Veris Residential, Inc. - Quarter Report: 2015 June (Form 10-Q)

For the quarterly period ended June 30, 2015

For the transition period from	to

Commission File Number:	1-13274

	Mack-Cali Realty Corporation
(Exact name of registrant as specified in its charter)
Maryland			22-3305147
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
343 Thornall Street, Edison, New Jersey			08837-2206
(Address of principal executive offices)			(Zip Code)
	(732) 590-1000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days.  YES X NO ___
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes X   No ___
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.    Large accelerated filer  x                                                                                                           Accelerated filer  ¨   Non-accelerated filer  ¨ (Do not check if a smaller reporting company)                            Smaller reporting company  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  YES___  NO X   As of July 20, 2015, there were 89,090,080 shares of the registrant’s Common Stock, par value $0.01 per share, outstanding.

		MACK-CALI REALTY CORPORATION
		FORM 10-Q
		INDEX
Part I	Financial Information		Page
	Item 1.	Financial Statements (unaudited):	3
		Consolidated Balance Sheets as of June 30, 2015	4
		and December 31, 2014
		Consolidated Statements of Operations for the three and six months	5
		ended June 30, 2015 and 2014
		Consolidated Statement of Changes in Equity for the six months	6
		ended June 30, 2015
		Consolidated Statements of Cash Flows for the six months	7
		ended June 30, 2015 and 2014
		Notes to Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition	37
		and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
	Item 4.	Controls and Procedures	55
Part II	Other Information
	Item 1.	Legal Proceedings	56
	Item 1A.	Risk Factors	56
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
	Item 3.	Defaults Upon Senior Securities	56
	Item 4.	Mine Safety Disclosures	56
	Item 5.	Other Information	56
	Item 6.	Exhibits	56
Signatures			57
Exhibit Index			58

		June 30,			December 31,
ASSETS		2015			2014
Rental property
Land and leasehold interests	$	749,359		$	760,855
Buildings and improvements		3,751,805			3,753,300
Tenant improvements		414,166			431,969
Furniture, fixtures and equipment		12,867			12,055
		4,928,197			4,958,179
Less – accumulated depreciation and amortization		(1,448,791)			(1,414,305)
Net investment in rental property		3,479,406			3,543,874
Cash and cash equivalents		19,813			29,549
Investments in unconsolidated joint ventures		284,507			247,468
Unbilled rents receivable, net		117,777			123,885
Deferred charges, goodwill and other assets, net		197,773			204,650
Restricted cash		42,052			34,245
Accounts receivable, net of allowance for doubtful accounts
of $1,871 and $2,584		12,137			8,576
Total assets	$	4,153,465		$	4,192,247
LIABILITIES AND EQUITY
Senior unsecured notes	$	1,268,293		$	1,267,744
Mortgages, loans payable and other obligations		766,526			820,910
Dividends and distributions payable		15,582			15,528
Accounts payable, accrued expenses and other liabilities		134,089			126,971
Rents received in advance and security deposits		49,093			52,146
Accrued interest payable		30,659			26,937
Total liabilities		2,264,242			2,310,236
Commitments and contingencies
Equity:
Mack-Cali Realty Corporation stockholders’ equity:
Common stock, $0.01 par value, 190,000,000 shares authorized,
89,195,529 and 89,076,578 shares outstanding		892			891
Additional paid-in capital		2,562,507			2,560,183
Dividends in excess of net earnings		(930,167)			(936,293)
Total Mack-Cali Realty Corporation stockholders’ equity		1,633,232			1,624,781
Noncontrolling interests in subsidiaries:
Operating Partnership		201,639			202,173
Consolidated joint ventures		54,352			55,057
Total noncontrolling interests in subsidiaries		255,991			257,230
Total equity		1,889,223			1,882,011
Total liabilities and equity	$	4,153,465		$	4,192,247

