10q10k10q10k.net

What changed in Veris Residential, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Veris Residential, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+268 added−375 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-22)

Top changes in Veris Residential, Inc.'s 2023 10-K

268 paragraphs added · 375 removed · 177 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

44 edited+10 added−18 removed12 unchanged
Biggest changeAmong the factors about which we have made assumptions are: • risks and uncertainties affecting the general economic climate and conditions, which in turn may have a negative effect on the fundamentals of our business and the financial condition of our tenants and residents; • the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis; • the extent of any tenant bankruptcies or of any early lease terminations; • our ability to lease or re-lease space at current or anticipated rents; • changes in the supply of and demand for our properties; • changes in interest rate levels and volatility in the securities markets; • our ability to complete construction and development activities on time and within budget, including without limitation obtaining regulatory permits and the availability and cost of materials, labor and equipment; • our ability to attract, hire and retain qualified personnel; • forward-looking financial and operational information, including information relating to future development projects, potential acquisitions or dispositions, leasing activities, capitalization rates, and projected revenue and income; • changes in operating costs; • our ability to obtain adequate insurance, including coverage for natural disasters and terrorist acts; • our credit worthiness and the availability of financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities and refinance existing debt and our future interest expense; • changes in governmental regulation, tax rates and similar matters; and • other risks associated with the development and acquisition of properties, including risks that the development may not be completed on schedule, that the tenants or residents will not take occupancy or pay rent, or that development or operating costs may be greater than anticipated.
Biggest changeAmong the factors about which we have made assumptions are: • risks and uncertainties affecting the general economic climate and conditions, which in turn may have a negative effect on the fundamentals of our business and the financial condition of our residents and tenants; • the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis; • changes in the supply of and demand for our properties, as well as demand for services or amenities at our properties; • our ability to attract, hire and retain qualified personnel; • forward-looking financial and operational information, including information relating to future development projects, potential acquisitions or dispositions, leasing activities, capitalization rates, and projected revenue and income; • changes in operating costs; • our ability to complete construction and development activities on time and within budget, including without limitation obtaining regulatory permits and the availability and cost of materials, labor and equipment; • our ability to obtain adequate insurance, including coverage for losses resulting from catastrophes, natural disasters, pandemics and terrorist acts; 9 Table of Contents • our credit worthiness and the availability of financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities and refinance existing debt and our future interest expense; • the extent of any tenant bankruptcies or of any early lease terminations; • our ability to lease or re-lease space at current or anticipated rents; • changes in governmental regulation, tax rates and similar matters, including rent stabilization laws or other housing laws and regulations; and • other risks associated with the development and acquisition of properties, including risks that the development may not be completed on schedule, that the residents or tenants will not take occupancy or pay rent, or that development or operating costs may be greater than anticipated.
The Company publishes an annual ESG Report that is aligned with the Global Reporting Initiative reporting framework, United Nations Sustainable Development Goals and includes the Company’s strategy, key performance indicators, annual like-for-like comparisons, and year-over-year achievements.
The Company publishes an annual ESG Report that is aligned with the Global Reporting Initiative reporting framework and United Nations Sustainable Development Goals, and includes the Company’s strategy, key performance indicators, annual like-for-like comparisons, and year-over-year achievements.
GOVERNMENT REGULATIONS In the ordinary course of business, the development, maintenance and management of commercial and multifamily properties is subject to various laws, ordinances, and regulations, including those concerning entitlement, building, health and safety, site and building design, environment, zoning, sales, and similar matters apply to or affect the real estate development industry.
GOVERNMENT REGULATIONS In the ordinary course of business, the development, maintenance and management of commercial and multifamily properties is subject to various laws, ordinances, and regulations, including those concerning entitlement, building, health and safety, site and building design, environment, zoning, sales, and similar matters which apply to or affect the real estate industry.
The Company has extensive experience acquiring residential and commercial assets nationally as well as in its core focus area of the Northeast, and has the capabilities to generate additional value by acquiring assets through 1031 programs, issuing OP Units, and recycling capital through dispositions of non-strategic assets.
The Company has extensive experience acquiring residential assets nationally as well as in its core focus area of the Northeast, and has the capabilities to generate additional value by acquiring assets through 1031 programs, issuing OP Units, and recycling capital through dispositions of non-strategic assets.
As part of this strategic initiative, the Company has sought to unlock shareholder value by simplifying its business, strengthening its balance sheet, enhancing its operational platform and aligning the Company with its corporate values and the sustainability-conscious lifestyle preferences of its residents.
As part of this strategic initiative, the Company sought to unlock shareholder value by simplifying its business, strengthening its balance sheet, enhancing its operational platform and aligning the Company with its corporate values and the sustainability-conscious lifestyle preferences of its residents.
In addition to flexible working arrangements, the Company offers the following enrichment opportunities and benefits to all eligible employees: • A 401(k) plan with a history of annual discretionary Company employee match or profit sharing contributions; • Minimum paid time off of 20 days in addition to public holidays, sick leave and other leaves offered by the company; • Ability to rollover or donate paid time off; • A 12-week fully paid parental leave; • A legal aid program; and • In house training and tuition reimbursement for education costs.
In addition to flexible working arrangements, the Company offers the following enrichment opportunities and benefits to all eligible employees: • A 401(k) plan with a history of annual discretionary Company employee match or profit sharing contributions; • Minimum paid time off of 20 days in addition to public holidays, sick leave and other leaves offered by the company; • Ability to rollover or donate certain paid time off; • A 12-week fully paid parental leave; • A legal aid program; and • In house training and tuition reimbursement for select education costs.
INDUSTRY SEGMENTS The Company operates in two industry segments: (i) multifamily real estate and services and (ii) commercial and other real estate. As of December 31, 2022, the Company does not have any foreign revenues and its business is not seasonal.
INDUSTRY SEGMENTS The Company operates in two industry segments: (i) multifamily real estate and services and (ii) commercial and other real estate. As of December 31, 2023, the Company does not have any foreign revenues and its business is not seasonal.
In addition, various federal, state, and local laws subject real estate owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present. These materials may include lead-based paint, asbestos, polychlorinated biphenyls, and petroleum-based fuels.
In addition, various federal, state, and local laws subject real estate owners or operators to liability for management, and the costs of removal or remediation, of certain potentially hazardous materials that may be present. 7 Table of Contents These materials may include lead-based paint, asbestos, polychlorinated biphenyls, and petroleum-based fuels.
When coupled with our commitment to providing premium resident services, such as concierges and professionally-curated events, the Company seeks to offer a multifamily experience that will maximize resident satisfaction and optimize rental revenue. The Company’s multifamily properties have an average age of 6 years, typically requiring less maintenance capital expenditures than a more mature portfolio.
When coupled with our commitment to providing premium resident services, such as concierges and professionally-curated events, the Company seeks to offer a multifamily experience that will maximize resident satisfaction and optimize rental revenue. The Company’s multifamily properties have an average age of seven years, typically requiring lower maintenance capital expenditures than a more mature portfolio.
Please see our financial statements attached hereto and incorporated by reference herein for financial information relating to our industry segments. SIGNIFICANT TENANTS As of December 31, 2022, no commercial tenant accounted for more than 10 percent of the Company’s consolidated revenues.
Please see our financial statements attached hereto and incorporated by reference herein for financial information relating to our industry segments. SIGNIFICANT TENANTS As of December 31, 2023, no tenant accounted for more than 10 percent of the Company’s consolidated revenues.
The Company believes that this factor provides it with a competitive advantage as it can retain more capital and generate a higher yield as compared to an older portfolio. Operational Strategy The Company has a fully integrated real estate platform with operational, investment, development, financial and management services provided in-house.
The Company believes that this factor provides it with a competitive advantage as it can retain more capital and generate a higher yield than an older portfolio. The Company has a fully integrated real estate platform with operational, investment, development, financial and management services provided in-house.
Equally important is the Company’s focus on supporting the health and wellbeing of its employees, residents and tenants, which the Company has enhanced through the inclusion of on-site amenity offerings, including fitness centers and on-demand fitness programs, as well as health and safety considerations across the portfolio and within its corporate offices.
Equally important is the Company’s focus on supporting the health and well-being of its employees, residents and tenants, which the Company has enhanced through the inclusion of on-site amenity offerings, including hydroponics gardens, fitness centers and on-demand fitness programs, as well as health and safety considerations across the portfolio and within its corporate offices.
The General Partner controls Veris Residential, L.P., a Delaware limited partnership, together with its subsidiaries (collectively, the “Operating Partnership”), as its sole general partner and owned a 90.7 and 91.0 percent common unit interest in the Operating Partnership as of December 31, 2022 and 2021, respectively.
The General Partner controls Veris Residential, L.P., a Delaware limited partnership, together with its subsidiaries (collectively, the “Operating Partnership”), as its sole general partner and owned a 91.4 percent and 90.7 percent common unit interest in the Operating Partnership as of December 31, 2023 and 2022, respectively.
The Properties are comprised of: (a) 27 wholly-owned or Company-controlled properties comprised of 17 multifamily properties and 10 non-core assets and (b) eight properties owned by unconsolidated joint ventures in which the Company has investment interests, including seven multifamily properties and a non-core asset. The Properties are located in three states in the Northeast, plus the District of Columbia.
The Properties are comprised of: (a) 21 wholly-owned or Company-controlled properties, comprised of 17 multifamily properties and four non-core assets, and (b) eight properties owned by unconsolidated joint ventures in which the Company has investment interests, including seven multifamily properties and one non-core asset. The Properties are located in three states in the Northeast, plus the District of Columbia.
Any shareholder also may obtain copies of these documents, free of charge, by sending a request in writing to: Veris Residential, Inc. Investor Relations Department, Harborside 3, 210 Hudson St., Ste. 400, Jersey City, NJ 07311 or to investorrelations@verisresidential.com.
Copies of these documents may be obtained, free of charge, from our internet website. Any shareholder also may obtain copies of these documents, free of charge, by sending a request in writing to: Veris Residential, Inc. Investor Relations Department, Harborside 3, 210 Hudson St., Ste. 400, Jersey City, NJ 07311 or to investorrelations@verisresidential.com.
ITEM 1. BUSINESS GENERAL Veris Residential, Inc., a Maryland corporation, together with its subsidiaries (collectively the “General Partner”), is a fully-integrated, self-administered and self-managed real estate investment trust (“REIT”). The Company develops, owns and operates predominantly multifamily rental properties located primarily in the Northeast, as well as a portfolio of Class A office properties.
ITEM 1. BUSINESS GENERAL Veris Residential, Inc., a Maryland corporation, together with its subsidiaries (collectively the “General Partner”), is a fully-integrated, self-administered and self-managed real estate investment trust (“REIT”). The Company owns, operates and develops multifamily rental properties located primarily in the Northeast, as well as a portfolio of non-strategic land and commercial assets.
RECENT DEVELOPMENTS In 2022, the Company accomplished a number of important milestones in its transformation to a pure play multifamily REIT.
RECENT DEVELOPMENTS In 2023, the Company accomplished a number of important milestones in substantially completing its transformation to a pure play multifamily REIT.
The Company is in the process of transitioning to a pure-play multifamily REIT and is focused on conducting business in a socially, ethically, and environmentally responsible manner, while seeking to maximize value for all stakeholders. Veris Residential, Inc. was incorporated on May 24, 1994.
The Company is focused on conducting business in a socially, ethically, and environmentally responsible manner, while seeking to maximize value for all stakeholders. Veris Residential, Inc. was incorporated on May 24, 1994.
In addition, the Company’s internet website includes other items related to corporate governance matters, including, among other things, the Company’s corporate governance principles, charters of various committees of the Board of Directors and code of business conduct and ethics applicable to all employees, officers and directors.
In addition, the Company’s internet website includes other items related to corporate governance matters, including, among other things, the Company’s corporate governance principles, charters of the standing committees of the Board of Directors, the code of business conduct and ethics applicable to all employees, officers and directors, the Dodd-Frank clawback policy and insider trading policy.
The Company’s efforts led it to obtain WELL® Health and Safety certification for 14 multifamily properties. A significant part of the Company’s commitment to sustainable development and operations is its commitment to transparent reporting of ESG performance indicators, as it recognizes the importance of this information to investors, lenders, and other stakeholders.
The Company’s efforts led to the achievement of WELL® Health-Safety rating across all of its managed locations. A significant part of the Company’s commitment to sustainable development and operations is its commitment to transparent reporting of ESG performance indicators, as it recognizes the importance of this information to investors, lenders, and other stakeholders.
As of December 31, 2022, the Company owned or had interests in 24 multifamily rental properties as well as non-core assets comprised of five office buildings, four parking/retail properties and two hotels, plus developable land (collectively, the “Properties”).
As of December 31, 2023, the Company owned or had interests in 24 multifamily rental properties as well as non-strategic assets comprised of one office property and four parking/retail properties, plus developable land (collectively, the "Properties").
Workforce diversity as of December 31, 2022 (excluding 3 employees that did non self-identify): • 55 percent of the Company’s employees identified as male, 44 percent as female and below 1 percent as non-binary • 53 percent of the Company’s employees were persons of color or other minority groups, up from 50 percent a year earlier.
Workforce diversity as of December 31, 2023 (excluding three employees that did non self-identify): • 56 percent of the Company’s employees identified as male, 43 percent as female and below one percent as non-binary • 52 percent of the Company’s employees were persons of color or other minority groups, down from 53 percent a year earlier.
Climate Resilience As a long-term owner and active manager of real estate assets in operation and under development, the Company recognizes that climate change is no longer a potential threat but today’s reality and is taking measured steps to mitigate its carbon footprint by assessing risks and adapting its business to ensure it is well positioned over the long-term.
Climate Resilience As a long-term owner and active manager of real estate assets in operation and under development, the Company recognizes that climate change is no longer just a potential threat but today’s reality.
The General Partner intends to disclose on the Company’s internet website any amendments to or waivers from its code of business conduct and ethics as well as any amendments to its corporate governance principles or the charters of various committees of the Board of Directors. Copies of these documents may be obtained, free of charge, from our internet website.
The General Partner intends to disclose on the Company’s internet website any amendments to or waivers from its code of business conduct and ethics as well as any amendments to its other governance documents, including without limitation the corporate governance principles, Dodd-Frank clawback policy, insider trading policy or the charters of the standing committees of the Board of Directors.
The Company believes it has strong relationships and networks to source off-market acquisition opportunities and may seek to add value to newly acquired properties by integrating them into its ESG- and technology-focused platform.
The Company may also seek to grow by raising capital through other sources such as through follow-on equity offerings, equity method investments and additional debt. The Company believes it has strong relationships and networks to source off-market acquisition opportunities and seeks to add value to newly acquired properties by integrating them into its sustainability and technology-focused platform.
The Company also promotes the philanthropic efforts of its employees by providing 24 hours of paid time off toward volunteerism, matching employee charitable contributions dollar for dollar (up to $1,000 per employee per year). 7 Table of Contents More information regarding the Company’s human capital policies, programs and initiatives is available under the “Investors” section of its public website and the Company’s ESG Report.
The Company also promotes the philanthropic efforts of its employees by providing 24 hours of paid time off toward volunteerism and matching employee charitable contributions dollar for dollar (up to $1,000 per employee per year).
Sustainability Strategy The Company’s goal is to conduct its business, development, and operations of new and existing buildings in a manner that contributes to positive environmental, social and economic outcomes for all its stakeholders.
When considering acquisitions, the Company may seek opportunities that improve the geographic diversity, asset quality, and product offering of its portfolio. Sustainability Strategy The Company aims to conduct its business, development, and operations of new and existing buildings in a manner that contributes to positive environmental, social and economic outcomes for all its stakeholders.
Information on or through the Company’s website is not considered part of this Annual Report nor any registration statement that incorporates this Annual Report by reference. COMPETITION We face competition from other real estate companies to acquire, dispose and develop multifamily properties.
Information contained on or accessed through the Company's website is not considered part of this Annual Report nor any registration statement that incorporates this Annual Report by reference.
This includes facilities such as clubrooms and lounges, state-of-the-art fitness centers, dog parks and rooftop swimming pools, as well as ESG-driven features like electric vehicle (EV) charging stations and green roofs. The Company believes that premium amenities such as the ones offered at our multifamily properties drive resident satisfaction and generate additional revenues through amenity fees.
The Company seeks to own a portfolio comprised primarily of Class A multifamily properties with premium amenities and offerings that reflect our commitment to sustainability. This includes facilities such as clubrooms and lounges, state-of-the-art fitness centers, dog parks and rooftop swimming pools, as well as sustainability-driven features like electric vehicle (EV) charging stations, bee hives, hydroponic gardens and green roofs.
The Company continued to further enhance its ESG and operational platform by: • Enhancing the portfolio’s composition by ending the year with over 40% of the Company’s wholly-owned multifamily portfolio Green Certified (LEED® or equivalent) up from 25% in the end of 2021. • Setting a target to reduce Scope 1 and 2 emissions by 50% by 2030 validated by the Science Based Targets initiative. • Earning 5 Star ESG rating from GRESB, the highest rating offered for distinguished ESG leadership and performance. • Continuing focus on resident satisfaction and experience translating into an 82.75 J Turner ORA Ranking as of year-end 2022, compared to a national average of 62.88.
The Company continued to further enhance its ESG and operational platform by: • Ending the year with over 80 percent of the Company’s wholly-owned multifamily portfolio Green Certified (LEED®, ENERGY STAR®, or equivalent), up from 43 percent at the end of 2022. • Exceeding its goal to reduce Scope 1 and 2 emissions by 50 percent by 2030, validated by the Science Based Targets initiative, and reducing like-for-like emissions by 54 percent compared to the 2019 baseline. • Surpassing its goal of reducing energy consumption by 20 percent by 2030 well ahead of schedule, cutting consumption by 24 percent over the last three years. 8 Table of Contents • Earning a 5-Star ESG rating from GRESB (the highest rating offered for distinguished ESG leadership and performance) for the second year in a row. • Expanding disclosure with respect to Scope 3 emissions, covering more than 90 percent of our operational carbon footprint in our 2022 ESG Report. • Reaching its target of sustainability addenda in more than 99 percent of residential leases. • Continuing its focus on resident satisfaction and experience, translating into an 83.16 J Turner ORA Ranking as of December 2023, compared to a national average of 63.63.
Forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate.
Forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved.
Event-driven (acute) and longer-term (chronic) physical risks that may result from climate change could have a material adverse effect on the Company’s properties, operations, and business. Management’s role in assessing and managing these climate-related risks and initiatives is spread across multiple teams throughout the Company.
As a result, the Company is taking action to mitigate its carbon footprint by assessing risks and adapting its business to ensure it is well positioned over the long-term. Event-driven (acute) and longer-term (chronic) physical risks that may result from climate change could have a material adverse effect on the Company’s properties, operations, and business.
Readers are cautioned not to place undue reliance on these forward-looking statements.
Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.
The Company’s existing multifamily portfolio has environmental considerations – particularly focused on energy consumption, water consumption and greenhouse gas emissions –integrated into many existing properties and development projects since the design stage.
The Company’s dedicated in-house team initiates and applies sustainable practices throughout all aspects of its business including property operations and resident experience. The Company’s multifamily portfolio has environmental considerations – particularly focused on energy consumption, water consumption and greenhouse gas emissions – integrated into many existing properties.
For more information on the Properties, refer to Item 2. STRATEGIC DIRECTION In 2021, the Company announced that it intended to transform the Company into a pure-play multifamily REIT located in the Northeast.
For more information on the Properties, refer to Item 2. THE COMPANY During 2023, the Company substantially completed its multi-year transformation to a pure-play multifamily REIT.
As a result of these efforts 43% of our multifamily portfolio is green certified (LEED®, Energy Star or equivalent). The Company believes that its focus on sustainability also enhances value for the Company in the short-term, through cost savings and lower capital expenditures.
The Company has also invested in energy-saving technology, such as those for irrigation, lighting, and HVAC to positively impact resident experience and asset value over the long-term. As a result of these efforts 80% of our multifamily portfolio is green certified (LEED®, ENERGY STAR® or equivalent).
In 2022 the Company set a target to reduce its Scope 1 and 2 greenhouse gas emissions by 50% by 2030 and had it validated by the Science Based Target initiative.
Since 2022 the Company has met its target validated by the Science Based Target initiative to reduce its like-for-like Scope 1 and 2 greenhouse gas emissions by 50%. HUMAN CAPITAL RESOURCES As of December 31, 2023, the Company had approximately 197 employees, and 30% of its employees have been with the Company for at least 10 years.
The Company’s competitive offerings help its employees stay healthy, balance their work and personal lives, and meet their financial and retirement goals.
The Company’s competitive offerings help its employees stay healthy, balance their work and personal lives, and meet their financial and retirement goals. The Company is also committed to ensuring that these benefits are attainable and affordable to its employees by limiting health insurance premiums and providing life insurance and short-term and long-term disability insurance at no cost to the employee.
Investment, Disposition and Development Strategy The Company may grow its portfolio of Class A multifamily assets through a combination of acquisitions, developments and redevelopments, and seek to enhance the portfolio through programmatic capital dispositions and capital recycling.
These technological enhancements combined with our experienced team have created a platform that is nimble and scalable, positioning the Company for growth. Investment Strategy The Company seeks to grow its portfolio of Class A multifamily assets through a combination of acquisitions, value-add redevelopments and developments.
The Company continued to streamline the portfolio by disposing of non-strategic office and hotel assets and selectively culling the land portfolio to right-size the Company’s equity allocated to its development pipeline and speculative land bank by: • Disposing of two office New Jersey Waterfront properties for net proceeds of $550.8 million, bringing total proceeds realized from the disposition of office properties to $1.6 billion. • Disposing of six developable land properties in New Jersey for net sales proceeds of approximately $151.7 million, bringing total proceeds realized from the disposition of land parcels to $198.6 million. • Disposing of its 50% interest in the Hyatt Hotel joint venture, with the hotel selling for gross proceeds of $117.0 million. 8 Table of Contents • Entering into a definitive contract to sell the last remaining suburban office asset for $17.3 million gross proceeds, (subject to due diligence and closing conditions). • Entering into a definitive contract to sell Harborside 1, 2 and 3 for $420.0 million gross proceeds (subject to due diligence and closing conditions).
The Company continued to streamline the portfolio by disposing of non-strategic office and hotel assets and selectively culling the land portfolio to right-size the Company’s equity allocated to its development pipeline and speculative land bank by: • Closing on the sale of the Port Imperial Hotels, resulting in the Company's full exit from the hotel segment • Consummating the sale of Harborside 1, 2, & 3 for an aggregate price of $420 million, releasing approximately $360 million of net proceeds. • Sold over $700 million of non-strategic assets since the beginning of 2023, comprised of eight properties and four land parcels.
Such efforts have included: setting a gender equality target at management level by 2025, establishing employee affinity groups and introducing company wide diversity training. The Company has also become a signatory of the CEO Action for Diversity & Inclusion Pledge and the UN Women Empowerment Principles and is included in the Bloomberg GEI index since 2023.
The Company is a signatory of the CEO Action for Diversity & Inclusion Pledge and the UN Women 6 Table of Contents Empowerment Principles and is included in the Bloomberg GEI index since 2023. Currently, five of the nine members (or 56 percent) of the Company’s Board of Directors are female and/or racially diverse.
The debt portfolio has a weighted average maturity of 3.9 years.
As of December 31, 2023, 99.9% of the Company's total debt portfolio (consolidated and unconsolidated) was hedged or fixed at a weighted average interest rate of 4.5%. The debt portfolio has a weighted average maturity of 3.7 years.
The Company has made significant investments in modernizing and streamlining the platform by reducing duplicative costs between its residential and office platforms, upgrading front office technology, reducing its cyber security vulnerabilities, and enhancing financial reporting automation. 5 Table of Contents The platform is underpinned by a commitment to technological enhancement and innovations that allow the Company to improve efficiency, optimize net operating income, and augment the resident experience.
The platform is underpinned by a commitment to technological enhancement and innovations which allow the Company to improve efficiency, optimize net operating income, and augment the resident experience, while eliminating costly manual processes that are time consuming and prone to human error.
Regarding employee tenure, 29 percent of its employees have been with the Company for at least 10 years. The Company embraces its responsibility towards the diverse and all-inclusive communities it serves and has taken proactive efforts to enhance this support to have positive impact on residents, employees and others.
The Company embraces the diverse and all-inclusive communities it serves and has taken focused efforts to support employees. Such efforts have included establishing employee affinity groups and introducing company wide diversity training.
Removed
The Company is executing this transformation by disposing of non-strategic assets, which included its New Jersey suburban and Waterfront office portfolios and its speculative land holdings, and strategically allocating the proceeds from such dispositions into debt repayments, selective multifamily developments and acquisitions.
Added
The Company believes that amenities such as the ones offered at our multifamily properties drive resident satisfaction, command higher monthly rents, and generate additional revenues through amenity fees.
Removed
Portfolio Strategy The Company seeks to own a portfolio comprised primarily of Class A multifamily properties with resort-like amenities and offerings that reflect our commitment to Environmental, Social and Governance (ESG) ideals.
Added
The Company expects to generate internal growth through organic optimization of its existing portfolio by recycling capital from non-strategic asset dispositions into debt repayments, value-add redevelopments, share buybacks, new developments, and acquisitions. These investments will convert low- to no-yielding 5 Table of Contents assets into cash-flowing, high quality assets with strong growth prospects.
Removed
As part of the transformation to a pure-play multifamily REIT, the Company has focused on controlling expenses with an in-depth review of asset and property management, including reassessing vendors and contracts, restructuring teams, and refining procedures and policies.
Added
The Company has a robust and disciplined underwriting process, and experienced investments and capital markets teams.
Removed
The adoption of strategic technological tools, such as the MyVeris app, serve to streamline and strengthen residents’ interactions with the Properties, allowing them to pay rent, reserve amenities, RSVP to events, and manage maintenance requests at the touch of a button.
Added
The Company believes that its focus on sustainability also enhances value for the Company in the short-term, through savings in utility expenses and higher interest from sustainability conscious residents.
Removed
The Company is also testing financial reporting and analysis tools which it believes will result in cost savings, robust and frequent financial analysis and further automation. The Company believes that this technology-focused approach optimizes net operating income by eliminating costly manual processes that are time consuming and prone to human error.
Added
Responsibility for assessing and managing these climate-related risks and initiatives is owned by every team throughout the Company, with oversight by the management team's ESG Task Force and the Board's Nominating, Environmental, Social and Governance Committee.
Removed
When considering acquisitions, the Company may seek opportunities that improve the geographic diversity, asset quality, and product offering of its portfolio. The Company has demonstrated its ability to effectively and thoughtfully execute multiple non-strategic asset dispositions during challenging market conditions by selling over $1.6 billion in non-strategic assets to progress its transformation.
Added
More information regarding the Company’s human capital policies, programs and initiatives is available in the "ESG" tab under the “Investors” section of its public website and the Company’s ESG Report. Information contained on or accessed through the Company’s website is not considered part of this Annual Report nor any registration statement that incorporates this Annual Report by reference.
Removed
The Company has sought to redeploy proceeds from sales into acquisitions, redevelopments, debt repayments or operations, as appropriate and where it believes it can create the most long-term value.
Added
COMPETITION We face competition from other real estate companies to acquire, develop and manage multifamily properties.
Removed
The Company regularly monitors its assets to assess their long-term value propositions and when appropriate, may look to sell assets in its core portfolio and reinvest into other assets, if it believes that such capital recycling is warranted. The Company believes it can further enhance shareholder value through accretive multifamily development projects at the appropriate time.
Added
As of February 21, 2024, approximately $139 million of non-strategic assets are under binding contract for sale, including our last office property, Harborside 5. The Company also thoughtfully redeployed proceeds from its disposition activities, strengthened its balance sheet, and enhanced its portfolio by: • Negotiating the early redemption of Rockpoint's interest in VRT for $520 million.
Removed
The company has developed 11 of its multifamily assets, and has the expertise to manage future investments into Class A multifamily projects to generate additional long term value.
Added
Refer to Note 14: Redeemable Noncontrolling Interests for more details and defined terms. • Entering into a $115 million term loan and $60 million revolving credit facility. The full proceeds of the term loan and $52 million of the revolving credit facility were drawn in July 2023 to fund the early redemption of Rockpoint's interest in VRT.
Removed
The Company is focused on developing and maintaining high-quality properties, while reducing operational costs and mitigating the potential external impacts of energy, water, waste, greenhouse gas emissions and climate change. The Company’s dedicated in-house team initiates and applies sustainable practices throughout all aspects of its business, from investment and development to property operations and resident experience.
Added
The full balances were repaid as of December 31, 2023 using proceeds from non-strategic sales, cash flow from operations, and proceeds from the refinancing of Haus25. • Refinancing the Haus25 construction loan well ahead of its December 2024 maturity at an interest rate of 5.46%, realizing a 124 basis point coupon saving relative to the prior construction loan while improving the term and distribution of the Company's overall debt maturity profile.
Removed
The Company has also further invested in energy-saving technology, such as those for irrigation, lighting, and HVAC to positively impact resident experience and its assets’ value over the long-term. To improve its overall carbon footprint, the Company carefully assesses its buildings’ location based on walkability as well as accessibility to public transport, neighborhoods and parks.
Removed
In addition, the Company 6 Table of Contents continues to work to further align its reporting with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures to disclose climate-related financial risks and opportunities.
Removed
HUMAN CAPITAL RESOURCES As of December 31, 2022, the Company had approximately 215 employees, 19 fewer than it had as of December 31, 2021 (the reduction in the number of employees was primarily due to the ongoing transition to a pure play multifamily REIT).
Removed
Currently, 4 of the 8 members (or 50 percent) of the Company’s Board of Directors are female and/or racially diverse.
Removed
For employees earning less than $50,000 annually, the Company pays 100 percent of the health insurance coverage premiums for its employees and their families, and generally 75 percent of the premiums of health and dental insurance coverage for all employees, as well as 100 percent of the cost of life insurance and short-term and long-term disability insurance.
Removed
Having seven land parcels under definitive contract to sell for gross proceeds of $108.6 million.
Removed
The Company thoughtfully redeployed proceeds from its disposition activities to strengthen its balance sheet, maximize its tax strategy, and enhance its portfolio by: • Retiring $400.0 million of mortgage financing from proceeds of dispositions of office assets, bringing the total amount of debt repaid to $524.5 million. • Paying down the Company’s revolving credit facility by $148.0 million to zero as of December 31, 2022, bringing the total reduction in consolidated net indebtedness to $898 million. • Acquiring one Class A, 240-unit multifamily property located in Park Ridge, New Jersey for $130.3 million gross proceeds. • Commencing operations on a Class A, 750-unit property located in Jersey City, New Jersey that as of February 15, 2023 was 95.9% leased and 92.5% occupied. • Refinancing $156 million construction loans with $185 million floating rate mortgage notes, resulting in total release of additional mortgage proceeds of $29 million at completion of refinancing. • As of December 31, 2022, 90% of the Company's total debt portfolio (consolidated and unconsolidated) hedged or fixed at a weighted average interest rate of 4.5%.
Removed
Although 9 Table of Contents we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

68 edited+38 added−49 removed84 unchanged
Biggest changeSuch events or conditions could include: • changes in the general economic climate and conditions; • changes in local conditions, such as an oversupply of office space, a reduction in demand for office space, or reductions in office market rental rates; • an oversupply or reduced demand for multifamily apartments caused by a decline in household formation, decline in employment or otherwise; • decreased attractiveness of our properties to tenants and residents; • competition from other office and multifamily properties; • development by competitors of competing multifamily communities; • unwillingness of tenants to pay rent increases; • rent control or rent stabilization laws, or other housing laws and regulations that could prevent us from raising multifamily rents to offset increases in operating costs; • our inability to provide adequate maintenance; • increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents; • changes in laws and regulations (including tax, environmental, zoning and building codes, landlord/tenant and other housing laws and regulations) and agency or court interpretations of such laws and regulations and the related costs of compliance; • changes in interest rate levels and the availability of financing; • the inability of a significant number of tenants or residents to pay rent; • our inability to rent multifamily or office rental space on favorable terms; and • civil unrest, earthquakes, acts of terrorism and other natural disasters or acts of God that may result in uninsured losses.
Biggest changeSuch events or conditions could include: • an oversupply of or reduced demand for multifamily properties caused by a decline in household formation or employment, a lack of employment growth or otherwise; • corporate restructurings and/or layoffs, and industry slowdowns; • decreases in the demand for services or amenities, the convenience and attractiveness of the communities or neighborhoods in which our multifamily rental properties are located or the quality of local schools; • development by competitors of competing multifamily communities; • the inability or unwillingness of residents to pay rent or rent increases; • changes in the financial condition of Fannie Mae or Freddie Mac which provide a major source of financing to the multifamily rental sector; • rent control or rent stabilization laws, or other housing laws and regulations that could prevent us from raising multifamily rents to offset increases in operating costs; • our inability to provide adequate maintenance; • increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents; • changes in laws and regulations (including tax, environmental, zoning and building codes, landlord/tenant and other housing laws and regulations) and agency or court interpretations of such laws and regulations and the related costs of compliance; • civil unrest, earthquakes, pandemics, acts of terrorism and other natural disasters or acts of God that may result in uninsured losses.
In addition, the consent of the holders of at least 85 percent of the Operating Partnership’s partnership units is required: (i) to merge (or permit the merger of) the Operating Partnership with another unrelated person, pursuant to a transaction in which the Operating Partnership is not the surviving entity; (ii) to dissolve, liquidate or wind up the Operating Partnership; or (iii) to convey or otherwise transfer all or substantially all of the Operating Partnership’s assets.
The consent of the holders of at least 85 percent of the Operating Partnership’s partnership units is required: (i) to merge (or permit the merger of) the Operating Partnership with another unrelated person, pursuant to a transaction in which the Operating Partnership is not the surviving entity; (ii) to dissolve, liquidate or wind up the Operating Partnership; or (iii) to convey or otherwise transfer all or substantially all of the Operating Partnership’s assets.
General : Our business and our ability to make distributions or payments to our investors depend on the ability of our properties to generate funds in excess of operating expenses (including scheduled principal payments on debt and capital expenditures). Events or conditions that are beyond our control may adversely affect our operations and the value of our properties.
General : Our business and our ability to make distributions or payments to our investors depend on the ability of our properties to generate funds in excess of operating expenses (including scheduled principal payments on debt and capital expenditures). Events or conditions that are beyond our control may adversely affect our operations and the value of our multifamily properties.
If we are unable to refinance our indebtedness on acceptable terms, or at all, events or conditions that may adversely affect our ability to make distributions or payments to our investors include the following: • we may need to dispose of one or more of our properties upon disadvantageous terms or adjust our capital expenditures in general or with respect to our strategy of acquiring multifamily residential properties and development opportunities in particular; • prevailing interest rates or other factors at the time of refinancing could increase interest rates and, therefore, our interest expense; • we may be subject to an event of default pursuant to covenants for our indebtedness; • if we mortgage property to secure payment of indebtedness and are unable to meet mortgage payments, the mortgagee could foreclose upon such property or appoint a receiver to receive an assignment of our rents and leases; and • foreclosures upon mortgaged property could create taxable income without accompanying cash proceeds and, therefore, hinder our ability to meet the real estate investment trust distribution requirements of the IRS Code.
If we are unable to refinance our indebtedness on acceptable terms, or at all, events or conditions that may adversely affect our ability to make distributions or payments to our investors include the following: • we may need to dispose of one or more of our properties upon disadvantageous terms or adjust our capital expenditures in general or with respect to our strategy of acquiring multifamily residential properties and development opportunities in particular; • prevailing interest rates or other factors at the time of refinancing could increase interest rates and, therefore, our interest expense; • we may be subject to an event of default pursuant to covenants for our indebtedness; 15 Table of Contents • if we mortgage property to secure payment of indebtedness and are unable to meet mortgage payments, the mortgagee could foreclose upon such property or appoint a receiver to receive an assignment of our rents and leases; and • foreclosures upon mortgaged property could create taxable income without accompanying cash proceeds and, therefore, hinder our ability to meet the real estate investment trust distribution requirements of the IRS Code.
