Veris Residential, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

MORTGAGES, LOANS PAYABLE AND OTHER OBLIGATIONS

MORTGAGES, LOANS PAYABLE AND OTHER OBLIGATIONS

12 Months Ended

Dec. 31, 2022

MORTGAGES, LOANS PAYABLE AND OTHER OBLIGATIONS

MORTGAGES, LOANS PAYABLE AND OTHER OBLIGATIONS The Company has mortgages, loans payable and other obligations which primarily consist of various loans collateralized by certain of the Company’s rental properties, land and development projects. As of December 31, 2022, 21 of the Company’s properties, with a total carrying value of approximately $3.3 billion are encumbered by the Company’s mortgages and loans payable. Payments on mortgages, loans payable and other obligations are generally due in monthly installments of principal and interest, or interest only. The Company was in compliance with its debt covenants under its mortgages and loans payable as of December 31, 2022, except as otherwise disclosed.

A summary of the Company’s mortgages, loans payable and other obligations as of December 31, 2022 and 2021 is as follows (dollars in thousands):


Property/Project Name	Lender		Effective Rate (a)		December 31, 2022		December 31, 2021		Maturity
111 River St. (b)	Athene Annuity and Life Company		3.90	%	$	—	$	150,000	—
101 Hudson (c)	Wells Fargo CMBS		3.20	%	—		250,000		—
Port Imperial 4/5 Hotel (d)	Fifth Third Bank	LIBOR+	3.40	%	84,000		89,000		04/01/23
Portside at Pier One	CBRE Capital Markets/FreddieMac		3.57	%	58,998		58,998		08/01/23
Signature Place	Nationwide Life Insurance Company		3.74	%	43,000		43,000		08/01/24
Liberty Towers	American General Life Insurance Company		3.37	%	265,000		265,000		10/01/24
Haus 25 (e)	QuadReal Finance	LIBOR+	2.70	%	297,324		255,453		12/01/24
Portside 5/6 (f)	New York Life Insurance Company		4.56	%	97,000		97,000		03/10/26
BLVD 425	New York Life Insurance Company		4.17	%	131,000		131,000		08/10/26
BLVD 401	New York Life Insurance Company		4.29	%	117,000		117,000		08/10/26
The Upton (g)	Bank of New York Mellon	LIBOR+	1.58	%	75,000		75,000		10/27/26
145 Front at City Square (h)	MUFG Union Bank	LIBOR+	1.84	%	63,000		63,000		12/10/26
Riverhouse 9 at Port Imperial (i)	JP Morgan Chase	SOFR+	1.41	%	110,000		87,175		06/21/27
Quarry Place at Tuckahoe	Natixis Real Estate Capital LLC		4.48	%	41,000		41,000		08/05/27
BLVD 475 N/S	The Northwestern Mutual Life Insurance Co.		2.91	%	165,000		165,000		11/10/27
Riverhouse 11 at Port Imperial	The Northwestern Mutual Life Insurance Co.		4.52	%	100,000		100,000		01/10/29
Soho Lofts (j)	New York Community Bank		3.77	%	160,000		160,000		07/01/29
Port Imperial South 4/5 Garage	American General Life & A/G PC		4.85	%	32,166		32,664		12/01/29
Emery at Overlook Ridge	New York Community Bank		3.21	%	72,000		72,000		01/01/31

Principal balance outstanding					1,911,488		2,252,290
Unamortized deferred financing costs					(7,511)		(11,220)

Total mortgages, loans payable and other obligations, net					$	1,903,977	$	2,241,070

(a)Reflects effective rate of debt, including deferred financing costs, comprised of the cost of terminated treasury lock agreements (if any), debt initiation costs, mark-to-market adjustment of acquired debt and other transaction costs, as applicable.

(b)In January 2022, the Company repaid this mortgage loan upon disposition of the property which was collateral against the mortgage loan. This mortgage loan did not permit early pre-payment. As a result of the disposal of the property, the Company incurred costs of approximately $6.3 million at closing, which was expensed as loss from extinguishment of debt in the year ended December 31, 2022. See Note 3-Recent Transactions.