			Three Months Ended						Six Months Ended
				June 30,						June 30,
REVENUES			2015			2014			2015			2014
Base rents		$	121,246		$	133,210		$	245,039		$	267,261
Escalations and recoveries from tenants			15,842			16,996			34,241			42,564
Real estate services			7,401			7,009			15,045			13,701
Parking income			2,850			2,236			5,392			4,350
Other income			1,228			849			2,565			2,020
Total revenues			148,567			160,300			302,282			329,896
EXPENSES
Real estate taxes			21,410			23,375			43,862			47,726
Utilities			13,399			14,573			30,974			42,854
Operating services			25,844			27,840			54,072			57,062
Real estate services expenses			6,208			6,571			12,847			13,280
General and administrative			11,988			13,673			22,999			36,554
Depreciation and amortization			42,365			44,711			83,167			89,696
Total expenses			121,214			130,743			247,921			287,172
Operating income			27,353			29,557			54,361			42,724
OTHER (EXPENSE) INCOME
Interest expense			(26,773)			(28,159)			(53,988)			(58,105)
Interest and other investment income			291			922			558			1,308
Equity in earnings (loss) of unconsolidated joint ventures			(2,329)			443			(5,858)			(792)
Realized gains (losses) on disposition of rental property, net			34,399			54,584			34,543			54,584
Gain on sale of investment in unconsolidated joint venture			6,448			-			6,448			-
Total other (expense) income			12,036			27,790			(18,297)			(3,005)
Net income			39,389			57,347			36,064			39,719
Noncontrolling interest in consolidated joint ventures			373			290			863			612
Noncontrolling interest in Operating Partnership			(4,383)			(6,514)			(4,069)			(4,506)
Net income available to common shareholders		$	35,379		$	51,123		$	32,858		$	35,825
Basic earnings per common share:
Net income available to common shareholders		$	0.40		$	0.58		$	0.37		$	0.40
Diluted earnings per common share:
Net income available to common shareholders		$	0.40		$	0.58		$	0.37		$	0.40
Basic weighted average shares outstanding			89,244			88,691			89,218			88,491
Diluted weighted average shares outstanding			100,314			100,023			100,313			99,964

								Additional			Dividends in			Noncontrolling
		Common Stock						Paid-In			Excess of		Interests				Total
		Shares			Par Value			Capital			Net Earnings			in Subsidiaries			Equity
Balance at January 1, 2015		89,077		$	891		$	2,560,183		$	(936,293)		$	257,230		$	1,882,011
Net income		-			-			-			32,858			3,206			36,064
Common stock dividends		-			-			-			(26,732)			-			(26,732)
Common unit distributions		-			-			-			-			(3,308)			(3,308)
Increase in noncontrolling interest
in consolidated joint ventures		-			-			-			-			158			158
Redemption of common units
for common stock		72			1			1,305			-			(1,306)			-
Shares issued under Dividend
Reinvestment and Stock Purchase Plan		1			-			25			-			-			25
Directors' deferred compensation plan		-			-			197			-			-			197
Stock compensation		46			-			808			-			-			808
Rebalancing of ownership percentage
between parent and subsidiaries		-			-			(11)			-			11			-
Balance at June 30, 2015		89,196		$	892		$	2,562,507		$	(930,167)		$	255,991		$	1,889,223

