Mack Cali Realty L P 10Q 2023 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13274 Veris Residential, Inc.

Commission File Number: 333-57103 Veris Residential, L.P.

Veris Residential, Inc.

Veris Residential, L.P.

(Exact name of registrant as specified in its charter)


Maryland (Veris Residential, Inc.)						22-3305147 (Veris Residential, Inc.)
Delaware (Veris Residential, L.P.)						22-3315804 (Veris Residential, L.P.)
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Harborside 3, 210 Hudson St., Ste. 400, Jersey City, New Jersey						07311
(Address of principal executive offices)						(Zip Code)

(732) 590-1010

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Veris Residential, Inc.:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VRE	New York Stock Exchange

Veris Residential, L.P.:

None

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.


Veris Residential, Inc.			Yes ☒ No ☐
Veris Residential, L.P.			Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).


Veris Residential, Inc.			Yes ☒ No ☐
Veris Residential, L.P.			Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Veris Residential, Inc.:

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging Growth Company ☐

Veris Residential, L.P.:

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Veris Residential, Inc. ☐

Veris Residential, L.P. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Veris Residential, Inc.			Yes ☐ No ☒
Veris Residential, L.P.			Yes ☐ No ☒

As of October 23, 2023, there were 92,221,526 shares of Veris Residential, Inc.’s Common Stock, par value $0.01 per share, outstanding.

Veris Residential, L.P. does not have any class of common equity that is registered pursuant to Section 12 of the Exchange Act.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2023 of Veris Residential, Inc. and Veris Residential, L.P. Unless stated otherwise or the context otherwise requires, references to the “Operating Partnership” mean Veris Residential, L.P., a Delaware limited partnership, and references to the “General Partner” mean Veris Residential, Inc., a Maryland corporation and real estate investment trust (“REIT”), and its subsidiaries, including the Operating Partnership. References to the “Company,” “we,” “us” and “our” mean collectively the General Partner, the Operating Partnership and those entities/subsidiaries consolidated by the General Partner.

The Operating Partnership conducts the business of providing management, leasing, acquisition, development and tenant-related services for its General Partner. The Operating Partnership, through its operating divisions and subsidiaries, including the Veris property-owning partnerships and limited liability companies is the entity through which all of the General Partner’s operations are conducted. The General Partner is the sole general partner of the Operating Partnership and has exclusive control of the Operating Partnership’s day-to-day management.

As of September 30, 2023, the General Partner owned an approximate 91.4 percent common unit interest in the Operating Partnership. The remaining approximate 8.6 percent common unit interest is owned by limited partners. The limited partners of the Operating Partnership are (1) persons who contributed their interests in properties to the Operating Partnership in exchange for common units (each, a “Common Unit”) or preferred units of limited partnership interest in the Operating Partnership or (2) recipients of long-term incentive plan units of the Operating Partnership pursuant to the General Partner’s executive compensation plans.

A Common Unit of the Operating Partnership and a share of common stock of the General Partner (the “Common Stock”) have substantially the same economic characteristics in as much as they effectively share equally in the net income or loss of the Company. The General Partner owns a number of common units of the Operating Partnership equal to the number of issued and outstanding shares of the General Partner’s common stock. Common unitholders (other than the General Partner) have the right to redeem their Common Units, subject to certain restrictions under the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Partnership Agreement”) and agreed upon at the time of issuance of the units that may restrict such right for a period of time, generally one year from issuance. The redemption is required to be satisfied in shares of Common Stock of the General Partner, cash, or a combination thereof, calculated as follows: one share of the General Partner’s Common Stock, or cash equal to the fair market value of a share of the General Partner’s Common Stock at the time of redemption, for each Common Unit. The General Partner, in its sole discretion, determines the form of redemption of Common Units (i.e., whether a common unitholder receives Common Stock of the General Partner, cash, or any combination thereof). If the General Partner elects to satisfy the redemption with shares of Common Stock of the General Partner as opposed to cash, the General Partner is obligated to issue shares of its Common Stock to the redeeming unitholder. Regardless of the rights described above, the common unitholders may not put their units for cash to the Company or the General Partner under any circumstances. With each such redemption, the General Partner’s percentage ownership in the Operating Partnership will increase. In addition, whenever the General Partner issues shares of its Common Stock other than to acquire Common Units, the General Partner must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must issue to the General Partner an equivalent number of Common Units. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the quarterly reports on Form 10-Q of the General Partner and the Operating Partnership into this single report provides the following benefits:

•enhance investors’ understanding of the General Partner and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business of the Company;

•eliminate duplicative disclosure and provide a more streamlined and readable presentation because a substantial portion of the disclosure applies to both the General Partner and the Operating Partnership; and

•create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between the General Partner and the Operating Partnership in the context of how they operate as a consolidated company. The financial results of the Operating Partnership are consolidated into the financial statements of the General Partner. The General Partner does not have any significant assets, liabilities or operations, other than its interests in the Operating Partnership, nor does the Operating Partnership have employees of its own. The Operating Partnership, not the General Partner, generally executes all

significant business relationships other than transactions involving the securities of the General Partner. The Operating Partnership holds substantially all of the assets of the General Partner, including ownership interests in joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by the General Partner, which are contributed to the capital of the Operating Partnership in consideration of common or preferred units in the Operating Partnership, as applicable, the Operating Partnership generates all remaining capital required by the Company’s business. These sources include working capital, net cash provided by operating activities, borrowings under the Company’s revolving credit facility, the issuance of secured and unsecured debt and equity securities, and proceeds received from the disposition of properties and joint ventures.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the General Partner and the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements as is the General Partner’s interest in the Operating Partnership. The noncontrolling interests in the Operating Partnership’s financial statements comprise the interests of unaffiliated partners in various consolidated partnerships and development joint venture partners. The noncontrolling interests in the General Partner’s financial statements are the same noncontrolling interests at the Operating Partnership’s level and include limited partners of the Operating Partnership. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at the General Partner and Operating Partnership levels.

To help investors better understand the key differences between the General Partner and the Operating Partnership, certain information for the General Partner and the Operating Partnership in this report has been separated, as set forth below:

•Item 1. Financial Statements (unaudited), which includes the following specific disclosures for Veris Residential, Inc. and Veris Residential, L.P.:

•Note 2. Significant Accounting Policies, where applicable;

•Note 14. Redeemable Noncontrolling Interests;

•Note 15. Veris Residential, Inc.’s Stockholders’ Equity and Veris Residential, L.P.’s Partners’ Capital;

•Note 16. Noncontrolling Interests in Subsidiaries; and

•Note 17. Segment Reporting, where applicable.

•Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of the General Partner and the Operating Partnership in order to establish that the requisite certifications have been made and that the General Partner and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

FORM 10-Q

INDEX


			Page
Part I	Financial Information
	Item 1.	Financial Statements (unaudited):
		Veris Residential, Inc.
		Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	6
		Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	7
		Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022	8
		Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2023 and 2022	9
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	11
		Veris Residential, L.P.
		Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022	12
		Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022	13
		Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2023 and 2022	14
		Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2023 and 2022	15
		Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	17
		Veris Residential, Inc. and Veris Residential, L.P.
		Notes to Consolidated Financial Statements	18
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	52
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	67
	Item 4.	Controls and Procedures	69
Part II	Other Information
		Veris Residential, Inc. and Veris Residential, L.P.
	Item 1.	Legal Proceedings	70
	Item 1A.	Risk Factors	70
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
	Item 3.	Defaults Upon Senior Securities	70
	Item 4.	Mine Safety Disclosures	70
	Item 5.	Other Information	70
	Item 6.	Exhibits	70
Exhibit Index			71
Signatures			72

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

Part I – Financial Information

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of operations, of comprehensive income (loss), of changes in equity, and of cash flows and related notes thereto, have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. The financial statements reflect all adjustments consisting only of normal, recurring adjustments, which are, in the opinion of management, necessary for a fair statement for the interim periods.

The aforementioned financial statements should be read in conjunction with the notes to the aforementioned financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in Veris Residential, Inc.’s and Veris Residential, L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The results of operations for the three and nine month periods ended September 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited)


ASSETS	September 30, 2023		December 31, 2022
Rental property
Land and leasehold interests	$	476,207	$	492,204
Buildings and improvements	2,841,573		3,332,315
Tenant improvements	40,846		122,509
Furniture, fixtures and equipment	101,793		99,094
	3,460,419		4,046,122
Less – accumulated depreciation and amortization	(460,664)		(631,910)
	2,999,755		3,414,212
Real estate held for sale, net	99,183		193,933
Net investment in rental property	3,098,938		3,608,145
Cash and cash equivalents	17,274		26,782
Restricted cash	23,603		20,867
Investments in unconsolidated joint ventures	119,830		126,158
Unbilled rents receivable, net	5,626		39,734
Deferred charges and other assets, net	60,764		96,162
Accounts receivable	3,855		2,920

Total assets	$	3,329,890	$	3,920,768
LIABILITIES AND EQUITY
Revolving credit facility and term loans	$	59,067	$	—
Mortgages, loans payable and other obligations, net	1,853,799		1,903,977

Dividends and distributions payable	5,221		110
Accounts payable, accrued expenses and other liabilities	57,737		72,041
Rents received in advance and security deposits	15,916		22,941
Accrued interest payable	6,845		7,131
Total liabilities	1,998,585		2,006,200

Commitments and contingencies

Redeemable noncontrolling interests	40,231		515,231

Equity:
Veris Residential, Inc. stockholders’ equity:
Common stock, $0.01 par value, 190,000,000 shares authorized, 92,217,463 and 91,141,649 shares outstanding	920		911
Additional paid-in capital	2,551,137		2,532,182
Dividends in excess of net earnings	(1,408,313)		(1,301,385)
Accumulated other comprehensive income	3,866		3,977
Total Veris Residential, Inc. stockholders’ equity	1,147,610		1,235,685

Noncontrolling interests in subsidiaries:
Operating Partnership	108,214		126,109
Consolidated joint ventures	35,250		37,543
Total noncontrolling interests in subsidiaries	143,464		163,652

Total equity	1,291,074		1,399,337

Total liabilities and equity	$	3,329,890	$	3,920,768

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
REVENUES	2023		2022		2023		2022
Revenue from leases	$	64,214	$	54,764	$	185,961	$	146,020
Real estate services	1,230		886		2,785		2,693
Parking income	4,674		4,083		13,574		11,659

Other income	1,364		3,402		4,623		5,892
Total revenues	71,482		63,135		206,943		166,264

EXPENSES
Real estate taxes	10,909		10,463		29,733		26,664
Utilities	2,746		2,483		7,629		6,730
Operating services	15,349		13,468		41,557		39,354
Real estate services expenses	3,533		2,752		9,864		8,035
General and administrative	14,620		12,818		34,487		43,793
Transaction related costs	2,704		3		7,051		1,348
Depreciation and amortization	23,212		22,359		70,543		61,815

Land and other impairments, net	—		2,535		3,396		9,367
Total expenses	73,073		66,881		204,260		197,106

OTHER (EXPENSE) INCOME
Interest expense	(23,715)		(18,819)		(67,422)		(45,167)
Interest cost of mandatorily redeemable noncontrolling interests	(36,392)		—		(49,782)		—
Interest and other investment income	1,240		280		5,283		627
Equity in earnings (losses) of unconsolidated joint ventures	210		(304)		2,843		1,847

(Loss) gain on disposition of developable land	—		—		(23)		57,747
Loss from extinguishment of debt, net	(1,046)		—		(3,702)		(129)
Other (expense) income, net	(57)		—		2,794		—
Total other (expense) income, net	(59,760)		(18,843)		(110,009)		14,925
Loss from continuing operations before income tax expense	(61,351)		(22,589)		(107,326)		(15,917)
Provision for income taxes	(293)		—		(293)		—
Loss from continuing operations after income tax expense	(61,644)		(22,589)		(107,619)		(15,917)

Discontinued operations:
Income (loss) from discontinued operations	971		(78,213)		3,290		(52,158)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net	423		(5,100)		(2,286)		(7,704)
Total discontinued operations, net	1,394		(83,313)		1,004		(59,862)
Net loss	(60,250)		(105,902)		(106,615)		(75,779)
Noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Noncontrolling interests in Operating Partnership of income from continuing operations	5,322		2,613		10,016		2,929
Noncontrolling interests in Operating Partnership in discontinued operations	(121)		7,710		(97)		5,597
Redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Net loss available to common shareholders	$	(54,807)	$	(101,218)	$	(102,214)	$	(83,937)

Basic earnings per common share:
Loss from continuing operations	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Discontinued operations	$	0.01	$	(0.83)	$	0.01	$	(0.60)
Net loss available to common shareholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)

Diluted earnings per common share:
Loss from continuing operations	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Discontinued operations	$	0.01	$	(0.83)	$	0.01	$	(0.60)
Net loss available to common shareholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)

Basic weighted average shares outstanding	92,177		91,087		91,762		91,022

Diluted weighted average shares outstanding	100,925		100,378		100,770		100,215

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Net loss	$	(60,250)	$	(105,902)	$	(106,615)	$	(75,779)
Other comprehensive income (loss):
Net unrealized (loss) gain on derivative instruments for interest rate swaps	(714)		2,577		(123)		4,699
Comprehensive loss	$	(60,964)	$	(103,325)	$	(106,738)	$	(71,080)
Comprehensive loss attributable to noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Comprehensive income attributable to redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Comprehensive loss attributable to noncontrolling interests in Operating Partnership	5,263		10,084		9,931		8,097
Comprehensive loss attributable to common shareholders	$	(55,459)	$	(98,880)	$	(102,325)	$	(79,667)

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Three Months Ended September 30, 2023	Shares	Par Value
Balance at July 1, 2023	92,041	918	$	2,540,309	$	(1,348,792)	$	4,518	$	151,065	$	1,348,018
Net loss	—	—	—		(54,807)		—		(5,443)		(60,250)
Common stock dividends	—	—	—		(4,714)		—		—		(4,714)
Unit distributions	—	—	—		—		—		(435)		(435)
Redeemable noncontrolling interests	—	—	—		—		—		(350)		(350)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		84		84
Redemption of common units for common stock	171	2	2,295		—		—		(2,297)		—

Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	1		—		—		—		1
Directors' deferred compensation plan	—	—	99		—		—		—		99
Stock compensation	9	—	9,366		—		—		—		9,366
Cancellation of restricted shares	(4)	—	(31)		—		—		—		(31)
Other comprehensive loss	—	—	—		—		(652)		(62)		(714)
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(902)		—		—		902		—
Balance at September 30, 2023	92,217	920	$	2,551,137	$	(1,408,313)	$	3,866	$	143,464	$	1,291,074


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Three Months Ended September 30, 2022	Shares	Par Value
Balance at July 1, 2022	91,063	911	$	2,525,466	$	(1,232,038)	$	1,941	$	170,893	$	1,467,173
Net loss	—	—	—		(101,218)		—		(4,684)		(105,902)


Redeemable noncontrolling interests	—	—	1,279		—		—		(6,234)		(4,955)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		6		6


Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	(4)		—		—		—		(4)
Directors' deferred compensation plan	—	—	110		—		—		—		110
Stock compensation	31	—	2,790		—		—		423		3,213
Cancellation of restricted shares	(10)	—	(156)		—		—		—		(156)
Other comprehensive income	—	—	—		—		2,338		239		2,577
Rebalancing of ownership percentage between parent and subsidiaries	—	—	160		—		—		(160)		—
Balance at September 30, 2022	91,084	911	$	2,529,645	$	(1,333,256)	$	4,279	$	160,483	$	1,362,062

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Nine Months Ended September 30, 2023	Shares	Par Value
Balance at January 1, 2023	91,142	911	$	2,532,182	$	(1,301,385)	$	3,977	$	163,652	$	1,399,337
Net loss	—	—	—		(102,214)		—		(4,401)		(106,615)
Common stock dividends	—	—	—		(4,714)		—		—		(4,714)
Unit distributions	—	—	—		—		—		(435)		(435)
Redeemable noncontrolling interests	—	—	(4,516)		—		—		(7,794)		(12,310)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		(478)		(478)
Redemption of common units for common stock	821	9	11,339		—		—		(11,348)		—
Redemption of common units	—	—	—		—		—		(94)		(94)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	3		—		—		—		3
Directors' deferred compensation plan	21	—	295		—		—		—		295
Stock compensation	268	—	16,218		—		—		487		16,705
Cancellation of restricted shares	(35)	—	(497)		—		—		—		(497)
Other comprehensive loss	—	—	—		—		(111)		(12)		(123)
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(3,887)		—		—		3,887		—
Balance at September 30, 2023	92,217	920	$	2,551,137	$	(1,408,313)	$	3,866	$	143,464	$	1,291,074


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Nine Months Ended September 30, 2022	Shares	Par Value
Balance at January 1, 2022	90,948	909	$	2,530,383	$	(1,249,319)	$	9	$	167,436	$	1,449,418
Net (loss) income	—	—	—		(83,937)		—		8,158		(75,779)

Unit distributions	—	—	—		—		—		218		218
Redeemable noncontrolling interests	—	—	(5,187)		—		—		(19,688)		(24,875)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		24		24
Redemption of common units for common stock	11	—	161		—		—		(161)		—
Redemption of common units	—	—	—		—		—		(1,801)		(1,801)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	2	—	23		—		—		—		23
Directors' deferred compensation plan	—	—	330		—		—		—		330
Stock compensation	174	2	7,254		—		—		3,401		10,657
Cancellation of restricted shares	(51)	—	(852)		—		—		—		(852)
Other comprehensive income	—	—	—		—		4,270		429		4,699
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(2,467)		—		—		2,467		—
Balance at September 30, 2022	91,084	911	$	2,529,645	$	(1,333,256)	$	4,279	$	160,483	$	1,362,062

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)


	Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2023		2022
Net loss	$	(106,615)	$	(75,779)
Net (income) loss from discontinued operations	(1,004)		59,862
Net loss from continuing operations	(107,619)		(15,917)
Adjustments to reconcile net income (loss) to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets	70,489		61,828
Amortization of deferred compensation stock units	295		330
Amortization of stock compensation	16,705		10,657
Amortization of deferred financing costs	3,161		3,228

Equity in earnings of unconsolidated joint ventures	(2,843)		(1,847)
Distributions of cumulative earnings from unconsolidated joint ventures	—		13


Loss (gain) on disposition of developable land	23		(57,747)


Land and other impairments, net	3,396		9,367
Loss from extinguishment of debt	3,702		129
Gain on insurance proceeds	(2,794)		—

Interest cost of mandatorily redeemable noncontrolling interests	49,782		—
Changes in operating assets and liabilities:
Decrease in unbilled rents receivable, net	2,737		3,066
Increase in deferred charges and other assets	(1,087)		(7,283)
Decrease (increase) in accounts receivable, net	97		(128)
(Decrease) increase in accounts payable, accrued expenses and other liabilities	(4,842)		1,989
Increase in rents received in advance and security deposits	828		2,738
Increase in accrued interest payable	40		587
Net cash flows provided by operating activities - continuing operations	32,070		11,010
Net cash flows provided by operating activities - discontinued operations	1,202		48,724

Net cash provided by operating activities	$	33,272	$	59,734

CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles	$	—	$	(130,500)
Rental property additions, improvements and other costs	(9,815)		(14,198)
Development of rental property and other related costs	(6,959)		(42,480)
Proceeds from the sales of rental property	7,784		127,020

Repayment of notes receivable	1,280		2,172

Investment in unconsolidated joint ventures	(180)		(147)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	9,351		10,361
Proceeds from insurance settlements	3,735		—
Other investing activities	750		—
Net cash provided by (used in) investing activities - continuing operations	5,946		(47,772)
Net cash provided by investing activities - discontinued operations	488,625		167,442

Net cash provided by investing activities	$	494,571	$	119,670

CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility	$	81,000	$	89,000
Repayment of revolving credit facility	(63,000)		(128,000)
Borrowings from term loans	115,000		—
Repayments of term loans	(72,000)		—

Proceeds from mortgages and loans payable	399,561		154,720
Repayment of mortgages, loans payable and other obligations	(441,198)		(240,395)
Redemption of redeemable noncontrolling interests, net	(520,388)		(12,000)
Payment of early debt extinguishment costs	(255)		(5,140)
Common unit redemptions	(94)		(2,653)
Payment of financing costs	(16,089)		(3,026)
Contribution from noncontrolling interests	84		24
Distributions to redeemable noncontrolling interests	(16,704)		(19,274)
Payment of common dividends and distributions	(38)		(56)
Other financing activities	(494)		—
Net cash used in financing activities	$	(534,615)	$	(166,800)

Net (decrease) increase in cash and cash equivalents	$	(6,772)	$	12,604
Cash, cash equivalents and restricted cash, beginning of period (1)	47,649		51,455

Cash, cash equivalents and restricted cash, end of period (2)	$	40,877	$	64,059

(1)Includes Restricted Cash of $20,867 and $19,701 as of December 31, 2022 and 2021, respectively.

