast and could be higher or lower than this estimate. See “Proposal One: Plan of Liquidation and Distribution — Estimated Liquidating Distributions — Calculation of Estimated Liquidating Distributions” for further details.

Further, the OPP provides that if a liquidation in the good faith judgment of the compensation committee of our board of directors necessitates action by way of equitable or proportionate adjustment in the terms of these LTIP Units to avoid distortion in the value of the LTIP Units, the compensation committee shall make equitable or proportionate adjustments and take such other action as it deems necessary to maintain the LTIP Unit rights under the OPP so that they are substantially proportionate to the rights of LTIP Units existing prior to the liquidation.

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Pursuant to the resolutions adopted by our board of directors in connection with the OPP Side Letter, we are authorized to file a Registration Statement on Form S-3 registering the resale of the shares of our common stock issuable in exchange for the previously earned LTIP Units and the Year 3 LTIP Units on or prior to December 26, 2016.

The 7,707,841 unearned LTIP Units held by the Advisor share in distributions (other than distributions of sales proceeds) in an amount equal to 10% of such distributions paid on other operating partnership units and will also be entitled to share in distributions of sales proceeds made prior to April 15, 2017. See “— Estimated Liquidating Distributions — Calculation of Estimated Liquidating Distributions” for further details.

Liquidating Distributions

Our directors and named executive officers will receive liquidating distributions for each share of common stock (including unvested restricted shares), each OP Unit and each earned LTIP Unit which they own on the same basis as other stockholders. The following table indicates, as of the record date, the aggregate number of shares of common stock, OP Units and earned but unvested LTIP Units owned by each of our directors and named executive officers, and the value of those securities based on the Total Liquidating Distributions Range.

     
Name