A loss the General Partner's status as a real estate investment trust could have an adverse effect on us. Failure to qualify as a real estate investment trust also would eliminate the requirement that the General Partner pay dividends to its stockholders.
A loss of the General Partner's status as a real estate investment trust could have an adverse effect on us. Failure to qualify as a real estate investment trust also would eliminate the requirement that the General Partner pay dividends to its stockholders.
Property ownership through joint ventures could subject us to the contrary business objectives of our co-venturers : We, from time to time, invest in joint ventures or partnerships in which we do not hold a controlling interest in the assets underlying the entities in which we invest, including joint ventures in which (i) we own a direct interest in an entity which controls such assets, or (ii) we own a direct interest in an entity which owns indirect interests, through one or more intermediaries, of such assets.
Property ownership through joint ventures could subject us to the contrary business objectives of our co-venturers : We invest in joint ventures or partnerships in which we do not hold a controlling interest in the assets underlying the entities in which we invest, including joint ventures in which (i) we own a direct interest in an entity which controls such assets, or (ii) we own a direct interest in an entity which owns indirect interests, through one or more intermediaries, of such assets.
As of December 31, 2022, we had total outstanding indebtedness of $1.9 billion, comprised of no outstanding borrowings under our revolving credit facility and approximately $1.9 billion of mortgages, loans payable and other obligations. We may have to refinance the principal due on our current or future indebtedness at maturity, and we may not be able to do so.
As of December 31, 2023, we had total outstanding indebtedness of $1.9 billion, comprised of no outstanding borrowings under our revolving credit facility and approximately $1.9 billion of mortgages, loans payable and other obligations. We may have to refinance the principal due on our current or future indebtedness at maturity, and we may not be able to do so.
Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If we cannot attract, hire and retain qualified personnel, our business, financial condition and results of operations would be negatively impacted.
Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our residents. If we cannot attract, hire and retain qualified personnel, our business, financial condition and results of operations would be negatively impacted.
The General Partner has, in its corporate governance principles, adopted a mandatory retirement age of 80 years old for directors.
The General Partner has, in its corporate governance principles, adopted a mandatory retirement age of 80 years for directors.
Maryland Business Combination Act : The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in certain business combinations, including mergers, consolidations, share exchanges or, in circumstances specified in the statute, asset transfers, issuances or reclassifications of shares of stock and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder, for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met.
Maryland Business Combination Act : The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in certain business combinations, including mergers, consolidations, share exchanges or, in 18 Table of Contents circumstances specified in the statute, asset transfers, issuances or reclassifications of shares of stock and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder, for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met.
Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions, and there can be no assurance that our actions, security measures, and controls designed to prevent, detect, or respond to intrusion; to limit access to data; to prevent loss, destruction, alteration, or exfiltration of business information; or to limit the negative impact from such attacks can provide absolute security against a cybersecurity incident.
Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions, 20 Table of Contents and there can be no assurance that our actions, security measures, and controls designed to prevent, detect, or respond to intrusion; to limit access to data; to prevent loss, destruction, alteration, or exfiltration of business information; or to limit the negative impact from such attacks can provide absolute security against a cybersecurity incident.
Among the market conditions that may affect the value of the General Partner's common stock are the following: • the general reputation of REITs and the attractiveness of the General Partner's equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • our financial performance; and • general stock and bond market conditions.
Among the market conditions that may affect the value of the Company's common stock are the following: • the general reputation of REITs and the attractiveness of the Company's equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • our financial performance; and • general stock and bond market conditions.
Repositioning the Company’s office portfolio may result in impairment charges or less than expected returns on office properties and could adversely affect our ability to make distributions or payments to our investors : There can be no assurance that the Company, as it seeks to reposition a portion of its portfolio from office to the multifamily rental sector, will be able to sell office properties and purchase multifamily rental properties at prices that in the aggregate are profitable for the Company or are efficient uses of its capital or that would not result in a reduction of the Company’s cash flow, and such transactions could adversely affect our ability to make distributions or payments to our investors.
Repositioning the Company’s office portfolio may result in less than expected returns on office properties and could adversely affect our ability to make distributions or payments to our investors : There can be no assurance that the Company, as it seeks to complete the repositioning of a portion of its portfolio from office to the multifamily rental sector, will be able to sell office properties and purchase multifamily rental properties at prices that in the aggregate are profitable for the Company or are efficient uses of its capital or that would not result in a reduction of the Company’s cash flow, and such transactions could adversely affect our ability to make distributions or payments to our investors.
Although the General Partner currently intends to continue to operate in a manner which will enable it to continue to qualify as a real estate investment trust under the IRS Code, it is possible that future economic, market, legal, tax or other considerations may cause its Board of Directors to revoke the election for the General Partner's to qualify as a real estate investment trust.
Although the General Partner currently intends to continue to operate in a manner which will 19 Table of Contents enable it to continue to qualify as a real estate investment trust under the IRS Code, it is possible that future economic, market, legal, tax or other considerations may cause its Board of Directors to revoke the election for the General Partner's to qualify as a real estate investment trust.
Its Board of Directors could waive this restriction if it was satisfied, based upon the advice of tax counsel or 21 Table of Contents otherwise, that such action would be in the best interests of the General Partner and its stockholders and would not affect its qualification as a real estate investment trust under the IRS Code.
Its Board of Directors could waive this restriction if it was satisfied, based upon the advice of tax counsel or otherwise, that such action would be in the best interests of the General Partner and its stockholders and would not affect its qualification as a real estate investment trust under the IRS Code.
An interested stockholder is generally a person owning or controlling, directly or indirectly, 10 percent or more of the 20 Table of Contents voting power of the outstanding stock of the Maryland corporation. The General Partner's board of directors has exempted from this statute business combinations between the Company and certain affiliated individuals and entities.
An interested stockholder is generally a person owning or controlling, directly or indirectly, 10 percent or more of the voting power of the outstanding stock of the Maryland corporation. The General Partner's board of directors has exempted from this statute business combinations between the Company and certain affiliated individuals and entities.
Moreover, as the Company seeks to reposition a portion of its portfolio from office to the multifamily rental sector, the Company may be subject to a Federal income tax on gain from sales of properties due to limitations in the IRS Code and related regulations on a real estate investment trust’s ability to sell properties.
Moreover, as the Company seeks to complete the repositioning of a portion of its portfolio from office to the multifamily rental sector, the Company may be subject to a Federal income tax on gain from sales of properties due to limitations in the IRS Code and related regulations on a real estate investment trust’s ability to sell properties.
Such newly acquired properties may not perform as expected and may subject us to unknown liability with respect to liabilities relating to such properties for clean-up of undisclosed environmental contamination or 12 Table of Contents claims by tenants, residents, vendors or other persons against the former owners of the properties.
Such newly acquired properties may not perform as expected and may subject us to unknown liability with respect to liabilities relating to such properties for clean-up of undisclosed environmental contamination or claims by tenants, residents, vendors or other persons against the former owners of the properties.
Any such legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us, and/or our investors. 22 Table of Contents OTHER RISKS S ecurity breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer .
Any such legislative action may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us, and/or our investors. OTHER RISKS S ecurity breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer .
The market value of the General Partner's common stock is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash dividends. Consequently, the General Partner's common stock may trade at prices that are higher or lower than its net asset value per share of common stock.
The market value of the Company's common stock is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and cash dividends. Consequently, the Company's common stock may trade at prices that are higher or lower than its net asset value per share of common stock.
In addition, while our current insurance policies insure us against loss from terrorist acts and toxic mold, in the future, insurance companies may no longer offer coverage against these types of losses, or, if offered, these types of insurance may be prohibitively expensive.
In addition, while our current insurance policies insure us against loss from catastrophic loss, natural disasters, terrorist acts and toxic mold, in the future, insurance companies may no longer offer coverage against these types of losses, or, if offered, these types of insurance may be prohibitively expensive.
We are obligated to comply with financial covenants in our indebtedness that could restrict our range of operating activities : The mortgages on our properties contain customary negative covenants, including limitations on our ability, 17 Table of Contents without the prior consent of the lender, to further mortgage the property, to enter into new leases outside of stipulated guidelines or to materially modify existing leases.
We are obligated to comply with financial covenants in our indebtedness that could restrict our range of operating activities : Some of the mortgages on our properties contain customary negative covenants, including limitations on our ability, without the prior consent of the lender, to further mortgage the property, to enter into new leases outside of stipulated guidelines or to materially modify existing leases.
We may be 14 Table of Contents forced to purchase supplies and materials in larger quantities or in advance of when we would typically purchase them. This may cause us to require use of capital sooner than anticipated.
We may be forced to purchase supplies and materials in larger quantities or in advance of when we would typically purchase them. This may cause us to require use of capital sooner than anticipated.
In addition, our residents and prospective residents also consider, as an alternative to renting, the purchase of a new or existing condominium or single-family home. Competitive residential housing could adversely affect our ability to lease apartment homes and to increase or maintain rental rates.
In addition, our multifamily residents and prospective residents also consider, as an alternative to renting, the purchase of a new or existing condominium or single-family home. Competitive residential housing could adversely affect our ability to lease multifamily units and to increase or maintain rental rates.
These risks, including the following, may adversely affect our ability to make distributions or payments to our investors: • our cash flow may be insufficient to meet required payments of principal and interest; • payments of principal and interest on borrowings may leave us with insufficient cash resources to pay operating expenses; • we may not be able to refinance indebtedness on our properties at maturity; and • if refinanced, the terms of refinancing may not be as favorable as the original terms of the related indebtedness.
These risks, including the following, may adversely affect our ability to make distributions or payments to our investors: • market interest rates on loans to refinance indebtedness on our properties at maturity may be significantly higher than the interest rates on that existing indebtedness; • our cash flow may be insufficient to meet required payments of principal and interest; • payments of principal and interest on borrowings may leave us with insufficient cash resources to pay operating expenses; • we may not be able to refinance indebtedness on our properties at maturity; and • if refinanced, the terms of refinancing may not be as favorable as the original terms of the related indebtedness.
Moreover, additional equity offerings, including sales of the General Partner’s common stock pursuant to its $200 million At-The-Market equity offering commenced in December 2021, may result in substantial dilution of our shareholders’ interests, and additional debt financing may substantially increase our leverage.
Moreover, additional equity offerings, including sales of the General Partner’s common stock pursuant to its $100 million At-The-Market equity offering commenced in November 2023, may result in substantial dilution of our shareholders’ interests, and additional debt financing may substantially increase our leverage.
It is uncertain whether we would be able to source the essential commodities, supplies, materials, and skilled labor timely or at all without incurring significant costs or delays, particularly during times of economic uncertainty resulting from events outside of our control, including, but not limited to, effects of COVID-19.
It is uncertain whether we would be able to source the essential commodities, supplies, materials, and skilled labor timely or at all without incurring significant costs or delays, particularly during times of economic uncertainty resulting from events outside of our control.
Our business may be affected by the continuing volatility in the financial and credit markets, the general global economic conditions and other market or economic challenges experienced by the U.S. economy or the real estate industry as a whole.
Our business may be affected by volatility in the financial and credit markets, the general global economic conditions and other market or economic challenges experienced by the U.S. economy or the real estate industry as a whole or in the Northeast where our properties are located.
Some of our debt instruments are cross-collateralized and contain cross default provisions with other debt instruments. Due to this cross-collateralization, a failure or default with respect to certain debt instruments or properties could have an adverse impact on us or our properties that are subject to the cross-collateralization under the applicable debt instrument.
Due to this cross-collateralization, a failure or default with respect to certain debt instruments or properties could have an adverse impact on us or our properties that are subject to the cross-collateralization under the applicable debt instrument.
If the General Partner’s bylaws are amended to repeal or limit the exemption from the Maryland Control Share Acquisition Act, it may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating a change in control.
If the General Partner’s bylaws are amended to repeal or limit the exemption from the Maryland Control Share Acquisition Act, it may make it more difficult for a third party to obtain control of us and increase the difficulty of consummating a change in control. Changes in market conditions could adversely affect the market price of the Company’s common stock.
Because our portfolio currently consists primarily of multifamily and office rental buildings (as compared to a more diversified real estate portfolio) located in the Northeast, if economic conditions persist or deteriorate, then our results of operations, financial condition and ability to service current debt and to pay distributions to our shareholders may be adversely affected by the following, among other potential conditions: • significant job losses in the financial and professional services industries may occur, which may decrease demand for our office space, causing market rental rates and property values to be negatively impacted; • our ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our 10 Table of Contents returns from both our existing operations and our acquisition and development activities and increase our future interest expense; • reduced values of our properties may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans; • the value and liquidity of our short-term investments and cash deposits could be reduced as a result of a deterioration of the financial condition of the institutions that hold our cash deposits or the institutions or assets in which we have made short-term investments, the dislocation of the markets for our short-term investments, increased volatility in market rates for such investments or other factors; • reduced liquidity in debt markets and increased credit risk premiums for certain market participants may impair our ability to access capital; and • one or more lenders under our line of credit could refuse or be unable to fund their financing commitment to us and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.
Our results of operations, financial condition and ability to service current debt and to pay distributions to our shareholders may be adversely affected by the following, among other potential conditions: • our ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from both our existing operations and our acquisition and development activities and increase our future interest expense; • reduced values of our properties may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans; • the value and liquidity of our short-term investments and cash deposits could be reduced as a result of a deterioration of the financial condition of the institutions that hold our cash deposits or the institutions or assets in which we have made short-term investments, the dislocation of the markets for our short-term investments, increased volatility in market rates for such investments or other factors; • reduced liquidity in debt markets and increased credit risk premiums for certain market participants may impair our ability to access capital; and 14 Table of Contents • one or more lenders under our line of credit could refuse or be unable to fund their financing commitment to us and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.
We also have ground lease expenses in certain of our properties. Ground lease costs are contractual, but in some cases, lease payments reset every few years based on changes of consumer price indexes.
Ground lease costs are contractual, but in some cases, lease payments reset every few years based on changes of consumer price indexes.
These investments involve risks that do not exist with properties in which we own a controlling interest with respect to the underlying assets, including the possibility that (i) our co-venturers or partners may, at any time, become insolvent or otherwise refuse to make capital contributions when due, (ii) we may be responsible to our co-venturers or partners for indemnifiable losses, (iii) we may become liable with respect to guarantees of payment or performance by the joint ventures, (iv) we may become subject to buy-sell arrangements which could cause us to sell our interests or acquire our co-venturer’s or partner’s interests in a joint venture, or (v) our co-venturers or partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives.
These investments involve risks that do not exist with properties in which we own a controlling interest with respect to the 13 Table of Contents underlying assets, including the possibility that (i)our co-venturers or partners may control the joint venture and we may not be able to prevent them from taking certain actions; (ii) we may have limited rights to terminate or liquidate our investment; (iii) the distribution preferences of our co-venturers or partners may limit operating, liquidating and disposition distributions to us; (iv) our co-venturers or partners may, at any time, become insolvent or otherwise refuse to make capital contributions when due, (v) we may be responsible to our co-venturers or partners for indemnifiable losses, (vi) we may become liable with respect to guarantees of payment or performance by the joint ventures, (vii) we may become subject to buy-sell arrangements which could cause us to sell our interests or acquire our co-venturer’s or partner’s interests in a joint venture, or (viii) our co-venturers or partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives.
A portion of our operating expenses is sensitive to inflation. These include expenses for property-related contracted services such as janitorial and engineering services, utilities, repairs and maintenance, and insurance. Property taxes are also impacted by inflationary changes as taxes are regularly reassessed based on changes in the fair value of our properties.
These include expenses for property-related contracted services such as janitorial and engineering services, utilities, repairs and maintenance, and insurance. Property taxes are also impacted by inflationary changes as taxes are regularly reassessed based on changes in the fair value of our properties. We also have ground lease expenses in certain of our properties.
If a tenant files for bankruptcy, we cannot evict the tenant solely because of the bankruptcy and a potential court judgment rejecting and terminating such tenant’s lease (which would subject all future unpaid rent to a statutory cap) could adversely affect our ability to make distributions or payments to our investors as we may be unable to replace the defaulting tenant with a new tenant at a comparable rental rate without incurring significant expenses or a reduction in rental income. 11 Table of Contents Renewing leases or re-letting space could be costly : If a tenant does not renew its lease upon expiration or terminates its lease early, we may not be able to re-lease the space on favorable terms or at all.
If a tenant files for bankruptcy, we cannot evict the tenant solely because of the bankruptcy and a potential court judgment rejecting and terminating such tenant’s lease (which would subject all future unpaid rent to a statutory cap) could adversely affect our ability to make distributions or payments to our investors as we may be unable to replace the defaulting tenant with a new tenant at a comparable rental rate without incurring significant expenses or a reduction in rental income.
We may incur additional indebtedness in the future that bears interest at variable rates. Variable rate debt creates higher debt service requirements if market interest rates increase. Higher debt service requirements could adversely affect our ability to make distributions or payments to our investors and/or cause us to default under certain debt covenants.
Variable rate debt creates higher debt service requirements if market interest rates increase. Higher debt service requirements could adversely affect our ability to make distributions or payments to our investors and/or cause us to default under certain debt covenants.
We may not be able to dispose of non-core office assets within our anticipated timeframe or at favorable prices : The Company has determined to sell over time properties at total estimated sales proceeds of up to $212 million.
We may not be able to dispose of remaining non-core assets within our anticipated timeframe or at favorable prices : The Company has determined to sell over time properties deemed non-core assets.
These provisions include the following: Removal of Directors : Under the General Partner's charter, subject to the rights of one or more classes or series of preferred stock to elect one or more directors, a director may be removed only for cause and only by the affirmative vote of at least two-thirds of all votes entitled to be cast by our stockholders generally in the election of directors.
