UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2014

[ ] 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:	333-57103

Mack-Cali Realty, L.P.

(Exact Name of Registrant as specified in its charter)

Delaware	22-3315804
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No)

343 Thornall Street, Edison, New Jersey	08837-2206
(Address of principal executive offices)	(Zip code)

	(732) 590-1000
(Registrant’s telephone number, including area code)

Not Applicable

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days. YES X NO ___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes X No ___

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

Large accelerated filer x Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES___ NO X

		MACK-CALI REALTY, L.P.
		FORM 10-Q
		INDEX
Part I	Financial Information		Page
	Item 1.	Financial Statements (unaudited):	3
		Consolidated Balance Sheets as of June 30, 2014	4
		Consolidated Balance Sheets as of September 30, 2014	4
		and December 31, 2013
		Consolidated Statements of Operations for the three and six months	5
		Consolidated Statements of Operations for the three and nine months	5
		ended June 30, 2014 and 2013
		ended September 30, 2014 and 2013
		Consolidated Statement of Changes in Equity for the six months	6
		Consolidated Statement of Changes in Equity for the nine months	6
		ended June 30, 2014
		ended September 30, 2014
		Consolidated Statements of Cash Flows for the six months	7
		Consolidated Statements of Cash Flows for the nine months	7
		ended June 30, 2014 and 2013
		ended September 30, 2014 and 2013
		Notes to Consolidated Financial Statements	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition	39
		and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	60
	Item 4.	Controls and Procedures	61
Part II	Other Information
	Item 1.	Legal Proceedings	62
	Item 1A.	Risk Factors	62
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
	Item 3.	Defaults Upon Senior Securities	62
	Item 4.	Mine Safety Disclosures	62
	Item 5.	Other Information	62
	Item 6.	Exhibits	6362
Signatures			6463
Exhibit Index			6564

MACK-CALI REALTY, L.P.

Part I – Financial Information

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of operations, 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 presentation 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 Mack-Cali Realty, L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

The results of operations for the three and ~~six~~nine month periods ended ~~June~~September 30, 2014 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

MACK-CALI REALTY, L.P. AND SUBSIDIARIES

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

		June 30,		December 31,
		September 30,		December 31,
ASSETS		2014		2013
Rental property
Land and leasehold interests	$	~~725~~746,~~542~~066	$	750,658
Buildings and improvements		3,~~807~~731,~~642~~700		3,915,800
Tenant improvements		~~423~~421,~~988~~291		456,003
Furniture, fixtures and equipment		910,~~461~~670		7,472
		4,966,633		5,129,933
		4,909,727		5,129,933
Less – accumulated depreciation and amortization		(1,~~389~~379,~~202~~911)		(1,400,988)
Net investment in rental property		3,~~577~~529,~~431~~816		3,728,945
Cash and cash equivalents		80105,~~943~~528		221,706
Investments in unconsolidated joint ventures		~~265~~239,~~866~~767		181,129
Unbilled rents receivable, net		~~126~~124,~~111~~278		136,304
Deferred charges, goodwill and other assets		~~266~~320,~~760~~396		218,519
Restricted cash		26,~~405~~571		19,794
Accounts receivable, net of allowance for doubtful accounts
of $2,163 and $2,832		11,256		8,931
of $1,408 and $2,832		10,841		8,931
Total assets	$	4,~~354~~357,~~772~~197	$	4,515,328
LIABILITIES AND EQUITY
Senior unsecured notes	$	1,417,~~141~~439	$	1,616,575
Revolving credit facility		56,000		-
Mortgages, loans payable and other obligations		821,202		746,191
Mortgages, loans payable and other obligations		735,127		746,191
Distributions payable		15,188		29,938
Distributions payable		15,173		29,938
Accounts payable, accrued expenses and other liabilities		126,580		121,286
Accounts payable, accrued expenses and other liabilities		140,546		121,286
Rents received in advance and security deposits		47,792		53,730
Rents received in advance and security deposits		48,932		53,730
Accrued interest payable		24,713		29,153
Accrued interest payable		25,973		29,153
Total liabilities		2,452,914		2,596,873
Total liabilities		2,438,892		2,596,873
Commitments and contingencies
Partners’ Capital:
General Partner, 88,982,062 and 88,247,591 common units outstanding		1,596,598		1,585,100
General Partner, 89,055,220 and 88,247,591 common units outstanding		1,587,448		1,585,100
Limited partners, 11,164,018 and 11,864,775 common units outstanding		264,576		278,072
Limited partners, 11,092,044 and 11,864,775 common units outstanding		261,822		278,072
Total Mack-Cali Realty, L.P. partners’ capital		1,~~861~~849,~~174~~270		1,863,172
Noncontrolling interests in consolidated joint ventures		5455,~~706~~013		55,283
Total equity		1,~~915~~904,~~880~~283		1,918,455
Total liabilities and equity	$	4,~~354~~357,~~772~~197	$	4,515,328

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

MACK-CALI REALTY, L.P. AND SUBSIDIARIES

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

		Three Months Ended				~~Six~~Nine Months Ended
		June 30,				June 30,
		September 30,				September 30,
REVENUES		2014		2013		2014		2013
Base rents	$	~~133~~125,~~210~~793	$	~~135~~134,~~438~~882	$	~~267~~393,~~261~~054	$	~~269~~403,~~061~~943
Escalations and recoveries from tenants		1619,~~996~~172		17,~~456~~173		4261,~~564~~736		3654,~~944~~117
Construction services		-		~~6,746~~678		-		1415,~~972~~650
Real estate services		7,~~009~~622		67,~~642~~003		1321,~~701~~323		1320,~~085~~088
Parking income		2,~~236~~255		1,~~597~~642		46,~~350~~605		24,~~989~~631
Other income		~~849~~647		~~467~~1,127		2,~~020~~667		23,~~208~~335
Total revenues		~~160~~155,~~300~~489		~~168~~162,~~346~~505		~~329~~485,~~896~~385		~~339~~501,~~259~~764
EXPENSES
Real estate taxes		2322,~~375~~154		1920,~~834~~572		4769,~~726~~880		4162,~~483~~055
Utilities		1415,~~573~~701		1318,~~739~~043		4258,~~854~~555		3048,~~027~~070
Operating services		2726,~~840~~519		25,~~327~~852		5783,~~062~~581		5076,~~635~~487
Direct construction costs		-		~~6,511~~609		-		14,~~336~~945
Real estate services expenses		6,~~571~~933		5,~~304~~552		1320,~~280~~213		1015,~~257~~809
General and administrative		1312,~~673~~665		1312,~~111~~151		3649,~~554~~219		2537,~~084~~235
Depreciation and amortization		4441,~~711~~983		4546,~~665~~094		89131,~~696~~679		89135,~~013~~122
Total expenses		130,743		129,491		287,172		260,835
Impairments		-		48,700		-		48,700
Operating income		29,557		38,855		42,724		78,424
Total expenses		125,955		177,573		413,127		438,423
Operating income (loss)		29,534		(15,068)		72,258		63,341
OTHER (EXPENSE) INCOME
Interest expense		(2827,~~159~~353)		(3130,~~270~~936)		(5885,~~105~~458)		(6192,~~139~~075)
Interest and other investment income		~~922~~908		~~1,094~~187		12,~~308~~216		1,~~100~~287
Equity in earnings (loss) of unconsolidated joint ventures		~~443~~(1,268)		(80229)		(~~792~~2,060)		(12,~~830~~059)
Realized gains (losses) and unrealized losses on disposition
Realized gains (losses) on disposition
of rental property, net		~~54,584~~264		-		54,~~584~~848		-
Total other (expense) income		(27,~~790~~449)		(30,~~256~~978)		(330,~~005~~454)		(6192,~~869~~847)
Income from continuing operations		57,347		8,599		39,719		16,555
Income (loss) from continuing operations		2,085		(46,046)		41,804		(29,506)
Discontinued operations:
Income from discontinued operations		-		42,~~530~~164		-		911,~~663~~842
Loss from early extinguishment of debt		-		~~(703)~~-		-		(703)
Realized gains (losses) and unrealized losses on disposition
Realized gains (losses) on disposition
of rental property, net		-		1347,~~758~~321		-		1361,~~758~~079
Total discontinued operations		-		1749,~~585~~485		-		2272,~~718~~218
Net income		572,~~347~~085		263,~~184~~439		3941,~~719~~804		3942,~~273~~712
Noncontrolling interest in consolidated joint ventures		~~290~~145		621,838		~~612~~757		~~124~~1,962
Net income available to common unitholders	$	572,~~637~~230	$	265,~~246~~277	$	4042,~~331~~561	$	3944,~~397~~674
Basic earnings per common unit:
Income from continuing operations	$	0.58	$	0.09	$	0.40	$	0.16
Income (loss) from continuing operations	$	0.02	$	(0.44)	$	0.43	$	(0.28)
Discontinued operations		-		0.1749		-		0.2373
Net income available to common unitholders	$	0.5802	$	0.2605	$	0.4043	$	0.3945
Diluted earnings per common unit:
Income from continuing operations	$	0.58	$	0.09	$	0.40	$	0.16
Income (loss) from continuing operations	$	0.02	$	(0.44)	$	0.43	$	(0.28)
Discontinued operations		-		0.1749		-		0.2373
Net income available to common unitholders	$	0.5802	$	0.2605	$	0.4043	$	0.3945
Basic weighted average units outstanding		99,~~993~~995		99,~~780~~787		99,~~935~~955		99,~~773~~778
Diluted weighted average units outstanding		100,~~023~~052		99,~~895~~787		99100,~~964~~014		99,~~892~~778

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

MACK-CALI REALTY, L.P. AND SUBSIDIARIES

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

								Noncontrolling
				General Partner		Limited Partner		Interest
	General Partner	Limited Partner		Common		Common		in Consolidated
	Common Units	Common Units		Unitholders		Unitholders		Joint Ventures		Total Equity
Balance at January 1, 2014	88,248	11,865	$	1,585,100	$	278,072	$	55,283	$	1,918,455
Net income	-	-		3537,~~825~~807		4,~~506~~754		(~~612~~757)		3941,~~719~~804
Distributions	-	-		(4053,~~012~~347)		(56,~~129~~793)		-		(4560,~~141~~140)
Increase in noncontrolling interests	-	-		-		-		35487		35487
Redemption of limited partner common
units for shares of general partner
common units	~~701~~773	(~~701~~773)		1214,~~873~~211		(1214,~~873~~211)		-		-
Shares issued under Dividend
Reinvestment and Stock
Purchase Plan	45	-		77102		-		-		77102
Director deferred compensation plan	-	-		213		-		-		213
Directors deferred compensation plan	-	-		310		-		-		310
Stock compensation	29	-		23,~~522~~265		-		-		23,~~522~~265
Balance at June 30, 2014	88,982	11,164	$	1,596,598	$	264,576	$	54,706	$	1,915,880
Balance at September 30, 2014	89,055	11,092	$	1,587,448	$	261,822	$	55,013	$	1,904,283

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

MACK-CALI REALTY, L.P. AND SUBSIDIARIES

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

		Six Months Ended
		Nine Months Ended
		June 30,
		September 30,
CASH FLOWS FROM OPERATING ACTIVITIES		2014		2013
Net income	$	3941,~~719~~804	$	3942,~~273~~712
Adjustments to reconcile net income to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets		90132,~~460~~698		88135,~~950~~148
Depreciation and amortization on discontinued operations		-		68,~~442~~196
Amortization of deferred stock units		~~213~~309		-
Amortization of stock compensation		56,~~563~~439		12,~~687~~451
Amortization of deferred financing costs and debt discount		12,~~528~~306		12,~~582~~379
Equity in (earnings) loss of unconsolidated joint venture, net		792		1,830
Write off of unamortized discount on senior unsecured notes		-		156
Distributions of cumulative earnings from unconsolidated joint ventures		3,756		4,712
Equity in (earnings) loss of unconsolidated joint venture, net		2,060		2,059
Realized (gains) and unrealized losses on disposition of rental property, net		(54,584)		(13,758)
Distributions of cumulative earnings from unconsolidated joint ventures		10,974		6,468
Realized (gains) on disposition of rental property, net		(54,848)		(61,079)
Impairments		-		48,700
Changes in operating assets and liabilities:
Increase in unbilled rents receivable, net		(34,~~551~~477)		(8,~~216~~504)
Increase in deferred charges, goodwill and other assets		(823,~~592~~042)		(1627,~~859~~584)
(Increase) decrease in accounts receivable, net		(21,~~325~~911)		1~~,171~~
Increase in accounts payable, accrued expenses and other liabilities		1913,~~946~~565		35,~~120~~967
Decrease in rents received in advance and security deposits		(45,~~798~~938)		(610,~~758~~059)
(Decrease) increase in accrued interest payable		(3,180)		1,007
Decrease in accrued interest payable		(4,440)		(4,083)
Net cash provided by operating activities	$	84115,~~947~~499	$	~~104~~142,~~183~~928
CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles	$	(3746,~~696~~883)	$	(149,200)
Rental property additions and improvements		(4177,~~825~~109)		(3967,~~688~~172)
Development of rental property, other related costs and deposits		(74,~~896~~881)		(12,~~204~~954)
Proceeds from the sale of rental property		~~190~~274,~~798~~839		~~161~~332,~~727~~540
Investments in notes receivable		(62,276)		-
Issuance of notes and mortgage receivable		(62,276)		(16,425)
Repayment of notes receivable		10,250		83208
Investment in unconsolidated joint ventures		(3857,~~948~~568)		(3132,~~500~~235)
Distributions in excess of cumulative earnings from unconsolidated joint ventures		~~837~~36,303		20,~~354~~671
Increase in restricted cash		(6,611)		(300)
(Increase) decrease in restricted cash		(6,777)		126
Net cash used in investing activities	$	(3,367)	$	(50,728)
Net cash provided by investing activities	$	65,898	$	75,559
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility	$	~~233~~262,~~500~~328	$	289,000
Repayment of revolving credit facility		(~~177~~262,~~500~~328)		(289,000)
Proceeds from senior unsecured notes		-		268,928
Repayment of senior unsecured notes		(200,000)		(100,000)
Proceeds from mortgages and loans payable		28,~~135~~350		12,~~798~~343
Repayment of mortgages, loans payable and other obligations		(4244,~~469~~825)		(912,~~420~~185)
Payment of contingent consideration		(35,~~936~~228)		(2,755)
Payment of financing costs		(~~198~~1,021)		(25,~~643~~459)
Payment of distributions		(59,875)		(89,669)
Payment of dividends and distributions		(74,851)		(119,561)
Net cash (used in) provided by financing activities	$	(~~222~~297,~~343~~575)	$	6631,~~239~~311
Net (decrease) increase in cash and cash equivalents	$	(~~140~~116,~~763~~178)	$	~~119~~249,~~694~~798
Cash and cash equivalents, beginning of period		221,706		58,245
Cash and cash equivalents, end of period	$	80105,~~943~~528	$	~~177~~308,~~939~~043

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

MACK-CALI REALTY, L.P. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

1. ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

Mack-Cali Realty, L.P., a Delaware limited partnership, together with its subsidiaries (collectively, the “Company” or “Operating Partnership”), was formed on May 31, 1994 to conduct the business of providing leasing, management, acquisition, development, construction and tenant-related services for its sole general partner, Mack-Cali Realty Corporation (“the Corporation” or “General Partner”). The Company, through its operating divisions and subsidiaries, including the Mack-Cali property-owning partnerships and limited liability companies (collectively, the “Property Partnerships”) is the entity through which all of the General Partner’s operations are conducted.

The General Partner is a fully-integrated self-administered, self-managed real estate investment trust (“REIT”). The General Partner controls the Company as its sole general partner and owned an 88.9 percent and 88.1 percent common unit interest in the Company as of ~~June~~September 30, 2014 and December 31, 2013, respectively.

The General Partner’s business is the ownership of interests in and operation of the Company, and all of the General Partner’s expenses are incurred for the benefit of the Company. The General Partner is reimbursed by the Company for all expenses it incurs relating to the ownership and operation of the Company.

As of ~~June~~September 30, 2014, the Company owned or had interests in ~~279~~282 properties, consisting of 266 commercial properties, primarily class A office and office/flex properties, totaling approximately 31.5 million square feet, leased to approximately 2,000 commercial tenants, and 1316 multi-family rental properties containing 34,~~898~~940 residential units, plus developable land (collectively, the “Properties”). The Properties are comprised of 251 buildings, primarily office and office/flex buildings totaling approximately 3031.90 million square feet (which include 3037 buildings, primarily office buildings aggregating approximately 56.10 million square feet owned by unconsolidated joint ventures in which the Company has investment interests), six industrial/warehouse buildings totaling approximately 387,400 square feet, 1316 multi-family properties totaling 34,~~898~~940 apartments (which include ~~seven~~10 properties aggregating 23,~~597~~639 apartments owned by unconsolidated joint ventures in which the Company has investment interests), five parking/retail properties totaling approximately 121,500 square feet (which include two buildings aggregating 81,500 square feet owned by unconsolidated joint ventures in which the Company has investment interests), one hotel (which is owned by an unconsolidated joint venture in which the Company has an investment interest) and three parcels of land leased to others. The Properties are located in seven states, primarily in the Northeast, plus the District of Columbia.

BASIS OF PRESENTATION

The accompanying consolidated financial statements include all accounts of the Company, its majority-owned and/or controlled subsidiaries and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. See Note 2: 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 one or more of the essential characteristics of a controlling financial interest; (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 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.

As of ~~June~~September 30, 2014 and December 31, 2013, the Company’s investments in consolidated real estate joint ventures in which the Company is deemed to be the primary beneficiary have total real estate assets of $~~227~~237.7 million and $219.9 million, respectively, mortgages of $~~85.8~~90 million and $81.9 million, respectively, and other liabilities of $~~15.1~~17 million and $18.3 million, respectively.

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. Actual results could differ from those estimates. Certain reclassifications have been made to prior period amounts in order to conform with current period presentation.

2. SIGNIFICANT ACCOUNTING POLICIES

Rental

Property Rental properties are stated at cost less accumulated depreciation and amortization. Costs directly related to the acquisition, development and construction of rental properties are capitalized. Acquisition-related costs are expensed as incurred. Capitalized development and construction costs include pre-construction costs essential to the development of the property, development and construction costs, interest, property taxes, insurance, salaries and other project costs incurred during the period of development. Capitalized development and construction salaries and related costs approximated $01.90 million and $01.9 million for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $12.87 million and $13.7 million for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively. Included in total rental property is construction, tenant improvement and development in-progress of $4458.28 million and $40.8 million as of ~~June~~September 30, 2014 and December 31, 2013, respectively. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts.

The Company considers a construction project as substantially completed and held available for occupancy upon the substantial completion of tenant 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 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 square footage of each portion, and capitalizes only those costs associated with the portion under construction.

Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:

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

Upon acquisition of rental property, the Company estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Company allocates the purchase price to the assets acquired and liabilities assumed based on their fair values. The Company records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Company considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases.

Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Company’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Company’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

On a periodic basis, management assesses whether there are any indicators that the value of the Company’s rental properties held for use may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near-term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near-term mortgage debt maturities or other factors that might impact the Company’s intent and ability to hold the property. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Company’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions. These assumptions are generally based on management’s experience in its local real estate markets and the effects of current market conditions. The assumptions are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved, and actual losses or impairments may be realized in the future.

Rental Property

Held for Sale

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

If circumstances arise that previously were considered unlikely and, as a result, the Company decides not to sell a property previously classified as held for sale, the property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

Investments in

Unconsolidated

Joint Ventures

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

On a periodic basis, management assesses whether there are any indicators that the value of the Company’s investments in unconsolidated joint ventures may be impaired. An investment is impaired only if management’s estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the investment over the value of the investment. The Company’s estimates of value for each investment (particularly in real estate joint ventures) are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and operating costs. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the values estimated by management in its impairment analyses may not be realized, and actual losses or impairment may be realized in the future. See Note 4: Investments in Unconsolidated Joint Ventures.

Cash and Cash

Equivalents

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

Deferred

Financing Costs Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Amortization of such costs is included in interest expense and was $~~759~~778,000 and $~~809~~954,000 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, $12,~~528~~306,000 and $12,~~582~~379,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively. If a financing obligation is extinguished early, any unamortized deferred financing costs are written off and included in gains (loss) from early extinguishment of debt.

Deferred

Leasing Costs Costs incurred in connection with commercial leases are capitalized and amortized on a straight-line basis over the terms of the related leases and included in depreciation and amortization. Unamortized deferred leasing costs are charged to amortization expense upon early termination of the lease. Certain employees of the Corporation are compensated for providing leasing services to the Properties. The portion of such compensation related to commercial leases, which is capitalized and amortized, approximated $~~845~~940,000 and $1962,~~033,~~000 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $12,~~876~~816,000 and $23,~~206~~168,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

Goodwill

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

Derivative

Instruments

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

Revenue

Recognition

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

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

Escalations and recoveries from tenants are received from tenants for certain costs as provided in the lease agreements. These costs generally include real estate taxes, utilities, insurance, common area maintenance and other recoverable costs. See Note 16: Tenant Leases.

Construction services revenue includes fees earned and reimbursements received by the Company for providing construction management and general contractor services to clients. Construction services revenue is recognized on the percentage of completion method. Using this method, profits are recorded on the basis of our estimates of the overall profit and percentage of completion of individual contracts. A portion of the estimated profits is accrued based upon estimates of the percentage of completion of the construction contract. This revenue recognition method involves inherent risks relating to profit and cost estimates.

Real estate services revenue includes property management, development and leasing commission fees and other services, and payroll and related costs reimbursed from clients. Fee income derived from the Company’s unconsolidated joint ventures (which are capitalized by such ventures) are recognized to the extent attributable to the unaffiliated ownership interests.

Parking income includes income from parking spaces leased to tenants and others.

Other income includes income from tenants for additional services arranged for by the Company and income from tenants for early lease terminations.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. Additionally, this guidance requires improved disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations.

Allowance for

Doubtful Accounts

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

Income and

Other Taxes

The Company is a partnership, and, as a result, all income and losses of the partnership are allocated to the partners for inclusion in their respective tax returns. Accordingly, no provision or benefit for income taxes has been made in the accompanying financial statements.

Certain of the Company’s corporate subsidiaries are taxable REIT subsidiaries (each a “TRS”). In general, a TRS may perform additional services for tenants of the Company and generally may engage in any real estate or non-real estate related business (except for the operation or management of health care facilities or lodging facilities or the providing to any person, under a franchise, license or otherwise, rights to any brand name under which any lodging facility or health care facility is operated). A TRS is subject to corporate federal income tax. The Company has conducted business through its TRS entities for certain property management, development, construction and other related services, as well as to hold a joint venture interest in a hotel and other matters. As of ~~June~~September 30, 2014, the Company had a deferred tax asset with a balance of approximately $14.1 million which has been fully reserved for through a valuation allowance. If the Corporation fails to qualify as a REIT in any taxable year, the Corporation will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate tax rates. The Corporation is subject to certain state and local taxes.

Pursuant to the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes, the Company recognized no material adjustments regarding its tax accounting treatment. The Company expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which is included in general and administrative expense.

In the normal course of business, the Company or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of ~~June~~September 30, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are generally from the year 2009 forward.

Earnings

Per Unit

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

Distributions

Payable The distributions payable at ~~June~~September 30, 2014 represents distributions payable to common unitholders (99,~~891~~907,~~581~~400 units) for all such holders of record as of ~~July~~October 3, 2014 with respect to the ~~second~~third quarter 2014. The ~~second~~third quarter 2014 common unit distributions of $0.15 per common unit were approved by the Corporation’s Board of Directors on ~~May~~September 3011, 2014. The common unit distributions payable were paid on ~~July~~October 1110, 2014.

The distributions payable at December 31, 2013 represents distributions payable to common unitholders (99,792,777 units), for all such holders of record as of January 6, 2014 with respect to the fourth quarter 2013. The fourth quarter 2013 common unit distributions of $0.30 per common unit were approved by the Corporation’s Board of Directors on December 10, 2013. The common unit distributions payable were paid on January 15, 2014.

Costs Incurred

For Stock

Issuances

Costs incurred in connection with the Corporation’s stock issuances are reflected as a reduction of General Partner’s capital.

Stock

Compensation The Company accounts for stock compensation in accordance with the provisions of ASC 718, Compensation-Stock Compensation. These provisions require that the estimated fair value of restricted stock (“Restricted Stock Awards”), TSR-based Performance Shares and stock options at the grant date be amortized ratably into expense over the appropriate vesting period. The Company recorded stock compensation expense of $~~877~~830,000 and $~~461~~641,000 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $45,~~264~~094,000 (which includes $3,~~203~~150,000 related to the departure of executive vice presidents. See Note 15: Commitments and Contingencies – Departure of Executive Vice Presidents); and $1,~~306~~947,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

Other

Comprehensive

Income Other comprehensive income (loss) includes items that are recorded in equity, such as unrealized holding gains or losses on marketable securities available for sale. There was no difference in other comprehensive income to net income for the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, and no accumulated other comprehensive income as of ~~June~~September 30, 2014 and December 31, 2013.

Fair Value

Hierarchy

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

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

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

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

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Discontinued

Operations

In April 2014, the FASB issued guidance related to the reporting of discontinued operation and disclosures of disposals of components of an entity. This guidance defines a discontinued operation as a component or group of components disposed or classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and final result; the guidance states that a strategic shift could include a disposal of a major geographical area of operations, a major line of business, a major equity method investment or other major parts of an entity. The guidance also provides for additional disclosure requirements in connection with both discontinued operations and other dispositions not qualifying as discontinued operations. The guidance will be effective for annual and interim periods beginning on or after December 15, 2014. The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date. All entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance. The Company has elected to early adopt this standard effective with the interim period beginning January 1, 2014. Prior to January 1, 2014, properties identified as held for sale and/or disposed of were presented in discontinued operations for all periods presented. See Note 7: Discontinued Operations.

3. REAL ESTATE TRANSACTIONS

Acquisitions

On April 10, 2014, the Company acquired Andover Place, a 220-unit multi-family rental property located in Andover, Massachusetts, for approximately $37.7 million, which was funded primarily through borrowing under the Company’s unsecured revolving credit facility.

The purchase price was allocated to the net assets acquired, as follows (in thousands):


		Andover
		Place
Land	$	8,535
Buildings and improvements		27,609
Furniture, fixtures and equipment		459
In-place lease values (1)		1,118
		37,721

Less: Below market lease values (1)		(25)

Net cash paid at acquisition	$	37,696

(1) In-place lease values and below market lease values will be amortized over one year or less.

On August 15, 2014, the Company acquired the equity interests of its joint venture partner in Overlook Ridge, L.L.C, Overlook Ridge JV, L.L.C. and Overlook Ridge JV 2C/3B, L.L.C. for $16.6 million, which was funded primarily through borrowing under the Company’s unsecured revolving credit facility. As a result, the Company increased its ownership to 100 percent of the developable land and now consolidates these entities which were previously accounted for through unconsolidated joint ventures (collectively, the “Consolidated Land”); and acquired an additional 25 percent, for a total of 50 percent of its subordinated, unconsolidated interests in two operating multi-family properties owned by those entities. See Note 4: Investments in Unconsolidated Joint Ventures. In conjunction with the Company’s acquisition of the Consolidated Land, the Company assumed loans with a total principal balance of $22.8 million, which bear interest in the range of LIBOR plus 2.50 to 3.50 percent. See Note 10: Mortgages, Loans Payable and Other Obligations.

For the nine months ended September 30, 2014, included in general and administrative expense was an aggregate of approximately $1.9 million in transactions costs related to the Company’s property and joint venture acquisitions.

Excluded from the cash flow statement for the nine months ended September 30, 2014 was $44.4 million of acquisition and other investment fundings (of which $40.1 million related to the acquisition of 50 percent tenants in common interests in the Curtis Center property. See Recent Transactions in Note 4: Investments in Unconsolidated Joint Ventures), which were handled through a qualified intermediary using proceeds from prior sales structured for tax purposes as Section 1031 transactions.

