Deferred Charges, Goodwill And Other Assets, Net |
12 Months Ended |
|---|---|
Dec. 31, 2021 | |
| Deferred Charges, Goodwill And Other Assets [Line Items] | |
| Deferred Charges, Goodwill And Other Assets, Net | 5. DEFERRED CHARGES, GOODWILL AND OTHER ASSETS, NET December 31, December 31,(dollars in thousands) 2021 2020Deferred leasing costs$ 88,265 $ 112,421Deferred financing costs - revolving credit facility (a) 6,684 5,559 94,949 117,980Accumulated amortization (40,956) (52,428)Deferred charges, net 53,993 65,552Notes receivable (b) 4,015 1,167In-place lease values, related intangibles and other assets, net (c)(d) 42,183 71,608Goodwill (e) - 2,945Right of use assets (f) 22,298 22,298Prepaid expenses and other assets, net 28,858 35,971 Total deferred charges, goodwill and other assets, net (g)$ 151,347 $ 199,541 (a)Deferred financing costs related to all other debt liabilities (other than for the revolving credit facility) are netted against those debt liabilities for all periods presented. See Note 2: Significant Accounting Policies – Deferred Financing Costs.(b)Includes as of December 31, 2021 and 2020, respectively, an interest-free note receivable with a net present value of $0.7 million and $1.2 million, which matures in April 2023. The Company believes this balance is fully collectible. Also includes $3.1 million, net of a loan loss allowance of $0.2 million, as of December 31, 2021, of seller-financing provided by the Company to the buyers of the Metropark portfolio. The receivable is secured against available cash of one of the Metropark properties disposed of and earned an annual return of four percent for 90 days after the disposition, with the interest rate increased to 15 percent through November 18, 2021 and to 10 percent thereafter, pursuant to an amended operating agreement. The Company recorded a loan loss allowance charge of $0.2 million at December 31, 2021 based on expected losses, by calculating the net present value of the contractual cash flows of the total receivable (See Note 12: Disclosure of fair value of assets and liabilities). Such charge was recorded in Interest and other investment income (loss) for the year ended December 31, 2021. See Note 3: Transactions – Real Estate Held for Sale/Discontinued Operations/Dispositions.(c)In accordance with ASC 805, Business Combinations, the Company recognizes rental revenue of acquired above and below market lease intangibles over the terms of the respective leases. The impact of amortizing the acquired above and below-market lease intangibles increased revenue by approximately $2.7 million, $3.7 million and $4.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes, as of December 31, 2021, the scheduled amortization of the Company’s acquired above and below-market lease intangibles for each of the five succeeding years (dollars in thousands): Acquired Above- Acquired Below- Market Lease Market Lease TotalYear Intangibles Intangibles Amortization2022$ (358) $ 2,209 $ 1,8512023 (352) 2,205 1,8532024 (308) 2,197 1,8892025 (293) 2,151 1,8582026 (275) 2,247 1,972 (d)The value of acquired in-place lease intangibles are amortized to expense over the remaining initial terms of the respective leases. The impact of the amortization of acquired in-place lease values is included in depreciation and amortization expense and amounted to approximately $2.1 million, $9.1 million and $34.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes, as of December 31, 2021, the scheduled amortization of the Company’s acquired in-place lease values for each of the five succeeding years (dollars in thousands): Year 2022 $ 2,2442023 2,2242024 2,1452025 2,0012026 1,994Total $ 10,608 (e)All goodwill was attributable to the Company’s Multifamily Real Estate and Services segment and was fully impaired as of December 31, 2021.(f)This amount has a corresponding liability of $23.7 million, which is included in Accounts payable, accrued expense and other liabilities. See Note 12: Commitments and Contingencies – Ground Lease agreements for further details.(g)The amount as of December 31, 2021 and 2020, includes $0.5 million and $42.5 million, respectively, for properties classified as held for sale. DERIVATIVE FINANCIAL INSTRUMENTS Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates an additional $35 thousand will be reclassified as an increase to interest expense. As of December 31, 2021, the Company had one interest rate cap outstanding with a notional amount of $75 million designated as a cash flow hedge of interest rate risk. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2021 and 2020 (dollars in thousands): Fair Value Asset Derivatives designated December 31, December 31, as hedging instruments 2021 2020 Balance sheet location Interest rate caps $ 850 $ - Deferred charges, goodwill and other assets The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the years ending December 31, 2021, 2020 and 2019 (dollars in thousands): Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into IncomeLocation of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative and Reclassification for Forecasted Transactions No Longer Probable of Occurring Total Amount of Interest Expense presented in the consolidated statements of operationsYear Ended December 31,2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 Interest Rate Caps$ 10 $ - $ - Interest expense $ - $ - $ - $ - $ - $ - $ (65,192) $ (80,991) $ (90,569) Interest rate swaps$ - $ - $ (4,682) Interest expense $ - $ 16 $ 3,551Interest and other investment income (loss) $ - $ - $ 1,926 $ (65,192) $ (80,991) $ (90,569) Credit-risk-related Contingent Features As of December 31, 2021, the Company did not have any interest rate derivatives in a net liability position. If the Company had breached any of these provisions at December 31, 2021, it could have been required to settle its obligations under the agreements at their termination value which includes accrued interest but excludes any adjustment for nonperformance risk. |
| VERIS RESIDENTIAL, L.P. [Member] | |
| Deferred Charges, Goodwill And Other Assets [Line Items] | |
