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Winthrop Realty Trust (NYSE:FUR)

Q1 2014 Results Earnings Conference Call

May 01, 2014 12:00 PM ET

Executives

Michael Ashner - Chairman and CEO

Carolyn Tiffany - President

John Garilli - Chief Financial Officer

David Heymann - [Director]

Analysts

Craig Mailman - KeyBanc

Wilkes Graham - Compass Point

Andrew Boord - Fenimore

Brett Reiss - Janney Montgomery

Charles Fischer - Ellis Partners

Operator

Greetings, and welcome to the Winthrop Realty Trust First Quarter 2014 Earnings Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions). As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host [Amy Grucan] of Winthrop Investor Relations. Thank you. You may begin.

Unidentified Company Representative

Good afternoon, everyone. Welcome to the Winthrop Realty Trust conference call to discuss our first quarter 2014 financial results. With us today from senior management are Michael Ashner, Chairman and Chief Executive Officer; Carolyn Tiffany, President; John Garilli, Chief Financial Officer; and other members of the management team. This morning, May 1st, we issued a press release and posted on our website supplemental financial information, both of which will be furnished on form 8-K with the SEC.

Both the press release and the supplemental financial information are available on our website at www.winthropreit.com. The press release is in the News and Events section and the supplemental financial information is in the Investor Relations section.

Additionally, we are hosting a live webcast of today's call, which you can also access in the website's News and Events section. At this time, management would like to inform you that certain statements made during this conference call which are not historical, might constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe the expectations reflected in any forward-looking statements, including NAV analysis are based on reasonable assumptions, we can give no assurance that these expectations will be attained.

Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in the press release and from time to time in our filings with the SEC. We do not undertake a duty to update any forward-looking statements. Please note that in the press release, we have reconciled all non-GAAP financial measures to the most directly comparable GAAP measures in accordance with Regulation G requirements. This can be found in the FFO table of the press release. Please note that all per share amounts are on a diluted basis.

I now would like to turn over the call to Carolyn Tiffany. Carolyn?

Carolyn Tiffany

Thank you, Amy and good afternoon, everyone. Thank you all for joining us today. I’m sure you are all interested to hear more about two sales announcements by the company of our Board proposed adoption of a plan of liquidation and the questions related to it.

Before getting to that so I will spend just a few minutes to discuss our first quarter operations. John will review our financial information and then hand the call over to Michael.

As we discussed on our last call in March, we have observed very favorable market conditions which have driven us the value for stabilized real estate, as value investors, we view this market as an opportune time to realize gains on our investments, so REIT limitations on which impart has driven our decision to liquidate.

Towards that end during the first quarter we completed a number of sales of operating properties which are detailed in today’s press release. In addition we began marketing certain assets for sales including our Amherst, New York property which is under letter of intent and our Jacksonville Florida property which is under contract.

The sale of our Denver Crossroads one and two properties are scheduled to close today, which will net the company approximately $30 million in proceeds. Similarly we completed a sale of a portion of our loan portfolio. We have reduced our loan asset portfolio from 14 loans with an outstanding carrying value of 110.2 million at December 31, 2013, return loans with a carrying value of $57.9 million at March 31, 2014.

Our new investment activity this quarter was the origination of $15.5 million mezzanine loan secured by Freed Management's interest and entities, owning 2 retail shopping centers Evans Lisle located in Illinois, and Norridge Commons located in Norridge Illinois. In addition Freed has pledged to interest in Sullivan Center as additional collaterals for the loan.

Our loan portfolio with the exception of the defaulted, Rockville loan which has been carried at zero for both financial statement purposes and net asset value purposes are all performing in accordance with their terms. Our Concord CDO continues to cash flow and we received cash distributions of $1.4 million during the first quarter from the CDO in Concord debt holding.

Turning to our operating properties as John will discuss in connection with the proposed adoption by board of trustees of the plan of liquidation, gap requires the company to review carrying value of all our long term assets and revise our evaluation to shorten our holding period for each asset to assess whether or not term is warranted.

