UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13274 Mack-Cali Realty Corporation

Commission File Number: 333-57103 Mack-Cali Realty, L.P.

Mack-Cali Realty Corporation

Mack-Cali Realty, L.P.

(Exact name of registrant as specified in its charter)


Maryland (Mack-Cali Realty Corporation)		22-3305147 (Mack-Cali Realty Corporation)
Delaware (Mack-Cali Realty, L.P.)		22-3315804 (Mack-Cali Realty, L.P.)
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


Harborside 3, 210 Hudson St., Ste. 400, Jersey City, New Jersey		07311
(Address of principal executive offices)		(Zip Code)

(732) 590-1010

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
‎Mack-Cali Realty Corporation:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CLI	New York Stock Exchange

Mack-Cali Realty, L.P.:
‎None

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days.


Mack-Cali Realty Corporation	YES  NO 
Mack-Cali Realty, L.P.	YES  NO 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Mack-Cali Realty Corporation	YES  NO 
Mack-Cali Realty, L.P.	YES  NO 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Mack-Cali Realty Corporation:


Large accelerated filer 	Accelerated filer 	Non-accelerated filer 	Smaller reporting company 	Emerging Growth Company 

Mack-Cali Realty, L.P.:


Large accelerated filer 	Accelerated filer 	Non-accelerated filer 	Smaller reporting company 	Emerging Growth Company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Mack-Cali Realty Corporation 

Mack-Cali Realty, L.P. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Mack-Cali Realty Corporation	YES  NO 
Mack-Cali Realty, L.P.	YES  NO 

As of May 4, 2021, there were 90,730,649 shares of Mack-Cali Realty Corporation’s Common Stock, par value $0.01 per share, outstanding.

Mack-Cali Realty, L.P. does not have any class of common equity that is registered pursuant to Section 12 of the Exchange Act.

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EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended March 31, 2021 of Mack-Cali Realty Corporation and Mack-Cali Realty, L.P. Unless stated otherwise or the context otherwise requires, references to the “Operating Partnership” mean Mack-Cali Realty, L.P., a Delaware limited partnership, and references to the “General Partner” mean Mack-Cali Realty Corporation, a Maryland corporation and real estate investment trust (“REIT”), and its subsidiaries, including the Operating Partnership. References to the “Company,” “we,” “us” and “our” mean collectively the General Partner, the Operating Partnership and those entities/subsidiaries consolidated by the General Partner.

The Operating Partnership conducts the business of providing leasing, management, acquisition, development, construction and tenant-related services for its General Partner. The Operating Partnership, through its operating divisions and subsidiaries, including the Mack-Cali property-owning partnerships and limited liability companies is the entity through which all of the General Partner’s operations are conducted. The General Partner is the sole general partner of the Operating Partnership and has exclusive control of the Operating Partnership’s day-to-day management.

As of March 31, 2021, the General Partner owned an approximate 91.0 percent common unit interest in the Operating Partnership. The remaining approximate 9.0 percent common unit interest is owned by limited partners. The limited partners of the Operating Partnership are (1) persons who contributed their interests in properties to the Operating Partnership in exchange for common units (each, a “Common Unit”) or preferred units of limited partnership interest in the Operating Partnership or (2) recipients of long term incentive plan units of the Operating Partnership pursuant to the General Partner’s executive compensation plans.

A Common Unit of the Operating Partnership and a share of common stock of the General Partner (the “Common Stock”) have substantially the same economic characteristics in as much as they effectively share equally in the net income or loss of the Company. The General Partner owns a number of common units of the Operating Partnership equal to the number of issued and outstanding shares of the General Partner’s common stock. Common unitholders (other than the General Partner) have the right to redeem their Common Units, subject to certain restrictions under the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Partnership Agreement”) and agreed upon at the time of issuance of the units that may restrict such right for a period of time, generally one year from issuance. The redemption is required to be satisfied in shares of Common Stock of the General Partner, cash, or a combination thereof, calculated as follows: one share of the General Partner’s Common Stock, or cash equal to the fair market value of a share of the General Partner’s Common Stock at the time of redemption, for each Common Unit. The General Partner, in its sole discretion, determines the form of redemption of Common Units (i.e., whether a common unitholder receives Common Stock of the General Partner, cash, or any combination thereof). If the General Partner elects to satisfy the redemption with shares of Common Stock of the General Partner as opposed to cash, the General Partner is obligated to issue shares of its Common Stock to the redeeming unitholder. Regardless of the rights described above, the common unitholders may not put their units for cash to the Company or the General Partner under any circumstances. With each such redemption, the General Partner’s percentage ownership in the Operating Partnership will increase. In addition, whenever the General Partner issues shares of its Common Stock other than to acquire Common Units, the General Partner must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must issue to the General Partner an equivalent number of Common Units. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the quarterly reports on Form 10-Q of the General Partner and the Operating Partnership into this single report provides the following benefits:

enhance investors’ understanding of the General Partner and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business of the Company;

eliminate duplicative disclosure and provide a more streamlined and readable presentation because a substantial portion of the disclosure applies to both the General Partner and the Operating Partnership; and

create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between the General Partner and the Operating Partnership in the context of how they operate as a consolidated company. The financial results of the Operating Partnership are consolidated into the financial statements of the General Partner. The General Partner does not have any other significant assets, liabilities or operations, other than its interests in the Operating Partnership, nor does the Operating Partnership have employees of its own. The Operating Partnership, not the General Partner, generally executes all significant business relationships other than transactions involving the securities of the General Partner. The Operating Partnership holds substantially all of the assets of the General Partner, including ownership interests in joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by the General Partner, which are contributed to the capital of the Operating Partnership in consideration of common or preferred units in the Operating Partnership, as applicable, the

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Operating Partnership generates all remaining capital required by the Company’s business. These sources include working capital, net cash provided by operating activities, borrowings under the Company’s unsecured revolving credit facility and unsecured term loan facilities, the issuance of secured and unsecured debt and equity securities and proceeds received from the disposition of properties and joint ventures.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the General Partner and the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements as is the General Partner’s interest in the Operating Partnership. The noncontrolling interests in the Operating Partnership’s financial statements comprise the interests of unaffiliated partners in various consolidated partnerships and development joint venture partners. The noncontrolling interests in the General Partner’s financial statements are the same noncontrolling interests at the Operating Partnership’s level and include limited partners of the Operating Partnership. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at the General Partner and Operating Partnership levels.

To help investors better understand the key differences between the General Partner and the Operating Partnership, certain information for the General Partner and the Operating Partnership in this report has been separated, as set forth below:

Item 1. Financial Statements (unaudited), which includes the following specific disclosures for Mack-Cali Realty Corporation and Mack-Cali Realty, L.P.:

Note 2. Significant Accounting Policies, where applicable;

Note 15. Redeemable Noncontrolling Interests;

Note 16. Mack-Cali Realty Corporation’s Stockholders’ Equity and Mack-Cali Realty, L.P.’s Partners’ Capital;

Note 17. Noncontrolling Interests in Subsidiaries; and

Note 18. Segment Reporting, where applicable.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of the General Partner and the Operating Partnership in order to establish that the requisite certifications have been made and that the General Partner and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

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MACK-CALI REALTY CORPORATION

MACK-CALI REALTY, L.P.

FORM 10-Q

INDEX


			Page
Part I	Financial Information
	Item 1.	Financial Statements (unaudited):
		Mack-Cali Realty Corporation
		Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	6
		Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	7
		Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020	8
		Consolidated Statements of Changes in Equity for the three months ended March 31, 2021 and 2020	9
		Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	10
		Mack-Cali Realty, L.P.
		Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	11
		Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	12
		Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020	13
		Consolidated Statements of Changes in Equity for the three months ended March 31, 2021 and 2020	14
		Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	15
		Mack-Cali Realty Corporation and Mack-Cali Realty, L.P.
		Notes to Consolidated Financial Statements	16
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	70
	Item 4.	Controls and Procedures	70
Part II	Other Information
		Mack-Cali Realty Corporation and Mack-Cali Realty, L.P.
	Item 1.	Legal Proceedings	71
	Item 1A.	Risk Factors	71
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	71
	Item 3.	Defaults Upon Senior Securities	71
	Item 4.	Mine Safety Disclosures	71
	Item 5.	Other Information	71
	Item 6.	Exhibits	71
Exhibit Index			72
Signatures			78

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MACK-CALI REALTY CORPORATION

MACK-CALI REALTY, L.P.

Part I – Financial Information

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of operations, of comprehensive income, of changes in equity, and of cash flows and related notes thereto, have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. The financial statements reflect all adjustments consisting only of normal, recurring adjustments, which are, in the opinion of management, necessary for a fair statement for the interim periods.

The aforementioned financial statements should be read in conjunction with the notes to the aforementioned financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in Mack-Cali Realty Corporation’s and Mack-Cali Realty, L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

The results of operations for the three-month period ended March 31, 2021 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

‎

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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited)



		March 31,		December 31,
ASSETS		2021		2020
Rental property
Land and leasehold interests	$	639,636	$	639,636
Buildings and improvements		3,804,162		3,743,831
Tenant improvements		164,448		171,623
Furniture, fixtures and equipment		85,612		83,553
		4,693,858		4,638,643
Less – accumulated depreciation and amortization		(668,452)		(656,331)
		4,025,406		3,982,312
Real estate held for sale, net		415,029		656,963
Net investment in rental property		4,440,435		4,639,275
Cash and cash equivalents		261,682		38,096
Restricted cash		18,836		14,207
Investments in unconsolidated joint ventures		159,971		162,382
Unbilled rents receivable, net		79,855		84,907
Deferred charges, goodwill and other assets, net		192,028		199,541
Accounts receivable		7,551		9,378

Total assets	$	5,160,358	$	5,147,786

LIABILITIES AND EQUITY
Senior unsecured notes, net	$	572,945	$	572,653
Unsecured revolving credit facility and term loans		-		25,000
Mortgages, loans payable and other obligations, net		2,249,019		2,204,144
Dividends and distributions payable		1,475		1,493
Accounts payable, accrued expenses and other liabilities		184,587		194,717
Rents received in advance and security deposits		31,810		34,101
Accrued interest payable		15,739		10,001
Total liabilities		3,055,575		3,042,109

Commitments and contingencies

Redeemable noncontrolling interests		515,267		513,297

Equity:
Mack-Cali Realty Corporation stockholders’ equity:
Common stock, $0.01 par value, 190,000,000 shares authorized,
90,729,703 and 90,712,417 shares outstanding		907		907
Additional paid-in capital		2,528,570		2,528,187
Dividends in excess of net earnings		(1,122,654)		(1,130,277)
Accumulated other comprehensive income (loss)		-		-
Total Mack-Cali Realty Corporation stockholders’ equity		1,406,823		1,398,817