These provisions include the following: Removal of Directors : Under the General Partner’s charter, as amended, subject to the rights of one or more classes or series of preferred stock to elect one or more directors, a director may be removed from office at any time, with or without cause, by the affirmative vote of a majority of the votes entitled to be cast by our stockholders generally in the election of directors.
Our insurance coverage on our properties may be inadequate or our insurance providers may default on their obligations to pay claims : We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire and flood.
We face general market and operational risks associated with the real estate industry. Our insurance coverage on our properties may be inadequate or our insurance providers may default on their obligations to pay claims : We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire and flood.
Such losses may adversely affect our ability to make distributions or payments to our investors. Financially distressed tenants may be unable to pay rent : If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord and protecting our investments.
Financially distressed commercial office tenants may be unable to pay rent : If a commercial office tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord and protecting our investments.
The prohibition in the Internal Revenue Code of 1986, as amended (the “IRS Code”), and related regulations on a real estate investment trust holding property for sale also may restrict our ability to sell property. The above limitations on our ability to sell our investments could adversely affect our ability to make distributions or payments to our investors.
The prohibition in the Internal Revenue Code of 1986, as 11 Table of Contents amended (the “IRS Code”), and related regulations on a real estate investment trust holding property for sale also may restrict our ability to sell property.
Our multifamily properties compete with other apartment operators as well as rental housing alternatives, such as condominiums or single-family homes for rent and short term furnished offerings such as those available from extended stay hotels or through on-line listing services.
Competition could limit our ability to lease multifamily properties or increase or maintain rents : Our multifamily properties compete with other multifamily property operators as well as rental housing alternatives, such as single-family homes for rent and short term furnished offerings such as those available from extended stay hotels or through online listing services.
The price of commodities and skilled labor for our construction projects may increase unpredictably due to external factors, including, but not limited to, performance of third-party suppliers and contractors; overall market supply and demand; government regulation; international trade; and changes in general business, economic, or political conditions.
We may face increased risks and costs associated with volatility in commodity and labor prices or as a result of supply chain or procurement disruptions, which may adversely affect the status of our construction projects : The price of commodities and skilled labor for our construction projects may increase unpredictably due to external factors, including, but not limited to, performance of third-party suppliers and contractors; overall market supply and demand; government regulation; international trade; and changes in general business, economic, or political conditions.
Our ability to hire and retain qualified personnel could be impaired by a lack of qualified candidates in the available labor force, the ongoing effects of the COVID-19 pandemic, including vaccination mandates, any diminution of our reputation, decrease in compensation levels relative to our competitors or modifications to our total compensation philosophy or competitor hiring programs.
We compete with various other companies in attracting and retaining qualified and skilled personnel. Our ability to hire and retain qualified personnel could be impaired by a lack of qualified candidates in the available labor force, any diminution of our reputation, decrease in compensation levels relative to our competitors or modifications to our total compensation philosophy or competitor hiring programs.
Such illiquidity may limit our ability to react quickly in response to changes in economic and other conditions. If we want to sell an investment, we might not be able to dispose of that investment in the time period we desire, and the sales price of that investment might not recoup or exceed the amount of our investment.
If we want to sell an investment, we might not be able to dispose of that investment in the time period we desire, and the sales price of that investment may not be recouped or may exceed the amount of our investment.
Rising interest rates may adversely affect our cash flow : As of December 31, 2022, we have no outstanding borrowings under our revolving credit facility, approximately $147.0 million of our unhedged mortgage indebtedness bearing interest at variable rates and approximately $482.3 million of our hedged mortgage indebtedness bearing interest at variable rates.
Rising interest rates may adversely affect our cash flow : As of December 31, 2023, we have no outstanding borrowings under our revolving credit facility and approximately $304.5 million of our hedged mortgage indebtedness bears interest at variable rates. We may incur additional indebtedness in the future that bears interest at variable rates.
Number of Directors, Board Vacancies, Terms of Office : The General Partner has, in its bylaws, elected to be subject to certain provisions of Maryland law which vest in the Board of Directors the exclusive right to determine the number of directors and the exclusive right, by the affirmative vote of a majority of the remaining directors, even if the remaining directors do not constitute a quorum, to fill vacancies on the board.
Number of Directors, Board Vacancies, Terms of Office : The General Partner has, in its bylaws, elected to be subject to a certain provision of Maryland law which vest in the Board of Directors the exclusive right to determine the number of directors.
Stockholder Requested Special Meetings : The General Partner’s bylaws provide that its stockholders have the right to call a special meeting only upon the written request of the stockholders entitled to cast not less than a majority of all the votes entitled to be cast by the stockholders at such meeting.
Stockholder Requested Special Meetings : The General Partner’s bylaws, as amended, provide that its stockholders have the right to call a special meeting only upon the written request of the stockholders entitled to cast not less than 25% of all votes entitled to be cast at such meeting, provided that unless requested by the stockholders entitled to cast a majority of all votes entitled to be cast at such meeting, a special meeting need not be called to consider any matter which is substantially the same as a matter voted on at any special meeting of stockholders held during the preceding 12 months.
In such case, we could experience a lapse in any or adequate insurance coverage with respect to one or more properties and be exposed to potential losses relating to any claims that may arise during such period of lapsed or inadequate coverage. Illiquidity of real estate limits our ability to act quickly : Real estate investments are relatively illiquid.
In such case, we could experience a lapse in any or adequate insurance coverage with respect to one or more properties and be exposed to potential losses relating to any claims that may arise during such period of lapsed or inadequate coverage. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future.
Compliance with the ADA requirements could involve removal of structural barriers from certain disabled persons’ entrances. Other federal, state and local laws may require modifications to or restrict further renovations of our properties with respect to such accesses.
Other federal, state and local laws may require modifications to or restrict further renovations of our properties with respect to such accesses.
The above factors could adversely affect our ability to make distributions or payments to our investors. Americans with Disabilities Act compliance could be costly : Under the Americans with Disabilities Act of 1990 (“ADA”), all public accommodations and commercial facilities must meet certain federal requirements related to access and use by disabled persons.
Americans with Disabilities Act compliance could be costly : Under the Americans with Disabilities Act of 1990 (“ADA”), all public accommodations and commercial facilities must meet certain federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could involve removal of structural barriers from certain 12 Table of Contents disabled persons’ entrances.
The market price of the General Partner's common stock could change in ways that may or may not be related to our business, the General Partner's industry or our operating performance and financial condition.
As with other publicly traded equity securities, the value of the Company's common stock depends on various market conditions, which may change from time to time. The market price of the Company's common stock could change in ways that may or may not be related to our business, the Company's industry or our operating performance and financial condition.
If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Such events could adversely affect our ability to make distributions or payments to our investors.
Nevertheless, we might remain obligated for any mortgage debt or other financial obligations related to the property or properties. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property.
CAPITAL AND FINANCING RISKS Our performance is subject to risks associated with repositioning a significant portion of the Company’s portfolio from office to multifamily rental properties.
Our performance is subject to risks associated with the anticipated completion of our repositioning of the Company’s portfolio from diversified asset classes to exclusively multifamily rental properties.
This means that our costs will not necessarily decline even if our revenues do. Our operating costs could also increase while our revenues do not. If our operating costs increase but our rental revenues do not, we may be forced to borrow to cover our costs and we may incur losses.
Our operating costs, however, do not necessarily fluctuate in relation to changes in our rental revenue. This means that our costs will not necessarily decline even if our revenues do. Our operating costs also could increase while our revenues do not.
Such competition may adversely affect our ability to make distributions or payments to our investors by: • reducing the number of suitable investment opportunities offered to us; • increasing the bargaining power of property owners; • interfering with our ability to attract and retain tenants; • increasing vacancies which lowers market rental rates and limits our ability to negotiate rental rates; and/or • adversely affecting our ability to minimize expenses of operation. 13 Table of Contents Our acquisition activities and their success are subject to the following risks: • adequate financing to complete acquisitions may not be available on favorable terms or at all as a result of the continuing volatility in the financial and credit markets; • even if we enter into an acquisition agreement for a property, we may be unable to complete that acquisition and risk the loss of certain non-refundable deposits and incurring certain other acquisition-related costs; • the actual costs of repositioning or redeveloping acquired properties may be greater than our estimates; • any acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations to our satisfaction or other conditions that are not within our control, which may not be satisfied; and • we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and acquired properties may fail to perform as expected; which may adversely affect our results of operations and financial condition.
Our acquisition activities and their success are subject to the following risks: • adequate financing to complete acquisitions may not be available on favorable terms or at all as a result of the continuing volatility in the financial and credit markets; • even if we enter into an acquisition agreement for a property, we may be unable to complete that acquisition and risk the loss of certain non-refundable deposits and incurring certain other acquisition-related costs; and • any acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations to our satisfaction or other conditions that are not within our control, which may not be satisfied.
Our success depends upon our ability to attract, integrate, manage and retain personnel who possess the skills and experience necessary to execute our acquisition, development, management and leasing strategies. We compete with various other companies in attracting and retaining qualified and skilled personnel.
MANAGEMENT RISKS We may not be able to attract, integrate, manage and retain personnel to execute our business strategy, and competition for skilled personnel could increase our labor costs. Our success depends upon our ability to attract, integrate, manage and retain personnel who possess the skills and experience necessary to execute our acquisition, development, management and leasing strategies.
In addition, our revolving credit facility contains customary requirements, including restrictions and other limitations on our ability to incur debt, debt to assets ratios and interest coverage ratios. These covenants limit our flexibility in conducting our operations and create a risk of default on our indebtedness if we cannot continue to satisfy them.
These revolving credit and term loan covenants may limit our flexibility in conducting our operations and create a risk of default on our indebtedness if we cannot continue to satisfy them. Some of our debt instruments contain cross default provisions with other debt instruments.
We expect to refinance projects purchased with short-term debt either with long-term indebtedness or equity financing depending upon the economic conditions at the time of refinancing.
We expect to refinance projects purchased with short-term debt either with long-term indebtedness or equity financing depending upon the economic conditions at the time of refinancing. However, we have entered into certain financial agreements which contain financial and operating covenants that limit our ability under certain circumstances to incur additional secured and unsecured indebtedness.
In addition, as the Company seeks to reposition a portion of its portfolio from office to the multifamily rental sector, the Company may become increasingly dependent on non-executive personnel with residential development and leasing expertise to effectively execute the Company’s long-term strategy. 19 Table of Contents INVESTMENT RISKS Certain provisions of Maryland law and the General Partner’s charter and bylaws could hinder, delay or prevent changes in control.
We do not have key man life insurance for our key personnel. In addition, as the Company seeks to complete the repositioning of a portion of its portfolio from office to the multifamily rental sector, the Company may become increasingly dependent on non-executive personnel with residential development and leasing expertise to effectively execute the Company’s long-term strategy.
The search for and process of acquiring such properties will also require a substantial amount of management’s time and attention.
The search for and process of acquiring such properties will also require a substantial amount of management’s time and attention. In addition, developers and other real estate companies may compete with us in seeking properties for acquisition, land for development and prospective tenants.
The effect of any technical corrections with respect to the Act could have an adverse effect on us or our stockholders or holders of our debt securities.” Consequences of the General Partner's failure to qualify as a real estate investment trust could adversely affect our financial condition.
REIT STATUS RISKS Consequences of the General Partner's failure to qualify as a real estate investment trust could adversely affect our financial condition.
Because these leases generally permit the residents to leave at the end of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. Competition in the multifamily rental and residential housing markets could limit our ability to lease multifamily units or increase or maintain rents.
Because these leases generally permit the residents to leave at the end of the lease term without penalty, our rental revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. 10 Table of Contents We may suffer adverse consequences if our revenues decline since our operating costs do not necessarily decline in proportion to our revenue : We earn a significant portion of our income from renting our multifamily properties.
New acquisitions, including acquisitions of multifamily rental properties, may fail to perform as expected and will subject us to additional new risks and could adversely affect our ability to make distributions or payments to our investors : We intend to and may acquire new properties, primarily in the multifamily rental sector, assuming that we are able to obtain capital on favorable terms.
As a result, our financial condition, results of operations, and cash flows, as well as our ability to pay dividends, could be adversely affected over time. We face risks associated with property acquisitions : We intend to and may acquire new properties, primarily in the multifamily rental sector, assuming that we are able to obtain capital on favorable terms.
As of February 15, 2023, the General Partner owned approximately 90.7 percent of the Operating Partnership’s outstanding common partnership units.
The terms of the Operating Partnership’s Agreement of Limited Partnership may limit our ability to take certain actions without the consent of some of the limited partners. As of February 15, 2024, the General Partner owned approximately 91.4 percent of the Operating Partnership’s outstanding common partnership units.
It is not yet possible to predict the magnitude of LIBOR's end on our borrowing costs given the remaining uncertainty about which rate(s) will replace LIBOR. Some of our costs, such as operating and general and administrative expenses, interest expense, and real estate acquisition and construction costs, are subject to inflation.
The above limitations on our ability to sell our investments could adversely affect our ability to make distributions or payments to our investors. Some of our costs, such as operating and general and administrative expenses, interest expense, and real estate acquisition and construction costs, are subject to inflation : A portion of our operating expenses is sensitive to inflation.
However, we have entered into certain financial agreements which contain financial and operating covenants that limit our ability under certain circumstances to incur additional secured and unsecured indebtedness. The Board of Directors could alter or eliminate its current policy on borrowing at any time at its discretion.
The Board of Directors could alter or eliminate its current policy on borrowing at any time at its discretion.
Price surges on construction materials may result in corresponding increases in our development costs. Short-term multifamily leases expose us to the effects of declining market rents. Substantially all of our multifamily apartment leases are for a term of one year or less.
Short-term leases expose us to the effects of declining market rents : Our multifamily leases are for an average term of 13 months.
Removed
The Company refers to itself as “we” or “our” in the following risk factors. OPERATING RISKS Adverse economic and geopolitical conditions in general and the Northeastern office markets in particular could have a material adverse effect on our results of operations, financial condition and our ability to pay distributions to you.
Added
The Company refers to itself as “Veris,” “we” or “our” in the following risk factors. OPERATING RISKS Our performance is subject to risks associated with the operation of multifamily properties.
Removed
Our business also may be adversely affected by local economic conditions, as substantially all of our revenues are derived from our properties located in New Jersey, New York and Massachusetts.
Added
If our operating costs increase significantly to the point that they exceed our rental revenues, we may be forced to borrow to cover our costs and we may incur losses. Such losses may adversely affect our ability to make distributions or payments to our investors. We face risks associated with the operation of our commercial office properties.
Removed
These conditions, which could have a material adverse effect on our results of operations, financial condition and ability to pay distributions, may continue or worsen in the future. Our performance is subject to risks associated with the real estate industry.
Added
Renewing commercial office leases or re-letting commercial office space could be costly : If a commercial office tenant does not renew its lease upon expiration or terminates its lease early, we may not be able to re-lease the space on favorable terms or at all.
Removed
We may suffer adverse consequences if our revenues decline since our operating costs do not necessarily decline in proportion to our revenue : We earn a significant portion of our income from renting our properties. Our operating costs, however, do not necessarily fluctuate in relation to changes in our rental revenue.
Added
Such events could adversely affect our ability to make distributions or payments to our investors.
Removed
Adverse developments concerning some of our major tenants and industry concentrations could have a negative impact on our revenue : We have tenants concentrated in various industries that may be experiencing adverse effects of current economic conditions. For instance, 7.09 percent of our revenue is derived from tenants in the Securities, Commodity Contracts and Other Financial Services industry.
Added
Illiquidity of real estate limits our ability to act quickly : Real estate investments are relatively illiquid. Such illiquidity may limit our ability to react quickly in response to changes in economic and other conditions.
Removed
Our business could be adversely affected if any of these industries suffered a downturn and/or these tenants or any other tenants became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely manner or at all.
Added
Inflation and its related impacts, including increased prices for services and goods and higher interest rates and wages, and any policy interventions by the U.S. government, could negatively impact our resident’s ability to pay rents or our results of operations.

… 75 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

7 edited+5 added−14 removed2 unchanged
Biggest changeMultifamily Rental Properties Location Year Built Apartment Units % Leased 12/31/22 (%) (a) 2022 Average Revenue Per Home ($) (b) NEW JERSEY The Upton Short Hills, NJ 2021 193 90.2 3,324 BLVD 475 N Jersey City, NJ 2011 243 96.7 3,048 BLVD 475 S Jersey City, NJ 2011 280 96.1 2,842 BLVD 425 Jersey City, NJ 2003 412 96.1 2,783 BLVD 401 Jersey City, NJ 2016 311 96.2 3,130 Liberty Towers Jersey City, NJ 2003 648 95.8 3,215 Soho Lofts Jersey City, NJ 2017 377 97.6 3,515 Haus25 (g) Jersey City, NJ 2022 750 88.3 — Riverhouse11 at Port Imperial Weehawken, NJ 2018 295 96.6 3,531 Riverhouse9 at Port Imperial Weehawken, NJ 2021 313 93.6 1,951 Signature Place Morris Plains, NJ 2018 197 95.9 2,896 The James (g) Park Ridge, NJ 2021 240 95.0 — Total New Jersey Multifamily Rental 4,259 94.4 2,934 NEW YORK Quarry Place at Tuckahoe Eastchester, NY 2016 108 93.6 3,443 Total New York Multifamily Rental 108 93.6 3,443 MASSACHUSETTS The Emery at Overlook Ridge Revere, MA 2020 326 95.1 2,498 Portside at Pier One East Boston, MA 2015 181 90.7 2,779 Portside 5/6 East Boston, MA 2018 296 95.5 2,947 145 Front at City Square Worcester, MA 2018 365 95.1 2,381 Total Massachusetts Multifamily Rental 1,168 94.5 2,619 TOTAL MULTIFAMILY PROPERTIES 5,535 94.4 2,972 24 Table of Contents Office Properties Property Location Location Year Built Net Rentable Area (SF) % Leased 12/31/22 (%) (a) 2022 Base Rent ($000’s) (c) 2022 Average Base Rent Per Sq.