(2)Includes Restricted Cash of $23,603 and $25,702 as of September 30, 2023 and 2022, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except per unit amounts) (unaudited)


ASSETS	September 30, 2023		December 31, 2022
Rental property
Land and leasehold interests	$	476,207	$	492,204
Buildings and improvements	2,841,573		3,332,315
Tenant improvements	40,846		122,509
Furniture, fixtures and equipment	101,793		99,094
	3,460,419		4,046,122
Less – accumulated depreciation and amortization	(460,664)		(631,910)
	2,999,755		3,414,212
Real estate held for sale, net	99,183		193,933
Net investment in rental property	3,098,938		3,608,145
Cash and cash equivalents	17,274		26,782
Restricted cash	23,603		20,867
Investments in unconsolidated joint ventures	119,830		126,158
Unbilled rents receivable, net	5,626		39,734
Deferred charges and other assets, net	60,764		96,162
Accounts receivable	3,855		2,920

Total assets	$	3,329,890	$	3,920,768
LIABILITIES AND EQUITY
Revolving credit facility and term loans	$	59,067	$	—
Mortgages, loans payable and other obligations, net	1,853,799		1,903,977

Distributions payable	5,221		110
Accounts payable, accrued expenses and other liabilities	57,737		72,041
Rents received in advance and security deposits	15,916		22,941
Accrued interest payable	6,845		7,131
Total liabilities	1,998,585		2,006,200

Commitments and contingencies

Redeemable noncontrolling interests	40,231		515,231

Partners’ Capital:
General Partner, 92,217,463 and 91,141,649 common units outstanding	1,079,858		1,163,935
Limited partners, 8,695,622 and 9,301,521 common units/LTIPs outstanding	172,100		193,882
Accumulated other comprehensive income	3,866		3,977
Total Veris Residential, L.P. partners’ capital	1,255,824		1,361,794

Noncontrolling interests in consolidated joint ventures	35,250		37,543

Total equity	1,291,074		1,399,337

Total liabilities and equity	$	3,329,890	$	3,920,768

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit amounts) (unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
REVENUES	2023		2022		2023		2022
Revenue from leases	$	64,214	$	54,764	$	185,961	$	146,020
Real estate services	1,230		886		2,785		2,693
Parking income	4,674		4,083		13,574		11,659

Other income	1,364		3,402		4,623		5,892
Total revenues	71,482		63,135		206,943		166,264
EXPENSES
Real estate taxes	10,909		10,463		29,733		26,664
Utilities	2,746		2,483		7,629		6,730
Operating services	15,349		13,468		41,557		39,354
Real estate services expenses	3,533		2,752		9,864		8,035
General and administrative	14,620		12,818		34,487		43,793
Transaction related costs	2,704		3		7,051		1,348
Depreciation and amortization	23,212		22,359		70,543		61,815

Land and other impairments, net	—		2,535		3,396		9,367
Total expenses	73,073		66,881		204,260		197,106
OTHER (EXPENSE) INCOME
Interest expense	(23,715)		(18,819)		(67,422)		(45,167)
Interest cost of mandatorily redeemable noncontrolling interests	(36,392)		—		(49,782)		—
Interest and other investment income	1,240		280		5,283		627
Equity in earnings (losses) of unconsolidated joint ventures	210		(304)		2,843		1,847

(Loss) gain on disposition of developable land	—		—		(23)		57,747

Loss from extinguishment of debt, net	(1,046)		—		(3,702)		(129)
Other (expense) income, net	(57)		—		2,794		—
Total other (expense) income, net	(59,760)		(18,843)		(110,009)		14,925
Loss from continuing operations before income tax expense	(61,351)		(22,589)		(107,326)		(15,917)
Provision for income taxes	(293)		—		(293)		—
Loss from continuing operations after income tax expense	(61,644)		(22,589)		(107,619)		(15,917)

Discontinued operations:
Income (loss) from discontinued operations	971		(78,213)		3,290		(52,158)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net	423		(5,100)		(2,286)		(7,704)
Total discontinued operations, net	1,394		(83,313)		1,004		(59,862)
Net loss	(60,250)		(105,902)		(106,615)		(75,779)
Noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Net loss available to common unitholders	$	(60,008)	$	(111,541)	$	(112,133)	$	(92,463)
Basic earnings per common unit:
Loss from continuing operations	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Discontinued operations	0.01		(0.83)		0.01		(0.60)
Net loss available to common unitholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)
Diluted earnings per common unit:
Loss from continuing operations	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Discontinued operations	0.01		(0.83)		0.01		(0.60)
Net loss available to common unitholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)

Basic weighted average units outstanding	100,925		100,378		100,770		100,215

Diluted weighted average units outstanding	100,925		100,378		100,770		100,215

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Net loss	$	(60,250)	$	(105,902)	$	(106,615)	$	(75,779)
Other comprehensive income (loss):
Net unrealized (loss) gain on derivative instruments for interest rate swaps	(714)		2,577		(123)		4,699
Comprehensive loss	$	(60,964)	$	(103,325)	$	(106,738)	$	(71,080)
Comprehensive loss attributable to noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Comprehensive income attributable to redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Comprehensive loss attributable to common unitholders	$	(60,722)	$	(108,964)	$	(112,256)	$	(87,764)

The accompanying notes are an integral part of these consolidated financial statements

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


For the Three Months Ended September 30, 2023	General Partner Common Units	Limited Partner Common Units/ Vested LTIP Units	Common Unitholders		Limited Partner Common Unitholders		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest in Consolidated Joint Ventures		Total Equity
Balance at July 1, 2023	92,041	8,867	$	1,127,647	$	180,095	$	4,518	$	35,758	$	1,348,018
Net loss	—	—	(54,807)		(5,201)		—		(242)		(60,250)
Unit distributions	—	—	(4,714)		(435)		—		—		(5,149)
Redeemable noncontrolling interests	—	—	—		—		—		(350)		(350)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		84		84

Redemption of limited partners common units for common stock	171	(171)	2,297		(2,297)		—		—		—

Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	1		—		—		—		1
Directors' deferred compensation plan	—	—	99		—		—		—		99
Other comprehensive loss	—	—	—		(62)		(652)		—		(714)
Stock compensation	9	—	9,366		—		—		—		9,366
Cancellation of common stock	(4)	—	(31)		—		—		—		(31)
Balance at September 30, 2023	92,217	8,696	$	1,079,858	$	172,100	$	3,866	$	35,250	$	1,291,074


For the Three Months Ended September 30, 2022	General Partner Common Units	Limited Partner Common Units/ Vested LTIP Units	Common Unitholders		Limited Partner Common Unitholders		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest in Consolidated Joint Ventures		Total Equity
Balance at July 1, 2022	91,063	9,290	$	1,226,783	$	199,806	$	1,941	$	38,643	$	1,467,173
Net (loss) income	—	—	(101,218)		(10,323)		—		5,639		(105,902)

Redeemable noncontrolling interests	—	—	1,279		131		—		(6,365)		(4,955)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		6		6



Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	(4)		—		—		—		(4)
Directors' deferred compensation plan	—	—	110		—		—		—		110
Other comprehensive income	—	—	—		239		2,338		—		2,577
Stock compensation	31	—	2,790		423		—		—		3,213
Cancellation of common stock	(10)	—	(156)		—		—		—		(156)



Balance at June 30, 2022	91,084	9,290	$	1,129,584	$	190,276	$	4,279	$	37,923	$	1,362,062

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


For the Nine Months Ended September 30, 2023	General Partner Common Units	Limited Partner Common Units/ Vested LTIP Units	Common Unitholders		Limited Partner Common Unitholders		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest in Consolidated Joint Ventures		Total Equity
Balance at January 1, 2023	91,142	9,301	$	1,163,935	$	193,882	$	3,977	$	37,543	$	1,399,337
Net (loss) income	—	—	(102,214)		(9,919)		—		5,518		(106,615)
Unit distributions	—	—	(4,714)		(435)		—		—		(5,149)
Redeemable noncontrolling interests	—	—	(4,516)		(461)		—		(7,333)		(12,310)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		(478)		(478)
Vested LTIP units	—	221	—		—		—		—		—
Redemption of limited partners common units for shares of general partner common units	821	(821)	11,348		(11,348)		—		—		—
Redemption of limited partner common units	—	(5)	—		(94)		—		—		(94)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	3		—		—		—		3
Directors' deferred compensation plan	21	—	295		—		—		—		295
Other comprehensive income	—	—	—		(12)		(111)		—		(123)
Stock compensation	268	—	16,218		487		—		—		16,705
Cancellation of restricted shares	(35)	—	(497)		—		—		—		(497)
Balance at September 30, 2023	92,217	8,696	$	1,079,858	$	172,100	$	3,866	$	35,250	$	1,291,074


For the Nine Months Ended September 30, 2022	General Partner Common Units	Limited Partner Common Units/ Vested LTIP Units	Common Unitholders		Limited Partner Common Unitholders		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interest in Consolidated Joint Ventures		Total Equity
Balance at January 1, 2022	90,948	9,013	$	1,211,790	$	197,236	$	9	$	40,383	$	1,449,418
Net (loss) income	—	—	(83,937)		(8,526)		—		16,684		(75,779)
Unit distributions	—	—	—		218		—		—		218
Redeemable noncontrolling interests	—	—	(5,187)		(520)		—		(19,168)		(24,875)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		24		24
Vested LTIP units	—	397	—		—		—		—		—
Redemption of limited partners common units for shares of general partner common units	11	(11)	161		(161)		—		—		—
Redemption of limited partners common units	—	(109)	—		(1,801)		—		—		(1,801)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	2	—	23		—		—		—		23
Directors' deferred compensation plan	—	—	330		—		—		—		330
Other comprehensive income	—	—	—		429		4,270		—		4,699
Stock compensation	174	—	7,256		3,401		—		—		10,657
Cancellation of restricted shares	(51)	—	(852)		—		—		—		(852)


Balance at September 30, 2022	91,084	9,290	$	1,129,584	$	190,276	$	4,279	$	37,923	$	1,362,062

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)


	Nine Months Ended September 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2023		2022
Net loss	$	(106,615)	$	(75,779)
Net (income) loss from discontinued operations	(1,004)		59,862
Net loss from continuing operations	(107,619)		(15,917)
Adjustments to reconcile net income (loss) to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets	70,489		61,828
Amortization of deferred compensation stock units	295		330
Amortization of stock compensation	16,705		10,657
Amortization of deferred financing costs	3,161		3,228

Equity in earnings of unconsolidated joint ventures	(2,843)		(1,847)
Distributions of cumulative earnings from unconsolidated joint ventures	—		13


Loss (gain) on disposition of developable land	23		(57,747)


Land and other impairments, net	3,396		9,367
Loss from extinguishment of debt	3,702		129

Gain on insurance proceeds	(2,794)		—
Interest cost of mandatorily redeemable noncontrolling interests	49,782		—
Changes in operating assets and liabilities:
Decrease in unbilled rents receivable, net	2,737		3,066
Increase in deferred charges and other assets	(1,087)		(7,283)
Decrease (increase) in accounts receivable, net	97		(128)
(Decrease) increase in accounts payable, accrued expenses and other liabilities	(4,842)		1,989
Increase in rents received in advance and security deposits	828		2,738
Increase in accrued interest payable	40		587
Net cash flows provided by operating activities - continuing operations	32,070		11,010
Net cash flows provided by operating activities - discontinued operations	1,202		48,724

Net cash provided by operating activities	$	33,272	$	59,734

CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles	$	—	$	(130,500)
Rental property additions, improvements and other costs	(9,815)		(14,198)
Development of rental property and other related costs	(6,959)		(42,480)
Proceeds from the sales of rental property	7,784		127,020

Repayment of notes receivable	1,280		2,172

Investment in unconsolidated joint ventures	(180)		(147)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	9,351		10,361
Proceeds from insurance settlements	3,735		—
Other investing activities	750		—
Net cash provided by (used in) investing activities - continuing operations	5,946		(47,772)
Net cash provided by investing activities - discontinued operations	488,625		167,442

Net cash provided by investing activities	$	494,571	$	119,670

CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility	$	81,000	$	89,000
Repayment of revolving credit facility	(63,000)		(128,000)
Borrowings from term loans	115,000		—
Repayments of term loans	(72,000)		—

Proceeds from mortgages and loans payable	399,561		154,720
Repayment of mortgages, loans payable and other obligations	(441,198)		(240,395)
Redemption of redeemable noncontrolling interests, net	(520,388)		(12,000)
Payment of early debt extinguishment costs	(255)		(5,140)
Common unit redemptions	(94)		(2,653)
Payment of financing costs	(16,089)		(3,026)
Contribution from noncontrolling interests	84		24
Distributions to redeemable noncontrolling interests	(16,704)		(19,274)
Payment of common dividends and distributions	(38)		(56)
Other financing activities	(494)		—
Net cash used in financing activities	$	(534,615)	$	(166,800)

Net (decrease) increase in cash and cash equivalents	$	(6,772)	$	12,604
Cash, cash equivalents and restricted cash, beginning of period (1)	47,649		51,455

Cash, cash equivalents and restricted cash, end of period (2)	$	40,877	$	64,059

(1)Includes Restricted Cash of $20,867 and $19,701 as of December 31, 2022 and 2021, respectively.

(2)Includes Restricted Cash of $23,603 and $25,702 as of September 30, 2023 and 2022, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC., VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

Veris Residential, Inc., a Maryland corporation, together with its subsidiaries (collectively, the “General Partner”) is a fully-integrated self-administered, self-managed real estate investment trust (“REIT”). 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 and 90.7 percent common unit interest in the Operating Partnership as of September 30, 2023 and December 31, 2022, respectively.

The Company develops, owns and operates predominantly multifamily rental properties located primarily in the Northeast, as well as a portfolio of non-strategic commercial properties and land parcels. The Company recently completed its transition 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.

Unless stated otherwise or the context requires, the “Company” refers to the General Partner and its subsidiaries, including the Operating Partnership and its subsidiaries.

As of September 30, 2023, the Company owned or had interests in 24 multifamily rental properties as well as non-core assets comprised of two office properties and four parking/retail properties. The Properties are comprised of: (a) 22 wholly-owned or Company-controlled properties comprised of 17 multifamily properties and five 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.

On July 25, 2023, Veris Residential Trust ("VRT") and the Operating Partnership entered into a REIT Interest and Partnership Interest Purchase Agreement (the “Rockpoint Purchase Agreement”) with certain affiliates of Rockpoint Group, L.L.C. (Rockpoint Group, L.L.C. and its affiliates, collectively, “Rockpoint") pursuant to which VRT and the Operating Partnership acquired from Rockpoint all of the Preferred Units that constituted the Put/Call Interests for an aggregate purchase price of approximately $520 million (the "Rockpoint Redemption”). The Rockpoint Redemption was completed concurrently with the signing of the agreement.

BASIS OF PRESENTATION

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. See Note 2 to the 2022 10-K: Significant Accounting Policies – Investments in Unconsolidated Joint Ventures, for the Company’s treatment of unconsolidated joint venture interests. Intercompany accounts and transactions have been eliminated.

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. 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. The Company consolidates VIEs in which it is considered to be the primary beneficiary. 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.

Under ASC 810, the Operating Partnership is considered a variable interest entity of the parent company, Veris Residential, Inc. As the Operating Partnership is already consolidated in the balance sheets of Veris Residential, Inc., this has no impact on the consolidated financial statements of Veris Residential, Inc.

As of September 30, 2023 and December 31, 2022, the Company’s investments in consolidated real estate joint ventures, which are variable interest entities in which the Company is deemed to be the primary beneficiary, other than Veris Residential Partners, L.P. (See Note 14: Redeemable Noncontrolling Interests – Rockpoint Transaction, the Rockpoint interests have been fully redeemed as of September 30, 2023), have total real estate assets of $452.4 million and $468.1 million, respectively, other assets of $6.4 million and $6.0 million, respectively, mortgages of $285.3 million and $285.5 million, respectively, and other liabilities of $15.0 million and $17.3 million, respectively.

The financial statements have been prepared in conformity with GAAP. 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. 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. 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.

During the third quarter of 2023, the Company identified and recorded out-of-period adjustments related to stock-based compensation expenses incurred in prior interim periods and years. These adjustments were deemed not material to our consolidated financial statements for any periods presented resulting in an increase of $2.8 million and $0.8 million in General and Administrative and Operating Services, respectively, with a corresponding increase of Additional paid-in capital.

In the consolidated statement of cash flows, for the period ended September 30, 2022, the Company recorded a $9.5 million adjustment from Increase in accounts payable, accrued expenses and other liabilities in operating cash flows to Proceeds from the sales of rental property and developable land in investing activities, to properly present good faith deposits received for an asset for sale under binding contracts. The Company concluded that this was not material to any periods. The adjustment has no impact on the other consolidated financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

These financial statements should be read in conjunction with the Company’s audited Annual Report on Form 10-K for the year ended December 31, 2022, as certain disclosures in this Quarterly Report on Form 10-Q that would duplicate those included in the 10-K are not included in these financial statements.

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. Where an acquisition has been determined to be an asset acquisition, acquisition-related transaction costs are capitalized. 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 $0.1 million and $0.3 million for the three months ended September 30, 2023 and 2022, respectively, and $0.4 million and $1.2 million for the nine months ended September 30, 2023 and 2022, respectively. Ordinary repairs and maintenance are expensed as incurred; major replacements and improvements, which enhance or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts.

