On December 19, 2019, the Company announced that its Board had determined to sell the Company’s entire Suburban Office Portfolio totaling approximately 6.6 million square feet.  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 classified as held for sale) are being classified as discontinued operations for all periods presented herein. As of December 31, 2020, the Company determined that a 350,000 square foot office property in the Suburban Office Portfolio, located in Holmdel, New Jersey no longer met the held for sale criteria. The property had originally been classified as held for sale as of December 31, 2019. The reclassified property has an aggregate book value of $19.8 million as of December 31, 2020, net of accumulated depreciation of $10.5 million (including catch-up depreciation). $2.8 million of previously recorded valuation allowance was reversed upon the reclassification of the asset from held for sale at December 31, 2020, and the corresponding property’s results and valuation allowance are also reclassified out of discontinued operations to continuing operations for all periods presented.

In late 2019 through December 31, 2020, the Company completed the sale of 20 of these suburban office properties, totaling 3.2 million square feet, for net sales proceeds of $377.4 million.  As of December 31, 2020, the Company has identified as held for sale 16 office properties (comprised of six disposal groups) in the Suburban Office Portfolio, totaling 3.0 million square feet (of which the Company currently has 15 properties totaling 2.8 million square feet under contract for sale for aggregate gross proceeds of $652.4 million).  In

January 2021, the Company completed the sale of one of the properties held for sale totaling 149,600 square feet for a gross sales price of $38 million. 

The Company plans to complete the sale of substantially all of its remaining Suburban Office Portfolio properties in 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 (“COVID-19”). After the completion of the Suburban Office Portfolio sales, the Company’s holdings will consist of its waterfront class A office portfolio and its multi-family rental portfolio, and related development projects and land holdings.

As a result of recent sales contract amendments 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 six of the remaining held for sale properties (comprised of three disposal groups) was not expected to be recovered from estimated net sales proceeds, and accordingly recognized an unrealized held-for-sale loss allowance of $14 million during the year ended December 31, 2020.

The following table summarizes income from discontinued operations and the related realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands):

(a)Represents valuation allowances and impairment charges on properties classified as discontinued operations in 2020.

(b)See Note 3: Real Estate Transactions – Dispositions for further information regarding properties sold and related gains (losses).

On December 19, 2019, the Company announced that its Board had determined to sell the Company’s entire Suburban Office Portfolio totaling approximately 6.6 million square feet.  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 classified as held for sale) are being classified as discontinued operations for all periods presented herein. As of December 31, 2020, the Company determined that a 350,000 square foot office property in the Suburban Office Portfolio, located in Holmdel, New Jersey no longer met the held for sale criteria. The property had originally been classified as held for sale as of December 31, 2019. The reclassified property has an aggregate book value of $19.8 million as of December 31, 2020, net of accumulated depreciation of $10.5 million (including catch-up depreciation). $2.8 million of previously recorded valuation allowance was reversed upon the reclassification of the asset from held for sale at December 31, 2020, and the corresponding property’s results and valuation allowance are also reclassified out of discontinued operations to continuing operations for all periods presented.

In late 2019 through December 31, 2020, the Company completed the sale of 20 of these suburban office properties, totaling 3.2 million square feet, for net sales proceeds of $377.4 million.  As of December 31, 2020, the Company has identified as held for sale 16 office properties (comprised of six disposal groups) in the Suburban Office Portfolio, totaling 3.0 million square feet (of which the Company currently has 15 properties totaling 2.8 million square feet under contract for sale for aggregate gross proceeds of $652.4 million).  In

January 2021, the Company completed the sale of one of the properties held for sale totaling 149,600 square feet for a gross sales price of $38 million. 

The Company plans to complete the sale of substantially all of its remaining Suburban Office Portfolio properties in 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 (“COVID-19”). After the completion of the Suburban Office Portfolio sales, the Company’s holdings will consist of its waterfront class A office portfolio and its multi-family rental portfolio, and related development projects and land holdings.

As a result of recent sales contract amendments 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 six of the remaining held for sale properties (comprised of three disposal groups) was not expected to be recovered from estimated net sales proceeds, and accordingly recognized an unrealized held-for-sale loss allowance of $14 million during the year ended December 31, 2020.

The following table summarizes income from discontinued operations and the related realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, for the years ended December 31, 2020, 2019 and 2018 (dollars in thousands):

(a)Represents valuation allowances and impairment charges on properties classified as discontinued operations in 2020.

(b)See Note 3: Real Estate Transactions – Dispositions for further information regarding properties sold and related gains (losses).