			Six Months Ended
				June 30,
CASH FLOWS FROM OPERATING ACTIVITIES			2015			2014
Net income		$	36,064		$	39,719
Adjustments to reconcile net income to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets			83,930			90,460
Amortization of deferred stock units			197			213
Amortization of stock compensation			805			5,563
Amortization of deferred financing costs			1,901			1,528
Amortization of debt discount and mark-to-market			2,018			3,836
Equity in (earnings) loss of unconsolidated joint ventures			5,858			792
Distributions of cumulative earnings from unconsolidated joint ventures			2,698			3,756
Realized (gains) loss on disposition of rental property, net			(34,543)			(54,584)
Realized (gains) loss on sale of investment in unconsolidated joint venture			(6,448)			-
Changes in operating assets and liabilities:
Decrease (increase) in unbilled rents receivable, net			801			(3,551)
Increase in deferred charges, goodwill and other assets			(14,802)			(15,022)
Increase in accounts receivable, net			(3,561)			(2,325)
Increase in accounts payable, accrued expenses and other liabilities			1,478			22,540
Decrease in rents received in advance and security deposits			(3,053)			(4,798)
Increase (decrease) in accrued interest payable			6,342			(3,180)
Net cash provided by operating activities		$	79,685		$	84,947
CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles		$	(4,057)		$	(37,696)
Rental property additions and improvements			(42,881)			(41,825)
Development of rental property, other related costs and deposits			(27,869)			(7,896)
Proceeds from the sales of rental property			80,581			190,798
Proceeds from the sale of investment in unconsolidated joint venture			6,448			-
Investments in notes receivable			-			(62,276)
Repayment of notes receivable			7,750			250
Investment in unconsolidated joint ventures			(49,305)			(38,948)
Distributions in excess of cumulative earnings from unconsolidated joint ventures			1,985			837
Increase in restricted cash			(7,808)			(6,611)
Net cash used in investing activities		$	(35,156)		$	(3,367)
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility		$	129,000		$	233,500
Repayment of revolving credit facility			(129,000)			(177,500)
Repayment of senior unsecured notes			-			(200,000)
Proceeds from mortgages and loans payable			2,897			28,135
Repayment of mortgages, loans payable and other obligations			(27,251)			(42,469)
Payment of contingent consideration			-			(3,936)
Payment of financing costs			(98)			(198)
Cash from noncontrolling interests			158			-
Payment of dividends and distributions			(29,971)			(59,875)
Net cash used in financing activities		$	(54,265)		$	(222,343)
Net decrease in cash and cash equivalents		$	(9,736)		$	(140,763)
Cash and cash equivalents, beginning of period			29,549			221,706
Cash and cash equivalents, end of period		$	19,813		$	80,943

Property

Rental properties are stated at cost less accumulated depreciation and amortization.  Costs directly related to the acquisition, development and construction of rental properties are capitalized.  Acquisition–related costs are expensed as incurred.  Capitalized development and construction costs include pre-construction costs essential to the development of the property, development and construction costs, interest, property taxes, insurance, salaries and other project costs incurred during the period of development.  Capitalized development and construction salaries and related costs approximated $1.2 million and $0.9 million for the three months ended June 30, 2015 and 2014, respectively, and $2.5 million and $1.8 million for the six months ended June 30, 2015 and 2014, respectively.  Included in total rental property is construction, tenant improvement and development in-progress of $83.2 million and $62.8 million as of June 30, 2015 and December 31, 2014, respectively.  Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.  Fully-depreciated assets are removed from the accounts.

Leasehold interests	Remaining lease term
Buildings and improvements	5 to 40 years
Tenant improvements	The shorter of the term of the
	related lease or useful life
Furniture, fixtures and equipment	5 to 10 years

 

 

 

 

Rental Property

Held for Sale

When assets are identified by management as held for sale, the Company discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets.  If, in management’s opinion, the estimated net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established.

Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.  The Company applies the equity method by initially recording these investments at cost, as Investments in Unconsolidated Joint Ventures, subsequently adjusted for equity in earnings and cash contributions and distributions.  The outside basis portion of the Company’s joint ventures is amortized over the anticipated useful lives of the underlying ventures’ tangible and intangible assets acquired and liabilities assumed.  Generally, the Company would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Company has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee.    If the venture subsequently generates income, the Company only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses.

 

 

 

 

 

Cash and Cash

Equivalents

All highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents.

 
 

Financing Costs

Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Amortization of such costs is included in interest expense and was $948,000 and $759,000 for the three months ended June 30, 2015 and 2014, respectively, and $1,901,000 and $1,528,000 for the six months ended June 30, 2015 and 2014, respectively.  If a financing obligation is extinguished early, any unamortized deferred financing costs are written off and included in gains (loss) from early extinguishment of debt.  No such unamortized costs were written off for the six months ended June 30, 2015 and 2014.

