3.    RECENT TRANSACTIONS



Acquisitions

The Company acquired the following office properties during the six months ended June 30, 2016 (dollars in thousands):





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





(1)Above market, in-place and below market leases will be amortized over a weighted-average term of 6.3 years.    



On July 1, 2016, the Company acquired a 566,000 square-foot office property located in Hoboken, New Jersey, for approximately $235 million.  It was not practicable to finalize the purchase price allocation for this acquisition given the short period of time between the acquisition date and the issuance of this Report.



Consolidations

On January 5, 2016, the Company, which held a 50 percent subordinated interest in the unconsolidated joint venture, Overlook Ridge Apartment Investors LLC, a 371-unit multi-family operating property located in Malden, Massachusetts, acquired the remaining interest for $39.8 million in cash plus the assumption of a first mortgage loan secured by the property with a principal balance of $52.7 million.  The cash portion of the acquisition was funded primarily through borrowings under the Company’s unsecured revolving credit facility.  Upon acquisition, the Company consolidated the asset 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 $10.2 million in the six months ended June 30, 2016.  On January 19, 2016, the Company repaid the assumed loan and obtained a new loan secured by the property in the amount of  $72.5 million, which bears interest at 3.625 percent and matures in February 2023.  See Note 10: Mortgages, Loans Payable and Other Obligations. 



During the three months ended June 30, 2016, the Company, which held a 38.25 percent subordinate interest in the unconsolidated Portside Apartment Developers,  L.L.C., a joint venture which owns a 175-unit operating multi-family property located in East Boston, Massachusetts,  acquired the remaining interests of its joint venture partners for $39.6 million in cash plus the assumption of  a mortgage loan secured by the property with a principal balance of $42.5 million and interest at LIBOR plus 215 basis points, with a floor of 275 basis points, maturing in December 2017.  See Note 10: Mortgages, loans payable.  The cash portion of the acquisition was funded primarily through borrowings under the Company’s unsecured revolving credit facility. Upon acquisition, the Company consolidated the asset 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 $5.2 million in the three and six months ended June 30, 2016. 



The purchase prices were allocated to the net assets acquired upon consolidation, as follows (in thousands):





(1)In-place lease values and below-market lease values will be amortized over a weighted average term of 7.5 years.    



Other Investments

On April 26, 2016, the Company acquired the remaining non-controlling interest in a development project located in Weehawken, NJ for $36.4 million.  The project includes developable land for approximately 1,100 multi-family units, 290,000 square feet of office space, a 52.5 percent ownership interest in Port Imperial 4/5 Garage and Retail operating properties.  The initial phase, Port Imperial South 11, a 295-unit multi-family project, began construction in the second quarter 2016.



Dispositions/Rental Property Held for Sale

The Company disposed of the following office properties during the six months ended June 30, 2016 (dollars in thousands):





The following table summarizes income (loss) for the three and six month periods ended June 30, 2016 and 2015 from the properties disposed of during the six months ended June 30, 2016 and the six properties disposed of during the year ended December 31, 2015:  (dollars in thousands)    



Rental Property Held for Sale, Net

During the three months ended June 30, 2016, the Company signed agreements to dispose of five office properties totaling approximately 567,000 square feet, and one 220-unit multi-family rental property, subject to certain conditions.  The office and multi-family rental properties are located in Parsippany, New Jersey, Upper Saddle River, New Jersey and Andover, Massachusetts.  The Company identified these properties as held for sale at June 30, 2016.  The total estimated sales proceeds expected from the four separate sales are approximately $84 million.  The Company determined that the carrying amounts of four of the office properties were not expected to be recovered from estimated net sales proceeds and accordingly recognized an unrealized loss allowance of $3.6 million at June 30, 2016.  In July 2016, the Company completed the disposition of four of these office properties for sales proceeds of approximately $24.9 million.  All the remaining dispositions are expected to be completed in the third quarter of 2016.



The following table summarizes the rental property held for sale, net, as of June 30, 2016: (dollars in thousands)    





Other assets and liabilities related to the rental properties held for sale, as of June 30, 2016, include $2.0 million in deferred charges, and other assets, $1.5 million in Unbilled rents receivable, $0.9 million in Accounts payable, accrued expenses and other liabilities, and $1.2 million in Rents received in advance and security deposits.  Approximately $3.5 million of these assets and $1.2 million of these liabilities are expected to be written off with the completion of the sales.



Other Sales Agreement

During the three months ended June 30, 2016, the Company also signed an agreement to dispose of a land parcel located in Upper Saddle River, New Jersey, for approximately $41.9 million, subject to certain conditions.  The disposition is expected to be completed in the fourth quarter 2016.



Unconsolidated Joint Venture Activity

On April 1, 2016, the Company bought out its partner PruRose Riverwalk G, L.L.C. for $11.3 million and increased its subordinated interest in Riverwalk G Urban Renewal,  L.L.C. from 25 percent to 50 percent using borrowings on the Company’s unsecured credit facility.  Riverwalk G Urban Renewal, L.L.C., owns a 316-unit operating multi-family property located in West New York, New Jersey. 



On May 26, 2016, the Company sold its 50 percent interest in Port Imperial South 15, L.L.C. (“RiversEdge”) and its 20 percent interest in Port Imperial South 13 Urban Renewal, L.L.C. (“RiverParc”), joint ventures that own the 236-unit and the 280-unit multi-family operating properties, respectively, located in Weehawken, New Jersey for $6.4 million.  The Company realized a gain on the sale of $5.7 million.