| Deferred Charges, Goodwill And Other Assets, Net | 5. DEFERRED CHARGES, GOODWILL AND OTHER ASSETS, NET December 31, December 31,(dollars in thousands) 2021 2020Deferred leasing costs$ 88,265 $ 112,421Deferred financing costs - revolving credit facility (a) 6,684 5,559 94,949 117,980Accumulated amortization (40,956) (52,428)Deferred charges, net 53,993 65,552Notes receivable (b) 4,015 1,167In-place lease values, related intangibles and other assets, net (c)(d) 42,183 71,608Goodwill (e) - 2,945Right of use assets (f) 22,298 22,298Prepaid expenses and other assets, net 28,858 35,971 Total deferred charges, goodwill and other assets, net (g)$ 151,347 $ 199,541 (a)Deferred financing costs related to all other debt liabilities (other than for the revolving credit facility) are netted against those debt liabilities for all periods presented. See Note 2: Significant Accounting Policies – Deferred Financing Costs.(b)Includes as of December 31, 2021 and 2020, respectively, an interest-free note receivable with a net present value of $0.7 million and $1.2 million, which matures in April 2023. The Company believes this balance is fully collectible. Also includes $3.1 million, net of a loan loss allowance of $0.2 million, as of December 31, 2021, of seller-financing provided by the Company to the buyers of the Metropark portfolio. The receivable is secured against available cash of one of the Metropark properties disposed of and earned an annual return of four percent for 90 days after the disposition, with the interest rate increased to 15 percent through November 18, 2021 and to 10 percent thereafter, pursuant to an amended operating agreement. The Company recorded a loan loss allowance charge of $0.2 million at December 31, 2021 based on expected losses, by calculating the net present value of the contractual cash flows of the total receivable (See Note 12: Disclosure of fair value of assets and liabilities). Such charge was recorded in Interest and other investment income (loss) for the year ended December 31, 2021. See Note 3: Transactions – Real Estate Held for Sale/Discontinued Operations/Dispositions.(c)In accordance with ASC 805, Business Combinations, the Company recognizes rental revenue of acquired above and below market lease intangibles over the terms of the respective leases. The impact of amortizing the acquired above and below-market lease intangibles increased revenue by approximately $2.7 million, $3.7 million and $4.3 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes, as of December 31, 2021, the scheduled amortization of the Company’s acquired above and below-market lease intangibles for each of the five succeeding years (dollars in thousands): Acquired Above- Acquired Below- Market Lease Market Lease TotalYear Intangibles Intangibles Amortization2022$ (358) $ 2,209 $ 1,8512023 (352) 2,205 1,8532024 (308) 2,197 1,8892025 (293) 2,151 1,8582026 (275) 2,247 1,972 (d)The value of acquired in-place lease intangibles are amortized to expense over the remaining initial terms of the respective leases. The impact of the amortization of acquired in-place lease values is included in depreciation and amortization expense and amounted to approximately $2.1 million, $9.1 million and $34.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes, as of December 31, 2021, the scheduled amortization of the Company’s acquired in-place lease values for each of the five succeeding years (dollars in thousands): Year 2022 $ 2,2442023 2,2242024 2,1452025 2,0012026 1,994Total $ 10,608 (e)All goodwill was attributable to the Company’s Multifamily Real Estate and Services segment and was fully impaired as of December 31, 2021.(f)This amount has a corresponding liability of $23.7 million, which is included in Accounts payable, accrued expense and other liabilities. See Note 12: Commitments and Contingencies – Ground Lease agreements for further details.(g)The amount as of December 31, 2021 and 2020, includes $0.5 million and $42.5 million, respectively, for properties classified as held for sale. DERIVATIVE FINANCIAL INSTRUMENTS Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates an additional $35 thousand will be reclassified as an increase to interest expense. As of December 31, 2021, the Company had one interest rate cap outstanding with a notional amount of $75 million designated as a cash flow hedge of interest rate risk. The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of December 31, 2021 and 2020 (dollars in thousands): Fair Value Asset Derivatives designated December 31, December 31, as hedging instruments 2021 2020 Balance sheet location Interest rate caps $ 850 $ - Deferred charges, goodwill and other assets The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the years ending December 31, 2021, 2020 and 2019 (dollars in thousands): Derivatives in Cash Flow Hedging Relationships Amount of Gain or (Loss) Recognized in OCI on Derivative Location of Gain or (Loss) Reclassified from Accumulated OCI into Income Amount of Gain or (Loss) Reclassified from Accumulated OCI into IncomeLocation of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivative and Reclassification for Forecasted Transactions No Longer Probable of Occurring Total Amount of Interest Expense presented in the consolidated statements of operationsYear Ended December 31,2021 2020 2019 2021 2020 2019 2021 2020 2019 2021 2020 2019 Interest Rate Caps$ 10 $ - $ - Interest expense $ - $ - $ - $ - $ - $ - $ (65,192) $ (80,991) $ (90,569) Interest rate swaps$ - $ - $ (4,682) Interest expense $ - $ 16 $ 3,551Interest and other investment income (loss) $ - $ - $ 1,926 $ (65,192) $ (80,991) $ (90,569) Credit-risk-related Contingent Features As of December 31, 2021, the Company did not have any interest rate derivatives in a net liability position. If the Company had breached any of these provisions at December 31, 2021, it could have been required to settle its obligations under the agreements at their termination value which includes accrued interest but excludes any adjustment for nonperformance risk. |