 
 

Leasing Costs

Costs incurred in connection with commercial leases are capitalized and amortized on a straight-line basis over the terms of the related leases and included in depreciation and amortization.  Unamortized deferred leasing costs are charged to amortization expense upon early termination of the lease.  Certain employees of the Company are compensated for providing leasing services to the Properties.  The portion of such compensation related to commercial leases, which is capitalized and amortized, approximated $846,000 and $845,000 for the three months ended June 30, 2015 and 2014, respectively, and $1,816,000 and $1,876,000 for the six months ended June 30, 2015 and 2014, respectively.

 
 

Goodwill

Goodwill represents the excess of the purchase price over the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is allocated to various reporting units, as applicable.  Each of the Company’s segments consists of a reporting unit. Goodwill is not amortized.  Management performs an annual impairment test for goodwill during the fourth quarter and between annual tests, management evaluates the recoverability of goodwill whenever events or changes in circumstances indicate that the carrying amount of goodwill may not be fully recoverable.  In its impairment tests of goodwill, management first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.  If based on this assessment, management determines that the fair value of the reporting unit is not less than its carrying amount, then performing the additional two-step impairment test is unnecessary. If the carrying amount of goodwill exceeds its fair value, an impairment charge is recognized.

 
 

Instruments

The Company measures derivative instruments, including certain derivative instruments embedded in other contracts, at fair value and records them as an asset or liability, depending on the Company’s rights or obligations under the applicable derivative contract.  For derivatives designated and qualifying as fair value hedges, the changes in the fair value of both the derivative instrument and the hedged item are recorded in earnings.  For derivatives designated as cash flow hedges, the effective portions of the derivative are reported in other comprehensive income (“OCI”) and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in fair value of derivative instruments not designated as hedging and ineffective portions of hedges are recognized in earnings in the affected period.

 
 

Recognition

Base rental revenue is recognized on a straight-line basis over the terms of the respective leases.  Unbilled rents receivable represents the cumulative amount by which straight-line rental revenue exceeds rents currently billed in accordance with the lease agreements.

 

 

 

 

Doubtful Accounts

Management performs a detailed review of amounts due from tenants to determine if an allowance for doubtful accounts is required based on factors affecting the collectability of the accounts receivable balances. The factors considered by management in determining which individual tenant receivable balances, or aggregate receivable balances, require a collectability allowance include the age of the receivable, the tenant’s payment history, the nature of the charges, any communications regarding the charges and other related information. Management’s estimate of the allowance for doubtful accounts requires management to exercise significant judgment about the timing, frequency and severity of collection losses, which affects the allowance and net income.

 
 

Other Taxes

The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”).  As a REIT, the Company generally will not be subject to corporate federal income tax (including alternative minimum tax) on net income that it currently distributes to its shareholders, provided that the Company satisfies certain organizational and operational requirements including the requirement to distribute at least 90 percent of its REIT taxable income (determined by excluding any net capital gains) to its shareholders.  If and to the extent the Company retains and does not distribute any net capital gains, the Company will be required to pay federal, state and local taxes on such net capital gains at the rate applicable to capital gains of a corporation.  The Company has elected to treat certain of its corporate subsidiaries as taxable REIT subsidiaries (each a “TRS”).  In general, a TRS of the Company may perform additional services for tenants of the Company and generally may engage in any real estate or non-real estate related business (except for the operation or management of health care facilities or lodging facilities or the providing to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated).  A TRS is subject to corporate federal income tax.   The Company has conducted business through its TRS entities for certain property management, development, construction and other related services, as well as to hold a joint venture interest in a hotel and other matters.

