Gyrodyne's Liquidation Value Rises Amidst Property Entitlement Battles

TL;DR

**GYRO's liquidation value is up, but legal battles over property entitlements could seriously delay payouts and eat into shareholder returns.**

AI Summary

Gyrodyne, LLC reported net assets in liquidation of $32,378,669 as of September 30, 2025, an increase of $1,782,356 or 5.8% from $30,596,313 at December 31, 2024. This increase was primarily driven by a $4,502,000 change in the liquidation value of real estate, partially offset by a $2,719,644 remeasurement of assets and liabilities. The company's real estate held for sale increased to $54,890,000 from $50,388,000. Total liabilities rose to $27,768,967 from $26,063,778, with estimated liquidation and operating costs net of estimated receipts increasing by $1,183,499 to $12,273,245. Gyrodyne is pursuing entitlements on its Flowerfield and Cortlandt Manor properties to maximize sale value, with a significant legal appeal ongoing for Flowerfield. A Purchase and Sale Agreement for an approximately 49-acre parcel of Flowerfield was signed on July 30, 2025, with B2K Smithtown LLC, valued between $24,000,000 and $28,740,000, contingent on subdivision and site plan approval. The company anticipates completing its liquidation by 2027, though this timeline is subject to significant risks.

Why It Matters

Gyrodyne's strategic shift to a liquidation basis of accounting and its focus on maximizing real estate value through entitlements directly impacts investor returns, as distributions are tied to asset sales. The ongoing Article 78 Proceeding for the Flowerfield property introduces significant legal and timing risks, potentially delaying the 2027 liquidation target and affecting the ultimate cash distributed to shareholders. Competitors in the real estate development space, particularly those eyeing properties in Suffolk and Westchester Counties, will be watching Gyrodyne's success in navigating regulatory hurdles and legal challenges, as it could set precedents for similar entitlement-driven strategies. The B2K Smithtown LLC agreement, valued up to $28.74 million, signals potential for substantial asset monetization, but its contingency on approvals highlights the inherent uncertainty.

Risk Assessment

Risk Level: high — The risk level is high due to significant legal uncertainties surrounding the Flowerfield property's Article 78 Proceeding, with petitioners appealing the dismissal and filing further motions, which could extend the liquidation timeline beyond the anticipated 2027. Additionally, the B2K Agreement for $24,000,000 to $28,740,000 is contingent on subdivision and site plan approval, introducing regulatory risk. Estimated liquidation and operating costs increased by $1,183,499 to $12,273,245, indicating rising expenses that could erode net asset value.

Analyst Insight

Investors should closely monitor the progress of the Flowerfield Article 78 Proceeding and the B2K Agreement's approval status. Given the high legal and regulatory risks, consider this a speculative investment with potential for significant delays and cost overruns impacting final distributions. Evaluate the current share price against the stated net assets in liquidation, factoring in the uncertainty of the 2027 liquidation timeline.

Financial Highlights

total Assets

$60.15M

total Debt

$10.95M

cash Position

$5.11M

Key Numbers

• $32.38M — Net assets in liquidation (Increased by $1,782,356 or 5.8% from December 31, 2024)
• $54.89M — Real estate held for sale (Increased from $50,388,000 at December 31, 2024)
• $4.50M — Change in liquidation value of real estate (Primary driver of net asset increase)
• $2.72M — Remeasurement of assets and liabilities (Offsetting reduction in net asset value)
• $28.74M — Estimated value of B2K contract (Potential sale price for a portion of Flowerfield, contingent on approvals)
• $12.27M — Estimated liquidation and operating costs (Increased by $1,183,499 from December 31, 2024)
• 2,199,308 — Common shares outstanding (As of November 10, 2025)
• 2027 — Anticipated liquidation completion year (Subject to significant risks and potential extensions)