Included in net investment in rental property as of September 30, 2023 and December 31, 2022 is real estate and building and tenant improvements not in service, as follows (dollars in thousands):


	September 30, 2023		December 31, 2022
Land held for development (including pre-development costs, if any) (a)(b)	$	255,798	$	264,934
Development and construction in progress, including land (c)	35,807		205,173
Total	$	291,605	$	470,107

(a)Includes predevelopment and infrastructure costs included in buildings and improvements of $96.0 million and $97.7 million as of September 30, 2023 and December 31, 2022, respectively.

(b)Includes $70.7 million of land and $14.8 million of building and improvements classified as to assets held for sale at September 30, 2023.

(c)Includes land of $11.5 million as of September 30, 2023 and $13.6 million as of December 31, 2022.

The Company considers a construction project as substantially completed and held available for occupancy upon the substantial completion of improvements, but no later than one year from cessation of major construction activity (as distinguished from activities such as routine maintenance and cleanup). If portions of a rental project are substantially completed and occupied by tenants or residents, or held available for occupancy, and other portions have not yet reached that stage, the substantially completed portions are accounted for as a separate project. The Company allocates costs incurred between the portions under construction and the portions substantially completed and held available for occupancy, primarily based on a percentage of the relative commercial square footage or multifamily units of each portion, and capitalizes only those costs associated with the portion under construction.

Dividends and Distributions Payable

As a result of the completion of the Company’s 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") has decided to reinstate a quarterly dividend beginning with the third quarter of 2023. The Company will reevaluate its dividend as the Company completes the sale of non-strategic asset sales.

The declaration and payment of dividends and distributions will continue to be determined by the Board of Directors in light of conditions then existing, including the Company’s earnings, cash flows, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT and legal restrictions and the general overall economic conditions and other factors.

On July 24, 2023, the Company declared a $0.05 dividend per common share, which was paid on October 10, 2023 to shareholders of record as of the close of business on September 30, 2023. At September 30, 2023, the balance of the dividends payable was $5.2 million.

The dividends and distributions payable at December 31, 2022 represent amounts payable on unvested LTIP units.

3. RECENT TRANSACTIONS

Real Estate Held for Sale/Discontinued Operations/Dispositions

The Company has discontinued operations related to its former New Jersey office and hotel portfolio (collectively, the “Office Portfolio”) which represented a strategic shift in the Company’s operations beginning in 2019. During the third quarter of 2023, the Company identified one additional land parcel as discontinued operations. See Note 7: Discontinued Operations.

As of September 30, 2023, the Company included as held for sale one office property totaling approximately 0.4 million square feet and several developable land parcels, which are located in Jersey City, Holmdel and Parsippany, New Jersey.

During the nine months ended September 30, 2023, a land parcel that was previously identified as held for sale was reclassified as held and used.

As a result of recent sales contracts in place, the Company determined that the carrying value of one office and three land parcels held for sale were not expected to be recovered from estimated net sales proceeds, and accordingly, during the three and nine months ended September 30, 2023, recognized impairment of zero and $7.0 million, respectively.

As of September 30, 2023, the total estimated sales proceeds of real estate held for sale, net of expected selling costs, are expected to be approximately $145.7 million. Subsequently, in October 2023, the Company completed the sale of one office property and two parcels of land for a gross sales price of $89.0 million.

The following table summarizes the real estate held for sale, net, and other assets and liabilities (dollars in thousands) as of September 30, 2023:


	Office Portfolio		Other Properties Held for Sale		Total
Land	$	4,336	$	71,876	$	76,212
Building & Other	25,949		18,243		44,192
Less: Accumulated depreciation	(12,165)		—		(12,165)
Less: Cumulative unrealized losses on property held for sale	(4,440)		(4,616)		(9,056)
Real estate held for sale, net	$	13,680	$	85,503	$	99,183


Other assets and liabilities	Office Portfolio		Other Properties Held for Sale		Total
Unbilled rents receivable, net (a)	$	37	$	—	$	37
Deferred charges, net (a)	43		—		43


Accounts payable, accrued expenses and other liabilities	(854)		(17)		(871)

(a)Expected to be removed with the completion of the sales.

The Company disposed of the following rental properties during the nine months ended September 30, 2023 (dollars in thousands):


Disposition Date	Property	Location	# of Bldgs.	Rentable Square Feet	Property Type	Net Sales Proceeds			Net Carrying Value		Discontinued Operations Realized Gains (Losses)/ Unrealized Losses, net
02/10/23	XS Hotels	Weehawken, New Jersey	2	—	Hotel	$	93,358	(a)	$	92,578	$	780
04/04/23	Harborside 1, 2 and 3	Jersey City, New Jersey	3	1,886,800	Office	362,446			362,304		142
09/13/23	Harborside 6	Jersey City, New Jersey	1	231,856	Office	44,145			43,722		423

Unrealized gains (losses) on real estate held for sale											(3,631)
Totals			6	2,118,656		$	499,949		$	498,604	$	(2,286)

(a)Included the proceeds of $84 million used to repay the mortgage loan encumbering the property at closing.

The Company disposed of the following developable land holding during the nine months ended September 30, 2023 (dollars in thousands):


Disposition Date	Property	Location	Net Sales Proceeds			Net Carrying Value		Realized Gains (Losses)/ Unrealized Losses, net
03/17/23	Columbia-Honeywell	Morris Township, New Jersey	$	8,214	(a)	$	8,236	$	(22)




Totals			$	8,214		$	8,236	$	(22)

(a) Included deposits totaling $1.1 million received by the Company in December 2022 and January 2023.

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

As of September 30, 2023, the Company had an aggregate investment of approximately $119.8 million in its equity method joint ventures. The Company formed these ventures with unaffiliated third parties, or acquired interests in them, to develop or manage properties, or in anticipation of possible development of rental properties. As of September 30, 2023, the unconsolidated joint ventures owned: seven multifamily properties totaling 2,146 apartment units, a retail property aggregating approximately 51,000 square feet and interests and/or rights to developable land parcels able to accommodate up to 829 apartment units. The Company’s unconsolidated interests range from 20 percent to 85 percent subject to specified priority allocations in certain of the joint ventures.

The amounts reflected in the following tables (except for the Company’s share of equity in earnings) are based on the historical financial information of the individual joint ventures. The Company does not record losses of the joint ventures in excess of its investment balances unless the Company is liable for the obligations of the joint venture or is otherwise committed to provide financial support to the joint venture. The outside basis portion of the Company’s investments in joint ventures is amortized over the anticipated useful lives of the underlying ventures’ tangible and intangible assets acquired and liabilities assumed.

The debt of the Company’s unconsolidated joint ventures generally is non-recourse to the Company, except for customary exceptions pertaining to such matters as intentional misuse of funds, environmental conditions, and material misrepresentations. The Company has agreed to guarantee repayment of a portion of the debt of its unconsolidated joint ventures. As of September 30, 2023, the outstanding balance of such debt, subject to guarantees, totaled $18.2 million of which $2.0 million was guaranteed by the Company.

The Company performed management, leasing, development and other services for the properties owned by the unconsolidated joint ventures, related parties to the Company, and recognized $1.1 million and $0.8 million for such services in the three months ended September 30, 2023 and 2022, respectively. The Company had $0.4 million and $0.2 million in accounts receivable due from its unconsolidated joint ventures as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, the Company does not have any investments in unconsolidated joint ventures that are considered VIEs.

The following is a summary of the Company's unconsolidated joint ventures as of September 30, 2023 and December 31, 2022 (dollars in thousands):


									Property Debt
Entity / Property Name	Number of Apartment Units or Rentable SF		Company's Effective Ownership % (a)		Carrying Value				As of September 30, 2023				Interest Rate

					September 30, 2023		December 31, 2022		Balance		Maturity Date
Multifamily
Metropolitan and Lofts at 40 Park (b) (c)	189	units	25.00	%	$	682	$	1,747	$	60,767	(d)		(d)
RiverTrace at Port Imperial	316	units	22.50	%	4,703		5,114		82,000		11/10/26		3.21	%
Capstone at Port Imperial	360	units	40.00	%	21,688		23,234		135,000		12/22/24	SOFR+	1.2	%
Riverpark at Harrison	141	units	45.00	%	—		—		30,192		07/01/35		3.19	%
Station House	378	units	50.00	%	32,167		32,372		89,946		07/01/33		4.82	%
Urby at Harborside (e)	762	units	85.00	%	58,493		61,594		186,457		08/01/29		5.197	%
PI North - Land (b) (f)	829	potential units	20.00	%	1,678		1,678		—		—		—



Other (g)					419		419		—		—		—
Totals:					$	119,830	$	126,158	$	584,362

(a)Company's effective ownership % represents the Company's entitlement to residual distributions after payments of priority returns, where applicable.

(b)The Company's ownership interests in this venture are subordinate to its partner's preferred capital balance and the Company is not expected to meaningfully participate in the venture's cash flows in the near term.

(c)Through the joint venture, the Company also owns a 25 percent interest in a 50,973 square feet retail building ("Shops at 40 Park") and a 50 percent interest in a 59-unit, five story multifamily rental property ("Lofts at 40 Park").

(d)Property debt balance consists of: (i) an interest only loan, collateralized by the Metropolitan at 40 Park, with a balance of $36,500, bears interest at SOFR +2.85 percent that subsequent to September 30, 2023 was extended to mature on October 10, 2024; (ii) an amortizable loan, collateralized by the Shops at 40 Park, with a balance of $6,067, with a fixed rate of 5.125%. On January 10, 2023, the loan was modified bearing interest at SOFR +2.00 percent and matures in January 2025; and (iii) an interest only loan, collateralized by the Lofts at 40 Park, with a balance of $18,200, which bears interest at SOFR +2.00 percent that subsequent to September 30, 2023 was extended to mature on February 1, 2024, requiring a $1 million principal repayment, of which our share was 50 percent.

(e)The Company owns an 85 percent interest with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines. The Company had guaranteed $22 million of the principal outstanding debt. On February 1, 2023, the lender released the guarantor of all obligations under the Guaranty Agreement.

(f)The Company owns a 20 percent residual interest in undeveloped land parcel 6 and parcel I that can accommodate the development of 829 multifamily units.

(g)The Company owns other interests in various unconsolidated joint ventures, including interests in assets previously owned and interest in ventures whose businesses are related to its core operations. These ventures are not expected to significantly impact the Company's operations in the near term.

The following is a summary of the Company’s equity in earnings (loss) of unconsolidated joint ventures for the three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Entity / Property Name	2023		2022		2023		2022
Multifamily
Metropolitan and Lofts at 40 Park	$	(357)	$	(207)	$	(965)	$	(440)
RiverTrace at Port Imperial	125		101		407		248
Capstone at Port Imperial	38		(109)		(275)		(60)
Riverpark at Harrison	68		94		473		139
Station House	(198)		(160)		(205)		(615)
Urby at Harborside	615		(23)		3,588		2,745
PI North - Land	(80)		—		(176)		(173)
Liberty Landing	(1)		—		(4)		(10)
Other
Other	—		—		—		13

Company's equity in earnings of unconsolidated joint ventures (a)	$	210	$	(304)	$	2,843	$	1,847

(a)Amounts are net of amortization of basis differences of $154 for each of the three months ended September 30, 2023 and 2022 and $463 for each of the nine months ended September 30, 2023 and 2022.

The following is a summary of the combined financial position of the unconsolidated joint ventures in which the Company had investment interests as of September 30, 2023 and December 31, 2022:


(dollars in thousands)	September 30, 2023		December 31, 2022
Assets:
Rental Property, net	$	731,601	$	745,210
Other assets	32,708		39,241
Total assets	$	764,309	$	784,451
Liabilities and partners'/members' capital:
Mortgages and loans payable	$	584,362	$	587,913
Other liabilities	9,680		15,545
Partners'/members' capital	170,267		180,993
Total liabilities and partners'/members' capital	$	764,309	$	784,451

The following is a summary of the combined results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total revenues	$	26,266	$	34,402	$	70,967	$	111,874
Operating and other expenses	(9,107)		(19,651)		(26,236)		(67,467)
Depreciation and amortization	(5,591)		(6,384)		(16,728)		(19,325)
Interest expense	(7,520)		(7,852)		(22,995)		(21,679)
Net income	$	4,048	$	515	$	5,008	$	3,403

5. DEFERRED CHARGES AND OTHER ASSETS, NET


(dollars in thousands)	September 30, 2023		December 31, 2022
Deferred leasing costs	$	11,128	$	59,651
Deferred financing costs - revolving credit facility (a)	771		6,684
	11,899		66,335
Accumulated amortization	(7,872)		(30,471)
Deferred charges, net	4,027		35,864
Notes receivable (b)	55		1,309
In-place lease values, related intangibles and other assets, net (c)	10,165		12,298
Right of use assets (c)	6,401		2,238
Prepaid expenses and other assets, net	40,116		44,453

Total deferred charges and other assets, net	$	60,764	$	96,162

(a)Deferred financing costs related to all other debt liabilities (other than for the revolving credit facility) are netted against those debt liabilities for all periods presented. See Note 2 to the Company's 2022 10-K: Significant Accounting Policies – Deferred Financing Costs.

(b)As of December 31, 2022, balance included an interest-free note receivable with a net present value of $0.2 million which matured in April 2023, and seller-financing of $1.0 million, net of a loan loss allowance of $26.0 thousand, to the buyers of the Metropark portfolio, which matured in May 2023.

(c)This amount has a corresponding liability of $7.5 million and $3.2 million as of September 30, 2023 and December 31, 2022, respectively, which is included in Accounts payable, accrued expense and other liabilities. See Note 12: Commitments and Contingencies – Office and Ground Lease agreements for further details.

DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be

reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next 12 months, the Company estimates $5.9 million will be reclassified as a decrease to interest expense.

As of September 30, 2023, the Company had four interest rate caps outstanding with a notional amount of $304.5 million designated as cash flow hedges of interest rate risk.

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2023 and December 31, 2022 (dollars in thousands):

Asset Derivatives designated
as hedging instruments

Fair Value

Balance sheet location

September 30,
2023

December 31,
2022

Interest rate caps

8,253

9,808

Deferred charges and other assets

The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Operations for the three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):


Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative				Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income				Total Amount of Interest Expense presented in the consolidated statements of operations
Three months ended September 30,	2023		2022			2023		2022		2023		2022
Interest Rate Caps	$	658	$	2,787	Interest expense	$	1,372	$	211	$	(23,715)	$	(18,819)
Nine months ended September 30,
Interest Rate Caps	$	2,356	$	4,912	Interest expense	$	2,478	$	213	$	(67,422)	$	(45,167)

Credit-risk-related Contingent Features

As of September 30, 2023, the Company did not have any interest rate derivatives in a liability position.

6. RESTRICTED CASH

Restricted cash generally includes tenant and resident security deposits for certain of the Company’s properties, and escrow and reserve funds for debt service, real estate taxes, property insurance, capital improvements, tenant improvements and leasing costs established pursuant to certain mortgage financing arrangements, and is comprised of the following (dollars in thousands):


	September 30, 2023		December 31, 2022
Security deposits	$	9,866	$	9,175
Escrow and other reserve funds	13,737		11,692

Total restricted cash	$	23,603	$	20,867

7. DISCONTINUED OPERATIONS

In late 2019, the Company announced that its Board of Directors had determined to sell the Company’s entire Office Portfolio, including both the suburban and waterfront office portfolios. As the decision to sell the Office Portfolio represented a strategic shift in the Company’s operations, the results of certain of these properties that were disposed of or classified as held for sale are being classified as discontinued operations for all periods presented.

The last property in the suburban office portfolio, a 350,000 square foot office property, was sold in October of 2023.

During the third quarter of 2023, the Company identified one additional land parcel as discontinued operations.

The following table summarizes income from discontinued operations and the related realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total revenues	$	2,421	$	29,631	$	21,983	$	106,973
Operating and other expenses	(1,346)		(13,316)		(12,373)		(36,843)
Property impairments	—		(84,509)		—		(84,509)
Depreciation and amortization	(104)		(6,701)		(5,486)		(21,787)
Interest expense	—		(3,318)		(822)		(9,703)

Income (loss) from discontinued operations	971		(78,213)		3,302		(45,869)

Loss from extinguishment of debt, net	—		—		(12)		(6,289)
Realized income (loss) on disposition of rental property	423		(5,100)		(2,286)		(7,704)
Realized income (loss), net	423		(5,100)		(2,298)		(13,993)

Total discontinued operations, net	$	1,394	$	(83,313)	$	1,004	$	(59,862)

8. REVOLVING CREDIT FACILITY AND TERM LOANS

On July 25, 2023, the Company entered into a revolving credit and term loan agreement (“2023 Credit Agreement”) with a group of two lenders that provides for a $60 million senior secured revolving credit facility (the “2023 Revolving Credit Facility”) and a $115 million senior secured term loan facility (the “2023 Term Loan”).

The terms of the 2023 Revolving Credit Facility include: (1) a one-year term ending in July 2024, subject to one six-month extension option; (2) revolving credit loans may be made to the Company in an aggregate principal amount of up to $60 million; (3) a first priority lien on the unencumbered property known as The James, a 240 unit multi-family residential property located at 87 Madison Avenue, Park Ridge, New Jersey (the “Collateral Pool Property”); and (4) a commitment fee payable quarterly equal to 35 basis points per annum on the daily unused amount of the 2023 Revolving Credit Facility.

The terms of the 2023 Term Loan included: (1) a one-year term ending in July 2024, subject to one six-month extension option; (2) a single draw of the term loan commitments up to an aggregate principal amount of $115 million; and (3) a first priority lien in the Collateral Pool Property.

Interest on borrowings under the 2023 Revolving Credit Facility and the 2023 Term Loan shall be based on applicable interest rate (the “Interest Rate”) plus a margin ranging from 250 basis points to 350 basis points (the “Applicable Margin”) depending on the Interest Rate elected, currently 3.5%. With respect to borrowings under the 2023 Revolving Credit Facility and the 2023 Term Loan, the Interest Rate shall be either (A) the Alternative Base Rate plus the Applicable Margin and/or (B) the Adjusted Term SOFR Rate plus the Applicable Margin or, with respect to the 2023 Revolving Credit Facility only, (C) the Adjusted Daily Effective SOFR Rate plus the Applicable Margin. As used herein: “Alternative Base Rate” means, subject to a floor of 1.00%, the highest of (i) the rate of interest last quoted by The Wall Street Journal in the U.S. as the prime rate in effect (the “Prime Rate”), (ii) the NYFRB Rate from time to time plus 0.5% and (iii) the Adjusted Term SOFR Rate for a one month interest period plus 1%; “Adjusted Term SOFR Rate” means, subject to a floor of 0.0%, the Term SOFR Rate, plus 10 basis points; and “Adjusted Daily Effective SOFR Rate” means, subject to a floor of 0.0%, for any day, the secured overnight financing rate for such business day published by the NYFRB on the NYFRB’s on the immediately succeeding business day (“SOFR”) plus 10 basis points.

The General Partner and certain subsidiaries of the Operating Partnership are the guarantors of the obligations of the Operating Partnership under the 2023 Credit Agreement, and certain subsidiaries of the Operating Partnership also granted

the lenders a security interest in certain subsidiary guarantors in order to further secure the obligations, liabilities and indebtedness of the Operating Partnership under the 2023 Credit Agreement.