 

 

 

 

Earnings

Per Share

The Company presents both basic and diluted earnings per share (“EPS”).  Basic EPS excludes dilution and is computed by dividing net income available to common shareholders by the weighted average number of shares outstanding for the period.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower EPS from continuing operations amount.  Shares whose issuance is contingent upon the satisfaction of certain conditions shall be considered outstanding and included in the computation of diluted EPS as follows (i) if all necessary conditions have been satisfied by the end of the period (the events have occurred), those shares shall be included as of the beginning of the period in which the conditions were satisfied (or as of the date of the grant, if later) or (ii) if all necessary conditions have not been satisfied by the end of the period, the number of contingently issuable shares included in diluted EPS shall be based on the number of shares, if any, that would be issuable if the end of the reporting period were the end of the contingency period (for example, the number of shares that would be issuable based on current period earnings or period-end market price) and if the result would be dilutive. Those contingently issuable shares shall be included in the denominator of diluted EPS as of the beginning of the period (or as of the date of the grant, if later).

Dividends and

Payable

The dividends and distributions payable at June 30, 2015 represents dividends payable to common shareholders (89,089,666 shares) and distributions payable to noncontrolling interest common unitholders of the Operating Partnership (11,012,069 common units) for all such holders of record as of July 6, 2015 with respect to the second quarter 2015.  The second quarter 2015 common stock dividends and common unit distributions of $0.15 per common share and unit were approved by the Board of Directors on May 11, 2015 and paid on July 14, 2015.

For Stock

Issuances

Costs incurred in connection with the Company’s stock issuances are reflected as a reduction of additional paid-in capital.

Compensation

The Company accounts for stock compensation in accordance with the provisions of ASC 718, Compensation-Stock Compensation.  These provisions require that the estimated fair value of restricted stock (“Restricted Stock Awards”), restricted stock units (“RSUs”), performance share units (“PSUs”), total stockholder return based performance shares (“TSR”)  and stock options at the grant date be amortized ratably into expense over the appropriate vesting period.  The Company recorded stock compensation expense of $492,000 and $877,000 for the three months ended June 30, 2015 and 2014, respectively, and $805,000 and $4,264,000 for the six months ended June 30, 2015 and 2014, respectively.  The amount for the six months ended June 30, 2014 included $3,203,000 related to the departure of certain executive officers.

Other

Comprehensive

Income

Other comprehensive income (loss), if any, includes items that are recorded in equity, such as unrealized holding gains or losses on marketable securities available for sale.  There was no difference in other comprehensive income to net income for the three and six months ended June 30, 2015 and 2014, and no accumulated other comprehensive income as of June 30, 2015 and December 31, 2014.

Fair Value

Hierarchy

The standard Fair Value Measurements specifies a hierarchy of valuation techniques based upon whether the inputs to those valuation techniques reflect assumptions other market participants would use based upon market data obtained from independent sources (observable inputs).  The following summarizes the fair value hierarchy:

·	Level 1: Quoted prices in active markets that are unadjusted and accessible at the measurement date for identical, unrestricted assets or liabilities;

·

Level 2: Quoted prices for identical assets and liabilities in markets that are inactive, quoted prices for similar assets and liabilities in active markets or financial instruments for which significant inputs are observable, either directly or indirectly, such as interest rates and yield curves that are observable at commonly quoted intervals and

·	Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

Discontinued

Operations

In April 2014, the Financial Accounting Standards Board (“FASB”) issued guidance related to the reporting of discontinued operation and disclosures of disposals of components of an entity.  This guidance defines a discontinued operation as a component or group of components disposed or classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and final result; the guidance states that a strategic shift could include a disposal of a major geographical area of operations, a major line of business, a major equity method investment or other major parts of an entity.  The guidance also provides for additional disclosure requirements in connection with both discontinued operations and other dispositions not qualifying as discontinued operations.  The guidance is effective for all companies for annual and interim periods beginning on or after December 15, 2014.  The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.  All entities could early adopt the guidance for new disposals (or new classifications as held for sale) that had not been reported in financial statements previously issued or available for issuance. The Company elected to early adopt this standard effective with the interim period beginning January 1, 2014. Prior to January 1, 2014, properties identified as held for sale and/or disposed of were presented in discontinued operations for all periods presented.