Noncontrolling interests in subsidiaries:
Operating Partnership		139,246		148,791
Consolidated joint ventures		43,447		44,772
Total noncontrolling interests in subsidiaries		182,693		193,563

Total equity		1,589,516		1,592,380

Total liabilities and equity	$	5,160,358	$	5,147,786

The accompanying notes are an integral part of these consolidated financial statements.
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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)


		Three Months Ended
		March 31,
REVENUES		2021		2020
Revenue from leases	$	65,771	$	71,979
Real estate services		2,527		2,993
Parking income		3,086		5,265
Hotel income		1,053		1,625
Other income		3,656		1,742
Total revenues		76,093		83,604

EXPENSES
Real estate taxes		11,831		11,140
Utilities		4,092		3,853
Operating services		15,450		16,221
Real estate services expenses		3,318		3,722
General and administrative		13,989		15,818
Depreciation and amortization		28,173		33,895
Land and other impairments		413		5,263
Total expenses		77,266		89,912

OTHER (EXPENSE) INCOME
Interest expense		(17,610)		(20,918)
Interest and other investment income (loss)		17		32
Equity in earnings (loss) of unconsolidated joint ventures		(1,456)		(708)
Realized gains (losses) and unrealized gains (losses) on disposition of
rental property, net		-		(7,915)
Gain on disposition of developable land		-		4,813
Total other income (expense)		(19,049)		(24,696)
Income (loss) from continuing operations		(20,222)		(31,004)

Discontinued operations:
Income from discontinued operations		10,962		20,906
Realized gains (losses) and unrealized gains (losses) on
disposition of rental property and impairments, net		22,781		(27,746)
Total discontinued operations, net		33,743		(6,840)
Net income (loss)		13,521		(37,844)
Noncontrolling interests in consolidated joint ventures		1,335		176
Noncontrolling interests in Operating Partnership of income from
continuing operations		2,305		3,562
Noncontrolling interests in Operating Partnership in discontinued operations		(3,067)		653
Redeemable noncontrolling interests		(6,471)		(6,471)
Net income (loss) available to common shareholders	$	7,623	$	(39,924)

Basic earnings per common share:
Income (loss) from continuing operations	$	(0.28)	$	(0.40)
Discontinued operations		0.34		(0.07)
Net income (loss) available to common shareholders	$	0.06	$	(0.47)

Diluted earnings per common share:
Income (loss) from continuing operations	$	(0.28)	$	(0.40)
Discontinued operations		0.34		(0.07)
Net income (loss) available to common shareholders	$	0.06	$	(0.47)

Basic weighted average shares outstanding		90,692		90,616

Diluted weighted average shares outstanding		99,760		100,183

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (unaudited)



		Three Months Ended
		March 31,
		2021		2020

Net income (loss)	$	13,521	$	(37,844)
Other comprehensive income (loss):
Net unrealized gain (loss) on derivative instruments
for interest rate swaps		-		(16)
Comprehensive income (loss)	$	13,521	$	(37,860)
Comprehensive (income) loss attributable to noncontrolling
interests in consolidated joint ventures		1,335		176
Comprehensive (income) loss attributable to redeemable
noncontrolling interests		(6,471)		(6,471)
Comprehensive (income) loss attributable to noncontrolling
interests in Operating Partnership		762		4,249
Comprehensive income (loss) attributable to common shareholders	$	9,147	$	(39,906)

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


									Accumulated
					Additional		Dividends in		Other		Noncontrolling
	Common Stock				Paid-In		Excess of		Comprehensive		Interests
For the Three Months Ended March 31, 2021	Shares		Par Value		Capital		Net Earnings		Income (Loss)		in Subsidiaries		Total Equity
Balance at January 1, 2021	90,712	$	907	$	2,528,187	$	(1,130,277)	$	-	$	193,563	$	1,592,380
Net income (loss)	-		-		-		7,623		-		5,898		13,521
Common stock dividends	-		-		-		-		-		-		-
Common unit distributions	-		-		-		-		-		4		4
Redeemable noncontrolling interests	-		-		(1,791)		-		-		(6,650)		(8,441)
Change in noncontrolling interests in consolidated joint ventures	-		-		-		-		-		10		10
Redemption of common units	-		-		-		-		-		(10,459)		(10,459)
Shares issued under Dividend Reinvestment and
Stock Purchase Plan	1		-		18		-		-		-		18
Directors' deferred compensation plan	-		-		72		-		-		-		72
Stock compensation	16		-		646		-		-		1,883		2,529
Cancellation of common stock	-		-		(118)		-		-		-		(118)
Rebalancing of ownership percentage
between parent and subsidiaries	-		-		1,556		-		-		(1,556)		-
Balance at March 31, 2021	90,729	$	907	$	2,528,570	$	(1,122,654)	$	-	$	182,693	$	1,589,516


									Accumulated
					Additional		Dividends in		Other		Noncontrolling
	Common Stock				Paid-In		Excess of		Comprehensive		Interests
For the Three Months Ended March 31, 2020	Shares		Par Value		Capital		Net Earnings		Income (Loss)		in Subsidiaries		Total Equity
Balance at January 1, 2020	90,595	$	906	$	2,535,440	$	(1,042,629)	$	(18)	$	205,776	$	1,699,475
Net income (loss)	-		-		-		(39,924)		-		2,080		(37,844)
Common stock dividends	-		-		-		(18,119)		-		-		(18,119)
Common unit distributions	-		-		-		-		-		(2,270)		(2,270)
Redeemable noncontrolling interests	-		-		(2,804)		-		-		(6,767)		(9,571)
Change in noncontrolling interests in consolidated joint ventures	-		-		-		-		-		216		216
Redemption of common units	-		-		-		-		-		(2,141)		(2,141)
Shares issued under Dividend Reinvestment and
Stock Purchase Plan	1		-		19		-		-		-		19
Directors' deferred compensation plan	-		-		82		-		-		-		82
Stock compensation	-		-		430		-		-		2,100		2,530
Cancellation of unvested LTIP units	-		-		-		-		-		(201)		(201)
Other comprehensive income (loss)	-		-		-		-		18		(34)		(16)
Rebalancing of ownership percentage
between parent and subsidiaries	-		-		742		-		-		(742)		-
Balance at March 31, 2020	90,596	$	906	$	2,533,909	$	(1,100,672)	$	-	$	198,017	$	1,632,160

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)


		Three Months Ended
		March 31,
CASH FLOWS FROM OPERATING ACTIVITIES		2021		2020
Net income (loss)	$	13,521	$	(37,844)
Net (income) loss from discontinued operations		(33,743)		6,840
Net income (loss) from continuing operations		(20,222)		(31,004)
Adjustments to reconcile net income (loss) to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets		27,111		33,003
Amortization of directors deferred compensation stock units		72		82
Amortization of stock compensation		2,529		2,530
Amortization of deferred financing costs		907		1,024
Amortization of debt discount and mark-to-market		167		(237)
Equity in (earnings) loss of unconsolidated joint ventures		1,456		708
Distributions of cumulative earnings from unconsolidated joint ventures		114		815
Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net		-		7,915
Gain on disposition of developable land		-		(4,813)
Land and other impairments		413		5,263
Changes in operating assets and liabilities:
Increase in unbilled rents receivable, net		(964)		(1,357)
(Increase) decrease in deferred charges, goodwill and other assets		1,719		273
Decrease (increase) in accounts receivable, net		1,859		(1,673)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(3,760)		4,295
(Decrease) Increase in rents received in advance and security deposits		296		(5,132)
Increase in accrued interest payable		5,738		5,473
Net cash flows provided by operating activities - continuing operations		17,435		17,165
Net cash flows provided by operating activities - discontinued operations		8,719		26,498

Net cash provided by operating activities	$	26,154	$	43,663

CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles	$	-	$	(16,019)
Rental property additions and improvements		(16,978)		(63,004)
Development of rental property and other related costs		(57,313)		(71,989)
Proceeds from the sales of rental property		-		6,939
Repayment of notes receivable		167		83
Investment in unconsolidated joint ventures		(509)		(125)
Distributions in excess of cumulative earnings from unconsolidated joint ventures		1,407		4,396
Net cash used in investing activities - continuing operations		(73,226)		(139,719)
Net cash provided by investing activities - discontinued operations		263,196		56,621

Net cash provided by (used in) investing activities	$	189,970	$	(83,098)

CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility	$	8,000	$	69,000
Repayment of revolving credit facility		(33,000)		(121,000)
Proceeds from mortgages and loans payable		44,150		120,658
Repayment of mortgages, loans payable and other obligations		(134)		(140)
Common unit redemptions		-		(2,141)
Payment of financing costs		(450)		(656)
(Contributions) distributions to noncontrolling interests		10		216
Distributions to redeemable noncontrolling interests		(6,471)		(6,471)
Payment of common dividends and distributions		(13)		(20,072)

Net cash provided by financing activities	$	12,092	$	39,394

Net increase (decrease) in cash and cash equivalents	$	228,216	$	(41)
Cash, cash equivalents and restricted cash, beginning of period (1)		52,302		41,168

Cash, cash equivalents and restricted cash, end of period (2)	$	280,518	$	41,127

(1)Includes Restricted Cash of $14,207 and $15,577 as of December 31, 2020 and 2019, respectively.