The shortened holding period resulted in changes of the projected recovery of two assets are Arboretum property located in Lisle, Illinois and so a much lesser extend our Kroger property located in Greensboro, North Carolina. As discussed on past calls, the Lisle, property’s occupancy suffered during the recession and has only recently begun to rebound at 78% at March 31, 2014.

United Healthcare which occupied 41,000 square feet or 24% at the building has a least maturity at December 2015. We are currently in discussions with their representatives and to lease extension and expansion the fair value analysis reflects the uncertainties surrounding the space.

On March 31, 2014 carrying value of $10.2 million is within the range of our net asset value. We have experience significant lease up in our operating property portfolio particularly the high growth property located in Stamford, Connecticut which was 92% leased at the time of our acquisition in October 2013 and is now 100% leased. Our 15115 Market Street property, which was 77% leased at the time of our acquisition in February 2013 is now 87% lease.

Our basic product line continues to perform well at 97% occupancy and from which we received distributions of $1.4 million during the first quarter in April 2014 with Tacoma property, which is one of the development field in the platform which stabilization six months ahead of schedule and was converted to permit financing. The urban center and Quilceda are on schedule and expected to be completed in 2013.

Finally our 701 Seventh Ave. property has commenced recognition demolition and transit authority for construction work. We anticipate a formal ground breaking in July. The remaining operating properties are stabilized and performing well, overall our operating property occupancy is 90% for our office retail and warehouse and 92% for our multifamily excluding Vintage.

Our March 31, 2014, reported net asset value remain relatively unchanged from last quarter at $13.79 to $15.79 and our pooled weighted average realized returns on investment made since 2009 is 29.12%.

Now I will turn the call over to John Garilli. John?

John Garilli

Thank you, Carolyn. Good afternoon, everyone. I will provide an overview of Winthrop's financial results as well as a review of our business our business segments for the quarter ended March 31, 2014. For the quarter ended March 31, 2014, we reported a net loss of $2.2 million or $0.06 per common shares compared with net income of $11 million or $0.33 per common share, from the quarter ended March 31, 2013. The net loss is due to the $9.2 million of impairments taken with respect to certain of a wholly owned properties, which I will discuss shortly.

Funds from operations or FFO for the first quarter of 2014 was $10.7 million or $0.30 per common share compared with FFO of $15.3 million or $0.46 per common share for the first quarter of 2013.

In connection with our Board's proposed adoption with our final liquidation, we are required by GAAP to revise our holding period for each of our operating property. As a result of shorten of the holding period, we recognized impairment charges during the first quarter of $8.5 million on our Corporetum property in Lisle, Illinois and $500,000 on our Kroger property in Greensboro, North Carolina.

In addition, we recognized a $200,000 impairment charge on our Jacksonville, Florida property. The Jacksonville property is under contract to be sold with an anticipated closing to occur in second quarter. These impairments are included in income from continuing operations and while the impact of this is reflected in our overall net income, they do not impact our FFO.

During the first quarter of 2014, we disposed of our Newbury Apartments residential property located in Meriden, Connecticut and our interest in River City office property located in Chicago, Illinois resulting a $4.4 million gain on sale of real estate. These included in income from discontinued operations, but are excluded from the FFO calculation.

Operating results by business segment for the quarter ended March 31, 2014 were as follows: With respect to our operating properties Business segment, operating income was approximately $14.2 million for the three months ended March 31, 2014 compared with approximately $10.7 million for the three months ended March 31, 2013. Operating income increased by $2.3 million from our consolidated operating properties and the $1.2 million from our equity investment operating property. With respect to our consolidated operating properties, operating income from our same-store properties was $5.7 million for three months ended March 31, 2014, down approximately $1 million from the comparable period last year. The decrease in NOI was due to a decrease in revenue at our Amherst, New York property, which resulted from a lease modification signed in 2013 that lowered the current rental payments, but extended the terms of the lease by 10 years as well as the $354,000 straight line rent reserve on our Jacksonville property has resulted the pending sale of the property.