Biggest changeMultifamily Properties Property Location Year Built Apartment Units % Occupied 12/31/23 (%) 2023 Average Revenue Per Home ($) (b) NEW JERSEY WATERFRONT Haus25 Jersey City, NJ 2022 750 94.1 4,396 Liberty Towers Jersey City, NJ 2003 648 93.2 4,058 BLVD 401 Jersey City, NJ 2016 311 97.4 4,025 BLVD 425 Jersey City, NJ 2003 412 95.6 3,921 BLVD 475 S Jersey City, NJ 2011 280 96.8 3,853 BLVD 475 N Jersey City, NJ 2011 243 96.3 4,200 Soho Lofts Jersey City, NJ 2017 377 94.4 4,557 RiverHouse 9 at Port Imperial Weehawken, NJ 2021 313 96.2 4,064 RiverHouse 11 at Port Imperial Weehawken, NJ 2018 295 94.6 4,044 Total New Jersey Waterfront Multifamily 3,629 95.0 4,154 MASSACHUSETTS Portside at East Pier East Boston, MA 2015 181 94.9 3,132 Portside 2 at East Pier East Boston, MA 2018 296 96.2 3,243 145 Front at City Square Worcester, MA 2018 365 92.9 2,601 The Emery at Overlook Ridge Revere, MA 2020 326 92.3 2,684 Total Massachusetts Multifamily 1,168 93.9 2,869 OTHER The Upton Short Hills, NJ 2021 193 91.7 4,693 The James Park Ridge, NJ 2021 240 96.3 2,947 Signature Place Morris Plains, NJ 2018 197 97.5 3,110 Quarry Place at Tuckahoe Eastchester, NY 2016 108 93.5 4,203 Total Other Multifamily 738 95.0 3,631 TOTAL MULTIFAMILY PROPERTIES 5,535 94.8 3,813 Office Properties Property Location Year Built Net Rentable Area (SF) % Leased 12/31/23 (%) (a) 2023 Base Rent ($000’s) (c) 2023 Average Base Rent Per Sq.
(b) Average Revenue per Home is calculated as total apartment revenue for the year divided by the average percent occupied for the year, divided by the number of apartments. (c) Total base rent for the year ended December 31, 2022, determined in accordance with generally accepted accounting principles (“GAAP”).
(b) Average Revenue per Home is calculated as total apartment revenue for the year divided by the average percent occupied for the year, divided by the number of apartments. (c) Total base rent for the year ended December 31, 2023, determined in accordance with generally accepted accounting principles (“GAAP”).
For leases whose rent commences after January 1, 2023, annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.
For leases whose rent commences after January 1, 2024, annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.
For the 12 months ended December 31, 2022, total escalations and recoveries from tenants were: $6,662, or $3.22 per leased square foot, for office properties. (d) Excludes space leased by the Company. (e) Base rent for the 12 months ended December 31, 2022 divided by net rentable commercial square feet leased at December 31, 2022.
For the year ended December 31, 2023, total escalations and recoveries from tenants were: $3.3 million, or $8.89 per leased square foot, for office properties. (d) Base rent for the year ended December 31, 2023 divided by net rentable commercial square feet leased at December 31, 2023.
Ft. ($) (c) (e) 2022 Average Effective Rent Per Sq. Ft.
Ft. ($) (c) (d) 2023 Average Effective Rent Per Sq. Ft.
(f) Total base rent, determined in accordance with GAAP, for 2022 minus 2022 amortization of tenant improvements, leasing commissions and other concessions and costs, determined in accordance with GAAP, divided by net rentable square feet leased at December 31, 2022. (g) Property was acquired or placed in service in 2022 and results have been excluded from the table above.
(e) Total base rent, determined in accordance with GAAP, for 2023 minus 2023 amortization of tenant improvements, leasing commissions and other concessions and costs, determined in accordance with GAAP, divided by net rentable square feet leased at December 31, 2023. (f) Total Rental Revenue for the year ended December 31, 2023 is calculated by adding base rent and parking income.
ITEM 2. PROPERTIES PROPERTY LIST As of December 31, 2022, the Company’s Consolidated Properties consisted of 17 multifamily rental properties, as well as eight in-service commercial properties and two hotels. The Consolidated Properties are located in the Northeast.
ITEM 2. PROPERTIES PROPERTY LIST Consolidated Properties As of December 31, 2023, the Company’s Consolidated Properties consisted of 17 multifamily properties, four in-service commercial properties, and several developable land parcels. The Consolidated Properties are located in the Northeast. The Consolidated Properties contain a total of approximately 5,535 apartment units and 1.0 million square feet of commercial space.
Removed
The Consolidated Properties contain a total of approximately 5,535 apartment units and 3.1 million square feet of commercial space with the individual commercial properties ranging from 8,400 to 977,225 square feet.
Added
($) (c) (e) Harborside Plaza 5 Jersey City, NJ 2002 977,225 34.6 17,027 45.93 49.23 TOTAL OFFICE PROPERTIES 977,225 34.6 17,027 45.93 49.23 23 Table of Contents Retail/Garage Properties Property Location Year Built Net Rentable Area (Retail SF) % Leased 12/31/23 (%) (a) 2023 Total Rental Revenue ($000’s) (f) 100 Avenue at Port Imperial Weehawken, NJ 2016 8,400 100.0 4,431 500 Avenue at Port Imperial Weehawken, NJ 2013 18,064 100.0 1,767 Riverwalk at Port Imperial West New York, NJ 2008 30,426 59.2 1,102 TOTAL RETAIL/GARAGE PROPERTIES 56,890 78.1 7,300 Developable Land Property Location Ownership Percentage Potential Units NEW JERSEY WATERFRONT 107 Morgan Jersey City, NJ 100% 783 Plaza 8 Jersey City, NJ 100% 680 Plaza 9 Jersey City, NJ 100% 597 PI South - Building 2 Weehawken, NJ 50% 245 Total New Jersey Waterfront Developable Land 2,305 MASSACHUSETTS Overlook Site 15 Revere, MA 100% 310 Overlook Site 1 (Retail) Revere, MA 100% (g) Overlook Site 13 Malden, MA 100% 307 Overlook Site 14 (Retail) Malden, MA 100% (g) Overlook Site 14 (Hotel) Malden, MA 100% 112 Overlook Site 14 Malden, MA 100% 120 Total Massachusetts Developable Land 849 OTHER Wall Land Wall Township, NJ 100% 228 Short Hills (Hotel) Short Hills, NJ 100% 160 keys 1633 Littleton Parsippany, NJ 100% (h) 65 Livingston Roseland, NJ 100% 252 6 Becker Farm / 85 Livingston Roseland, NJ 100% 439 1 Water Street White Plains, NY 100% 299 Total Other Developable Land 1,378 TOTAL DEVELOPABLE LAND 4,532 Unconsolidated Joint Venture Properties As of December 31, 2023, the Company’s Unconsolidated Joint Venture Properties consisted of seven multifamily rental properties, an in-service commercial property, and a developable land parcel.
Removed
($) (c) (f) Harborside Plaza 2 Jersey City, NJ 1990 761,200 95.3 21,772 30.01 23.74 Harborside Plaza 3 (d) Jersey City, NJ 1990 726,022 76.0 20,752 37.61 29.76 Harborside Plaza 5 Jersey City, NJ 2002 977,225 40.2 22,872 58.22 52.50 Harborside Plaza 6 Jersey City, NJ 2000 231,856 20.5 43 0.90 0.38 23 Main Street (h) Holmdel, NJ 1977 350,000 100.0 4,566 13.05 11.25 TOTAL OFFICE PROPERTIES 3,046,303 67.9 (i) 70,005 33.86 28.16 Retail/Garage & Hotel Properties Property Location Location Year Built Net Rentable Area (Retail SF/Rooms) % Leased 12/31/22 (%) (a) 2022 Total Rental Revenue ($000’s) (j) 100 Avenue at Port Imperial Weehawken, NJ 2016 8,400 100.0 3,752 500 Avenue at Port Imperial Weehawken, NJ 2013 18,064 92.0 1,184 Port Imperial North Retail West New York, NJ 2008 30,745 64.3 803 TOTAL RETAIL/GARAGE PROPERTIES 57,209 78.3 5,739 Hotel Properties Envue Autograph Collection (h) Weehawken, NJ 2019 208 — 8,723 Residence Inn at Port Imperial (h) Weehawken, NJ 2018 164 — 6,782 TOTAL HOTEL PROPERTIES 372 — 15,505 Footnotes to Property List (dollars in thousands, except per square foot amounts): (a) Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates in the future.
Added
The Unconsolidated Joint Venture Properties are located in the Northeast and Washington, D.C. The Unconsolidated Joint Venture Properties contain a total of approximately 2,146 apartment units and 51.0 thousand square feet of commercial space.
Removed
(h) Property is held for sale by the Company as of December 31, 2022 and disposed of in February 2023. (i) Excludes Harborside Plaza 1, a 400,000 square foot office property which has been removed from service.
Added
The Company’s unconsolidated interests range from 20 percent to 85 percent subject to specified priority allocations in certain of the joint ventures. 24 Table of Contents Unconsolidated Joint Ventures - Multifamily Properties Property Location Year Built Ownership Percentage Apartment Units % Occupied 12/31/23 (%) 2023 Average Revenue Per Home ($) (b) NEW JERSEY WATERFRONT Urby at Harborside Jersey City, NJ 2017 85.00% 762 92.3 3,844 RiverTrace at Port Imperial West New York, NJ 2014 22.50% 316 95.6 3,641 The Capstone at Port Imperial West New York, NJ 2021 40.00% 360 95.0 4,272 Total New Jersey Waterfront Multifamily Properties 1,438 93.7 3,907 OTHER Riverpark at Harrison Harrison, NJ 2014 45.00% 141 92.2 2,746 The Metropolitan at 40 Park Morristown, NJ 2010 25.00% 130 95.4 3,577 Metropolitan Lofts Morristown, NJ 2018 50.00% 59 94.4 3,591 Station House Washington, DC 2015 50.00% 378 92.1 2,529 Total Other Multifamily Properties 708 92.9 2,853 TOTAL MULTIFAMILY PROPERTIES 2,146 93.4 3,559 Unconsolidated Joint Ventures - Retail Properties Property Location Year Built Ownership Percentage Net Rentable Area (Retail SF) % Leased 12/31/23 (%) (a) 2023 Total Rental Revenue ($000’s) (f) Shops at 40 Park Morristown, NJ 2010 25.00% 50,973 69.0 1,369 TOTAL RETAIL PROPERTIES 50,973 69.0 1,369 Unconsolidated Joint Ventures - Developable Land Property Location Ownership Percentage Potential Units PI North - Land West New York, NJ 20.00% 829 TOTAL DEVELOPABLE LAND 829 Footnotes to Property List (dollars in thousands, except per square foot amounts): (a) Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates in the future.
Removed
(j) Total Rental Revenue for the year ended December 31, 2022 is calculated by adding base rent, parking income and hotel income. 25 Table of Contents OCCUPANCY The following table sets forth the year-end occupancy of the Company’s Portfolio for the last five years: Percent Leased (%) December 31, Multifamily Commercial (a)(b) 2022 94.4 67.9 2021 96.4 74.0 2020 85.4 78.7 2019 92.1 80.7 (c) 2018 94.2 83.2 (c) (a) Percentage of square-feet leased includes all leases in effect as of the period end date, some of which have commencement dates in the future and leases that expire at the period end date.
Added
(g) The Company has an additional 13,775 square feet of potential retail space within land developments that is not represented in this table.
Removed
For all years, excludes properties being prepared for lease up. (b) Includes properties classified as held for sale as of December 31, 2022. (c) Excludes properties being considered for repositioning or redevelopment.
Added
(h) Property is approved for office zoning consisting of 5.19 acres. 25 Table of Contents OCCUPANCY The following table sets forth the year-end occupancy of the Company’s Consolidated Multifamily Portfolio for the last five years: December 31, Percent Occupied (%) 2023 94.8 2022 94.4 2021 96.4 2020 85.4 2019 92.1 MARKET DIVERSIFICATION The following table lists the Company’s markets, based on annualized contractual base rent of the Company's Consolidated Multifamily Portfolio: Market Annualized Base Rental Revenue ($ in thousands) (a) (b) Percentage Of Annualized Base Rental Revenue (%) New Jersey Waterfront 174,822 72.2 Massachusetts 37,768 15.6 Other 29,500 12.2 Totals 242,090 100.0 (a) Annualized base rental revenue is based on actual December 2023 billings times 12.
Removed
Inclusive of such properties, percentage of square feet leased as of 2019 and 2018 was 80.6 and 81.7 percent, respe ctively. 26 Table of Contents SIGNIFICANT TENANTS The following table sets forth a schedule of the Company’s 15 largest commercial tenants for the Consolidated Properties as of December 31, 2022 based upon annualized base rental revenue: Number of Properties (a) Annualized Base Rental Revenue ($) (b) Percentage of Company Annualized Base Rental Revenue (%) (c) Square Feet Leased Percentage Total Company Leased Sq.
Removed
(%) Year of Lease Expiration MUFG Bank Ltd. 1 5,688,654 8.4 137,076 7.0 2029 Collectors Universe, Inc. 1 5,544,620 8.1 146,812 7.5 (d) E-Trade Financial Corporation 1 5,504,869 8.1 132,265 6.8 2031 Vonage America Inc. 1 5,124,000 7.5 350,000 17.9 2023 Sumitomo Mitsui Banking Corp. 1 4,624,190 6.8 111,105 5.7 2036 Arch Insurance Company 1 4,326,008 6.4 106,815 5.5 2024 Brown Brothers Harriman & Company 1 4,017,930 5.9 114,798 5.9 2026 Cardinia Real Estate LLC 1 3,238,703 4.8 79,771 4.1 2032 New Jersey City University 1 3,057,806 4.5 84,929 4.4 2035 Zurich American Insurance Company 1 2,988,810 4.4 64,414 3.3 2032 Amtrust Financial Services 1 2,614,328 3.8 76,892 3.9 2023 Tradeweb Markets LLC 1 2,413,954 3.5 65,242 3.3 2027 Sunamerica Asset Management 1 2,005,894 2.9 36,336 1.9 2023 BETMGM, LLC 1 1,863,634 2.8 49,043 2.5 2032 Whole Foods Market Services 1 1,833,355 2.7 47,398 2.5 2032 Totals 54,846,755 80.6 1,602,896 82.2 (a) Includes office property tenants only.
Removed
Excludes leases for amenity, retail, parking and month‑to‑month tenants. Some tenants have multiple leases. (b) Annualized base rental revenue is based on actual December 2022 billings times 12. For leases whose rent commences after January 1, 2023, annualized base rental revenue is based on the first full month’s billing times 12.
Removed
As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above. (c) Based on Commercial Base Rental Revenue only.
Removed
(d) 16,393 square feet expire in 2023; 130,419 square feet expire in 2038. 27 Table of Contents SCHEDULE OF LEASE EXPIRATIONS The following table sets forth a schedule of lease expirations for the total of the Company’s office and stand-alone retail properties included in the Consolidated Properties beginning January 1, 2023, assuming that none of the tenants exercise renewal or termination options: Year Of Expiration Number Of Leases Expiring (a) Net Rentable Area Subject To Expiring Leases (Sq.
Removed
Ft.) Percentage Of Total Leased Square Feet Represented By Expiring Leases (%) Annualized Base Rental Revenue Under Expiring Leases ($) (b) Average Annual Base Rent Per Net Rentable Square Foot Represented By Expiring Leases ($) Percentage Of Annual Base Rent Under Expiring Leases (%) 2023 11 546,436 28.0 12,749,460 23.33 18.7 2024 8 162,776 8.3 6,781,459 41.66 10.0 2025 8 104,572 5.4 3,171,250 30.33 4.7 2026 4 138,553 7.1 4,900,037 35.37 7.2 2027 0 — — — — — 2028 5 88,842 4.6 3,542,684 39.88 5.2 2029 1 137,076 7.0 5,688,654 41.50 8.4 2030 0 — — — — — 2031 1 132,265 6.8 5,504,869 41.62 8.1 2032 8 313,978 16.1 12,799,977 40.77 18.8 2033 and thereafter 6 326,453 16.7 12,898,756 39.51 18.9 Totals/Weighted Average 52 1,950,951 (c) 100.0 68,037,146 34.87 100.0 (a) Includes office property tenants only.
Removed
Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases. (b) Annualized base rental revenue is based on actual December 2022 billings multiplied by 12. For leases whose rent commences after January 1, 2023 annualized base rental revenue is based on the first full month’s billing multiplied by 12.
Removed
As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.
Removed
(c) Reconciliation to Company’s total net rentable square footage is as follows: Square Feet Square footage leased to commercial tenants 1,950,951 Square footage used for corporate offices, management offices, building use, retail tenants, food services, other ancillary service tenants and occupancy adjustments 116,776 Square footage unleased 978,576 Total net rentable commercial square footage (does not include land leases) 3,046,303 MARKET DIVERSIFICATION The following table lists the Company’s markets, based on annualized contractual base rent of the Consolidated Properties: Market Property Type Annualized Base Rental Revenue ($) (a) (b) Percentage Of Annualized Base Rental Revenue (%) Hudson County, NJ Commercial/Multifamily 237,110,993 78.3 Suffolk/Worcester Counties, MA Multifamily 38,235,682 12.6 Morris/Essex Counties, NJ Multifamily 9,780,522 3.2 Bergen County, NJ Multifamily 7,735,921 2.6 Monmouth County, NJ Commercial 5,124,000 1.7 Westchester County, NY Multifamily 5,017,670 1.7 Totals 303,004,788 100.0 28 Table of Contents (a) Annualized base rental revenue is based on actual December 2022 billings times 12.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+4 added−2 removed3 unchanged
Biggest changeHOLDERS On February 15, 2023, the General Partner had 234 common shareholders of record (this does not include beneficial owners for whom Cede & Co. or others act as nominee) and the Operating Partnership had 60 owners of limited partnership units and one owner of General Partnership Units. RECENT SALES OF UNREGISTERED SECURITIES; USES OF PROCEEDS FROM REGISTERED SECURITIES None.