Sales

The Company sold the following office properties during the ~~six~~nine months ended ~~June~~September 30, 2014 (dollars in thousands):

				Rentable		Net		Net
Sale			# of	Square		Sales		Book		Realized
Date	Property/Address	Location	Bldgs.	Feet		Proceeds		Value		Gain
04/23/14	22 Sylvan Way	Parsippany, New Jersey	1	249,409	$	94,897	$	60,244	$	34,653
06/23/14	30 Knightsbridge Road (a)	Piscataway, New Jersey	4	680,350		54,641		52,361		2,280
06/23/14	470 Chestnut Ridge Road (a) (b)	Woodcliff Lake, New Jersey	1	52,500		7,195		7,109		86
06/23/14	530 Chestnut Ridge Road (a) (b)	Woodcliff Lake, New Jersey	1	57,204		6,299		6,235		64
06/27/14	400 Rella Boulevard	Suffern, New York	1	180,000		27,539		10,938		16,601
06/30/14	412 Mount Kemble Avenue (a)	Morris Township, New Jersey	1	475,100		44,751		43,851		900
Totals:			9	1,694,563	$	235,322	$	180,738	$	54,584
07/29/14	17-17 Route 208 North (a) (b)	Fair Lawn, New Jersey	1	143,000		11,835		11,731		104
08/20/14	555, 565, 570 Taxter Road (a)	Elmsford, New York	3	416,108		41,057		41,057		-
08/20/14	200, 220 White Plains Road (a)	Tarrytown, New York	2	178,000		12,619		12,619		-
08/20/14	1266 East Main Street (a) (b)	Stamford, Connecticut	1	179,260		18,406		18,246		160
Totals:			16	2,610,931	$	319,239	$	264,391	$	54,848

(a) The Company completed the sale of these properties for approximately $~~117~~221 million comprised of: $~~114~~192.65 million in cash from a combination of affiliates of Keystone Property Group’s (“Keystone Entities”) senior and pari-passu equity and mortgage financing; Company subordinated equity interests in each of the properties sold with capital accounts aggregating $21.2 million and Company pari-passu equity interests in five of the properties sold aggregating $7.43 million. Net sale proceeds from the sale aggregated $~~112~~196.98 million which was comprised of the $~~117~~221 million gross sales price less the subordinated equity interests of $221.42 million and $~~1.7~~3 million in closing costs. The purchasers of these properties are unconsolidated joint ventures formed between the Company and ~~affiliates of~~ the Keystone ~~Property Group (“Keystone~~ Entities”). The senior and pari-passu equity will receive a 15 percent internal rate of return (“IRR”) after which the subordinated equity will receive a ~~ten~~10 percent IRR and then all distributable cash flow will be split equally between the Keystone Entities and the Company. See Note 4: Investments in Unconsolidated Joint Ventures. In connection with certain of these partial sale transactions, because the buyer ~~receives~~received a preferential return on certain of the ventures for which the Company received subordinated equity interests, the Company only recognized profit to the extent that they received net proceeds in excess of their entire carrying value of the properties, effectively reflecting their retained ~~subordinate~~subordinated equity interest at zero. The Company has contracts with Keystone Entities to sell an additional seven of its office properties in New Jersey, New York and Connecticut, aggregating approximately 928,258 square feet, for approximately $104 million, comprised of: $78.3 million in cash from a combination of Keystone Entities senior and pari-passu equity and mortgage financing; Company subordinated equity interests in each of the properties being sold with capital accounts aggregating $18.8 million; and Company pari passu equity interests in three of the properties being sold aggregating $6.9 million.

(b) The Company recorded an impairment charge of $320.97 million on these properties at December 31, 2013 as it estimated that the carrying value of the properties may not be recoverable over their anticipated holding periods.

On January 1, 2014, the Company early adopted the new discontinued operations standard and as the properties sold in the six months ended June 30, 2014 will not represent a strategic shift (as the Company is not entirely exiting markets or property types), they have not been reflected as part of discontinued operations.

~~The~~On ~~following~~January ~~table~~1, ~~summarizes~~2014, ~~income~~the ~~from~~Company early adopted the new discontinued operations accounting standard and as the properties sold ~~during~~in the ~~six~~nine months ended ~~June~~September 30, 2014 ~~for~~will ~~the~~not ~~three~~represent ~~and~~a ~~six~~strategic ~~months~~shift ~~ended~~(as ~~June~~the ~~30,~~Company ~~2014~~is ~~and~~not ~~2013:~~entirely ~~(dollars~~exiting inmarkets ~~thousands~~or property types) ~~See~~, ~~Note~~they 7:have ~~Discontinued~~not ~~Operations~~been ~~for~~reflected ~~properties~~as ~~sold~~part inof ~~2013~~discontinued operations.

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
Total revenues	$	6,547	$	9,235	$	16,302	$	18,478
Operating and other expenses		(3,208)		(3,918)		(8,764)		(7,099)
Depreciation and amortization		(1,433)		(2,190)		(3,379)		(4,376)
Interest income		3		-		3		-
Income from properties sold		1,909		3,127		4,162		7,003

The following table summarizes income from the properties sold during the nine months ended September 30, 2014 for the three and nine months ended September 30, 2014 and 2013: (dollars in thousands) See Note 7: Discontinued Operations for properties sold in 2013.

For the three and six months ended June 30, 2014, included in general and administrative expense was an aggregate of approximately $1.9 million in transactions costs related to the Company’s property and joint venture acquisitions.


		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2014		2013		2014		2013
Total revenues	$	2,763	$	13,672	$	28,824	$	41,965
Operating and other expenses		(1,957)		(7,368)		(17,248)		(20,681)
Depreciation and amortization		(502)		(3,600)		(6,371)		(10,945)
Interest income		2		-		4		-

Income from properties sold	$	306	$	2,704	$	5,209	$	10,339

Excluded from the cash flow statement for the six months ended June 30, 2014 was $4.4 million of sale proceeds and $40 million of acquisition and other investment fundings, which were handled through a qualified intermediary.

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

As of ~~June~~September 30, 2014, the Company had an aggregate investment of approximately $~~265~~239.98 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 primarily office and multi-family rental properties, or to acquire land in anticipation of possible development of office and multi-family rental properties. As of ~~June~~September 30, 2014, the unconsolidated joint ventures owned: 2936 office and two retail properties aggregating approximately 45.7 million square feet, ~~seven~~10 multi-family properties totaling 23,~~597~~639 apartments, a 350-room hotel, ~~a senior mezzanine loan position in the capital stack of a 1.7 million square foot commercial property;~~ development projects for up to approximately 32,~~317~~275 apartments; and interests and/or rights to developable land parcels able to accommodate up to 42,~~130~~994 apartments and 1.54 million square feet of office space. The Company’s unconsolidated interests range from 7.5 percent to 85 percent subject to specified priority allocations in certain of the joint ventures.

On October 23, 2012, the Company acquired the real estate development and management businesses (the “Roseland Business”) of Roseland Partners, L.L.C. (“Roseland Partners”), a premier multi-family rental community developer and manager based in Short Hills, New Jersey, and the Roseland Partners’ interests (the “Roseland Transaction”), principally through unconsolidated joint venture interests in various entities which, directly or indirectly, own or have rights with respect to various residential and/or commercial properties or vacant land (collectively, the “Roseland Assets”). The locations of the properties extend from New Jersey to Massachusetts, with the majority of the properties located in New Jersey. Certain of the entities which own the Roseland Assets are controlled by the Company upon acquisition and are therefore consolidated. However, many of the entities are not controlled by the Company and, therefore, are accounted for under the equity method as investments in unconsolidated 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. Unless otherwise noted below, 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 ~~June~~September 30, 2014, such debt had a total facility amount of $~~311~~287.19 million of which the Company agreed to guarantee up to $8971.95 million. As of ~~June~~September 30, 2014, the outstanding balance of such debt totaled $~~200~~215.65 million of which $7962.86 million was guaranteed by the Company. The Company also posted a $4.61 million letter of credit in support of the South Pier at Harborside joint venture, half of which is indemnified by Hyatt Corporation, the Company’s joint venture partner. The Company performed management, leasing, development and other services for the properties owned by the unconsolidated joint ventures and recognized $1.49 million and $1.37 million for such services in the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $25.81 million and $24.32 million for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively. The Company had $899,000 and $523,000 in accounts receivable due from its unconsolidated joint ventures as of September 30, 2014 and December 31, 2013.

~~The~~Included in the Company’s ~~had~~investments ~~$824~~in unconsolidated joint ventures as of September 30,~~000~~ ~~and~~2014 ~~$523~~are eight unconsolidated development joint ventures,~~000~~ inwhich ~~accounts~~are ~~receivable~~VIEs ~~due~~for ~~from~~which ~~its~~the ~~unconsolidated~~Company is not the primary beneficiary. These joint ventures are primarily established to develop real estate property for long-term investment and were deemed VIEs primarily based on the fact that the equity investment at risk was not sufficient to permit the entities to finance their activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of ~~June~~these VIEs based on the fact that the Company has shared control of these entities along with the entity’s partners and therefore does not have controlling financial interests in these VIEs. The Company’s aggregate investment in these VIEs was approximately $96.7 million as of September 30, 2014. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is estimated to be approximately $207.4 million, which includes the Company’s current investment and ~~December~~estimated 31future funding commitments/guarantees of approximately $110.7 million. The Company has not provided financial support to these VIEs that it was not previously contractually required to provide. In general, ~~2013~~future costs of development not financed through third party will be funded with capital contributions from the Company and its outside partners in accordance with their respective ownership percentages.

Included in the Company’s investments in unconsolidated joint ventures as of June 30, 2014 are eight unconsolidated development joint ventures, which are VIEs for which the Company is not the primary beneficiary. These joint ventures are primarily established to develop real estate property for long-term investment and were deemed VIEs primarily based on the fact that the equity investment at risk was not sufficient to permit the entities to finance their activities without additional financial support. The initial equity contributed to these entities was not sufficient to fully finance the real estate construction as development costs are funded by the partners throughout the construction period. The Company determined that it was not the primary beneficiary of these VIEs based on the fact that the Company has shared control of these entities along with the entity’s partners and therefore does not have controlling financial interests in these VIEs. The Company’s aggregate investment in these VIEs was approximately $94.5 million as of June 30, 2014. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is estimated to be approximately $110.8 million, which includes the Company’s current investment and estimated future funding commitments of approximately $16.3 million. The Company has not provided financial support to these VIEs that it was not previously contractually required to provide. In general, future costs of development not financed through third party will be funded with capital contributions from the Company and its outside partners in accordance with their respective ownership percentages.

The following is a summary of the Company's unconsolidated joint ventures as of ~~June~~September 30, 2014: (dollars in thousands)

	Number of		Company's			Company's		Property Debt
	Apartment Units		Effective			Carrying			Maturity	Interest
Entity / Property Name	or Square Feet (sf)		Ownership % (a)			Amount		Balance	Date	Rate
Multi-family
Marbella RoseGarden, L.L.C./ Marbella (b)	412	units	24.27	%	$	15,~~782~~784	$	95,000	05/01/18	4.99	%
RoseGarden Monaco Holdings, L.L.C./ Monaco (North and South) (b)	523	units	15.00	%		2,~~686~~438		165,000	02/01/21	4.19	%
Rosewood Lafayette Holdings, L.L.C./ Highlands at Morristown Station (b)	217	units	25.00	%		~~496~~275		3938,~~021~~846	07/01/15	4.00	%
PruRose Port Imperial South 15, LLC /RiversEdge at Port Imperial (b)	236	units	50.00	%		-		57,500	09/01/20	4.32	%
Rosewood Morristown, L.L.C. / Metropolitan at 40 Park (c) (d)	130	units	12.50	%		6,~~257~~127		46,217	(e)	(e)
Overlook Ridge JV, L.L.C./ Quarrystone (b) (f)	251	units	2550.00	%		-		7569,~~366~~580	(g)	(g)
Overlook Ridge JV 2C/3B, L.L.C./Overlook Ridge 2C & 3B (b)	371	units	25.00	%		-		41,006	12/28/15	L+2.50	%	(h)
Overlook Ridge JV 2C/3B, L.L.C./Overlook Ridge 2C & 3B (b) (f)	371	units	50.00	%		2,753		47,872	12/26/15	L+2.50	%	(h)
PruRose Riverwalk G, L.L.C./ RiverTrace at Port Imperial (b)	316	units	25.00	%		1,~~950~~332		7679,~~334~~053	07/15/21	6.00	%	(i)
Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C) (b)	355	units	7.50	%		-		7279,~~619~~266	06/27/16	L+2.10	%	(j)
Crystal House Apartments Investors LLC / Crystal House (k)	828	units	25.00	%		26,~~458~~602		165,000	0304/1901/20	3.17	%
Portside Master Company, L.L.C./ Portside at Pier One - Bldg 7 (b)	176	units	38.25	%		2,~~655~~306		2032,~~007~~693	12/0504/15	L+2.50	%	(l)
PruRose Port Imperial South 13, LLC / Port Imperial Bldg 13 (b)	280	units	20.00	%		1,~~685~~402		2637,~~097~~355	06/27/16	L+2.15	%	(m)
Roseland/Port Imperial Partners, L.P./ Riverwalk C (b) (n)	363	units	20.00	%		1,~~926~~849		-	-	-
RoseGarden Marbella South, L.L.C./ Marbella II (b)	311	units	24.27	%		8,580		12,503	03/30/17	L+2.25	%	(o)
RoseGarden Marbella South, L.L.C./ Marbella II	311	units	24.27	%		9,612		19,626	03/30/17	L+2.25	%	(o)
Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B) (b)	227	units	7.50	%		-		2230,~~157~~830	01/25/17	L+2.10	%	(p)
Riverpark at Harrison I, L.L.C./ Riverpark at Harrison	141	units	36.00	%		4,~~247~~556		1317,~~370~~446	06/27/16	L+2.35	%	(q)
Capitol Place Mezz LLC / Station Townhouses	377	units	50.00	%		4748,~~978~~682		4555,~~039~~414	07/01/33	4.82	%	(r)
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside	763	units	85.00	%		22,150		-	-	-
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside (ab)	763	units	85.00	%		28,080		-	08/01/29	5.197	%	(aa)
Overlook Ridge, L.L.C./Overlook Ridge Land	896	potential units	50.00	%		-		16,940	03/02/15	L+3.50	%
RoseGarden Monaco, L.L.C./ San Remo Land	300	potential units	41.67	%		1,269		-	-	-
RoseGarden Monaco, L.L.C./ San Remo Land	300	potential units	41.67	%		1,255		-	-	-
Grand Jersey Waterfront URA, L.L.C./ Liberty Landing	1,000	potential units	50.00	%		337		-	-	-
Office
Red Bank Corporate Plaza, L.L.C./ Red Bank	92,878	sf	50.00	%		3,~~771~~880		16,~~240~~054	05/17/16	L+3.00	%	(s)
12 Vreeland Associates, L.L.C./ 12 Vreeland Road	139,750	sf	50.00	%		5,~~658~~680		14,~~717~~124	07/01/23	2.87	%
BNES Associates III / Offices at Crystal Lake	106,345	sf	31.25	%		12,~~899~~026		76,~~057~~907	11/01/23	4.76	%
Hillsborough 206 Holdings, L.L.C./ Hillsborough 206	160,000	sf	50.00	%		1,962		-	-	-
KPG-P 100 IMW JV, LLC / 100 Independence Mall West	339,615	sf	33.33	%		~~751~~339		61,500	09/09/16	L+7.00	%	(t)
Keystone-Penn	1,842,820	sf	(u)			-		~~200~~201,~~601~~606	(v)	(v)
Keystone-TriState	1,266,384	sf	(uw)			-5,725		~~118~~204,~~890~~548	(wx)	(wx)
KPG-MCG Curtis JV, L.L.C./ Curtis Center	885,000	sf	50.00	%		2,187		-	-	-
KPG-MCG Curtis JV, L.L.C./ Curtis Center (ac)	885,000	sf	50.00	%		60,440		(ae)	(ae)	(ae)
Curtis Center TIC I and II LLC / Curtis Center	n/a		(x)			61,296		-	-	-
Other
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)	1,225,000	sf	50.00	%		3,~~848~~922		-	-	-
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial (b)	30,745	sf	20.00	%		1,~~883~~849		-	-	-
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson	350	rooms	50.00	%		-		6665,~~799~~974	(y)	(y)
Stamford SM LLC / Senior Mezzanine Loan (z)	n/a	n/a	80.00	%		~~37,418~~-		-	-	-
Other (aa)						751		-	-	-
Other (ad)						540		-	-	-
Totals:					$	~~265~~239,~~866~~767	$	1,~~474~~607,~~980~~411

(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 12.5 percent interest in a 50,973 square feet of retail building ("Shops at 40 Park") and a 25 percent interest in a to-be-built 59-unit, five story multi-family rental development property ("Lofts at 40 Park").

(d) The Company's ownership interests in this venture are subordinate to its partner's preferred capital balance and the payment of the outstanding balance remaining on a note ($975 as of ~~June~~September 30, 2014), and is not expected to meaningfully participate in the venture's cash flows in the near term.

(e) Property debt balance consists of: (i) a loan, collateralized by the Metropolitan at 40 Park, ~~has~~with a balance of $38,600 at September 30, 2014, bears interest at 3.25 percent, matures in September 2020 and is interest only through September 2015; (ii) a loan, collateralized by the Shops at 40 Park, ~~has~~with a balance of $6,500 at September 30, 2014, bears interest at 3.63 percent, matures in August 2018 and is interest-only through July 2015; and (iii) ~~the~~a loan, collateralized by the Lofts at 40 Park, ~~has~~with a balance of $1,117, bears interest at LIBOR plus 250 basis points and matures in September 2015. The Shops at 40 Park mortgage loan also provides for additional borrowing proceeds of $1 million based on certain preferred thresholds being achieved.

(f) ~~Through~~On August 15, 2014, the Company acquired the equity interests of its joint venture partner in Overlook Ridge JV 2C/3B, L.L.C. for $2.97 million and LR Overlook Phase II, L.L.C., the ~~Company~~property-owning ~~also~~entity ~~owns~~owned aby Overlook Ridge JV, L.L.C., which increased its ownership to 50 percent ~~interest~~ in atwo ~~land~~operating ~~parcel~~multi-family ("properties. The Company also acquired the equity interests of its joint venture partner in LR Overlook Phase III, ~~Land")~~L.L.C. ~~that~~and ~~can~~Overlook ~~accommodate~~Ridge, ~~the~~L.L.C. ~~development~~for of$0.6 ~~approximately~~million ~~240~~and ~~apartment~~$12.99 ~~units~~million respectively, which increased its ownership to 100 percent in developable land (See Note 3: Real Estate Transactions – Acquisitions).

(g) Property debt balance consists of: (i) ~~a loan, collateralized by~~ the Overlook Phase III Land, has a balance of $5,709, bears interest at a rate of LIBOR plus 250 basis points, matures in April 2015 and, subject to certain conditions, provides for a one-year extension option with a fee of 25 basis points, and (ii) the senior loan, collateralized by the Quarrystone property, ~~has~~with a balance of $52,~~657~~580 at September 30, 2014, bears interest at LIBOR plus 200 basis, matures in March 2016 and (~~iii~~ii) the junior loan, with a balance of $17,000, bears interest at LIBOR plus 90 basis points, matures in March 2016 and is collateralized by a $17,000 letter of credit provided by an affiliate of the partner.

(h) The construction loan has a maximum borrowing amount of $55,500 and provides, subject to certain conditions, two one-year extension options with a fee of 25 basis points each. The joint venture has a swap agreement that fixes the all-in rate to 3.0875 percent per annum on an initial notional amount of $1,840, increasing to $5052,~~800~~000, for the period from September 3, 2013 to November 2, 2015.

(i)	The construction loan has a maximum borrowing amount of $83,113.

(j)	The construction loan has a maximum borrowing amount of $91,000 and provides, subject to certain conditions, a one-year extension option with a fee of 25 basis points.

(k)	The Company also owns a 50 percent interest in a vacant land to accommodate the development of approximately 295 additional units of which 252 are currently approved.

(l)	The construction loan has a maximum borrowing amount of $42,500 and provides, subject to certain conditions, two two-year extension options with a fee of 12.5 basis points for the first two-year extension and 25 basis points for the second two-year extension.

(m)

The construction loan has a maximum borrowing amount of $73,350 and provides, subject to certain conditions, one-year extension option followed by a six-month extension option with a fee of 25 basis points each. The joint venture has a swap agreement that fixes the all-in rate to 2.79 percent per annum on an initial notional amount of $1,620, increasing to $69,500 for the period from July 1, 2013 to January 1, 2016.

(n)	The Company also owns a 20 percent residual interest in undeveloped land parcels: parcels 6, I, and J ("Port Imperial North Land") that can accommodate the development of 836 apartment units.

(o)	The construction loan has a maximum borrowing amount of $77,400 and provides, subject to certain conditions, two one-year extension options with a fee of 25 basis points for each year.

(p)	The construction loan has a maximum borrowing amount of $57,000 and provides, subject to certain conditions, a one-year extension option with a fee of 25 basis points.

(q)	The construction loan has a maximum borrowing amount of $23,400 and provides, subject to certain conditions, two one-year extension options with a fee of 20 basis points for each year.

(r) The construction/permanent loan has a maximum borrowing amount of $100,700 with amortization starting in August 2017.

(s)	The joint venture has a swap agreement that fixes the all-in rate to 3.99375 percent per annum on an initial notional amount of $13,650 and then adjusting in accordance with an amortization schedule, which is effective from October 17, 2011 through loan maturity.

(t) The mortgage loan has two one-year extension options, subject to certain conditions, and includes a $25 million construction reserve with a balance of $16.8 million at September 30, 2014.

(u) The Company’s equity interests in the joint ventures will be subordinated to ~~affiliates of the~~ Keystone ~~Property~~Entities ~~Group~~ receiving a 15 percent internal rate of return (“IRR”) after which the Company will receive a ~~ten~~10 percent IRR on its subordinate equity and then all profit will be split equally.

(v) Principal balance of $127,600 bears interest at 5.114 percent and matures in August 27, 2023; principal balance of $6263,~~577~~581 bears interest at rates ranging from LIBOR+5.0 percent to LIBOR+5.75 percent and matures in August 27, 2016; principal balance of $10,425 bears interest at LIBOR+6.0 percent matures in August 27, 2015.

(w) ~~Principal~~Includes ~~balance~~the Company’s pari-passu interests of $~~77,650~~6.5 ~~bears~~million ~~interest~~in atfive ~~rates~~properties ~~ranging~~and ~~from~~Company’s ~~4.888~~subordinated ~~percent~~equity interests to ~~4.93~~Keystone ~~percent~~Entities ~~and~~receiving ~~matures~~a on15 ~~July~~percent 6,internal ~~2024;~~rate ~~principal~~of ~~balance~~return of(“IRR”) ~~$41,240~~after ~~bears~~which ~~interest~~the atCompany ~~LIBOR+4.95~~will receive a 10 percent IRR on its subordinate equity and ~~matures~~then onall ~~July~~profit 1,will ~~2017~~be split equally (See Note 3: Real Estate Transactions – Sales).

(x) ~~Includes~~Principal ~~undivided~~balance ~~interests~~of in$41,240 ~~the~~bears ~~same~~interest ~~manner~~at as4.95 ~~investments~~percent inand ~~noncontrolled~~matures ~~partnership~~on July 1, ~~pursuant~~2017; principal balance of $70,608 bears interest at rates ranging from 5.65 percent to ~~ASC~~6.75 ~~970-323-25-12~~percent and matures on September 9, 2017; principal balance of $14,250 bears interest at 4.88 ~~See~~percent ~~discussion~~and inmatures ~~Recent~~on ~~Transactions~~July ~~following~~6, in2024; ~~this~~principal ~~footnote~~balance of $63,400 bears interest at 4.93 percent and matures on July 6, 2044; principal balance of $15,050 bears interest at 4.71 percent and matures on August 6, 2044.

(y) Balance includes: (i) mortgage loan, collateralized by the hotel property, ~~has~~with a balance of $6261,~~175~~850, bears interest at 6.15 percent and matures in November 2016, and (ii) loan with a balance of $4.61 million, bears interest at fixed rates ranging from 6.09 percent to 6.62 percent and matures in August 1, 2020. The Company posted a $4.61 million letter of credit in support of this loan, half of which is indemnified by the partner.

(z) The joint venture ~~owns~~collected anet ~~senior~~proceeds ~~mezzanine loan (“Mezz Loan”) with a face value~~ of $~~50,000 and is secured by the equity interests in a seven-building portfolio containing 1~~47.672 million ~~square~~at ~~feet of Class A office space and 106 residential rental units totaling 70~~maturity,~~500~~ ~~square feet. The interest-only Mezz Loan has a carrying value~~ of ~~$46,505~~which ~~and~~the isCompany ~~subject~~received toits anshare ~~agreement that provides, subject to certain conditions, for the payment~~ of ~~principal proceeds above~~ $~~47,000 to another party~~37.8 ~~The~~million ~~Mezz~~on ~~loan bears interest at LIBOR plus 325 basis points and matures in~~ August 6, 2014. ~~The joint venture is evaluating its option regarding its investment as the loan approaches maturity.~~

(aa) The ~~Company~~construction/permanent ~~owns~~loan ~~other~~has ~~interests~~a inmaximum ~~various~~borrowing ~~unconsolidated~~amount ~~joint~~of ~~ventures~~$192, ~~including interests in assets previously owned and interest in ventures whose businesses are related to its core operations~~000. ~~These ventures are not expected to significantly impact the Company's operations in the near term.~~

(ab)	See discussion in Recent Transactions following in this footnote.

(ac)	Includes undivided interests in the same manner as investments in noncontrolling partnership, pursuant to ASC 970-323-25-12. See discussion in Recent Transactions following in this footnote.

(ad)	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.

(ae) See Note 10: Mortgages, Loans Payable and Other Obligations for debt secured by interests in these assets.

The following is a summary of the financial position of the unconsolidated joint ventures in which the Company had investment interests as of ~~June~~September 30, 2014 and December 31, 2013: (dollars in thousands)

		June 30,		December 31,
		September 30,		December 31,
		2014		2013
Assets:
Rental property, net	$	1,~~202~~404,~~271~~929	$	755,049
Loan receivable		~~46,505~~-		45,050
Other assets		~~486~~445,~~239~~127		582,990
Total assets	$	1,~~735~~850,~~015~~056	$	1,383,089
Liabilities and partners'/
members' capital:
Mortgages and loans payable	$	~~844~~992,~~476~~434	$	637,709
Other liabilities		~~211~~221,~~959~~414		87,231
Partners'/members' capital		~~678~~636,~~580~~208		658,149
Total liabilities and
partners'/members' capital	$	1,~~735~~850,~~015~~056	$	1,383,089

The following is a summary of the Company’s investments in unconsolidated joint ventures as of ~~June~~September 30, 2014 and December 31, 2013: (dollars in thousands)

		June 30,		December 31,
		September 30,		December 31,
Entity / Property Name		2014		2013
Marbella RoseGarden, L.L.C./ Marbella	$	15,782	$	15,797
Multi-family
RoseGarden Monaco Holdings, L.L.C./ Monaco (North and South)		2,686		3,201
Marbella RoseGarden, L.L.C./ Marbella	$	15,784	$	15,797
Rosewood Lafayette Holdings, L.L.C./ Highlands at Morristown Station		496		857
RoseGarden Monaco Holdings, L.L.C./ Monaco (North and South)		2,438		3,201
Rosewood Lafayette Holdings, L.L.C./ Highlands at Morristown Station		275		857
PruRose Port Imperial South 15, LLC /RiversEdge at Port Imperial		-		-
Rosewood Morristown, L.L.C. / Metropolitan at 40 Park		6,~~257~~127		6,455
Overlook Ridge JV, L.L.C./ Quarrystone		-		-
Overlook Ridge JV 2C/3B, L.L.C./Overlook Ridge 2C & 3B		-2,753		-
PruRose Riverwalk G, L.L.C./ RiverTrace at Port Imperial		1,~~950~~332		3,117
Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C)		-		203
Crystal House Apartments Investors LLC / Crystal House		26,~~458~~602		26,838
Portside Master Company, L.L.C./ Portside at Pier One - Bldg 7		2,~~655~~306		3,207
PruRose Port Imperial South 13, LLC / Port Imperial Bldg 13		1,~~685~~402		2,206
Roseland/Port Imperial Partners, L.P./ Riverwalk C		1,~~926~~849		2,068
RoseGarden Marbella South, L.L.C./ Marbella II		89,~~580~~612		7,567
Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B)		-		24
Riverpark at Harrison I, L.L.C./ Riverpark at Harrison		4,~~247~~556		3,655
Capitol Place Mezz LLC / Station Townhouses		4748,~~978~~682		46,628
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside (a)		22,150		-
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside		28,080		-
Overlook Ridge, L.L.C./Overlook Ridge Land		-		-
RoseGarden Monaco, L.L.C./ San Remo Land		1,269		1,224
RoseGarden Monaco, L.L.C./ San Remo Land		1,255		1,224
Grand Jersey Waterfront URA, L.L.C./ Liberty Landing		337		337
Red Bank Corporate Plaza, L.L.C./ Red Bank		3,771		4,046
Office
12 Vreeland Associates, L.L.C./ 12 Vreeland Road		5,658		5,514
Red Bank Corporate Plaza, L.L.C./ Red Bank		3,880		4,046
BNES Associates III / Offices at Crystal Lake		1,899		1,753
12 Vreeland Associates, L.L.C./ 12 Vreeland Road		5,680		5,514
BNES Associates III / Offices at Crystal Lake		2,026		1,753
Hillsborough 206 Holdings, L.L.C./ Hillsborough 206		1,962		1,962
KPG-P 100 IMW JV, LLC / 100 Independence Mall West		~~751~~339		1,887
Keystone-Penn		-		-
Keystone-TriState		-5,725		-
KPG-MCG Curtis JV, L.L.C./ Curtis Center (a)		2,187		-
KPG-MCG Curtis JV, L.L.C. / Curtis Center		60,440		-
Curtis Center TIC I and II LLC / Curtis Center (b)		61,296		-
Other
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)		3,~~848~~922		3,702
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial		1,~~883~~849		1,930
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson (c)		-		-
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson (a)		-		-
Stamford SM LLC / Senior Mezzanine Loan		~~37,418~~-		36,258
Other		~~751~~540		693
Company's investment in unconsolidated joint ventures	$	~~265~~239,~~866~~767	$	181,129

(a) ~~See~~The ~~discussion~~negative ininvestment ~~Recent~~balance ~~Transactions~~for ~~following~~this joint venture of $2,582 and $1,706 as of September 30, 2014 and December 31, 2013, respectively, were included in ~~this~~accounts ~~footnote~~payable, accrued expenses and other liabilities.