The 2023 Credit Agreement includes certain restrictions and covenants which limit, among other things the incurrence of additional indebtedness, the incurrence of liens and the disposition of real estate properties, and which require compliance with financial ratios relating to (a) the maximum total leverage ratio (65 percent), (b) the minimum debt service coverage ratio (1.25 times), (c) the minimum tangible net worth ratio (80% of tangible net worth as of July 25, 2023 plus 80% of net cash proceeds of equity issuances by the General Partner or the Operating Partnership), and (d) the maximum unhedged variable rate debt ratio (30%). Subject to certain exceptions, the net proceeds from any property sales are to be used to mandatorily repay the 2023 Term Loan until it is retired. In addition, the 2023 Credit Agreement includes a mandatory cash sweep provision that provides that any cash, cash equivalents or marketable securities of the General Partner or Operating Partnership in excess of $25 million as of the end of the last business day of any calendar week shall be applied to repayment of any outstanding borrowings under the 2023 Credit Agreement.

The 2023 Credit Agreement contains “change of control” provisions that permit the lenders to declare a default and require the immediate repayment of all outstanding borrowings under the 2023 Revolving Credit Facility. These change of control provisions, which have been an event of default under the agreements governing the Operating Partnership’s revolving credit facilities since June 2000, are triggered if, among other things, a majority of the seats on the Board of Directors (other than vacant seats) become occupied by directors who were neither nominated by the Board of Directors, nor appointed by the Board of Directors. If these change of control provisions were triggered, the Operating Partnership could seek a forbearance, waiver or amendment of the change of control provisions from the lenders, however there can be no assurance that the Operating Partnership would be able to obtain such forbearance, waiver or amendment on acceptable terms or at all. If an event of default has occurred and is continuing, the entire outstanding balance under the 2023 Credit Agreement may (or, in the case of any bankruptcy event of default, shall) become immediately due and payable, and the Operating Partnership will not make any excess distributions except to enable the General Partner to continue to qualify as a REIT under the IRS Code.

On July 25, 2023, the Operating Partnership drew the full $115 million available under the 2023 Term Loan and borrowed $52 million from the 2023 Revolving Credit Facility which proceeds, together with available cash, were used to fund the purchase price under the Rockpoint Purchase Agreement. As of September 30, 2023, the principal balance of the 2023 Revolving Credit Facility and 2023 Term Loan was $18.0 million and $43.0 million, respectively.

During October 2023, the Company repaid the remaining balances of the 2023 Term Loan and 2023 Revolving Credit Facility.

On May 6, 2021, the Company entered into a revolving credit and term loan agreement (“2021 Credit Agreement”) with a group of seven lenders that provided for a $250 million senior secured revolving credit facility (the “2021 Credit Facility”) and a $150 million senior secured term loan facility (the “2021 Term Loan”), and terminated the 2017 credit agreement on May 13, 2021. On April 7, 2023, the Company terminated the 2021 Credit Agreement for both the 2021 Credit Facility and 2021 Term Loan. As a result of the termination, the Company has written off the unamortized deferred financing costs in an amount of $2.7 million during the second quarter of 2023, which is recorded within Loss from extinguishment of debt, net, on the Consolidated Statements of Operations.

The Company was in compliance with its debt covenants under its 2023 Revolving Credit Facility and 2023 Term Loan as of September 30, 2023.

9. MORTGAGES, LOANS PAYABLE AND OTHER OBLIGATIONS

The Company has mortgages, loans payable and other obligations which primarily consist of various loans collateralized by certain of the Company’s rental properties. As of September 30, 2023, 17 of the Company’s properties, with a total carrying value of approximately $2.6 billion, are encumbered by the Company's mortgages and loans payable. Payments on mortgages, loans payable and other obligations are generally due in monthly installments of principal and interest, or interest only. The Company was in compliance with its debt covenants under its mortgages and loans payable as of September 30, 2023.

A summary of the Company’s mortgages, loans payable and other obligations as of September 30, 2023 and December 31, 2022 is as follows (dollars in thousands):


Property/Project Name	Lender		Effective Rate (a)		September 30, 2023		December 31, 2022		Maturity

Port Imperial 4/5 Hotel (b)	Fifth Third Bank		N/A		$	—	$	84,000	—
Signature Place	Nationwide Life Insurance Company		3.74	%	43,000		43,000		08/01/24
Liberty Towers	American General Life Insurance Company		3.37	%	265,000		265,000		10/01/24
Portside 5/6 (c)	New York Life Insurance Company		4.56	%	97,000		97,000		03/10/26
BLVD 425	New York Life Insurance Company		4.17	%	131,000		131,000		08/10/26
BLVD 401	New York Life Insurance Company		4.29	%	117,000		117,000		08/10/26

Portside at Pier One (d)	KKR	SOFR+	2.75	%	56,500		58,998		09/07/26
The Upton (e)	Bank of New York Mellon	SOFR+	1.58	%	75,000		75,000		10/27/26
145 Front at City Square (f)	MUFG Union Bank	SOFR+	1.84	%	63,000		63,000		12/10/26
Riverhouse 9 at Port Imperial (g)	JP Morgan	SOFR+	1.41	%	110,000		110,000		06/21/27
Quarry Place at Tuckahoe	Natixis Real Estate Capital LLC		4.48	%	41,000		41,000		08/05/27
BLVD 475 N/S	The Northwestern Mutual Life Insurance Co.		2.91	%	165,000		165,000		11/10/27
Haus25 (h)	Freddie Mac		6.04	%	343,061		297,324		09/01/28
Riverhouse 11 at Port Imperial	The Northwestern Mutual Life Insurance Co.		4.52	%	100,000		100,000		01/10/29
Soho Lofts (i)	New York Community Bank		3.77	%	159,513		160,000		07/01/29
Port Imperial South 4/5 Garage	American General Life & A/G PC		4.85	%	31,778		32,166		12/01/29
Emery at Overlook Ridge (j)	New York Community Bank		3.21	%	72,000		72,000		01/01/31

Principal balance outstanding					1,869,852		1,911,488
Unamortized deferred financing costs					(16,053)		(7,511)

Total mortgages, loans payable and other obligations, net					$	1,853,799	$	1,903,977

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

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

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

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

(e)On October 27, 2021, the Company obtained a $75 million mortgage loan and entered into an interest-rate cap agreement for the mortgage loan.

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

(g)On June 21, 2022, the Company obtained a $110 million mortgage loan and entered into an interest-rate cap agreement for the mortgage loan.

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

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

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

Cash Paid for Interest and Interest Capitalized

Cash paid for interest for the nine months ended September 30, 2023 and 2022 was $61.6 million and $59.0 million (of which $1.1 million and $9.7 million pertained to properties classified as discontinued operations), respectively. Interest capitalized by the Company for the nine months ended September 30, 2023 and 2022 was zero and $12.2 million, respectively.

Summary of Indebtedness


(dollars in thousands)	September 30, 2023				December 31, 2022
	Balance		Weighted Average Interest Rate		Balance		Weighted Average Interest Rate
Fixed Rate & Hedged Debt (a)	$	1,853,799	4.34	%	$	1,757,308	4.27	%
Revolving Credit Facility, Term Loan and Other Variable Rate Debt	59,067		8.92	%	146,669		6.86	%

Totals/Weighted Average:	$	1,912,866	4.49	%	$	1,903,977	4.47	%

(a) As of September 30, 2023 and December 31, 2022, includes debt with interest rate caps outstanding with a notional amount of $304.5 million and $485 million, respectively.

10. EMPLOYEE BENEFIT 401(k) PLANS

Employees of the General Partner, who meet certain minimum age and service requirements, are eligible to participate in the Veris Residential, Inc. 401(k) Savings/Retirement Plan (the “401(k) Plan”). Eligible employees may elect to defer from one percent up to 60 percent of their annual compensation on a pre-tax basis to the 401(k) Plan, subject to certain limitations imposed by federal law. The amounts contributed by employees are immediately vested and non-forfeitable. The Company may make discretionary matching or profit sharing contributions to the 401(k) Plan on behalf of eligible participants in any plan year. Participants are always 100 percent vested in their pre-tax contributions and will begin vesting in any matching or profit sharing contributions made on their behalf after two years of service with the Company at a rate of 20 percent per year, becoming 100 percent vested after a total of six years of service with the Company. All contributions are allocated as a percentage of compensation of the eligible participants for the Plan year. The assets of the 401(k) Plan are held in trust and a separate account is established for each participant. A participant may receive a distribution of his or her vested account balance in the 401(k) Plan in a single sum or in installment payments upon his or her termination of service with the Company. Total expense recognized by the Company for the 401(k) Plan for the three months ended September 30, 2023 and 2022 was $102 thousand and $143 thousand, respectively and $378 thousand and $473 thousand for the nine months ended September 30, 2023 and 2022, respectively.

11. DISCLOSURE OF FAIR VALUE OF ASSETS AND LIABILITIES

The following disclosure of estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize on disposition of the assets and liabilities at September 30, 2023 and December 31, 2022. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

Cash equivalents, receivables, notes receivables, accounts payable, and accrued expenses and other liabilities are carried at amounts which reasonably approximate their fair values as of September 30, 2023 and December 31, 2022.

The fair value of the Company’s long-term debt, consisting of revolving credit facility, term loans, mortgages, loans payable and other obligations aggregated approximately $1.8 billion and $1.8 billion as compared to the book value of approximately $1.9 billion and $1.9 billion as of September 30, 2023 and December 31, 2022, respectively. The fair value of the Company’s long-term debt was valued using level 3 inputs (as provided by ASC 820, Fair Value Measurements and Disclosures). The fair value was estimated using a discounted cash flow analysis valuation based on the borrowing rates currently available to the Company for loans with similar terms and maturities. The fair value of the mortgage debt was determined by discounting the future contractual interest and principal payments by a market rate. Although the Company has determined that the majority of the inputs used to value its derivative financial instruments fall within level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivative financial instruments utilize level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. The Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of

its derivative financial instruments. As a result, the Company has determined that its derivative financial instruments valuations in their entirety are classified in level 2 of the fair value hierarchy.

The notes receivable by the Company are presented at the lower of cost basis or net amount expected to be collected in accordance with ASC 326. For its seller-financing note receivable provided to the buyers of the Metropark portfolio, the Company calculated the net present value of contractual cash flows of the total receivable.

The fair value measurements used in the evaluation of the Company’s rental properties for impairment analysis are considered to be Level 3 valuations within the fair value hierarchy, as there are significant unobservable assumptions. Assumptions that were utilized in the fair value calculations include, but are not limited to, discount rates, market capitalization rates, expected lease rental rates, room rental and food and beverage revenue rates, third-party broker information and information from potential buyers, as applicable.

Valuations of real estate identified as held for sale are based on estimated sale prices, net of estimated selling costs, of such property. In the absence of an executed sales agreement with a set sales price, management’s estimate of the net sales price may be based on a number of unobservable assumptions, including, but not limited to, the Company’s estimates of future cash flows, market capitalization rates and discount rates, if applicable. For developable land, an estimated per-unit market value assumption is also considered based on development rights or plans for the land.

Disclosure about fair value of assets and liabilities is based on pertinent information available to management as of September 30, 2023 and December 31, 2022.

12. COMMITMENTS AND CONTINGENCIES

TAX ABATEMENT AGREEMENTS

Pursuant to agreements with certain municipalities, the Company is required to make payments in lieu of property taxes (“PILOT”) on certain of its properties and has tax abatement agreements on other properties, as follows:


				PILOT Payments Three				PILOT Payments Nine
Property Name	Location	Asset Type	PILOT Expiration Dates	Months Ended September 30,				Months Ended September 30,
				2023		2022		2023		2022
				(Dollars in Thousands)				(Dollars in Thousands)
111 River Street (a)	Hoboken, NJ	Office	4/2022	$	—	$	—	$	—	$	85
Harborside Plaza 4A (b)	Jersey City, NJ	Office	2/2022	—		—		—		218
Harborside Plaza 5 (c)	Jersey City, NJ	Office	6/2022	—		—		—		2,000
BLVD 401 (Marbella 2) (d)	Jersey City, NJ	Multifamily	4/2026	446		450		1,310		1,185
RiverHouse 11 at Port Imperial (e)	Weehawken, NJ	Multifamily	7/2033	388		432		1,167		1,138
Port Imperial 4/5 Hotel (f)	Weehawken, NJ	Hotel	12/2033	—		729		224		2,189
RiverHouse 9 at Port Imperial (g)	Weehawken, NJ	Multifamily	6/2046	422		321		1,176		961
Haus25 (h)	Jersey City, NJ	Mixed-Use	3/2047	670		343		1,817		467
The James (i)	Park Ridge, NJ	Multifamily	6/2051	143		—		430		—

Total Pilot taxes				$	2,069	$	2,275	$	6,124	$	8,243

(a)The property was disposed of in the first quarter of 2022.

(b)The annual PILOT is equal to two percent of Total Project Costs, as defined. The total Project Costs are $49.5 million.

(c)The annual PILOT is equal to two percent of Total Project Costs, as defined. The total Project Costs are $170.9 million.

(d)The annual PILOT is equal to ten percent of Gross Revenues for years 1-4, 12 percent for years 5-8 and 14 percent for years 9-10, as defined.

(e)The annual PILOT is equal to 12 percent of Gross Revenues for years 1-5, 13 percent for years 6-10 and 14 percent for years 11-15, as defined.

(f)The annual PILOT is equal to two percent of Total Project Costs, as defined. The property was disposed of during the first quarter of 2023.

(g)The annual PILOT is equal to 11 percent of Gross Revenues for years 1-10, 12.5 percent for years 11-18 and 14 percent for years 19-25, as defined.

(h)For a term of 25 years following substantial completion, which occurred in April 2022. The annual PILOT is equal to seven percent of Gross Revenues, as defined.

(i)The property was acquired in July 2022. For a term of 30 years following substantial completion which occurred in June 2021. The annual PILOT is equal to 10 percent of Gross Revenues for years 1-10, 11.5 percent for years 11-21 and 12.5 percent for years 22-30, as defined.

At the conclusion of the above-referenced agreements, it is expected that the properties will be assessed by the municipality and be subject to real estate taxes at the then prevailing rates.

LITIGATION

The Company is a defendant in litigation arising in the normal course of its business activities. Management does not believe that the ultimate resolution of these matters will have a materially adverse effect upon the Company’s financial condition taken as whole.

OFFICE AND GROUND LEASE AGREEMENTS

Future minimum rental payments under the terms of all non-cancelable office and ground leases under which the Company is the lessee, as of September 30, 2023 and December 31, 2022, are as follows (dollars in thousands):


Year	As of September 30, 2023 Amount
October 1 through December 31, 2023	$	318
2024	1,272
2025	1,279
2026	1,279
2027	1,280
2028 through 2101	31,940
Total lease payments	37,368
Less: imputed interest	(29,820)

Total	$	7,548


Year	As of December 31, 2022 Amount
2023	$	192
2024	192
2025	199
2026	199
2027	200
2028 through 2101	31,664
Total lease payments	32,646
Less: imputed interest	(29,418)

Total	$	3,228

Office and ground lease expenses incurred by the Company amounted to $599 thousand and $225 thousand for the three months ended September 30, 2023 and 2022, respectively, and $1.4 million and $787 thousand for the nine months ended September 30, 2023 and 2022.

In accordance with ASU 2016-02 (Topic 842), the Company capitalized operating leases for one office and two ground leases, which had a total balance of $6.4 million at September 30, 2023. Such amount represents the net present value (“NPV”) of future payments detailed above. The weighted average incremental borrowing rate used to arrive at the NPV was 6.6 percent for the weighted average lease terms of 32.6 years. These rates were arrived at by adjusting the fixed and floating rates of the Company’s mortgage debt with debt having terms approximating the remaining lease term of the Company’s office and ground leases and calculating notional rates for fully-collateralized loans.

The initial recognition of a lease liability and right-of-use asset in an amount of $4.7 million for the office lease is a noncash activity during the nine months ended September 30, 2023.

OTHER

As of September 30, 2023, the Company has outstanding stay-on award agreements with 21 employees, which provides them with the potential to receive compensation, in cash or Company stock at the employees’ option, contingent upon remaining with the Company in good standing until the occurrence of certain corporate transactions, which have not been

identified. The total potential cost of such awards is currently estimated to be up to approximately $2.7 million, including the potential future issuance of up to 42,095 shares of the Company’s common stock. Such cash or stock awards would only be earned and payable if such transaction was identified and communicated to the employee within seven years of the agreement dates, most of which were signed in late 2020 and early 2021, and all other conditions were satisfied.

13. TENANT LEASES

The Company’s consolidated office properties are leased to tenants under operating leases with various expiration dates through 2034. Substantially all of the commercial leases provide for annual base rents plus recoveries and escalation charges based upon the tenant’s proportionate share of and/or increases in real estate taxes and certain operating costs, as defined, and the pass-through of charges for electrical usage.

Future minimum rentals to be received under non-cancelable commercial operating leases (excluding properties classified as discontinued operations) at September 30, 2023 and December 31, 2022 are as follows (dollars in thousands):


Year	As of September 30, 2023 Amount
October 1 through December 31, 2023	$	3,319
2024	12,072
2025	10,952
2026	8,822
2027	5,748
2028 and thereafter	7,807

Total	$	48,720


Year	As of December 31, 2022 Amount
2023	$	14,618
2024	11,879
2025	10,535
2026	8,397
2027	5,315
2028 and thereafter	6,891

Total	$	57,635

Multifamily rental property residential leases are excluded from the above table as they generally expire within one year.

14. REDEEMABLE NONCONTROLLING INTERESTS

The Company evaluates the terms of the partnership units issued in accordance with the FASB’s Distinguishing Liabilities from Equity guidance. Units which embody an unconditional obligation requiring the Company to redeem the units for cash after a specified or determinable date (or dates) or upon the occurrence of an event that is not solely within the control of the issuer are determined to be contingently redeemable under this guidance and are included as Redeemable noncontrolling interests and classified within the mezzanine section between Total liabilities and Stockholders’ equity on the Company’s Consolidated Balance Sheets. Convertible units for which the Company has the option to settle redemption

amounts in cash or Common Stock are included in the caption Noncontrolling interests in subsidiaries within the equity section on the Company’s Consolidated Balance Sheet.

Rockpoint Transaction

On April 5, 2023, Veris Residential Trust (“VRT”) delivered notice to Rockpoint (as defined below) that VRT was exercising its right to purchase and redeem the Put/Call Interests from Rockpoint. On April 6, 2023, Rockpoint delivered notice to VRT that Rockpoint was exercising its right under the Veris Residential Partners, L.P. (“VRLP”) Partnership Agreement to defer the closing of VRT’s purchase and redemption of the Put/Call Interests for one year. The exercise of the call right caused Rockpoint's interests to be reclassified as mandatorily redeemable noncontrolling interests under the accounting guidance, and included within the Total liabilities on the Company's Consolidated Balance Sheets. The impact of subsequent change in redemption value at each period end is recorded as interest cost. The carrying amount is not reduced below the initial measurement amount.

