Recent Transactions |
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| Recent Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recent Transactions |
3. RECENT TRANSACTIONS
Properties Commencing Initial Operations
The following properties commenced initial operations during the nine months ended September 30, 2021 (dollars in thousands):
(a)As of September 30, 2021, 193 apartment units are in service. The development costs included approximately $2.9 million in land costs. (b)As of September 30, 2021, 206 apartment units are in service. The remaining 107 apartment units are expected to be placed in service in the fourth quarter of 2021. The development costs included approximately $2.7 million in land costs.
Additionally, a land lease located in Parsippany, New Jersey, with two restaurant tenants, also commenced initial operations during the nine months ended September 30, 2021. Development costs incurred amounted to $5.1 million. This land lease was sold by the Company on June 30, 2021.
Unconsolidated Joint Ventures
On April 29, 2021, the Company sold its interest in the 12 Vreeland Road joint venture for a gross sales price of approximately $2 million, with no gain or loss on the transaction.
On September 1, 2021, the Company sold its interest in the Offices at Crystal Lake joint venture to its venture partner for $1.9 million and recorded a loss on the sale of approximately $1.9 million in the three and nine months ended September 30, 2021.
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 had excluded 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 single 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 September 30, 2021, the Company completed the sale of 35 of these suburban office properties, totaling 6 million square feet, for net sales proceeds of $1.0 billion. In October 2021, the Company completed the sale of the last Suburban Office Portfolio property classified as held for sale, which was a 248,480 square foot office property, for a gross sales price of $25.3 million. As a result of a change in the estimated selling costs for this disposition, the Company recognized an unrealized gain of $0.5 million during the three and nine months ended September 30, 2021 (partially reversing cumulative held for sale loss allowances recognized).
As of September 30, 2021, the Company identified as held for sale two office properties totaling approximately 1.8 million square feet to be sold separately, which are located in Jersey City and Hoboken, New Jersey. The total estimated sales proceeds, net of expected selling costs but before the required aggregate paydown of $400 million of mortgages encumbering the properties and related costs, are expected to be approximately $570 million. The Company may need to pay significant prepayment costs between approximately $20 million to $25 million to pay down these mortgage loans which will be expensed when incurred at the time of such paydown.
Additionally, the Company also identified a small retail pad leased to others and several developable land parcels as held for sale as of September 30, 2021, including a developable land parcel in Jersey City, 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 two held for sale properties and a land parcel held for sale was not expected to be recovered from estimated net sales proceeds, and accordingly recognized an unrealized held for sale loss allowance of $3.0 million and $3.5 million for the properties (none of which is included in discontinued operations), and land impairments of $0.3 million and $0.7 million, during the three and nine months ended September 30, 2021, respectively. As a result of a recent sales contract in place for a land parcel held for sale, the Company recognized an unrealized gain of $3.7 million during both the three and nine months ended September 30, 2021 (reversing cumulative held for sale loss allowances recognized).
The following table summarizes the real estate held for sale, net, and other assets and liabilities (dollars in thousands):
(a)Classified as discontinued operations at September 30, 2021 for all periods presented. See Note 7: Discontinued Operations. (b)Expected to be removed with the completion of the sales. (c)Includes $19.2 million of right of use assets expected to be removed with the completion of the sales. (d)Includes $20.5 million of right of use liabilities expected to be removed with the completion of the sales.
The Company disposed of the following rental properties during the nine months ended September 30, 2021 (dollars in thousands):
(a)As part of the consideration from the buyer, 678,302 Common Units were redeemed by the Company at a 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. (b)Includes $10 million of seller financing provided to the buyers of the Metropark portfolio. See Note 5: Deferred charges, goodwill and other assets, net. (c)The mortgage loan encumbering three of the properties was defeased at closing, for which the Company incurred costs of $22.6 million. These costs were expensed as loss from extinguishment of debt during the three months ended June 30, 2021.
On May 24, 2021, the Company disposed of a developable land parcel located in Hamilton, New Jersey, for net sales proceeds of $745,000 (and recorded a net gain of $111,000 on the disposition).
In October 2021, the Company completed the sale of a 248,480 square foot office property classified as held for sale at September 30, 2021, for a gross sales price of $25.3 million.
Impairments on Properties and Land Held and Used
The Company determined that, due to the shortening of its expected period of ownership, which occurred during the second quarter 2021, the Company evaluated the recoverability of the carrying value of its office property in Hoboken, New Jersey (which was subsequently classified as held for sale as of September 30, 2021), and determined that it was necessary to reduce the carrying value of the property to its estimated fair value. Accordingly, the Company recorded an impairment charge of $6.0 million on the office property at June 30, 2021, which is included in property impairments on the consolidated statement of operations. Also, as a result of the Company’s shortening of its expected holding period beginning in the second quarter 2021, the Company evaluated the recoverability of the carrying values of its land parcels during the second and third quarters 2021 and determined that it was necessary to reduce the carrying value of a held-and-used developable land parcel located in Jersey City, New Jersey, to its estimated fair value and recorded in land and other impairment charges an amount of $6.8 million and $14.3 million, respectively, for the three and nine months ended September 30, 2021. |
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| Recent Transactions |
3. RECENT TRANSACTIONS
Properties Commencing Initial Operations
The following properties commenced initial operations during the nine months ended September 30, 2021 (dollars in thousands):
(a)As of September 30, 2021, 193 apartment units are in service. The development costs included approximately $2.9 million in land costs. (b)As of September 30, 2021, 206 apartment units are in service. The remaining 107 apartment units are expected to be placed in service in the fourth quarter of 2021. The development costs included approximately $2.7 million in land costs.