(b) Includes undivided interests in the same manner as investments in noncontrolled partnership, pursuant to ASC 970-323-25-12. See discussion in Recent Transactions following in this footnote.

(c) The negative investment balance for this joint venture of $710 and $1,706 as of June 30, 2014 and December 31, 2013, respectively, were included in accounts payable, accrued expenses and other liabilities.

The following is a summary of the results from operations of the unconsolidated joint ventures for the period in which the Company had investment interests during the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013: (dollars in thousands)

		Three Months Ended				~~Six~~Nine Months Ended
		June 30,				June 30,
		September 30,				September 30,
		2014		2013		2014		2013
Total revenues	$	~~113~~80,~~118~~711	$	9199,~~274~~117	$	~~144~~224,~~111~~822	$	~~103~~202,~~693~~810
Operating and other expenses		(9658,~~605~~684)		(8148,~~321~~621)		(~~114~~173,~~958~~642)		(89137,~~268~~889)
Depreciation and amortization		(815,~~213~~134)		(1011,~~083~~556)		(1631,~~581~~715)		(1324,~~174~~730)
Interest expense		(811,~~786~~296)		(3,~~310~~934)		(1526,~~127~~423)		(59,~~322~~256)
Net income (loss)	$	(~~486~~4,403)	$	(335,~~440)~~006	$	(26,~~555~~958)	$	(430,~~071)~~935

The following is a summary of the Company’s equity in earnings (loss) of unconsolidated joint ventures for the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013: (dollars in thousands)

		Three Months Ended				~~Six~~Nine Months Ended
		June 30,				June 30,
		September 30,				September 30,
Entity / Property Name		2014		2013		2014		2013
Marbella RoseGarden, L.L.C./ Marbella	$	(9)	$	(165)	$	(15)	$	(276)
Multi-family
RoseGarden Monaco Holdings, L.L.C./ Monaco (North and South)		(238)		(423)		(515)		(822)
Marbella RoseGarden, L.L.C./ Marbella	$	3	$	(170)	$	(13)	$	(446)
Rosewood Lafayette Holdings, L.L.C./ Highlands at Morristown Station		(203)		(284)		(419)		(574)
RoseGarden Monaco Holdings, L.L.C./ Monaco (North and South)		(249)		(416)		(764)		(1,238)
Rosewood Lafayette Holdings, L.L.C./ Highlands at Morristown Station		(221)		(295)		(639)		(869)
PruRose Port Imperial South 15, LLC /RiversEdge at Port Imperial		-		-		-		(606)
Rosewood Morristown, L.L.C. / Metropolitan at 40 Park		(7690)		(~~117~~152)		(~~174~~264)		(~~241~~393)
Overlook Ridge JV, L.L.C./ Quarrystone		-		-		-		-
Overlook Ridge JV 2C/3B, L.L.C./Overlook Ridge 2C & 3B		-(217)		~~224~~53		62(155)		~~151~~204
PruRose Riverwalk G, L.L.C./ RiverTrace at Port Imperial		(~~613~~615)		(~~192~~198)		(1,~~151~~766)		(~~378~~576)
Elmajo Urban Renewal Associates, LLC / Lincoln Harbor (Bldg A&C)		~~(91)~~-		(8287)		(203)		(~~168~~255)
Crystal House Apartments Investors LLC / Crystal House		5368		(1,~~535~~149)		(~~274~~206)		(12,~~522~~671)
Portside Master Company, L.L.C./ Portside at Pier One - Bldg 7		(~~220~~228)		(68109)		(~~434~~661)		(~~113~~222)
PruRose Port Imperial South 13, LLC / Port Imperial Bldg 13		(~~213~~220)		(~~145~~181)		(~~418~~638)		(~~278~~459)
Roseland/Port Imperial Partners, L.P./ Riverwalk C		(~~180~~173)		-		(~~345~~518)		-
RoseGarden Marbella South, L.L.C./ Marbella II		-		(1920)		-		(3757)
Estuary Urban Renewal Unit B, LLC / Lincoln Harbor (Bldg B)		-		(3444)		(15)		(63107)
Riverpark at Harrison I, L.L.C./ Riverpark at Harrison		-		-		-		-
Capitol Place Mezz LLC / Station Townhouses		-		-		-		-
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside (a)		(212)		-		(212)		-
Harborside Unit A Urban Renewal, L.L.C. / URL Harborside		-		-		(212)		-
Overlook Ridge, L.L.C./Overlook Ridge Land		(213)		-		(259)		-
RoseGarden Monaco, L.L.C./ San Remo Land		-		-		-		-
Grand Jersey Waterfront URA, L.L.C./ Liberty Landing		~~(16)~~-		-		(54)		-
Red Bank Corporate Plaza, L.L.C./ Red Bank		106		106		205		207
Office
12 Vreeland Associates, L.L.C./ 12 Vreeland Road		54		116		144		24
Red Bank Corporate Plaza, L.L.C./ Red Bank		101		99		306		306
BNES Associates III / Offices at Crystal Lake		110		(2)		147		(71)
12 Vreeland Associates, L.L.C./ 12 Vreeland Road		22		(25)		165		(1)
BNES Associates III / Offices at Crystal Lake		127		(37)		273		(108)
Hillsborough 206 Holdings, L.L.C./ Hillsborough 206		-		-		(5)		-
KPG-P 100 IMW JV, LLC / 100 Independence Mall West		(~~483~~412)		-		(1,~~136~~548)		-
Keystone-Penn		-		-		-		-
Keystone-TriState		-(733)		-		-(733)		-
KPG-MCG Curtis JV, L.L.C./ TIC I and II LLC / Curtis Center (b)		251		-		251		-
KPG-MCG Curtis JV, L.L.C./ Curtis Center		113		-		364		-
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)		44		19		146		28
Other
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial		(23)		(83)		(47)		(132)
Plaza VIII & IX Associates, L.L.C./ Vacant land (parking operations)		74		24		220		52
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson		892		1,056		1,290		545
Roseland/North Retail, L.L.C./ Riverwalk at Port Imperial		(34)		(62)		(81)		(194)
Stamford SM LLC / Senior Mezzanine Loan		928		897		1,844		1,782
South Pier at Harborside / Hyatt Regency Jersey City on the Hudson		583		835		1,874		1,380
Other		795		651		795		714
Stamford SM LLC / Senior Mezzanine Loan		493		1,023		2,337		2,805
Company's equity in earnings (loss) of unconsolidated joint ventures	$	443	$	(80)	$	(792)	$	(1,830)
Other		340		682		876		1,396
Company's equity in earnings (loss) of unconsolidated joint ventures	$	(1,268)	$	(229)	$	(2,060)	$	(2,059)

(a) See discussion in Recent Transactions following in this footnote.

(b) Includes undivided interests in the same manner as investments in noncontrolled partnership, pursuant to ASC 970-323-25-12. See discussion in Recent Transactions following in this footnote.

Recent Transactions

Harborside Unit A Urban Renewal, L.L.C.

Pursuant to a developer agreement entered into in December 2011, on May 21, 2014, the Company entered into a joint venture agreement with Ironstate Harborside-A LLC (“ISA”) to form Harborside Unit A Urban Renewal, L.L.C. (“URL-Harborside”), a newly-formed joint venture that will develop, own and operate a high-rise tower of approximately 763 multi-family apartment units above a parking pedestal to be located on land contributed by the Company at its Harborside complex in Jersey City, New Jersey (the “URL Project”). The construction of the URL Project is estimated to cost a total of approximately $320 million and is projected to be ready for occupancy by the fourth quarter of 2016. The URL Project has been awarded up to $33 million in future tax credits (“URL Tax Credits”), subject to certain conditions, from the New Jersey Economic Development Authority. The venture has an agreement to sell these credits, subject to certain conditions. On August 1, 2014, the venture obtained a construction/permanent loan with a maximum borrowing amount of $192 million (with no balance currently outstanding as of September 30, 2014), which bears interest at a rate of 5.197 percent and matures in August 2029. The Company currently expects that it will fund approximately $8865.6 million of the remaining development costs of the project, net of ~~future~~the loan financing.

The Company owns an 85 percent interest in URL-Harborside and the remaining interest owned by ISA, with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines. Upon entering into the joint venture, the Company’s initial contribution was $30.6 million, which included a capital credit of $30 per approved developable square foot for its contributed land aggregating approximately $20.6 million with the balance consisting of previously incurred development costs, and ISA’s initial contribution was approximately $5.4 million. Included in the Company’s investment in the unconsolidated joint venture is ~~the~~its land contribution with a carrying amount of $5.5 million. The Company has funded an additional $12.6 million in development costs for the venture through September 30, 2014.

In general, the operating agreement of URL-Harborside provides that net operating cash flows are distributed first, to the members in respect of preferred return, as defined, until each member shall have received payment of the accrued and unpaid preferred return; and, thereafter, ~~to each member as follows:~~ 75 percent to the Company and 25 percent to ISA.

Net cash flows from a capital event are distributed first, to the members in respect of preferred return, as defined, until each member shall have received payment of the accrued and unpaid preferred return; second, to the members pro rata based upon the ratio that their respective capital accounts bear to each other until each member shall have received their respective net capital, as defined; third, to the members at the rate of 75 percent to the Company and 25 percent to ISA until the Company shall have received distributions equal to an 18 percent internal rate of return on the Company’s capital contributions; and, thereafter, to the members, at the rate of 65 percent to the Company and 35 percent to ISA.

KPG-MCG Curtis JV, LLC / Curtis Center ~~TIC I and II, L.L.C.~~

On June 6, 2014, the Company and an affiliate of Keystone Property Group (“KPG”) acquired 50 percent tenants-in-common interests each for $62.5 million in Curtis Center, an 885,000 square foot commercial office property located at 601 Walnut Street in Philadelphia, Pennsylvania (the “Curtis Center Property”), which amounted to a total purchase of approximately $125.0 million for the property. In connection with the transaction, the Company provided short-term loans to KPG affiliates, as follows: a 90-day, $52.3 million loan which ~~bears~~bore interest at an annual rate of 3.5 percent payable at maturity, which iswas collateralized by the KPG affiliates’ interest in the Curtis Center Property; and a 90-day, $10 million loan which also ~~bears~~bore interest at an annual rate of 3.5 percent payable at maturity. The $10 million loan was repaid in full on September 2, 2014 and the $52.3 million loan was subsequently repaid in full on October 1, 2014. The investments were funded by the Company primarily through borrowing under its revolving credit facility. The venture plans to reposition the property into a mixed-use ~~environment~~property by converting a portion of existing office space into multi-family rental apartments.

Simultaneous with the acquisition of the Curtis Center Property, the Company and a KPG affiliate formed a new joint venture named KPG-MCG Curtis JV, LLC (the “Curtis Center JV”), which master leased the Curtis Center Property from the acquisition entities for approximately 29 years at market-based terms. The Company and the KPG affiliate both own a 50 percent interest in the Curtis Center JV, with shared control over major decisions.

In general, the operating agreement of the Curtis Center JV provides that net cash flows from operations and capital events are distributed first, to the members, pro rata in proportion to their unreturned capital contributions, until each member’s unreturned capital contributions have been reduced to zero; and, thereafter, to each member, pro rata, in accordance with their percentage interests.

5. DEFERRED CHARGES, GOODWILL AND OTHER ASSETS

		June 30,		December 31,
		September 30,		December 31,
(dollars in thousands)		2014		2013
Deferred leasing costs	$	~~227~~226,~~930~~605	$	258,648
Deferred financing costs		2124,~~916~~689		25,366
		249,846		284,014
		251,294		284,014
Accumulated amortization		(~~112~~115,~~249~~620)		(131,669)
Deferred charges, net		~~137~~135,~~597~~674		152,345
Notes receivable (1)		8373,~~889~~828		21,986
In-place lease values, related intangibles and other assets, net		97,~~515~~566		13,659
Goodwill		2,945		2,945
Prepaid expenses and other assets, net		32,814		27,584
Prepaid expenses and other assets, net (2)		100,383		27,584
Total deferred charges, goodwill and other assets	$	~~266~~320,~~760~~396	$	218,519

(1) Includes as of September 30, 2014: a mortgage receivable for $10.4 million which bears interest at LIBOR plus six percent; a note receivable for $7.8 million which bears interest at eight percent; ~~notes~~an ~~receivable~~interest-free ~~for~~note ~~$62.3~~receivable ~~million~~with ~~which~~a ~~bear~~net ~~interest~~present atvalue of $3.~~5 percent (See Note~~ 4: ~~Unconsolidated~~million ~~joint ventures – Recent Transactions);~~ and ana ~~interest-free~~ note receivable ~~with~~for a$52.3 ~~net~~million ~~present~~which ~~value~~bore ofinterest $at 3.45 ~~million~~percent as(which ofwas ~~June~~repaid 30in full on October 1, 2014).

(2)	Includes a receivable of $61.9 million related to the completion of the Curtis Center mortgage loan financing on September 30, 2014 for which the Company received its loan proceeds on October 1, 2014. See Note 10: Mortgages, Loans Payable and Other Obligations.

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)

		June 30,		December 31,
		September 30,		December 31,
		2014		2013
Security deposits	$	87,~~782~~594	$	8,534
Escrow and other reserve funds		1718,~~623~~977		11,260
Total restricted cash	$	26,~~405~~571	$	19,794

7. DISCONTINUED OPERATIONS

On January 1, 2014, the Company early adopted the new discontinued operations accounting standard and as the properties sold in the ~~six~~nine months ended ~~June~~September 30, 2014 will not represent a strategic shift (as the Company is not entirely exiting markets or property types), they have not been reflected as part of discontinued operations. See Note 3: Real Estate Transactions – Sales.

The Company disposed of 24 office properties located in New York, New Jersey, Pennsylvania and Connecticut aggregating 3 million square feet and three developable land parcels for total net sales proceeds of approximately $390.6 million during the year ended December 31, 2013. The Company has presented these properties as discontinued operations in its statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2013.

The following table summarizes income from discontinued operations for the three and ~~six~~nine months ended ~~June~~September 30, 2013: (dollars in thousands)

	Three Months Ended		~~Six~~Nine Months Ended
		June 30,	June 30,
		September 30,	September 30,
		2013		2013
Total revenues	$	126,~~333~~405	$	2733,~~205~~610
Operating and other expenses		(42,~~778~~472)		(1013,~~982~~454)
Depreciation and amortization		(21,~~989~~769)		(68,~~442~~196)
Interest expense		~~(36)~~-		(118)
Income from discontinued operations		42,~~530~~164		911,~~663~~842
Loss from early extinguishment of debt		~~(703)~~-		(703)
Impairments (1)		~~(23,851)~~-		(23,851)
Realized gains on disposition of rental property		3747,~~609~~321		3784,~~609~~930
Realized gains (losses) and unrealized losses on
Realized gains (losses) on disposition
disposition of rental property and impairments, net		13,758		13,758
of rental property and impairments, net		47,321		61,079
Total discontinued operations	$	1749,~~585~~485	$	2272,~~718~~218

(1) Represents impairment charges recorded on certain properties prior to their sale.

8. SENIOR UNSECURED NOTES

A summary of the Company’s senior unsecured notes as of ~~June~~September 30, 2014 and December 31, 2013 is as follows: (dollars in thousands)

		June 30,		December 31,	Effective
		September 30,		December 31,	Effective
		2014		2013	Rate (1)
5.125% Senior Unsecured Notes, due February 15, 2014 (2)		-	$	200,030	5.110	%
5.125% Senior Unsecured Notes, due January 15, 2015	$	149,~~948~~971		149,902	5.297	%
5.800% Senior Unsecured Notes, due January 15, 2016		200,~~123~~104		200,161	5.806	%
2.500% Senior Unsecured Notes, due December 15, 2017		249,~~003~~077		248,855	2.803	%
7.750% Senior Unsecured Notes, due August 15, 2019		248,~~906~~959		248,799	8.017	%
4.500% Senior Unsecured Notes, due April 18, 2022		299,~~535~~550		299,505	4.612	%
3.150% Senior Unsecured Notes, due May 15, 2023		269,~~626~~778		269,323	3.517	%
Total senior unsecured notes	$	1,417,~~141~~439	$	1,616,575

(1)	Includes the cost of terminated treasury lock agreements (if any), offering and other transaction costs and the discount/premium on the notes, as applicable.

(2)	On February 17, 2014, the Company repaid these notes at their maturity using available cash and borrowings on the Company’s unsecured revolving credit facility.

The terms of the Company’s senior unsecured notes include certain restrictions and covenants which require compliance with financial ratios relating to the maximum amount of debt leverage, the maximum amount of secured indebtedness, the minimum amount of debt service coverage and the maximum amount of unsecured debt as a percent of unsecured assets. The Company was in compliance with its debt covenants as of ~~June~~September 30, 2014.

9. UNSECURED REVOLVING CREDIT FACILITY

On July 16, 2013, the Company amended and restated its unsecured revolving credit facility with a group of 17 lenders. The $600 million facility is expandable to $1 billion and matures in July 2017. It has two six-month extension options each requiring the payment of a 7.5 basis point fee. The interest rate on outstanding borrowings (not electing the Company’s competitive bid feature) and the facility fee on the current borrowing capacity payable quarterly in arrears are based upon the Operating Partnership’s unsecured debt ratings, as follows:

Operating Partnership's	Interest Rate -
Unsecured Debt Ratings:	Applicable Basis Points	Facility Fee
Higher of S&P or Moody's	Above LIBOR	Basis Points
No ratings or less than BBB-/Baa3	170.0	35.0
BBB- or Baa3	130.0	30.0
BBB or Baa2(current)	110.0	20.0
BBB+ or Baa1	100.0	15.0
A- or A3 or higher	92.5	12.5

The facility has a competitive bid feature, which allows the Company to solicit bids from lenders under the facility to borrow up to $300 million at interest rates less than those above.

The terms of the unsecured facility include 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 (to the extent that: (i) such property dispositions cause the Company to default on any of the financial ratios of the facility described below, or (ii) the property dispositions are completed while the Company is under an event of default under the facility, unless, under certain circumstances, such disposition is being carried out to cure such default), and which require compliance with financial ratios relating to the maximum leverage ratio (60 percent), the maximum amount of secured indebtedness (40 percent), the minimum amount of fixed charge coverage (1.5 times), the maximum amount of unsecured indebtedness (60 percent), the minimum amount of unencumbered property interest coverage (2.0 times) and certain investment limitations (generally 15 percent of total capitalization). If an event of default has occurred and is continuing, the Corporation will not make any excess distributions except to enable the Corporation to continue to qualify as a REIT under the Code. The Company was in compliance with its debt covenants as of ~~June~~September 30, 2014.

The lending group for the credit facility consists of: JPMorgan Chase Bank, N.A., as administrative agent; Bank of America, N.A., as syndication agent; Deutsche Bank AG New York Branch; U.S. Bank National Association and Wells Fargo Bank, N.A., as documentation agents; Capital One, National Association; Citibank N.A.; Comerica Bank; PNC Bank, National Association; SunTrust Bank; The Bank of Tokyo-Mitsubishi UFJ, LTD.; The Bank of New York Mellon; as managing agents; and Compass Bank; Branch Banking and Trust Company; TD Bank, N.A.; Citizens Bank of Pennsylvania; Mega International Commercial Bank Co., LTD. New York Branch, as participants.

As of ~~June~~September 30, 2014 and December 31, 2013, the Company had no outstanding borrowings ~~of $56 million~~ under its unsecured revolving credit facility ~~and no outstanding borrowings as of December 31, 2013~~.

Through July 15, 2013, the Company had a $600 million unsecured revolving credit facility, which had an interest rate on outstanding borrowings of LIBOR plus 125 basis points and a facility fee of 25 basis points.

MONEY MARKET LOAN

The Company has an agreement with JPMorgan Chase Bank to participate in a noncommitted money market loan program (“Money Market Loan”). The Money Market Loan is an unsecured borrowing of up to $75 million arranged by JPMorgan Chase Bank with maturities of 30 days or less. The rate of interest on the Money Market Loan borrowing is set at the time of each borrowing. As of ~~June~~September 30, 2014 and December 31, 2013, the Company had no outstanding borrowings under the Money Market Loan.

10. 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 ~~June~~September 30, 2014, 2730 of the Company’s properties, with a total book value of approximately $~~879~~982 million, 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. Except as noted below, the Company was in compliance with its debt covenants as of ~~June~~September 30, 2014.

A summary of the Company’s mortgages, loans payable and other obligations as of ~~June~~September 30, 2014 and December 31, 2013 is as follows: (dollars in thousands)

			Effective				~~June~~September 30,		December 31,
Property Name	Lender		Rate (a)				2014		2013	Maturity
6301 Ivy Lane (b)	RGA Reinsurance Company		5.520	%		$	-	$	5,447	-
395 West Passaic (c)	State Farm Life Insurance Co.		6.004	%			-		9,719	-
35 Waterview Boulevard (d)	Wells Fargo CMBS		6.348	%			-		18,417	-
233 Canoe Brook Road (e)	The Provident Bank		4.375	%			-		3,877	-
6 Becker, 85 Livingston,	Wells Fargo CMBS		10.220	%			6465,~~829~~035		64,233	808/11/~~2014 (l)~~14	(o)
75 Livingston &
20 Waterview (f)
4 Sylvan	Wells Fargo CMBS		10.190	%			14,~~565~~575		14,538	808/11/~~2014 (l)~~14	(o)
10 Independence (g)	Wells Fargo CMBS		12.440	%			16,~~850~~924		16,638	08/11/14	(g)
Port Imperial South 4/5	Wells Fargo Bank N.A.	LIBOR+3.50		%			36,950		36,950	0810/3031/14	(q)
9200 Edmonston Road (h)	Principal Commercial Funding L.L.C.		5.534	%			4,026		4,115	05/01/15
Overlook - Site IIID,IIIC, IIIA (p)	Wells Fargo Bank N.A.	LIBOR+3.50		%			17,100		-	03/02/15
Port Imperial South	Wells Fargo Bank N.A.	LIBOR+1.75		%			43,697		43,278	09/19/15
Overlook - Site IIB (Quarrystone I) (p)	Wells Fargo Bank N.A.	LIBOR+2.50		%			5,748		-	04/14/15
4 Becker	Wells Fargo CMBS		9.550	%			39,108		38,820	05/11/16
9200 Edmonston Road (h)	Principal Commercial Funding L.L.C.		5.534	%			3,996		4,115	05/01/15
5 Becker (i)	Wells Fargo CMBS		12.830	%			13,467		13,092	05/11/16
Port Imperial South	Wells Fargo Bank N.A.	LIBOR+1.75		%			43,910		43,278	09/19/15
210 Clay	Wells Fargo CMBS		13.420	%			13,039		12,767	05/11/16
4 Becker	Wells Fargo CMBS		9.550	%			39,268		38,820	05/11/16
Various (j)	Prudential Insurance		6.332	%			146,532		147,477	01/15/17
5 Becker (i)	Wells Fargo CMBS		12.830	%			13,666		13,092	05/11/16
150 Main St.	Webster Bank	LIBOR+2.35		%			217		-	03/30/17
210 Clay	Wells Fargo CMBS		13.420	%			13,182		12,767	05/11/16
23 Main Street	JPMorgan CMBS		5.587	%			29,529		29,843	09/01/18
Curtis Center (j)	CCRE & PREFG	LIBOR+4.55		%	(m)		64,000		-	10/09/16
Harborside Plaza 5	The Northwestern Mutual Life		6.842	%			223,381		225,139	11/01/18
Various (k)	Prudential Insurance		6.332	%			146,048		147,477	01/15/17
	Insurance Co. & New York Life
150 Main St.	Webster Bank	LIBOR+2.35		%			218		-	03/30/17
	Insurance Co.
23 Main Street	JPMorgan CMBS		5.587	%			29,373		29,843	09/01/18
100 Walnut Avenue	Guardian Life Insurance Co.		7.311	%			18,669		18,792	02/01/19
Harborside Plaza 5	The Northwestern Mutual Life		6.842	%			222,480		225,139	11/01/18
One River Center (k)	Guardian Life Insurance Co.		7.311	%			42,768		43,049	02/01/19
	Insurance Co. & New York Life
Park Square	Wells Fargo Bank N.A.	LIBOR+1.75		%			27,500		-	04/10/19
	Insurance Co.
Total mortgages, loans payable and other obligations						$	735,127	$	746,191
100 Walnut Avenue	Guardian Life Insurance Co.		7.311	%			18,606		18,792	02/01/19
One River Center (l)	Guardian Life Insurance Co.		7.311	%			42,623		43,049	02/01/19
Park Square	Wells Fargo Bank N.A.	LIBOR+1.75		%	(n)		27,500		-	04/10/19
Total mortgages, loans payable and other obligations						$	821,202	$	746,191

(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)	On April 1, 2014, the Company repaid the mortgage loan at par, using available cash.

(c)	On May 1, 2014, the Company repaid the mortgage loan at par, using available cash.

(d)	On May 12, 2014, the Company repaid the mortgage loan at par, using borrowings on the Company’s unsecured revolving credit facility.

(e)	On April 30, 2014, the Company repaid the mortgage loan at par, using available cash.

(f)	Mortgage is cross collateralized by the four properties.

(g)	The Company is negotiating a deed-in-lieu of foreclosure in satisfaction of this mortgage loan.

(h)

The mortgage loan originally matured on May 1, 2013. The maturity date was extended until May 1, 2015 with the same interest rate. Excess cash flow, as defined, is being held by the lender for re-leasing costs. The deed for the property was placed in escrow and is available to the lender in the event of default or non-payment at maturity.

(i)

The cash flow from this property is insufficient to cover operating costs and debt service. Consequently, the Company notified the lender and suspended debt service payments in August 2013. The Company has begun discussions with the lender regarding a deed-in-lieu of foreclosure and began remitting available cash flow to the lender effective August 2013.

(j) ~~Mortgage~~The isCompany ~~cross~~owns ~~collateralized~~a by50 ~~seven~~percent ~~properties~~tenants-in-common interest in the Curtis Center Property. The ~~Operating~~Company’s ~~Partnership~~$64.0 ~~has~~million ~~agreed~~loan consists of its 50 percent interest in a $102 million senior loan with a current rate of 3.45 percent at September 30, ~~subject~~2014 toand ~~certain~~its ~~conditions~~50 percent interest in a $26 million mezzanine loan (with a maximum borrowing capacity of $48 million) with a current rate of 9.65 percent at September 30, to2014. ~~guarantee~~The ~~repayment~~senior loan rate is based on a floating rate of one-month LIBOR plus 329 basis points and the mezzanine loan rate is based on a ~~portion~~floating rate of one-month LIBOR plus 950 basis points. Both loans have LIBOR caps for the period. The loans provide for three one-year extension options. As the Curtis Center Property loans closed on September 30, 2014 with the loan proceeds received on October 1, 2014, the Company recorded the loan and a receivable on September 30, 2014. See Note 5: Deferred Charges, Goodwill and Other Assets.

(k) Mortgage is cross collateralized by ~~the~~seven ~~three~~ properties. ~~comprising~~The ~~One~~Operating ~~River~~Partnership ~~Center~~has agreed, subject to certain conditions, to guarantee repayment of a portion of the loan.

(l) ~~The~~Mortgage ~~Company~~is ~~has~~collateralized ~~begun~~by ~~discussions with~~ the ~~lender~~three toproperties ~~extend~~comprising ~~the~~One ~~maturity~~River ~~date and modify the loan terms~~Center.

~~CASH~~(m) ~~PAID~~Amortization ~~FOR~~of ~~INTEREST~~deferred ~~AND~~financing ~~INTEREST~~costs ~~CAPITALIZED~~adds 1.523 percent to the variable interest rate stated above.

~~Cash~~(n) ~~paid~~Amortization ~~for~~of ~~interest~~deferred ~~for~~financing ~~the~~costs ~~six~~adds ~~months ended June 30, 2014 and 2013 was $61,999,000 and $60,838,000, respectively~~0. ~~Interest~~122 ~~capitalized~~percent byto the ~~Company~~variable for the six months ended June 30, 2014 and 2013 was $6,493,000 and $6,748,000, respectively (of which these amounts included $1,953,000 and $584,000 for the six months ended June 30, 2014 and 2013, respectively, for interest ~~capitalized~~rate onstated ~~the Company’s investments in unconsolidated joint ventures which were substantially in development)~~above.

(o)	The Company has begun discussions with the lender regarding the past due maturity of the loans.

(p)	On August 15, 2014, the Company assumed these loans as a result of its acquisition of interests which increased its ownership to 100 percent in certain previously unconsolidated joint ventures which owned developable land.

(q) The Company is pursuing permanent financing at the maturity of the construction financing in October 2014.

CASH PAID FOR INTEREST AND INTEREST CAPITALIZED

Cash paid for interest for the nine months ended September 30, 2014 and 2013 was $92,096,000 and $97,284,000, respectively. Interest capitalized by the Company for the nine months ended September 30, 2014 and 2013 was $10,650,000 and $10,262,000, respectively (of which these amounts included $3,284,000 and $980,000 for the nine months ended September 30, 2014 and 2013, respectively, for interest capitalized on the Company’s investments in unconsolidated joint ventures which were substantially in development).