On July 25, 2023, VRT and the Operating Partnership entered into the Rockpoint Purchase Agreement with Rockpoint pursuant to which VRT and the Operating Partnership acquired from Rockpoint all of the Preferred Units that constituted the Put/Call Interests for an aggregate purchase price of approximately $520 million. Under the terms of the Rockpoint Purchase Agreement, the Original Investment Agreement and the Add On Investment Agreement have been terminated and are of no further force and effect (other than certain tax and related indemnification rights and obligations), Rockpoint ceased to be, direct or indirect, as applicable, members of VRLP, and all obligations of VRT and VRLP and all rights, title and interest of Rockpoint in and pursuant to the VRLP Partnership Agreement (except for certain tax, confidentiality and indemnification rights and obligations) and all other agreements by and between the General Partner, the Operating Partnership, VRT, VRLP and Rockpoint were terminated, including without limitation all provisions relating to the valuation and repurchase of the Put/Call Interests. As a result of the redemption, the Company recorded the change in redemption value of approximately $34.8 million as interest cost of mandatorily redeemable noncontrolling interests.

Previously, on February 27, 2017, the Company, VRT, the Company’s subsidiary through which the Company conducts its multifamily residential real estate operations, VRLP, the operating partnership through which VRT conducts all of its operations, and certain other affiliates of the Company entered into a preferred equity investment agreement (the “Original Investment Agreement”) with certain affiliates of Rockpoint Group, L.L.C. (Rockpoint Group, L.L.C. and its affiliates, collectively, “Rockpoint”) . The Original Investment Agreement provided for VRT to contribute property to VRLP in exchange for common units of limited partnership interests in VRLP (the “Common Units”) and for multiple equity investments by Rockpoint in VRLP from time to time for up to an aggregate of $300 million of preferred units of limited partnership interests in VRLP (the “Preferred Units”). The initial closing under the Original Investment Agreement occurred on March 10, 2017 for $150 million of Preferred Units and the parties agreed that the Company’s contributed equity value (“VRT Contributed Equity Value”), was $1.23 billion at closing. During the year ended December 31, 2018, a total additional amount of $105 million of Preferred Units was issued and sold to Rockpoint pursuant to the Original Investment Agreement. During the year ended December 31, 2019, a total additional amount of $45 million of Preferred Units was issued and sold to Rockpoint pursuant to the Original Investment Agreement, which brought the Preferred Units to the full balance of $300 million. In addition, certain contributions of property to VRLP by VRT subsequent to the execution of the Original Investment Agreement resulted in VRT being issued approximately $46 million of Preferred Units and Common Units in VRLP prior to June 26, 2019.

On June 26, 2019, the Company, VRT, VRLP, certain other affiliates of the Company and Rockpoint entered into an additional preferred equity investment agreement (the “Add On Investment Agreement”). The closing under the Add On Investment Agreement occurred on June 28, 2019. Pursuant to the Add On Investment Agreement, Rockpoint invested an additional $100 million in Preferred Units and the Company and VRT agreed to contribute to VRLP two additional properties located in Jersey City, New Jersey. The Company used the $100 million in proceeds received to repay outstanding borrowings under its revolving credit facility and other debt by June 30, 2019. In addition, Rockpoint has a right of first refusal to invest another $100 million in Preferred Units in the event VRT determines that VRLP requires additional capital prior to March 1, 2023 and, subject thereto, VRLP may issue up to approximately $154 million in Preferred Units to VRT or an affiliate so long as at the time of such funding VRT determines in good faith that VRLP has a valid business purpose to use such proceeds. Included in general and administrative expenses for the year ended December 31, 2019 were $371 thousand in fees associated with the modifications of the Original Investment Agreement, which were made upon signing of the Add On Investment Agreement.

Under the terms of the new transaction with Rockpoint, set forth in the Third Amended and Restated Limited Partnership Agreement of VRLP, dated as of June 28, 2019 (the “VRLP Partnership Agreement”), the cash flow from operations of VRLP will be distributable to Rockpoint and VRT as follows:

•first, to provide a 6% annual return to Rockpoint and VRT on their capital invested in Preferred Units (the “Preferred Base Return”);

•second, 95.36% to VRT and 4.64% to Rockpoint until VRT has received a 6% annual return (the “VRT Base Return”) on the equity value of the properties contributed by it to VRLP in exchange for Common Units (previously 95% and 5%, respectively, under the Original Investment Agreement), subject to adjustment in the event VRT contributes additional property to VRLP in the future; and

•third, pro rata to Rockpoint and VRT based on total respective capital invested in and contributed equity value of Preferred Units and Common Units (based on Rockpoint’s $400 million of invested capital at September 30, 2023, this pro rata distribution would be approximately 21.89% to Rockpoint in respect of Preferred Units, 2.65% to VRT in respect of Preferred Units and 75.46% to VRT in respect of Common Units).

VRLP’s cash flow from capital events will generally be distributable by VRLP to Rockpoint and VRT as follows:

•first, to Rockpoint and VRT to the extent there is any unpaid, accrued Preferred Base Return;

•second, as a return of capital to Rockpoint and to VRT in respect of Preferred Units;

•third, 95.36% to VRT and 4.64% to Rockpoint until VRT has received the VRT Base Return in respect of Common Units (previously 95% and 5%, respectively, under the Original Investment Agreement), subject to adjustment in the event VRT contributes additional property to VRLP in the future;

•fourth, 95.36% to VRT and 4.64% to Rockpoint until VRT has received a return of capital based on the equity value of the properties contributed by it to VRLP in exchange for Common Units (previously 95% and 5%, respectively, under the Original Investment Agreement), subject to adjustment in the event VRT contributes additional property to the capital of VRLP in the future;

•fifth, pro rata to Rockpoint and VRT based on respective total capital invested in and contributed equity value of Preferred and Common Units until Rockpoint has received an 11% internal rate of return (based on Rockpoint’s $400 million of invested capital at September 30, 2023, this pro rata distribution would be approximately 21.89% to Rockpoint in respect of Preferred Units, 2.65% to VRT in respect of Preferred Units and 75.46% to VRT in respect of Common Units); and

•sixth, to Rockpoint and VRT in respect of their Preferred Units based on 50% of their pro rata shares described in “fifth” above and the balance to VRT in respect of its Common Units (based on Rockpoint’s $400 million of invested capital at September 30, 2023, this pro rata distribution would be approximately 10.947% to Rockpoint in respect of Preferred Units, 1.325% to VRT in respect of Preferred Units and 87.728% to VRT in respect of Common Units).

In general, VRLP may not sell its properties in taxable transactions, although it may engage in tax-deferred like-kind exchanges of properties or it may proceed in another manner designed to avoid the recognition of gain for tax purposes.

In connection with the Add On Investment Agreement, on June 26, 2019, VRT increased the size of its board of trustees from six to seven persons, with five trustees being designated by the Company and two trustees being designated by Rockpoint.

In addition, as was the case under the Original Investment Agreement, VRT and VRLP are required to obtain Rockpoint’s consent with respect to:

•debt financings in excess of a 65% loan-to-value ratio;

•corporate level financings that are pari-passu or senior to the Preferred Units;

•new investment opportunities to the extent the opportunity requires an equity capitalization in excess of 10% of VRLP’s NAV;

•new investment opportunities located in a Metropolitan Statistical Area where VRLP owns no property as of the previous quarter;

•declaration of bankruptcy of VRT;

•transactions between VRT and the Company, subject to certain limited exceptions;

•any equity granted or equity incentive plan adopted by VRLP or any of its subsidiaries; and

•certain matters relating to the Credit Enhancement Note (as defined below) between the Company and VRLP (other than ordinary course borrowings or repayments thereunder).

Under a Discretionary Demand Promissory Note (the “Credit Enhancement Note”), the Company may provide periodic cash advances to VRLP. The Credit Enhancement Note provides for an interest rate equal to the London Inter-Bank Offered Rate plus fifty (50) basis points above the applicable interest rate under the Company’s revolving credit facility. The maximum aggregate principal amount of advances at any one time outstanding under the Credit Enhancement Note is limited to $50 million, an increase of $25 million from the prior transaction.

VRT and VRLP also have agreed, as was the case under the Original Investment Agreement, to register the Preferred Units under certain circumstances in the future in the event VRT or VRLP becomes a publicly traded company.

During the period commencing on June 28, 2019 and ended on March 1, 2023 (the “Lockout Period”), Rockpoint’s interest in the Preferred Units cannot be redeemed or repurchased, except in connection with (a) a sale of all or substantially all of VRLP or a sale of a majority of the then-outstanding interests in VRLP, in each case, which sale is not approved by Rockpoint, or (b) a spin-out or initial public offering of common stock of VRT, or distributions of VRT equity interests by the Company or its affiliates to shareholders or their respective parent interest holders (an acquisition pursuant clauses (a) or (b) above, an “Early Purchase”). VRT has the right to acquire Rockpoint’s interest in the Preferred Units in connection with an Early Purchase for a purchase price generally equal to (i) the amount that Rockpoint would receive upon the sale of the assets of VRLP for fair market value and a distribution of the net sale proceeds in accordance with (A) the capital event distribution priorities discussed above (in the case of certain Rockpoint Preferred Holders) and (B) the distribution priorities applicable in the case of a liquidation of VRLP (in the case of the other Rockpoint Preferred Holder), plus (ii) a make whole premium (such purchase price, the “Purchase Payment”). The make whole premium is an amount equal to (i) $173.5 million until December 28, 2020, or $198.5 million thereafter, less distributions theretofore made to Rockpoint with respect to its Preferred Base Return or any deficiency therein, plus (ii) $1.5 million less certain other distributions theretofore made to Rockpoint.

The fair market value of VRLP’s assets is determined by a third party appraisal of the net asset value (“NAV”) of VRLP and the fair market value of VRLP’s assets, to be completed within ninety (90) calendar days of March 1, 2023 and annually thereafter.

After the Lockout Period, either VRT may acquire from Rockpoint, or Rockpoint may sell to VRT, all, but not less than all, of Rockpoint’s interest in the Preferred Units (each, a “Put/Call Event”) for a purchase price equal to the Purchase Payments (determined without regard to the make whole premium and any related tax allocations). An acquisition of Rockpoint’s interest in the Preferred Units pursuant to a Put/Call Event is generally required to be structured as a purchase of the common equity in the applicable Rockpoint entities holding direct or indirect interests in the Preferred Units (the “Put/Call Interests”). Subject to certain exceptions, Rockpoint also has a right of first offer and a participation right with respect to other common equity interests of VRLP or any subsidiary of VRLP that may be offered for sale by VRLP or its subsidiaries from time to time. Upon a Put/Call Event, other than in the event of a sale of VRLP, Rockpoint may elect to convert all, but not less than all, of its Preferred Units to Common Units in VRLP.

As such, the Preferred Units contain a substantive redemption feature that is outside of the Company’s control and accordingly, pursuant to ASC 480-1—S99-3A, the Preferred Units were previously classified in mezzanine equity measured based on the estimated future redemption value before the redemption right was exercised.

The Company determined the redemption value of these interests by hypothetically liquidating the estimated NAV of the VRT real estate portfolio including debt principal through the applicable waterfall provisions of the new transaction with Rockpoint. The estimation of NAV included unobservable inputs that consider assumptions of market participants in pricing the underlying assets of VRLP. For properties under development, the Company applied a discount rate to the estimated future cash flows allocable to the Company during the period under construction and then applies a direct capitalization method to the estimated stabilized cash flows. For operating properties, the direct capitalization method was used by applying a capitalization rate to the projected net operating income. For developable land holdings, an estimated per-unit market value assumption was considered based on development rights or plans for the land. Estimated future cash flows used in such analyses were based on the Company’s business plan for each respective property including capital expenditures, management’s views of market and economic conditions, and considered items such as current and future rental rates, occupancies and market transactions for comparable properties. The estimated future redemption value of the

Preferred Units, including current preferred return payments of $2.0 million was approximately $487.6 million as of June 30, 2023.

Preferred Units

On February 3, 2017, the Operating Partnership issued 42,800 shares of a new class of 3.5 percent Series A Preferred Limited Partnership Units of the Operating Partnership (the “Series A Units”). The Series A Units were issued to the Company’s partners in the Plaza VIII & IX Associates L.L.C. joint venture that owns a development site adjacent to the Company’s Harborside property in Jersey City, New Jersey as non-cash consideration for their approximate 37.5 percent interest in the joint venture.

Each Series A Unit has a stated value of $1,000, pays dividends quarterly at an annual rate of 3.5 percent (subject to increase under certain circumstances), is convertible into 28.15 common units of limited partnership interests of the Operating Partnership beginning generally five years from the date of issuance, or an aggregate of up to 1,204,820 common units. The conversion rate was based on a value of $35.52 per common unit. The Series A Units have a liquidation and dividend preference senior to the common units and include customary anti-dilution protections for stock splits and similar events. The Series A Units are redeemable for cash at their stated value beginning five years from the date of issuance at the option of the holder. During the six months ended June 30, 2022, 12,000 Series A Units were redeemed for cash at the stated value.

During October 2023, the Company received notice from a unit holder electing to have 15,100 Series A Units redeemed for cash at the stated value, which the Company expects to settle in November 2023.

On February 28, 2017, the Operating Partnership authorized the issuance of 9,213 shares of a new class of 3.5 percent Series A-1 Preferred Limited Partnership Units of the Operating Partnership (the “Series A-1 Units”). 9,122 Series A-1 Units were issued on February 28, 2017 and an additional 91 Series A-1 Units were issued in April 2017 pursuant to acquiring additional interests in a joint venture that owns Monaco Towers in Jersey City, New Jersey. The Series A-1 Units were issued as non-cash consideration for the partner’s approximate 13.8 percent ownership interest in the joint venture.

Each Series A-1 Unit has a stated value of $1,000 (the “Stated Value”), pays dividends quarterly at an annual rate equal to the greater of (x) 3.50 percent, or (y) the then-effective annual dividend yield on the General Partner’s common stock, and is convertible into 27.936 common units of limited partnership interests of the Operating Partnership beginning generally five years from the date of issuance, or an aggregate of up to 257,375 Common Units. The conversion rate was based on a value of $35.80 per common unit. The Series A-1 Units have a liquidation and dividend preference senior to the Common Units and include customary anti-dilution protections for stock splits and similar events. The Series A-1 Units are redeemable for cash at their stated value beginning five years from the date of issuance at the option of the holder. The Series A-1 Units are pari passu with the 3.5% Series A Units issued on February 3, 2017.

The following tables set forth the changes in Mandatorily redeemable noncontrolling interests for the three and nine months ended September 30, 2023 (dollars in thousands):


	Rockpoint Interests in VRT
Balance at July 1, 2023	$	487,619

Income Attributed to Noncontrolling Interests	1,617
Distributions	(3,623)
Redemption Value Adjustment	34,775
Redemption	(520,388)
Balance at September 30, 2023	$	—


	Rockpoint Interests in VRT
Balance at April 5, 2023	$	—
Reclassification from Redeemable Non-controlling Interests	479,977
Income Attributed to Noncontrolling Interests	7,365
Distributions	(9,371)
Redemption Value Adjustment	42,417
Redemption	(520,388)
Balance at September 30, 2023	$	—

The following tables set forth the changes in Redeemable noncontrolling interests within the mezzanine section for the three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):


	Series A and A-1 Preferred Units In VRLP		Rockpoint Interests in VRT		Total Redeemable Noncontrolling Interests
Balance at July 1, 2023	$	40,231	$	—	$	40,231



Income Attributed to Noncontrolling Interests	350		—		350
Distributions	(350)		—		(350)


Balance at September 30, 2023	$	40,231	$	—	$	40,231


	Series A and A-1 Preferred Units In VRLP		Rockpoint Interests in VRT		Total Redeemable Noncontrolling Interests
Balance at July 1, 2022	$	40,231	$	476,094	$	516,325



Income Attributed to Noncontrolling Interests	350		6,015		6,365
Distributions	(350)		(6,015)		(6,365)
Redemption Value Adjustment	—		(1,411)		(1,411)
Balance at September 30, 2022	$	40,231	$	474,683	$	514,914


	Series A and A-1 Preferred Units In VRLP		Rockpoint Interests in VRT		Total Redeemable Noncontrolling Interests
Balance at Balance at January 1, 2023	$	40,231	$	475,000	$	515,231



Income Attributed to Noncontrolling Interests	1,050		6,283		7,333
Distributions	(1,050)		(6,283)		(7,333)
Redemption Value Adjustment	—		4,977		4,977
Reclassification to Mandatorily Redeemable Non-controlling Interests	—		(479,977)		(479,977)
Balance at September 30, 2023	$	40,231	$	—	$	40,231


	Series A and A-1 Preferred Units In VRLP		Rockpoint Interests in VRT		Total Redeemable Noncontrolling Interests
Balance at January 1, 2022	$	52,324	$	468,989	$	521,313
Redemption/Payout	(12,000)		—		(12,000)

Net	40,324		468,989		509,313
Income Attributed to Noncontrolling Interests	1,121		18,047		19,168
Distributions	(1,121)		(18,047)		(19,168)
Redemption Value Adjustment	(93)		5,694		5,601
Balance at September 30, 2022	$	40,231	$	474,683	$	514,914

15. VERIS RESIDENTIAL, INC. STOCKHOLDERS’ EQUITY AND VERIS RESIDENTIAL, L.P.’S PARTNERS’ CAPITAL

To maintain its qualification as a REIT, not more than 50 percent in value of the outstanding shares of the General Partner may be owned, directly or indirectly, by five or fewer individuals at any time during the last half of any taxable year of the General Partner, other than its initial taxable year (defined to include certain entities), applying certain constructive ownership rules. To help ensure that the General Partner will not fail this test, the General Partner’s Charter provides, among other things, certain restrictions on the transfer of common stock to prevent further concentration of stock ownership. Moreover, to evidence compliance with these requirements, the General Partner must maintain records that disclose the actual ownership of its outstanding common stock and demands written statements each year from the holders of record of designated percentages of its common stock requesting the disclosure of the beneficial owners of such common stock.

Partners’ Capital in the accompanying consolidated financial statements relates to (a) General Partners’ capital consisting of common units in the Operating Partnership held by the General Partner, and (b) Limited Partners’ capital consisting of common units and LTIP units held by the limited partners. See Note 16: Noncontrolling Interests in Subsidiaries.

The following table reflects the activity of the General Partner capital for the three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Opening Balance	$	1,196,953	$	1,296,280	$	1,235,685	$	1,281,982
Net loss available to common shareholders	(54,807)		(101,218)		(102,214)		(83,937)
Common stock distributions	(4,714)		—		(4,714)		—
Redeemable noncontrolling interests	—		1,279		(4,516)		(5,187)
Redemption of common units for common stock	2,297		—		11,348		161
Shares issued under Dividend Reinvestment and Stock Purchase Plan	1		(4)		3		23
Directors' deferred compensation plan	99		110		295		330
Stock Compensation	9,366		2,790		16,218		7,256
Cancellation of common stock	(31)		(156)		(497)		(852)
Other comprehensive (loss) income	(652)		2,338		(111)		4,270
Rebalancing of ownership percent between parent and subsidiaries	(902)		160		(3,887)		(2,467)
Balance at September 30	$	1,147,610	$	1,201,579	$	1,147,610	$	1,201,579

Any transactions resulting in the issuance of additional common and preferred stock of the General Partner result in a corresponding issuance by the Operating Partnership of an equivalent amount of common and preferred units to the General Partner.