Our new store properties, which consist of our office property in Philadelphia, Pennsylvania and our residential properties in Stamford, Connecticut; San Pedro, California; Houston, Texas; Phoenix, Arizona; and Oklahoma City, Oklahoma, generated net operating income of $4.2 million for the quarter.

Net operating income from operating property equity investments was $4.4 million for the three months ended March 31, 2014 compared to net income of $3.1 million for the month ended March 31, 2013. This increase was due to an $861,000 increase in income from our 701 Seventh Avenue, Times Square investment as a result of our increased equity investment throughout 2013. Quarterly operating income from our Sullivan Center investments increased by $793,000 from $443,000 to $1.2 million.

Turning to our loan assets. In February of this year we sold 5 of our loan assets for net cash proceeds of $42.9 million. Our loan assets and loan securities business segment reported net operating income of $7.3 million for the three months ended March 31, 2014 compared to net operating income of $10.1 million for the three months ended March 31, 2013.

This decrease in quarter-over-quarter earnings is primarily the result of lower earnings from our equity investment loan assets. Specifically our investment in RECDO management which had one-time earnings component last year, related to the sales of investment held by this venture. This decrease in RECDO income was partially offset by a $943,000 increase in earnings from our Concord investments. And lastly at March 31, 2014 we had cash and cash equivalents of $102.5 million compared to a balance of $112.5 million at December 31, 2013.

Now I’ll turn the call over to Michael Ashner. Michael?

Michael Ashner

Thank you, John for that exciting description of operations. Before we direct the subject I suspect to forefront most people’s minds I want to reiterate important point Carolyn’s and John’s presentations. The write-down of 550, 650 corporate program has this occasion not by change in management’s view as their opportunity but rather was necessitated by GAAP accounting which requires that the company adjusted value of these assets more closely to their current net asset value the company is considering adoption in plan of liquidation. That said, I am cautiously optimistic that we may realize a high price in these assets as leasing improves.

I think with that side now open up the call to questions rather than drawn on about macro micro real estate economic market conditions, as I’m sure some of your questions based on today’s two big announcements.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). Thank you. Our first question comes from line of Craig Mailman of KeyBanc. Please proceed with your questions.

Craig Mailman - KeyBanc

Hey, guys. As it relates to the liquidation, could you maybe just give an overview of kind of the process review if the shareholders do approve what the next steps are? As that relates to some investment fee that still meets the fund 701 7 and how you view kind of how the distributions are going to come out to shareholders?

Michael Ashner

Lot of questions, I see if I can answer. All right, so process in a 10,000 foot overview as a proxy this we will be filing with the SEC a proxy statement for their review probably prior to the shareholders meeting. The SEC reviews the proxy statement and once it has approved it, we have 30 days to have a shareholder meeting, we anticipate that the review process and the establishment of a shareholder meeting will be in early August, once the shareholders have approved it, the plan of liquidations would be adopted.

We then have two years from then in which we are a in formal liquidations but we are a listed company, we are in the New York Stock Exchange hopefully our attention to stay on the stock exchange, we trade, we make all of our filings, we do all the things companies do. We said, we have not sold all of our assets at the end of two years. We then put the remaining assets into what’s called a liquidating trust. Liquidating trust can supply for up to three years and its solo function is to make distributions.

With respect to what it is, we can do proactively with respect to our cash, we can continue with our commitments and the principal commitments we have is to 701 and there maybe have some other smaller commitments on our joint ventures. So we have to continue with that. And we will, we are permitted to do TI CapEx, which most thing to need to enhance the viable share of the assets products we sale And we can buy repurchase securities of the company from time-to-time. Other than that -- we can also hold our cash in U.S. treasuries or short-tern in-short super qualified obligations, other than that we will be making no new investments.

Craig Mailman - KeyBanc

Okay. But in terms of distribution or special dividend of this is the, you guys are going to do it once a year quarterly how do you view that. And I guess it depends on what the taxable gains are as well, right?