SUMMARY OF INDEBTEDNESS

As of ~~June~~September 30, 2014, the Company’s total indebtedness of $2,~~208~~238,~~268~~641,000 (weighted average interest rate of 5.5162 percent) was comprised of $~~164~~195,~~363~~426,000 of ~~revolving credit facility borrowings and other~~ variable rate mortgage debt (weighted average rate of 23.1186 percent) and fixed rate debt and other obligations of $2,043,~~905~~215,000 (weighted average rate of 5.78 percent).

As of December 31, 2013, the Company’s total indebtedness of $2,362,766,000 (weighted average interest rate of 5.62 percent) was comprised of $80,228,000 of variable rate mortgage debt (weighted average rate of 2.74 percent) and fixed rate debt and other obligations of $2,282,538,000 (weighted average rate of 5.72 percent).

DERIVATIVE FINANCIAL INSTRUMENTS

The Company does not have any derivative instruments designated as cash flow hedges. The following table summarizes the notional and fair value of the Company’s derivative financial instruments, designated as fair value hedges, as of September 30, 2014 (dollars in thousands):


		Notional		Strike		Effective	Expiration
		Value	(a)	Rate		Date	Date		Fair Value
LIBOR Cap	$	51,000		1.5	%	September 2014	October 2015	$	4
LIBOR Cap		24,000		1.5	%	September 2014	October 2015		2
LIBOR Cap		51,000		1.75	%	October 2015	October 2016		115
LIBOR Cap		24,000		1.75	%	October 2015	October 2016		53
								$	174

(a)	The notional value is an indication of the extent of our involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks.

The Company includes these derivative financial instruments in deferred charges, goodwill and other assets.

11. MACK-CALI REALTY, L.P.’S PARTNERS’ CAPITAL

Partners’ Capital in the accompanying consolidated financial statements relates to (a) General Partners’ capital consisting of common units in the Company held by the General Partner, and (b) Limited Partners’ capital consisting of common units held by the limited partners.

Any transactions resulting in the issuance of additional common and preferred stock of the Corporation result in a corresponding issuance by the Company of an equivalent amount of common and preferred units to the Corporation.

GENERAL PARTNERS’ CAPITAL

REPURCHASE OF GENERAL PARTNER UNITS

In September 2012, the Corporation’s Board of Directors renewed and authorized an increase to the Corporation’s repurchase program (“Repurchase Program”). The Corporation has authorization to repurchase up to $150 million of its outstanding common stock under the renewed Repurchase Program, which it may repurchase from time to time in open market transactions at prevailing prices or through privately negotiated transactions. The Corporation has purchased and retired 394,625 shares of its outstanding common stock for an aggregate cost of approximately $11 million through ~~June~~September 30, 2014 (none of which occurred in the ~~six~~nine months ended ~~June~~September 30, 2014 and the year ended December 31, 2013), with a remaining authorization under the Repurchase Program of $139 million. Concurrent with these purchases, the Corporation sold to the Company 394,625 common units for approximately $11 million.

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN

The Corporation has a Dividend Reinvestment and Stock Purchase Plan (the “DRIP”) which commenced in March 1999 under which approximately 5.5 million shares of the Corporation’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 Corporation’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 Corporation waives this limit, for additional amounts subject to certain restrictions and other conditions set forth in the DRIP prospectus filed as part of the Corporation’s effective registration statement on Form S-3 filed with the SEC for the approximately 5.5 million shares of the Corporation’s common stock reserved for issuance under the DRIP.

STOCK OPTION PLANS

In May 2013, the Corporation established the 2013 Incentive Stock Plan (the “2013 Plan”) under which a total of 4,600,000 shares have been reserved for issuance. In May 2004, the Corporation established the 2004 Incentive Stock Plan (the “2004 Plan”) under which a total of 2,500,000 shares had been reserved for issuance. The 2004 Plan was terminated upon establishment of the 2013 Plan. No options were granted under the 2004 Plan. In September 2000, the Corporation established the 2000 Employee Stock Option Plan (“2000 Employee Plan”) and the Amended and Restated 2000 Director Stock Option Plan (“2000 Director Plan” and together with the 2000 Employee Plan, the “2000 Plans”). In May 2002, shareholders of the Corporation approved amendments to both of the 2000 Plans to increase the total shares reserved for issuance under both of the 2000 Plans from 2,700,000 to 4,350,000 shares of the Corporation’s common stock (from 2,500,000 to 4,000,000 shares under the 2000 Employee Plan and from 200,000 to 350,000 shares under the 2000 Director Plan). As the 2000 Plans expired in 2010, stock options may no longer be issued under those plans. Stock options granted under the 2000 Employee Plan became exercisable over a five-year period. All stock options granted under the 2000 Director Plan became exercisable in one year. All options were granted at the fair market value at the dates of grant and have terms of ten years. As of June 30, 2014 and December 31, 2013, the stock options outstanding, had a weighted average remaining contractual life of approximately 5.4 and 0.7 years, respectively.

STOCK OPTION PLANS

In May 2013, the Corporation established the 2013 Incentive Stock Plan (the “2013 Plan”) under which a total of 4,600,000 shares have been reserved for issuance. In May 2004, the Corporation established the 2004 Incentive Stock Plan (the “2004 Plan”) under which a total of 2,500,000 shares had been reserved for issuance. The 2004 Plan was terminated upon establishment of the 2013 Plan. No options were granted under the 2004 Plan. In September 2000, the Corporation established the 2000 Employee Stock Option Plan (“2000 Employee Plan”) and the Amended and Restated 2000 Director Stock Option Plan (“2000 Director Plan” and together with the 2000 Employee Plan, the “2000 Plans”). In May 2002, shareholders of the Corporation approved amendments to both of the 2000 Plans to increase the total shares reserved for issuance under both of the 2000 Plans from 2,700,000 to 4,350,000 shares of the Corporation’s common stock (from 2,500,000 to 4,000,000 shares under the 2000 Employee Plan and from 200,000 to 350,000 shares under the 2000 Director Plan). As the 2000 Plans expired in 2010, stock options may no longer be issued under those plans. Stock options granted under the 2000 Employee Plan became exercisable over a five-year period. All stock options granted under the 2000 Director Plan became exercisable in one year. All options were granted at the fair market value at the dates of grant and have terms of 10 years. As of September 30, 2014 and December 31, 2013, the stock options outstanding, had a weighted average remaining contractual life of approximately 5.2 and 0.7 years, respectively.

Information regarding the Corporation’s stock option plans is summarized below:

	Shares Under Options		Weighted Average Exercise Price		Aggregate Intrinsic Value $(000’s)
			Weighted		Aggregate
			Average		Intrinsic
	Shares		Exercise		Value
	Under Options		Price		$(000’s)
Outstanding at January 1, 2014	15,000	$	40.54	$	-
Granted	5,000		21.25
Lapsed or Cancelled	(10,000)		38.07
Outstanding at June 30, 2014 ($21.25 – $45.47)	10,000	$	33.36	$	-
Outstanding at September 30, 2014 ($21.25 – $45.47)	10,000	$	33.36	$	-
Options exercisable at June 30, 2014	5,000
Options exercisable at September 30, 2014	5,000
Available for grant at June 30, 2014	4,466,143
Available for grant at September 30, 2014	4,466,143

The weighted average fair value of options granted during the ~~six~~nine months ended ~~June~~September 30, 2014 was $1.71 per option. The fair value of each option grant is estimated on the date of grant using the Black-Scholes model. The following weighted average assumptions are included in the Company’s fair value calculations of stock options granted during the ~~six~~nine months ended ~~June~~ September 30, 2014:



Expected life (in years)	6
Risk-free interest rate	1.50	%
Volatility	20.26	%
Dividend yield	5.65	%

No cash was received from options exercised under all stock option plans for the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively. The total intrinsic value of options exercised during each of the three and ~~six~~nine months ended ~~June~~September 30, 2014 and 2013 was zero. The Corporation has a policy of issuing new shares to satisfy stock option exercises.

The Company recognized stock options expense of $1,000 and zero for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $23,000 and zero for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

RESTRICTED STOCK AWARDS

The Corporation has issued stock awards (“Restricted Stock Awards”) to officers, certain other employees, and nonemployee members of the Board of Directors of the Corporation, which allow the holders to each receive a certain amount of shares of the Corporation’s common stock generally over a one to seven-year vesting period, of which 304,816 unvested shares were legally outstanding at ~~June~~September 30, 2014. Of the Restricted Stock Awards issued to executive officers and senior management, 210,000 are contingent upon the Corporation meeting certain performance goals to be set by the Executive Compensation and Option Committee of the Board of Directors of the Corporation each year (“Performance Shares”), with the remaining based on time and service. These Performance Shares are not considered granted until the performance goals are set. All currently outstanding and unvested Restricted Stock Awards provided to the officers and certain other employees were issued under the 2013 Plan and 2004 Plan. Currently outstanding and unvested Restricted Stock Awards provided to directors were issued under the 2013 Plan.

On September 12, 2012, the Board of Directors of the Corporation approved the recommendations and ratified the determinations of the Executive Compensation and Option Committee of the Board of Directors of the Corporation (the “Committee”) with respect to new Restricted Stock Awards totaling 319,667 shares for those executive officers in place on such date. The new Restricted Stock Awards may vest commencing January 1, 2014 and with the number of Restricted Stock Awards scheduled to be vested and earned on each vesting date on an annual basis over a five to seven year vesting schedule, with each annual vesting of each tranche of Restricted Stock Awards being subject to the attainment of annual performance targets to be set by the Committee for each year. As the Committee determined that the performance targets for the year ended December 31, 2013 were not satisfied, 63,933 shares due to vest on January 1, 2014 did not vest. Such shares may vest on any subsequent vesting date provided that the performance targets for the subsequent calendar year are met. Amounts recorded as compensation expense pertaining to these shares during the year ended December 31, 2013 were reversed. In connection with the departure of two executive officers effective March 31, 2014, the Corporation agreed to grant and accelerate vesting of 109,667 shares of Restricted Stock Awards on April 1, 2014.

Information regarding the Restricted Stock Awards grant activity is summarized below:

			Weighted-Average
			Grant – Date
	Shares		Fair Value
Outstanding at January 1, 2014 (a)	153,560	$	25.20
Granted (b)	208,589		20.83
Vested	(183,214)		22.37
Forfeited	(119)		26.36
Outstanding at June 30, 2014	178,816	$	23.00
Outstanding at September 30, 2014	178,816	$	23.00

(a)	Includes 63,933 Performance Shares which were legally granted in 2013 for which the 2013 performance goals were not met, which may be earned if subsequent years’ performance goals are met.

(b) Includes 42,000 Performance Shares which were legally granted in 2013 for which the 2014 performance goals were set by the Committee on March 31, 2014. Also includes 87,734 shares which were additionally granted to two executive officers in connection with their departure ~~affective~~effective March 31, 2014, ~~and~~ which vested on April 1, 2014.

TSR-BASED AWARDS

Also on September 12, 2012, the Board of Directors of the Corporation approved the recommendations and ratified the determinations of the Committee with respect to new multi-year total stockholder return (“TSR”) based awards (the “TSR-Based Awards”) totaling 5,160 performance shares (the “TSR Performance Shares”) for those executive officers in place on such date, each TSR Performance Share evidencing the right to receive $1,000 in the Corporation’s common stock upon vesting. In accordance with the amended and restated TSR-Based Awards agreements entered into between the Corporation and those executive officers in June 2013, the TSR Performance Shares may vest commencing December 31, 2014, with the number of TSR Performance Shares scheduled to be granted annually over the next four years. The vesting of each tranche of TSR Performance Shares is subject to the attainment at each performance period end of a minimum stock price and either an absolute TSR target or a relative TSR target (the “TSR Performance Targets”) in comparison to a selection of Peer Group REITs, in each case as shall be fixed by the Committee for each performance period. TSR, for purposes of the TSR-Based Performance Agreements, shall be equal to the share appreciation in the relevant period. The Corporation granted 1,032 TSR Performance Shares in the year ended December 31, 2013, which were valued in accordance with ASC 718, Compensation - Stock Compensation, at their fair value, utilizing a Monte-Carlo simulation to estimate the probability of the vesting conditions being satisfied. The Corporation has reserved shares of common stock under the 2004 Plan for issuance upon vesting of the TSR Performance Shares in accordance with the terms and conditions of the TSR-Based Awards. In connection with the departure of two executive vice presidents effective March 31, 2014, the Corporation agreed to vest 357 TSR Performance Shares and to grant and accelerate the vesting of 528 TSR Performance Shares, for which the Corporation issued 45,062 shares of Common Stock on April 2, 2014. See Note 15: ~~Commitment~~Commitments and Contingencies – Departure of Executive Vice Presidents.

As of ~~June~~September 30, 2014, the Company had $21.56 million of total unrecognized compensation cost related to unvested stock compensation granted under the Corporation’s stock compensation plans. That cost is expected to be recognized over a weighted average period of 1.3 years.

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 Corporation 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 Corporation, as defined in the plan. Deferred stock units are credited to each director quarterly using the closing price of the Corporation’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 ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, 1015,~~245~~230 and 1016,~~372~~332 deferred stock units were earned, respectively. As of ~~June~~September 30, 2014 and December 31, 2013, there were ~~148~~152,~~208~~745 and 136,440 deferred stock units outstanding, respectively.

LIMITED PARTNERS’ CAPITAL

Common Units

Certain individuals and entities own common units in the Company. A common unit and a share of Common Stock of the Corporation have substantially the same economic characteristics in as much as they effectively share equally in the net income or loss of the Company. Common unitholders (other than the General Partner) have the right to redeem their common units, subject to certain restrictions. 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 Company, 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 Company 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.

EARNINGS PER UNIT

Basic EPU excludes dilution and is computed by dividing net income available to common unitholders by the weighted average number of units outstanding for the period. Diluted EPU reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

The following information presents the Company’s results for the three and nine months ended ~~June~~September 30, 2014 and 2013 in accordance with ASC 260, Earning Per Unit: (dollars in thousands, except per unit amounts)

		Three Months Ended				~~Six~~Nine Months Ended
		June 30,				June 30,
		September 30,				September 30,
Computation of Basic EPU		2014		2013		2014		2013
Income (loss) from continuing operations	$	572,~~347~~085	$	8(46,~~599~~046)	$	3941,~~719~~804	$	16(29,~~555~~506)
Add: Noncontrolling interest in consolidated joint ventures		~~290~~145		621,838		~~612~~757		~~124~~1,962
Income (loss) from continuing operations available to common unitholders		572,~~637~~230		8(44,~~661~~208)		4042,~~331~~561		16(27,~~679~~544)
Income from discontinued operations available to common
unitholders		-		1749,~~585~~485		-		2272,~~718~~218
Net income (loss) available to common unitholders	$	572,~~637~~230	$	265,~~246~~277	$	4042,~~331~~561	$	3944,~~397~~674
Weighted average common units		99,~~993~~995		99,~~780~~787		99,~~935~~955		99,~~773~~778
Basic EPU:
Income (loss) from continuing operations available to common unitholders	$	0.5802	$	(0.0944)	$	0.4043	$	(0.1628)
Income from discontinued operations available to common
unitholders		-		0.1749		-		0.2373
Net income (loss) available to common unitholders	$	0.5802	$	0.2605	$	0.4043	$	0.3945
		Three Months Ended				Six Months Ended
		June 30,				June 30,
Computation of Diluted EPU		2014		2013		2014		2013
Income (loss) from continuing operations available to common
unitholders	$	57,637	$	8,661	$	40,331	$	16,679
Income from discontinued operations for diluted earnings
per unit		-		17,585		-		22,718
Net income (loss) available to common unitholders	$	57,637	$	26,246	$	40,331	$	39,397
Weighted average common unit		100,023		99,895		99,964		99,892
Diluted EPU:
Income (loss) from continuing operations available to common unitholders	$	0.58	$	0.09	$	0.40	$	0.16
Income from discontinued operations available to common
unitholders		-		0.17		-		0.23
Net income (loss) available to common unitholders	$	0.58	$	0.26	$	0.40	$	0.39

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
Computation of Diluted EPU		2014		2013		2014		2013
Income (loss) from continuing operations available to common unitholders	$	2,230	$	(44,208)	$	42,561	$	(27,544)
Income from discontinued operations for diluted earnings
per unit		-		49,485		-		72,218
Net income (loss) available to common unitholders	$	2,230	$	5,277	$	42,561	$	44,674

Weighted average common unit		100,052		99,787		100,014		99,778

Diluted EPU:
Income (loss) from continuing operations available to common unitholders	$	0.02	$	(0.44)	$	0.43	$	(0.28)
Income from discontinued operations available to common
unitholders		-		0.49		-		0.73
Net income (loss) available to common unitholders	$	0.02	$	0.05	$	0.43	$	0.45

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

	Three Months Ended		~~Six~~Nine Months Ended
	June 30,		June 30,
	September 30,		September 30,
	2014	2013	2014	2013
Basic EPU units	99,~~993~~995	99,~~780~~787	99,~~935~~955	99,~~773~~778
Add: Restricted Stock Awards	3057	~~115~~-	2959	~~119~~-
Diluted EPU units	100,~~023~~052	99,~~895~~787	99100,~~964~~014	99,~~892~~778

Contingently issuable shares under the TSR Award plan were excluded from the denominator in 2014 and 2013 because the criteria had not been met for the periods ended ~~June~~September 30, 2014 and ~~June~~September 30, 2013. Not included in the computations of diluted EPU were 10,000 and 15,000 stock options as such securities were anti-dilutive during the periods ended ~~June~~September 30, 2014 and 2013, respectively. Unvested restricted stock outstanding as of ~~June~~September 30, 2014 and 2013 were 304,816 and ~~352~~351,~~358~~592 shares, respectively.

Distributions declared per common unit for the three month periods ended ~~June~~September 30, 2014 and 2013 was $0.15 and $0.30 per unit, respectively. Distributions declared per common unit for the ~~six~~nine month periods ended ~~June~~September 30, 2014 and 2013 was $0.4560 and $01.6005 per share, respectively.

12. NONCONTROLLING INTERESTS IN CONSOLIDATED JOINT VENTURES

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

The following table reflects the activity of noncontrolling interests in consolidated joint ventures for the nine months ended September 30, 2014 and 2013, respectively (dollars in thousands):


		Nine Months Ended
		September 30,
		2014		2013
Balance at January 1	$	55,283	$	56,442
Net income		(757)		(1,962)
Increase in noncontrolling interest		487		1,570
Balance at September 30	$	55,013	$	56,050

PARTICIPATION RIGHTS

The Company’s interests in certain real estate projects (three properties and a future development) each provide for the initial distributions of net cash flow solely to the Company, and thereafter, other parties have participation rights (“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.

13.	EMPLOYEE BENEFIT 401(k) PLANS AND DEFERRED RETIREMENT COMPENSATION AGREEMENTS

Employees of the Corporation, who meet certain minimum age and service requirements, are eligible to participate in the Mack-Cali Realty Corporation 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 Corporation 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 Corporation at a rate of 20 percent per year, becoming 100 percent vested after a total of six years of service with the Corporation. 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 Corporation. ~~The 401(k) Plan was recently amended to provide for employees of the Roseland Business to receive matching contributions.~~ Total expense recognized by the Company for the 401(k) Plan for the three months ended ~~June~~September 30, 2014 and 2013 was $2724,000 and $2924,000, respectively, and $5377,000 and $6791,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

On September 12, 2012, the Board of Directors of the Corporation approved multi-year deferred retirement compensation agreements for those executive officers in place on such date (the “Deferred Retirement Compensation Agreements”). Pursuant to the Deferred Retirement Compensation Agreements, the Corporation was to make annual contributions of stock units (“Stock Units”) representing shares of the Corporation’s common stock on January 1 of each year from 2013 through 2017 into a deferred compensation account maintained on behalf of each Messrs. Hersh, Lefkowitz and Thomas. In connection with Messrs. Lefkowitz and Thomas’ separation from service to the Corporation effective March 31, 2014, the Company agreed to make cash payments totaling $1.2 million for all vested and unvested Stock Units and future cash contributions pursuant to their respective Deferred Retirement Compensation Agreements (see Note 15: Commitments and Contingencies – Departure of Executive Vice Presidents). The annual contribution for Mr. Hersh will be in an amount of Stock Units equal to $500,000. Vesting of each annual contribution of Stock Units will occur on December 31 of each year, subject to continued employment. Upon the payment of dividends on the Corporation’s common stock, Mr. Hersh shall be entitled to dividend equivalent payments in respect of both vested and unvested Stock Units payable in the form of additional Stock Units. The Stock Units shall become payable to Mr. Hersh within 30 days after the earliest of any of the following triggering events: (a) Mr. Hersh’s death or disability; (b) the date of Mr. Hersh’s separation from service to the Corporation; and (c) the effective date of a change in control, in each case as such terms are defined in Mr. Hersh’s employment agreement. Upon the occurrence of a triggering event, the Stock Units shall be paid in cash based on the closing price of the Corporation’s common stock on the date of such triggering event. The Corporation granted 36,~~218~~347 Stock Units, including ~~836~~966 additional Stock Units on accrued dividends, in the ~~six~~nine months ended ~~June~~September 30, 2014. Total expense recognized by the Company under the Deferred Retirement Compensation Agreements for the three months ended ~~June~~September 30, 2014 and 2013 was $~~142~~47,000 and $~~153~~114,000, respectively, and $1.3 million (see Note 15: Commitments and Contingencies – Departure of Executive Vice Presidents) and $~~341~~455,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

14. DISCLOSURE OF FAIR VALUE OF FINANCIAL INSTRUMENTS

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 financial instruments at ~~June~~September 30, 2014 and December 31, 2013. 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 ~~June~~September 30, 2014 and December 31, 2013.

The fair value of the Company’s long-term debt, consisting of senior unsecured notes, an unsecured revolving credit facility and mortgages, loans payable and other obligations aggregated approximately $2,261,079,000 and $2,407,802,000 as compared to the book value of approximately $2,208,268,000 and $2,362,766,000 as of June 30, 2014 and December 31, 2013, respectively. The fair value of the Company’s long-term debt is categorized as a level 3 basis (as provided by ASC 820, Fair Value Measurements and Disclosures). The fair value is 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 and the unsecured notes was determined by discounting the future contractual interest and principal payments by a market rate.32

~~Disclosure~~The ~~about~~ fair value of ~~financial~~the ~~instruments~~Company’s islong-term ~~based~~debt, onconsisting ~~pertinent~~of ~~information~~senior ~~available~~unsecured notes, an unsecured revolving credit facility and mortgages, loans payable and other obligations aggregated approximately $2,283,232,000 and $2,407,802,000 as compared to ~~management~~the book value of approximately $2,238,641,000 and $2,362,766,000 as of ~~June~~September 30, 2014 and December 31, 2013, respectively. ~~Although~~The ~~management~~fair value of the Company’s long-term debt is ~~not~~categorized ~~aware~~as a level 3 basis (as provided by ASC 820, Fair Value Measurements and Disclosures). The fair value is 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 ~~any~~the ~~factors~~mortgage debt and the unsecured notes was determined by discounting the future contractual interest and principal payments by a market rate. Although the Company has determined that ~~would~~the ~~significantly~~majority ~~affect~~of the inputs used to value its derivative financial instruments fall within level 2 of the fair value ~~amounts~~hierarchy, the credit valuation adjustments associated with its derivative financial instruments utilize level 3 inputs, such ~~amounts~~as ~~have~~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 ~~been~~significant ~~comprehensively~~to ~~revalued~~the ~~for~~overall ~~purposes~~valuation of ~~these~~its derivative financial ~~statements~~instruments. ~~since~~As ~~June~~a 30result, ~~2014~~the ~~and~~Company ~~current~~has ~~estimates~~determined ofthat ~~fair~~its ~~value~~derivative ~~may~~financial ~~differ~~instruments ~~significantly~~valuations ~~from~~in their entirety are classified in level 2 of the ~~amounts~~fair ~~presented~~value ~~herein~~hierarchy.

Disclosure about fair value of financial instruments is based on pertinent information available to management as of September 30, 2014 and December 31, 2013. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since September 30, 2014 and current estimates of fair value may differ significantly from the amounts presented herein.

15. 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:

The Harborside Plaza 4-A agreement with the City of Jersey City, as amended, which commenced in 2002, is for a term of 20 years. The annual PILOT is equal to two percent of Total Project Costs, as defined. Total Project Costs are $49.5 million. The PILOT totaled $247,000 and $247,000 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $~~495~~742,000 and $~~495~~742,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

The Harborside Plaza 5 agreement, also with the City of Jersey City, as amended, which commenced in 2002, is for a term of 20 years. The annual PILOT is equal to two percent of Total Project Costs, as defined. Total Project Costs are $170.9 million. The PILOT totaled $854,000 and $854,000 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $12.76 million and $12.76 million for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

The agreement with the City of Weehawken for its Port Imperial 4/5 garage development project (acquired in the Roseland Transaction) was executed in March 2011 and has a term of five years beginning when the project is substantially complete, which occurred in the third quarter 2013. The agreement provides that real estate taxes be paid initially on the land value of the project only and allows for a phase in of real estate taxes on the value of the improvements over a five year period.

The agreement with the City of Rahway for its Park Square multi-family rental property executed in 2009 provides that real estate taxes will be partially abated, on a declining scale, for four years from 2011 through 2015.

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.

GROUND LEASE AGREEMENTS

Future minimum rental payments under the terms of all non-cancelable ground leases under which the Company is the lessee, as of ~~June~~September 30, 2014, are as follows: (dollars in thousands)

Year		Amount
July 1 through December 31, 2014	$	184
October 1 through December 31, 2014	$	92
2015		371
2016		371
2017		267
2018		232
2019 through 2084		15,~~819~~818
Total	$	17,~~244~~151

Ground lease expense incurred by the Company during the three months ended ~~June~~September 30, 2014 and 2013 amounted to $102,000 and $102,000, respectively, and $~~203~~305,000 and $~~203~~305,000 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

ROSELAND CONTINGENT CONSIDERATION

The purchase price for the Roseland Transaction included the fair value of contingent consideration pursuant to an earn-out (“Earn Out”) agreement of approximately $10 million. The Earn Out largely represents contingent consideration and requires the Company to pay Roseland Partners up to an aggregate maximum of $15.6 million. The Earn Out is based on defined criteria, as follows: (i) the Roseland Assets component of up to $8.6 million for the completion of certain developments ($2.8 million), and the start of construction on others ($2.8 million), obtaining tax credits/grants on others ($3.0 million), all of which are payable over various periods of up to three years; and (ii) total return to shareholders for up to an additional $7 million, based on a total return to shareholders measured on a three year cumulative basis and on discrete years, both on an absolute basis and in comparison to a peer group. Each of the Earn Out elements were separately valued as of the acquisition date with an aggregate fair value of contingent consideration of approximately $10 million (representing $6.3 million for the Roseland Assets and $3.7 million for the total return to shareholders component). During the ~~period~~three and nine months ended ~~June~~September 30, 2014, the Company recognized benefits of zero and $380,000 related to a decline in fair value in the Earn Out liability, which is included in Interest and other investment income for the period. Prospectively, the Earn Out liability will be remeasured at fair value quarterly until the contingency has been resolved, with any changes in fair value representing a charge or benefit directly to earnings (with no adjustment to purchase accounting). The measures of the Earn Out are based on significant inputs that are not observable in the market, which ASC 820 refers to as ~~Level~~level 3 inputs. In addition to an appropriate discount rate, the key assumption affecting the valuation for the Roseland Assets component was the probability of occurrence of the payment events under the relevant provisions (management assumed between 92 and 99 percent for completion/start criteria and 50 percent for the tax credit/grant criteria in its initial valuation). The valuation of the TRS component includes assumptions for the risk-free rate and various other factors (i.e., stock price, dividend levels and volatility) for the Company and the relevant peer group, as defined in the Earn Out agreement. As a result of the achievement of certain of the defined criteria, the Company paid Roseland Partners $2.8 million on January 25, 2013, ~~and~~ $1.4 million on March 21, 2014 and $1.4 million on September 17, 2014 related to the Roseland Assets component of the Earn Out. On July 18, 2014, the Company agreed to pay $1 million of the $3 million Earn Out related to certain tax credits/grants. The $1 million payment had previously been at the chief executive officer’s discretion and was being accrued over the three-year period as compensation expense, and not as contingent consideration of the purchase price. As of September 30, 2014, the balance of the Earn Out liabilities amounted to $2.4 million. See Roseland Transaction Modifications following in this Note. The Company previously recorded the $2.8 million payment of contingent consideration described above in the ~~six~~nine-month period ended ~~June~~September 30, 2013 as a cash out flow from investing activity. Management subsequently concluded that the payment should be appropriately classified as a cash out flow from financing activity and had reflected it as such in the annual financial statements for 2013. The cash flow statement for the ~~six~~nine month period ended ~~June~~September 30, 2013 presented herein has been revised to reflect this change in classification. The Company has determined that the impact to the 2013 quarterly financial statements is not material. ~~The cash flow statements for the nine-month period ended September 30, 2013 will be revised in the future filing.~~

The purchase consideration for the Roseland Transaction is subject to the return of a portion of the purchase price of up to $2.0 million upon the failure to achieve a certain level of fee revenue from the Roseland Business during the 33-month period following the closing date. Because the fee target was highly probable, no discount was ascribed to this contingently returnable consideration. Also, at the closing, approximately $34 million in cash of the purchase price was deposited in escrow to secure certain of the indemnification obligations of Roseland Partners and its affiliates. In April 2013, $6.7 million of the escrow was released to Roseland Partners and on July 18, 2014, the Company agreed to release all remaining escrow funds to Roseland Partners. See Roseland Transaction Modifications following in this Note.

