Recent Transactions |
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| Recent Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recent Transactions |
3. RECENT TRANSACTIONS
Properties Commencing Initial Operations
The following property commenced initial operations during the three months ended March 31, 2021 (dollars in thousands):
(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 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):
The Company disposed of the following rental properties during the three months ended March 31, 2021 (dollars in thousands):
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| Recent Transactions |
3. RECENT TRANSACTIONS
Properties Commencing Initial Operations
The following property commenced initial operations during the three months ended March 31, 2021 (dollars in thousands):
(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 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):
The Company disposed of the following rental properties during the three months ended March 31, 2021 (dollars in thousands):
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