Michael Ashner

Yes. That’s exactly sort of interesting. There is no taxable gain to shareholders unless and until, they get their basis back to someone pay $14 per share of stock in the total amount of cash distributed prior to going into a liquidating trust as $14 they have no taxable gain, it just be a return of basis, their basis would be reduced to zero.

Carolyn Tiffany

But yet, correct, we want to be subject to the distribution of our tax, so we will be excited to all the [week] requirements including a distribution and taxable income. So you're right that the distributions will have to correlated to some degree to the level of asset sales in a particular year.

Craig Mailman - KeyBanc

Okay. And until you guys get the vote done, are you guys subject to Safe Harbor rules at this point or can you sell more?

Michael Ashner

We are pumping up against this, we have sold six assets this year, I think the Safe Harbor's seven. So, anything that we do, we can't initiate process to sell assets, but anything we do at this point, going to be subject to the adoptions of the planned liquidation by the shareholders.

Craig Mailman - KeyBanc

Okay. And then one last quick one. What I know you guys want to stay listed. But what would prevent that at the company size? Kind of what are the parameters there to stay on the NYSE during this process?

David Heymann

Craig, this is David Heymann. So subject to the New York Stock Exchange listing standards, which will be sized, float, all the usual type things. And it'll be subject to them looking at it. And that's it.

Craig Mailman - KeyBanc

Alright. So nothing special during this process that would change the deal? Okay, great. Thank you guys.

Carolyn Tiffany

Thanks Craig.

Operator

Thank you. (Operator Instructions). Thank you. Our next question comes from the line of Wilkes Graham with Compass Point. Please proceed with your question.

Wilkes Graham - Compass Point

Hi, good morning. I'm a little new to this story but I've been looking at it, obviously, the past few days. Do you mind just sharing your thoughts on what drove you to make this decision now as opposed to a couple of quarters ago or even later this year?

Michael Ashner

Well, I mean, I can't tell you the specifics in this quarter as to the last year the next year, but we’re an opportunity fund, really operating as a REIT. And in order to be factual for our shareholders we have to be able to either invest on an accretive basis and liquidate assets on an accretive basis. I think we came to conclusion that there was very little opportunity out there and I don’t believe the management believes that there is significant likely of reemergence of opportunity in the near future.

Having said that, we were on the other hand we’re sort of bared from selling the assets into this frothy market. So we were between sell and (cribbage) you can’t sell you can’t invest. We’re not inclined and we’re actually disinclined very much to just flow stock and just to invest at current market yields. Notwithstanding in May it give some sort of short-term life to the company stock. But long-term it may erode volume.

So since we were disinclined to do dilutive share offerings since the opportunities were do not likely we see through early part of 2013 as we were unable to sell assets based on the REIT rules and since candidly we don’t know when the market will come back to what it is we want to do. There is the cost of public company we thought this into best thing we can do for our shareholders. We’re not going to take it private, we’ll just liquidate the assets we’ve done this four times before four different public companies and the shareholders who have been with us and who are joining us and whatever will benefit from that that’s it. It’s a pretty a clear decision.

We ran a process, we did not get a price for the company that we liked, we are still opened if someone wants to offer us new price tomorrow and it’s a price we like we will consider it, but the process we initiated in the fourth quarter of last year did not in general price to board and the management felt it was commensurate with their underlying net asset value. And so this is the alternative left to us.

Wilkes Graham - Compass Point

Great, thank you for all that color and good luck.

Michael Ashner

Thank you.

Operator

Thank you. Our next question comes from the line of Andrew Boord with Fenimore. Please proceed with your question.

Andrew Boord - Fenimore

Yes, First of all I wanted to say thank you very much. It's been five bumpy years but you guys have done a good job by us. So I appreciate that and you're doing it again here today. So first of all, thank you. The question I have is you have some kind of unique unusual assets like the CDOs and Concord and all that. And I'm sure there are some other ones, too if I sit and look through the list. Those might be a little trickier to sell and to explain to other people. And on this hyper sensitive world, you buying them yourselves I guess is a little tricky. But that may actually be the best option. So I wonder if you could kind of explain your thinking on some of those pieces.

