The real estate investment trust, whose holdings include a 49 percent stake in Manhattan’s Worldwide Plaza, is worth about $14 a share, said Litt, founder and chief investment officer of Land & Buildings Investment Management LLC. The shares were little changed at $10.15 at 12:16 p.m. in New York trading.

“We view this discount as largely a result of institutional investor concerns regarding NYRT’s corporate governance, lack of appropriate board stewardship, and the legacy external management structure,” Litt said in a letter to Marc Rowan, a co-founder of Apollo Global Management LLC, which agreed to buy a majority interest in a firm, AR Capital, which externally manages New York REIT.

New York REIT properties including Worldwide Plaza, a fully occupied skyscraper on Eighth Avenue whose tenants include Nomura Holdings Inc., and 1440 Broadway, a tower just south of Times Square, “are crown jewels, prime Manhattan office buildings,” Litt said in an interview. Worldwide Plaza “would fetch a very big price if that was put on the market.” 

The company has underperformed primarily because of flawed corporate governance, Litt said. Once investors are confident the board is serving them and not New York REIT’s external manager, the company will trade closer to the value of its properties, he said.

Stephen Cohen, speaking for both Apollo’s Rowan and New York REIT, said neither had any comment on the letter. Apollo’s chairman is billionaire Leon Black.

‘More Independence’

Litt called Michael Happel, who replaced Schorsch as the company’s chief executive officer in December, “an earnest and sincere guy.” But Happel can’t fix investor concerns without a more independent board, he said. 

“We need real guys the market believes in,” Litt said. 

Land & Buildings held almost 1.2 percent of New York REIT’s shares as of June 30, according to data compiled by Bloomberg.

New York REIT has been under pressure from shareholders since founder Schorsch became embroiled last year in a scandal over accounting errors at American Realty Capital Properties Inc., now known as Vereit Inc. He resigned from New York REIT’s board along with those of 12 other companies in December. In May, New York REIT suspended a study by investment bankers into ways of enhancing shareholder value.

Incentive Fee

Litt, in his letter, said he is concerned about a $33.5 million incentive fee AR Capital earned from New York REIT. The fee was based on a stock price that was inflated by the company’s engagement of Barclays Plc’s investment banking unit last October to advise on its options, Litt said in the interview. Such studies sometimes lead to the sale of assets or the entire company.

The payment showed investors “they were not truly interested in maximizing value for shareholders by selling the company,” Litt said.

Also, all four of the landlord’s board members are employed by AR Capital or serve on boards of other entities advised by the external manager, he wrote.

Shareholder Rambleside Holdings has called on New York REIT to consider a sale or liquidation, while real estate investors Steve Witkoff and Michael Ashner have offered to manage the company.