The purchase consideration for the Roseland Transaction is subject to the return of a portion of the purchase price of up to $2.0 million upon the failure to achieve a certain level of fee revenue from the Roseland Business during the 33-month period following the closing date. Because the fee target was highly probable, no discount was ascribed to this contingently returnable consideration. Also, at the closing, approximately $34 million in cash of the purchase price was deposited in escrow to secure certain of the indemnification obligations of Roseland Partners and its affiliates. In April 2013, $6.7 million of the escrow was released to Roseland Partners. On July 18, 2014, the Company agreed to release all remaining escrow funds to Roseland Partners. See Roseland Transaction Modifications following in this Note.

DEPARTURE OF EXECUTIVE VICE PRESIDENTS

On March 3, 2014, the Company announced that Barry Lefkowitz was leaving his position as Executive Vice President and Chief Financial Officer of the Corporation effective March 31, 2014. In connection with Mr. Lefkowitz’s departure, he ~~will~~received ~~receive~~ severance benefits payable pursuant to his employment agreement and outstanding equity compensation awards, including an aggregate cash payment of approximately $3.4 million, vesting of 11,457 newly issued shares of common stock of the Corporation, and vesting of 68,667 unvested shares of Restricted Stock Awards. The Company also will pay the premiums for the continuation of Mr. Lefkowitz’s existing health insurance for a period up to 48 months following March 31, 2014.

Also on March 3, 2014, the Company announced that Roger W. Thomas was leaving his position as Executive Vice President, General Counsel and Secretary of the Corporation effective March 31, 2014. In connection with Mr. Thomas’ departure, he ~~will~~received ~~receive~~ severance benefits payable pursuant to his employment agreement and outstanding equity compensation awards, including an aggregate cash payment of approximately $3.1 million, acceleration and discretionary full vesting of 33,605 newly issued shares of common stock of the Corporation, and vesting of 41,000 unvested shares of Restricted Stock Awards. The Company also will pay the premiums for the continuation of Mr. Thomas’ existing health insurance for a period of up to 48 months following September 30, 2014. Mr. Thomas ~~will~~served ~~serve~~ as a consultant to the ~~Company~~Corporation from April 1, 2014 through September 30, 2014 for an aggregate cash compensation of $300,000.

The Company’s total estimated costs for the departure of the two executive vice presidents of approximately $11 million during the ~~six~~nine months ended ~~June~~September 30, 2014 was included in general and administration expense ~~and~~(approximately $8 million was included in accounts payable, accrued expenses and other liabilities as of ~~June~~September 30, 2014).

ROSELAND TRANSACTION MODIFICATIONS

On July 18, 2014, the Company entered into separation agreements (the “Separation Agreements”) with each of Bradford R. Klatt and Carl Goldberg, formerly principals of Roseland Partners who have served as co-presidents of Roseland Management since the Company acquired the Roseland Business in October 2012. The Separation Agreements provide that the employment agreements of Messrs. Klatt and Goldberg terminate and that they shall resign as co-presidents of Roseland Management effective October 23, 2014 (the “Separation Date”). Also on July 18, 2014, the Company amended its purchase agreement with the sellers of the Roseland Business (the “Roseland Amendment”) to modify certain terms of the Roseland Transaction in connection with the departures of Messrs. Klatt and Goldberg. In addition, Mr. Goldberg entered into a consulting agreement with Roseland Management (the “Consulting Agreement”) pursuant to which he shall provide consulting services for a period of one year following the Separation Date for $400,000 payable in four, equal quarterly installments.

Pursuant to the Separation Agreements, each of Messrs. Klatt and Goldberg shall receive a separation payment of $750,000 within five days following the Separation Date, and an additional payment of $500,000 in full satisfaction of any and all bonus payments under their respective employment agreements, which amount shall be paid six months after the date of their “separation from service” as defined in Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations and other guidance promulgated thereunder. The Separation Agreements also contain customary mutual releases of claims and non-disparagement provisions, and Mr. Goldberg’s Consulting Agreement contains customary non-compete, confidentiality and indemnification covenants. Mr. Goldberg’s Separation Agreement also provides that Roseland Management shall pay the premiums for the continuation of his existing health insurance for a period of one year from the Separation Date or until any earlier termination of his Consulting Agreement.

The Roseland Amendment provides for the following material modifications to the Roseland Transaction:

The non-competition covenants as they apply to Messrs. Klatt and Goldberg shall terminate on the Separation Date, and the non-competition covenants as they apply to Marshall Tycher shall be amended to permit Mr. Tycher to invest in certain future, family-controlled business ventures, subject to a right of first offer by the Company to make an investment of at least 50 percent in multi-family properties or projects covered by the right of first offer;

The release to the sellers of the Roseland Business of all remaining funds held in the indemnity escrow account and the acceleration of the effectiveness of certain indemnity covenants to the Separation Date; and

3. The payment of $1 million of the $3 million Earn Out related to certain tax credits/grants.

~~JOINT~~The ~~VENTURE~~Company’s ~~INTERESTS~~total ~~AGREEMENT~~estimated costs related to the Separation Agreements and Roseland Amendment of approximately $1.1 million in the three and nine months ended September 30, 2014 was included in general and administration expense. Included in accounts payable, accrued expense and other liabilities as of September 30, 2014 was $2.6 million related to the Separation Agreements and Roseland Amendment.

On July 23, 2014, the Company entered into an agreement to acquire the equity interests of its joint venture partner in Overlook Ridge, L.L.C., Overlook Ridge JV, L.L.C. and Overlook Ridge JV 2C/3B, L.L.C. for approximately $16.6 million. As a result of this transaction, the Company will increase its ownership to 100 percent of developable land with proposed build-out of approximately 1,167 apartment homes in Malden, Massachusetts; and to 50 percent of its subordinated interests in two operating multi-family properties, also in Malden, Massachusetts. The transaction is expected to close in the third quarter 2014. 35

OTHER

The Company may not dispose of or distribute certain of its properties, currently comprised of seven properties with an aggregate net book value of approximately $~~123~~125.52 million, which were originally contributed by certain unrelated common unitholders, without the express written consent of such common unitholders, as applicable, except in a manner which does not result in recognition of any built-in-gain (which may result in an income tax liability) or which reimburses the appropriate specific common unitholders for the tax consequences of the recognition of such built-in-gains (collectively, the “Property Lock-Ups”). The aforementioned restrictions do not apply in the event that the Company sells all of its properties or in connection with a sale transaction which the Corporation’s Board of Directors determines is reasonably necessary to satisfy a material monetary default on any unsecured debt, judgment or liability of the Company or to cure any material monetary default on any mortgage secured by a property. The Property Lock-Ups expire periodically through 2016. Upon the expiration of the Property Lock-Ups, the Company is generally required to use commercially reasonable efforts to prevent any sale, transfer or other disposition of the subject properties from resulting in the recognition of built-in gain to the specific common unitholders, which include members of the Mack Group (which includes William L. Mack, Chairman of the Corporation’s Board of Directors; David S. Mack, director of the Corporation; Earle I. Mack, a former director of the Corporation; and Mitchell E. Hersh, president, chief executive officer and director of the Corporation), the Robert Martin Group (which includes Robert F. Weinberg, a former director of the Corporation and current member of its Advisory Board), and the Cali Group (which includes John R. Cali, a former director of the Corporation and current member of its Advisory Board). ~~115~~110 of the Company’s properties, with an aggregate net book value of approximately $1.43 billion, have lapsed restrictions and are subject to these conditions.

In July 2012, the Company entered into a ground lease with Wegmans Food Markets, Inc. (“Wegmans”) at the Company’s undeveloped site located at Sylvan Way and Ridgedale Avenue in Hanover Township, New Jersey. Subject to receiving all necessary governmental approvals, Wegmans intends to construct a store of approximately 140,000 square feet on a finished pad to be delivered by the Company in the ~~first~~third quarter of 2015. The Company expects to incur costs of approximately $15.7 million for the development of the site through the fourth quarter of ~~2015~~2016 (of which the Company has incurred $67.40 million through ~~June~~September 30, 2014).

16. TENANT LEASES

The Properties are leased to tenants under operating leases with various expiration dates through 2035. 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.

35Future minimum rentals to be received under non-cancelable commercial operating leases at September 30, 2014 are as follows (dollars in thousands):

Future minimum rentals to be received under non-cancelable commercial operating leases at June 30, 2014 are as follows (dollars in thousands):

Year		Amount
October 1 through December 31, 2014	$	118,687
2015		445,922
2016		408,691
2017		357,819
2018		276,297
2019 and thereafter		1,067,223

Total	$	2,674,639

Year		Amount
July 1 through December 31, 2014	$	243,001
2015		451,877
2016		409,744
2017		357,438
2018		274,021
2019 and thereafter		1,045,178
Total	$	2,781,259

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

17. SEGMENT REPORTING

The Company operates in three business segments: (i) commercial and other real estate, (ii) multi-family real estate, and (iii) multi-family services. The Company provides leasing, property management, acquisition, development, construction and tenant-related services for its commercial and other real estate and multi-family real estate portfolio. The Company’s multi-family services business also provides similar services for third parties. The Company no longer considers construction services as a reportable segment as it has significantly reduced its operations. The Company had no revenues from foreign countries recorded for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013. The Company had no long lived assets in foreign locations as of ~~June~~September 30, 2014 and December 31, 2013. 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 in each of its real estate segments (commercial and other, and multi-family) and from its multi-family services segment.

~~Selected~~The ~~results~~Company ofevaluates ~~operations~~performance ~~for~~based ~~the~~upon ~~three~~net ~~and~~operating ~~six~~income ~~months~~from ~~ended~~the ~~June~~combined ~~30,~~properties ~~2014~~in ~~and~~each ~~2013~~of ~~and~~its ~~selected~~real ~~asset~~estate ~~information~~segments as(commercial ofand ~~June 30~~other, ~~2014~~ and ~~December~~multi-family) ~~31,~~and ~~2013~~from ~~regarding~~its ~~the~~multi-family ~~Company’s~~services ~~operating segments are as follows. Amounts for prior periods have been restated to conform to the current period~~ segment ~~reporting presentation: (dollars in thousands)~~.

		Real Estate
		Commercial				Multi-family			Corporate		Total
		& Other		Multi-family		Services			& Other (d)		Company
Total revenues:
Three months ended:
June 30, 2014	$	150,877	$	6,329	$	7,403	(e)	$	(4,309)	$	160,300
June 30, 2013		155,249		3,655		6,394	(f)		3,048		168,346
Six months ended:
June 30, 2014		311,450		12,132		14,351	(g)		(8,037)		329,896
June 30, 2013		313,897		4,937		11,878	(h)		8,547		339,259
Total operating and
interest expenses (a):
Three months ended:
June 30, 2014	$	72,303	$	3,006	$	8,382		$	29,578	$	113,269
June 30, 2013		65,889		1,568		7,657			38,888		114,002
Six months ended:
June 30, 2014		159,236		5,705		18,541			70,791		254,273
June 30, 2013		136,282		2,104		15,132			78,343		231,861
Equity in earnings (loss) of
unconsolidated joint ventures:
Three months ended:
June 30, 2014	$	1,829	$	(2,255)	$	869		$	-	$	443
June 30, 2013		2,845		(2,925)		-			-		(80)
Six months ended:
June 30, 2014		2,817		(4,478)		869			-		(792)
June 30, 2013		3,230		(5,060)		-			-		(1,830)
Net operating income (loss) (b):
Three months ended:
June 30, 2014	$	80,403	$	1,068	$	(110)		$	(33,887)	$	47,474
June 30, 2013		92,205		(838)		(1,263)			(35,840)		54,264
Six months ended:
June 30, 2014		155,031		1,949		(3,321)			(78,828)		74,831
June 30, 2013		180,845		(2,227)		(3,254)			(69,796)		105,568
Total assets:
June 30, 2014	$	3,796,166	$	398,190	$	9,004		$	151,412	$	4,354,772
December 31, 2013		3,886,574		377,237		10,488			241,029		4,515,328
Total long-lived assets (c):
June 30, 2014	$	3,421,351	$	277,734	$	3,923		$	3,479	$	3,706,487
December 31, 2013		3,620,494		240,501		3,468			3,730		3,868,193
Total investments in
unconsolidated joint ventures:
June 30, 2014	$	116,829	$	148,286	$	751		$	-	$	265,866
December 31, 2013		53,160		127,276		693			-		181,129

Selected results of operations for the three and nine months ended September 30, 2014 and 2013 and selected asset information as of September 30, 2014 and December 31, 2013 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)


		Real Estate
		Commercial				Multi-family			Corporate		Total
		& Other		Multi-family		Services			& Other (d)		Company
Total revenues:
Three months ended:
September 30, 2014	$	142,486	$	6,459	$	8,300	(e)	$	(1,756)	$	155,489
September 30, 2013		155,129		3,736		6,867	(f)		(3,227)		162,505
Nine months ended:
September 30, 2014		447,779		18,593		22,650	(g)		(3,637)		485,385
September 30, 2013		469,026		8,673		18,745	(h)		5,320		501,764

Total operating and
interest expenses (a):
Three months ended:
September 30, 2014	$	69,315	$	3,271	$	10,249		$	27,582	$	110,417
September 30, 2013		71,356		1,960		8,214			31,998		113,528
Nine months ended:
September 30, 2014		226,798		8,976		28,790			100,126		364,690
September 30, 2013		207,637		4,066		23,345			110,341		345,389

Equity in earnings (loss) of
unconsolidated joint ventures:
Three months ended:
September 30, 2014	$	328	$	(2,088)	$	492		$	-	$	(1,268)
September 30, 2013		1,919		(2,830)		682			-		(229)
Nine months ended:
September 30, 2014		3,145		(6,566)		1,361			-		(2,060)
September 30, 2013		5,149		(7,890)		682			-		(2,059)

Net operating income (loss) (b):
Three months ended:
September 30, 2014	$	73,499	$	1,100	$	(1,457)		$	(29,338)	$	43,804
September 30, 2013		85,692		(1,054)		(665)			(35,225)		48,748
Nine months ended:
September 30, 2014		224,126		3,051		(4,779)			(103,763)		118,635
September 30, 2013		266,538		(3,283)		(3,918)			(105,021)		154,316

Total assets:
September 30, 2014	$	3,861,779	$	460,998	$	10,648		$	23,772	$	4,357,197
December 31, 2013		3,886,574		377,237		10,488			241,029		4,515,328

Total long-lived assets (c):
September 30, 2014	$	3,333,851	$	315,841	$	3,909		$	3,438	$	3,657,039
December 31, 2013		3,620,494		240,501		3,468			3,730		3,868,193

Total investments in
unconsolidated joint ventures:
September 30, 2014	$	82,012	$	157,215	$	540		$	-	$	239,767
December 31, 2013		53,160		127,276		693			-		181,129

(a)

Total operating and interest expenses represent the sum of: real estate taxes; utilities; operating services; direct construction costs; real estate services expenses; general and administrative and interest expense (net of interest income). All interest expense, net of interest 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 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, unbilled rents receivable and goodwill.

(d)

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

(e) Includes $~~935~~1,199 of fees earned for this period from the multi-family real estate segment, which are eliminated in consolidation.

(f) Includes $~~571~~665 of fees earned for this period from the multi-family real estate segment, which are eliminated in consolidation.

(g) Includes $12,~~800~~962 of fees earned for this period from the multi-family real estate segment, which are eliminated in consolidation.

(h) Includes $~~767~~1,432 of fees earned for this period from the multi-family real estate segment, which are eliminated in consolidation.

~~The following schedule reconciles net operating income to net income available to common unitholders: (dollars in~~37

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

		Three Months Ended				~~Six~~Nine Months Ended
		June 30,				June 30,
		September 30,				September 30,
		2014		2013		2014		2013
Net operating income	$	4743,~~474~~804	$	5448,~~264~~748	$	74118,~~831~~635	$	~~105~~154,~~568~~316
Less:
Depreciation and amortization		(4441,~~711~~983)		(4546,~~665~~094)		(89131,~~696~~679)		(89135,~~013~~122)
Realized gains and unrealized losses on disposition of
Realized gains on disposition of
rental property, net		~~54,584~~264		-		54,~~584~~848		-
Income from continuing operations		57,347		8,599		39,719		16,555
Impairments		-		(48,700)		-		(48,700)
Income (loss) from continuing operations		2,085		(46,046)		41,804		(29,506)
Discontinued operations:
Income from discontinued operations		-		42,~~530~~164		-		911,~~663~~842
Loss from early extinguishment of debt		-		~~(703)~~-		-		(703)
Realized gains and unrealized losses on disposition of
Realized gains on disposition of
rental property, net		-		1347,~~758~~321		-		1361,~~758~~079
Total discontinued operations		-		1749,~~585~~485		-		2272,~~718~~218
Net income		572,~~347~~085		263,~~184~~439		3941,~~719~~804		3942,~~273~~712
Noncontrolling interest in consolidated joint ventures		~~290~~145		621,838		~~612~~757		~~124~~1,962
Net income available to common unitholders	$	572,~~637~~230	$	265,~~246~~277	$	4042,~~331~~561	$	3944,~~397~~674

18. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

FASB Accounting Standards Update No. 2014-2015, Presentation of Financial Statements – Going Concern (Subtopic 205-40) – Disclosure about an Entity’s Ability to Continue as a Going Concern

In August 2014, the FASB issued ASU 2014-15, which requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31, 2016 and for annual periods and interim periods thereafter with early adoption permitted. The adoption of ASU 2014-15 is not expected to materially impact the Company’s consolidated financial statements.

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 Mack-Cali Realty, 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

Mack-Cali Realty Corporation together with its subsidiaries, (the “Corporation” or the “General Partner”) is one of the largest real estate investment trusts (REITs) in the United States. Mack-Cali Realty, L.P. (“the Company” or “Operating Partnership”) has been involved in all aspects of commercial real estate development, management and ownership for over 60 years and the Corporation has been a publicly-traded REIT since 1994. As of ~~June~~September 30, 2014, the Company owns or has interests in ~~279~~282 properties (collectively, the “Properties”), consisting of 266 commercial properties, primarily class A office and office/flex buildings, totaling approximately 31.5 million square feet, leased to approximately 2,000 commercial tenants and 1316 multi-family rental properties containing approximately 34,~~900~~940 residential units. The Properties are located primarily in suburban markets of the Northeast, some with adjacent, Company-controlled developable land sites able to accommodate up to 5.7 million square feet of additional commercial space and up to 8,355 apartment units.

The Company’s historical strategy has been to focus its operations, acquisition and development of office properties in high-barrier-to-entry markets and sub-markets where it believes it is, or can become, a significant and preferred owner and operator. With changing work force demographics and reduced demand for suburban office properties in its current markets, the Company intends to continue to leverage its experience and expertise in its core Northeast markets to pursue multi-family rental investments in those markets, both through acquisitions and developments, both wholly owned and through joint ventures. This strategy includes selectively disposing of office and office/flex assets and re-deploying proceeds to multi-family rental properties, as well as the repositioning of a portion of its office properties and land held for development to multi-family rental properties.

As an owner of real estate, almost all of the Company’s earnings and cash flow is derived from rental revenue received pursuant to leased space at the Properties. Key factors that affect the Company’s business and financial results include the following:


·	the general economic climate;
·	the occupancy rates of the Properties;
·	rental rates on new or renewed leases;
·	tenant improvement and leasing costs incurred to obtain and retain tenants;
·	the extent of early lease terminations;
·	the value of our office properties and the cash flow from the sale of such properties;
·	operating expenses;
·	anticipated acquisition and development costs for multi-family rental properties and the revenues and earnings from these properties;
·	cost of capital; and
·	the extent of acquisitions, development and sales of real estate.

Any negative effects of the above key factors could potentially cause a deterioration in the Company’s revenue and/or earnings. Such negative effects could include: (1) failure to renew or execute new leases as current leases expire; (2) failure to renew or execute new leases with rental terms at or above the terms of in-place leases; and (3) tenant defaults.

A failure to renew or execute new leases as current leases expire or to execute new leases with rental terms at or above the terms of in-place leases may be affected by several factors such as: (1) the local economic climate, which may be adversely impacted by business layoffs or downsizing, industry slowdowns, changing demographics and other factors; and (2) local real estate conditions, such as oversupply of the Company’s product types or competition within the market.

The Company’s core office markets continue to be weak. The percentage leased in the Company’s consolidated portfolio of stabilized operating commercial properties aggregating 2625 million, 2826 million and 3028 million square feet at ~~June~~September 30, 2014, ~~March~~June 3130, 2014 and ~~June~~September 30, 2013, respectively was 83.7 percent leased at ~~June~~September 30, 2014 as compared to 83.67 percent leased at ~~March~~June 3130, 2014 and 86.21 percent leased at ~~June~~September 30, 2013. Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates in the future and leases that expire at the period end date. Leases that expired as of ~~June~~September 30, 2014, ~~March~~June 3130, 2014 and ~~June~~September 30, 2013 aggregate ~~101~~160,~~880~~152, ~~119~~101,~~109~~880 and ~~306~~62,~~496~~054 square feet, respectively, or 0.46, 0.4 and 1.0.2 percentage of the net rentable square footage, respectively. Rental rates (including escalations) on the Company’s commercial space that was renewed (based on first rents payable) during the three months ended ~~June~~September 30, 2014 (on ~~466~~268,~~046~~576 square feet of renewals) decreased an average of 64.38 percent compared to rates that were in effect under the prior leases, as compared to aan 611.23 percent decrease during the three months ended ~~June~~September 30, 2013 (on ~~777~~643,~~934~~490 square feet of renewals). Estimated lease costs for the renewed leases during the three months ended ~~June~~September 30, 2014 averaged $12.8345 per square foot per year for a weighted average lease term of 43.04 years and estimated lease costs for the renewed leases during the three months ended ~~June~~September 30, 2013 averaged $2.2801 per square foot per year for a weighted average lease term of 3.56 years. The Company believes that commercial vacancy rates may continue to increase and commercial rental rates may continue to decline in some of its markets in 2014 and possibly beyond. For example, a significant tenant aggregating 474,801 square feet and approximately $8.6 million in annualized base rent, whose lease expires ~~over~~in the ~~next~~near-term 12and ~~months~~ is not renewing its lease. As of ~~June~~September 30, 2014, commercial leases which comprise approximately 310.57 percent of the Company’s annualized base rent are scheduled to expire during the year ended December 31, ~~2014~~2015. With the decline of rental rates in the Company’s office markets over the past few years, as leases expire in ~~2014~~2015, assuming no further changes in current market rental rates, the Company expects that the rental rates it is likely to achieve on new leases will generally be lower than the rates currently being paid, thereby resulting in less revenue from the same space. As a result of the above factors, the Company’s future earnings and cash flow may continue to be negatively impacted by current market conditions affecting its commercial portfolio.

The Company expects that the continued impact of the current state of the economy, including ~~high~~historically ~~unemployment~~weak employment in certain of its markets will continue to have a negative effect on the fundamentals of its business, including in particular lower occupancy, and reduced effective rents, ~~and increases~~ in ~~defaults and past due accounts in~~ respect of the Company’s commercial properties. These conditions would negatively affect the Company’s future net income and cash flows and could have a material adverse effect on the Company’s financial condition.

As a result of the continued weakness in the Company's core office markets, the Company intends to expand its holdings in the multi-family rental sector, which it believes has traditionally been a more stable product type. The Company believes that the opportunity to invest in multi-family development properties at higher returns on cost will position the Company to potentially produce higher levels of net operating income than if the Company were to only purchase stabilized multi-family rental properties at market returns. The Company anticipates that it will be several years before many of its multi-family development projects are income-producing. The long-term nature of the Company’s multi-family strategy coupled with the continued weakness in the Company’s core office markets and the disposition of income producing non-core office properties, to fund the Company’s multi-family rental acquisitions and development will likely result in declining net operating income and cash flows relative to historical returns. As the Company continues to execute its multi-family residential strategy, the Company believes that over the long-term its net operating income and cash flows will stabilize at levels less than historical or current returns.

Extended winter freeze conditions in early 2014 resulted in record electricity demand, as well as reduced natural gas production and distributions disruptions in the Company’s northeast markets. This in turn resulted in significant increases in the utility costs at most of the Company’s properties (including both gas and electricity prices – the latter now being heavily dependent on gas fired power plants). The pricing situation has since stabilized and is not expected to occur for the remainder of the year but could recur in future winters. The Company expects to recover a portion of these additional costs pursuant to the terms of most of its leases with tenants.

The remaining portion of this Management’s Discussion and Analysis of Financial Condition and Results of Operations should help the reader understand our:

· recent transactions; · critical accounting policies and estimates; · results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2014 as compared to the three and ~~six~~nine months ended ~~June~~September 30, 2013 and · liquidity and capital resources.

Recent Transactions

Acquisitions

On April 10, 2014, the Company acquired Andover Place, a 220-unit multi-family rental property located in Andover, Massachusetts, for approximately $37.7 million in cash. The purchase price for the property was funded primarily through borrowings under the Company’s unsecured revolving credit facility.

Sales

The Company sold the following office properties during the ~~six~~nine months ended ~~June~~September 30, 2014 (dollars in thousands):

				Rentable		Net		Net
Sale			# of	Square		Sales		Book		Realized
Date	Property/Address	Location	Bldgs.	Feet		Proceeds		Value		Gain
04/23/14	22 Sylvan Way	Parsippany, New Jersey	1	249,409	$	94,897	$	60,244	$	34,653
06/23/14	30 Knightsbridge Road (a)	Piscataway, New Jersey	4	680,350		54,641		52,361		2,280
06/23/14	470 Chestnut Ridge Road (a) (b)	Woodcliff Lake, New Jersey	1	52,500		7,195		7,109		86
06/23/14	530 Chestnut Ridge Road (a) (b)	Woodcliff Lake, New Jersey	1	57,204		6,299		6,235		64
06/27/14	400 Rella Boulevard	Suffern, New York	1	180,000		27,539		10,938		16,601
06/30/14	412 Mount Kemble Avenue (a)	Morris Township, New Jersey	1	475,100		44,751		43,851		900
Totals:			9	1,694,563	$	235,322	$	180,738	$	54,584
07/29/14	17-17 Route 208 North (a) (b)	Fair Lawn, New Jersey	1	143,000		11,835		11,731		104
08/20/14	555, 565, 570 Taxter Road (a)	Elmsford, New York	3	416,108		41,057		41,057		-
08/20/14	200, 220 White Plains Road (a)	Tarrytown, New York	2	178,000		12,619		12,619		-
08/20/14	1266 East Main Street (a) (b)	Stamford, Connecticut	1	179,260		18,406		18,246		160
Totals:			16	2,610,931	$	319,239	$	264,391	$	54,848

(a) The Company completed the sale of these properties for approximately $~~117~~221 million, comprised of: $~~114~~192.65 million in cash from a combination of affiliates of Keystone Property Group’s (“Keystone Entities”) senior and pari-passu equity and mortgage financing; Company subordinated equity interests in each of the properties sold with capital accounts aggregating $21.2 million; and Company pari-passu equity interests in five of the properties sold aggregating $7.43 million. Net sale proceeds from the sale aggregated $~~112~~196.98 million which was comprised of the $~~117~~221 million gross sales price less the subordinated equity interests of $221.42 million and $~~1.7~~3 million in closing costs. The purchasers of these properties are unconsolidated joint ventures formed between the Company and ~~affiliates of~~ the Keystone ~~Property Group (“Keystone~~ Entities”). The senior and pari-passu equity will receive a 15 percent internal rate of return (“IRR”) after which the subordinated equity will receive a ~~ten~~10 percent IRR and then all distributable cash flow will be split equally between the Keystone Entities and the Company. See Note 4: Investments in Unconsolidated Joint Ventures. In connection with certain of these partial sale transactions, because the buyer ~~receives~~received a preferential return, on certain of the ventures for which the Company received subordinated equity interests the Company only recognized profit to the extent that they received net proceeds in excess of their entire carrying value of the properties, effectively reflecting their retained ~~subordinate~~subordinated equity interest at zero. The Company has contracts with Keystone Entities to sell an additional seven of its office properties in New Jersey, New York and Connecticut, aggregating approximately 928,258 square feet, for approximately $104 million, comprised of: $78.3 million in cash from a combination of Keystone Entities senior and pari-passu equity and mortgage financing; Company subordinated equity interests in each of the properties being sold with capital accounts aggregating $18.8 million; and Company pari passu equity interests in three of the properties being sold aggregating $6.9 million.

Unconsolidated Joint Venture Activity

~~For~~On August 15, 2014, the ~~three~~Company ~~and~~acquired ~~six~~the ~~months~~equity ~~ended~~interests ~~June~~of 30its joint venture partner in Overlook Ridge, ~~2014~~L.L.C, ~~included~~Overlook inRidge ~~general~~JV, L.L.C. and ~~administrative~~Overlook ~~expense~~Ridge JV 2C/3B, L.L.C. for $16.6 million, which was funded primarily through borrowing under the Company’s unsecured revolving credit facility. As a result, the Company increased its ownership to 100 percent of the developable land and now consolidates these entities, which were previously accounted for through unconsolidated joint ventures (collectively, the “Consolidated Land”); and acquired an ~~aggregate~~additional 25 percent, for a total of ~~approximately~~50 $1percent of its subordinated, unconsolidated interests in two operating multi-family properties owned by those entities.9 See ~~million~~Note 4: Investments in ~~transactions~~Unconsolidated ~~costs~~Joint ~~related~~Ventures. In toconjunction with the Company’s ~~property~~acquisition ~~and~~of ~~joint~~the ~~venture~~Consolidated ~~acquisitions~~Land, the Company assumed loans with a total principal balance of $22.8 million, which bear interest in the range of LIBOR plus 2.50 to 3.50 percent. See Note 10: Mortgages, Loans Payable and Other Obligations.