ATM PROGRAM

On December 13, 2021, the Company entered into a distribution agreement (the “Distribution Agreement”) with J.P. Morgan Securities LLC, BofA Securities, Inc., BNY Mellon Capital Markets, LLC, Capital One Securities, Inc., Comerica Securities, Inc., Goldman Sachs & Co. LLC, R. Seelaus & Co., LLC and Samuel A. Ramirez & Company, Inc., as sales agents. Pursuant to the Distribution Agreement, the Company may issue and sell, from time to time, shares of common stock, par value $0.01 per share, having a combined aggregate offering price of up to $200 million. The Company will pay a commission that will not exceed, but may be lower than, 2% of the gross proceeds of all shares sold through the ATM Program. As of September 30, 2023, the Company had not sold any shares pursuant to the ATM Program.

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN

The General Partner has a Dividend Reinvestment and Stock Purchase Plan (the “DRIP”) which commenced in March 1999 under which approximately 5.4 million shares of the General Partner’s common stock have been reserved for future issuance. The DRIP provides for automatic reinvestment of all or a portion of a participant’s dividends from the General Partner’s shares of common stock. 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 SEC for the approximately 5.4 million shares of the General Partner’s common stock reserved for issuance under the DRIP.

INCENTIVE STOCK PLAN

In May 2013, the General Partner established the 2013 Incentive Stock Plan (the “2013 Plan”) under which a total of 4,600,000 shares has been reserved for issuance. In June 2021, stockholders of the Company approved amendments to the 2013 Plan to increase the total shares reserved for issuance under the plan from 4,600,000 to 6,565,000 shares.

Stock Options

In addition to stock options issued in June 2021 under the 2013 Plan, in March 2021, the General Partner granted 950,000 stock options with an exercise price equal to the closing price of the Company’s common stock on the grant date of $15.79 per share to the Chief Executive Officer as an employment “inducement award” that is intended to comply with New York Stock Exchange Rule 303A.08. In April 2022, the General Partner granted 250,000 stock options with an exercise price equal to the closing price of the Company’s common stock on the grant date of $16.33 per share to the Chief Investment Officer as an employment “inducement award” that is intended to comply with New York Stock Exchange Rule 303A.08. Both of the these inducement awards have a three-year vesting period.

There were no stock options that were exercised under any stock option plans for the nine months ended September 30, 2023 and 2022, respectively. The Company has a policy of issuing new shares to satisfy stock option exercises.

As of September 30, 2023 and December 31, 2022, the stock options outstanding had a weighted average remaining contractual life of approximately 3.8 and 4.6 years, respectively.

The Company recognized stock compensation expense related to stock options of $414 thousand and $323 thousand for the three months ended September 30, 2023 and 2022, respectively and $1.2 million and $885 thousand for the nine months ended September 30, 2023 and 2022, respectively.

Restricted Stock Awards

The Company has issued Restricted Stock Awards in the form of restricted stock units to non-employee members of the Board of Directors, which allow the holders to each receive shares of the Company’s common stock following a one-year vesting period. Vesting of the Restricted Stock Awards issued is based on time and service. On June 14, 2023, the

Company issued Restricted Stock Awards to non-employee members of the Board of Directors, of which 54,184 unvested Restricted Stock Awards were outstanding at September 30, 2023.

The Company recognized stock compensation expense related to Restricted Stock Awards of $230 thousand and $175 thousand for the three months ended September 30, 2023 and 2022, respectively and $592 thousand and $511 thousand for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, the Company had $649 thousand of total unrecognized compensation cost related to unvested Restricted Stock Awards granted under the Company’s stock compensation plans. That cost is expected to be recognized over a weighted average period of 0.7 years.

All currently outstanding and unvested Restricted Stock Awards provided to the non-employee members of the Board of Directors were issued under the 2013 Plan.

Long-Term Incentive Plan Awards

The Company has granted long-term incentive plans awards (“LTIP Awards”) to officers, senior management, and certain other employees of the Company. LTIP Awards generally are granted in the form of restricted stock units (each, an “RSU” and collectively, the “RSU LTIP Awards”) and constitute awards under the 2013 Plan.

A portion of the RSUs are subject to time-based vesting conditions and will vest over three-year period. Additionally, in April 2022, the General Partner granted approximately 60,000 RSUs subject to time-vesting conditions, vesting over three years, to three executive officers as “inducement awards” intended to comply with New York Stock Exchange Rule 303A.08. As of September 30, 2023, there are 816,876 time-based awards outstanding and unvested.

Another portion of the annual LTIP Awards have market-based vesting conditions, and recipients will only earn the full amount of the market-based RSUs if, over the three-year performance period, the General Partner achieves an absolute TSR target and if the General Partner’s relative TSR as compared to a group of peer REITs exceeds certain thresholds. The market-based award targets are determined annually by the compensation committee of the Board of Directors. Currently, there are 853,430 awards outstanding and unvested.

In addition, the Company has granted RSUs subject to the achievement of adjusted funds from operations targets. The RSU LTIP Awards are designed to align the interests of senior management to relative and absolute performance of the Company over a three years performance period. Currently there are 660,710 awards outstanding and unvested.

The Company recognized stock compensation expense related to LTIP awards of $5.1 million and $3 million for the three months ended September 30, 2023 and 2022, respectively and $11.3 million and $9 million for the nine months ended September 30, 2023 and 2022, respectively.

As of September 30, 2023, the Company had $12.8 million of total unrecognized compensation cost related to unvested LTIP awards granted under the Company’s stock compensation plans. That cost is expected to be recognized over a weighted average period of 1.9 years.

All currently outstanding and unvested RSU LTIP Awards provided to the officers and certain other employees were issued under the 2013 Plan and as inducement awards.

Deferred Stock Compensation Plan For Directors

The Amended and Restated Deferred Compensation Plan for Directors, which commenced January 1, 1999, allows non-employee directors of the Company to elect to defer up to 100 percent of their annual retainer fee into deferred stock units. The deferred stock units are convertible into an equal number of shares of common stock upon the directors’ termination of service from the Board of Directors or a change in control of the Company, as defined in the plan. Deferred stock units are credited to each director quarterly using the closing price of the Company’s common stock on the applicable dividend record date for the respective quarter. Each participating director’s account is also credited for an equivalent amount of deferred stock units based on the dividend rate for each quarter.

During the three months ended September 30, 2023 and 2022, 6,193 and 9,607 deferred stock units were earned, respectively. During the nine months ended September 30, 2023 and 2022, 19,143 and 24,024 deferred stock units were

earned, respectively. As of September 30, 2023 and December 31, 2022, there were 71,446 and 73,071 deferred stock units outstanding, respectively. Pursuant to the retirement of a director from the Board of Directors in May 2023, the Company converted 20,767 deferred stock units into shares of common stock.

EARNINGS PER SHARE/UNIT

Basic EPS or EPU excludes dilution and is computed by dividing net income available to common shareholders or unitholders by the weighted average number of shares or units outstanding for the period. Diluted EPS or EPU reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In the calculation of basic and diluted EPS and EPU, a redemption value adjustment of redeemable noncontrolling interests attributable to common shareholders or unitholders is included in the calculation to arrive at the numerator of net income (loss) available to common shareholders or unitholders.

The following information presents the Company’s results for the three and nine months ended September 30, 2023 and 2022 in accordance with ASC 260, Earnings Per Share (dollars in thousands, except per share amounts):

Veris Residential, Inc.:


	Three Months Ended September 30,				Nine Months Ended September 30,
Computation of Basic EPS	2023		2022		2023		2022
Loss from continuing operations after income tax expense	$	(61,644)	$	(22,589)	$	(107,619)	$	(15,917)
Add (deduct): Noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Add (deduct): Noncontrolling interests in Operating Partnership	5,322		2,613		10,016		2,929
Add (deduct): Redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Add (deduct): Redemption value adjustment of redeemable noncontrolling interests attributable to common shareholders	—		1,279		(4,516)		(5,187)
Loss from continuing operations available to common shareholders	$	(56,080)	$	(24,336)	$	(107,637)	$	(34,859)
Income (loss) from discontinued operations available to common shareholders	1,273		(75,603)		907		(54,265)
Net loss available to common shareholders for basic earnings per share	(54,807)		(99,939)		(106,730)		(89,124)

Weighted average common shares	92,177		91,087		91,762		91,022

Basic EPS:
Loss from continuing operations available to common shareholders	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Income (loss) from discontinued operations available to common shareholders	0.01		(0.83)		0.01		(0.60)
Net loss available to common shareholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)


	Three Months Ended September 30,				Nine Months Ended September 30,
Computation of Diluted EPS	2023		2022		2023		2022
Net loss from continuing operations available to common shareholders	$	(56,080)	$	(24,336)	$	(107,637)	$	(34,859)
Add (deduct): Noncontrolling interests in Operating Partnership	(5,322)		(2,613)		(10,016)		(2,929)
Add (deduct): Redemption value adjustment of redeemable noncontrolling interests attributable to the Operating Partnership unitholders	—		131		(461)		(520)
Loss from continuing operations for diluted earnings per share	(61,402)		(26,818)		(118,114)		(38,308)
Income (loss) from discontinued operations for diluted earnings per share	1,394		(83,313)		1,004		(59,862)
Net loss available for diluted earnings per share	$	(60,008)	$	(110,131)	$	(117,110)	$	(98,170)

Weighted average common shares	100,925		100,378		100,770		100,215

Diluted EPS:
Loss from continuing operations available to common shareholders	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Income (loss) from discontinued operations available to common shareholders	0.01		(0.83)		0.01		(0.60)
Net loss available to common shareholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)

The following schedule reconciles the weighted average shares used in the basic EPS calculation to the shares used in the diluted EPS calculation (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Basic EPS shares	92,177	91,087	91,762	91,022
Add: Operating Partnership – common and vested LTIP units	8,748	9,291	9,008	9,193


Diluted EPS Shares	100,925	100,378	100,770	100,215

Contingently issuable shares under Restricted Stock Awards were excluded from the denominator during the periods ended September 30, 2023 as such securities were anti-dilutive during the periods. Shares issuable under all outstanding stock options were excluded from the denominator during the periods ended September 30, 2023 as such securities were anti-dilutive during the periods. Also not included in the computations of diluted EPS were the unvested LTIP Units as such securities were anti-dilutive during all periods presented.

Veris Residential, L.P.:


	Three Months Ended September 30,				Nine Months Ended September 30,
Computation of Basic EPU	2023		2022		2023		2022
Loss from continuing operations after income tax expense	$	(61,644)	$	(22,589)	$	(107,619)	$	(15,917)
Add (deduct): Noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Add (deduct): Redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Add (deduct): Redemption value adjustment of redeemable noncontrolling interests	—		1,410		(4,977)		(5,707)
Loss from continuing operations available to unitholders	(61,402)		(26,818)		(118,114)		(38,308)
Income (loss) from discontinued operations available to unitholders	1,394		(83,313)		1,004		(59,862)
Net loss available to common unitholders for basic earnings per unit	$	(60,008)	$	(110,131)	$	(117,110)	$	(98,170)

Weighted average common units	100,925		100,378		100,770		100,215

Basic EPU:
Loss from continuing operations available to unitholders	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Income (loss) from discontinued operations available to unitholders	0.01		(0.83)		0.01		(0.60)
Net loss available to common unitholders for basic earnings per unit	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)

	Three Months Ended September 30,				Nine Months Ended September 30,
Computation of Diluted EPU	2023		2022		2023		2022
Loss from continuing operations available to common unitholders	$	(61,402)	$	(26,818)	$	(118,114)	$	(38,308)
Income (loss) income from discontinued operations for diluted earnings per unit	1,394		(83,313)		1,004		(59,862)
Net loss available to common unitholders for diluted earnings per unit	$	(60,008)	$	(110,131)	$	(117,110)	$	(98,170)

Weighted average common unit	100,925		100,378		100,770		100,215

Diluted EPU:
Loss from continuing operations available to common unitholders	$	(0.61)	$	(0.27)	$	(1.17)	$	(0.38)
Income (loss) from discontinued operations available to common unitholders	0.01		(0.83)		0.01		(0.60)
Net loss available to common unitholders	$	(0.60)	$	(1.10)	$	(1.16)	$	(0.98)

The following schedule reconciles the weighted average units used in the basic EPU calculation to the units used in the diluted EPU calculation (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022
Basic EPU units	100,925	100,378	100,770	100,215


Diluted EPU Units	100,925	100,378	100,770	100,215

Contingently issuable shares under Restricted Stock Awards were excluded from the denominator during the periods ended September 30, 2023 as such securities were anti-dilutive during the periods. Shares issuable under all outstanding stock options were excluded from the denominator during the periods ended September 30, 2023 as such securities were anti-dilutive during the periods. Also not included in the computations of diluted EPU were the unvested LTIP Units as such securities were anti-dilutive during all periods presented.

16. NONCONTROLLING INTERESTS IN SUBSIDIARIES

Noncontrolling interests in subsidiaries in the accompanying consolidated financial statements relate to (i) common units (“Common Units”) and LTIP units in the Operating Partnership, held by parties other than the General Partner (“Limited Partners”), and (ii) interests in consolidated joint ventures for the portion of such ventures not owned by the Company.

The following table reflects the activity of noncontrolling interests for the three and nine months ended September 30, 2023 and 2022, respectively (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Opening Balance	$	151,065	$	170,893	$	163,652	$	167,436
Net (loss) income	(5,443)		(4,684)		(4,401)		8,158
Unit distributions	(435)		—		(435)		218
Redeemable noncontrolling interests	(350)		(6,234)		(7,794)		(19,688)
Change in noncontrolling interests in consolidated joint ventures	84		6		(478)		24
Redemption of common units for common stock	(2,297)		—		(11,348)		(161)
Redemption of common units	—		—		(94)		(1,801)
Stock compensation	—		423		487		3,401

Other comprehensive (loss) income	(62)		239		(12)		429
Rebalancing of ownership percentage between parent and subsidiaries	902		(160)		3,887		2,467
Balance at September 30	$	143,464	$	160,483	$	143,464	$	160,483

Pursuant to ASC 810, Consolidation, on the accounting and reporting for noncontrolling interests and changes in ownership interests of a subsidiary, changes in a parent’s ownership interest (and transactions with noncontrolling interests unitholders in the subsidiary) while the parent retains its controlling interest in its subsidiary should be accounted for as equity transactions. The carrying value of the noncontrolling interests shall be adjusted to reflect the change in its ownership interest in the subsidiary, with the offset to equity attributable to the parent. Accordingly, as a result of equity transactions which caused changes in ownership percentages between Veris Residential, Inc. stockholders’ equity and noncontrolling interests in the Operating Partnership that occurred during the nine months ended September 30, 2023, the Company has increased noncontrolling interests in the Operating Partnership and decreased additional paid-in capital in Veris Residential, Inc. stockholders’ equity by approximately $3.9 million as of September 30, 2023.

NONCONTROLLING INTERESTS IN OPERATING PARTNERSHIP (applicable only to General Partner)

Common Units

During the nine months ended September 30, 2023, the Company redeemed for cash 6,168 common units at their fair value of $94 thousand.

Certain individuals and entities own common units in the Operating Partnership. A common unit and a share of Common Stock of the General Partner have substantially the same economic characteristics in as much as they effectively share equally in the net income or loss of the Operating Partnership. Common unitholders have the right to redeem their common units, subject to certain restrictions. The redemption is required to be satisfied in shares of Common Stock, cash, or a combination thereof, calculated as follows: one share of the General Partner’s Common Stock, or cash equal to the fair market value of a share of the General Partner’s Common Stock at the time of redemption, for each common unit. The General Partner, in its sole discretion, determines the form of redemption of common units (i.e., whether a common unitholder receives Common Stock, cash, or any combination thereof). If the General Partner elects to satisfy the redemption with shares of Common Stock as opposed to cash, it is obligated to issue shares of its Common Stock to the redeeming unitholder. Regardless of the rights described above, the common unitholders may not put their units for cash to the General Partner or the Operating Partnership under any circumstances. When a unitholder redeems a common unit, noncontrolling interests in the Operating Partnership is reduced and Veris Residential, Inc. Stockholders’ equity is increased.

LTIP Units

From time to time, the Company has granted LTIP awards to executive officers of the Company. All of the LTIP Awards granted through January 2021 are in the form of units in the Operating Partnership. LTIP Units are designed to qualify as “profits interests” in the Operating Partnership for federal income tax purposes. As a general matter, the profits interests characteristics of the LTIP Units mean that initially they will not be economically equivalent in value to a common unit. If and when events specified by applicable tax regulations occur, LTIP Units can over time increase in value up to the point where they are equivalent to common units on a one-for-one basis. After LTIP Units are fully vested, and to the extent the special tax rules applicable to profits interests have allowed them to become equivalent in value to common units, LTIP Units may be converted on a one-for-one basis into common units. Common units in turn have a one-for-one relationship in value with shares of the General Partner’s common stock, and are redeemable on a one-for-one basis for cash or, at the election of the Company, shares of the General Partner’s common stock.

Noncontrolling Interests Ownership in Operating Partnership

As of September 30, 2023 and December 31, 2022, the noncontrolling interests common unit holders owned 8.6 percent and 9.3 percent of the Operating Partnership, respectively.

NONCONTROLLING INTERESTS IN CONSOLIDATED JOINT VENTURES (applicable to General Partner and Operating Partnership)

The Company consolidates certain joint ventures in which it has ownership interests. Various entities and/or individuals hold noncontrolling interests in these ventures.

PARTICIPATION RIGHTS

The Company’s interests in a potential future development provides for the initial distributions of net cash flow solely to the Company, and thereafter, other parties have participation rights in 50 percent of the excess net cash flow remaining after the distribution to the Company of the aggregate amount equal to the sum of: (a) the Company’s capital contributions, plus (b) an IRR of 10 percent per annum.

17. SEGMENT REPORTING

The Company operates in two business segments: (i) multifamily real estate and services and (ii) commercial and other real estate. The Company provides property management, leasing, acquisition, development, construction and tenant-related services for its commercial and other real estate and multifamily real estate portfolio. The Company’s multifamily services

business also provides similar services for third parties. The Company had no revenues from foreign countries recorded for the nine months ended September 30, 2023 and 2022. The Company had no long lived assets in foreign locations as of September 30, 2023 and December 31, 2022. The accounting policies of the segments are the same as those described in Note 2: Significant Accounting Policies, excluding depreciation and amortization.

The Company evaluates performance based upon net operating income from the combined properties and operations in each of its real estate segments (commercial and other real estate and multifamily real estate and services). All properties classified as discontinued operations have been excluded.

