3.    RECENT TRANSACTIONS

Acquisitions

The Company acquired the following rental properties (which were determined to be asset acquisitions in accordance with ASU 2017-01) during the nine months ended September 30, 2019 (dollars in thousands):

The acquisition costs were allocated to the net assets acquired, as follows (in thousands):

On May 10, 2019, the Company completed the acquisition of three unimproved land parcels (“107 Morgan”) located in Jersey City, New Jersey for approximately $67.2 million. The 107 Morgan acquisition was funded using funds available with the Company’s qualified intermediary from prior property sales proceeds, and through borrowing under the Company’s unsecured revolving credit facility. The Company’s mortgage receivable of $46.1 million with the seller was repaid in full to the Company at closing.

Properties Commencing Initial Operations

The following property commenced initial operations during the nine months ended September 30, 2019 (dollars in thousands):

Consolidation

On January 31, 2019, the Company, which held a 24.27 percent subordinated interest in the unconsolidated joint venture, Marbella Tower Urban Renewal Associates South LLC, a 311-unit multi-family operating property located in Jersey City, New Jersey, acquired its equity partner’s 50 percent preferred controlling interest for $77.5 million in cash. The property was subject to a mortgage loan that had a principal balance of $74.7 million. The acquisition was funded primarily using available cash. Concurrently with the closing, the joint venture repaid in full the property’s $74.7 million mortgage loan and obtained a new loan collateralized by the property in the amount of $117 million, which bears interest at 4.2 percent and matures in August 2026. The Company received $43.3 million in distribution from the loan proceeds which was used to acquire the equity partner’s 50 percent interest. As the result of the acquisition, the Company increased its ownership of the property from a 24.27 percent subordinated interest to a 74.27 percent controlling interest.

In accordance with ASC 810, Consolidation, the Company evaluated the acquisition and determined that the entity meets the criteria of a VIE. As such, the Company consolidated the asset upon acquisition and accordingly, remeasured its equity interests, as required by the FASB’s consolidation guidance, at fair value (based upon the income approach using current rates and market cap rates and discount rates). As a result, the Company recorded a gain on change of control of interests of $13.8 million (a non-cash item) in the nine months ended September 30, 2019, in which the Company accounted for the transaction as a VIE that is not a business in accordance with ASC 810-10-30-4. Additional non-cash items included in the acquisition were the Company’s carrying value of its interest in the joint venture of $15.3 million and the noncontrolling interest’s fair value of $13.7 million. See Note 9: Mortgages, Loans Payable and Other Obligations.

Net assets recorded upon consolidation were as follows (in thousands):

Dispositions/Rental Property Held for Sale

The Company disposed of the following office and multi-family properties during the nine months ended September 30, 2019 (dollars in thousands):

On April 30, 2019, the Company disposed of developable land holding located in Malden, Massachusetts for net sales proceeds of approximately $685,000. The Company recorded a gain of approximately $270,000 on the disposition. On September 20, 2019, the Company disposed of developable land holding located in Revere, Massachusetts for net sales proceeds of approximately $1,185,000. The Company recorded a gain of approximately $296,000 on the disposition.

The Company identified as held for sale three office properties totaling 697,000 square feet, three multi-family properties totaling 1,386

units and one retail pad leased to others as of September 30, 2019. The properties are located in Fort Lee, Parsippany, Hanover and Neptune, New Jersey, and Malden and Revere, Massachusetts. The total estimated sales proceeds, net of expected selling costs, from the sales are expected to be approximately $536.6 million. The Company determined that the carrying value of two of the properties was not expected to be recovered from estimated net sales proceeds, and accordingly recognized an unrealized loss allowance of $35.1 million during the three months ended September 30, 2019. In October 2019, the Company completed the sale of one of the office properties and three multi-family properties held for sale for approximately $433 million.

The following table summarizes the rental property held for sale, net, as of September 30, 2019 (dollars in thousands):

Other assets and liabilities related to the rental property held for sale, as of September 30, 2019, include $7.2 million in Deferred charges and other assets, $5.5 million in Unbilled rents receivable and $3.6 million in Accounts payable, accrued expenses and other liabilities. Approximately $11.5 million of these assets and $0.7 million of these liabilities are expected to be removed with the completion of the sales.

On October 3, 2019, the Company entered into a Purchase and Sale Agreement (the “Overlook Ridge Agreement”) with affiliates of the Rockpoint Group, L.L.C. (collectively, the “Overlook Purchasers”) to sell to the Overlook Purchasers the Company’s Chase at Overlook Ridge and Alterra at Overlook Ridge properties located in Malden and Revere, Massachusetts, respectively, (the “Overlook Ridge Properties”) for an aggregate sale price of $411.5 million. The Overlook Ridge Properties are multi-family residential properties totaling 1,386 residential units and were identified as held for sale as of September 30, 2019, as referenced earlier. The Overlook Ridge Agreement is filed as Exhibit 10.108 to this Quarterly Report on Form 10-Q.

The sale of the Overlook Ridge Properties was completed on October 23, 2019. Proceeds from the sale were used primarily to retire mortgage loans of $235.8 million and to repay outstanding borrowings under the Company’s revolving credit facility that were drawn to fund a portion of the Company's purchase of Liberty Towers.

Impairments

As part of its ongoing portfolio assessment process, the Company made the decision in the second quarter 2019 to pursue selling a 317,040 square foot office property. The Company evaluated the recoverability of the carrying value of this property and determined that due to the shortening of the expected period of ownership, it was necessary to reduce the carrying value of the property to its estimated fair value. Accordingly, the Company recorded a valuation impairment charge of $5.8 million at June 30, 2019.

Additionally, at September 30, 2019, the Company evaluated the recoverability of the carrying value of certain properties and undeveloped land, being considered for sale in the short or medium term and determined that due to the potential shortening of the expected period of ownership, it was necessary to reduce the carrying value of the properties and land to their estimated fair values. The Company also recorded an impairment charge of $451,000 on miscellaneous investments. Accordingly, the Company recorded a property impairment charge of $5.9 million and land and other impairment charges of $6.1 million at September 30, 2019.

The Company owns two separate developable land parcels in Conshohocken and Bala Cynwyd, Pennsylvania, that were being considered for development into multi-family rental properties. During the fourth quarter 2018, the Company made the decision to pursue selling the land parcels as opposed to development. Due to the shortening of the expected periods of ownership, the Company determined that it was necessary to reduce the carrying value of the land parcels to their estimated fair value and recorded land impairments charges of $24.6 million at December 31, 2018. As a result of its periodic evaluation of the recoverability of the carrying value, the Company recorded additional land impairment charges of $0.2 and $2.7 million in the three and nine months ended September 30, 2019, respectively.

Rockpoint Transaction

On February 27, 2017, the Company, Roseland Residential Trust (“RRT”), the Company’s subsidiary through which the Company conducts its multi-family residential real estate operations, Roseland Residential, L.P. (“RRLP”), the operating partnership through which RRT conducts all of its operations, and certain other affiliates of the Company entered into a preferred equity investment