Biggest changeThe Company has determined that the total distribution of $0.05 per common share paid during the year ended December 31, 2023 represented 100% return of capital distributions. 27 Table of Contents HOLDERS On February 15, 2024, the General Partner had 218 common shareholders of record (this does not include beneficial owners for whom Cede & Co. or others act as nominee) and the Operating Partnership had 69 owners of limited partnership units and one owner of General Partnership Units.
The graph assumes that the value of the investment in the General Partner's Common Stock and in the S&P 500 and NAREIT indices was $100 at December 31, 2017 and that all dividends were reinvested. The price of the General Partner's Common Stock on December 31, 2017 (on which the graph is based) was $21.56.
The graph assumes that the value of the investment in the General Partner's Common Stock and in the S&P 500 and NAREIT indices was $100 at December 31, 2018 and that all dividends were reinvested. The price of the General Partner's Common Stock on December 31, 2018 (on which the graph is based) was $19.59.
There is no established public trading market for the Operating Partnership's common units. GRAPH The following graph compares total stockholder returns from the last five fiscal years to the Standard & Poor’s 500 Index (“S&P 500”) and to the National Association of Real Estate Investment Trusts, Inc.’s FTSE NAREIT Equity REIT Index (“NAREIT”).
GRAPH The following graph compares total stockholder returns from the last five fiscal years to the Standard & Poor’s 500 Index (“S&P 500”) and to the National Association of Real Estate Investment Trusts, Inc.’s FTSE NAREIT Equity REIT Index (“NAREIT”).
On June 24, 2022, the General Partner filed with the NYSE its annual CEO Certification and Annual Written Affirmation pursuant to Section 303A.12 of the NYSE Listed Company Manual, each certifying that the General Partner was in compliance with all of the listing standards of the NYSE.
There is no established public trading market for the Operating Partnership's common units. 26 Table of Contents On August 8, 2023, the General Partner filed with the NYSE its annual CEO Certification and Annual Written Affirmation pursuant to Section 303A.12 of the NYSE Listed Company Manual, each certifying that the General Partner was in compliance with all of the listing standards of the NYSE.
Removed
Comparison of Five-Year Cumulative Total Return DIVIDENDS AND DISTRIBUTIONS The Company has suspended its common dividends since September 2020, which was initially a strategic decision by the Board to allow for greater financial flexibility during the COVID-19 pandemic and to retain incremental capital to support the Company’s value-enhancing investments across the portfolio and was based upon its estimates of taxable income.
Added
Comparison of Five-Year Cumulative Total Return DIVIDENDS AND DISTRIBUTIONS As a result of the Company substantially completing its transformation to a pure-play multifamily REIT, as well as the Company’s current estimates of taxable income, the Board of Directors of the General Partner (the "Board of Directors") reinstated a quarterly dividend beginning with the third quarter of 2023.
Removed
Based upon its current estimates of taxable income and its expectation of disposition activity, the Board has made the 29 Table of Contents strategic decision to continue to suspend its dividend to support the transformation of the Company to a pure-play multifamily REIT and will re-evaluate this decision when such transition is substantially complete.
Added
On December 18, 2023, the Company declared a $0.0525 distribution per common share to be payable on January 10, 2024 to shareholders of record as of the close of business on December 29, 2023. At December 31, 2023, the balance of the distributions payable was $5.5 million.
Added
The $0.0525 distribution per common share will be reported to shareholders for the year ending December 31, 2024. On July 24, 2023, the Company declared a $0.05 distribution per common share with a payment date of October 10, 2023, to shareholders of record as of the close of business on September 30, 2023.
Added
RECENT SALES OF UNREGISTERED SECURITIES; USES OF PROCEEDS FROM REGISTERED SECURITIES None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

46 edited+33 added−114 removed13 unchanged
Biggest changeYear Ended December 31, 2022 Compared to Year Ended December 31, 2021 35 Table of Contents Years Ended December 31, Dollar Change Percent Change (dollars in thousands) 2022 2021 Revenue from rental operations and other: Revenue from leases $ 284,062 $ 276,864 $ 7,198 2.6 % Parking income 18,557 15,003 3,554 23.7 Hotel income 15,505 10,618 4,887 46.0 Other income 33,313 11,309 22,004 194.6 Total revenues from rental operations 351,437 313,794 37,643 12.0 Property expenses: Real estate taxes 58,585 47,106 11,479 24.4 Utilities 14,344 14,802 (458) (3.1) Operating services 77,855 71,246 6,609 9.3 Total property expenses 150,784 133,154 17,630 13.2 Non-property revenues: Real estate services 3,581 9,596 (6,015) (62.7) Total non-property revenues 3,581 9,596 (6,015) (62.7) Non-property expenses: Real estate services expenses 10,549 12,857 (2,308) (18.0) General and administrative 56,169 57,190 (1,021) (1.8) Dead deal and transaction-related costs 3,467 12,221 (8,754) (71.6) Depreciation and amortization 111,518 110,038 1,480 1.3 Property impairments 94,811 13,467 81,344 604.0 Land and other impairments, net 9,368 23,719 (14,351) (60.5) Total non-property expenses 285,882 229,492 56,390 24.6 Operating income (loss) (81,648) (39,256) (42,392) 108.0 Other (expense) income: Interest expense (78,040) (65,192) (12,848) 19.7 Interest and other investment income (loss) 729 524 205 39.1 Equity in earnings (loss) of unconsolidated joint ventures 1,200 (4,251) 5,451 (128.2) Realized gains (losses) and unrealized losses on disposition of rental property, net 66,115 3,022 63,093 2087.8 Gain on disposition of developable land 57,262 2,115 55,147 2607.4 Gain on sale from unconsolidated joint ventures 7,677 (1,886) 9,563 (507.1) Gain (loss) from extinguishment of debt, net (7,432) (47,078) 39,646 (84.2) Total other (expense) income 47,511 (112,746) 160,257 (142.1) Income (loss) from continuing operations (34,137) (152,002) 117,865 (77.5) Discontinued operations: Income from discontinued operations 3,692 16,911 (13,219) (78.2) Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net (4,440) 25,552 (29,992) (117.4) Total discontinued operations (748) 42,463 (43,211) (101.8) Net income (loss) $ (34,885) $ (109,539) $ 74,654 (68.2) % 36 Table of Contents The following is a summary of the changes in revenue from rental operations and other, and property expenses, in 2022 as compared to 2021 divided into Same-Store Properties, Acquired and Developed Properties and Properties Sold in 2021 and 2022 (excluding properties classified as discontinued operations): Total Company Same-Store Properties Acquired and Developed Properties Properties Sold in 2021 and 2022 ( dollars in thousands ) Dollar Change Percent Change Dollar Change Percent Change Dollar Change Percent Change Dollar Change Percent Change Revenue from rental operations and other: Revenue from leases $ 7,198 2.6 % $ 12,450 4.5 % $ 28,717 10.4 % $ (33,969) (12.3) % Parking income 3,554 23.7 3,034 20.2 1,103 7.4 (583) (3.9) Hotel income 4,887 46.0 4,887 46.0 — — — — Other income 22,004 194.6 21,646 191.4 472 4.2 (114) (1.0) Total $ 37,643 12.0 % $ 42,017 13.4 % $ 30,292 9.7 % $ (34,666) (11.0) % Property expenses: Real estate taxes $ 11,479 24.4 % $ 9,925 21.1 % $ 3,275 7.0 % $ (1,721) (3.7) % Utilities (458) (3.1) (9) (0.1) 1,004 6.8 (1,453) (9.8) Operating services 6,609 9.2 7,230 10.1 6,784 9.5 (7,405) (10.4) Total $ 17,630 13.2 % $ 17,146 12.9 % $ 11,063 8.3 % $ (10,579) (7.9) % OTHER DATA: Number of Consolidated Properties 27 23 4 20 Commercial Square feet (in thousands) 3,104 3,104 — 4,842 Multifamily portfolio (number of units) 5,535 4,039 1496 0 Revenue from leases.
Biggest changeSee Note 7: Discontinued Operations to the Financial Statements for additional details. 33 Table of Contents Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 Years Ended December 31, Dollar Change Percent Change (dollars in thousands) 2022 2021 Revenue from rental operations and other: Revenue from leases $ 206,052 $ 162,082 $ 43,970 27.1 % Parking income 15,819 12,274 3,545 28.9 Other income 7,996 10,693 (2,697) (25.2) Total revenues from rental operations 229,867 185,049 44,818 24.2 Property expenses: Real estate taxes 39,112 28,818 10,294 35.7 Utilities 8,921 8,307 614 7.4 Operating services 52,797 45,460 7,337 16.1 Total property expenses 100,830 82,585 18,245 22.1 Non-property revenues: Real estate services 3,581 9,596 (6,015) (62.7) Total non-property revenues 3,581 9,596 (6,015) (62.7) Non-property expenses: Real estate services expenses 10,549 12,858 (2,309) (18.0) General and administrative 56,014 56,977 (963) (1.7) Transaction-related costs 3,468 12,208 (8,740) (71.6) Depreciation and amortization 85,434 68,506 16,928 24.7 Land and other impairments, net 9,368 23,719 (14,351) (60.5) Total non-property expenses 164,833 174,268 (9,435) (5.4) Operating income (loss) (32,215) (62,208) 29,993 (48.2) Other (expense) income: Interest expense (66,381) (47,505) (18,876) 39.7 Interest and other investment income (loss) 729 524 205 39.1 Equity in earnings (loss) of unconsolidated joint ventures 1,200 (4,250) 5,450 (128.2) Realized gains (losses) and unrealized losses on disposition of rental property, net — 3,023 (3,023) (100.0) Gain on disposition of developable land 57,262 2,115 55,147 2607.4 Loss on sale from unconsolidated joint ventures — (1,886) 1,886 (100.0) Loss from extinguishment of debt, net (129) (47,078) 46,949 (99.7) Total other (expense) income (7,319) (95,057) 87,738 (92.3) Loss from continuing operations (39,534) (157,265) 117,731 (74.9) Discontinued operations: (Loss) income from discontinued operations (64,704) 22,174 (86,878) (391.8) Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net 69,353 25,552 43,801 171.4 Total discontinued operations 4,649 47,726 (43,077) (90.3) Net loss $ (34,885) $ (109,539) $ 74,654 (68.2) % 34 Table of Contents The following is a summary of the changes in revenue from rental operations and other, and property expenses, in 2022 as compared to 2021 divided into Same-Store Properties, Acquired and Developed Properties and Properties Sold in 2021 and 2022: Total Company Same-Store Properties Acquired and Developed Properties Properties Sold in 2021 and 2022 ( dollars in thousands ) Dollar Change Percent Change Dollar Change Percent Change Dollar Change Percent Change Dollar Change Percent Change Revenue from rental operations and other: Revenue from leases $ 43,970 27.1 % $ 17,324 11.2 % $ 28,717 100.0 % $ (2,071) (100.0) % Parking income 3,545 28.9 2,655 22.7 1,103 100.0 (213) (100.0) Other income (2,697) (25.2) (3,191) (30.5) 472 100.0 22 (100.0) Total $ 44,818 24.2 % $ 16,788 9.5 % $ 30,292 100.0 % $ (2,262) (100.0) % Property expenses: Real estate taxes $ 10,294 35.7 % $ 7,450 27.2 % $ 3,275 100.0 % $ (431) (100.0) % Utilities 614 7.4 (332) (4.2) 1,004 100.0 (58) (100.0) Operating services 7,337 16.1 1,235 2.9 6,784 100.0 (682) (100.0) Total $ 18,245 22.1 % $ 8,353 10.7 % $ 11,063 100.0 % $ (1,171) (100.0) % OTHER DATA: Number of Consolidated Properties 27 23 4 2 Commercial Square feet (in thousands) 3,104 3,104 — — Multifamily portfolio (number of units) 5,535 4,039 1,496 — Revenue from leases.
Equity in earnings (loss) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures increased $5.5 million, or 128.2 percent, for 2022 as compared to 2021, due primarily to higher revenues resulting from lower concessions and higher market rents at various multifamily ventures in 2022 as compared to 2021.
Equity in earnings (loss) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures increased $5.5 million, or 128.2 percent, for 2022 as compared to 2021, due primarily to higher revenues resulting from lower concessions and higher market rents at various unconsolidated multifamily joint ventures in 2022 as compared to 2021.
The DRIP also permits participants to make optional cash investments up to $5,000 a month without restriction and, if the Company waives this limit, for additional amounts subject to certain restrictions and other conditions set forth in the DRIP prospectus filed as part of the Company’s effective registration statement on Form S-3 filed with the Securities and Exchange Commission (“SEC”) for the approximately 5.5 million shares of the General Partner’s common stock reserved for issuance under the DRIP.
The DRIP also permits participants to make optional cash investments up to $5,000 a month without restriction and, if the Company waives this limit, for additional amounts subject to certain restrictions and other conditions set forth in the DRIP prospectus filed as part of the Company’s effective registration statement on Form S-3 filed with the Securities and Exchange Commission (“SEC”) for the approximately 5.4 million shares of the General Partner’s common stock reserved for issuance under the DRIP.
This increase was primarily the result of the cessation of the capitalization of mortgage interest related to a property which was placed in service in 2022 and higher interest rates on our floating rate indebtedness. Interest and other investment income. Interest and other investment income remained relatively unchanged for 2022 compared to 2021.
This increase was primarily the result of the cessation of the capitalization of mortgage interest related to a multifamily property which was placed in service in 2022 and higher interest rates on our floating rate indebtedness. Interest and other investment income. Interest and other investment income remained relatively unchanged for 2022 as compared to 2021.
REIT Restrictions To maintain its qualification as a REIT under the IRS Code, the General Partner must make annual distributions to its stockholders of at least 90 percent of its REIT taxable income, determined without regard to the dividends paid deduction and by excluding net capital gains.
REIT Distribution Requirements To maintain its qualification as a REIT under the IRS Code, the General Partner must make annual distributions to its stockholders of at least 90 percent of its REIT taxable income, determined without regard to the dividends paid deduction and by excluding net capital gains.
In 2021, the Company recognized losses from early extinguishment of debt of $47.1 million which consists of $24.2 million in connection with the redemption of the Company’s Senior Unsecured Notes and $22.6 million in connection with the sale of Short Hills office portfolio and related defeasement of the mortgage loan. Discontinued operations.
Loss from extinguishment of debt, net. In 2021, the Company recognized losses from early extinguishment of debt of $47.1 million which consists of $24.2 million in connection with the redemption of the Company’s Senior Unsecured Notes and $22.6 million in connection with the sale of Short Hills office portfolio and related defeasance of the mortgage loan. Discontinued operations.
Revenue from leases at the Acquired and Developed Properties increased $28.7 million in 2022 as compared to 2021, due to the commencement of operations at a multifamily property as well as the acquisition of one multifamily property. Parking income.
Revenue from leases at the Acquired and Developed Properties increased $28.7 million in 2022 as compared to 2021, due to the commencement of operations at three multifamily properties during the periods as well as the acquisition of one multifamily property in mid-2022. Parking income.
(b) Net income available to common shareholders in 2022, 2021 and 2020 included $9.4 million, $23.7 million and $16.8 million, respectively, of land impairment charges and $94.8 million, $2.1 million and $5.8 million, respectively, from a gain on disposition of developable land, which are included in the calculation to arrive at funds from operations as such gains and charges relate to non-depreciable assets.
(b) Net loss available to common shareholders in 2023, 2022 and 2021 included $9.3 million, $9.4 million and $23.7 million, respectively, of land impairment charges and $46.3 million, $94.8 million and $2.1 million, respectively, from a gain on disposition of developable land, which are included in the calculation to arrive at funds from operations as such gains and charges relate to non-depreciable assets.
Real estate taxes on the Same-Store Properties increased $9.9 million, or 21.1 percent, for 2022 as compared to 2021 due primarily to increased tax rates on properties located in Jersey City, New Jersey as well as the expiration in early 2022 of the PILOT agreements on two multifamily properties. Utilities.
Real estate taxes on the Same-Store Properties increased $7.5 million, or 27.2 percent, for 2022 as compared to 2021 due primarily to increased tax rates on properties located in Jersey City, New Jersey as well as the expiration in early 2022 of the PILOT agreements on two multifamily properties. Utilities.
Debt Strategy The Company intends to utilize a combination of corporate and property level indebtedness. The Company will seek to refinance or retire its debt obligations at maturity with either available proceeds received from the Company’s planned non-strategic asset sales, as well as with new corporate or property level indebtedness on or before the applicable maturity dates.
The Company will seek to refinance or retire its debt obligations at maturity with available proceeds received from the Company’s planned non-strategic asset sales, as well as with new corporate or property level indebtedness on or before the applicable maturity dates.
Land and other impairments . In 2022, the Company recorded net $9.4 million of impairments on developable land parcels. In 2021, the Company recorded $20.8 million of impairments on developable land parcels and $2.9 million of goodwill impairment. Interest expense. Interest expense increased $12.8 million, or 19.7 percent, for 2022 as compared to 2021.
In 2021, the Company recorded $20.8 million of impairments on developable land parcels and $2.9 million of goodwill impairment. Interest expense. Interest expense increased $18.9 million, or 39.7 percent, for 2022 as compared to 2021.
Realized gains (losses) and unrealized losses on disposition of rental property, net. The Company had realized gains (unrealized losses) on disposition of rental property of $66.1 million in 2022 and $3.0 million in 2021. See Note 3: Recent Transactions – Dispositions – to the Financial Statements. Gain on disposition of developable land.
Realized gains (losses) and unrealized losses on disposition of rental property, net. The Company had no realized gains (unrealized losses) on disposition of rental property in 2022 and 3.0 million in 2021. See Note 3: Investment in Rental Property – Dispositions of Rental Properties and Developable Land – to the Financial Statements. Gain on disposition of developable land.
Parking income for the Same-Store Properties increased $3.0 million, or 20.2 percent for 2022 as compared to 2021 due primarily to an increase in usage at the parking garages. Hotel income .
