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, 2023

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, 2023, 17 of the Company’s properties, with a total carrying value of approximately $2.6 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, 2023.

A summary of the Company’s mortgages, loans payable and other obligations as of December 31, 2023 and 2022 is as follows (dollars in thousands):


Property/Project Name	Lender		Effective Rate (a)		December 31, 2023		December 31, 2022		Maturity
Port Imperial 4/5 Hotel (b)	Fifth Third Bank		N/A		—		84,000		N/A
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
Portside 2 at East Pier (c)	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
Portside at East Pier (d)	KKR	SOFR+	2.75	%	56,500		58,998		09/07/26
The Upton (e)	Bank of New York Mellon	SOFR+	1.58	%	75,000		75,000		10/27/26
145 Front at City Square (f)	US Bank	SOFR+	1.84	%	63,000		63,000		12/10/26
RiverHouse 9 at Port Imperial (g)	JP Morgan	SOFR+	1.41	%	110,000		110,000		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
Haus25 (h)	Freddie Mac		6.04	%	343,061		297,324		09/01/28
RiverHouse 11 at Port Imperial	The Northwestern Mutual Life Insurance Co.		4.52	%	100,000		100,000		01/10/29
Soho Lofts (i)	New York Community Bank		3.77	%	158,777		160,000		07/01/29
Port Imperial Garage South	American General Life & A/G PC		4.85	%	31,645		32,166		12/01/29
The Emery at Overlook Ridge (j)	New York Community Bank		3.21	%	72,000		72,000		01/01/31

Principal balance outstanding					1,868,983		1,911,488
Unamortized deferred financing costs					(15,086)		(7,511)

Total mortgages, loans payable and other obligations, net					$	1,853,897	$	1,903,977

(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)The loan was paid off on disposition of the hotels on February 10, 2023.

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

(d)On August 10, 2023, the Company refinanced the Freddie Mac fixed rate loan. Additionally, a 3-year cap at a strike rate of 3.5% was placed.

(e)As of December 31, 2023, an interest-rate cap agreement was in place for this mortgage loan with a strike rate of 1.0%, expiring in October 2024.

(f)On September 30, 2023 the Company placed a 9-month SOFR cap at a strike rate of 4.0%.

(g)As of December 31, 2023, an interest-rate cap agreement was in place for this mortgage loan, with a strike rate of 3.0%, expiring in June 2024.

(h)On August 15, 2023, the $297 million QuadReal Finance backed construction loan was fully repaid and the existing cap was terminated through refinancing activity.

(i)Effective rate reflects the fixed rate period, which ends in July 1, 2024. After that period ends, the Company must make a one-time election of how to compute the interest rate for this loan: (a) the floating-rate option, the sum of the highest prime rate as published in the New York Times on each applicable Rate Change Date plus 2.75% annually or (b) the fixed-rate option, the sum of the Five Year Fixed Rate Advance of the Federal Home Loan Bank of New York in effects as of the first business day of the month which is three months prior to the Rate Change Date plus 3.00% annually.

(j)Effective rate reflects the fixed rate period, which ends on January 1, 2026. After that period ends, the Company must make a one-time election of how to compute the interest rate for this loan: (a) the floating-rate option, the sum of the highest prime rate as published in the New York Times on each applicable Rate Change Date plus 2.75% annually or (b) the fixed-rate option, the sum of the Five Year Fixed Rate Advance of the Federal Home Loan Bank of New York in effects as of the first business day of the month which is three months prior to the Rate Change Date plus 3.00% annually.

SCHEDULED PRINCIPAL PAYMENTS

Scheduled principal payments for the Company’s mortgages, loans payable and other obligations as of December 31, 2023 are as follows (dollars in thousands):


Period	Scheduled Amortization		Principal Maturities		Total
2024	$	6,076	$	308,000	$	314,076
2025	9,487		—		9,487
2026	9,651		536,487		546,138
2027	8,158		305,320		313,478
2028	5,331		343,061		348,392
Thereafter	5,574		331,838		337,412
Sub-total	44,277		1,824,706		1,868,983
Unamortized deferred financing costs	(15,086)		—		(15,086)

Totals	$	29,191	$	1,824,706	$	1,853,897

CASH PAID FOR INTEREST AND INTEREST CAPITALIZED

Cash paid for interest for the years ended December 31, 2023, 2022 and 2021 was $81.6 million, $80.3 million and $85.2 million, (of which $1.4 million, $13.3 million and $18.5 million pertained to properties classified as discontinued operations), respectively. Interest capitalized by the Company for the years ended December 31, 2023, 2022 and 2021 was zero, $12.2 million and $30.5 million, respectively (which amounts included zero, zero and $0.3 million for the years ended December 31, 2023, 2022 and 2021, 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, 2023				December 31, 2022
	Balance		Weighted Average Interest Rate		Balance		Weighted Average Interest Rate
Fixed Rate & Hedged Debt (a)	$	1,853,897	4.34	%	$	1,757,308	4.27	%
Revolving Credit Facility & Other Variable Rate Debt	—		—	%	146,669		6.86	%

Totals/Weighted Average:	$	1,853,897	4.34	%	$	1,903,977	4.47	%

(a) As of December 31, 2023 and 2022, includes debt with interest rate caps outstanding with a notional amount of $304.5 million and $485.0 million, respectively.