Annual report pursuant to Section 13 and 15(d)

RECENT TRANSACTIONS

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RECENT TRANSACTIONS
 12 Months Ended
Dec. 31, 2022
Recent Transactions [Abstract]  
RECENT TRANSACTIONS RECENT TRANSACTIONS
Acquisition

The Company acquired the following rental property during the year ended December 31, 2022 (dollars in thousands):
Acquisition Date Property Location Property
Type		 # of
Apartment Units		 Acquisition
 Cost
7/21/2022 The James (a) Park Ridge, NJ Multifamily 240 $ 130,308 
Total Acquisitions 240 $ 130,308 
(a)    This acquisition was funded using funds available with the Company's qualified intermediary from prior property sales proceeds and through borrowing under the Company's revolving credit facility.
Properties Commencing Initial Operations
The following property commenced initial operations during the years ended December 31, 2022 and 2021 (dollars in thousands):
2022
In Service
Date		 Property Location Property
Type		 # of
Apartment Units		  Total Development
Costs Incurred
04/01/22 Haus25 (a) Jersey City Multifamily 750 $ 485,587
Totals       750 $ 485,587
(a)As of December 31, 2022, all apartment units are in service. The development costs includes approximately $53.4 million in land costs.
2021
In Service
Date		 Property Location Property
Type		 # of
Apartment Units		 Total Development
Costs Incurred
03/01/21 The Upton (a) Short Hills, NJ Multifamily 193 $ 101,269
07/01/21 Riverhouse 9 at Port Imperial (b) Weehawken, NJ Multifamily 313 164,633
Totals     506 $ 265,902
(a)As of December 31, 2021, all apartment units are in service. The development costs included approximately $2.9 million in land costs.
(b)As of December 31, 2021, all apartment units are in service. The development costs included approximately $2.7 million in land costs.
Additionally, a land lease located in Parsippany, New Jersey also commenced initial operations during the first quarter 2021. Development costs incurred amounted to $5.1 million. This land lease was sold by the Company during 2021.
Real Estate Held for Sale/Discontinued Operations/Dispositions
2022
The Company has discontinued operations related to its former suburban New Jersey office portfolio (collectively, the “Suburban Office Portfolio”) which represented a strategic shift in the Company’s operations beginning in 2019. The Company has sold all but one of those assets and expects to dispose of this final suburban office asset in the first quarter of 2023. See Note 7: Discontinued Operations.

As of December 31, 2022, the Company identified as held for sale an office property of 0.4 million square feet, two hotels and several developable land parcels, which are located in Jersey City, Holmdel, Parsippany, Morris Township, Wall and Weehawken, New Jersey. As a result of recent sales contracts in place, the Company determined that the carrying value of the remaining held for sale office property, two hotels and two land parcels held for sale were not expected to be recovered from estimated net sales proceeds, and accordingly, during the year ended December 31, 2022, respectively, recognized an unrealized held for sale loss allowance of $12.5 million ($4.4 million of which is included in discontinued operations) and also recorded land and other impairments of $6.4 million during the year ended December 31, 2022. In February 2023, the Company completed the disposition of its hotels held for sale at December 31, 2022, for gross proceeds of $97 million and paid down the $84.0 million mortgage encumbering the property.

During the third quarter of 2022, the Company entered into a contract with a non-refundable deposit to dispose of three office properties totaling approximately 1.9 million square feet for a gross sales price of $420 million. As of December 31, 2022, due to current market conditions for office sales, the Company determined that this transaction did not meet all of the criteria for classification as held for sale under ASC 360-10-45-9 and hence the assets were not reclassified as held for sale. The Company recorded an impairment charge of $84.5 million on these properties for the period ending September 30, 2022. As of June 30, 2022 two land parcels that were previously identified as held for sale were reclassified as held and used, resulting in transaction-related costs of $0.1 million.

The total estimated sales proceeds of real estate held for sale, net of expected selling costs, are expected to be approximately $212.1 million.