Critical Accounting Policies and Estimates

The accompanying consolidated financial statements include all accounts of the Company, its majority-owned and/or controlled subsidiaries and variable interest entities for which the Company has determined itself to be the primary beneficiary, if any. See Note 2: Significant Accounting Policies – Investments in Unconsolidated Joint Ventures – to the Financial Statements, for the Company’s treatment of unconsolidated joint venture interests. Intercompany accounts and transactions have been eliminated.

The Financial Statements have been prepared in conformity with generally accepted accounting principles. The preparation of the Financial Statements 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 reported 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. 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.

Rental Property:

Rental properties are stated at cost less accumulated depreciation and amortization. Costs directly related to the acquisition, development and construction of rental properties are capitalized. Acquisition-related costs are expensed as incurred. Capitalized development and construction costs include pre-construction costs essential to the development of the property, development and construction costs, interest, property taxes, insurance, salaries and other project costs incurred during the period of development. Interest capitalized by the Company for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013 was $610.57 million and $610.73 million, respectively. Ordinary repairs and maintenance are expensed as incurred; major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives. Fully-depreciated assets are removed from the accounts.

Properties are depreciated using the straight-line method over the estimated useful lives of the assets. The estimated useful lives are as follows:


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

Rental Property Held for Sale:

Investments in Unconsolidated Joint Ventures:

Goodwill:

Derivative Instruments:

Revenue Recognition:

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining terms of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

Construction services revenue includes fees earned and reimbursements received by the Company for providing construction management and general contractor services to clients.

Construction services revenue is recognized on the percentage of completion method. Using this method, profits are recorded on the basis of our estimates of the overall profit and percentage of completion of individual contracts. A portion of the estimated profits is accrued based upon estimates of the percentage of completion of the construction contract. This revenue recognition method involves inherent risks relating to profit and cost estimates.

Parking income includes income from parking spaces leased to tenants and others.

Other income includes income from tenants for additional services arranged for by the Company and income from tenants for early lease terminations.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2014-09 Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. Additionally, this guidance requires improved disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning after December 15, 2016, and early adoption is not permitted. The Company is currently in the process of evaluating the impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations.

Allowance for Doubtful Accounts:

Discontinued Operations:

Results From Operations

The following comparisons for the three and six months ended June 30, 2014 (“2014”), as compared to the three and six months ended June 30, 2013 (“2013”), make reference to the following: (i) the effect of the “Same-Store Properties,” which represent all in-service properties owned by the Company at March 31, 2013, (for the three-month period comparisons), and which represent all in-service properties owned by the Company at December 31, 2012 (for the six-month period comparisons), excluding properties sold through June 30, 2014; (ii) the effect of the “Acquired Properties,” which represent all properties acquired by the Company or commencing initial operation from April 1, 2013 through June 30, 2014 (for the three-month period comparisons), and which represents all properties acquired by the Company or commencing initial operations from January 1, 2013 through June 30, 2014 (for the six-month period comparisons) and (iii) the effect of “Properties Sold in 2014,” which represent properties sold by the Company during the six months ended June 30, 2014.

~~Three~~Results ~~Months~~From ~~Ended June 30, 2014 Compared to Three Months Ended June 30, 2013~~Operations

		Three Months Ended
		June 30,				Dollar	Percent
(dollars in thousands)		2014		2013		Change	Change
Revenue from rental operations and other:
Base rents	$	133,210	$	135,438	$	(2,228)	(1.6)	%
Escalations and recoveries from tenants		16,996		17,456		(460)	(2.6)
Parking income		2,236		1,597		639	40.0
Other income		849		467		382	81.8
Total revenues from rental operations		153,291		154,958		(1,667)	(1.1)
Property expenses:
Real estate taxes		23,375		19,834		3,541	17.9
Utilities		14,573		13,739		834	6.1
Operating services		27,840		25,327		2,513	9.9
Total property expenses		65,788		58,900		6,888	11.7
Non-property revenues:
Construction services		-		6,746		(6,746)	(100.0)
Real estate services		7,009		6,642		367	5.5
Total non-property revenues		7,009		13,388		(6,379)	(47.6)
Non-property expenses:
Direct construction costs		-		6,511		(6,511)	(100.0)
Real estate services expenses		6,571		5,304		1,267	23.9
General and administrative		13,673		13,111		562	4.3
Depreciation and amortization		44,711		45,665		(954)	(2.1)
Total non-property expenses		64,955		70,591		(5,636)	(8.0)
Operating income		29,557		38,855		(9,298)	(23.9)
Other (expense) income:
Interest expense		(28,159)		(31,270)		3,111	9.9
Interest and other investment income		922		1,094		(172)	(15.7)
Equity in earnings (loss) of unconsolidated joint ventures		443		(80)		523	653.8
Realized gains (losses) and unrealized losses on disposition
of rental property, net		54,584		-		54,584	-
Total other (expense) income		27,790		(30,256)		58,046	191.8
Income from continuing operations		57,347		8,599		48,748	566.9
Discontinued operations:
Income from discontinued operations		-		4,530		(4,530)	(100.0)
Loss from early extinguishment of debt		-		(703)		703	100.0
Realized gains (losses) and unrealized losses
on disposition of rental property, net		-		13,758		(13,758)	(100.0)
Total discontinued operations, net		-		17,585		(17,585)	(100.0)
Net income		57,347		26,184		31,163	119.0
Noncontrolling interest in consolidated joint ventures		290		62		228	367.7
Net income available to common unitholders	$	57,637	$	26,246	$	31,391	119.6	%

The following comparisons for the three and nine months ended September 30, 2014 (“2014”), as compared to the three and nine months ended September 30, 2013 (“2013”), make reference to the following: (i) the effect of the “Same-Store Properties,” which represent all in-service properties owned by the Company at June 30, 2013, (for the three-month period comparisons), and which represent all in-service properties owned by the Company at December 31, 2012 (for the nine-month period comparisons), excluding properties sold through September 30, 2014; (ii) the effect of the “Acquired Properties,” which represent all properties acquired by the Company or commencing initial operation from July 1, 2013 through September 30, 2014 (for the three-month period comparisons), and which represents all properties acquired by the Company or commencing initial operations from January 1, 2013 through September 30, 2014 (for the nine-month period comparisons), and (iii) the effect of “Properties Sold in 2014,” which represent properties sold by the Company during the nine months ended September 30, 2014.

~~The~~Three ~~following~~Months isEnded aSeptember ~~summary~~30, ~~of the changes in revenue from rental operations and property expenses in~~ 2014 asCompared ~~compared~~ to ~~2013~~Three ~~divided~~Months ~~into~~Ended ~~Same-Store~~September ~~Properties~~30, ~~and Acquired Properties (dollars in thousands):~~2013

		Total				Same-Store				Acquired				Properties
		Three Months Ended
		Company				Properties				Properties				Sold in 2014
		September 30,				Dollar	Percent
		Dollar	Percent			Dollar	Percent			Dollar	Percent			Dollar	Percent
(dollars in thousands)		2014		2013		Change	Change
(dollars in thousands)		Change	Change			Change	Change			Change	Change			Change	Change
Revenue from rental operations and other:
Revenue from rental
Base rents	$	125,793	$	134,882	$	(9,089)	(6.7)	%
operations and other:
Escalations and recoveries from tenants		19,172		17,173		1,999	11.6
Base rents	$	(2,228)	(1.6)	%	$	(3,601)	(2.6)	%	$	3,445	2.5	%	$	(2,072)	(1.5)	%
Parking income		2,255		1,642		613	37.3
Escalations and recoveries
Other income		647		1,127		(480)	(42.6)
from tenants		(460)	(2.6)			(122)	(0.6)			270	1.5			(608)	(3.5)
Total revenues from rental operations		147,867		154,824		(6,957)	(4.5)
Parking income		639	40.0			(161)	(10.1)			800	50.1			-	-
Property expenses:
Other income		382	81.8			278	59.5			113	24.2			(9)	(1.9)
Real estate taxes		22,154		20,572		1,582	7.7
Total	$	(1,667)	(1.1)	%	$	(3,606)	(2.4)	%	$	4,628	3.0	%	$	(2,689)	(1.7)	%
Utilities		15,701		18,043		(2,342)	(13.0)
Property expenses:
Operating services		26,519		25,852		667	2.6
Real estate taxes	$	3,541	17.9	%	$	3,271	16.5	%	$	708	3.6	%	$	(438)	(2.2)	%
Total property expenses		64,374		64,467		(93)	(0.1)
Utilities		834	6.1			814	6.0			128	0.9			(108)	(0.8)
Non-property revenues:
Operating services		2,513	9.9			1,995	7.8			652	2.6			(134)	(0.5)
Construction services		-		678		(678)	(100.0)
Total	$	6,888	11.7	%	$	6,080	10.2	%	$	1,488	2.7	%	$	(680)	(1.2)	%
Real estate services		7,622		7,003		619	8.8
OTHER DATA:
Total non-property revenues		7,622		7,681		(59)	(0.8)
Number of Consolidated Properties		239				232				7				9
Non-property expenses:
Commercial Square feet (in thousands)		26,280				26,054				226				1,695
Direct construction costs		-		609		(609)	(100.0)
Multi-family portfolio (number of units)		1,301				310				991				-
Real estate services expenses		6,933		5,552		1,381	24.9
General and administrative		12,665		12,151		514	4.2
Depreciation and amortization		41,983		46,094		(4,111)	(8.9)
Impairments		-		48,700		(48,700)	(100.0)
Total non-property expenses		61,581		113,106		(51,525)	(45.6)
Operating income (loss)		29,534		(15,068)		44,602	296.0
Other (expense) income:
Interest expense		(27,353)		(30,936)		3,583	11.6
Interest and other investment income		908		187		721	385.6
Equity in earnings (loss) of unconsolidated joint ventures		(1,268)		(229)		(1,039)	(453.7)
Realized gains (losses) on disposition
of rental property, net		264		-		264	-
Total other (expense) income		(27,449)		(30,978)		3,529	11.4
Income (loss) from continuing operations		2,085		(46,046)		48,131	104.5
Discontinued operations:
Income from discontinued operations		-		2,164		(2,164)	(100.0)
Realized gains (losses) on disposition
of rental property, net		-		47,321		(47,321)	(100.0)
Total discontinued operations, net		-		49,485		(49,485)	(100.0)
Net income		2,085		3,439		(1,354)	(39.4)
Noncontrolling interest in consolidated joint ventures		145		1,838		(1,693)	(92.1)
Net income available to common unitholders	$	2,230	$	5,277	$	(3,047)	(57.7)	%

Base rents for the Same-Store Properties decreased $3.6 million, or 2.6 percent, for 2014 as compared to 2013, due primarily to a decrease in occupancy and rental rates in 2014 as compared to 2013. Escalations and recoveries from tenants for the Same-Store Properties was relatively unchanged, decreasing $0.1 million, or 0.6 percent, for 2014 over 2013. Parking income for the Same-Store Properties decreased $0.2 million, or 10.1 percent for 2014 as compared to 2013, due primarily to decreased parking demand during the period. Other income for the Same-Store Properties increased $0.3 million, or 59.5 percent, due primarily to an increase in reimbursed improvement costs.

Real estate taxes on the Same-Store Properties increased $3.3 million, or 16.6 percent, for 2014 as compared to 2013. The change in real estate taxes principally results from a decrease in tax appeal proceeds received in 2014 as compared to 2013. Real estate taxes, without the effect of net tax appeal proceeds, did not increase significantly in 2014 compared to 2013. Utilities for the Same-Store Properties increased $0.8 million, or 6.0 percent, for 2014 as compared to 2013, due primarily to increased rates in 2014 as compared to 2013. Operating services for the Same-Store Properties increased $2.0 million, or 7.8 percent, due primarily to an increase in maintenance and repair costs of $1.1 million and in insurance costs of $0.5 million for 2014 as compared to 2013.

Construction services revenue decreased $6.7 million, or 100.0 percent, in 2014 as compared to 2013, due to the Company’s phase out of this business segment. Real estate services revenues (primarily reimbursement of property personnel costs) increased by $0.4 million, or 5.5 percent, for 2014 as compared to 2013, due primarily to an increase in salary reimbursement income for 2014 as compared to 2013.

Direct construction costs decreased $6.5 million, or 100.0 percent, in 2014 as compared to 2013, due to the Company’s phase out of this business segment.

Real estate services expenses increased $1.3 million, or 23.9 percent, for 2014 as compared to 2013. This increase was due primarily to increased compensation and related costs, due to increased activity in multifamily services.

General and administrative expenses increased $0.6 million in 2014 as compared to 2013. This increase was primarily due to acquisition transaction costs of $1.9 million in 2014, partially offset by a decrease in salaries and related expenses of $1.3 million for 2014 as compared to 2013.

~~Depreciation~~The ~~and~~following ~~amortization~~is ~~decreased by $1.0 million, or 2.1 percent, for 2014 over 2013. This decrease was due primarily to~~ a ~~decrease~~summary of ~~$1.4 million for~~ the ~~Same-Store~~changes ~~Properties~~in ~~due~~revenue tofrom ~~assets~~rental ~~becoming~~operations ~~fully amortized,~~ and aproperty ~~decrease~~expenses ofin ~~$0.8 million for~~ 2014 as compared to 2013 ~~for~~divided ~~the~~into ~~properties~~Same-Store ~~sold~~Properties inand ~~2014~~Acquired Properties (~~which~~dollars ~~were~~in ~~not classified as discontinued operations~~thousands)~~. These were partially offset by an increase of $1.2 million for 2014 as compared to 2013 for the Acquired Properties.~~:

Interest expense decreased by $3.1 million, or 9.9 percent, for 2014 as compared to 2013. This decrease was primarily the result of lower overall average debt balances in 2014 as compared to 2013.

		Total				Same-Store				Acquired				Properties
		Company				Properties				Properties				Sold in 2014
		Dollar	Percent			Dollar	Percent			Dollar	Percent			Dollar	Percent
(dollars in thousands)		Change	Change			Change	Change			Change	Change			Change	Change
Revenue from rental
operations and other:
Base rents	$	(9,089)	(6.7)	%	$	(2,757)	(2.0)	%	$	2,615	1.9	%	$	(8,947)	(6.6)	%
Escalations and recoveries
from tenants		1,999	11.6			3,923	22.8			34	0.2			(1,958)	(11.4)
Parking income		613	37.3			(40)	(2.5)			657	40.0			(4)	(0.2)
Other income		(480)	(42.6)			(529)	(46.9)			49	4.3			-	-
Total	$	(6,957)	(4.5)	%	$	597	0.4	%	$	3,355	2.2	%	$	(10,909)	(7.1)	%

Property expenses:
Real estate taxes	$	1,582	7.7	%	$	2,839	13.8	%	$	337	1.6	%	$	(1,594)	(7.7)	%
Utilities		(2,342)	(13.0)			(486)	(2.7)			140	0.8			(1,996)	(11.1)
Operating services		667	2.6			1,672	6.5			760	2.9			(1,765)	(6.8)
Total	$	(93)	(0.1)	%	$	4,025	6.3	%	$	1,237	1.9	%	$	(5,355)	(8.3)	%

OTHER DATA:
Number of Consolidated Properties		232				227				5				16
Commercial Square feet (in thousands)		25,364				25,341				23				2,611
Multi-family portfolio (number of units)		1,301				722				579				-

~~Interest~~Base ~~and~~rents ~~other~~for ~~investment~~the ~~income~~Same-Store Properties decreased $02.8 million, or 2.0 percent, for 2014 as compared to 2013, due primarily to a decrease in occupancy and rental rates in 2014 as compared to 2013. Escalations and recoveries from tenants for the Same-Store Properties increased $3.9 million, or 1522.78 percent, for 2014 over 2013 due primarily to the reimbursement of higher operating expenses in 2014 as compared to 2013. ~~This~~Parking income for the Same-Store Properties was ~~primarily~~relatively ~~due~~unchanged for 2014 as compared to ~~lower~~2013. Other ~~average~~income ~~available~~for ~~cash~~the ~~balances~~Same-Store Properties decreased $0.5 million, or 46.9 percent, due primarily to ~~invest~~less overall other income items in 2014.

~~Equity~~Real inestate ~~earnings~~taxes ofon ~~unconsolidated~~the ~~joint~~Same-Store ~~ventures~~Properties increased $02.58 million, or ~~653~~13.8 percent, for 2014 as compared to 2013. The ~~increase~~change ~~was~~in ~~due~~real ~~primarily~~estate taxes principally results from a decrease in tax appeal proceeds received in 2014 as compared to ~~increased~~2013. Real ~~income~~estate taxes, without the effect of net tax appeal proceeds, increased $1.62 million, ~~from~~or ~~the~~6.0 ~~Crystal~~percent, ~~House~~for ~~Apartments~~2014 ~~Investors~~as ~~venture~~compared ~~(which~~to ~~was~~2013 ~~entered~~due ~~into~~primarily into ~~March~~increased ~~2013)~~rates. ~~This~~Utilities ~~was~~for ~~partially~~the ~~offset~~Same-Store byProperties adecreased ~~loss of~~ $0.5 million, ~~from~~or 2.7 percent, for 2014 as compared to 2013, due primarily to decreased usage in 2014 as compared to 2013. Operating services for the ~~KPG~~Same-PStore ~~100~~Properties ~~IMW~~increased ~~venture~~$1.7 million, ~~which~~or ~~was~~6.5 ~~entered~~percent, ~~into~~due primarily to an increase in ~~late~~repairs ~~2013~~and maintenance and ansalaries ~~increased~~and ~~loss~~related costs of $0.49 million ~~from~~and ~~the~~in ~~PruRose~~insurance ~~Riverwalk~~costs Gof ~~venture~~$0.5 million for 2014 as compared to 2013.

~~The~~Construction ~~Company~~services ~~had~~revenue ~~realized~~decreased ~~gains~~$0.7 ~~and~~million, ~~unrealized~~or ~~losses~~100.0 onpercent, ~~disposition~~in 2014 as compared to 2013, due to the Company’s phase out of ~~rental~~this ~~property~~business segment. Real estate services revenues (primarily reimbursement of property personnel costs) increased by $540.6 million, inor 8.8 percent, for 2014 ~~(which~~as ~~were~~compared ~~not~~to ~~classified~~2013, asdue ~~discontinued~~primarily ~~operations). See~~to ~~Note~~an 3:increase ~~Real~~in ~~Estate~~salary ~~Transactions~~reimbursement –income ~~Sales~~for –2014 toas ~~the~~compared ~~Financial~~to ~~Statements~~2013.

~~Income~~Direct ~~from~~construction ~~continuing~~costs ~~operations~~decreased ~~increased to~~ $570.36 million, inor ~~2014 from $8~~100.60 ~~million~~percent, in ~~2013. The~~2014 ~~increase~~as ofcompared ~~$48.7~~to ~~million~~2013, ~~was~~ due to the ~~factors~~Company’s ~~discussed~~phase ~~above~~out of this business segment.

~~Net~~Real ~~income~~estate ~~available~~services toexpenses ~~common unitholders~~ increased by $311.4 million, or ~~119~~24.69 percent, ~~from $26.2 million in 2013 to $57.6 million in 2014. The increase was primarily the result of an increase in income from continuing operations of $48.7 million~~ for 2014 as compared to 2013~~, a loss on early extinguishment of debt of $0~~.7 This ~~million in 2013, and an~~ increase inwas ~~noncontrolling~~due ~~interest~~to inprimarily ~~consolidated joint ventures of $0.2 million for 2014 as compared~~ to ~~2013. These~~increased ~~were~~compensation ~~partially offset by realized gains~~ and ~~unrealized~~related ~~losses on disposition of rental property~~costs, ~~net,~~due ofto ~~approximately~~increased ~~$13.7~~activity ~~million~~ in ~~2013~~multifamily ~~(which were classified as discontinued operations) and a decrease in income from discontinued operations of $4~~services.~~5 million for 2014 as compared to 2013.~~

General and administrative expenses increased $0.5 million in 2014 as compared to 2013, which was primarily due to increased marketing costs in 2014, as compared to 2013.

Depreciation and amortization decreased by $4.1 million, or 8.9 percent, for 2014 over 2013. This decrease was due primarily to a decrease of $2.6 million for the Same-Store Properties due to assets becoming fully amortized, and a decrease of $3.1 million for 2014 as compared to 2013 for the properties sold in 2014 (which were not classified as discontinued operations). These were partially offset by an increase of $1.6 million for 2014 as compared to 2013 for the Acquired Properties.

~~Six~~The ~~Months~~Company ~~Ended~~recorded ~~June~~$48.7 30million in impairment charges in 2013, ~~2014~~primarily ~~Compared~~on nine properties to ~~Six~~reduce ~~Months~~their ~~Ended~~carrying ~~June~~values ~~30,~~to ~~2013~~their estimated fair market values.

		Six Months Ended
		June 30,				Dollar	Percent
(dollars in thousands)		2014		2013		Change	Change
Revenue from rental operations and other:
Base rents	$	267,261	$	269,061	$	(1,800)	(0.7)	%
Escalations and recoveries from tenants		42,564		36,944		5,620	15.2
Parking income		4,350		2,989		1,361	45.5
Other income		2,020		2,208		(188)	(8.5)
Total revenues from rental operations		316,195		311,202		4,993	1.6
Property expenses:
Real estate taxes		47,726		41,483		6,243	15.0
Utilities		42,854		30,027		12,827	42.7
Operating services		57,062		50,635		6,427	12.7
Total property expenses		147,642		122,145		25,497	20.9
Non-property revenues:
Construction services		-		14,972		(14,972)	(100.0)
Real estate services		13,701		13,085		616	4.7
Total non-property revenues		13,701		28,057		(14,356)	(51.2)
Non-property expenses:
Direct construction costs		-		14,336		(14,336)	(100.0)
Real estate services expenses		13,280		10,257		3,023	29.5
General and administrative		36,554		25,084		11,470	45.7
Depreciation and amortization		89,696		89,013		683	0.8
Total non-property expenses		139,530		138,690		840	0.6
Operating income		42,724		78,424		(35,700)	(45.5)
Other (expense) income:
Interest expense		(58,105)		(61,139)		3,034	5.0
Interest and other investment income		1,308		1,100		208	18.9
Equity in earnings (loss) of unconsolidated joint ventures		(792)		(1,830)		1,038	56.7
Realized gains (losses) and unrealized losses on disposition
of rental property, net		54,584		-		54,584	-
Total other (expense) income		(3,005)		(61,869)		58,864	95.1
Income from continuing operations		39,719		16,555		23,164	139.9
Discontinued operations:
Income from discontinued operations		-		9,663		(9,663)	(100.0)
Loss from early extinguishment of debt		-		(703)		703	100.0
Realized gains (losses) and unrealized losses
on disposition of rental property, net		-		13,758		(13,758)	(100.0)
Total discontinued operations, net		-		22,718		(22,718)	(100.0)
Net income		39,719		39,273		446	1.1
Noncontrolling interest in consolidated joint ventures		612		124		488	393.5
Net income available to common unitholders	$	40,331	$	39,397	$	934	2.4	%

Interest expense decreased by $3.6 million, or 11.6 percent, for 2014 as compared to 2013. This decrease was primarily the result of lower overall average debt balances in 2014 as compared to 2013.

Interest and other investment income increased $0.7 million, or 385.6 percent, for 2014 as compared to 2013. This was primarily due to interest income on higher average notes receivable balances in 2014.

Equity in earnings of unconsolidated joint ventures decreased $1.0 million, or 453.7 percent, for 2014 as compared to 2013. The decrease was due primarily to a loss in 2014 of $0.7 million from the Keystone-TriState venture (which was entered into in 2014), decreased income of $0.5 million from the Stamford SM venture (due to the venture’s note receivable being repaid in 2014), an increased loss of $0.4 million from the PruRose Riverwalk G venture, and a loss of $0.4 million from the KPG-P 100 IMW venture, which was entered into in late 2013. These were partially offset by increased income of $1.2 million from the Crystal House Apartments Investors venture in 2014.

The Company had realized gains on disposition of rental property of $0.3 million in 2014 (which were not classified as discontinued operations). See Note 3: Real Estate Transactions – Sales – to the Financial Statements.

Income from continuing operations increased to $2.1 million in 2014 from a loss of $46.0 million in 2013. The increase of $48.1 million was due to the factors discussed above.

Net income available to common unitholders decreased by $3.0 million, or 57.7 percent, from $5.3 million in 2013 to approximately $2.3 million in 2014. The decrease was primarily the result of realized gains on disposition of rental property, net of $47.3 million in 2013 (which were classified as discontinued operations), a decrease in income from discontinued operations of approximately $2.1 million for 2014 as compared to 2013 and a decrease in noncontrolling interest in consolidated joint ventures of $1.7 million for 2014 as compared to 2013. These were partially offset by an increase in income from continuing operations of $48.1 million from 2014 as compared to 2013.

~~The~~Nine ~~following~~Months isEnded aSeptember ~~summary~~30, ~~of the changes in revenue from rental operations and property expenses in~~ 2014 asCompared ~~compared~~ to ~~2013~~Nine ~~divided~~Months ~~into~~Ended ~~Same-Store~~September ~~Properties~~30, ~~and Acquired Properties (dollars in thousands):~~2013

		Total				Same-Store				Acquired				Properties
		Nine Months Ended
		Company				Properties				Properties				Sold in 2014
		September 30,				Dollar	Percent
		Dollar	Percent			Dollar	Percent			Dollar	Percent			Dollar	Percent
(dollars in thousands)		2014		2013		Change	Change
(dollars in thousands)		Change	Change			Change	Change			Change	Change			Change	Change
Revenue from rental operations and other:
Revenue from rental
Base rents	$	393,054	$	403,943	$	(10,889)	(2.7)	%
operations and other:
Escalations and recoveries from tenants		61,736		54,117		7,619	14.1
Base rents	$	(1,800)	(0.7)	%	$	(7,596)	(2.8)	%	$	8,445	3.1	%	$	(2,649)	(1.0)	%
Parking income		6,605		4,631		1,974	42.6
Escalations and recoveries
Other income		2,667		3,335		(668)	(20.0)
from tenants		5,620	15.2			4,506	12.2			631	1.7			483	1.3
Total revenues from rental operations		464,062		466,026		(1,964)	(0.4)
Parking income		1,361	45.5			(138)	(4.7)			1,499	50.2			-	-
Property expenses:
Other income		(188)	(8.5)			(735)	(33.2)			557	25.2			(10)	(0.5)
Real estate taxes		69,880		62,055		7,825	12.6
Total	$	4,993	1.6	%	$	(3,963)	(1.3)	%	$	11,132	3.6	%	$	(2,176)	(0.7)	%
Utilities		58,555		48,070		10,485	21.8
Property expenses:
Operating services		83,581		76,487		7,094	9.3
Real estate taxes	$	6,243	15.0	%	$	3,995	9.6	%	$	1,603	3.8	%	$	645	1.6	%
Total property expenses		212,016		186,612		25,404	13.6
Utilities		12,827	42.7			11,208	37.3			537	1.8			1,082	3.6
Non-property revenues:
Operating services		6,427	12.7			4,809	9.5			1,627	3.2			(9)	-
Construction services		-		15,650		(15,650)	(100.0)
Total	$	25,497	20.9	%	$	20,012	16.4	%	$	3,767	3.1	%	$	1,718	1.4	%
Real estate services		21,323		20,088		1,235	6.1
OTHER DATA:
Total non-property revenues		21,323		35,738		(14,415)	(40.3)
Number of Consolidated Properties		239				231				8				9
Non-property expenses:
Commercial Square feet (in thousands)		26,280				26,054				226				1,695
Direct construction costs		-		14,945		(14,945)	(100.0)
Multi-family portfolio (number of units)		1,301				-				1,301				-
Real estate services expenses		20,213		15,809		4,404	27.9
General and administrative		49,219		37,235		11,984	32.2
Depreciation and amortization		131,679		135,122		(3,443)	(2.5)
Impairments		-		48,700		(48,700)	(100.0)
Total non-property expenses		201,111		251,811		(50,700)	(20.1)
Operating income		72,258		63,341		8,917	14.1
Other (expense) income:
Interest expense		(85,458)		(92,075)		6,617	7.2
Interest and other investment income		2,216		1,287		929	72.2
Equity in earnings (loss) of unconsolidated joint ventures		(2,060)		(2,059)		(1)	-
Realized gains (losses) on disposition
of rental property, net		54,848		-		54,848	-
Total other (expense) income		(30,454)		(92,847)		62,393	67.2
Income (loss) from continuing operations		41,804		(29,506)		71,310	241.7
Discontinued operations:
Income from discontinued operations		-		11,842		(11,842)	(100.0)
Loss from early extinguishment of debt		-		(703)		703	100.0
Realized gains (losses) on disposition
of rental property, net		-		61,079		(61,079)	(100.0)
Total discontinued operations, net		-		72,218		(72,218)	(100.0)
Net income		41,804		42,712		(908)	(2.1)
Noncontrolling interest in consolidated joint ventures		757		1,962		(1,205)	(61.4)
Net income available to common unitholders	$	42,561	$	44,674	$	(2,113)	(4.7)	%

Base rents for the Same-Store Properties decreased $7.6 million, or 2.8 percent, for 2014 as compared to 2013, due primarily to a decrease in occupancy and rental rates in 2014 as compared to 2013. Escalations and recoveries from tenants for the Same-Store Properties increased $4.5 million, or 12.2 percent, for 2014 over 2013, due primarily to recoveries from tenants of higher electric and operating expenses in 2014 pursuant to the terms of most of its leases. Parking income for the Same-Store Properties decreased $0.1 million, or 4.7 percent for 2014 as compared to 2013, due primarily to decreased demand for parking during the period. Other income for the Same-Store Properties decreased $0.7 million, or 33.2 percent, due primarily to a decrease in reimbursed improvement costs.