Michael Ashner

Well I think you really go into the core question, how you value things, or how do you think of disposing those? And pretty much everything we’ve done, almost everything we’ve done, we have we control our access so there is we can sell whether we own the asset we can sell the asset if we own JV interest we have by sell rights we’ve done that some sort of exit from that to monetize ourselves. But you did hit it, on the some assets you just on that, when we do an NAV announcement we just simply discounted cash flow.

The CDO goes away in two years by its terms. So you sort of discount to cash flow and what you will get from that liquidation, you don’t really ponder it as a potential set sold asset itself. So a few of those assets there, we just think, well like ice cubes that will melt over time.

Andrew Boord - Fenimore

All right, thanks so much, guys.

Operator

Thank you. (Operator Instructions) Thank you. Our next question comes from the line of Brett Reiss with Janney Montgomery. Please proceed with your questions.

Brett Reiss - Janney Montgomery

Yes hi, the cost basis of the liquidating trust in a taxable account and the tax character of the distributions after one takes the delivery of that, could you speak to me on that?

Michael Ashner

Well I start and Carolyn, and I’ll let Carolyn correct everything I say. Prior to liquidating trust, next two years falls in the adoption to plan, all of the distributions of the company are again individual basis of the stock. So if you pay we distribute out again $14 and their basis was $13 and they have $1 of capital gain, conversely the basis was $15 and we should bid out $14 in tax and non-taxable cash they have a $1 abate remaining basis.

When you flip into the liquidating trust. The company makes an estimates with your remaining net asset values. If the remaining net asset value at that point in time is a gain to the shareholders so at that point in time, the value of the stuff that was left was $3 a share. So the individual, who had take who had gotten back, who had a basis of $15 and gotten back $14 we have the $2 capital gain at that point and time.

The individual who had a $13 basis, have gotten $14, we now have another capital gain of $3. When the liquidating trust wants down and has made its distributions and at that very end you have a final account whether or not that as that $3 estimation was right or wrong, if it's lower, it turns out wasn't $3 it was $2 and you have another dollar of long-term capital loss, if in fact it was higher we actually distributes more than at that point in time, you realize the capital gain at a higher capital gain with the disparity between what it was and we thought you had we're getting what you guys.

Brett Reiss - Janney Montgomery

Okay. I appreciate that. What do you think the fate of 701 Seventh Avenue is going to be? Do you think it's sold within the two years? Or does that wind up in the liquidating trust?

Michael Ashner

I don't know. Well, I don't know. And I think that’s an interesting question. We have the ability with some limitation to sell our interest and there is always interest in buying our interest at any given moment. That having being said, it's a judgment call as to whether now we want, how long we want to be in there work and what point we want to add. Do we want to exit right now before formal ground breaking, we want to exit after the building is completed, we want to exit after the facility is being completed, but there is a tenant has been signed, it's really a judgment call.

Brett Reiss - Janney Montgomery

Right, right.

Michael Ashner

I want, I'm sorry

Brett Reiss - Janney Montgomery

Yes. I'm when I look at the supplemental information, in terms of the assets listed there, can you share with us which ones have evinced the most amount of interest? Or is it too soon in the process for that?

Michael Ashner

An answer I'd give is they're all our children. And I don't want to tell the market which one of our children people think it’s better looking than others okay.

Brett Reiss - Janney Montgomery

Okay.

Michael Ashner

We are here to maximize our value, we've done as I said four liquidations before and I don't think it's a good idea for us to open our cards to everyone. We think we have fairly valued our assets on our supplement. (Inaudible) two things that ST, we have not given any appreciation to and we haven't given any appreciation to our investment in 701 other than the dividends which accrues on our account.