(2)Includes Restricted Cash of $18,836 and $15,863 as of March 31, 2021 and 2020, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except per unit amounts) (unaudited)



		March 31,		December 31,
ASSETS		2021		2020
Rental property
Land and leasehold interests	$	639,636	$	639,636
Buildings and improvements		3,804,162		3,743,831
Tenant improvements		164,448		171,623
Furniture, fixtures and equipment		85,612		83,553
		4,693,858		4,638,643
Less – accumulated depreciation and amortization		(668,452)		(656,331)
		4,025,406		3,982,312
Real estate held for sale, net		415,029		656,963
Net investment in rental property		4,440,435		4,639,275
Cash and cash equivalents		261,682		38,096
Restricted cash		18,836		14,207
Investments in unconsolidated joint ventures		159,971		162,382
Unbilled rents receivable, net		79,855		84,907
Deferred charges, goodwill and other assets, net		192,028		199,541
Accounts receivable		7,551		9,378

Total assets	$	5,160,358	$	5,147,786

LIABILITIES AND EQUITY
Senior unsecured notes, net	$	572,945	$	572,653
Unsecured revolving credit facility and term loans		-		25,000
Mortgages, loans payable and other obligations, net		2,249,019		2,204,144
Distributions payable		1,475		1,493
Accounts payable, accrued expenses and other liabilities		184,587		194,717
Rents received in advance and security deposits		31,810		34,101
Accrued interest payable		15,739		10,001
Total liabilities		3,055,575		3,042,109

Commitments and contingencies

Redeemable noncontrolling interests		515,267		513,297

Partners’ Capital:
General Partner, 90,729,703 and 90,712,417 common units outstanding		1,336,498		1,330,048
Limited partners, 8,980,338 and 9,649,031 common units/LTIPs outstanding		209,571		217,560
Total Mack-Cali Realty, L.P. partners’ capital		1,546,069		1,547,608

Noncontrolling interests in consolidated joint ventures		43,447		44,772

Total equity		1,589,516		1,592,380

Total liabilities and equity	$	5,160,358	$	5,147,786

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit amounts) (unaudited)


		Three Months Ended
		March 31,
REVENUES		2021		2020
Revenue from leases	$	65,771	$	71,979
Real estate services		2,527		2,993
Parking income		3,086		5,265
Hotel income		1,053		1,625
Other income		3,656		1,742
Total revenues		76,093		83,604

EXPENSES
Real estate taxes		11,831		11,140
Utilities		4,092		3,853
Operating services		15,450		16,221
Real estate services expenses		3,318		3,722
General and administrative		13,989		15,818
Depreciation and amortization		28,173		33,895
Land and other impairments		413		5,263
Total expenses		77,266		89,912

OTHER (EXPENSE) INCOME
Interest expense		(17,610)		(20,918)
Interest and other investment income (loss)		17		32
Equity in earnings (loss) of unconsolidated joint ventures		(1,456)		(708)
Realized gains (losses) and unrealized gains (losses) on disposition of
rental property, net		-		(7,915)
Gain on disposition of developable land		-		4,813
Total other income (expense)		(19,049)		(24,696)
Income (loss) from continuing operations		(20,222)		(31,004)

Discontinued operations:
Income from discontinued operations		10,962		20,906
Realized gains (losses) and unrealized gains (losses) on
disposition of rental property and impairments, net		22,781		(27,746)
Total discontinued operations, net		33,743		(6,840)
Net income (loss)		13,521		(37,844)
Noncontrolling interests in consolidated joint ventures		1,335		176
Redeemable noncontrolling interests		(6,471)		(6,471)
Net income (loss) available to common unitholders	$	8,385	$	(44,139)

Basic earnings per common unit:
Income (loss) from continuing operations	$	(0.28)	$	(0.40)
Discontinued operations		0.34		(0.07)
Net income (loss) available to common unitholders	$	0.06	$	(0.47)

Diluted earnings per common unit:
Income (loss) from continuing operations	$	(0.28)	$	(0.40)
Discontinued operations		0.34		(0.07)
Net income (loss) available to common unitholders	$	0.06	$	(0.47)

Basic weighted average units outstanding		99,760		100,183

Diluted weighted average units outstanding		99,760		100,183

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (unaudited)



		Three Months Ended
		March 31,
		2021		2020

Net income (loss)	$	13,521	$	(37,844)
Other comprehensive income (loss):
Net unrealized gain (loss) on derivative instruments
for interest rate swaps		-		(16)
Comprehensive income (loss)	$	13,521	$	(37,860)
Comprehensive (income) loss attributable to noncontrolling
interests in consolidated joint ventures		1,335		176
Comprehensive (income) loss attributable to redeemable
noncontrolling interests		(6,471)		(6,471)
Comprehensive income (loss) attributable to common unitholders	$	8,385	$	(44,155)

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


								Accumulated		Noncontrolling
		Limited Partner		General Partner		Limited Partner		Other		Interest
	General Partner	Common Units/		Common		Common		Comprehensive		in Consolidated
For the Three Months Ended March 31, 2021	Common Units	Vested LTIP Units		Unitholders		Unitholders		Income (Loss)		Joint Ventures		Total Equity
Balance at January 1, 2021	90,712	9,649	$	1,330,048	$	217,560	$	-	$	44,772	$	1,592,380
Net income (loss)	-	-		7,623		762		-		5,136		13,521
Distributions	-	-		-		4		-		-		4
Redeemable noncontrolling interests	-	-		(1,791)		(179)		-		(6,471)		(8,441)
Change in noncontrolling interests in consolidated joint ventures	-	-		-		-		-		10		10
Vested LTIP units	-	9		-		-		-		-		-
Redemption of limited partner common units	-	(678)		-		(10,459)		-		-		(10,459)
Shares issued under Dividend Reinvestment and
Stock Purchase Plan	1	-		18		-		-		-		18
Directors' deferred compensation plan	-	-		72		-		-		-		72
Stock compensation	16	-		646		1,883		-		-		2,529
Cancellation of common stock	-	0		(118)		-		-		-		(118)
Cancellation of unvested LTIP units	-	-		-		-		-		-		-
Balance at March 31, 2021	90,729	8,980	$	1,336,498	$	209,571	$	-	$	43,447	$	1,589,516


								Accumulated		Noncontrolling
		Limited Partner		General Partner		Limited Partner		Other		Interest
	General Partner	Common Units/		Common		Common		Comprehensive		in Consolidated
For the Three Months Ended March 31, 2020	Common Units	Vested LTIP Units		Unitholders		Unitholders		Income (Loss)		Joint Ventures		Total Equity
Balance at January 1, 2020	90,595	9,612	$	1,427,568	$	224,629	$	(18)	$	47,296	$	1,699,475
Net income (loss)	-	-		(39,924)		(4,215)		-		6,295		(37,844)
Distributions	-	-		(18,119)		(2,270)		-		-		(20,389)
Redeemable noncontrolling interests	-	-		(2,804)		(296)		-		(6,471)		(9,571)
Change in noncontrolling interests in consolidated joint ventures	-	-		-		-		-		216		216
Vested LTIP units	-	4		-		-		-		-		-
Redemption of limited partners common units	-	(98)		-		(2,141)		-		-		(2,141)
Shares issued under Dividend Reinvestment and
Stock Purchase Plan	1	-		19		-		-		-		19
Directors' deferred compensation plan	-	-		82		-		-		-		82
Other comprehensive income (loss)	-	-		-		(34)		18		-		(16)
Stock compensation	-	-		430		2,100		-		-		2,530
Cancellation of unvested LTIP units	-	-		-		(201)		-		-		(201)
Balance at March 31, 2020	90,596	9,518	$	1,367,252	$	217,572	$	0	$	47,336	$	1,632,160

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)


		Three Months Ended
		March 31,
CASH FLOWS FROM OPERATING ACTIVITIES		2021		2020
Net income (loss)	$	13,521	$	(37,844)
Net (income) loss from discontinued operations		(33,743)		6,840
Net income (loss) from continuing operations		(20,222)		(31,004)
Adjustments to reconcile net income (loss) to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets		27,111		33,003
Amortization of directors deferred compensation stock units		72		82
Amortization of stock compensation		2,529		2,530
Amortization of deferred financing costs		907		1,024
Amortization of debt discount and mark-to-market		167		(237)
Equity in (earnings) loss of unconsolidated joint ventures		1,456		708
Distributions of cumulative earnings from unconsolidated joint ventures		114		815
Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net		-		7,915
Gain on disposition of developable land		-		(4,813)
Land and other impairments		413		5,263
Changes in operating assets and liabilities:
Increase in unbilled rents receivable, net		(964)		(1,357)
(Increase) decrease in deferred charges, goodwill and other assets		1,719		273
Decrease (increase) in accounts receivable, net		1,859		(1,673)
Increase (decrease) in accounts payable, accrued expenses and other liabilities		(3,760)		4,295
(Decrease) Increase in rents received in advance and security deposits		296		(5,132)
Increase in accrued interest payable		5,738		5,473
Net cash flows provided by operating activities - continuing operations		17,435		17,165
Net cash flows provided by operating activities - discontinued operations		8,719		26,498

Net cash provided by operating activities	$	26,154	$	43,663

CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles	$	-	$	(16,019)
Rental property additions and improvements		(16,978)		(63,004)
Development of rental property and other related costs		(57,313)		(71,989)
Proceeds from the sales of rental property		-		6,939
Repayment of notes receivable		167		83
Investment in unconsolidated joint ventures		(509)		(125)
Distributions in excess of cumulative earnings from unconsolidated joint ventures		1,407		4,396
Net cash used in investing activities - continuing operations		(73,226)		(139,719)
Net cash provided by investing activities - discontinued operations		263,196		56,621

Net cash provided by (used in) investing activities	$	189,970	$	(83,098)

CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility	$	8,000	$	69,000
Repayment of revolving credit facility		(33,000)		(121,000)
Proceeds from mortgages and loans payable		44,150		120,658
Repayment of mortgages, loans payable and other obligations		(134)		(140)
Common unit redemptions		-		(2,141)
Payment of financing costs		(450)		(656)
(Contributions) distributions to noncontrolling interests		10		216
Distributions to redeemable noncontrolling interests		(6,471)		(6,471)
Payment of distributions		(13)		(20,072)

Net cash provided by financing activities	$	12,092	$	39,394

Net increase (decrease) in cash and cash equivalents	$	228,216	$	(41)
Cash, cash equivalents and restricted cash, beginning of period (1)		52,302		41,168

Cash, cash equivalents and restricted cash, end of period (2)	$	280,518	$	41,127

(1)Includes Restricted Cash of $14,207 and $15,577 as of December 31, 2020 and 2019, respectively.

(2)Includes Restricted Cash of $18,836 and $15,863 as of March 31, 2021 and 2020, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

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MACK-CALI REALTY CORPORATION, MACK-CALI REALTY, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

Organization

Mack-Cali Realty Corporation, a Maryland corporation, together with its subsidiaries (collectively, the “General Partner”) is a fully-integrated self-administered, self-managed real estate investment trust (“REIT”). The General Partner controls Mack-Cali Realty, L.P., a Delaware limited partnership, together with its subsidiaries (collectively, the “Operating Partnership”), as its sole general partner and owned a 91.0 and 90.4 percent common unit interest in the Operating Partnership as of March 31, 2021 and December 31, 2020, respectively. The General Partner’s business is the ownership of interests in and operation of the Operating Partnership and all of the General Partner’s expenses are incurred for the benefit of the Operating Partnership. The General Partner is reimbursed by the Operating Partnership for all expenses it incurs relating to the ownership and operation of the Operating Partnership.