Real estate taxes on the Same-Store Properties increased $4.0 million, or 9.6 percent, for 2014 as compared to 2013. The change in real estate taxes principally results from a decrease in tax appeal proceeds received in 2014 as compared to 2013. Real estate taxes, without the effect of net tax appeal proceeds, did not increase significantly in 2014 compared to 2013. Utilities for the Same-Store Properties increased $11.2 million, or 37.3 percent, for 2014 as compared to 2013, due primarily to increased rates in 2014 as compared to 2013. Operating services for the Same-Store Properties increased $4.8 million, or 9.5 percent, due primarily to an increase in maintenance and repair costs of $3.5 million (which includes $1.2 million in snow removal costs) and in insurance costs of $0.5 million for 2014 as compared to 2013.

Construction services revenue decreased $15.0 million, or 100.0 percent, in 2014 as compared to 2013, due to the Company‘s phase out of this business segment. Real estate services revenues (primarily reimbursement of property personnel costs) increased by $0.6 million, or 4.7 percent, for 2014 as compared to 2013, due primarily to an increase in salary reimbursement income for 2014 as compared to 2013.

Direct construction costs decreased $14.3 million, or 100.0 percent, in 2014 as compared to 2013, due to the Company’s phase out of this business segment.

Real estate services expenses increased $3.0 million, or 29.5 percent, for 2014 as compared to 2013. This increase was due primarily to increased compensation and related costs, due to increased activity in multi-family services.

General and administrative expenses increased $11.5 million in 2014 as compared to 2013. This increase was primarily due to approximately $11 million of severance costs related to the departure of two of the Company’s executive vice presidents in 2014 and acquisition transaction costs of $1.9 million in 2014, partially offset by costs of $0.6 million incurred in 2013 in connection with the write down of the cost basis of an unconsolidated venture and a decrease in salaries and related expenses of $0.5 million for 2014 as compared to 2013.

Depreciation and amortization increased by $0.7 million, or 0.8 percent, for 2014 over 2013. This increase was due primarily to an increase of $3.3 million for 2014 as compared to 2013 related to depreciation and amortization on assets from the Acquired Properties partially offset by a decrease of $1.6 million for the Same-Store Properties due to assets becoming fully amortized, and a decrease of $1.0 million for 2014 as compared to 2013 for the properties sold in 2014 (which were not classified as discontinued operations).

~~Interest~~The ~~expense~~following ~~decreased~~is bya ~~$3.0~~summary ~~million,~~of orthe ~~5.0~~changes ~~percent,~~in ~~for~~revenue ~~2014~~from asrental ~~compared~~operations toand ~~2013. This~~property ~~decrease~~expenses ~~was~~in ~~primarily~~2014 ~~the~~as ~~result~~compared ofto ~~lower~~2013 ~~overall~~divided ~~average~~into ~~debt~~Same-Store ~~balances~~Properties inand ~~2014~~Acquired asProperties ~~compared~~(dollars toin ~~2013~~thousands):

Interest and other investment income increased $0.2 million, or 18.9 percent for 2014 as compared to 2013. This was primarily due to higher available average cash balances to invest in 2014.

		Total				Same-Store				Acquired				Properties
		Company				Properties				Properties				Sold in 2014
		Dollar	Percent			Dollar	Percent			Dollar	Percent			Dollar	Percent
(dollars in thousands)		Change	Change			Change	Change			Change	Change			Change	Change
Revenue from rental
operations and other:
Base rents	$	(10,889)	(2.7)	%	$	(10,497)	(2.6)	%	$	10,995	2.7	%	$	(11,387)	(2.8)	%
Escalations and recoveries
from tenants		7,619	14.1			8,415	15.6			924	1.7			(1,720)	(3.2)
Parking income		1,974	42.6			(174)	(3.8)			2,152	46.5			(4)	(0.1)
Other income		(668)	(20.0)			(1,207)	(36.2)			569	17.1			(30)	(0.9)
Total	$	(1,964)	(0.4)	%	$	(3,463)	(0.7)	%	$	14,640	3.1	%	$	(13,141)	(2.8)	%

Property expenses:
Real estate taxes	$	7,825	12.6	%	$	6,824	11.0	%	$	2,176	3.5	%	$	(1,175)	(1.9)	%
Utilities		10,485	21.8			10,391	21.6			689	1.4			(595)	(1.2)
Operating services		7,094	9.3			6,473	8.5			2,209	2.9			(1,588)	(2.1)
Total	$	25,404	13.6	%	$	23,688	12.7	%	$	5,074	2.7	%	$	(3,358)	(1.8)	%

OTHER DATA:
Number of Consolidated Properties		232				224				8				16
Commercial Square feet (in thousands)		25,363				25,137				226				2,611
Multi-family portfolio (number of units)		1,301				-				1,301				-

~~Equity~~Base inrents ~~earnings~~for ofthe ~~unconsolidated~~Same-Store ~~joint~~Properties ~~ventures~~decreased ~~increased~~ $110.05 million, or 562.76 percent, for 2014 as compared to 2013, due primarily to a decrease in occupancy and rental rates in 2014 as compared to 2013. ~~The~~Escalations ~~increase~~and ~~was~~recoveries ~~due~~from ~~primarily~~tenants tofor ~~increased~~the ~~income~~Same-Store ofProperties increased $18.24 million, ~~from~~or ~~the~~15.6 ~~Crystal~~percent, ~~House~~for ~~Apartments~~2014 ~~Investors~~over ~~venture~~2013 (due primarily to ~~being~~the ~~entered~~reimbursement ~~into~~of inincreased ~~March~~operating ~~2013)~~expenses ~~and~~for ~~increased~~2014 as compared to 2013. Parking income offor the Same-Store Properties decreased $0.72 million, ~~from~~or ~~the~~3.8 ~~South~~percent ~~Pier~~for at2014 ~~Harborside~~as ~~venture~~compared to 2013, due primarily to decreased parking demand during the period. ~~These~~Other ~~were~~income ~~partially~~for ~~offset~~the bySame-Store aProperties ~~loss~~decreased of $01.82 million, ~~from~~or ~~the~~36.2 ~~PruRose~~percent, ~~Riverwalk~~due Gprimarily ~~venture~~to a decrease in lease breakage fees recognized in 2014 as compared to 2013.

Real estate taxes on the Same-Store Properties increased $6.8 million, or 11.0 percent, for 2014 as compared to 2013. The ~~Company~~change ~~had~~in ~~realized~~real ~~gains~~estate ~~and~~taxes ~~unrealized~~principally ~~losses~~results onfrom ~~disposition~~a ofdecrease ~~rental~~in ~~property~~tax appeal proceeds received in 2014 as compared to 2013. Real estate taxes, without the effect of net tax appeal proceeds, increased $541.62 million, inor 1.9 percent, due primarily to increased rates. Utilities for the Same-Store Properties increased $10.4 million, or 21.6 percent, for 2014 ~~(which~~as ~~were~~compared ~~not~~to ~~classified~~2013, due primarily to sharply increased electricity rates in 2014 as ~~discontinued~~compared ~~operations)~~to 2013. ~~See~~As ~~Note~~more 3:fully ~~Real~~discussed ~~Estate~~in ~~Transactions~~the –“Executive ~~Sales~~Overview”, –extended towinter freeze conditions in early 2014 caused record electricity demand, and combined with reduced actual gas production and distribution disruptions, resulted in significant market price increases for electricity during the ~~Financial~~period. Operating ~~Statements~~services for the Same-Store Properties increased $6.5 million, or 8.5 percent, due primarily to an increase in maintenance, repair and salary costs of $4.0 million and in insurance costs of $1.0 million for 2014 as compared to 2013.

~~Income~~Construction ~~from~~services ~~continuing~~revenue ~~operations~~decreased ~~increased to~~ $3915.7 million, or 100.0 percent, in 2014 ~~from~~as ~~approximately~~compared ~~$16.5~~to ~~million~~2013, indue ~~2013~~to the Company’s phase out of this business segment. ~~The~~Real ~~increase~~estate services revenues (primarily reimbursement of property personnel costs) increased by $231.2 million, ~~was~~or 6.1 percent, for 2014 as compared to 2013, due primarily to ~~the~~an ~~factors~~increase ~~discussed~~in ~~above~~salary reimbursement income for 2014 as compared to 2013.

~~Net~~Direct ~~income~~construction ~~available~~costs todecreased ~~common unitholders increased by~~ $014.9 million, or 2100.40 percent, ~~from $39.4 million~~ in ~~2013 to $40.3 million in~~ 2014~~. The~~ ~~increase was primarily the result of an increase in income from continuing operations of $23.2 million for 2014~~ as compared to 2013, adue ~~loss on early extinguishment of debt of $0.7 million in 2013, and an increase in noncontrolling interest in consolidated joint ventures of $0.5 million for 2014 as compared~~ to ~~2013. These~~the ~~were~~Company’s ~~partially~~phase ~~offset~~out ~~by realized gains and unrealized losses on disposition~~ of ~~rental~~this ~~property,~~business ~~net of $13~~segment.~~8 million in 2013 (which were not classified as discontinued operations) and a decrease in income from discontinued operations of $9.7 million for 2014 as compared to 2013.~~

Real estate services expenses increased $4.4 million, or 27.9 percent, for 2014 as compared to 2013. This increase was due primarily to increased compensation and related costs, due to increased activity in multifamily services.

General and administrative expenses increased $12.0 million in 2014 as compared to 2013. This increase was primarily due to approximately $11.0 million of severance costs related to the departure of two of the Company’s executive vice presidents in 2014 and acquisition transaction costs of $1.9 million in 2014.

Depreciation and amortization decreased by $3.4 million, or 2.5 percent, for 2014 over 2013. This decrease was due primarily to a decrease of $1.8 million for the Same-Store Properties due to assets becoming fully amortized, and a decrease of $4.6 million for 2014 as compared to 2013 for the properties sold in 2014 (which were not classified as discontinued operations). These were partially offset by an increase of $3.0 million for 2014 as compared to 2013 for the Acquired Properties.

The Company recorded $48.7 million in impairment charges in 2013, primarily on nine properties to reduce their carrying values to their estimated fair market values.

Interest expense decreased by $6.6 million, or 7.2 percent, for 2014 as compared to 2013. This decrease was primarily the result of lower overall average debt balances in 2014 as compared to 2013.

Interest and other investment income increased $0.9 million, or 72.2 percent, for 2014 as compared to 2013. This was primarily due to higher average notes receivable balances in 2014.

Equity in earnings of unconsolidated joint ventures was relatively unchanged for 2014 as compared to 2013. There were increases due primarily to increased income of $2.5 million from the Crystal House Apartments Investors venture (which was entered into in March 2013), increased income of $0.5 million from the Marbella RoseGarden venture and increased income of $0.5 million from the Harborside South Pier venture. These were partially offset by a loss of $1.5 million from the KPG-P 100 IMW venture, which was entered into in late 2013, an increased loss of $1.2 million from the PruRose Riverwalk G venture for 2014 as compared to 2013, and a loss in 2014 of $0.7 million from the Keystone-TriState venture (which was entered into in 2014).

The Company had realized gains on disposition of rental property of $54.8 million in 2014 (which were not classified as discontinued operations). See Note 3: Real Estate Transactions – Sales – to the Financial Statements.

Income from continuing operations increased to $41.8 million in 2014 from a loss of $29.5 million in 2013. The increase of $71.3 million was due to the factors discussed above.

Net income available to common unitholders decreased by $2.1 million, or 4.7 percent, from $44.7 million in 2013 to $42.6 million in 2014. The decrease was primarily the result of realized gains on disposition of rental property, net of $61.1 million in 2013 (which were classified as discontinued operations), a decrease in income from discontinued operations of $11.8 million for 2014 as compared to 2013 and a decrease in noncontrolling interest in consolidated joint ventures of $1.2 million for 2014 as compared to 2013. These were partially offset by an increase in income from continuing operations of $71.3 million for 2014 as compared to 2013 and a loss on early extinguishment of debt of $0.7 million in 2013.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Overview:

Historically, rental revenue has been the Company’s principal source of funds to pay operating expenses, debt service, capital expenditures and distributions, 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 and Corporation have and expect to continue to finance such activities through borrowings under the Company’s revolving credit facility, other debt and equity financings, proceeds from the sale of properties and joint venture capital.

The Company believes that with the general downturn in the Company’s core Northeast markets in recent years, it is reasonably likely that vacancy rates in the office sector may continue to increase, effective rental rates on new and renewed leases at office properties may continue to decrease and tenant installation costs at office properties, including concessions, may continue to increase in most or all of its markets in 2014 and possibly beyond. As a result of the potential negative effects on the Company’s revenue from the overall reduced demand for office space and the redeployment of capital from the sale of income-producing office properties to fund the Company’s expansion into the multi-family rental sector, the Company’s cash flow could be insufficient to cover increased tenant installation costs over the short-term. If this situation were to occur, the Company expects that it would finance any shortfalls through borrowings under its revolving credit facility and other debt securities by the Company and equity financings by the Corporation.

The Company expects to meet its short-term liquidity requirements generally through its working capital, which may include proceeds from the sales of office properties, net cash provided by operating activities and from its revolving credit facility. The Company frequently examines potential property acquisitions and development projects and, at any given time, one or more of such acquisitions or development projects may be under consideration. Accordingly, the ability to fund property acquisitions and development projects is a major part of the Company’s financing requirements. The Company expects to meet its financing requirements through funds generated from operating activities, to the extent available, proceeds from property sales, joint venture capital, long-term and short-term borrowings (including draws on the Company’s revolving credit facility) and the issuance of additional debt securities by the Company and/or equity securities by the Corporation.

Repositioning of the Company’s Portfolio:

The Company continually reviews its portfolio and opportunities to divest office properties that no longer meet its long-term strategy, have reached their potential, are less efficient to operate, or when market conditions are favorable to be sold at attractive prices. The Company anticipates redeploying the proceeds from sales of office and office/flex properties in the near-term to develop, redevelop and acquire multi-family rental properties as well as reposition certain office properties into multi-family/mixed use properties, in its core Northeast sub-markets as part of its overall strategy to reposition its portfolio from office and office/flex to a mix of office, office/flex and multi-family rental properties. The Company believes this strategy will provide additional working capital for its expansion into the multi-family rental sector. In continuation of this strategy, the Company entered into the following transactions:

Construction Projects:

Pursuant to a developer agreement entered into in December 2011, on May 21, 2014, the Company entered into a joint venture agreement with Ironstate Harborside-A LLC (“ISA”) to form Harborside Unit A Urban Renewal, L.L.C. (“URL-Harborside”), a newly-formed joint venture that will develop, own and operate a high-rise tower of approximately 763 multi-family apartment units above a parking pedestal to be located on land contributed by the Company at its Harborside complex in Jersey City, New Jersey (the “URL Project”). The construction of the URL Project is estimated to cost a total of approximately $320 million (of which development costs of $4352.19 million have been incurred by URL-Harborside through ~~June~~September 30, 2014). The URL Project is projected to be ready for occupancy by the fourth quarter of 2016. The URL Project has been awarded up to $33 million in future tax credits (“URL Tax Credits”), subject to certain conditions, from the New Jersey Economic Development Authority. The venture has an agreement to sell these credits, subject to certain conditions. On August 1, 2014, the venture obtained a construction/permanent loan with a maximum borrowing amount of $192 million (with no balance currently outstanding as of September 30, 2014), which bears interest at a rate of 5.197 percent and matures in August 2029. The Company currently expects that it will fund approximately $7165.76 million of the remaining development costs of the project, net of ~~future~~the loan financing.

The Company owns an 85 percent interest in URL-Harborside and the remaining interest owned by ISA, with shared control over major decisions such as, approval of budgets, property financings and leasing guidelines. Upon entering into the joint venture, the Company’s initial contribution was $30.6 million, which included a capital credit of $30 per approved developable square foot for its contributed land aggregating approximately $20.6 million with the balance consisting of previously incurred development costs, and ISA’s initial contribution was approximately $5.4 million. The Company has funded an additional $12.6 million in development costs for the venture through September 30, 2014.

52In July 2012, the Company entered into a ground lease with Wegmans Food Markets, Inc. (“Wegmans”) at the Company’s undeveloped site located at Sylvan Way and Ridgedale Avenue in Hanover Township, New Jersey. Subject to receiving all necessary governmental approvals, Wegmans intends to construct a store of approximately 140,000 square feet on a finished pad to be delivered by the Company in the third quarter of 2015. The Company expects to incur costs of approximately $15.7 million for the development of the site through the fourth quarter of 2016 (of which the Company has incurred $7.0 million through September 30, 2014).

InOn ~~July~~August ~~2012~~22, 2013, the Company ~~entered~~contributed ~~into~~an aadditional ~~ground~~$4.9 ~~lease~~million ~~with~~and ~~Wegmans~~the ~~Food~~operating ~~Markets,~~agreement ~~Inc.~~of ~~(“Wegmans”)~~Eastchester atwas modified which increased the Company’s ~~undeveloped~~effective ~~site~~ownership ~~located~~to at76.25 ~~Sylvan~~percent, ~~Way~~with ~~and~~the ~~Ridgedale~~remaining ~~Avenue~~23.75 inpercent ~~Hanover~~owned ~~Township,~~by ~~New Jersey~~HVLH. The ~~Subject~~agreement toalso ~~receiving~~provided the Company with control of all ~~necessary~~major ~~governmental~~decisions. Accordingly, ~~approvals~~effective August 22, ~~Wegmans~~2013, ~~intends~~the toCompany ~~construct~~consolidated aEastchester ~~store~~under the provisions of ~~approximately~~ASC ~~140~~810,~~000~~ ~~square~~Consolidation. As ~~feet~~the oncarrying avalue ~~finished~~approximated ~~pad~~the tofair bevalue ~~delivered~~of by the ~~Company~~net inassets ~~the~~acquired, ~~first~~there ~~quarter~~was ofno ~~2015~~holding period gain or loss recognized on this transaction. The Company ~~expects~~had acquired a 26.25 percent interest in a to-be-built, ~~incur~~108-unit ~~costs~~multi-family ofrental property located in Eastchester, New York (the “Eastchester Project”) for approximately $152.71 million. The ~~for~~remaining interests in the development ofproject-owning ~~the~~entity, ~~site~~150 ~~through~~Main ~~the~~Street, ~~fourth~~L.L.C. ~~quarter~~(“Eastchester”) ofwas ~~2015~~owned 26.25 percent by JMP Eastchester, L.L.C. and 47.5 percent by Hudson Valley Land Holdings, L.L.C. (“HVLH”). The Eastchester Project began construction in late 2013. Estimated total development costs of ~~which~~$50 ~~the~~million ~~Company~~are ~~has~~expected ~~incurred~~to be funded with a $628.48 million ~~through~~construction ~~June~~loan 30and the balance of $21.2 million from member’s capital, ~~2014)~~of which the Company’s share is $20. 9 million.

On August 22, 2013, the Company contributed an additional $4.9 million and the operating agreement of Eastchester was modified which increased the Company’s effective ownership to 76.25 percent, with the remaining 23.75 percent owned by HVLH. The agreement also provided the Company with control of all major decisions. Accordingly, effective August 22, 2013, the Company consolidated Eastchester under the provisions of ASC 810, Consolidation. As the carrying value approximated the fair value of the net assets acquired, there was no holding period gain or loss recognized on this transaction.53

The Company had acquired a 26.25 percent interest in a to-be-built, 108-unit multi-family rental property located in Eastchester, New York (the “Eastchester Project”) for approximately $2.1 million. The remaining interests in the development project-owning entity, 150 Main Street, L.L.C. (“Eastchester”) was owned 26.25 percent by JMP Eastchester, L.L.C. and 47.5 percent by Hudson Valley Land Holdings, L.L.C. (“HVLH”). The Eastchester Project began construction in late 2013. Estimated total development costs of $50 million are expected to be funded with a $28.8 million construction loan and the balance of $21.2 million from member’s capital, of which the Company’s share is $20.9 million.

REIT Restrictions:

To maintain its qualification as a REIT under the Code, the Corporation 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. Moreover, the Corporation intends to continue to make regular quarterly dividends to its common stockholders. Based upon the most recently paid common stock dividend rate of $0.15 per common share, in the aggregate, such distributions would equal approximately $53.3 million ($60 million, including common units in the Company, held by parties other than the Corporation) on an annualized basis. However, any such distribution, 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 Company will be required to pay federal, state and local taxes on such net capital gains at the rate applicable to capital gains of a corporation.

Property Lock-Ups:

The Company may not dispose of or distribute certain of its properties, currently comprised of seven properties with an aggregate net book value of approximately $~~123~~125.52 million, which were originally contributed by certain unrelated common unitholders of the Company, without the express written consent of such common unitholders, as applicable, except in a manner which does not result in recognition of any built-in-gain (which may result in an income tax liability) or which reimburses the appropriate specific common unitholders for the tax consequences of the recognition of such built-in-gains (collectively, the “Property Lock-Ups”). The aforementioned restrictions do not apply in the event that the Company sells all of its properties or in connection with a sale transaction which the Corporation’s Board of Directors determines is reasonably necessary to satisfy a material monetary default on any unsecured debt, judgment or liability of the Company or to cure any material monetary default on any mortgage secured by a property. The Property Lock-Ups expire periodically through 2016. Upon the expiration of the Property Lock-Ups, the Company is generally required to use commercially reasonable efforts to prevent any sale, transfer or other disposition of the subject properties from resulting in the recognition of built-in gain to the specific common unitholders, which include members of the Mack Group (which includes William L. Mack, Chairman of the Corporation’s Board of Directors; David S. Mack, director of the Corporation; Earle I. Mack, a former director of the Corporation; and Mitchell E. Hersh, president, chief executive officer and director of the Corporation), the Robert Martin Group (which includes Robert F. Weinberg, a former director of the Corporation and current member of its Advisory Board), and the Cali Group (which includes John R. Cali, a former director of the Corporation and current member of its Advisory Board). As of ~~June~~September 30, 2014, ~~115~~110 of the Company’s properties, with an aggregate net book value of approximately $1.43 billion, have lapsed restrictions and are subject to these conditions.

Unencumbered Properties:

As of ~~June~~September 30, 2014, the Company had ~~215~~207 unencumbered properties with a carrying amount of $2.65 billion representing 8988.68 percent of the Company’s total consolidated property count.

Cash Flows

Cash and cash equivalents decreased by $~~140~~116.82 million to $80105.95 million at ~~June~~September 30, 2014, compared to $221.7 million at December 31, 2013. This decrease is comprised of the following net cash flow items:

(1) $85115.05 million provided by operating activities.

(2) $365.49 million used in investing activities, consisting primarily of the following:

(a) $62.3 million used for ~~investments~~the inissuance of notes ~~receivable~~and mortgage receivables; plus

(b) $4177.81 million used for additions to rental property and improvements; plus

(d) $74.98 million used for the development of rental property, other related costs and deposits; plus

(e) $3857.96 million used for investments in unconsolidated joint ventures; plus

(f) $6.67 million used for restricted cash; minus

(g) $~~190~~274.8 million from proceeds from the sale of rental property; minus

(h) $~~837~~36.3 ~~thousand~~million received from distributions in excess of cumulative earnings from unconsolidated joint ventures; minus

(i) $~~250~~10.3 ~~thousand~~million from repayments of notes receivable.

~~(3) $222.3 million used in financing activities, consisting primarily of the following:~~54

(3)	$297.6 million used in financing activities, consisting primarily of the following:

(a)	$200.0 million used for repayments of senior unsecured notes; plus

(b) $5974.8 million used for payments of dividends and distributions; plus

(d) $4244.58 million used for repayments of mortgages, loans payable and other obligations; plus

(e) $~~177~~262.53 million used for repayments of revolving credit facility; plus

(f) $~~198~~1.0 ~~thousand~~million used for repayment of finance costs; minus

(g) $~~233~~262.53 million from borrowings under the revolving credit facility; minus

(h) $28.14 million from proceeds received from mortgages.

Debt Financing

Summary of Debt:

The following is a breakdown of the Company’s debt between fixed and variable-rate financing as of ~~June~~September 30, 2014:

		Balance			Weighted Average			Weighted Average
		($000’s)	% of Total		Interest Rate (a)			Maturity in Years
Fixed Rate Unsecured Debt and
Other Obligations	$	1,417,~~141~~439	6463.1732	%	4.92	%		54.1287
Fixed Rate Secured Debt		~~626~~625,~~764~~776	2827.3895	%	7.7273	%		32.0077
Variable Rate Secured Debt		~~108~~195,~~363~~426	48.9173	%	23.5486	%		1.7759
Variable Rate Unsecured Debt (b)		56,000	2.54	%	1.26	%		3.08
Totals/Weighted Average:	$	2,238,641	100.00	%	5.62	%	(b)	4.00
Totals/Weighted Average:	$	2,208,268	100.00	%	5.51	%		4.30

(a) The actual weighted average LIBOR rate for the Company’s ~~outstanding~~ variable rate debt was 0.1617 percent as of ~~June~~September 30, 2014, plus the applicable spread.

(b) Excludes amortized deferred financing costs pertaining to the Company’s unsecured revolving credit facility which amounted to $0.7 million and $12.30 million for the three and ~~six~~nine months ended ~~June~~September 30, 2014, respectively.

Debt Maturities:

Scheduled principal payments and related weighted average annual effective interest rates for the Company’s debt as of ~~June~~September 30, 2014 are as follows:

		Scheduled		Principal			Weighted Avg.
		Amortization		Maturities		Total	Effective Interest Rate of
Period		($000’s)		($000’s)		($000’s)	Future Repayments (a)
July 1 to December 31, 2014	$	4,661	$	133,484	$	138,145	8.66	%
October 1 to December 31, 2014	$	2,305	$	133,484	$	135,789	8.67	%
2015		8,539		~~197~~220,~~585~~646		~~206~~229,~~124~~185	4.6654	%
2016		8,311		~~269~~333,272		~~277~~341,583	76.1497	%
2017 (b)		7,274		447,368		454,642	3.76	%	(c)
2017		7,275		391,369		398,644	4.11	%
2018		7,311		231,537		238,848	6.67	%
Thereafter		658		906,566		907,224	5.32	%
Sub-total		3634,~~754~~399		2,~~185~~216,~~812~~874		2,~~222~~251,~~566~~273
Adjustment for unamortized debt
discount/premium, net, as of
June 30, 2014		(14,298)		-		(14,298)
September 30, 2014		(12,632)		-		(12,632)
Totals/Weighted Average	$	2221,~~456~~767	$	2,~~185~~216,~~812~~874	$	2,~~208~~238,~~268~~641	5.5162	%	(b)

(a) The actual weighted average LIBOR rate for the Company’s outstanding variable rate debt was 0.1617 percent as of ~~June~~September 30, 2014, plus the applicable spread.

(b) ~~Includes~~Excludes ~~outstanding~~amortized ~~borrowings~~deferred offinancing costs pertaining to the Company’s unsecured revolving credit facility ofwhich amounted to $560.7 million ~~which~~and ~~matures~~$2.0 inmillion ~~2017~~for ~~with~~the ~~two~~three ~~six-month~~and ~~extension~~nine ~~options~~months ~~with~~ended ~~the~~September ~~payment~~30, of2014, ~~a fee~~respectively.

(c) Excludes amortized deferred financing costs pertaining to the Company’s unsecured revolving credit facility which amounted to $0.7 million and $1.3 million for the three and six months ended June 30, 2014, respectively.

Senior Unsecured Notes:

On February 18, 2014, the Company repaid its $200 million face amount of 5.125 percent senior unsecured notes at their maturity, using available cash and borrowing on the Company’s unsecured revolving credit facility.

The terms of the Company’s senior unsecured notes (which totaled approximately $1.4 billion as of June 30, 2014) include certain restrictions and covenants which require compliance with financial ratios relating to the maximum amount of debt leverage, the maximum amount of secured indebtedness, the minimum amount of debt service coverage and the maximum amount of unsecured debt as a percent of unsecured assets.55

The terms of the Company’s senior unsecured notes (which totaled approximately $1.4 billion as of September 30, 2014) include certain restrictions and covenants which require compliance with financial ratios relating to the maximum amount of debt leverage, the maximum amount of secured indebtedness, the minimum amount of debt service coverage and the maximum amount of unsecured debt as a percent of unsecured assets.