The following table summarizes the real estate held for sale, net, and other assets and liabilities (dollars in thousands):
Suburban
Office
Portfolio
Other Assets & Liabilities
Held for Sale
Total
Land $ 4,336  $ 88,507  $ 92,843 
Building & Other 30,389  112,165  142,554 
Less: Accumulated depreciation (12,165) (16,759) (28,924)
Less: Cumulative unrealized losses on property held for sale (4,440) (8,100) (12,540)
Real estate held for sale, net $ 18,120  $ 175,813  $ 193,933 
Other assets and liabilities Suburban
Office
 Portfolio (a)		 Other
Assets
 Held for Sale		 Total
Unbilled rents receivable, net (a) $ 368 $ — $ 368
Deferred charges, net (a) 426 — 426
Total deferred charges & other assets, net 457 985 1,442
Mortgages & loans payable, net (a) — (85,664) (85,664)
Accounts payable, accrued exp & other liability (759) (473) (1,232)
(a)    Expected to be removed with the completion of the sales.

The Company disposed of the following rental property during the year ended December 31, 2022 (dollars in thousands):
Disposition
Date		 Property Location # of
Bldgs.		 Rentable
Square
Feet		 Property
Type		 Net
Sales
 Proceeds		 Net
 Carrying
Value		 Realized
 Gains
 (Losses)/
 Unrealized
 Losses, net		 Discontinued
Operations
Realized
 Gains
 (losses)/
Unrealized
 Losses, net
01/21/22 111 River Street Hoboken, New Jersey 1 566,215 Office $ 208,268  (a) $ 206,432  $ 1,836  $ — 
10/07/22 101 Hudson Street Jersey City, New Jersey 1 1,246,283  Office 342,578  (b) 270,198  72,380  — 
Unrealized gains (losses) on real estate held for sale $ (8,100) $ (4,440)
Totals 2 1,812,498  $ 550,846  $ 476,630  $ 66,116  $ (4,440)
(a)    The $150 million mortgage loan encumbering the property was repaid at closing, for which the Company incurred costs of $6.3 million. These costs were expensed as loss from extinguishment of debt during the year ended December 31, 2022.
(b)    The $250 million mortgage loan encumbering the property was assumed by the purchaser at closing, for which the Company incurred costs of $1.0 million. These costs were expensed as loss from extinguishment of debt during the year ended December 31, 2022. The assumed mortgage was a non-cash portion of this sales transaction.

The Company disposed of the following developable land holdings during the year ended December 31, 2022 (dollars in thousands):