Selected results of operations for the three and nine months ended September 30, 2023 and 2022 and selected asset information as of September 30, 2023 and December 31, 2022 regarding the Company’s operating segments are as follows. Amounts for prior periods have been restated to conform to the current period segment reporting presentation (dollars in thousands):


	Commercial & Other Real Estate		Multifamily Real Estate & Services (d)		Corporate & Other (e)		Total Company
Total revenues:
Three months ended:
September 30, 2023	$	4,682	$	66,202	$	598	$	71,482
September 30, 2022	3,241		60,363		(469)		63,135
Nine months ended:
September 30, 2023	$	12,745	$	192,625	$	1,573	$	206,943
September 30, 2022	7,922		159,756		(1,414)		166,264

Total operating and interest expenses (a):
Three months ended:
September 30, 2023	$	3,513	$	26,338	$	78,877	$	108,728
September 30, 2022	614		31,117		28,795		60,526
Nine months ended:
September 30, 2023	$	8,104	$	78,400	$	155,738	$	242,242
September 30, 2022	5,612		82,125		82,727		170,464

Equity in earnings (loss) of unconsolidated joint ventures:
Three months ended:
September 30, 2023	$	—	$	210	$	—	$	210
September 30, 2022	—		(304)		—		(304)
Nine months ended:
September 30, 2023	$	—	$	2,843	$	—	$	2,843
September 30, 2022	—		1,847		—		1,847

Net operating income (loss) (b):
Three months ended:
September 30, 2023	$	1,169	$	40,074	$	(78,279)	$	(37,036)
September 30, 2022	2,627		28,942		(29,264)		2,305
Nine months ended:
September 30, 2023	$	4,641	$	117,068	$	(154,165)	$	(32,456)
September 30, 2022	2,310		79,478		(84,141)		(2,353)



Total assets:
September 30, 2023	$	164,956	$	3,146,961	$	17,973	$	3,329,890
December 31, 2022	597,459		3,302,188		21,121		3,920,768

Total long-lived assets (c):
September 30, 2023	$	153,828	$	2,952,451	$	(1,715)	$	3,104,564
December 31, 2022	547,923		3,101,286		(1,330)		3,647,879

Total investments in unconsolidated joint ventures:
September 30, 2023	$	—	119,830		$	—	$	119,830
December 31, 2022	—		126,158		—		126,158

(a)Total operating and interest expenses represent the sum of: real estate taxes; utilities; operating services; real estate services expenses; general and administrative, acquisition related costs and interest expense (net of interest income). All interest expense, net of interest and other investment income (including for property-level mortgages), is excluded from segment amounts and classified in Corporate & Other for all periods.

(b)Net operating income represents total revenues less total operating and interest expenses (as defined and classified in Note “a”), plus equity in earnings (loss) of unconsolidated joint ventures, for the period.

(c)Long-lived assets are comprised of net investment in rental property and unbilled rents receivable.

(d)Segment assets and operations were owned through a consolidated and variable interest entity commencing in February 2018.

(e)Corporate & Other represents all corporate-level items (including interest and other investment income, interest expense, non-property general and administrative expense), as well as intercompany eliminations necessary to reconcile to consolidated Company totals.

Veris Residential, Inc.

The following schedule reconciles net operating income to net income (loss) available to common shareholders (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net operating (loss) income	$	(37,036)	$	2,305	$	(32,456)	$	(2,353)
Add (deduct):
Depreciation and amortization	(23,212)		(22,359)		(70,543)		(61,815)

Land and other impairments, net	—		(2,535)		(3,396)		(9,367)

(Loss) gain on disposition of developable land	—		—		(23)		57,747

Loss from extinguishment of debt, net	(1,046)		—		(3,702)		(129)
Other income, net	(57)		—		2,794		—
Loss from continuing operations before income tax expense	(61,351)		(22,589)		(107,326)		(15,917)
Provision for income taxes	(293)		—		(293)		—
Loss from continuing operations after income tax expense	(61,644)		(22,589)		(107,619)		(15,917)
Discontinued operations
Income (loss) from discontinued operations	971		(78,213)		3,290		(52,158)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net	423		(5,100)		(2,286)		(7,704)
Total discontinued operations, net	1,394		(83,313)		1,004		(59,862)
Net loss	(60,250)		(105,902)		(106,615)		(75,779)
Noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Noncontrolling interests in Operating Partnership	5,322		2,613		10,016		2,929
Noncontrolling interest in discontinued operations	(121)		7,710		(97)		5,597
Redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Net loss available to common shareholders	$	(54,807)	$	(101,218)	$	(102,214)	$	(83,937)

Veris Residential, L.P.

The following schedule reconciles net operating income to net income (loss) available to common unitholders (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net operating (loss) income	$	(37,036)	$	2,305	$	(32,456)	$	(2,353)
Add (deduct):
Depreciation and amortization	(23,212)		(22,359)		(70,543)		(61,815)

Land and other impairments, net	—		(2,535)		(3,396)		(9,367)

(Loss) gain on disposition of developable land	—		—		(23)		57,747

Loss from extinguishment of debt, net	(1,046)		—		(3,702)		(129)
Other income, net	(57)		—		2,794		—
Loss from continuing operations before income tax expense	(61,351)		(22,589)		(107,326)		(15,917)
Provision for income taxes	(293)		—		(293)		—
Loss from continuing operations after income tax expense	(61,644)		(22,589)		(107,619)		(15,917)
Discontinued operations
Income (loss) from discontinued operations	971		(78,213)		3,290		(52,158)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net	423		(5,100)		(2,286)		(7,704)
Total discontinued operations, net	1,394		(83,313)		1,004		(59,862)
Net loss	(60,250)		(105,902)		(106,615)		(75,779)
Noncontrolling interests in consolidated joint ventures	592		726		1,815		2,484
Redeemable noncontrolling interests	(350)		(6,365)		(7,333)		(19,168)
Net loss available to common unitholders	$	(60,008)	$	(111,541)	$	(112,133)	$	(92,463)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

The following discussion should be read in conjunction with the Consolidated Financial Statements of Veris Residential, Inc. and Veris Residential, L.P. and the notes thereto (collectively, the “Financial Statements”). Certain defined terms used herein have the meaning ascribed to them in the Financial Statements.

Executive Overview

Veris Residential, Inc., together with its subsidiaries, (collectively, the “General Partner”), including Veris Residential, L.P. (the “Operating Partnership”), has been involved in all aspects of commercial real estate development, management and ownership for over 60 years and the General Partner has been a publicly traded REIT since 1994.

The Operating Partnership conducts the business of providing management, leasing, acquisition, development and tenant-related services for its General Partner. The Operating Partnership, through its operating divisions and subsidiaries, including the Veris property-owning partnerships and limited liability companies, is the entity through which all of the General Partner’s operations are conducted. Unless stated otherwise or the context requires, the “Company” refers to the General Partner and its subsidiaries, including the Operating Partnership and its subsidiaries.

As of September 30, 2023, the Company owns or has interests in 30 properties (collectively, the “Properties”) and developable land parcels. These Properties are comprised of 24 multifamily rental properties containing 7,681 apartment units as well as non-core assets comprised of two office properties and four parking/retail properties, and 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.

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. 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.

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. 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. The Company consolidates VIEs in which it is considered to be the primary beneficiary. 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.

The financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”). 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. 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. 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. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

Results From Operations

The following comparisons for the three and nine months ended September 30, 2023 (“2023”), as compared to the three and nine months ended September 30, 2022 (“2022”), make reference to the following:

(i)“Same-Store Properties,” which represent all in-service properties owned by the Company at December 31, 2021 excluding properties sold, disposed of, removed from service, or being redeveloped or repositioned from January 1, 2022 through September 30, 2023;

(ii)“Acquired and Developed Properties,” which represent all properties acquired by the Company or commencing initial operations from January 1, 2022 through September 30, 2023; 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, 2022 through September 30, 2023.

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022


(dollars in thousands)	Three Months Ended September 30,				Dollar Change		Percent Change
	2023		2022
Revenue from rental operations and other:
Revenue from leases	$	64,214	$	54,764	$	9,450	17.3	%
Parking income	4,674		4,083		591		14.5

Other income	1,364		3,402		(2,038)		(59.9)
Total revenues from rental operations	70,252		62,249		8,003		12.9

Property expenses:
Real estate taxes	10,909		10,463		446		4.3
Utilities	2,746		2,483		263		10.6
Operating services	15,349		13,468		1,881		14.0
Total property expenses	29,004		26,414		2,590		9.8

Non-property revenues:
Real estate services	1,230		886		344		38.8
Total non-property revenues	1,230		886		344		38.8

Non-property expenses:
Real estate services expenses	3,533		2,752		781		28.4
General and administrative	14,620		12,818		1,802		14.1
Transaction related costs	2,704		3		2,701		90,033.3
Depreciation and amortization	23,212		22,359		853		3.8

Land and other impairments, net	—		2,535		(2,535)		(100.0)
Total non-property expenses	44,069		40,467		3,602		8.9
Operating loss	(1,591)		(3,746)		2,155		57.5
Other (expense) income:
Interest expense	(23,715)		(18,819)		(4,896)		(26.0)
Interest cost of mandatorily redeemable noncontrolling interests	(36,392)		—		(36,392)		100.0
Interest and other investment income	1,240		280		960		342.9
Equity in earnings (losses) of unconsolidated joint ventures	210		(304)		514		169.1



Loss from extinguishment of debt, net	(1,046)		—		(1,046)		100.0
Other (expense) income, net	(57)		—		(57)		100.0
Total other (expense) income	(59,760)		(18,843)		(40,917)		217.1
Loss from continuing operations before income tax expense	(61,351)		(22,589)		(38,762)		(171.6)
Provision for income taxes	(293)		—		(293)		100.0
Loss from continuing operations after income tax expense	(61,644)		(22,589)		(39,055)		(172.9)
Discontinued operations:
Income (loss) from discontinued operations	971		(78,213)		79,184		(101.2)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net	423		(5,100)		5,523		(108.3)
Total discontinued operations	1,394		(83,313)		84,707		(101.7)
Net loss	$	(60,250)	$	(105,902)	$	45,652	43.1	%

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):


(dollars in thousands)	Total Company				Same-Store Properties				Acquired and Developed Properties				Properties Sold in 2022 and 2023
	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	$	9,450	17.3	%	$	4,586	8.4	%	$	4,864	8.9	%	$	—	—	%
Parking income	591		14.5		428		10.5		163		4.0		—		—

Other income	(2,038)		(59.9)		(2,067)		(60.8)		29		0.9		—		—
Total	$	8,003	12.9	%	$	2,947	4.7	%	$	5,056	8.1	%	$	—	—	%

Property expenses:
Real estate taxes	$	446	4.3	%	$	(57)	0.5	%	$	503	4.8	%	$	—	—	%
Utilities	263		10.6		248		10.0		15		0.6		—		—
Operating services	1,881		14.0		1,101		8.2		780		5.8		—		—
Total	$	2,590	9.8	%	$	1,292	4.9	%	$	1,298	4.9	%	$	—	—	%

OTHER DATA:
Number of Consolidated Properties	21				19				2				—
Commercial Square feet (in thousands)	1,034,112				1,034,112				—				—
Multifamily portfolio (number of units)	5,535				4,545				990				—

Revenue from leases. Revenue from leases for the Same-Store Properties increased $4.6 million, or 8.4 percent, for 2023 as compared to 2022, due primarily to an increase in market rental rates and a reduction in concessions of the multifamily rental properties.

Parking income. Parking income for the Same-Store Properties increased $0.4 million, or 10.5 percent, for 2023 as compared to 2022 due primarily to increased usage at the parking garages in 2023 as compared to 2022.

Other income. Other income for the Same-Store Properties decreased $2.1 million, or 60.8 percent, due primarily to the return of escrow on a previous transaction and post sales items received in 2022.

Real estate taxes. Real estate taxes for the Same-Store Properties remained relatively unchanged.

Utilities. Utilities for the Same-Store Properties remained relatively unchanged.

Operating services. Operating services for the Same-Store Properties increased $1.1 million, or 8.2 percent, due primarily to increased repairs and maintenance costs, and the stock-based compensation expenses adjustment of $0.8 million recorded in the third quarter of 2023.

Real estate services revenue. Real estate services revenue (primarily reimbursement of property personnel costs) remained relatively unchanged.

Real estate services expense. Real estate services expense increased $0.8 million, or 28.4 percent due to increased management activity in multi-family services.

General and administrative. General and administrative expenses increased $1.8 million, or 14.1 percent, for 2023 as compared to 2022, primarily due to higher stock compensation expense in 2023 as a result of the $2.8 million adjustment, partially offset by higher severance and related costs in 2022 and cost reductions in 2023.

Depreciation and amortization. Depreciation and amortization increased $0.9 million, or 3.8 percent. This increase was primarily due to an increase of $0.6 million for Acquired and Developed Properties.

Land and other impairments, net. In 2022, the Company recorded $2.5 million of impairments on developable land parcels.

Interest expense. Interest expense increased $4.9 million, or 26.0 percent, for 2023 as compared to 2022. 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 Haus25 being placed in service during 2022.

Interest cost of mandatorily redeemable noncontrolling interests. During the third quarter of 2023, the Company recognized $36.4 million in interest cost of mandatorily redeemable noncontrolling interests primarily related to the redemption of Rockpoint's interests.

Interest and other investment income (loss). Interest income increased $1.0 million, or 342.9 percent, for 2023 compared to 2022. The increase is primarily related to interest income earned on larger cash balances in the banks from sales proceeds received.

Equity in earnings (losses) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures increased $0.5 million for 2023 as compared to 2022, due primarily to the improved operating performance of its unconsolidated joint ventures as a result of higher rental rates.

Loss from extinguishment of debt, net. In the third quarter of 2023, the Company wrote off $1.1 million of unamortized deferred financing costs related to the loan refinancing for the Haus25 property located in Jersey City, NJ.

Discontinued operations. The Company recognized income from discontinued operations of $1.0 million in 2023 and a loss of $78.2 million in 2022. In 2023 and 2022, the Company recognized realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, of a gain of $0.4 million and of a loss of $5.1 million, respectively, on these properties. See Note 7: Discontinued Operations to the Financial Statements.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022


(dollars in thousands)	Nine Months Ended September 30,				Dollar Change		Percent Change
	2023		2022
Revenue from rental operations and other:
Revenue from leases	$	185,961	$	146,020	$	39,941	27.4	%
Parking income	13,574		11,659		1,915		16.4

Other income	4,623		5,892		(1,269)		(21.5)
Total revenues from rental operations	204,158		163,571		40,587		24.8

Property expenses:
Real estate taxes	29,733		26,664		3,069		11.5
Utilities	7,629		6,730		899		13.4
Operating services	41,557		39,354		2,203		5.6
Total property expenses	78,919		72,748		6,171		8.5

Non-property revenues:
Real estate services	2,785		2,693		92		3.4
Total non-property revenues	2,785		2,693		92		3.4

Non-property expenses:
Real estate services expenses	9,864		8,035		1,829		22.8
General and administrative	34,487		43,793		(9,306)		(21.2)
Transaction related costs	7,051		1,348		5,703		423.1
Depreciation and amortization	70,543		61,815		8,728		14.1

Land and other impairments, net	3,396		9,367		(5,971)		(63.7)
Total non-property expenses	125,341		124,358		983		0.8
Operating income (loss)	2,683		(30,842)		33,525		(108.7)
Other (expense) income:
Interest expense	(67,422)		(45,167)		(22,255)		49.3
Interest cost of mandatorily redeemable noncontrolling interests	(49,782)		—		(49,782)		(100.0)
Interest and other investment income	5,283		627		4,656		742.6
Equity in earnings (losses) of unconsolidated joint ventures	2,843		1,847		996		53.9

(Loss) gain on disposition of developable land	(23)		57,747		(57,770)		(100.0)

Loss from extinguishment of debt, net	(3,702)		(129)		(3,573)		2769.8
Other Income, net	2,794		��		2,794		100.0
Total other (expense) income	(110,009)		14,925		(124,934)		(837.1)
Loss from continuing operations before income tax expense	(107,326)		(15,917)		(91,409)		574.3
Provision for income taxes	(293)		—		(293)		—
Loss from continuing operations after income tax expense	(107,619)		(15,917)		(91,702)		576.1
Discontinued operations:
Income (loss) from discontinued operations	3,290		(52,158)		55,448		(106.3)
Realized losses (gains)and unrealized losses (gains) on disposition of rental property and impairments, net	(2,286)		(7,704)		5,418		(70.3)
Total discontinued operations	1,004		(59,862)		60,866		(101.7)
Net loss	$	(106,615)	$	(75,779)	$	(30,836)	40.7	%


(dollars in thousands)	Total Company				Same-Store Properties				Acquired and Developed Properties				Properties Sold in 2022 and 2023
	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	$	39,941	27.4	%	$	15,364	10.5	%	$	24,577	16.8	%	$	—	—	%
Parking income	1,915		16.4		1,300		11.2		709		6.1		(94)		0.8

Other income	(1,269)		(21.5)		(1,386)		(23.5)		117		2.0		—		—
Total	$	40,587	24.8	%	$	15,278	9.3	%	$	25,403	15.5	%	$	(94)	0.1	%

Property expenses:
Real estate taxes	$	3,069	11.5	%	$	792	3.0	%	$	2,355	8.8	%	$	(78)	0.3	%
Utilities	899		13.4		288		4.3		611		9.1		—		—
Operating services	2,203		5.6		(2,205)		(5.6)		4,448		11.3		(40)		0.1
Total	$	6,171	8.5	%	$	(1,125)	(1.5)	%	$	7,414	10.2	%	$	(118)	0.2	%

OTHER DATA:
Number of Consolidated Properties	21				19				2				—
Commercial Square feet (in thousands)	1,034,112				1,034,112				—				—
Multifamily portfolio (number of units)	5,535				4,545				990				—

Revenue from leases. Revenue from leases for the Same-Store Properties increased $15.4 million, or 10.5% percent, for 2023 as compared to 2022, due primarily to an increase in market rental rates and a reduction in concessions of the multifamily rental properties.

Parking income. Parking income for the Same-Store Properties increased $1.3 million, or 11.2 percent, for 2023 as compared to 2022 due primarily to increased usage at the parking garages in 2023 as compared to 2022.

Other income. Other income for the Same-Store Properties decreased $1.4 million, or 23.5 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. Real estate taxes for the Same-Store Properties increased $0.8 million, or 3.0 percent, for 2023 as compared to 2022, due primarily to increased tax rates primarily related to properties located in Jersey City, New Jersey offset by prior period tax appeal refunds received on several properties.

Utilities. Utilities for the Same-Store Properties remained relatively unchanged.

Operating services. Operating services for the Same-Store Properties decreased $2.2 million, or 5.6 percent, for 2023 as compared to 2022, due primarily to a reduction in services and operations pertaining to property maintenance, and the stock-based compensation expenses adjustment of $0.8 million recorded in the third quarter of 2023.

Real estate services revenue. Real estate services revenue (primarily reimbursement of property personnel costs) remained relatively unchanged.

Real estate services expense. Real estate services expense increased $1.8 million, or 22.8 percent due to increased management activity in multi-family services.

General and administrative. General and administrative expenses decreased $9.3 million, or 21.2 percent, for 2023 as compared to 2022. This decrease was due primarily to higher severance and related costs in 2022 and cost reductions in 2023, offset by higher stock compensation expense in 2023 as a result of the $2.8 million adjustment.

Depreciation and amortization. Depreciation and amortization increased $8.7 million, or 14.1 percent. This increase was primarily due to an increase of $7.9 million for Acquired and Developed Properties.

Land and other impairments, net. In 2023, the Company recorded $3.4 million of impairments on developable land parcels, in comparison to 2022, the Company recorded $9.4 million of impairments.