Parking income for the Same-Store Properties increased $2.7 million, or 22.7 percent for 2022 as compared to 2021 due primarily to an increase in usage at the parking garages. Other income.
Other income for the Same-Store Properties increased $1.6 million, or 17.1 percent for 2021 as compared to 2020 due primarily to the recognition in 2021 of forfeited deposits received from potential buyers in disposition deals that were not completed, as well as post property sales items received in 2021. Real estate taxes.
Other income for the Same-Store Properties decreased 3.2 million, or 30.5 percent for 2022 as compared to 2021 due primarily to the recognition in 2021 of forfeited deposits received from potential buyers in disposition deals that were not completed, as well as post property sales items received in 2021. Real estate taxes.
The Company generally considers assets (as identified by their disposal groups) to be held for sale when the transaction has received appropriate corporate authority, it is probable to be sold within the following 12 months, and there are no significant contingencies relating to a sale.
The Company generally considers assets (as identified by their disposal groups) to be held for sale when the transaction has received appropriate corporate authority, it is probable that the disposition will occur within one year and there are no significant contingencies relating to a sale.
Shelf Registration Statements The General Partner has an effective shelf registration statement on Form S-3 filed with the SEC for an aggregate amount of $2.0 billion in common stock, preferred stock, depositary shares, and/or warrants of the General Partner, under which $200 million of shares of common stock have been allocated for sales pursuant to the Company’s ATM Program commenced in December 2021 and no securities have been sold as of February 15, 2023. 47 Table of Contents The General Partner and the Operating Partnership also have an effective shelf registration statement on Form S-3 filed with the SEC for an aggregate amount of $2.5 billion in common stock, preferred stock, depositary shares and guarantees of the General Partner and debt securities of the Operating Partnership, under which no securities have been sold as of February 15, 2023.
Equity Financing and Registration Statements Shelf Registration Statements The General Partner has an effective shelf registration statement on Form S-3 filed with the SEC for an aggregate amount of $2.0 billion in common stock, preferred stock, depositary shares, and/or warrants of the General Partner, under which $100 million of shares of common stock have been allocated for sale pursuant to the Company's ATM Program commenced in November 2023 and no securities have been sold as of February 15, 2024.
As of December 31, 2022, the outstanding balance of such debt totaled $188.5 million of which $22.0 million was guaranteed by the Company. The Company’s off-balance sheet arrangements are further discussed in Note 4: Investments in Unconsolidated Joint Ventures to the Financial Statements.
As of December 31, 2023, the outstanding balance of such debt totaled $17.2 million of which $1.5 million was guaranteed by the Company. In January 2024, the joint venture repaid the $17.2 million loan. The Company’s off-balance sheet arrangements are further discussed in Note 4: Investments in Unconsolidated Joint Ventures to the Financial Statements.
Utilities for the Same-Store Properties remained relatively unchanged for 2022 compared to 2021. Operating services. Operating services for the Same-Store properties increased $7.2 million, or 10.1 percent, for 2022 as compared to 2021, due primarily to an increase in repairs and maintenance costs at commercial properties, and insurance expenses in 2022. 37 Table of Contents Real estate services revenue.
Utilities for the Same-Store Properties remained relatively unchanged for 2022 compared to 2021. Operating services. Operating services for the Same-Store properties increased $1.2 million, or 2.9 percent, for 2022 as compared to 2021, due primarily to an increase in insurance expenses in 2022. Real estate services revenue.
Real estate services revenue (primarily reimbursement of property personnel costs) decreased $6.0 million, or 62.7 percent, for 2022 as compared to 2021, due primarily to a reduction in third party development and management activity in 2022. Real estate services expenses.
Real estate services revenue, which is primarily related to management fees and reimbursement of property personnel costs from the Company's third party/ joint ventures management businesses, decreased $6.0 million, or 62.7%, for 2022 as compared to 2021, due primarily to a reduction in third party development and management activity in 2022. 35 Table of Contents Real estate services expenses.
Excludes non-real estate-related depreciation and amortization of $1,328, $1,304 and $1,610 for the years ended December 31, 2022, 2021 and 2020, respectively.
Excludes non-real estate-related depreciation and amortization of $1.0 million, $1.3 million and $1.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.
Revenue from leases for the Same-Store Properties increased $12.4 million, or 4.5 percent, for 2022 as compared to 2021, due primarily to an increase in occupancy and market rents of the multifamily rental properties, partially offset by a reduction in occupancy of the office properties in 2022 as compared to 2021.
Revenue from leases for the Same-Store Properties increased $17.3 million, or 11.2 percent, for 2022 as compared to 2021, due primarily to an increase in occupancy and market rents of the multifamily rental properties.
In 2022, the Company recognized a gain of $57.3 million on the sale of multiple developable land parcels. In 2021, the Company recorded a gain of $2.1 million on the sale of land holdings in Newark and Hamilton, New Jersey. Gain on sale from unconsolidated joint ventures.
In 2022, the Company recognized a gain of $57.3 million on the sale of multiple developable land parcels. In 2021, the Company recorded a gain of $2.1 million on the sale of land holdings in Newark and Hamilton, New Jersey. See Note 3: Investment in Rental Property – Dispositions of Rental Properties and Developable Land – to the Financial Statements.
In 2020, the Company recorded a $35.2 million gain for its share on the sale the joint venture - owned property in Arlington, Virginia and land in Hillsborough, New Jersey. See Note 4: Investments in Unconsolidated Joint Ventures – to the Financial Statements. 42 Table of Contents Loss from extinguishment of debt, net.
Gain on sale from unconsolidated joint ventures. In 2021, the Company recorded a $1.9 million loss for its share on the sale of the joint venture - owned property in Arlington, Virginia and land in Hillsborough, New Jersey. See Note 3: Investment in Rental Property - Dispositions of Unconsolidated Joint Venture – to the Financial Statements.
As the Company considers its primary earnings measure, net income available to common shareholders, as defined by GAAP, to be the most comparable earnings measure to FFO, the following table presents a reconciliation of net income available to common shareholders to FFO, as calculated in accordance with NAREIT’s current definition, for the years ended December 31, 2022, 2021 and 2020 ( in thousands ): Year Ended December 31, 2022 2021 2020 Net income (loss) available to common shareholders $ (52,066) $ (119,042) $ (51,387) Add (deduct): Noncontrolling interests in Operating Partnership (5,202) (15,739) (13,830) Noncontrolling interests in discontinued operations (72) 3,860 8,431 Real estate-related depreciation and amortization on continuing operations (a) 120,584 118,835 131,236 Real estate-related depreciation and amortization on discontinued operations 889 2,555 6,386 Property impairments on continuing operations 94,811 13,467 36,582 Impairment of unconsolidated joint venture investment (included in Equity in earnings) — (2) 2,562 Gain on sale from unconsolidated joint ventures (7,677) 1,886 (35,184) Continuing operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net (66,116) (3,022) (2,656) Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net 4,440 (25,552) (14,026) Funds from operations available to common stock and Operating Partnership unitholders (b) $ 89,591 $ (22,754) $ 68,114 48 Table of Contents (a) Includes the Company’s share from unconsolidated joint ventures, and adjustments for noncontrolling interests, of $10.4 million, $10.1 million and $12.4 million for the years ended December 31, 2022, 2021 and 2020, respectively.
As the Company considers its primary earnings measure, net income available to common shareholders, as defined by GAAP, to be the most comparable earnings measure to FFO, the following table presents a reconciliation of net income 39 Table of Contents available to common shareholders to FFO, as calculated in accordance with NAREIT’s current definition, for the years ended December 31, 2023, 2022 and 2021 ( in thousands ): Year Ended December 31, 2023 2022 2021 Net loss available to common shareholders $ (107,265) $ (52,066) $ (119,042) Add (deduct): Noncontrolling interests in Operating Partnership (14,267) (5,652) (16,212) Noncontrolling interests in discontinued operations 3,872 378 4,333 Real estate-related depreciation and amortization on continuing operations (a) 103,049 95,103 77,908 Real estate-related depreciation and amortization on discontinued operations 5,335 26,370 43,482 Property impairments on continuing operations 32,516 — — Property impairments on discontinued operations — 94,811 13,467 Impairment of unconsolidated joint venture investment (included in Equity in earnings) — — (1) Discontinued operations: Gain on sale from unconsolidated joint ventures — (7,677) 1,886 Continuing operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net — — (3,023) Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net (2,411) (61,676) (25,552) Funds from operations available to common stock and Operating Partnership unitholders (b) (c) $ 20,829 $ 89,591 $ (22,754) (a) Includes the Company’s share from unconsolidated joint ventures, and adjustments for noncontrolling interests, of $10.3 million, $10.4 million and $10.1 million for the years ended December 31, 2023, 2022 and 2021, respectively.
(c) Includes debt with interest rate caps outstanding with a notional amount of $485 million. 44 Table of Contents Debt Maturities Scheduled principal payments and related weighted average annual effective interest rates for the Company’s debt as of December 31, 2022 are as follows: Period Scheduled Amortization ($000’s) Principal Maturities ($000’s) Total ($000’s) Weighted Avg.
Debt Maturities Scheduled principal payments and related weighted average annual effective interest rates for the Company’s debt as of December 31, 2023 are as follows: Period Scheduled Amortization ($000’s) Principal Maturities ($000’s) Total ($000’s) Weighted Avg.
General and administrative expenses remained relatively unchanged for 2022 compared to 2021 due to increases in severance and related costs in 2022 as compared to 2021, partially offset by cost saving reductions in 2022. Transaction related costs.
General and administrative expenses remained relatively unchanged for 2022 compared to 2021 due to increases in severance and related costs in 2022 as compared to 2021, partially offset by cost saving reductions in 2022. Transaction related costs. The Company incurred costs of $3.5 million in 2022 and $12.2 million in 2021 in connection with transactions that were not consummated.
(3) $290.3 million used in financing activities, consisting primarily of the following: (a) $250.0 million used for repayments of the revolving credit facility; plus (b) $25.6 million used for distributions to redeemable noncontrolling interests; plus (c) $245.5 million used for repayments of mortgages, loans payable and other obligations; plus (d) $5.1 million used for payment of early debt extinguishment costs, minus (e) $102.0 million from borrowings under the revolving credit facility; minus (f) $154.7 million from proceeds received from mortgages and loans payable.
(3) $618.3 million used in financing activities, consisting primarily of the following: (a) $535.5 million used for the redemption of redeemable noncontrolling interests; plus (b) $442.1 million used for repayments of mortgages, loans payable and other obligations; plus (c) 17.1 million used for distributions to redeemable noncontrolling interests; plus (d) $16.2 million used for payments of financing costs; plus (e) $5.1 million used for payment of common dividends and distributions; minus (f) $399.6 million received from proceeds from mortgages and loans payable.
(2) $220.1 million provided by investing activities, consisting primarily of the following: (a) $7.7 million proceeds from the sale of investments in unconsolidated joint ventures; plus (b) $2.9 million received from repayments of notes receivables; plus (c) $451.9 million received from proceeds from the sales of rental property; minus (d) $51.5 million used for additions to rental property and improvements; minus (e) $73.2 million used for the development of rental property, other related costs and deposits; minus (f) $130.5 million used for rental property acquisitions and related intangibles.
(2) $579.7 million provided by investing activities, consisting primarily of the following: (a) $560.0 million received mainly from proceeds of rental properties included in discontinued operations; plus (b) $23.0 million received from proceeds of the sales of rental property in continuing operations; plus (c) $12.1 million received from distributions in excess of cumulative earnings from unconsolidated joint ventures; plus (d) $3.8 million received from proceeds from insurance settlements; plus (e) $1.3 million received from repayments of notes receivables; minus (f) $12.5 million used for additions to rental property and improvements; minus (g) $8.4 million used for the development of rental property, other related costs and deposits; minus (h) $0.8 million used for investment in unconsolidated joint ventures.
On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment is impaired only if management’s estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary.
An investment is impaired only if management’s estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary.
If there are different potential outcomes for a property, the Company will take a probability-weighted approach to estimating future cash flows. To the extent impairment has occurred, the impairment loss is measured as the excess of the carrying value of the property over the fair value of the property.
A p roperty’s value is considered impaired when the expected undiscounted cash flows for a property are less than its carrying value. If there are different potential outcomes for a property, the Company will take a probability weighted approach to estimating future cash flows.
Real Estate Held for Sale and Discontinued Operations When assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the sales price, net of expected selling costs, of such assets.
When assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the fair value.
Land and other impairments . In 2021, the Company recorded $20.8 million of impairments on developable land parcels and $2.9 million of goodwill impairment. In 2020, the Company recorded valuation impairment charges of $16.8 million on developable land parcels. Interest expense. Interest expense decreased $15.8 million, or 19.5 percent, for 2021 as compared to 2020.
Land and other impairments . In 2023 and 2022, the Company recorded net $9.3 million and $9.4 million of impairment charges on developable land parcels, respectively. Interest expense. Interest expense increased $23.0 million, or 34.6 percent, for 2023 as compared to 2022.
The values of in-place leases are amortized to expense over the remaining initial terms of the respective leases. On a periodic basis, management assesses whether there are any indicators that the value of the Company’s rental properties held for use may be impaired.
Impairment On a periodic basis, management assesses whether there are any indicators, including property operating performance, changes in anticipated holding period, and general market conditions, that the value of the Company’s rental properties held for use may be impaired.
Revenue from leases at the Acquired and Developed Properties increased $13.0 million in 2021 as compared to 2020, due to the commencement of operations of three multifamily properties and one retail property. Parking income.
Revenue from leases at the Acquired and Developed Properties increased $27.6 million, or 164.7 percent, in 2023 as compared to 2022, due to an increase in market rental rates and the commencement of operations at a multifamily property as well as the acquisition of one multifamily property during mid-2022. Parking income.
Other income for the Same-Store Properties increased $21.6 million, or 191.4 percent for 2022 as compared to 2021 due primarily to lease termination income recognized from office properties in 2022. Real estate taxes.
Parking income for the Same-Store Properties increased $1.4 million, or 9.1 percent for 2023 as compared to 2022 due primarily to an increase in usage at the parking garages. Other income.
Real estate taxes on the Same-Store Properties increased $1.7 million, or 3.7 percent, for 2021 as compared to 2020 due primarily to the expiration in early 2021 of the PILOT agreements on two multifamily properties located in Jersey City, New Jersey. Utilities.
Real estate taxes on the Same-Store Properties decreased $1.1 million, or 2.8 percent, for 2023 as compared to 2022 due primarily to prior period tax appeal refunds received in 2023 on several properties offset by increased tax rates primarily related to properties located in Jersey City, New Jersey.
Debt Financing Summary of Debt The following is a breakdown of the Company’s debt between fixed and variable-rate financing as of December 31, 2022: Balance ($000’s) % of Total Weighted Average Interest Rate (a) Weighted Average Maturity in Years Fixed Rate & Hedged Secured (c) $ 1,764,488 92.31 % 4.27 % 3.71 Variable Rate Secured Debt 147,000 7.69 % 6.86 % 1.83 Totals/Weighted Average: $ 1,911,488 100.00 % 4.47 % (b) 3.57 Unamortized deferred financing costs (7,511) Total Debt, Net $ 1,903,977 (a) The actual weighted average of floating rates (LIBOR and SOFR) for the Company’s outstanding variable rate debt was 4.15 percent as of December 31, 2022, plus the applicable spread.
Debt Summary The following is a breakdown of the Company’s debt between fixed and variable-rate financing as of December 31, 2023: Balance ($000’s) % of Total Weighted Average Interest Rate Weighted Average Maturity in Years Fixed Rate & Hedged Secured (a) $ 1,868,983 100.00 % 4.34 % 3.46 Variable Rate Secured Debt — — % — % — Totals/Weighted Average: $ 1,868,983 100.00 % 4.34 % 3.46 Unamortized deferred financing costs (15,086) Total Debt, Net $ 1,853,897 (a) Includes debt with interest rate caps outstanding with a notional amount of $304.5 million.
This decrease is comprised of the following net cash flow items: (1) $66.5 million provided by operating activities.
Cash Flows Cash, cash equivalents and restricted cash increased by $6.9 million to $54.6 million at December 31, 2023, compared to $47.6 million at December 31, 2022. This increase is comprised of the following net cash flow items: (1) $45.5 million provided by operating activities.
See Note 4: Investments in Unconsolidated Joint Ventures – to the Financial Statements. Loss from extinguishment of debt, net. In 2022, the Company recognized a loss of $7.4 million on extinguishment of debt primarily in connection with the sales of two office properties located in Hoboken, New Jersey and Jersey City, New Jersey.
In 2022, the Company recorded a gain of $57.3 million on the sale of land holdings in West Windsor, Weehawken, and Jersey City, New Jersey. See Note 3: Investment in Rental Property – Dispositions of Rental Properties and Developable Land – to the Financial Statements. Loss from extinguishment of debt, net.
Revenue from leases for the Same-Store Properties increased $1.8 million, or 0.7 percent, for 2021 as compared to 2020, of which an increase of $3.4 million at the commercial properties is due to an increase in escalation settle-ups.
Revenue from leases for the Same-Store Properties increased $18.5 million, or 9.8 percent, for 2023 as compared to 2022, due primarily to an increase in market rental rates and a reduction in concessions at the multifamily rental properties.
To the extent impairment has occurred, the loss shall be measured as the excess of the carrying value of the investment over the value of the investment.
To the extent impairment has occurred, the loss shall be measured as the excess of the carrying value of the 28 Table of Contents investment over the estimated fair value of the investment. Estimated fair values which are based on discounted cash flow models include all estimated cash inflows and outflows over a specified holding period.
The Company incurred costs of $3.5 million in 2022 and $12.2 million in 2021 in connection with transactions that were not consummated and increased advisory fees. Depreciation and amortization. Depreciation and amortization increased $1.5 million, or 1.3 percent, for 2022 over 2021.
The Company incurred costs of $7.6 million in 2023 primarily associated with the purchase of Rockpoint's interests (See Note 14: Redeemable Noncontrolling Interests - Rockpoint Transactions – to the Financial Statements), and $3.5 million in 2022 in connection with transactions that were not consummated. Depreciation and amortization.