Key Players & Entities

• Gyrodyne, LLC (company) — Registrant and primary entity undergoing liquidation
• B2K Smithtown LLC (company) — Purchaser of a 49-acre parcel of Flowerfield property
• Town of Smithtown Planning Board (regulator) — Granted preliminary approval for Flowerfield subdivision
• Incorporated Village of Head of the Harbor (company) — Petitioner in the Article 78 Proceeding against Gyrodyne
• Supreme Court of the State of New York, Suffolk County (regulator) — Court handling the Article 78 Proceeding
• JLL (company) — Real estate broker engaged to sell properties
• Flowerfield (company) — One of Gyrodyne's two remaining real estate properties
• Cortlandt Manor (company) — One of Gyrodyne's two remaining real estate properties
• GSD Flowerfield LLC (company) — Wholly-owned subsidiary of Gyrodyne that entered the B2K Agreement

FAQ

Risk Factors

• Flowerfield Subdivision and Article 78 Proceeding [high — legal]: Gyrodyne is involved in a legal battle concerning the Flowerfield Subdivision Application. An Article 78 Proceeding seeks to annul the Planning Board's approval of the subdivision and its findings statement. While motions to dismiss were partially granted, the case continues with specific petitioners, posing a risk to the planned development and sale of the property.
• Delays in Entitlement and Approval Processes [medium — operational]: The pursuit of entitlements for Flowerfield and Cortlandt Manor has faced significant delays, notably due to the COVID-19 pandemic impacting regulatory staff. These delays can extend the timeline for property sales and potentially impact the maximized sale value, affecting the overall liquidation timeline.
• Uncertainty in Liquidation Value and Distributions [medium — financial]: The company's strategy to pursue entitlements aims to maximize sale value, but the ultimate amount of proceeds and timing of distributions to shareholders are uncertain. The actual distributions may not equal or exceed the estimated net assets in liquidation, and are subject to the Board's discretion and satisfaction of liabilities.
• Contingent Purchase Agreement for Flowerfield Parcel [high — financial]: A Purchase and Sale Agreement for a 49-acre parcel of Flowerfield is valued between $24,000,000 and $28,740,000, but it is contingent on subdivision and site plan approval. Failure to obtain these approvals would jeopardize this significant potential sale, impacting the liquidation process.
• Increasing Liquidation and Operating Costs [medium — financial]: Estimated liquidation and operating costs net of estimated receipts increased by $1,183,499 to $12,273,245 as of September 30, 2025. This rise in costs directly reduces the net assets available for distribution to shareholders.

Industry Context

The real estate development and management industry, particularly for properties undergoing entitlement processes, is subject to significant regulatory oversight and market fluctuations. Companies in this space often face lengthy approval timelines and legal challenges, as seen with Gyrodyne's Flowerfield property. The success of such ventures hinges on navigating complex zoning laws, environmental reviews, and community feedback, alongside broader economic conditions affecting property values and development demand.

Regulatory Implications

Gyrodyne's operations are subject to local zoning and land use regulations, as well as environmental review processes like SEQRA. The ongoing Article 78 Proceeding highlights the critical nature of these regulatory approvals and the potential for legal challenges to derail development plans and impact asset disposition timelines.

What Investors Should Do

1. Monitor the outcome of the Flowerfield Article 78 Proceeding.
2. Track progress on entitlement applications for Cortlandt Manor.
3. Evaluate the company's ability to manage liquidation costs.
4. Assess the feasibility of the 2027 liquidation completion target.

Key Dates

• 2025-07-30: Purchase and Sale Agreement signed for Flowerfield parcel — Indicates a potential significant sale of a large portion of the Flowerfield property, valued between $24M and $28.74M, contingent on approvals.
• 2025-09-30: Consolidated Statements of Net Assets as of September 30, 2025 — Reports net assets in liquidation of $32.38M, an increase from December 31, 2024, driven by real estate value changes.
• 2024-12-31: Consolidated Statements of Net Assets as of December 31, 2024 — Reported net assets in liquidation of $30.60M, serving as the prior period benchmark for the current reporting period.
• 2024-02-06: Supreme Court Order on Flowerfield Article 78 Proceeding — The court denied motions to dismiss the Article 78 Proceeding in part, allowing it to continue against certain petitioners, impacting the legal certainty of the Flowerfield development.
• 2022-03-30: Town of Smithtown Planning Board granted preliminary approval for Flowerfield Subdivision — This was a key step in the entitlement process for Flowerfield, though it was subsequently challenged by an Article 78 Proceeding.