The Operating Partnership conducts the business of providing leasing, management, acquisition, development and tenant-related services for its General Partner. The Operating Partnership, through its operating divisions and subsidiaries, including the Mack-Cali property-owning partnerships and limited liability companies, is the entity through which all of the General Partner’s operations are conducted. Unless stated otherwise or the context requires, the “Company” refers to the General Partner and its subsidiaries, including the Operating Partnership and its subsidiaries.

As of March 31, 2021, the Company owned or had interests in 49 real estate properties (the “Properties”). The Properties are comprised of 20 office buildings totaling approximately 7.1 million square feet and leased to approximately 150 tenants (which include two buildings, aggregating approximately 0.2 million square feet owned by unconsolidated joint ventures in which the Company has investment interests), 20 multi-family properties, totaling 6,018 apartment units (which include six properties aggregating 1,786 apartment units owned by unconsolidated joint ventures in which the Company has investment interests), four parking/retail properties totaling approximately 108,000 square feet (which include a building aggregating 51,000 square feet owned by unconsolidated joint ventures in which the Company has investment interests), three hotels containing 723 rooms (one of which is owned by an unconsolidated joint venture in which the Company has an investment interest) and two parcels of land leased to third parties. The Properties are located in three states in the Northeast, plus the District of Columbia.

On December 19, 2019, the Company announced that its Board had determined to sell the Company’s entire suburban New Jersey office portfolio totaling approximately 6.6 million square feet (collectively, the “Suburban Office Portfolio”). As the decision to sell the Suburban Office Portfolio represented a strategic shift in the Company’s operations, these properties’ results (other than a property not qualified to be classified as held for sale) are being classified as discontinued operations for all periods presented herein. See Note 7: Discontinued Operations.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include all accounts of the Company, its majority-owned and/or controlled subsidiaries, which consist principally of the Operating Partnership and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. See Note 2: Significant Accounting Policies – Investments in Unconsolidated Joint Ventures, for the Company’s treatment of unconsolidated joint venture interests. Intercompany accounts and transactions have been eliminated.

Accounting Standards Codification (“ASC”) 810, Consolidation, provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack (i) the ability to make decisions about the entity’s activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and substantially all of the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance: and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

On January 1, 2016, the Company adopted accounting guidance under ASC 810, Consolidation, modifying the analysis it must perform to determine whether it should consolidate certain types of legal entities. The guidance does not amend the existing disclosure requirements for variable interest entities or voting interest model entities. The guidance, however, modified the requirements to qualify

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under the voting interest model. Under the revised guidance, the Operating Partnership will be a variable interest entity of the parent company, Mack-Cali Realty Corporation. As the Operating Partnership is already consolidated in the balance sheets of Mack-Cali Realty Corporation, the identification of this entity as a variable interest entity has no impact on the consolidated financial statements of Mack-Cali Realty Corporation. There were no other legal entities qualifying under the scope of the revised guidance that were consolidated as a result of the adoption.

As of March 31, 2021 and December 31, 2020, the Company’s investments in consolidated real estate joint ventures, which are variable interest entities in which the Company is deemed to be the primary beneficiary, other than Roseland Residential, L.P. (See Note 15: Redeemable Noncontrolling Interests – Rockpoint Transaction), have total real estate assets of $483.7 million and $486.1 million, respectively, other assets of $4 million and $4.5 million, respectively, mortgages of $285.3 million and $284.8 million, respectively, and other liabilities of $20.8 million and $21 million, respectively.

The financial statements have been prepared in conformity with GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates. Certain reclassifications have been made to prior period amounts in order to conform with current period presentation, primarily related to classification of certain properties as discontinued operations.

2. SIGNIFICANT ACCOUNTING POLICIES

These financial statements should be read in conjunction with the Company’s audited Annual Report on Form 10-K for the year ended December 31, 2020, as certain disclosures in this Quarterly Report on Form 10-Q that would duplicate those included in the 10-K are not included in these financial statements.

Rental Property

Rental properties are stated at cost less accumulated depreciation and amortization. Costs directly related to the acquisition, development and construction of rental properties are capitalized. The Company adopted Financial Accounting Standards Board (“FASB”) guidance Accounting Standards Update (“ASU”) 2017-01 on January 1, 2017, which revises the definition of a business and is expected to result in more transactions to be accounted for as asset acquisitions and significantly limit transactions that would be accounted for as business combinations. Where an acquisition has been determined to be an asset acquisition, acquisition-related costs are capitalized. Capitalized development and construction costs include pre-construction costs essential to the development of the property, development and construction costs, interest, property taxes, insurance, salaries and other project costs incurred during the period of development. Capitalized development and construction salaries and related costs approximated $0.6 million and $0.5 million for the three months ended March 31, 2021 and 2020, respectively. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts.

Included in net investment in rental property as of March 31, 2021 and December 31, 2020 is real estate and building and tenant improvements not in service, as follows (dollars in thousands):



		March 31,		December 31,
		2021		2020
Land held for development (including pre-development costs, if any) (a)(c)	$	360,930	$	364,946
Development and construction in progress, including land (b)		766,978		733,560
Total	$	1,127,908	$	1,098,506

(a)Includes predevelopment and infrastructure costs included in buildings and improvements of $160.3 million and $160.3 million as of March 31, 2021 and December 31, 2020, respectively.

(b)Includes land of $74.4 million and $74.9 million as of March 31, 2021 and December 31, 2020, respectively.

(c)Includes $27.9 million of land and $6.5 million of building and improvements pertaining to assets held for sale at March 31, 2021.

The Company considers a construction project as substantially completed and held available for occupancy upon the substantial completion of improvements, but no later than one year from cessation of major construction activity (as distinguished from activities such as routine maintenance and cleanup). If portions of a rental project are substantially completed and occupied by tenants or residents, or held available for occupancy, and other portions have not yet reached that stage, the substantially completed portions are accounted for as a separate project. The Company allocates costs incurred between the portions under construction and the portions substantially

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completed and held available for occupancy, primarily based on a percentage of the relative commercial square footage or multi-family units of each portion, and capitalizes only those costs associated with the portion under construction.

Dividends and Distributions Payable

On September 30, 2020, the Company announced that its Board of Directors was suspending its common dividends and distributions attributable to the third and fourth quarters 2020. As the Company’s management estimated that as of September 2020 it had satisfied its dividends obligations as a REIT on taxable income expected for 2020, the Board made the strategic decision to suspend its common dividends and distributions for the remainder of 2020 in an effort to provide greater financial flexibility during the pandemic and to retain incremental capital to support leasing initiatives at its Harborside commercial office properties on the Jersey City waterfront. On March 19, 2021, the Company announced that its Board of Directors would continue to suspend its common dividend for the remainder of 2021 in order to conserve capital and allow for greater financial flexibility during this period of heightened economic uncertainty and based on the Company’s projected 2021 taxable income estimates. The Company believes that with this suspension, it will still satisfy its dividends obligation as a REIT on taxable income estimated for 2021.

The dividends and distributions payable at March 31, 2021 and December 31, 2020 represent amounts payable on unvested LTIP units.

Impact of Recently-Issued Accounting Standards

In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments provide practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance is optional and is effective between March 12, 2020 and December 31, 2022. The guidance may be elected over time as reference rate reform activities occur. The Company is currently in the process of evaluating the impact the adoption of ASU 2020-04 will have on the Company’s consolidated financial statements.

3. RECENT TRANSACTIONS

Properties Commencing Initial Operations

The following property commenced initial operations during the three months ended March 31, 2021 (dollars in thousands):


						Total
In Service			Property	# of		Development
Date	Property	Location	Type	Apartment Units		Costs Incurred
03/01/21	The Upton	Short Hills, NJ	Multi-Family	193	$	97,700
Totals				193	$	97,700

(a)As of March 31, 2021, 42 apartment units are currently available for occupancy. The development costs included approximately $2.9 million in land costs. The Company anticipates additional costs of $1.7 million which will be funded from a construction loan.

Additionally, a land lease located in Parsippany, New Jersey, with two restaurant tenants, also commenced initial operations during the three months ended March 31, 2021. Development costs incurred amounted to $5.1 million.

Real Estate Held for Sale/Discontinued Operations/Dispositions

On December 19, 2019, the Company announced that its Board had determined to sell the Company’s entire suburban New Jersey office portfolio totaling approximately 6.6 million square feet, which excludes the Company’s office properties in Jersey City and Hoboken, New Jersey, (collectively, the “Suburban Office Portfolio”). As the decision to sell the Suburban Office Portfolio represented a strategic shift in the Company’s operations, these properties’ results (other than a property not qualified to be classified as held for sale) are being classified as discontinued operations for all periods presented herein. See Note 7: Discontinued Operations.

In late 2019 through March 31, 2021, the Company completed the sale of 25 of these suburban office properties, totaling 4.3 million square feet, for net sales proceeds of $659.4 million. As of March 31, 2021, the Company has identified as held for sale the remaining 11 office properties (comprised of four identified disposal groups) in the Suburban Office Portfolio, totaling two million square feet (all of which the Company currently has under contract for sale for aggregate gross sales proceeds of approximately $391.4 million).

The Company plans to complete the sale of substantially all of its remaining Suburban Office Portfolio properties during the remainder of 2021, and to use the available sales proceeds to pay down its corporate-level, unsecured indebtedness. However, the Company cannot predict whether or to what extent the timing of these sales and the expected amount may be impacted by the ongoing coronavirus pandemic (“COVID-19”). After the completion of the Suburban Office Portfolio sales, the Company’s holdings will consist primarily

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of its Jersey City and Hoboken, New Jersey waterfront class A office portfolio and its multi-family rental portfolio, and related development projects and land holdings.

Additionally, the Company also identified a retail pad leased to others and several developable land parcels as held for sale as of March 31, 2021. The held for sale properties are located in Parsippany, Madison, Short Hills and Red Bank, New Jersey. As a result of recent sales contracts in place and after considering the current market conditions as a result of the challenging economic climate with the current worldwide COVID-19 pandemic, the Company determined that the carrying value of one of the remaining held for sale properties and a land parcel held for sale was not expected to be recovered from estimated net sales proceeds, and accordingly, during the three months ended March 31, 2021, recognized an unrealized held for sale loss allowance of $1.2 million (which is included in discontinued operations), for the property and land impairments of $0.4 million.