Standards

In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. Additionally, this guidance requires improved disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.  ASU 2014-09 is effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted for periods beginning after December 15, 2016.  The Company is currently in the process of evaluating the impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations.

 

 

 

 

·	A term that ends on December 31, 2018 (the “Employment Term”) unless earlier terminated;

·	An annual base salary for each of Messrs. Rudin and DeMarco of $700,000, subject to potential merit increases (but not decreases) each year;

·

A target annual bonus opportunity of one hundred percent (100%) of base salary, or $700,000, for each of Messrs. Rudin and DeMarco, with a threshold bonus of fifty percent (50%) of base salary, or $350,000, and a maximum bonus of two hundred percent (200%) of base salary, or $1,400,000, a pro rata bonus opportunity for 2015 based on the assessment of the Executive Compensation and Option Committee of the Board of Directors (“Committee”) of each executive’s development of a strategic plan for the Company and bonuses for 2016 and subsequent years to be based on objective performance goals to be established annually by the Committee;

·

2015 long-term incentive (“LTI”) awards under the Company’s 2013 Incentive Stock Plan (the “2015 LTI Awards”), consisting of the granting to each of Messrs. Rudin and DeMarco on June 5, 2015 of 18,775.27 restricted stock units subject to time-based vesting over three years, and of 56,325.82 performance share units (“PSUs”) which will vest from 0 to 150 percent of the number of PSUs granted based on the Company’s total shareholder return relative to a peer group of equity office REITs over a three-year performance period; and

·

The grant on June 5, 2015 (the “Grant Date”) to each of Messrs. Rudin and DeMarco of options to purchase 400,000 shares of the Company’s common stock, exercisable for a period of ten years with an exercise price equal to the closing price of the Company’s common stock on the NYSE on the Grant Date (which price was $17.31 per share), with 200,000 of such options vesting in three equal annual installments commencing on the first anniversary of the Grant Date, and 200,000 of such options vesting if the Company’s common stock trades at or above $25.00 per share for 30 consecutive trading days while Mr. Rudin and Mr. DeMarco is employed, as applicable, or on or before June 30, 2019 if Mr. Rudin and Mr. DeMarco is employed for the entire Employment Term (except if the executive’s employment has been terminated by the Company for cause following expiration of the Employment Term).

 

 

 

 

			Three Months Ended						Six Months Ended
				June 30,						June 30,
			2015			2014			2015			2014
Total revenues		$	2,728		$	14,424		$	5,647		$	32,797
Operating and other expenses			(688)			(7,025)			(1,544)			(17,320)
Depreciation and amortization			(912)			(3,045)			(2,034)			(7,035)
Interest income			(557)			(880)			(1,355)			(1,767)
Income from properties disposed of		$	571		$	3,474		$	714		$	6,675
Realized gains on dispositions			34,399			54,584			34,543			54,584
Total income from properties disposed of		$	34,970		$	58,058		$	35,257		$	61,259