Glossary

Liquidation Basis

A basis of accounting where assets are valued at their estimated liquidation values and liabilities are recognized at their estimated settlement amounts, used when a company is winding down its operations. (Gyrodyne is in liquidation, so its financial statements are presented on this basis to reflect the expected net proceeds available to shareholders.)

Entitlements

The process of obtaining necessary governmental approvals and permits (e.g., zoning, subdivision, site plan) to develop or redevelop a property. (Gyrodyne's strategy to maximize property value relies heavily on obtaining entitlements for its Flowerfield and Cortlandt Manor properties.)

Article 78 Proceeding

A type of legal action in New York State used to review the legality of a decision made by a government body or officer. (This is the legal mechanism being used by opponents to challenge the approval of Gyrodyne's Flowerfield Subdivision Application.)

Remeasurement of assets and liabilities

The process of re-evaluating the value of assets and liabilities to reflect current market conditions or changes in estimates, often impacting net income or net assets. (A significant negative remeasurement of $2,719,644 offset the gains from real estate value changes, impacting the net assets in liquidation.)

SEQRA

State Environmental Quality Review Act, a New York State law requiring state and local government agencies to consider environmental impacts before undertaking certain actions. (The findings statement related to SEQRA for the Flowerfield Subdivision Application is a key point of contention in the ongoing legal challenge.)

Year-Over-Year Comparison

Gyrodyne's net assets in liquidation increased by 5.8% to $32.38 million as of September 30, 2025, compared to $30.60 million at December 31, 2024. This growth was primarily driven by a $4.50 million increase in the liquidation value of real estate held for sale, which rose to $54.89 million. However, this was partially offset by a $2.72 million remeasurement of assets and liabilities. Total liabilities also increased, with estimated liquidation and operating costs rising by $1.18 million to $12.27 million, indicating increased expenses associated with the winding-down process.

Key Financial Figures

• $193,000 — xtension/new loan fees of approximately $193,000 and additional land development fees of

Filing Documents

• gyrllc20250930_10q.htm (10-Q) — 689KB
• ex_882326.htm (EX-10.10) — 18KB
• ex_882324.htm (EX-31.1) — 12KB
• ex_882325.htm (EX-32.1) — 7KB
• db01.jpg (GRAPHIC) — 6KB
• 0001437749-25-034094.txt ( ) — 4082KB
• gyro-20250930.xsd (EX-101.SCH) — 61KB
• gyro-20250930_def.xml (EX-101.DEF) — 342KB
• gyro-20250930_lab.xml (EX-101.LAB) — 269KB
• gyro-20250930_pre.xml (EX-101.PRE) — 361KB
• gyro-20250930_cal.xml (EX-101.CAL) — 11KB
• gyrllc20250930_10q_htm.xml (XML) — 478KB

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION 3

Financial Statements

Item 1. Financial Statements. 3 Consolidated Statements of Net Assets as of September 30, 2025 (liquidation basis and unaudited) and December 31, 2024 (liquidation basis) 3 Consolidated Statement of Changes in Net Assets for the nine months ended September 30, 2025 (liquidation basis and unaudited) 4