In April 2021, the Company completed the sale of a four-property office park in Short Hills, New Jersey which were held for sale in an identified disposal group, for gross proceeds of $255 million. The transaction produced approximately $100 million of net proceeds to the Company, after retirement of the existing $124.5 million financing and related transaction costs, which is expected to be used to pay down the Company’s unsecured corporate debt during the second quarter of 2021. The Company paid approximately $22 million at closing to defease the mortgage loan encumbering the properties, which will be expensed during the second quarter of 2021. See Note 10: Mortgages, loans payable and other obligations. As a result of a change in the estimated selling costs for this disposition, which was completed in April 2021, the Company recognized an unrealized gain of $2.2 million during the three months ended March 31, 2021 (partially reversing an unrealized held for sale loss allowance recognized in 2020).

The following table summarizes the real estate held for sale, net, and other assets and liabilities (dollars in thousands):


		Suburban		Other
		Office		Assets
		Portfolio (a)		Held for Sale		Total
Land	$	53,539	$	76,396	$	129,935
Building & Other		480,804		42,138		522,942
Less: Accumulated depreciation		(112,789)		(7,991)		(120,780)
Less: Cumulative unrealized losses on property held for sale		(76,337)		(40,731)		(117,068)
Real estate held for sale, net	$	345,217	$	69,812	$	415,029


		Suburban		Other
		Office		Assets
Other assets and liabilities		Portfolio (a)		Held for Sale		Total
Unbilled rents receivable, net (b)	$	11,200	$	2,156	$	13,356
Deferred charges, net (b)		8,675		651		9,326
Total intangibles, net (b)		17,464		-		17,464
Total deferred charges & other assets, net		27,204		683		27,887
Mortgages & loans payable, net (b)		123,797		-		123,797
Total below market liability (b)		2,898		-		2,898
Accounts payable, accrued exp & other liability		11,642		136		11,778
Unearned rents/deferred rental income (b)		5,835		215		6,050

(a) Classified as discontinued operations at March 31, 2021 for all periods presented. See Note 7: Discontinued Operations.
(b) Expected to be removed with the completion of the sales.

The Company disposed of the following rental properties during the three months ended March 31, 2021 (dollars in thousands):


												Discontinued
												Operations:
												Realized
												Gains
				Rentable			Net			Net		(losses)/
Disposition			# of	Square	Property		Sales			Carrying		Unrealized
Date	Property/Address	Location	Bldgs.	Feet	Type		Proceeds			Value		Losses, net
01/13/21	100 Overlook Center	Princeton, New Jersey	1	149,600	Office	$	34,724	(a)	$	26,488	$	8,236
03/25/21	Metropark portfolio	Edison and Iselin, New Jersey	4	926,656	Office		247,351			233,826		13,525
Sub-total			5	1,076,256			282,075			260,314		21,761

Unrealized gains(losses) on real estate held for sale												1,020
Totals			5	1,076,256		$	282,075		$	260,314	$	22,781

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(a)

As part of the consideration from the buyer, 678,302 Common Units were redeemed by the Company at book value of $10.5 million, which was a non-cash portion of this sales transaction. The balance of the proceeds was received in cash and used to repay the Company's borrowings on its unsecured revolving credit facility. See Note 17: Noncontrolling Interests in Subsidiaries - Noncontrolling Interests in Operating Partnership.

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

As of March 31, 2021, the Company had an aggregate investment of approximately $160.0 million in its equity method joint ventures. The Company formed these ventures with unaffiliated third parties, or acquired interests in them, to develop or manage primarily office and multi-family rental properties, or to acquire land in anticipation of possible development of office and multi-family rental properties. As of March 31, 2021, the unconsolidated joint ventures owned: two office properties aggregating approximately 0.2 million square feet, six multi-family properties totaling 1,786 apartment units, a retail property aggregating approximately 51,000 square feet, a 351-room hotel, a development project for up to approximately 360 apartment units, which commenced initial operation in March 2021; and interests and/or rights to developable land parcels able to accommodate up to 1,621 apartment units. The Company’s unconsolidated interests range from 20 percent to 85 percent subject to specified priority allocations in certain of the joint ventures.

The amounts reflected in the following tables (except for the Company’s share of equity in earnings) are based on the historical financial information of the individual joint ventures. The Company does not record losses of the joint ventures in excess of its investment balances unless the Company is liable for the obligations of the joint venture or is otherwise committed to provide financial support to the joint venture. The outside basis portion of the Company’s investments in joint ventures is amortized over the anticipated useful lives of the underlying ventures’ tangible and intangible assets acquired and liabilities assumed. Unless otherwise noted below, the debt of the Company’s unconsolidated joint ventures generally is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations.

The Company has agreed to guarantee repayment of a portion of the debt of its unconsolidated joint ventures. As of March 31, 2021, such debt had a total borrowing capacity of up to $304.0 million of which the Company agreed to guarantee up to $33.2 million. As of March 31, 2021, the outstanding balance of such debt totaled $278.1 million of which $30.6 million was guaranteed by the Company. The Company performed management, leasing, development and other services for the properties owned by the unconsolidated joint ventures and recognized $0.3 million and $0.6 million for such services in the three months ended March 31, 2021 and 2020, respectively. The Company had $0.2 million and $0.3 million in accounts receivable due from its unconsolidated joint ventures as of March 31, 2021 and December 31, 2020, respectively.

Included in the Company’s investments in unconsolidated joint ventures as of March 31, 2021 are three unconsolidated development joint ventures, two of which are operating properties and one development project, which are VIEs for which the Company is not the primary beneficiary. These joint ventures are primarily established to develop real estate property for long-term investment and were deemed VIEs primarily based on the fact that the equity investment at risk was not sufficient to permit the entities to finance their activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of these VIEs based on the fact that the Company has shared control of these entities along with the entity’s partners and therefore does not have controlling financial interests in these VIEs. The Company’s aggregate investment in these VIEs was approximately $108 million as of March 31, 2021. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is estimated to be approximately $142 million, which includes the Company’s current investment and estimated future funding commitments/guarantees of approximately $33.9 million. The Company has not provided financial support to these VIEs that it was not previously contractually required to provide. In general, future costs of development not financed through third parties will be funded with capital contributions from the Company and its outside partners in accordance with their respective ownership percentages.

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The following is a summary of the Company's unconsolidated joint ventures as of March 31, 2021 and December 31, 2020 (dollars in thousands):


											Property Debt
	Number of		Company's			Carrying Value					As of March 31, 2021
	Apartment Units		Effective			March 31,		December 31,				Maturity	Interest
Entity / Property Name	or Rentable SF		Ownership % (a)			2021		2020			Balance	Date	Rate
Multi-family
Metropolitan and Lofts at ‎40 Park (b) (c)	189	units	25.00	%	$	3,116	$	3,347		$	60,767	(d)	(d)
RiverTrace at Port Imperial	316	units	22.50	%		6,472		6,667			82,000	11/10/26	3.21	%
PI North - Riverwalk C (e)	360	units	40.00	%		37,201		36,992			86,116	12/06/21	L+2.75	%
Riverpark at Harrison	141	units	45.00	%		604		681			30,192	07/01/35	3.19	%
Station House	378	units	50.00	%		33,962		34,026			94,693	07/01/33	4.82	%
Urby at Harborside (f)	762	units	85.00	%		70,817		72,752			192,000	08/01/29	5.197	%
PI North - Land (b) (g)	771	potential units	20.00	%		1,678		1,678			-	-	-
Liberty Landing	850	potential units	50.00	%		337		337			-	-	-
Office
12 Vreeland Road (h)	139,750	sf	50.00	%		1,811		1,811	(h)		4,154	07/01/23	2.87	%
Offices at Crystal Lake	106,345	sf	31.25	%		3,626		3,744			2,328	11/01/23	4.76	%
Other
Hyatt Regency Hotel Jersey City	351	rooms	50.00	%		-		-			100,000	10/01/26	3.668	%
Other (i)						347		347			-	-	-
Totals:					$	159,971	$	162,382		$	652,250


(a)	Company's effective ownership % represents the Company's entitlement to residual distributions after payments of priority returns, where applicable.
(b)	The Company's ownership interests in this venture are subordinate to its partner's preferred capital balance and the Company is not expected to meaningfully participate in the venture's cash flows in the near term.
(c)	Through the joint venture, the Company also owns a 25 percent interest in a 50,973 square feet retail building ("Shops at 40 Park") and a 50 percent interest in a 59-unit, five story multi-family rental property ("Lofts at 40 Park").
(d)	Property debt balance consists of: (i) an interest only loan, collateralized by the Metropolitan at 40 Park, with a balance of $36,500, bears interest at LIBOR +2.85 percent, matures in October 2023; (ii) an amortizable loan, collateralized by the Shops at 40 Park, with a balance of $6,067, bears interest at LIBOR +1.5 percent and matures in October 2021; (iii) an interest only loan, collateralized by the Lofts at 40 Park, with a balance of $18,200, which bears interest at LIBOR +1.5 percent and matures in January 2023.
(e)	The venture has a construction loan with a maximum borrowing amount of $112,000, of which the Company has guaranteed 10 percent of the principal outstanding.
(f)	The Company owns an 85 percent interest with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines. The Company has guaranteed $22 million of the principal outstanding debt.
(g)	The Company owns a 20 percent residual interest in undeveloped land parcels: parcels 6, I, and J that can accommodate the development of 771 apartment units.
(h)	Starting in December 2019, the Company evaluated the recoverability of the carrying value of certain investments in unconsolidated joint venture, being considered for sale in the short or medium term. The Company determined that due to tenant turnover, lease-up assumptions, along with the Company's plans to exit its investment, it was necessary to reduce the carrying value of the investment to its estimated fair value. Accordingly, the Company recorded an impairment charge of $2.6 million at December 31, 2020. On April 29, 2021, the Company sold its interest in the joint venture for a gross sales price of approximately $2 million.
(i)	The Company owns other interests in various unconsolidated joint ventures, including interests in assets previously owned and interest in ventures whose businesses are related to its core operations. These ventures are not expected to significantly impact the Company's operations in the near term.