Interest expense. Interest expense increased $22.3 million, or 49.3 percent, for 2023 as compared to 2022. 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 Haus25 being placed in service during 2022.

Interest cost of mandatorily redeemable noncontrolling interests. The Company recognized $49.8 million interest cost of mandatorily redeemable noncontrolling interests related to Rockpoint's interests.

Interest and other investment income (loss). Interest and other investment income (loss) increased $4.7 million, or 742.6 percent, for 2023 compared to 2022. The increase is primarily related to interest income for sales proceeds deposits.

Equity in earnings (losses) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures increased $1.0 million for 2023 as compared to 2022, due primarily to the improved operating performance of its unconsolidated joint ventures as a result of higher rental rates.

(Loss) gain on disposition of developable land. In 2022, the Company recognized a loss of $57.7 million on the sale of developable land parcels located in Jersey City and West Windsor, New Jersey.

Other Income, net. In 2023, the Company received insurance proceeds of $2.8 million.

Discontinued operations. The Company recognized income from discontinued operations of $3.3 million in 2023 and a loss of $52.2 million in 2022. In 2023 and 2022, the Company recognized realized gains (losses) and unrealized losses on disposition of rental property and impairments, net, of a loss of $2.3 million and $7.7 million, respectively, on these properties. See Note 7: Discontinued Operations to the Financial Statements.

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. To the extent that the Company’s cash flow from operating activities is insufficient to finance its non-recurring capital expenditures such as property acquisitions, development and construction costs and other capital expenditures, the Company has and expects to continue to finance such activities through other debt and equity financings, proceeds from the sale of properties and joint venture capital.

The Company expects to meet its short-term liquidity requirements generally through its working capital, which may include proceeds from the sales of rental properties and land, and net cash provided by operating activities.

On July 25, 2023, VRT and the Operating Partnership acquired from Rockpoint all of the Preferred Units that constituted the Put/Call Interests for an aggregate purchase price of approximately $520 million (the "Rockpoint Redemption").

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. However, any such distributions, whether for federal income tax purposes or otherwise, would be paid out of available cash, including borrowings and other sources, after meeting operating requirements, preferred stock dividends and distributions, and scheduled debt service on the Company’s debt. If and to the extent the Company retains and does not distribute any net capital gains, the General Partner 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.

On July 24, 2023, the Company declared a $0.05 dividend per common share to be payable on October 10, 2023 to shareholders of record as of the close of business on September 30, 2023. At September 30, 2023, the balance of the dividends payable was $5.2 million.

The dividends and distributions payable at December 31, 2022 represent amounts payable on unvested LTIP units.

Unencumbered Properties

As of September 30, 2023, the Company had five unencumbered properties with a carrying value of $289.2 million representing 22.7 percent of the Company’s total consolidated property count.

Cash Flows

Cash, cash equivalents and restricted cash decreased by $6.8 million to $40.9 million at September 30, 2023, compared to $47.6 million at December 31, 2022. This decrease is comprised of the following net cash flow items:

(1)$33.3 million provided by operating activities.

(2)$494.6 million provided by investing activities, consisting primarily of the following:

(a)$488.6 million received from proceeds of rental properties included in discontinued operations;

(b)$9.4 million received from distributions in excess of cumulative earnings from unconsolidated joint ventures;

(c)$7.8 million received from proceeds from the sales of rental property;

(d)$3.7 million received from insurance settlements;

(e)$1.3 million received from repayment of notes receivable;

(f)$9.8 million used for additions to rental property, improvements and other costs;

(g)$7.0 million used for the development of rental property and other related costs.

(3)$534.6 million used in financing activities, consisting primarily of the following:

(a)$520.4 million used for the redemption of redeemable noncontrolling interests;

(b)$441.2 million used for repayments of mortgages, loans payable and other obligations;

(c)$72.0 million used for repayments of term loans;

(d)$63.0 million used for repayments of revolving credit facility;

(e)$16.7 million used for distribution to redeemable noncontrolling interests;

(f)$16.1 million used for the payment of financing costs;

(g)$399.6 million received from proceeds from mortgages and loans payable;

(h)$115.0 million received from borrowings under the term loan;

(i)$81.0 million received from borrowings under the revolving credit facility.

Debt Financing

Summary of Debt

The following is a breakdown of the Company’s debt between fixed and variable-rate financing as of September 30, 2023:


	Balance ($000’s)		% of Total		Weighted Average Interest Rate		Weighted Average Maturity in Years
Fixed Rate & Hedged Secured (a)	$	1,869,852	96.84	%	4.34	%	3.71
Revolving Credit Facility, Term Loan and Variable Rate Secured Debt	61,000		3.16	%	8.92	%	0.82

Totals/Weighted Average:	$	1,930,852	100.00	%	4.49	%	3.62
Unamortized deferred financing costs	(17,986)
Total Debt, Net	$	1,912,866

(a)Includes debt with interest rate caps outstanding with a notional amount of $304.5 million.

Debt Maturities

Scheduled principal payments and related weighted average annual effective interest rates for the Company’s debt as of September 30, 2023 are as follows:


Period	Scheduled Amortization ($000’s)		Principal Maturities ($000’s)		Total ($000’s)		Weighted Avg. Effective Interest Rate of Future Repayments (a)
2023	$	1,172	$	—	$	1,172	3.95	%
2024	5,037		369,000		374,037		4.32	%
2025	8,384		—		8,384		3.39	%
2026	8,780		539,500		548,280		4.44	%
2027	8,158		305,319		313,477		3.66	%
Thereafter	7,418		678,084		685,502		5.01	%
Sub-total	38,949		1,891,903		1,930,852		4.49	%
Unamortized deferred financing costs	(17,986)		—		(17,986)
Totals/Weighted Average	$	20,963	$	1,891,903	$	1,912,866	4.49	%

(a)The actual weighted average of floating rates (SOFR) for the Company’s outstanding variable rate debt was 5.37 percent as of September 30, 2023, plus the applicable spread.

Revolving Credit Facility and Term Loans

the lenders a security interest in certain subsidiary guarantors in order to further secure the obligations, liabilities and indebtedness of the Operating Partnership under the 2023 Credit Agreement.

During October 2023, the Company repaid the remaining balances of the 2023 Term Loan and 2023 Revolving Credit Facility.

The Company was in compliance with its debt covenants under its 2023 Revolving Credit Facility and 2023 Term Loan as of September 30, 2023.

Mortgages, Loans Payable and Other Obligations

The Company has other mortgages, loans payable and other obligations which consist of various loans collateralized by certain of the Company’s rental properties. Payments on mortgages, loans payable and other obligations are generally due in monthly installments of principal and interest, or interest only.

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. If it cannot raise sufficient proceeds to retire the maturing debt, the Company may use cash on hand to repay the debt. The Company is continually evaluating its financing and refinancing options, including the issuance of additional, or

exchange of current, unsecured debt or common and preferred stock, and/or obtaining additional mortgage debt of the Operating Partnership, some or all of which may be completed in 2023. The Company currently anticipates that its available cash and cash equivalents, cash flows from operating activities and proceeds from the sale of real estate assets and joint ventures investments, together with cash available from borrowings and other sources, will be adequate to meet the Company’s capital and liquidity needs in the short term. However, if these sources of funds are insufficient or unavailable, due to current economic conditions or otherwise, or if capital needs to fund acquisition and development opportunities in the multifamily rental sector arise, the Company’s ability to make the expected distributions discussed in “REIT Restrictions” above may be adversely affected.

Equity Financing and Registration Statements

Dividend Reinvestment and Stock Purchase Plan

The Company has a Dividend Reinvestment and Stock Purchase Plan (the “DRIP”) which commenced in March 1999 under which approximately 5.4 million shares of the General Partner’s common stock have been reserved for future issuance. The DRIP provides for automatic reinvestment of all or a portion of a participant’s dividends from the General Partner’s shares of common stock. 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.

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 no securities have been sold as of October 23, 2023.

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 October 23, 2023.

Off-Balance Sheet Arrangements

Unconsolidated Joint Venture Debt

The debt of the Company’s unconsolidated joint ventures generally provides for recourse to the Company for customary matters such as intentional misuse of funds, environmental conditions and material misrepresentations. The Company has agreed to guarantee repayment of a portion of the debt of its unconsolidated joint ventures. As of September 30, 2023, the outstanding balance of such debt totaled $18.2 million of which $2 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.

Funds from Operations

Funds from operations (“FFO”) (available to common stock and unit holders) is defined as net income (loss) before noncontrolling interests in Operating Partnership, computed in accordance with GAAP, excluding gains or losses from depreciable rental property transactions (including both acquisitions and dispositions), and impairments related to depreciable rental property, plus real estate-related depreciation and amortization. The Company believes that FFO is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that as FFO excludes the effect of depreciation, gains (or losses) from property transactions and impairments related to depreciable rental property (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO can facilitate comparison of operating performance between equity REITs.

FFO should not be considered as an alternative to net income available to common shareholders as an indication of the Company’s performance or to cash flows as a measure of liquidity. FFO presented herein is not necessarily comparable to

FFO presented by other real estate companies due to the fact that not all real estate companies use the same definition. However, the Company’s FFO is comparable to the FFO of real estate companies that use the current definition of the National Association of Real Estate Investment Trusts (“NAREIT”).

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 three and nine months ended September 30, 2023 and 2022 (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net loss available to common shareholders	$	(54,807)	$	(101,218)	$	(102,214)	$	(83,937)
Add (deduct): Noncontrolling interests in Operating Partnership	(5,322)		(2,613)		(10,016)		(2,929)
Noncontrolling interests in discontinued operations	121		(7,710)		97		(5,597)
Real estate-related depreciation and amortization on continuing operations (a)	25,568		24,802		77,622		69,154
Real estate-related depreciation and amortization on discontinued operations	104		6,550		5,335		21,334
Property impairments on discontinued operations	—		84,509		—		84,509



Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net	(423)		5,100		2,286		7,704
Funds from operations available to common stock and Operating Partnership unitholders (b) (c)	$	(34,759)	$	9,420	$	(26,890)	$	90,238

(a)Includes the Company’s share from unconsolidated joint ventures, and adjustments for noncontrolling interests of $2.6 million for the three months ended September 30, 2023 and 2022, and $7.7 million and $7.8 million for the nine months ended September 30, 2023 and 2022, respectively. Excludes non-real estate-related depreciation and amortization of $0.2 million and $0.3 million for the three months ended September 30, 2023 and 2022, respectively, and $0.8 million and $0.9 million for the nine months ended September 30, 2023 and 2022, respectively.

(b)Net loss available to common shareholders included land impairment charges of zero and $2.5 million for the three months ended September 30, 2023 and 2022, respectively, and $3.4 million and $9.4 million for the nine months ended September 30, 2023 and 2022, respectively. Net loss available to common shareholders also included loss or gain on disposition of developable land of zero for the three months ended September 30, 2023 and 2022, and $23.0 thousand and $57.7 million for the nine months ended September 30, 2023 and 2022, respectively. These balances are included in the calculation to arrive at funds from operations as such charges relate to non-depreciable assets.

(c) Includes $36.4 million and $49.8 million of interest cost related to the mandatorily redeemable noncontrolling interests for the three and nine months ended September 30, 2023, respectively.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

We consider portions of this information, including the documents incorporated by reference, to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of such act. Such forward-looking statements relate to, without limitation, our future economic performance, plans and objectives for future operations and projections of revenue and other financial items. Forward-looking statements can be identified by the use of words such as “may,” “will,” “plan,” “potential,” “projected,” “should,” “expect,” “anticipate,” “estimate,” “target,” “continue” or comparable terminology. 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. 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.

Among 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.

For further information on factors which could impact us and the statements contained herein, see Item 1A: Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022. We assume no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

Item 3. 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. 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. 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.

Approximately $1.9 billion of the Company’s long-term debt as of September 30, 2023 bears interest at fixed rates 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 September 30, 2023 ranged from LIBOR/SOFR plus 141 basis points to LIBOR/SOFR plus 360 basis points. Assuming interest-rate swaps and caps are not in effect as of September 30, 2023, 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 $3.7 million annually. As of September 30, 2023, the Company's indebtedness with an aggregate principal balance of $1.9 billion had an estimated aggregate fair value of $1.8 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 September 30, 2023 would be approximately $57.2 million higher or lower, respectively.

The following table presents principal cash flows (in thousands) based upon maturity dates of the debt obligations and the related weighted-average interest rates by expected maturity dates for the fixed rate debt.


September 30, 2023 Debt, including current portion ($s in thousands)	10/1/23 - 12/31/2023			2024			2025			2026			2027			Thereafter			Sub-total		Other (a)		Total			Fair Value

Fixed Rate and Hedged Debt	$	1,172		$	313,037		$	8,384		$	548,280		$	313,477		$	685,502		$	1,869,852	$	(16,053)	$	1,853,799		$	1,728,732
Weighted Average Interest Rate	3.95		%	3.43		%	3.39		%	4.44		%	3.66		%	5.01		%					4.34		%
Variable Rate	$	—		$	61,000		$	—		$	—		$	—		$	—		$	61,000	$	(1,933)	$	59,067		$	59,067

(a)Adjustment for unamortized debt discount/premium, net, unamortized deferred financing costs, net, and unamortized mark-to-market, net as of September 30, 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 4. Controls and Procedures

Veris Residential, Inc.

Disclosure Controls and Procedures. The General Partner’s management, with the participation of the General Partner’s chief executive officer and chief financial officer, has evaluated the effectiveness of the General Partner’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the General Partner’s chief executive officer and chief financial officer have concluded that, as of the end of such period, the General Partner’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the General Partner in the reports that it files or submits under the Exchange Act.

Changes In Internal Control Over Financial Reporting. There have not been any changes in the General Partner’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the General Partner’s internal control over financial reporting.

Veris Residential, L.P.

Disclosure Controls and Procedures. The General Partner’s management, with the participation of the General Partner’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Operating Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the General Partner’s chief executive officer and chief financial officer have concluded that, as of the end of such period, the Operating Partnership’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Operating Partnership in the reports that it files or submits under the Exchange Act.

Changes In Internal Control Over Financial Reporting. There have not been any changes in the Operating Partnership’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

Part II – Other Information

Item 1. Legal Proceedings

There are no material pending legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company is a party or to which any of its Properties are subject.

Item 1A. Risk Factors

There have been no material changes in our assessment of risk factors from those set forth in the Annual Report on Form 10-K for the year ended December 31, 2022 of the General Partner and the Operating Partnership.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)COMMON STOCK

During the three months ended September 30, 2023, the Company issued 171,053 shares of common stock to holders of common units in the Operating Partnership upon the redemption of such common units in private offerings pursuant to Section 4(a)(2) of the Securities Act. The holders of the common units were limited partners of the Operating Partnership and accredited investors under Rule 501 of the Securities Act. The common units were redeemed for an equal number of shares of common stock. The Company has registered the resale of such shares under the Securities Act.

(b)Not Applicable.

(c)Not Applicable.

Item 3. Defaults Upon Senior Securities

(a)Not Applicable.

(b)Not Applicable.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

(a)Not Applicable.

(b)Not Applicable.

(c)Not Applicable.

Item 6. Exhibits

The exhibits required by this item are set forth on the Exhibit Index attached hereto.

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

EXHIBIT INDEX


Exhibit Number						Exhibit Title

3.1						Articles of Amendment to the Articles of Restatement of Veris Residential, Inc. as filed with the State Department of Assessments and Taxation of Maryland on June 16, 2023 (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

3.2						Fourth Amended and Restated Bylaws of Veris Residential, Inc (filed as Exhibit 3.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

10.1+						REIT Interest and Partnership Interest Purchase Agreement among Veris Residential, L.P., Veris Residential Trust, Rockpoint Growth and Income Upper REIT Aggregator II-A, L.L.C., Rockpoint Growth and Income Lower REIT Aggregator II-A, L.L.C., Rockpoint Growth and Income Upper REIT Upsize Aggregator II-A, L.L.C., Rockpoint Growth and Income Lower REIT Upsize Aggregator II-A, L.L.C. and RPIIA-RLB, L.L.C. dated July 25, 2023 (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

10.2+						Revolving Credit and Term Loan Agreement dated as of July 25, 2023 among Veris Residential, L.P., as borrower, and JPMorgan Chase Bank, N.A., as administrative agent, Goldman Sachs Bank USA, as syndication agent, JPMorgan Chase Bank, N.A. and Goldman Sachs Bank USA as joint bookrunners and joint arrangers, and the lenders party thereto (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

10.3						Parent Guaranty dated of Veris Residential, Inc. dated July 25, 2023 (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

10.4						Subsidiary Guaranty of the subsidiary guarantors of Veris Residential, L.P. party thereto dated July 25, 2023 (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

10.5						Pledge and Security Agreement by and among Veris Residential, L.P., as borrower, the subsidiary pledgees of Veris Residential, L.P. party thereto, and JPMorgan Chase Bank, N.A., as administrative agent, dated July 25, 2023 (filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 as filed with the SEC on July 26, 2023 and incorporated herein by reference).

10.6						Executive Compensation Clawback Policy (filed as Exhibit 10.1 to the Company’s Current Report on Form 8 -K as filed with the SEC on October 4, 2023 and incorporated herein by reference).

31.1*						Certification of the General Partner’s Chief Executive Officer, Mahbod Nia, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the General Partner.

31.2*						Certification of the General Partner’s Chief Financial Officer, Amanda Lombard, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the General Partner.

31.3*						Certification of the General Partner’s Chief Executive Officer, Mahbod Nia, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Operating Partnership.

31.4*						Certification of the General Partner’s Chief Financial Officer, Amanda Lombard, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, with respect to the Operating Partnership.

32.1*						Certification of the General Partner’s Chief Executive Officer, Mahbod Nia and the General Partner’s Chief Financial Officer, Amanda Lombard, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the General Partner.

32.2*						Certification of the General Partner’s Chief Executive Officer, Mahbod Nia and the General Partner’s Chief Financial Officer, Amanda Lombard, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, with respect to the Operating Partnership.

101.1*						The following financial statements from Veris Residential, Inc. and Veris Residential, L.P. from their combined Report on Form 10-Q for the quarter ended September 30, 2023 formatted in Inline XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Comprehensive Income (Loss) (unaudited), (iv) Consolidated Statements of Changes in Equity (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Financial Statements (unaudited).

104.1*						The cover page from this Quarterly Report on Form 10-Q, formatted in Inline XBRL.

* filed herewith

+ Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K.

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			Veris Residential, Inc.
			(Registrant)

Date:	October 25, 2023	By:	/s/ Mahbod Nia
			Mahbod Nia
			Chief Executive Officer
			(principal executive officer)

Date:	October 25, 2023	By:	/s/ Amanda Lombard
			Amanda Lombard
			Chief Financial Officer
			(principal financial officer and principal accounting officer)

			Veris Residential, L.P.
			(Registrant)
			By: Veris Residential, Inc.
			its General Partner

Date:	October 25, 2023	By:	/s/ Mahbod Nia
			Mahbod Nia
			Chief Executive Officer
			(principal executive officer)

Date:	October 25, 2023	By:	/s/ Amanda Lombard
			Amanda Lombard
			Chief Financial Officer
			(principal financial officer and principal accounting officer)

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Mack Cali Realty L P 10-Q2023 Q3 Quarterly report

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