Additionally, a land lease located in Parsippany, New Jersey, with two restaurant tenants, also commenced initial operations during the nine months ended September 30, 2021. Development costs incurred amounted to $5.1 million. This land lease was sold by the Company on June 30, 2021.
Unconsolidated Joint Ventures
On April 29, 2021, the Company sold its interest in the 12 Vreeland Road joint venture for a gross sales price of approximately $2 million, with no gain or loss on the transaction.
On September 1, 2021, the Company sold its interest in the Offices at Crystal Lake joint venture to its venture partner for $1.9 million and recorded a loss on the sale of approximately $1.9 million in the three and nine months ended September 30, 2021.
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 had excluded 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 single 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 September 30, 2021, the Company completed the sale of 35 of these suburban office properties, totaling 6 million square feet, for net sales proceeds of $1.0 billion. In October 2021, the Company completed the sale of the last Suburban Office Portfolio property classified as held for sale, which was a 248,480 square foot office property, for a gross sales price of $25.3 million. As a result of a change in the estimated selling costs for this disposition, the Company recognized an unrealized gain of $0.5 million during the three and nine months ended September 30, 2021 (partially reversing cumulative held for sale loss allowances recognized).
As of September 30, 2021, the Company identified as held for sale two office properties totaling approximately 1.8 million square feet to be sold separately, which are located in Jersey City and Hoboken, New Jersey. The total estimated sales proceeds, net of expected selling costs but before the required aggregate paydown of $400 million of mortgages encumbering the properties and related costs, are expected to be approximately $570 million. The Company may need to pay significant prepayment costs between approximately $20 million to $25 million to pay down these mortgage loans which will be expensed when incurred at the time of such paydown.
Additionally, the Company also identified a small retail pad leased to others and several developable land parcels as held for sale as of September 30, 2021, including a developable land parcel in Jersey City, 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 two held for sale properties and a land parcel held for sale was not expected to be recovered from estimated net sales proceeds, and accordingly recognized an unrealized held for sale loss allowance of $3.0 million and $3.5 million for the properties (none of which is included in discontinued operations), and land impairments of $0.3 million and $0.7 million, during the three and nine months ended September 30, 2021, respectively. As a result of a recent sales contract in place for a land parcel held for sale, the Company recognized an unrealized gain of $3.7 million during both the three and nine months ended September 30, 2021 (reversing cumulative held for sale loss allowances recognized).
The following table summarizes the real estate held for sale, net, and other assets and liabilities (dollars in thousands):
(a)Classified as discontinued operations at September 30, 2021 for all periods presented. See Note 7: Discontinued Operations. (b)Expected to be removed with the completion of the sales. (c)Includes $19.2 million of right of use assets expected to be removed with the completion of the sales. (d)Includes $20.5 million of right of use liabilities expected to be removed with the completion of the sales.
The Company disposed of the following rental properties during the nine months ended September 30, 2021 (dollars in thousands):
(a)As part of the consideration from the buyer, 678,302 Common Units were redeemed by the Company at a 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. (b)Includes $10 million of seller financing provided to the buyers of the Metropark portfolio. See Note 5: Deferred charges, goodwill and other assets, net. (c)The mortgage loan encumbering three of the properties was defeased at closing, for which the Company incurred costs of $22.6 million. These costs were expensed as loss from extinguishment of debt during the three months ended June 30, 2021.
On May 24, 2021, the Company disposed of a developable land parcel located in Hamilton, New Jersey, for net sales proceeds of $745,000 (and recorded a net gain of $111,000 on the disposition).
In October 2021, the Company completed the sale of a 248,480 square foot office property classified as held for sale at September 30, 2021, for a gross sales price of $25.3 million.
Impairments on Properties and Land Held and Used
The Company determined that, due to the shortening of its expected period of ownership, which occurred during the second quarter 2021, the Company evaluated the recoverability of the carrying value of its office property in Hoboken, New Jersey (which was subsequently classified as held for sale as of September 30, 2021), and determined that it was necessary to reduce the carrying value of the property to its estimated fair value. Accordingly, the Company recorded an impairment charge of $6.0 million on the office property at June 30, 2021, which is included in property impairments on the consolidated statement of operations. Also, as a result of the Company’s shortening of its expected holding period beginning in the second quarter 2021, the Company evaluated the recoverability of the carrying values of its land parcels during the second and third quarters 2021 and determined that it was necessary to reduce the carrying value of a held-and-used developable land parcel located in Jersey City, New Jersey, to its estimated fair value and recorded in land and other impairment charges an amount of $6.8 million and $14.3 million, respectively, for the three and nine months ended September 30, 2021. |
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