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The following is a summary of the Company’s equity in earnings (loss) of unconsolidated joint ventures for the three months ended March 31, 2021 and 2020 (dollars in thousands):



		Three Months Ended
		March 31,
Entity / Property Name		2021		2020
Multi-family
Metropolitan and Lofts at 40 Park	$	(231)	$	(140)
RiverTrace at Port Imperial		(5)		98
Crystal House (c)		-		(159)
Riverpark at Harrison		(50)		(58)
Station House		(364)		(467)
Urby at Harborside		(745)		17
PI North - Land		(57)		(119)
Office
12 Vreeland Road		-		111
Offices at Crystal Lake		(118)		20
Other
Riverwalk Retail (b)		-		(11)
Other		114		-

Company's equity in earnings (loss) of unconsolidated joint ventures (a)	$	(1,456)	$	(708)


(a)	Amounts are net of amortization of basis differences of $143 and $152 for the three months ended March 31, 2021 and 2020, respectively.
(b)	On March 12, 2020, the Company acquired its equity partner's 80 percent interest and increased ownership to 100 percent.
(c)	On December 31, 2020, the Crystal House Apartment Investors LLC, an unconsolidated joint venture property sold its sole apartment property. The Company realized its share of the gain on the property sale from the unconsolidated joint venture of $35.1 million.

5. DEFERRED CHARGES, GOODWILL AND OTHER ASSETS, NET


		March 31,		December 31,
(dollars in thousands)		2021		2020
Deferred leasing costs	$	101,072	$	112,421
Deferred financing costs - unsecured revolving credit facility (a)		6,009		5,559
		107,081		117,980
Accumulated amortization		(47,425)		(52,428)
Deferred charges, net		59,656		65,552
Notes receivable (b)		11,000		1,167
In-place lease values, related intangibles and other assets, net		62,261		71,608
Goodwill (c)		2,945		2,945
Right of use assets (d)		22,298		22,298
Prepaid expenses and other assets, net		33,868		35,971

Total deferred charges, goodwill and other assets, net (e)	$	192,028	$	199,541

(a)Deferred financing costs related to all other debt liabilities (other than for the unsecured revolving credit facility) are netted against those debt liabilities for all periods presented. See Note 2: Significant Accounting Policies – Deferred Financing Costs.

(b)Includes as of March 31, 2021 and December 31, 2020, respectively, an interest-free note receivable with a net present value of $1.0 million and $1.2 million which matures in April 2023. Also includes $10 million as of March 31, 2021 of seller-financing provided by the Company to the buyers of the Metropark portfolio. The receivable is secured against available cash of one of the properties disposed of and earns an annual return of four percent for 90 days after the disposition, with the interest rate increasing to 15 percent thereafter. The Company believes these balances are fully collectible.

(c)All goodwill is attributable to the Company’s Multi-family Real Estate and Services segment.

(d)This amount has a corresponding liability of $23.6 million, which is included in Accounts payable, accrued expense and other liabilities. See Note 13: Commitments and Contingencies – Ground Lease agreements for further details.

(e)Includes as of March 31, 2021 and December 31, 2020, $27.2 million and $42.5 million, respectively, for properties classified as discontinued operations.

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DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. As of March 31, 2021 and December 31, 2020, the Company did not have any outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates no additional amount to be reclassified to interest expense.

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statement of Operations for the three months ending March 31, 2021 and 2020 (dollars in thousands):


Derivatives in Cash Flow Hedging Relationships		Amount of Gain or (Loss) Recognized in OCI on Derivative			Location of Gain or (Loss) Reclassified from Accumulated OCI into Income		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income			Location of Gain or (Loss) Recognized in Income on Derivative		Amount of Gain or (Loss) Recognized in Income on Derivative and Reclassification for Forecasted Transactions No Longer Probable of Occurring)				Total Amount of Interest Expense presented in the consolidated statements
Three months ended March 31,		2021		2020			2021		2020			2021		2020		2021		2020

Interest rate swaps	$	-	$	-	Interest expense	$	-	$	16	Interest and other investment income (loss)	$	-	$	-	$	(17,610)	$	(20,918)

Credit-risk-related Contingent Features

The Company had agreements with each of its derivative counterparties that contained a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness was accelerated by the lender due to the Company's default on the indebtedness. As of March 31, 2021, the Company did not have any outstanding derivatives.

6. RESTRICTED CASH

Restricted cash generally includes tenant and resident security deposits for certain of the Company’s properties, and escrow and reserve funds for debt service, real estate taxes, property insurance, capital improvements, tenant improvements, leasing costs and property expenses established pursuant to certain mortgage financing arrangements, and is comprised of the following (dollars in thousands):


		March 31,		December 31,
		2021		2020
Security deposits	$	5,733	$	5,289
Escrow and other reserve funds		13,103		8,918

Total restricted cash	$	18,836	$	14,207

7. DISCONTINUED OPERATIONS

On December 19, 2019, the Company announced that its Board had determined to sell the Company’s entire Suburban Office Portfolio totaling approximately 6.6 million square feet. As the decision to sell the Suburban Office Portfolio represented a strategic shift in the Company’s operations, these properties’ results (other than a property not qualified to be classified as held for sale) are being classified as discontinued operations for all periods presented herein.

In late 2019 through March 31, 2021, the Company completed the sale of 25 of these suburban office properties, totaling 4.3 million square feet, for net sales proceeds of $659.4 million. As of March 31, 2021, the Company has identified as held for sale the remaining 11 office properties (comprised of four disposal groups) in the Suburban Office Portfolio, totaling two million square feet (all of which the Company currently has under contract for sale for aggregate gross sales proceeds of approximately $391.4 million).

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predict whether or to what extent the timing of these sales and the expected amount may be impacted by the ongoing coronavirus (“COVID-19”). After the completion of the Suburban Office Portfolio sales, the Company’s holdings will consist primarily of its Jersey City and Hoboken, New Jersey waterfront class A office portfolio and its multi-family rental portfolio, and related development projects and land holdings.

As a result of recent sales contracts in place and after considering the current market conditions as a result of the challenging economic climate with the current worldwide COVID-19 pandemic, the Company determined that the carrying value of one of the remaining held for sale properties was not expected to be recovered from estimated net sales proceeds, and accordingly recognized an unrealized held for sale loss allowance of $1.2 million during the three months ended March 31, 2021.

In April 2021, the Company completed the sale of a four-property office park in Short Hills, New Jersey, which were held for sale in an identified disposal group, for gross proceeds of $255 million. As a result of a change in the estimated selling costs for this disposition, which was completed in April 2021, the Company recognized an unrealized gain of $2.2 million during the three months ended March 31, 2021 (partially reversing an unrealized held for sale loss allowance recognized in 2020).

The following table summarizes income from discontinued operations and the related realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, for the three months ended March 31, 2021 and 2020 (dollars in thousands):


		Three Months Ended March 31,
		2021		2020
Total revenues	$	21,637	$	40,062
Operating and other expenses		(8,723)		(16,496)
Depreciation and amortization		(659)		(1,354)
Interest expense		(1,293)		(1,306)

Income from discontinued operations		10,962		20,906

Unrealized gains (losses) on disposition of rental property (a)		1,020		(45,068)
Realized gains (losses) on disposition of rental property (b)		21,761		17,322
Realized gains (losses) and unrealized gains (losses) on
disposition of rental property and impairments, net		22,781		(27,746)

Total discontinued operations, net	$	33,743	$	(6,840)

(a)Represents valuation allowances, including reversals, and impairment charges on properties classified as discontinued operations in 2020.

(b)See Note 3: Real Estate Transactions – Dispositions for further information regarding properties sold and related gains (losses).

8. SENIOR UNSECURED NOTES

A summary of the Company’s senior unsecured notes as of March 31, 2021 and December 31, 2020 is as follows (dollars in thousands):


		March 31,		December 31,	Effective
		2021		2020	Rate (1)
4.500% Senior Unsecured Notes, due April 18, 2022 (2)	$	300,000	$	300,000	4.612	%
3.150% Senior Unsecured Notes, due May 15, 2023 (2)		275,000		275,000	3.517	%
Principal balance outstanding		575,000		575,000
Adjustment for unamortized debt discount		(1,337)		(1,504)
Unamortized deferred financing costs		(718)		(843)

Total senior unsecured notes, net	$	572,945	$	572,653

(1)Includes the cost of terminated treasury lock agreements (if any), offering and other transaction costs and the discount/premium on the notes, as applicable.

(2)On May 6, 2021, the Company retired these notes earlier than their maturity, using net sales proceeds from office property sales currently under contract and having been completed subsequent to March 31, 2021, and borrowings under its newly-signed credit facility and term loan.

The terms of the Company’s senior unsecured notes include certain restrictions and covenants which require compliance with financial ratios relating to the maximum amount of debt leverage, the maximum amount of secured indebtedness, the minimum amount of debt service coverage and the maximum amount of unsecured debt as a percent of unsecured assets. The Company was in compliance with its debt covenants under the indenture relating to its senior unsecured notes as of March 31, 2021.

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On May 6, 2021, the Company delivered to the trustee under the indenture relating to its senior unsecured notes notices of redemption of both series of outstanding senior unsecured notes and deposited the full amount of the redemption payment through the June 6, 2021 redemption date with the trustee, thereby satisfying and discharging all of the senior unsecured notes as of May 6, 2021. In conjunction with the notes being discharged, the Company paid a make-whole premium of approximately $20 million to redeem these notes, which will be expensed during the second quarter of 2021.

9. UNSECURED REVOLVING CREDIT FACILITY AND TERM LOANS

On January 25, 2017, the Company entered into an amended revolving credit facility and new term loan agreement (“2017 Credit Agreement”) with a group of 13 lenders. Pursuant to the 2017 Credit Agreement, the Company refinanced its existing $600 million unsecured revolving credit facility (“2017 Credit Facility”) and entered into a new $325 million unsecured, delayed-draw term loan facility (“2017 Term Loan”). Effective March 6, 2018, the Company elected to determine its interest rate under the 2017 Credit Agreement and under the 2017 Term Loan using the defined leverage ratio option, resulting in an interest rate of London Inter-Bank Offered Rate (“LIBOR”) plus 130 basis points and LIBOR plus 155 basis points, respectively.

The terms of the 2017 Credit Facility include: (1) a four year term ending in January 2021, with two six month extension options, subject to the Company not being in default on the facility and with the payment of a fee of 7.5 basis points for each extension; (2) revolving credit loans may be made to the Company in an aggregate principal amount of up to $600 million (subject to increase as discussed below), with a sublimit under the 2017 Credit Facility for the issuance of letters of credit in an amount not to exceed $60 million (subject to increase as discussed below), of which $10.6 million of letters of credit had been issued as of March 31, 2021; (3) an interest rate, based on the Operating Partnership’s unsecured debt ratings from Moody’s or S&P, or, at the Operating Partnership’s option, if it no longer maintains a debt rating from Moody’s or S&P, or such debt ratings fall below Baa3 and BBB-, based on a defined leverage ratio; and (4) a facility fee, currently 25 basis points, payable quarterly based on the Operating Partnership’s unsecured debt ratings from Moody’s or S&P, or, at the Operating Partnership’s option, if it no longer maintains a debt rating from Moody’s or S&P or such debt ratings fall below Baa3 and BBB-, based on a defined leverage ratio. The Company’s unsecured debt is currently rated B1 by Moody’s and B+ by S&P. In January 2021, the Company elected to exercise the first option to extend the 2017 Credit Facility maturity date for a period of six months. Accordingly, the term of the 2017 Credit Facility was extended to July 2021, with the Company’s payment of the 7.5 basis point extension fee.