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 5

Risk Factors

Item 1A. Risk Factors. 19

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 21

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 35

Controls and Procedures

Item 4. Controls and Procedures. 35

- OTHER INFORMATION

PART II - OTHER INFORMATION 35

Legal Proceedings

Item 1. Legal Proceedings. 35

Exhibits

Item 6. Exhibits. 36

SIGNATURES

SIGNATURES 38 EXHIBIT INDEX 38 2

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. GYRODYNE, LLC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF NET ASSETS AS OF SEPTEMBER 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024 (Liquidation Basis) September 30, December 31, 2025 (Unaudited) 2024 ASSETS: Real estate held for sale $ 54,890,000 $ 50,388,000 Cash and cash equivalents 5,106,711 5,899,232 Rent receivable 135,026 335,966 Other receivables 15,899 36,893 Total Assets $ 60,147,636 $ 56,660,091 LIABILITIES: Accounts payable $ 1,945,240 $ 1,524,238 Accrued liabilities 2,333,208 2,045,596 Deferred rent liability 36,660 21,195 Tenant security deposits payable 235,411 213,081 Loans payable 10,945,203 11,169,922 Estimated liquidation and operating costs net of estimated receipts 12,273,245 11,089,746 Total Liabilities 27,768,967 26,063,778 Net assets in liquidation $ 32,378,669 $ 30,596,313 See notes to consolidated financial statements 3 GYRODYNE, LLC AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 2025 (Liquidation Basis) (Unaudited) Net assets in liquidation, as of December 31, 2024 $ 30,596,313 Changes in assets and liabilities in liquidation: Change in liquidation value of real estate 4,502,000 Remeasurement of assets and liabilities ( 2,719,644 ) Net increase in liquidation value 1,782,356 Net assets in liquidation, as of September 30, 2025 $ 32,378,669 See notes to consolidated financial statements 4

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (LIQUIDATION BASIS) FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 2025 (unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (LIQUIDATION BASIS) FOR THE NINE-MONTHS ENDED SEPTEMBER 30, 2025 (unaudited) 1. The Company Strategic Overview Gyrodyne, LLC's (including its subsidiaries, "Gyrodyne", the "Company" or the "Registrant") corporate strategy is to pursue entitlements on our two remaining properties, so that they can be sold to one or more developers with increased development flexibility at higher prices, thereby maximizing value and distributions. Gyrodyne intends to dissolve after we complete the disposition of our assets, apply the proceeds to settle debts and claims, and then pay liquidating distributions to our shareholders. Gyrodyne filed subdivision applications in March 2017 with respect to Cortlandt Manor and Flowerfield. The COVID-19 pandemic caused significant delays in the regulatory approval process, as state, county and local staff charged with processing our subdivision applications all postponed activity due to work-from-home transitions. Flowerfield On March 30, 2022, the Town of Smithtown Planning Board (the "Planning Board") voted four to zero with one abstention to grant Gyrodyne's application for preliminary approval to divide the Flowerfield property into eight lots, subject to certain conditions (the "Flowerfield Subdivision Application"). On April 26, 2022, the Incorporated Village of Head of the Harbor and certain other parties (collectively, the "Petitioners"), commenced a special proceeding under Article 78 of New York's Civil Practice Law & Rules (the "Article 78 Proceeding") against the Town of Smithtown and certain other parties, including Gyrodyne, seeking to annul the Planning Board's determinations relating to the Flowerfield Subdivision Application. Specifically, the petition commencing the Article 78 Proceeding (the "Petition") seeks to annul the Planning Board's (i) approval of a findings statement pursuant to the State Environmental Quality Review Act ("SEQRA"), dated September 16, 2021, and ad

Business

Business Gyrodyne is a limited liability company formed under the laws of the State of New York whose primary business is the management of, and the pursuit of entitlements on, a portfolio of medical office and industrial properties located in Suffolk ("Flowerfield") and Westchester Counties ("Cortlandt Manor"), New York State. Substantially all of our developed properties are subject to leases in which the tenant reimburses the Company for a portion, all of or substantially all of the costs and/or cost increases for utilities, insurance, repairs, maintenance and real estate taxes. Certain leases provide that the Company is responsible for certain operating expenses. 6 Our efforts to generate the highest values for Flowerfield and Cortlandt Manor may involve in limited circumstances other strategies to manage risk and or enhance the net value of Flowerfield and Cortlandt Manor to maximize the returns for our shareholders. Gyrodyne intends to dissolve after we complete the disposition of all of our real property assets, apply the proceeds of such dispositions first to settle any debts and claims, pending or otherwise, against Gyrodyne, and then pay distributions to holders of Gyrodyne common shares. The process of seeking entitlements and the amount and timing of distributions from proceeds of asset sales involve risks and uncertainties. As such, it is impossible at this time to determine with certainty the ultimate amount of proceeds that will actually be distributed to our shareholders or the timing of such payments. Accordingly, no assurance can be given that the distributions will equal or exceed the estimate of net assets presented in our consolidated statements of net assets. The actual nature, amount and timing of all distributions will be determined by Gyrodyne's Board in its sole discretion and will depend in part upon the Company's ability to convert our remaining assets into cash in compliance with our obligations under the Stipulation entered into in

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