But I think we have a lot of very attractive assets and I believe, we will draw attention to that.

Brett Reiss - Janney Montgomery

Right. Well thanks as always for taking the questions and answering them. Good luck.

Michael Ashner

Carol, do you want to add to that?

Carolyn Tiffany

I have nothing further.

Brett Reiss - Janney Montgomery

Okay.

Carolyn Tiffany

Thanks, Brett.

Operator

Thank you. Our next question comes from the line of Charles Fischer with LF Partners. Please proceed with your question.

Charles Fischer - Ellis Partners

Good afternoon. Good afternoon everyone. And first of all, I want to thank you all for your continued hardwork from Michael and Carolynn and the whole team. And I think this is interesting decision that you guys made is mix emotions for me obviously it’s going to work very well financially. But I won’t be able to parse with you in a couple of years and that’s a little sad, so anyway all that’s my comment.

A couple of questions, Michael one is can you talk about the actual sales process that you went through with your formal process with informal? And then my other question is during the period of if we’re going to liquidating trust will we have the benefit of your efforts and Carolyn and John and the rest of the team during that liquidation period post two years from now?

Michael Ashner

Well first of all, it did go through our formal process but I think it’s best as you read in the proxy statements would be filed in a couple of weeks. I mean I said about the rule will be into either this is mildly inaccurate it will be put my face. So it will be detailed, we did our formal process.

Absolutely we have our team, like exclusivity contract has not been changed at all, we will be here that we will be here to the better end, all right. We are aligned with our shareholders we are probably the largest shareholders in this company and it’s in our interest as much as this is in your interest for us to stay the stand and it’s just written.

Charles Fischer - Ellis Partners

And Michael let’s say hypothetically that’s $200 million of assets at the end when we go into liquidated trust with the existing management agreement with FUR advisors kind of kick in and then just be the continuation of that’s just based on lower asset account?

Michael Ashner

The advisory agreement will remain unchanged just be picked up on it by the trust, but limited.

Charles Fischer - Ellis Partners

And not to be getting too far [Multiple speakers] sales…..

Michael Ashner

To fire us. (Inaudible) determines to fire us which is not that right.

Charles Fischer - Ellis Partners

Sure. But not to get ahead of ourselves. So in theory if things are not being liquidating did in trust it’s going to be because you and your team have decided the appropriate thing to do. We’re going to get the same love and care that we were getting while we’re public except we won’t be public anymore. So really as a shareholder if you make a decision it really is likely going to be in our best interest to go beyond the two year wind up?

Michael Ashner

Dave wants to answer, (inaudible) want to answer.

David Heymann

Hey Charles how are you doing?

Charles Fischer - Ellis Partners

Hi Dave.

David Heymann

The one point I will make is in a liquidated trust it is likely that annual filings will be required 10-Ks will still continue. So there will be an 8-Ks as well so there will be that disclosure that the benefits (inaudible) trust will continue to receive.

Charles Fischer - Ellis Partners

So it's essentially we'll have a private equity -- the liquidating trust, the way I've been involved with a few of these. But essentially it becomes a private equity deal.

Michael Ashner

We’re public shareholders.

Charles Fischer - Ellis Partners

Yes.

Michael Ashner

Yes.

Charles Fischer - Ellis Partners

Okay. Well, just keep up the great work and I appreciate it. I will be interesting to see how you guys navigate this. I know that you guys will do a great job.

Michael Ashner

Thanks.

Operator

Thank you. Our next question comes from line of [Daniel Fu] with Weiss Asset Management. Please proceed with your questions.

Unidentified Analyst

Hi. I just had a question on your Series D preferred shares outstanding. What is the earlier set you are allowed to repay these?

Michael Ashner

I am going to give that question to David.

David Heymann

So the Series D shares are governed by both the trust degradation trust and must be modified by the specific designations for the Series D. This degradation trust, it clearly reserves the right of Winthrop to voluntarily liquidate dissolve and wind up which is the case with the plan of liquidation is adopted.