After electing to use the defined leverage ratio to determine the interest rate, the interest rates on outstanding borrowings, alternate base rate loans and the facility fee on the current borrowing capacity, payable quarterly in arrears, on the 2017 Credit Facility are currently based on the following total leverage ratio grid:


		Interest Rate -
		Applicable
	Interest Rate -	Basis Points
	Applicable	Above LIBOR for
	Basis Points	Alternate Base	Facility Fee
Total Leverage Ratio	Above LIBOR	Rate Loans	Basis Points
<45%	125.0	25.0	20.0
≥45% and <50%	130.0	30.0	25.0
≥50% and <55% (current ratio)	135.0	35.0	30.0
≥55%	160.0	60.0	35.0

Prior to the election to use the defined leverage ratio option, the interest rates on outstanding borrowings, alternate base rate loans and the facility fee on the current borrowing capacity, payable quarterly in arrears, on the 2017 Credit Facility were based upon the Operating Partnership’s unsecured debt ratings, as follows:


		Interest Rate -
		Applicable
	Interest Rate -	Basis Points
Operating Partnership's	Applicable	Above LIBOR for
Unsecured Debt Ratings:	Basis Points	Alternate Base	Facility Fee
Higher of S&P or Moody's	Above LIBOR	Rate Loans	Basis Points
No ratings or less than BBB-/Baa3	155.0	55.0	30.0
BBB- or Baa3 (interest rate based on Company's election through March 5, 2018)	120.0	20.0	25.0
BBB or Baa2	100.0	0.0	20.0
BBB+ or Baa1	90.0	0.0	15.0
A- or A3 or higher	87.5	0.0	12.5

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The terms of the 2017 Term Loan included: (1) a three year term ending in January 2020, with two one year extension options; (2) multiple draws of the term loan commitments may be made within 12 months of the effective date of the 2017 Credit Agreement up to an aggregate principal amount of $325 million (subject to increase as discussed below), with no requirement to be drawn in full; provided, that, if the Company does not borrow at least 50 percent of the initial term commitment from the term lenders (i.e. 50 percent of $325 million) on or before July 25, 2017, the amount of unused term loan commitments shall be reduced on such date so that, after giving effect to such reduction, the amount of unused term loan commitments is not greater than the outstanding term loans on such date; (3) an interest rate, based on the Operating Partnership’s unsecured debt ratings from Moody’s or S&P, or, at the Operating Partnership’s option if it no longer maintains a debt rating from Moody’s or S&P or such debt ratings fall below Baa3 and BBB-, based on a defined leverage ratio; and (4) a term commitment fee on any unused term loan commitment during the first 12 months after the effective date of the 2017 Credit Agreement at a rate of 0.25 percent per annum on the sum of the average daily unused portion of the aggregate term loan commitments.

During the year ended December 31, 2019, the Company prepaid the 2017 Term Loan (using a portion of the proceeds from a new mortgage loan collateralized by an office building located at 111 River Street and using borrowings under the Company’s unsecured revolving credit facility) and recorded a net loss of $173,000 from extinguishment of debt, as a result of a gain of $80,000 due to the early termination of part of the interest rate swap arrangements and the write off of unamortized deferred financing costs and fees amounting to $253,000 as a result of the debt prepayment.

After electing to use the defined leverage ratio to determine the interest rate, the interest rate under the 2017 Term Loan was based on the following total leverage ratio grid:


		Interest Rate -
		Applicable
	Interest Rate -	Basis Points
	Applicable	Above LIBOR for
	Basis Points	Alternate Base Rate
Total Leverage Ratio	above LIBOR	Loans
<45%	145.0	45.0
≥45% and <50%	155.0	55.0
≥50% and <55% (current ratio)	165.0	65.0
≥55%	195.0	95.0

Prior to the election to use the defined leverage ratio option, the interest rate on the 2017 Term Loan was based upon the Operating Partnership's unsecured debt ratings, as follows:


		Interest Rate -
		Applicable
	Interest Rate -	Basis Points
Operating Partnership's	Applicable	Above LIBOR for
Unsecured Debt Ratings:	Basis Points	Alternate Base Rate
Higher of S&P or Moody's	Above LIBOR	Loans
No ratings or less than BBB-/Baa3	185.0	85.0
BBB- or Baa3 (interest rate based on Company's election through March 5, 2018)	140.0	40.0
BBB or Baa2	115.0	15.0
BBB+ or Baa1	100.0	0.0
A- or A3 or higher	90.0	0.0

The 2017 Credit Agreement, which applies to both the 2017 Credit Facility and 2017 Term Loan, includes certain restrictions and covenants which limit, among other things the incurrence of additional indebtedness, the incurrence of liens and the disposition of real estate properties (to the extent that: (i) such property dispositions cause the Company to default on any of the financial ratios of the 2017 Credit Agreement (described below), or (ii) the property dispositions are completed while the Company is under an event of default under the 2017 Credit Agreement, unless, under certain circumstances, such disposition is being carried out to cure such default), and which require compliance with financial ratios relating to the maximum leverage ratio (60 percent), the maximum amount of secured indebtedness (40 percent), the minimum amount of fixed charge coverage (1.5 times), the maximum amount of unsecured indebtedness (60 percent), the minimum amount of unencumbered property interest coverage (2.0 times) and certain investment limitations (generally 15 percent of total capitalization). The 2017 Credit Agreement contains “change of control” and other covenants that permit the lenders to declare a default and require the immediate repayment of all outstanding borrowings under the 2017 Credit Facility. These change of control provisions, which have been included as an event of default under the agreements governing the Company’s revolving credit facilities since June 2000, are triggered if, among other things, a majority of the seats on the Board of Directors (other than vacant seats) become occupied by directors who were neither nominated by the Board Directors nor appointed by a majority of directors nominated by the Board of Directors. Furthermore, the agreements governing the Company's Senior Unsecured Notes include cross-acceleration

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provisions that would constitute an event of default requiring immediate repayment of the Notes if the change of control or other covenants under the 2017 Credit Facility are triggered and the lenders declare a default and exercise their rights under the 2017 Credit Facility and accelerate repayment of the outstanding borrowings thereunder. In addition, construction loans secured by two multi-family residential property development projects contain cross-acceleration provisions similar to those in the agreements governing the Notes for defaults by the Company. If these change of control or other covenants were triggered and an event of default was declared under the 2017 Credit Facility, the Company could seek a forbearance, waiver or amendment of the change of control or other covenants from the lenders, as applicable, however there can be no assurance that the Company would be able to obtain such forbearance, waiver or amendment on acceptable terms or at all. If an event of default has occurred and is continuing, the entire outstanding balance under the 2017 Credit Agreement may (or, in the case of any bankruptcy event of default, shall) become immediately due and payable, and the Company will not make any excess distributions except to enable the General Partner to continue to qualify as a REIT under the IRS Code.

On May 6, 2021, the Company entered into a revolving credit and term loan agreement (“2021 Credit Agreement”) with a group of seven lenders that provides for a $250 million senior secured revolving credit facility (the “2021 Credit Facility") and a $150 million senior secured term loan facility (the “2021 Term Loan”), and delivered written notice to the administrative agent to terminate the 2017 Credit Agreement, which termination shall become effective on May 13, 2021.

The terms of the 2021 Credit Facility include: (1) a three year term ending in May 2024; (2) revolving credit loans may be made to the Company in an aggregate principal amount of up to $250 million (subject to increase as discussed below), with a sublimit under the 2021 Credit Facility for the issuance of letters of credit in an amount not to exceed $50 million; and (3) a first priority lien in unencumbered properties of the Company with an appraised value greater than or equal to $800 million which must include the Company’s Harborside 2/3 and Harborside 5 properties; and (4) a facility fee payable quarterly equal to 35 basis points if usage of the 2021 Credit Facility is less than or equal to 50%, and 25 basis points if usage of the 2021 Credit Facility is greater than 50%.

The terms of the 2021 Term Loan include: (1) an eighteen month term ending in November 2022; (2) a single draw of the term loan commitments up to an aggregate principal amount of $150 million; and (3) a first priority lien in unencumbered properties of the Company with an appraised value greater than or equal to $800 million which must include the Company’s Harborside 2/3 and Harborside 5 properties.

Interest on borrowings under the 2021 Credit Facility and 2021 Term Loan shall be based on applicable base rate (the “Base Rate”) plus a margin ranging from 125 basis points to 275 basis points depending on the Base Rate elected, currently 0.12%. The Base Rate shall be either (A) the highest of (i) the Wall Street Journal prime rate, (ii) the greater of the then effective (x) Federal Funds Effective Rate, or (y) Overnight Bank Funding Rate plus 50 basis points, and (iii) a LIBO Rate, as adjusted for statutory reserve requirements for eurocurrency liabilities (the “Adjusted LIBO Rate”) and calculated for a one-month interest period, plus 100 basis points (such highest amount being the “ABR Rate”), or (B) the Adjusted LIBO Rate for the applicable interest period; provided, however, that the ABR Rate shall not be less than 1% and the Adjusted LIBO Rate shall not be less than zero.

The 2021 Credit Agreement, which applies to both the 2021 Credit Facility and 2021 Term Loan, includes certain restrictions and covenants which limit, among other things the incurrence of additional indebtedness, the incurrence of liens and the disposition of real estate properties, and which require compliance with financial ratios relating to the minimum collateral pool value ($800 million), maximum collateral pool leverage ratio (40 percent), minimum number of collateral pool properties (two), the maximum total leverage ratio (65 percent), the minimum debt service coverage ratio (1.10 times until May 6, 2022, 1.20 times from May 7, 2022 through May 6, 2023, and 1.40 times thereafter), and the minimum tangible net worth ratio (80% of tangible net worth as of December 31, 2020 plus 80% of net cash proceeds of equity issuances by the General Partner or the Operating Partnership).