Operating services for the Same-Store properties increased $1.7 million, or 2.5 percent, for 2021 as compared to 2020, due primarily to an increase in severance and related expenses in 2021 as compared to 2020. Real estate services revenue.
Operating services for the Same-Store properties remained relatively unchanged. Operating services expenses at the Acquired and Developed Properties increased $5.0 million, or 127.2 percent, in 2023 as compared to 2022, due to the commencement of operations at a multifamily property as well as the acquisition of one multifamily property during mid-2022. 32 Table of Contents Real estate services revenue.
Real estate services revenue (primarily reimbursement of property personnel costs) decreased $1.8 million, or 15.8 percent, for 2021 as compared to 2020, due primarily to decreased third party development and management activity in 2021 as compared to 2020. Real estate services expenses.
Real Estate services expenses include off-site expenses associated with the self-management of the Company's properties as well as operating and personnel expenses for the Company's third-party/joint venture management businesses. Real estate services expenses increased $3.6 million, or 34.5 percent, for 2023 as compared to 2022, due primarily to increased personnel expenses and management activity in multifamily services. General and administrative.
LIQUIDITY AND CAPITAL RESOURCES Liquidity Overview Rental revenue is the Company’s principal source of funds to pay its material cash commitments consisting of operating expenses, debt service, capital expenditures and dividends, excluding non-recurring capital expenditures.
The Company believe these sources of financing will be sufficient to meet our short-term and long-term liquidity requirements. The Company's cash flow from operations primarily consists of rental revenue which is the principal source of funds that is used to pay operating expenses, debt service, general and administrative expenses, operating capital expenditures, dividends, and transaction-related expenses.
Hotel income for the Same-Store properties increased $4.9 million, or 46.0 percent, for 2022 as compared to 2021, primarily due to higher occupancy, higher average daily rates and increased events as a result of easing COVID-19 restrictions. Other income.
Other income for the Same-Store Properties decreased $2.3 million, or 30.0 percent for 2023 as compared to 2022 due primarily to the return of escrow on a previous transaction and post sales items received in 2022. Real estate taxes.
Removed
Executive Overview Veris Residential, Inc. together with its subsidiaries, including Veris Residential, L.P. (the “Operating Partnership” and collectively, the “Company”), has been involved in all aspects of commercial real estate development, management and ownership for over 60 years and has been a publicly traded REIT since 1994.
Added
Critical Accounting Policies and Estimates Our significant accounting policies are described in Note 2: Significant Accounting Policies – to the Consolidated Financial Statements. Certain of these accounting policies require judgment and the use of estimates and assumptions when applying these policies in the preparation of our consolidated financial statements.
Removed
The Company develops, owns and operates predominantly multifamily rental properties located primarily in the Northeast, as well as a portfolio of Class A office properties. The Company is in the process of transitioning to a pure-play multifamily REIT and is focused on conducting business in a socially, ethically, and environmentally responsible manner, while seeking to maximize value for all stakeholders.
Added
On a quarterly basis, we evaluate these estimates and judgments based on historical experience as well as other factors that we believe to be reasonable under the circumstances. These estimates are subject to change in the future if underlying assumptions or factors change. Certain accounting policies, while significant, may not require the use of estimates.
Removed
The General Partner controls Veris Residential, L.P., a Delaware limited partnership, together with its subsidiaries (collectively, the “Operating Partnership”), as its sole general partner and owned a 90.7 and 91.0 percent common unit interest in the Operating Partnership as of December 31, 2022 and 2021, respectively.
Added
We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Removed
As of December 31, 2022, the Company owns or has interests in 35 properties (collectively, the “Properties”) and developable land parcels.
Added
To the extent impairment has occurred, the impairment loss is measured as the excess of the carrying value of the property over the estimated fair value of the property. Estimated fair values which are based on discounted cash flow models include all estimated cash inflows and outflows over a specified holding period.
Removed
These properties are comprised of 24 multifamily rental properties containing 7,681 apartment units as well as non-core assets comprised of five office properties, four parking/retail properties and two hotels and eight properties owned by unconsolidated joint ventures in which the Company has investment interests, including seven multifamily properties and a non-core asset.
Added
Capitalization rates and discount rates utilized in these models are based upon unobservable rates that the Company believes to be within a reasonable range of current market rates. In addition, such cash flow models consider factors such as expected future operating income, trends and prospects, as well as the effects of demand, competition and other factors.
Removed
The Properties are located in three states in the Northeast, plus the District of Columbia. 30 Table of Contents Critical Accounting Policies and Estimates The accompanying consolidated financial statements include all accounts of the Company, its majority-owned and/or controlled subsidiaries, which consist principally of the Operating Partnership and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any.
Added
To the extent impairment has occurred, the carrying value of the property would be adjusted to an amount to reflect the estimated fair value of the property.
Removed
See Note 2: Significant Accounting Policies – to the Financial Statements, for the Company’s treatment of unconsolidated joint venture interests. Intercompany accounts and transactions have been eliminated.
Added
If the fair value of the assets, less estimated cost to sell, is less than the carrying value of the assets, an adjustment to the carrying value would be recognized and recorded within the Unrealized gains (losses) on disposition of rental property to reflect the estimated fair value of the assets.
Removed
Accounting Standards Codification (“ASC”) 810, Consolidation, provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs.
Added
The Company will continue to review the property for subsequent changes in the fair value, and may recognize an additional impairment charge, if warranted.
Removed
Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and substantially all of the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.
Added
In addition, on a periodic basis, management assesses whether there are any indicators, including the underlying investment property operating performance and general market conditions, that the value of the Company’s investments in unconsolidated joint ventures may be impaired.
Removed
The Company consolidates VIEs in which it is considered to be the primary beneficiary.
Added
Capitalization rates and discount rates utilized in these models are based upon unobservable rates that the Company believes to be within a reasonable range of current market rates. 29 Table of Contents Results From Operations The following comparisons for the year ended December 31, 2023 (“2023”), as compared to the year ended December 31, 2022 (“2022”), and for 2022 as compared to the year ended December 31, 2021 (“2021”) make reference to the following: (i) “Same-Store Properties,” which represent all in-service properties owned by the Company at December 31, 2021, (for the 2023 versus 2022 comparisons), and which represent all in-service properties owned by the Company at December 31, 2020 (for the 2022 versus 2021 comparisons), excluding properties sold, disposed of, removed from service, or being redeveloped or repositioned from January 1, 2021 through December 31, 2023; (ii) “Acquired and Developed Properties,” which represent all properties acquired by the Company or commencing initial operation from January 1, 2022 through December 31, 2023 (for the 2023 versus 2022 comparisons), and which represents all properties acquired by the Company or commencing initial operations from January 1, 2021 through December 31, 2022 (for the 2022 versus 2021 comparisons); and (iii) “Properties Sold” which represent properties sold, disposed of, or removed from service (including properties being redeveloped or repositioned) by the Company from January 1, 2021 through December 31, 2023. 30 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Years Ended December 31, Dollar Change Percent Change (dollars in thousands) 2023 2022 Revenue from rental operations and other: Revenue from leases $ 252,144 $ 206,052 $ 46,092 22.4 % Parking income 18,036 15,819 2,217 14.0 Other income 5,811 7,996 (2,185) (27.3) Total revenues from rental operations 275,991 229,867 46,124 20.1 Property expenses: Real estate taxes $ 40,810 39,112 1,698 4.3 Utilities 9,922 8,921 1,001 11.2 Operating services 57,925 52,797 5,128 9.7 Total property expenses 108,657 100,830 7,827 7.8 Non-property revenues: Real estate services 3,868 3,581 287 8.0 Total non-property revenues 3,868 3,581 287 8.0 Non-property expenses: Real estate services expenses 14,188 10,549 3,639 34.5 General and administrative 44,472 56,014 (11,542) (20.6) Transaction-related costs 7,627 3,468 4,159 119.9 Depreciation and amortization 93,589 85,434 8,155 9.5 Property impairments 32,516 — 32,516 100.0 Land and other impairments, net 9,324 9,368 (44) (0.5) Total non-property expenses 201,716 164,833 36,883 22.4 Operating loss (30,514) (32,215) 1,701 (5.3) Other (expense) income: Interest expense (89,355) (66,381) (22,974) 34.6 Interest cost of mandatorily redeemable noncontrolling interests (49,782) — (49,782) 100.0 Interest and other investment income (loss) 5,515 729 4,786 656.5 Equity in earnings (loss) of unconsolidated joint ventures 3,102 1,200 1,902 158.5 Gain on disposition of developable land 7,068 57,262 (50,194) (87.7) Loss from extinguishment of debt, net (5,606) (129) (5,477) 4,245.7 Other income, net 2,871 — 2,871 100.0 Total other (expense) income (126,187) (7,319) (118,868) 1624.1 Loss from continuing operations before income tax expenses (156,701) (39,534) (117,167) 296.4 Provision for income taxes (492) — (492) 100.0 Loss from continuing operations after income tax (157,193) (39,534) (117,659) 297.6 Discontinued operations: Income (Loss) from discontinued operations 3,150 (64,704) 67,854 (104.9) Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net 41,682 69,353 (27,671) (39.9) Total discontinued operations 44,832 4,649 40,183 864.3 Net loss $ (112,361) $ (34,885) $ (77,476) 222.1 % 31 Table of Contents The following is a summary of the changes in revenue from rental operations and other, and property expenses, in 2023 as compared to 2022 divided into Same-Store Properties, Acquired and Developed Properties and Properties Sold in 2022 and 2023 (excluding properties classified as discontinued operations): Total Company Same-Store Properties Acquired and Developed Properties Properties Sold in 2022 and 2023 ( dollars in thousands ) Dollar Change Percent Change Dollar Change Percent Change Dollar Change Percent Change Dollar Change Percent Change Revenue from rental operations and other: Revenue from leases $ 46,092 22.4 % $ 18,523 9.8 % $ 27,569 164.7 % $ — — % Parking income 2,217 14.0 1,404 9.1 813 211.7 — — Other income (2,185) (27.3) (2,320) (30.0) 135 50.9 — — Total $ 46,124 20.1 % $ 17,607 8.3 % $ 28,517 164.0 % $ — — % Property expenses: Real estate taxes $ 1,698 4.3 % $ (1,050) (2.8) % $ 2,748 181.7 % $ — — % Utilities 1,001 11.2 383 4.7 618 84.5 — — Operating services 5,128 9.7 82 0.2 5,046 127.2 — — Total $ 7,827 7.8 % $ (585) (0.6) % $ 8,412 135.5 % $ — — % OTHER DATA: Number of Consolidated Properties 21 19 2 — Commercial Square feet (in thousands) 1,034 1,034 — — Multifamily portfolio (number of units) 5,535 4,545 990 — Revenue from leases.
Removed
The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance: and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.
Added
Real estate taxes at the Acquired and Developed Properties increased $2.7 million, or 181.7 percent, in 2023 as compared to 2022, due to the commencement of operations at a multifamily property as well as the acquisition of one multifamily property during mid-2022. Utilities. Utilities for the Same-Store Properties remained relatively unchanged. Operating services.
Removed
The financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”).
Added
Real estate services revenue, which is primarily related to management fees and reimbursement of property personnel costs from the Company's third party/ joint ventures management businesses, remained relatively unchanged. Real estate services expenses.
Removed
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Added
General and administrative expenses decreased $11.5 million, or 20.6 percent, for 2023 compared to 2022 due to decrease in severance and related costs and cost reductions in 2023, offset by higher stock compensation expense in 2023 as a result of the $2.9 million adjustment in the third quarter of 2023. Transaction related costs.
Removed
These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. Actual results could differ from those estimates.
Added
Depreciation and amortization increased $8.2 million, or 9.5 percent, for 2023 as compared to 2022, primarily due to additional depreciation and amortization in the Acquired and Developed Properties. Property impairments. In 2023, the Company recorded impairment charges of $32.5 million on one held and used office property in Jersey City, New Jersey. No such impairments were recorded in 2022.
Removed
Certain reclassifications have been made to prior period amounts in order to conform with current period presentation, primarily related to classification of certain properties as discontinued operations. The Company’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Company’s financial results.
Added
The increase is primarily related to increases in LIBOR and SOFR rates as well as a reduction in capitalized interest in 2023 compared to 2022 due to one multifamily property being placed in service during 2022. Interest cost of mandatorily redeemable noncontrolling interests.
Removed
Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances. Rental Property Rental properties are reported at cost less accumulated depreciation and amortization. Costs directly related to the acquisition, development and construction of rental properties are capitalized.
Added
During 2023, the Company recognized $49.8 million in interest cost of mandatorily redeemable noncontrolling interests related to the Company's redemption of Rockpoint's interests. Interest and other investment income. Interest and other investment income increased $4.8 million, or 656.5 percent, for 2023 compared to 2022. The increase is primarily related to interest income for sales proceeds deposits.
Removed
The Company adopted Financial Accounting Standards Board (“FASB”) guidance Accounting Standards Update (“ASU”) 2017-01 on January 1, 2017, which revises the definition of a business and is expected to result in more transactions to be accounted for as asset acquisitions and significantly limit transactions that would be accounted for as business combinations.
Added
Equity in earnings (loss) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures increased $1.9 million or 158.5 percent, for 2023 as compared to 2022, due primarily to higher revenues resulting from lower concessions and higher market rents at various multifamily unconsolidated joint ventures in 2023 as compared to 2022. Gain on disposition of developable land.

… 113 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−1 removed2 unchanged
Biggest changeDecember 31, 2022 Debt, including current portion ($s in thousands) 2023 2024 2025 2026 2027 Thereafter Sub-total Other (a) Total Fair Value Fixed Rate $ 61,045 $ 610,361 $ 8,384 $ 428,780 $ 313,477 $ 342,441 $ 1,764,488 $ (7,180) $ 1,757,308 $ 1,635,357 Average Interest Rate 3.59 % 5.02 % 3.39 % 4.00 % 3.66 % 3.98 % 4.34 % Variable Rate $ 84,000 $ — $ — $ 63,000 $ — $ — $ 147,000 $ (331) $ 146,669 $ 146,669 (a) Adjustment for unamortized debt discount/premium, net, unamortized deferred financing costs, net, and unamortized mark-to-market, net, as of December 31, 2022.
Biggest changeDecember 31, 2023 Debt, including current portion ($ in thousands) 2024 2025 2026 2027 2028 Thereafter Sub-total Other (a) Total Fair Value Fixed Rate & Hedged Debt $ 314,076 $ 9,487 $ 546,138 $ 313,478 $ 348,392 $ 337,412 $ 1,868,983 $ (15,086) $ 1,853,897 $ 1,791,121 Average Interest Rate 3.43 % 3.67 % 4.44 % 3.66 % 6.01 % 3.98 % 4.34 % (a) Adjustment for unamortized debt discount/premium, net, unamortized deferred financing costs, net, and unamortized mark-to-market, net, as of December 31, 2023.
While the Company has not experienced any significant credit losses, in the event of a significant rising interest rate environment and/or economic downturn, tenant vacancies or defaults could increase and result in losses to the Company which could adversely affect its operating results and liquidity, including its ability to pay its debt obligations. ITEM 8.
While the Company has not experienced any significant credit losses, in a significant rising interest rate environment and/or economic downturn, tenant vacancies or defaults could increase and result in losses to the Company which could adversely affect its operating results and liquidity, including its ability to pay its debt obligations. ITEM 8.
Assuming interest-rate swaps and caps are not in effect as of December 31, 2022, if market rates of interest on the Company’s variable rate debt increased or decreased by 100 basis points, then the increase or decrease in interest costs on the Company’s variable rate debt would be approximately $1.5 million annually.
Assuming interest-rate caps are not in effect as of December 31, 2023, if market rates of interest on the Company’s variable rate debt increased or decreased by 40 Table of Contents 100 basis points, then the increase or decrease in interest costs on the Company’s variable rate debt would be approximately $3.0 million annually.
Approximately $1.8 billion of the Company’s long-term debt as of December 31, 2022 bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates.
Approximately $1.6 billion of the Company’s long-term debt as of December 31, 2023 bears interest at fixed rates with a weighted average coupon of 4.29% and therefore the fair value of these instruments is affected by changes in market interest rates.
The effective interest rates on the Company’s variable rate debt as of December 31, 2022 ranged from LIBOR/SOFR plus 141.0 basis points to LIBOR/SOFR plus 340.0 basis points.
The effective interest rates on the Company’s variable rate debt, which are hedged by interest-rate caps, as of December 31, 2023 ranged from SOFR plus 141.0 basis points to SOFR plus 275.0 basis points.
As of December 31, 2022, the Company's indebtedness with an aggregate principal balance of $1.8 billion had an estimated aggregate fair value of $1.6 billion and if market rates of interest increased or decreased by 100 basis points, the fair value of the Company’s fixed rate debt as of December 31, 2022 would be approximately $52.6 million higher or lower, respectively.
If market rates of interest increased or decreased by 100 basis points, the fair value of the Company’s fixed rate debt as of December 31, 2023 would be approximately $47.9 million higher or lower, respectively.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk from its indebtedness primarily from loss resulting from interest rate risk.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risk from its indebtedness primarily from changes in market interest rates. The Company monitors interest rate risk as an integral part of its overall risk management.
The Company manages its exposure to interest rate risk by utilizing fixed rate indebtedness or by hedging the majority of its floating rate indebtedness with interest rate swaps or caps, as appropriate.
The Company manages its exposure to interest rate risk by utilizing fixed rate indebtedness or by hedging the majority of its floating rate indebtedness with interest rate swaps or caps, as appropriate. As of December 31, 2023, the Company's indebtedness with an aggregate principal balance of $1.9 billion had an estimated aggregate fair value of $1.8 billion.
Removed
Changes in the general level of interest rates prevailing in the financial markets may affect the spread between the Company’s yield on invested assets and cost of funds and, in turn, its ability to make distributions or payments to its investors.
Added
Changes in interest rates, impact the fair value of the Company's fixed rate debt instruments, computed using current market yields.

Other VRE 10-K year-over-year comparisons