(c)In October 2022, this loan was assumed by the purchaser of the property encumbered by the loan. The assumed mortgage was a non-cash portion of the sales transaction. As a result of the disposal of the property, the Company incurred costs of approximately $1.0 million at closing, which was expensed as loss from extinguishment of debt in the year ended December 31 2022. See Note 3-Recent Transactions.

(d)In May 2021, the Company executed an agreement extending its maturity date to April 2023, with a six month extension option. The Company repaid $5 million of the outstanding principal and has guaranteed $13.7 million of the outstanding principal, subject to certain conditions. The loan requires a debt service coverage charge test (“DSCR Test”), with which the Company was not in compliance for the quarter ended September 30, 2022. Therefore the Company was required to make a partial principal repayment of $5.0 million as well as deposit three months of interest amounting to $1.2 million into an escrow account and sweep all excess property level cash flows into such escrow account until two consecutive periods have passed where the Company is in compliance with the DSCR Test. In February 2023, the Company repaid this mortgage loan upon disposition of the hotels which were collateral against the mortgage loan.

(e)The construction loan has a LIBOR floor of 2.0 percent, has a maximum borrowing capacity of $300 million and provides, subject to certain conditions, one one year extension option with a fee of 25 basis points. The Company entered into an interest-rate cap agreement for the mortgage loan.

(f)The Company has guaranteed 10 percent of the outstanding principal, subject to certain conditions.

(g)On October 27, 2021, the Company obtained a $75 million mortgage loan maturing in October 2026 and repaid the existing construction loan. The Company entered into an interest-rate cap agreement for the mortgage loan.

(h)On January 12, 2023 the Company entered into an interest-rate cap agreement for the mortgage loan.

(i)This construction loan had a maximum borrowing capacity of $92 million. On June 21, 2022, the Company obtained a $110 million mortgage loan maturing in June 2027 from a different lender and repaid the existing construction loan. The Company entered into an interest-rate cap agreement for the mortgage loan.

(j)Effective rate reflects the first five years of interest payments at a fixed rate. Interest payments after that period ends are based on LIBOR plus 2.75% annually.

SCHEDULED PRINCIPAL PAYMENTS

Scheduled principal payments for the Company’s revolving credit facility (see Note 8) and mortgages, loans payable and other obligations (See Note 9) as of December 31, 2022 are as follows (dollars in thousands):


Period	Scheduled Amortization		Principal Maturities		Total
2023	$	2,047	$	142,998	$	145,045
2024	5,037		605,324		610,361
2025	8,384		—		8,384
2026	8,780		483,000		491,780
2027	8,158		305,319		313,477
Thereafter	7,418		335,023		342,441
Sub-total	39,824		1,871,664		1,911,488
Unamortized deferred financing costs	(7,511)		—		(7,511)

Totals	$	32,313	$	1,871,664	$	1,903,977

CASH PAID FOR INTEREST AND INTEREST CAPITALIZED

Cash paid for interest for the years ended December 31, 2022, 2021 and 2020 was $80.3 million, $85.2 million and $103.5 million, (of which zero, $1.7 million and $5.1 million pertained to properties classified as discontinued operations), respectively. Interest capitalized by the Company for the years ended December 31, 2022, 2021 and 2020 was $12.2 million, $30.5 million and $26.4 million, respectively (which amounts included zero, $0.3 million and $1.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, of interest capitalized on the Company’s investments in unconsolidated joint ventures which were substantially in development).

SUMMARY OF INDEBTEDNESS


(dollars in thousands)	December 31, 2022				December 31, 2021
	Balance		Weighted Average Interest Rate (a)		Balance		Weighted Average Interest Rate (a)
Fixed Rate & Hedged Debt (a)	$	1,757,308	4.27	%	$	1,675,353	3.71	%
Revolving Credit Facility & Other Variable Rate Debt	146,669		6.86	%	713,717		3.32	%

Totals/Weighted Average:	$	1,903,977	4.47	%	$	2,389,070	3.60	%

(a) As of December 31, 2022 and 2021, includes debt with interest rate caps outstanding with a notional amount of $485 million and $75 million, respectively.