The 2021 Credit Agreement contains “change of control” provisions that permit the lenders to declare a default and require the immediate repayment of all outstanding borrowings under the 2021 Credit Facility. These change of control provisions, which have been an event of default under the agreements governing the Company’s revolving credit facilities since June 2000, are triggered if, among other things, a majority of the seats on the Board of Directors (other than vacant seats) become occupied by directors who were neither nominated by the Board of Directors, nor appointed by the Board of Directors. Furthermore, construction loans secured by two multi-family residential property development projects contain cross-acceleration provisions that would constitute an event of default requiring immediate repayment of the construction loans if the change of control provisions under the 2021 Credit Facility are triggered and the lenders declare a default and exercise their rights under the 2021 Credit Facility and accelerate repayment of the outstanding borrowings thereunder. If these change of control provisions were triggered, the Company could seek a forbearance, waiver or amendment of the change of control provisions from the lenders, however there can be no assurance that the Company would be able to obtain such forbearance, waiver or amendment on acceptable terms or at all. If an event of default has occurred and is continuing, the entire outstanding balance under the 2021 Credit Agreement may (or, in the case of any bankruptcy event of default, shall) become immediately due and payable, and the Company will not make any excess distributions except to enable the General Partner to continue to qualify as a REIT under the IRS Code.

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On May 6, 2021, the Company drew the full $150 million available under the 2021 Term Loan and borrowed $145 million from the 2021 Credit Facility to retire the Company’s Senior Unsecured Notes.

Before it amended and restated its unsecured revolving credit facility in January 2017, the Company had a $600 million unsecured revolving credit facility with a group of 17 lenders that was scheduled to mature in July 2017. The interest rate on outstanding borrowings (not electing the Company’s competitive bid feature) and the facility fee on the current borrowing capacity, payable quarterly in arrears, was based upon the Operating Partnership’s unsecured debt ratings at the time, as follows:


Operating Partnership's	Interest Rate -
Unsecured Debt Ratings:	Applicable Basis Points	Facility Fee
Higher of S&P or Moody's	Above LIBOR	Basis Points
No ratings or less than BBB-/Baa3	170.0	35.0
BBB- or Baa3 (since January 2017 amendment)	130.0	30.0
BBB or Baa2	110.0	20.0
BBB+ or Baa1	100.0	15.0
A- or A3 or higher	92.5	12.5

In January 2016, the Company obtained a $350 million unsecured term loan (“2016 Term Loan”), which had been scheduled to mature in January 2019 with two one year extension options. On January 7, 2019, the Company exercised the first one year extension option with the payment of an extension fee of $0.5 million, which extended the maturity of the 2016 Term Loan to January 2020. The interest rate for the term loan is based on the Operating Partnership’s unsecured debt ratings, or, at the Company's option, a defined leverage ratio. Effective March 6, 2018, the Company elected to determine its interest rate under the 2016 Term Loan using the defined leverage ratio option, resulting in an interest rate of LIBOR plus 155 basis points. The Company entered into interest rate swap arrangements to fix LIBOR for the duration of the term loan. Including costs, the current all-in fixed rate is 3.28 percent. The proceeds from the loan were used primarily to repay outstanding borrowings on the Company’s then existing unsecured revolving credit facility and to repay $200 million senior unsecured notes that matured on January 15, 2016.

During the year ended December 31, 2019, the Company prepaid the 2016 Term Loan (using a portion of the cash sales proceeds from the Flex portfolio sale, using the proceeds from a mortgage loan financing obtained on Soho Lofts Apartments and using a portion of the proceeds from a new mortgage loan collateralized by an office building located at 111 River Street) and recorded a gain of $2.1 million due to the early termination of part of the interest rate swap arrangements, as a result of the debt prepayment during the year ended December 31, 2019. Unamortized deferred financing costs and fees amounting to $242,000 pertaining to the 2016 Term Loan were written off during the year ended December 31, 2019.

After electing to use the defined leverage ratio to determine interest rate, the interest rate under the 2016 Term Loan was based on the following total leverage ratio grid:


		Interest Rate -
		Applicable Basis
Total Leverage Ratio		Points above LIBOR
<45%		145.0
≥45% and <50%		155.0
≥50% and <55% (current ratio)		165.0
≥55%		195.0

Prior to the election to use the defined interest leverage ratio option, the interest rate on the 2016 Term Loan was based upon the Operating Partnership’s unsecured debt ratings, as follows:


Operating Partnership's		Interest Rate -
Unsecured Debt Ratings:		Applicable Basis Points
Higher of S&P or Moody's		Above LIBOR
No ratings or less than BBB-/Baa3		185.0
BBB- or Baa3 (interest rate based on Company's election through March 5, 2018)		140.0
BBB or Baa2		115.0
BBB+ or Baa1		100.0
A- or A3 or higher		90.0

The terms of the 2016 Term Loan include certain restrictions and covenants which limit, among other things the incurrence of additional indebtedness, the incurrence of liens and the disposition of real estate properties (to the extent that: (i) such property dispositions cause the Company to default on any of the financial ratios of the term loan described below, or (ii) the property dispositions are completed

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while the Company is under an event of default under the term loan, unless, under certain circumstances, such disposition is being carried out to cure such default), and which require compliance with financial ratios relating to the maximum leverage ratio (60 percent), the maximum amount of secured indebtedness (40 percent), the minimum amount of fixed charge coverage (1.5 times), the maximum amount of unsecured indebtedness (60 percent), the minimum amount of unencumbered property interest coverage (2.0 times) and certain investment limitations (generally 15 percent of total capitalization). If an event of default has occurred and is continuing, the Company will not make any excess distributions except to enable the General Partner to continue to qualify as a REIT under the IRS Code.

On August 30, 2018, the Company entered into an amendment to the 2017 Credit Agreement (the “2017 Credit Agreement Amendment”) and an amendment to the 2016 Term Loan (the “2016 Term Loan Amendment”).

Each of the 2017 Credit Agreement Amendment and the 2016 Term Loan Amendment was effective as of June 30, 2018 and provided for the following material amendments to the terms of both the 2017 Credit Agreement and 2016 Term Loan:

1.The unsecured debt ratio covenant has been modified with respect to the measurement of the unencumbered collateral pool of assets in the calculation of such ratio for the period commencing July 1, 2018 and continuing until December 31, 2019 to allow the Operating Partnership to utilize the “as-is” appraised value of the properties known as ‘Harborside Plaza I’ and ‘Harborside Plaza V’ properties located in Jersey City, NJ in such calculation; and

2.A new covenant has been added that prohibits the Company from making any optional or voluntary payment, repayment, repurchase or redemption of any unsecured indebtedness of the Company (or any subsidiaries) that matures after January 25, 2022, at any time when any of the Total Leverage Ratio or the unsecured debt ratio covenants exceeds 60 percent (all as defined in the 2017 Credit Agreement and the 2016 Term Loan) or an appraisal is being used to determine the value of Harborside Plaza I and Harborside Plaza V for the unsecured debt ratio covenant.

All other terms and conditions of the 2017 Credit Agreement and the 2016 Term Loan remained unchanged.

As of March 31, 2021 the Company had no borrowings under its unsecured revolving credit facility, and as of December 31, 2020, the Company’s borrowings under its unsecured credit facility totaled $25 million.

10. MORTGAGES, LOANS PAYABLE AND OTHER OBLIGATIONS

The Company has mortgages, loans payable and other obligations which primarily consist of various loans collateralized by certain of the Company’s rental properties, land and development projects. As of March 31, 2021, 19 of the Company’s properties, with a total carrying value of approximately $2.9 billion and three of the Company’s land and development projects, with a total carrying value of approximately $634 million, are encumbered by the Company’s mortgages and loans payable. Payments on mortgages, loans payable and other obligations are generally due in monthly installments of principal and interest, or interest only. The Company was in compliance with its debt covenants requirements under its mortgages and loans payable as of March 31, 2021.

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A summary of the Company’s mortgages, loans payable and other obligations as of March 31, 2021 and December 31, 2020 is as follows (dollars in thousands):



		Effective			March 31,		December 31,
Property/Project Name	Lender	Rate (a)			2021		2020	Maturity
Port Imperial South 4/5 Retail	American General Life & A/G PC	4.56	%	$	3,848	$	3,866	12/01/21
Port Imperial 4/5 Hotel (b)	Fifth Third Bank	LIBOR+3.40	%		94,000		94,000	04/09/22
Port Imperial South 9 (c)	Bank of New York Mellon	LIBOR+2.13	%		60,253		46,357	12/19/22
Portside 7	CBRE Capital Markets/FreddieMac	3.57	%		58,998		58,998	08/01/23
Short Hills Residential (d)	People's United Bank	LIBOR+2.15	%		50,395		42,459	03/26/23
250 Johnson	Nationwide Life Insurance Company	3.74	%		43,000		43,000	08/01/24
Liberty Towers (e)	American General Life Insurance Company	3.37	%		265,000		265,000	10/01/24
The Charlotte (f)	QuadReal Finance	LIBOR+2.70	%		183,863		161,544	12/01/24
Portside 5/6 (g)	New York Life Insurance Company	4.56	%		97,000		97,000	03/10/26
Marbella (BLVD 425)	New York Life Insurance Company	4.17	%		131,000		131,000	08/10/26
Marbella II (BLVD 401)	New York Life Insurance Company	4.29	%		117,000		117,000	08/10/26
101 Hudson	Wells Fargo CMBS	3.20	%		250,000		250,000	10/11/26
Worcester	MUFG Union Bank	LIBOR+1.84	%		63,000		63,000	12/10/26
Short Hills Portfolio (h)	Wells Fargo CMBS	4.15	%		124,500		124,500	04/01/27
150 Main St.	Natixis Real Estate Capital LLC	4.48	%		41,000		41,000	08/05/27
Monaco (BLVD 495 N/S) (l)	The Northwestern Mutual Life Insurance Co.	2.91	%		165,000		165,000	11/10/27
Port Imperial South 11	The Northwestern Mutual Life Insurance Co.	4.52	%		100,000		100,000	01/10/29
Soho Lofts (i)	New York Community Bank	3.77	%		160,000		160,000	07/01/29
111 River St.	Athene Annuity and Life Company	3.90	%		150,000		150,000	09/01/29
Port Imperial South 4/5 Garage (j)	American General Life & A/G PC	4.85	%		33,023		33,138	12/01/29
Emery at Overlook Ridge (k)	New York Community Bank	3.21	%		72,000		72,000	01/01/31

Principal balance outstanding