Unsecured Revolving Credit Facility:

On July 16, 2013, the Company amended and restated its unsecured revolving credit facility with a group of 17 lenders. The $600 million facility is expandable to $1 billion and matures in July 2017. It has two six month extension options each requiring the payment of a 7.5 basis point fee. The interest rate on outstanding borrowings (not electing the Company’s competitive bid feature) and the facility fee on the current borrowing capacity payable quarterly in arrears are based upon the Operating Partnership’s unsecured debt ratings, as follows:

Operating Partnership's	Interest Rate -
Unsecured Debt Ratings:	Applicable Basis Points	Facility Fee
Higher of S&P or Moody's	Above LIBOR	Basis Points
No ratings or less than BBB-/Baa3	170.0	35.0
BBB- or Baa3	130.0	30.0
BBB or Baa2(current)	110.0	20.0
BBB+ or Baa1	100.0	15.0
A- or A3 or higher	92.5	12.5

The facility has a competitive bid feature, which allows the Company to solicit bids from lenders under the facility to borrow up to $300 million at interest rates less than those above.

The terms of the unsecured facility include 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 (to the extent that: (i) such property dispositions cause the Company to default on any of the financial ratios of the facility described below, or (ii) the property dispositions are completed while the Company is under an event of default under the facility, unless, under certain circumstances, such disposition is being carried out to cure such default), and which require compliance with financial ratios relating to the maximum leverage ratio (60 percent), the maximum amount of secured indebtedness (40 percent), the minimum amount of fixed charge coverage (1.5 times) , the maximum amount of unsecured indebtedness (60 percent), the minimum amount of unencumbered property interest coverage (2.0 times) and certain investment limitations (generally 15 percent of total capitalization). If an event of default has occurred and is continuing, the Corporation will not make any excess distributions except to enable the Corporation to continue to qualify as a REIT under the Code.

As of ~~July~~October 2320, 2014, the Company had no outstanding borrowings ~~of $31 million~~ under its unsecured revolving credit facility.

Money Market Loan:

The Company entered into an agreement with JPMorgan Chase Bank to participate in a noncommitted money market loan program (“Money Market Loan”). The Money Market Loan is an unsecured borrowing of up to $75 million arranged by JPMorgan Chase Bank with maturities of 30 days or less. The rate of interest on the Money Market Loan borrowing is set at the time of each borrowing. As of ~~June~~September 30, 2014, the Company had no outstanding borrowings under its Money Market Loan program.

Mortgages, Loans Payable and Other Obligations and Notes Receivables:

On April 10, 2014, the Company obtained a $27.5 million mortgage loan, collateralized by its property located in Rahway, New Jersey. The loan bears interest of LIBOR plus 1.75 percent and matures in April 2019 with two one-year extension options, subject to certain conditions, with a fee of 125 basis points. The loan is interest-only during the initial three-year term.

The Company has 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 does not intend to reserve funds to retire the Company’s senior unsecured notes, borrowings under its unsecured revolving credit facility, or its mortgages, loans payable and other obligations upon maturity. Instead, the Corporation or Company will seek to refinance such debt at maturity or retire such debt through the issuance of additional equity or debt securities on or before the applicable maturity dates. If it cannot raise sufficient proceeds to retire the maturing debt, the Company may draw on its revolving credit facility to retire the maturing indebtedness, which would reduce the future availability of funds under such facility. As of July 23, 2014, the Company had outstanding borrowings of $31 million under its unsecured revolving credit facility and no outstanding borrowings under the Money Market Loan. The Company is reviewing various financing and refinancing options, including the purchase of its senior unsecured notes in privately-negotiated transactions, the issuance of additional, or exchange of current, unsecured debt, common and preferred stock, and/or obtaining additional mortgage debt, some or all of which may be completed in 2014. The Company currently anticipates that its available cash and cash equivalents, cash flows from operating activities and proceeds from the sale of office properties, 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 multi-family rental sector arise, the Corporation’s ability to make the expected distributions discussed in “REIT Restrictions” above may be adversely affected.

On June 6, 2014, the Company and an affiliate of KPG acquired 50 percent tenants-in-common interests each for $62.5 million in the Curtis Center Property, which amounted to a total purchase of approximately $125.0 million for the property. In connection with the transaction, the Company provided short-term loans to KPG affiliates, as follows: a 90-day, $52.3 million loan which bore interest at an annual rate of 3.5 percent payable at maturity, which was collateralized by the KPG affiliates’ interest in the Curtis Center Property; and a 90-day, $10 million loan which also bore interest at an annual rate of 3.5 percent payable at maturity. The investments were funded by the Company primarily through borrowing under its revolving credit facility. The $10 million loan was repaid in full on September 2, 2014 and the $52.3 million loan was subsequently repaid in full on October 1, 2014.

On October 1, 2014, the Company obtained $64.0 million in mortgage loan proceeds, representing its 50 percent interest in a $102 million senior loan with a current rate of 3.45 percent at September 30, 2014 and its 50 percent interest in a $26 million mezzanine loan (with a maximum borrowing capacity of $48 million) with a current rate of 9.65 percent at September 30, 2014. These loans are scheduled to mature in October 2016 and are collateralized by the Curtis Center Property. The senior loan rate is based on a floating rate of one-month LIBOR plus 329 basis points and the mezzanine loan rate is based on a floating rate of one-month LIBOR plus 950 basis points. Both loans have LIBOR caps for the period. The loans provide for three one-year extension options.

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.

Joint Venture Activity:

On August 6, 2014, the Stamford SM LLC joint venture received repayment in full on the joint venture’s senior mezzanine note receivable, of which the Company received a distribution of $37.8 million from the venture representing its share of the net proceeds.

Debt Strategy:

The Company does not intend to reserve funds to retire the Company’s senior unsecured notes, outstanding borrowings under its unsecured revolving credit facility, or its mortgages, loans payable and other obligations upon maturity. Instead, the Corporation or Company will seek to refinance such debt at maturity or retire such debt through the issuance of additional equity or debt securities on or before the applicable maturity dates. If it cannot raise sufficient proceeds to retire the maturing debt, the Company may draw on its revolving credit facility to retire the maturing indebtedness, which would reduce the future availability of funds under such facility. As of October 20, 2014, the Company had no outstanding borrowings under its unsecured revolving credit facility and under the Money Market Loan. The Company is reviewing various financing and refinancing options, including the purchase of its senior unsecured notes in privately-negotiated transactions, the issuance of additional, or exchange of current, unsecured debt, common and preferred stock, and/or obtaining additional mortgage debt, some or all of which may be completed in 2014. The Company currently anticipates that its available cash and cash equivalents, cash flows from operating activities and proceeds from the sale of office properties, 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 multi-family rental sector arise, the Corporation’s ability to make the expected distributions discussed in “REIT Restrictions” above may be adversely affected.

Equity Financing and Registration Statements

Common Equity:

The following table presents the changes in the Corporation’s issued and outstanding shares of Common Stock and the Company’s Common Units for the ~~three~~nine months ended ~~June~~September 30, 2014:

	Common	Common
	Stock	Units	Total
Outstanding at January 1, 2014	88,247,591	11,864,775	100,112,366
Common units redeemed for Common Stock	~~700~~772,~~757~~731	(~~700~~772,~~757~~731)	-
Shares issued under Dividend Reinvestment
and Stock Purchase Plan	35,~~968~~152	-	35,~~968~~152
Restricted shares issued, net of cancellations	29,746	-	29,746
Outstanding at June 30, 2014	88,982,062	11,164,018	100,146,080
Outstanding at September 30, 2014	89,055,220	11,092,044	100,147,264

Share Repurchase Program:

The Corporation has a share repurchase program which was renewed and authorized by its Board of Directors in September 2012 to purchase up to $150 million of the Corporation’s outstanding common stock (“Repurchase Program”), which it may repurchase from time to time in open market transactions at prevailing prices or through privately negotiated transactions. As of ~~June~~September 30, 2014, the Corporation has a remaining authorization under the Repurchase Program of $139 million. There were no common stock repurchases in 2013 and through October 20, 2014.

Dividend Reinvestment and Stock Purchase Plan:

The Corporation has a Dividend Reinvestment and Stock Purchase Plan (the “DRIP”) which commenced in March 1999 under which approximately 5.5 million shares of the Corporation’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 Corporation’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 Corporation waives this limit, for additional amounts subject to certain restrictions and other conditions set forth in the DRIP prospectus filed as part of the Corporation’s effective registration statement on Form S-3 filed with the Securities and Exchange Commission (“SEC”) for the approximately 5.5 million shares of the Corporation’s common stock reserved for issuance under the DRIP.

Shelf Registration Statements:

The Corporation 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 Corporation, under which no securities have been sold as of ~~July~~October 2320, 2014.

The Corporation and the Company 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 Corporation and debt securities of the Company, under which no securities have been sold as of ~~July~~October 2320, 2014.

Off-Balance Sheet Arrangements

Unconsolidated Joint Venture Debt:

The debt of the Company’s unconsolidated joint ventures generally provide 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. Such debt has a total facility amount of $~~311~~287.19 million of which the Company has agreed to guarantee up to $8971.95 million. As of ~~June~~September 30, 2014, the outstanding balance of such debt totaled $~~200~~215.65 million of which $7962.86 million was guaranteed by the Company. The Company has also posted a $4.61 million letter of credit in support of the Harborside South Pier joint venture, half of which is indemnified by Hyatt Corporation, the Company’s joint venture partner.

The Company’s off-balance sheet arrangements are further discussed in Note 4: Investments in Unconsolidated Joint Ventures to the Financial Statements.

Contractual Obligations

The following table outlines the timing of payment requirements related to the Company’s debt (principal and interest), PILOT agreements, ground lease agreements and other obligations, as of ~~June~~September 30, 2014:

				Payments Due by Period		~~Payments Due by Period~~
				Less than 1		1 – 3		4 – 5		6 – 10		After 10
(dollars in thousands)		Total		Year		Years		Years		Years		Years
Senior unsecured notes	$	1,~~770~~750,~~288~~956	$	~~217~~213,~~075~~231	$	~~307~~301,~~175~~375	$	~~336~~586,200	$	~~909~~650,~~838~~150	$	-
Revolving credit facility (a)		58,176		706		1,411		56,059		-		-
Mortgages, loans payable
and other obligations (b)		871,150		184,650		331,669		354,831		-		-
and other obligations (a)		957,713		259,139		350,815		347,759		-		-
Payments in lieu of taxes
(PILOT)		3433,~~735~~632		24,~~204~~407		1413,~~324~~222		8,815		97,~~392~~188		-
Ground lease payments		17,~~244~~151		~~369~~370		~~939~~904		467		1,~~165~~166		14,~~304~~244
Other		32,~~718~~438		~~1,286~~-		2,~~432~~438		-		-		-
Total	$	2,~~755~~761,~~311~~890	$	~~406~~477,~~290~~147	$	~~657~~668,~~950~~754	$	~~756~~943,~~372~~241	$	~~920~~658,~~395~~504	$	14,~~304~~244

(a) Interest payments assume LIBOR rate of 0.1617 percent, which is the weighted average rate on ~~this~~its outstanding variable rate mortgage debt at ~~June~~September 30, 2014, plus the applicable spread.

~~(b) Interest payments assume LIBOR rate of 0.17 percent, which is the weighted average rate on its outstanding variable rate mortgage debt at June 30, 2014, plus the applicable spread.~~58

Departure of Executive Vice Presidents:

On March 3, 2014, the Company announced that it had entered into a Settlement and General Release Agreement with Barry Lefkowitz (the “Lefkowitz Separation Agreement”) pursuant to which Mr. Lefkowitz left his position as Executive Vice President and Chief Financial Officer of the Corporation effective March 31, 2014 after twenty (20) years with the Corporation and its predecessor. The Lefkowitz Separation Agreement provides, pursuant to the terms of his employment agreement, for (i) vesting of 68,667 shares of restricted common stock pursuant to Mr. Lefkowitz’s multi-year performance award, (ii) vesting of 11,457 newly issued shares of common stock of the Corporation pursuant to Mr. Lefkowitz’s TSR-based performance award, (iii) a cash payment to Mr. Lefkowitz of $2.5 million, (iv) a cash payment of $763,021 pursuant to his deferred retirement compensation award, and (v) a cash payment of $123,601 in accrued but unpaid dividend equivalents pursuant to his multi-year performance award. All such cash amounts ~~will~~were be paid to Mr. Lefkowitz on October 1, 2014. The Company also will pay the premiums for the continuation of Mr. Lefkowitz’s existing health insurance for a period up to 48 months following March 31, 2014.

Also on March 3, 2014, the Company announced that it had entered into a Settlement and General Release Agreement with Roger W. Thomas (the “Thomas Separation Agreement”) pursuant to which Mr. Thomas left his position as Executive Vice President, General Counsel and Secretary of the Corporation effective March 31, 2014 after twenty (20) years with the Corporation and its predecessor. The Thomas Separation Agreement provides, pursuant to the terms of his employment agreement, for (i) vesting of 41,000 shares of restricted common stock pursuant to Mr. Thomas’ multi-year performance award, (ii) acceleration but discretionary full vesting of 33,605 newly issued shares of common stock of the Corporation pursuant to Mr. Thomas’ TSR-based performance award, (iii) a cash payment to Mr. Thomas of $2.5 million, (iv) a cash payment of $476,888 pursuant to his deferred retirement compensation award, and (v) a cash payment of $73,800 in accrued but unpaid dividend equivalents pursuant to his multi-year performance award. All such cash amounts ~~will~~were be paid to Mr. Thomas on October 1, 2014. The Company also will pay the premiums for the continuation of Mr. Thomas’ existing health insurance for a period up to 48 months following September 30, 2014. Mr. Thomas ~~will~~remained ~~remain~~ as a consultant to the ~~Company~~Corporation from April 1, 2014 through September 30, 2014 for aggregate cash compensation of $300,000.

Funds from Operations

Funds from operations (“FFO”) is defined as net income (loss) before noncontrolling interest of unitholders, computed in accordance with GAAP, excluding gains (or losses) from extraordinary items, sales of depreciable rental property, 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 sales of properties 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 unitholders 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 unitholders, 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 unitholders to FFO, as calculated in accordance with NAREIT’s current definition, for the three and nine months ended ~~June~~September 30, 2014 and 2013 (in thousands):

		Three Months Ended				~~Six~~Nine Months Ended
		June 30,				June 30,
		September 30,				September 30,
		2014		2013		2014		2013
Net income (loss) available to common unitholders	$	57,637	$	26,246	$	40,331	$	39,397
Net income available to common unitholders	$	2,230	$	5,277	$	42,561	$	44,674
Add (deduct): Real estate-related depreciation and amortization on
continuing operations (a)		4746,~~291~~071		4948,~~702~~685		94140,~~739~~810		96144,~~134~~834
Real estate-related depreciation and amortization
on discontinued operations		-		21,~~989~~769		-		68,~~442~~196
Realized (gains) losses and
Impairments		-		48,700		-		72,551
unrealized losses on disposition of rental property		(54,584)		(13,758)		(54,584)		(13,758)
Realized (gains) losses on disposition
Funds from operations	$	50,344	$	65,179	$	80,486	$	128,215
of rental property and impairments		(264)		(47,321)		(54,848)		(84,930)
Funds from operations	$	48,037	$	57,110	$	128,523	$	185,325

(a) Includes the Company’s share from unconsolidated joint ventures of $24,~~658~~181 and $4,~~117~~145 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $59,~~215~~396 and $711,~~272~~417 for the ~~six~~nine months ended ~~June 30~~September30, 2014 and 2013, respectively. Excludes non-real estate-related depreciation and amortization of $7893 and $8171 for the three months ended ~~June~~September 30, 2014 and 2013, respectively, and $~~172~~265 and $~~151~~222 for the ~~six~~nine months ended ~~June~~September 30, 2014 and 2013, respectively.

Inflation

The Company’s leases with the majority of its commercial tenants provide for recoveries and escalation charges based upon the tenant’s proportionate share of, and/or increases in, real estate taxes and certain operating costs, which reduce the Company’s exposure to increases in operating costs resulting from inflation.

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,” “continue” or comparable terminology. Forward-looking statements are inherently subject to risks 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;

·	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;

·	changes in operating costs;

·	our ability to obtain adequate insurance, including coverage for terrorist acts;

·	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 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, 2013. 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

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices. In pursuing its business plan, the primary market risk to which the Company is exposed is 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.

Approximately $2.0 billion of the Company’s long-term debt as of June 30, 2014 bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. 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. The interest rates on the Company’s variable rate debt as of June 30, 2014 ranged from LIBOR plus 110 basis points to LIBOR plus 350 basis points. If market rates of interest on the Company’s variable rate debt increased or decreased by 100 basis points, then the increase or decrease in interest costs on the Company’s variable rate debt would be approximately $1.6 million annually and the increase or decrease in the fair value of the Company’s fixed rate debt as of June 30, 2014 would be approximately $81 million.

June 30, 2014
Debt, including current portion		7/1/14 -																									Fair
($s in thousands)		12/31/2014			2015			2016			2017			2018			Thereafter			Sub-total		Other (a)		Total			Value
Fixed Rate	$	101,195		$	162,427		$	277,583		$	397,493		$	237,447		$	882,058		$	2,058,203	$	(14,298)	$	2,043,905		$	2,096,715
Average Interest Rate		6.82	%		5.40	%		7.14	%		4.12	%		6.70	%		5.41	%						5.78	%
Variable Rate		-		$	36,950		$	43,696		$	56,217	(b)				$	27,500		$	164,363		-	$	164,363		$	164,363

(a) Adjustment for unamortized debt discount/premium, net, as of June 30, 2014.

(b) Includes $56 million of outstanding borrowings under the Company’s unsecured revolving credit facility which matures in 2017 with two six-month extension options with the payment of a fee.

While the Company has not experienced any significant credit losses, in the event of a significant rising interest rate environment and/or economic downturn, defaults could increase and result in losses to the Company which could adversely affect its operating results and liquidity.

Approximately $2.0 billion of the Company’s long-term debt as of September 30, 2014 bears interest at fixed rates and therefore the fair value of these instruments is affected by changes in market interest rates. 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. The interest rates on the Company’s variable rate debt as of September 30, 2014 ranged from LIBOR plus 175 basis points to LIBOR plus 455 basis points. Assuming interest-rate caps are not in effect, 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 $2.0 million annually and the increase or decrease in the fair value of the Company’s fixed rate debt as of September 30, 2014 would be approximately $76 million.

September 30, 2014
Debt, including current portion		10/1/14 -																									Fair
($s in thousands)		12/31/2014			2015			2016			2017			2018			Thereafter			Sub-total		Other (a)		Total			Value

Fixed Rate	$	98,839		$	162,427		$	277,583		$	397,493		$	237,447		$	882,058		$	2,055,847	$	(12,632)	$	2,043,215		$	2,087,806
Average Interest Rate		10.54	%		5.89	%		7.14	%		4.12	%		6.70	%		5.41	%						5.78	%

Variable Rate	$	36,950			66,758		$	64,000		$	218			-		$	27,500		$	195,426		-	$	195,426		$	195,426

(a) Adjustment for unamortized debt discount/premium, net, as of September 30, 2014.

Item 4. Controls and Procedures

Disclosure Controls and Procedures. The ~~Company~~Corporation’s management, with the participation of the ~~Company~~Corporation’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’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 ~~Company~~Corporation’s chief executive officer and chief financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Company 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 Company’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 Company’s internal control over financial reporting.

MACK-CALI REALTY, 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

None.

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

(a) COMMON STOCK

During the three months ended ~~June~~September 30, 2014, the Corporation issued ~~354~~71,~~051~~974 shares of common stock to holders of common units in the Company upon the redemption of such common units in private offerings pursuant to Section 4(2) of the Securities Act. The holders of the common units were limited partners of the Company 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 Corporation has registered the resale of such shares under the Securities Act.

(b) 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) ~~On July 18, 2014, the Company entered into separation agreements (the “Separation Agreements”) with each of Bradford R~~None. Klatt and Carl Goldberg, formerly principals of Roseland Partners who have served as co-presidents of Roseland Management since the Company acquired the Roseland Business in October 2012. The Separation Agreements provide that the employment agreements of each of Messrs. Klatt and Goldberg terminate and that they shall resign as co-presidents of Roseland Management effective October 23, 2014 (the “Separation Date”). Also on July 18, 2014, the Company amended its purchase agreement with the sellers of the Roseland Business (the “Roseland Amendment”) to modify certain terms of the Roseland Transaction in connection with the departures of Messrs. Klatt and Goldberg. In addition, Mr. Goldberg entered into a consulting agreement with Roseland Management (the “Consulting Agreement”) pursuant to which he shall provide consulting services for a period of one year following the Separation Date for $400,000 payable in four, equal quarterly installments.

The Roseland Amendment provides for the following material modifications to the Roseland Transaction:

1. The non-competition covenants as they apply to Messrs. Klatt and Goldberg shall terminate on the Separation Date, and the non-competition covenants as they apply to Marshall Tycher shall be amended to permit Mr. Tycher to invest in certain future, family-controlled business ventures, subject to a right of first offer by the Company to make an investment of at least 50 percent in multi-family properties or projects covered by the right of first offer;

2. The release to the sellers of the Roseland Business of all remaining funds held in the indemnity escrow account and the acceleration of the effectiveness of certain indemnity covenants to the Separation Date; and

3. The payment of $1 million of the $3 million Earn Out related to certain tax credits/grants.

Disclosure of the Separation Agreements, the Roseland Amendment and the Consulting Agreement is being provided in this Part II, Item 5 in lieu of Items 1.01 and 9.01 of Form 8-K. Copies of the Separation Agreements are filed as Exhibits 10.122 and 10.123 to this Quarterly Report on Form 10-Q and are incorporated herein by reference. A copy of the Roseland Amendment is filed as Exhibit 10.124 to this Quarterly Report on Form 10-Q and is incorporated herein by reference. A copy of Mr. Goldberg’s Consulting Agreement is filed as Exhibit 10.125 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

Item 6. Exhibits

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

6362

MACK-CALI REALTY, L.P.

Signatures

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

		Mack-Cali Realty, L.P
		(Registrant)
		By: Mack-Cali Realty Corporation
		its General Partner
Date: July 23, 2014	By:	/s/ Mitchell E. Hersh
Date: October 22, 2014	By:	/s/ Mitchell E. Hersh
		Mitchell E. Hersh
		President and
		President and Chief Executive Officer
		Chief Executive Officer
		(principal executive officer)
		(principal executive officer)
Date: October 22, 2014	By:	/s/ Anthony Krug
Date: July 23, 2014	By:	/s/ Anthony Krug
		Anthony Krug
		Anthony Krug
		Chief Financial Officer
		Chief Financial Officer
		(principal financial officer)
		(principal financial officer)

6463

MACK-CALI REALTY, L.P.

EXHIBIT INDEX


Exhibit
Number		Exhibit Title

3.1		Articles of Restatement of Mack-Cali Realty Corporation dated September 18, 2009 (filed as Exhibit 3.2 to the Company’s Form 8-K dated September 17, 2009 and incorporated herein by reference).

3.2		Articles of Amendment to the Articles of Restatement of Mack-Cali Realty Corporation as filed with the State Department of Assessments and Taxation of Maryland on May 14, 2014 (filed as Exhibit 3.1 to the Company’s Form 8-K dated 12, 2014 and incorporated herein by reference).

3.3		Amended and Restated Bylaws of Mack-Cali Realty Corporation dated June 10, 1999 (filed as Exhibit 3.2 to the Corporation’s Form 8-K dated June 10, 1999 and incorporated herein by reference).

3.4		Amendment No. 1 to the Amended and Restated Bylaws of Mack-Cali Realty Corporation dated March 4, 2003, (filed as Exhibit 3.3 to the Corporation's Form 10-Q dated March 31, 2003 and incorporated herein by reference).

3.5		Amendment No. 2 to the Mack-Cali Realty Corporation Amended and Restated Bylaws dated May 24, 2006 (filed as Exhibit 3.1 to the Corporation’s Form 8-K dated May 24, 2006 and incorporated herein by reference).

3.6		Amendment No. 3 to the Mack-Cali Realty Corporation Amended and Restated Bylaws dated May 14, 2014 (filed as Exhibit 3.2 to the Company’s Form 8-K dated 12, 2014 and incorporated herein by reference).

3.7		Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated December 11, 1997 (filed as Exhibit 10.110 to the Corporation’s Form 8-K dated December 11, 1997 and incorporated herein by reference).

3.8		Amendment No. 1 to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated August 21, 1998 (filed as Exhibit 3.1 to the Company’s and the Corporation’s Registration Statement on Form S-3, Registration No. 333-57103, and incorporated herein by reference).

3.9		Second Amendment to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated July 6, 1999 (filed as Exhibit 10.1 to the Company’s Form 8-K dated July 6, 1999 and incorporated herein by reference).

3.10		Third Amendment to the Second Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty, L.P. dated September 30, 2003 (filed as Exhibit 3.7 to the Company’s Form 10-Q dated September 30, 2003 and incorporated herein by reference).

4.1		Indenture dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as issuer, Mack-Cali Realty Corporation, as guarantor, and Wilmington Trust Company, as trustee (filed as Exhibit 4.1 to the Operating Partnership’s Form 8-K dated March 16, 1999 and incorporated herein by reference).

4.2		Supplemental Indenture No. 1 dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated March 16, 1999 and incorporated herein by reference).

4.3		Supplemental Indenture No. 2 dated as of August 2, 1999, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.4 to the Operating Partnership’s Form 10-Q dated June 30, 1999 and incorporated herein by reference).

4.4		Supplemental Indenture No. 3 dated as of December 21, 2000, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated December 21, 2000 and incorporated herein by reference).

6564


Exhibit
Number		Exhibit Title

4.5		Supplemental Indenture No. 4 dated as of January 29, 2001, by and among Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated January 29, 2001 and incorporated herein by reference).

4.6		Supplemental Indenture No. 5 dated as of December 20, 2002, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Operating Partnership’s Form 8-K dated December 20, 2002 and incorporated herein by reference).

4.7		Supplemental Indenture No. 6 dated as of March 14, 2003, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated March 14, 2003 and incorporated herein by reference).

4.8		Supplemental Indenture No. 7 dated as of June 12, 2003, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated June 12, 2003 and incorporated herein by reference).

4.9		Supplemental Indenture No. 8 dated as of February 9, 2004, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated February 9, 2004 and incorporated herein by reference).

4.10		Supplemental Indenture No. 9 dated as of March 22, 2004, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated March 22, 2004 and incorporated herein by reference).

4.11		Supplemental Indenture No. 10 dated as of January 25, 2005, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated January 25, 2005 and incorporated herein by reference).

4.12		Supplemental Indenture No. 11 dated as of April 15, 2005, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated April 15, 2005 and incorporated herein by reference).

4.13		Supplemental Indenture No. 12 dated as of November 30, 2005, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated November 30, 2005 and incorporated herein by reference).

4.14		Supplemental Indenture No. 13 dated as of January 24, 2006, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated January 18, 2006 and incorporated herein by reference).

4.15		Supplemental Indenture No. 14 dated as of August 14, 2009, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated August 14, 2009 and incorporated herein by reference).

4.16		Supplemental Indenture No. 15 dated as of April 19, 2012, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated April 19, 2012 and incorporated herein by reference).

4.17		Supplemental Indenture No. 16 dated as of November 20, 2012, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee. (filed as Exhibit 4.2 to the Company’s Form 8-K dated November 20, 2012 and incorporated herein by reference).

6665


Exhibit
Number		Exhibit Title

4.18		Supplemental Indenture No. 17 dates as of May 8, 2013, by and between Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated May 8, 2013 and incorporated herein by reference).

10.1		Amended and Restated Employment Agreement dated as of July 1, 1999 between Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as Exhibit 10.2 to the Company’s Form 10-Q dated June 30, 1999 and incorporated herein by reference).

10.2		Letter Agreement dated December 9, 2008 by and between Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.4 to the Company's Form 8-K dated December 9, 2008 and incorporated herein by reference).

10.3		Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Barry Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit 10.6 to the Company’s Form 10-Q dated June 30, 1999 and incorporated herein by reference).

10.4		Letter Agreement dated December 9, 2008 by and between Mack-Cali Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.5 to the Company's Form 8-K dated December 9, 2008 and incorporated herein by reference).

10.5		Second Amended and Restated Employment Agreement dated as of July 1, 1999 between Roger W. Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.7 to the Company’s Form 10-Q dated June 30, 1999 and incorporated herein by reference).

10.6		Letter Agreement dated December 9, 2008 by and between Mack-Cali Realty Corporation and Roger W. Thomas (filed as Exhibit 10.8 to the Company's Form 8-K dated December 9, 2008 and incorporated herein by reference).

10.7		Form of Multi-Year Restricted Share Award Agreement (filed as Exhibit 10.1 to the Company’s Form 8-K dated September 12, 2007 and incorporated herein by reference).

10.8		Form of Tax Gross-Up Agreement (filed as Exhibit 10.2 to the Company’s Form 8-K dated September 12, 2007 and incorporated herein by reference).

10.9		Form of Restricted Share Award Agreement effective December 3, 2012 by and between Mack-Cali Realty Corporation and each of Mitchell E. Hersh, Barry Lefkowitz and Roger W. Thomas. (filed as Exhibit 10.1 to the Company's Form 8-K dated December 3, 2012 and incorporated herein by reference)

10.10

Filing Compare · Veris Residential, L.P.