Michael Ashner

No it’s a volatile we can do it as the unreserved voluntary liquidate.

John Garilli

Yes, that’s correct Michael.

Michael Ashner

No reservation.

John Garilli

No reservation It expressly and unequivocally provide that on disposal of assets in connection with plans of liquidation the trust distributes the proceeds, the shareholders in course of the terms of the…

Michael Ashner

No ifs, ands, or buts.

John Garilli

No ifs, ands, or but preference to the share. And as we’ve discussed Michael in this Certificate of Designations and in specifically Section 5A, it was Cetificate of Designations it provides that the preference is to the Series D over the common shares again no, if and or buts. And Section 5A provides that, excuse me Section 5A prohibits one from paying a dividend on the common shares until the Series D has gotten the liquidation preference which is as you guys know $25, plus any that accrued dividends.

Michael Ashner

And included dividend…

John Garilli

I’d say no premiums no penalties no…

Michael Ashner

No maintenance, no penalties and whatever because as you correctly say make sure...

John Garilli

That is the correct. So the only -- but the only one restriction that there is that you have to give that big trust as to give advance notice of the date that it’s going to pay off. And then the Certificate of Designations and further provide that after the payment of the liquidation preference plus as Michael clearly stated the dividends to that date the Series D is no right to any claim on the remaining assets of Winthrop.

Michael Ashner

So if you think about it, it actually makes a lot of logical sense because if the plan of liquidation was not being the solution and liquidation of winding up effect of what Winthrop could do is pay the 9.25% quarterly dividend and then take every amount of cash it has after that pay down to the common which will put the liquidation preference at risk. Well that would mean that the preferred wouldn't get any of their $126 million.

John Garilli

$120 million, (inaudible) $6 million correct. It could be a risk.

Michael Ashner

They could get their current dividend but there would be no cash to pay in principal.

John Garilli

Correct, that would be helpful.

Unidentified Analyst

And then…

Michael Ashner

I think, I hope that answers your questions.

Unidentified Analyst

Yes, that was very clear, I guess to confirm there is no vision for like make whole payment for dividends up until the November 2016 non-called date?

Michael Ashner

That is correct.

Unidentified Analyst

And then you said that I guess you guys have to give notice to the preferred holders, do you know how…?

Michael Ashner

The 30 days no more, no less than 30 and no more than I believe it’s 60.

Unidentified Analyst

Okay. So basically does that 30 days is that start from the liquidation so like in August if shareholders do liquidate does that 30 days start ticking from.

Michael Ashner

The notice would be from the company, let’s say the company has the cash to satisfy the liquidation preference, whenever again in September or January 1st to Michael’s point on January 1st, the early stage that it could pay-off would be February 1st, so I guess technically January 31st.

John Garilli

And the latest that would be whatever 60 days after January 1st, its February 2nd, and that’s is the (inaudible).

Unidentified Analyst

Okay. Great thanks a lot guys.

Operator

Thank you. Our next question comes from line of Wilkes Graham with Compass Point Research. Please proceed with your question. Mr. Graham your line is live with proceed with your question.

Wilkes Graham - Compass Point

Sorry. I'm sorry, I was on the -- you -- I have just one follow up. You mentioned that you ran a process. You didn't get the price you wanted. You clearly think that you're going to get much closer to the real NAV of the company, probably plus some appreciation at 701 and STS via a liquidation. But as you pare down the portfolio or wind down the portfolio, can you still take a bid for the whole company once you started the process?

Unidentified Company Representative

Absolutely.

Wilkes Graham - Compass Point

Okay. That's the clarification I needed. Thank you.

Operator

Thank you. We have no further questions in queue at this time. I would like to turn the floor back over to management for closing comments.

Michael Ashner

Well, thank you all for joining us today for our call. If you have any questions regarding any of the items that we discussed today please feel free to contact Carolyn or myself or David Heyman for any clarification you like. As always, you can as follow through this on www.winthropreit.com. And all have a good day.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time and thank you for your participation.

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