													Property Debt
	Number of		Company's				Carrying Amount						As of June 30, 2015
	Apartment Units		Effective				June 30,			December 31,				Maturity	Interest
Entity / Property Name	or Square Feet (sf)		Ownership % (a)				2015			2014			Balance	Date	Rate
Multi-family
Marbella RoseGarden, L.L.C./ Marbella  (b)	412	units	24.27	%		$	15,721		$	15,779		$	95,000	05/01/18	4.99	%
RoseGarden Monaco Holdings, L.L.C./ Monaco   (b)	523	units	15.00	%			1,532			2,161			165,000	02/01/21	4.19	%
Rosewood Lafayette Holdings, L.L.C./ Highlands at Morristown Station (c)	217	units	25.00	%			-			62			-	-	-
PruRose Port Imperial South 15, LLC /RiversEdge at Port Imperial (b)	236	units	50.00	%			-			-			57,500	09/01/20	4.32	%
Rosewood Morristown, L.L.C. / Metropolitan at 40 Park  (d) (e)	130	units	12.50	%			5,806			6,029			46,217	(f)	(f)
Overlook Ridge JV 2C/3B, L.L.C./The Chase at Overlook Ridge  (b)	371	units	50.00	%			2,277			2,524			52,662	12/26/15	L+2.50	%	(g)
PruRose Riverwalk G, L.L.C./ RiverTrace at Port Imperial   (b)	316	units	25.00	%			425			955			79,380	07/15/21	6.00	%	(h)
Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C)  (b)	355	units	7.50	%			-			-			128,100	03/01/30	4.00	%	(i)
Crystal House Apartments Investors LLC / Crystal House  (j)	798	units	25.00	%			28,018			27,051			165,000	04/01/20	3.17	%
Portside Master Company, L.L.C./ Portside at Pier One - Bldg 7  (b)	176	units	38.25	%			379			1,747			42,108	12/04/15	L+2.50	%	(k)
PruRose Port Imperial South 13, LLC / RiverParc at Port Imperial  (b)	280	units	20.00	%			274			1,087			64,927	06/27/16	L+2.15	%	(l)
Roseland/Port Imperial Partners, L.P./ Riverwalk C  (b) (m)	363	units	20.00	%			1,678			1,800			-	-	-
RoseGarden Marbella South, L.L.C./ Marbella II	311	units	24.27	%			14,149			11,282			51,206	03/30/17	L+2.25	%	(n)
Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B)  (b)	227	units	7.50	%			-			-			81,900	03/01/30	4.00	%	(o)
Riverpark at Harrison I, L.L.C./ Riverpark at Harrison	141	units	36.00	%			4,420			4,744			23,400	06/27/16	L+2.35	%	(p)
Capitol Place Mezz LLC / Station Townhouses	378	units	50.00	%			48,610			49,327			91,434	07/01/33	4.82	%	(q)
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside	763	units	85.00	%			77,564			34,954			-	08/01/29	5.197	%	(r)
RoseGarden Monaco, L.L.C./ San Remo Land	250	potential units	41.67	%			1,310			1,283			-	-	-
Grand Jersey Waterfront URA, L.L.C./ Liberty Landing	850	potential units	50.00	%			337			337			-	-	-
Office
Red Bank Corporate Plaza, L.L.C./ Red Bank	92,878	sf	50.00	%			4,201			3,963			15,496	05/17/16	L+3.00	%	(s)
12 Vreeland Associates, L.L.C./ 12 Vreeland Road	139,750	sf	50.00	%			5,692			5,620			13,278	07/01/23	2.87	%
BNES Associates III / Offices at Crystal Lake	106,345	sf	31.25	%			2,114			1,993			6,448	11/01/23	4.76	%
Hillsborough 206 Holdings, L.L.C./ Hillsborough 206	160,000	sf	50.00	%			1,962			1,962			-	-	-
KPG-P 100 IMW JV, LLC / 100 Independence Mall West	339,615	sf	33.33	%			37			-			61,500	09/09/16	L+7.00	%	(t)
Keystone-Penn	1,842,820	sf	(u)				-			-			207,345	(v)	(v)
Keystone-TriState	1,266,384	sf	(w)				4,549			6,140			206,272	(x)	(x)
KPG-MCG Curtis JV, L.L.C./ Curtis Center  (y)	885,000	sf	50.00	%			57,382			59,911			(z)	(z)	(z)
Other
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)	1,225,000	sf	50.00	%			3,867			4,022			-	-	-
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial  (b)	30,745	sf	20.00	%			1,793			1,828			-	-	-
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson	350	rooms	50.00	%			(aa)			(aa)			64,968	(ab)	(ab)
Stamford SM LLC / Senior Mezzanine Loan  (ac)	n/a	n/a	80.00	%			-			-			-	-	-
Other (ad)							410			907			-	-	-
Totals:						$	284,507		$	247,468		$	1,719,141