Disposition
Date		 Property Address Location Net
Sales
 Proceeds		 Net
Carrying
 Value		 Realized
Gains
 (losses)/
Unrealized
 Losses, net
03/22/22 Palladium residential land West Windsor, New Jersey $ 23,908  $ 24,182  $ (274)
03/22/22 Palladium commercial land West Windsor, New Jersey 4,688  1,791  2,897 
04/15/22 Port Imperial Park parcel Weehawken, New Jersey 29,331  29,744  (413)
04/21/22 Urby II/III Jersey City, New Jersey 68,854  13,316  55,538 
11/03/22 Port Imperial Parcels 3 & 16 (a) Weehawken, New Jersey 24,885  25,371  (486)
Totals $ 151,666  $ 94,404  $ 57,262 
(a)    Includes non-cash expenses of $2.5 million.
2021
As of December 31, 2021, the Company identified as held for sale two office properties totaling approximately 1.8 million square feet to be sold separately, which were located in Jersey City and Hoboken, New Jersey. The total estimated sales proceeds, net of expected selling costs but before the required aggregate paydown or buyer assumption of $400 million of mortgages encumbering the properties and related costs, were expected to be approximately $575 million.
Additionally, the Company also identified several developable land parcels as held for sale as of December 31, 2021. As a result of recent sales contracts in place and after considering the market conditions due to the challenging economic climate and the COVID-19 pandemic, the Company determined that the carrying value of several land parcels held for sale was not expected to be recovered from estimated net sales proceeds, and accordingly, during the year ended December 31, 2021, recognized land impairments of $10.2 million. The Company also recognized an unrealized gain of $3.7 million during the year ended December 31, 2021 (reversing cumulative held for sale loss allowances recognized) for a held for sale land parcel that was previously impaired when the Company entered into a contract to sell the land parcel.
The following table summarizes the real estate held for sale, net, and other assets and liabilities (dollars in thousands):
Assets
 Held for Sale
Land $ 159,968
Building & Other 618,216
Less: Accumulated depreciation (159,538)
Real estate held for sale, net $ 618,646
Other assets and liabilities Assets
 Held for Sale
Unbilled rents receivable, net (a) $ 30,526
Deferred charges, net (a) 16,056
Total intangibles, net (a) 31,155
Total deferred charges & other assets, net (b) 69,410
Mortgages & loans payable, net (a) (397,953)
Total below market liability (a) (24,098)
Accounts payable, accrued exp & other liability (c) (49,648)
Unearned rents/deferred rental income (a) (5,831)
(a)Expected to be removed with the completion of the sales.
(b)Includes $19.2 million of right of use assets expected to be removed with the completion of the sales.
(c)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 year ended December 31, 2021 (dollars in thousands):
Disposition
Date		 Property/Address Location # of
Bldgs.		 Rentable
Square
Feet		 Property
Type		 Net
Sales
 Proceeds		 Net
 Carrying
Value		  Realized
 Gains
 (Losses)/
 Unrealized
 Losses, net		 Discontinued
Operations
Realized
 Gains
 (losses)/
Unrealized
 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 (b) Edison and Iselin, New Jersey 4 926,656  Office 247,351  233,826  —  13,525 
04/20/21 Short Hills portfolio (c) Short Hills, New Jersey 4 828,413  Office 248,664  245,800  —  2,864 
06/11/21 Red Bank portfolio Red Bank, New Jersey 5 659,490  Office 80,730  78,364  —  2,366 
06/30/21 Retail land leases Hanover and Parsippany, New Jersey — —  Land Lease 41,957  37,951  4,006  — 
07/26/21 7 Giralda Farms Madison, New Jersey 1 236,674  Office 28,182  30,143  —  (1,961)
10/20/21 4 Gatehall Drive Parsippany, New Jersey 1 248,480  Office 24,239  23,717  —  522 
12/16/21 Retail land lease Unit B Hanover, New Jersey — —  Land Lease 5,423  6,407  (984) — 
Totals     16 3,049,313    $ 711,270  $ 682,696  $ 3,022  $ 25,552 
(a)As part of the consideration from the buyer, a related party, 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 revolving credit facility. See Note 16: 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 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.
The Company disposed of the following developable land holdings during the year ended December 31, 2021 (dollars in thousands):
Disposition
Date		 Property Address Location Net
Sales
 Proceeds		 Net
Carrying
 Value		 Realized
Gains
 (losses)/
Unrealized
 Losses, net
05/24/21 Horizon common area Hamilton, New Jersey $ 745 $ 634 $ 111
12/22/21 346/360 University Ave Newark, New Jersey 4,266 2,262 2,004
Totals $ 5,011 $ 2,896 $ 2,115
Impairments on Properties and Land Held and Used
2022
The Company determined that, due to the shortening of its expected hold period for four office properties and several land parcels, it was necessary to reduce the carrying value of these assets to their estimated fair values. Accordingly, the Company recorded impairment charges of $94.8 million on the office properties and $2.9 million on the land parcels in the consolidated statement of operations for the year ended December 31, 2022.
2021
The Company determined that, due to the shortening of its expected hold period for one office property and its land parcels, it was necessary to reduce the carrying value of these assets to their estimated fair values. Accordingly, the Company recorded an impairment charge of $6.0 million on the office asset, which is included in property impairments on the consolidated statement of operations for the year ended December 31, 2021 and $14.3 million on the land parcels in land and other impairments on the consolidated statement of operations for the year ended December 31, 2021. Additionally, the Company determined that, due to the shortening of its expected hold period and as a result of the adverse effect the COVID-19 pandemic has had, and continues to have, on its hotel operations, the Company evaluated the recoverability of the carrying values of its two adjacent hotel properties and determined that it was necessary to reduce the carrying values of its three hotel assets located in Weehawken, New Jersey to their estimated fair values. Accordingly, the Company recorded an impairment charge of $7.4 million on these hotels at December 31, 2021, which is included in property impairments on the consolidated statement of operations for the year ended December 31, 2021.
Unconsolidated Joint Venture Activity
2022
On November 30, 2022, the Company's Cal-Harbor joint venture was sold for $117.0 million and the Company recorded a gain on the sale for its interest of approximately $7.7 million in the year ended December 31, 2022.
2021
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 year ended December 31, 2021.
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.