UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2014~~2015

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

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		(IRS Employer
incorporation or organization)		Identification No.)

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)

Securities registered pursuant to Section 12(b) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes X No ___

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ___ No X

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 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [ X ]

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

LOCATION OF EXHIBIT INDEX: The index of exhibits is contained herein on page number ~~124~~118.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of Mack-Cali Realty Corporation’s definitive proxy statement for fiscal year ended December 31, ~~2014~~2015 to be issued in conjunction with Mack-Cali Realty Corporation’s annual meeting of shareholders expected to be held on ~~May~~June 111, ~~2015~~2016 are incorporated by reference in Part III of this Form 10-K. The definitive proxy statement will be filed by Mack-Cali Realty Corporation with the SEC not later than 120 days from the end of Mack-Cali Realty Corporation’s fiscal year ended December 31, ~~2014~~2015.

FORM 10-K
Table of Contents
PART I		~~Page No.~~	Page No.
Item 1	~~Business~~	3Business	3
Item 1A	~~Risk Factors~~	10Risk Factors	10
Item 1B	~~Unresolved Staff Comments~~	20Unresolved Staff Comments	20
Item 2	~~Properties~~	21Properties	21
Item 3	~~Legal Proceedings~~	41Legal Proceedings	37
Item 4	~~Mine Safety Disclosures~~	41Mine Safety Disclosures	37
PART II
Item 5	~~Market for Registrant’s Common Equity, Related Stockholder Matters~~	Market for Registrant’s Common Equity, Related Stockholder Matters
	~~and Issuer Purchases of Equity Securities~~	42and Issuer Purchases of Equity Securities	38
Item 6	~~Selected Financial Data~~	45Selected Financial Data	41
Item 7	~~Management’s Discussion and Analysis of Financial Condition and~~	Management’s Discussion and Analysis of Financial Condition and
	~~Results of Operations~~	46Results of Operations	42
Item 7A	~~Quantitative and Qualitative Disclosures About Market Risk~~	67Quantitative and Qualitative Disclosures About Market Risk	63
Item 8	~~Financial Statements and Supplementary Data~~	68Financial Statements and Supplementary Data	63
Item 9	~~Changes in and Disagreements with Accountants on Accounting and~~	Changes in and Disagreements with Accountants on Accounting and
	~~Financial Disclosure~~	68Financial Disclosure	63
Item 9A	~~Controls and Procedures~~	68Controls and Procedures	64
Item 9B	~~Other Information~~	69Other Information	64
PART III
Item 10	~~Directors, Executive Officers and Corporate Governance~~	69Directors, Executive Officers and Corporate Governance	65
Item 11	~~Executive Compensation~~	69Executive Compensation	65
Item 12	~~Security Ownership of Certain Beneficial Owners and Management~~	Security Ownership of Certain Beneficial Owners and Management
	~~and Related Stockholder Matters~~	69and Related Stockholder Matters	65
Item 13	~~Certain Relationships and Related Transactions, and Director Independence~~	69Certain Relationships and Related Transactions, and Director Independence	65
Item 14	~~Principal Accounting Fees and Services~~	69Principal Accounting Fees and Services	65
PART IV
Item 15	~~Exhibits and Financial Statement Schedules~~	70Exhibits and Financial Statement Schedules	66
SIGNATURES		~~122~~	116
EXHIBIT INDEX		~~124~~	118

PART I

ITEM 1. BUSINESS

GENERAL

Mack-Cali Realty L.P., a Delaware limited partnership (together with its subsidiaries collectively, the “Company” or “Operating Partnership”), is a majority-owned subsidiary of Mack-Cali Realty Corporation, a Maryland Corporation and a real estate investment trust (“REIT”) (the “Corporation” or the “General Partner”). The Company owns and operates a real estate portfolio comprised predominantly of Class A office and office/flex properties located primarily in the Northeast with a recent emphasis on expansion into the multi-family rental sector in the same markets. The Company performs substantially all real estate leasing, management, acquisition, development and construction services on an in-house basis. The Company was organized on May 24, 1994. The Company’s executive offices are located at 343 Thornall Street, Edison, New Jersey 08837-2206, and its telephone number is (732) 590-1000. The Corporation has an internet website at www.mack-cali.com

As of December 31, ~~2014~~2015, the Company owned or had interests in ~~283~~275 properties, consisting of ~~264 commercial~~147 ~~properties, primarily class A~~ office and ~~office/~~109 flex properties, totaling approximately 3129.09 million square feet, leased to approximately 21,~~000~~900 commercial tenants and 19 multi-family rental properties containing 5,~~484~~644 residential units, plus developable land (collectively, the “Properties”). The Properties are comprised of: (a) ~~231~~223 wholly-owned or Company-controlled properties consisting of ~~118~~111 office buildings and 95106 ~~office/~~flex buildings aggregating approximately 24.92 million square feet, ~~six~~and ~~industrial/warehouse buildings totaling approximately 387,400 square feet,~~ six multi-family properties totaling 1,301 apartments, ~~three stand-alone retail properties totaling approximately 40,000 square feet, and three land leases~~ (collectively, the “Consolidated Properties”); and (b) 36 office properties totaling approximately 5.6 million square feet, 13 multi-family properties totaling 4,~~183~~343 apartments, two retail properties totaling ~~approximately~~ 81,~~500~~700 square feet and a 350-room hotel, which are owned by unconsolidated joint ventures in which the Company has investment interests. Unless otherwise indicated, all references to square feet represent net rentable area. As of December 31, ~~2014~~2015, the office, ~~office/flex, industrial/warehouse~~ and ~~stand-alone~~flex ~~retail~~ properties included in the Consolidated Properties were 8486.2 percent leased. 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 December 31, ~~2014~~2015 aggregate ~~205~~69,~~220~~522 square feet, or 0.83 percent of the net rentable square footage. The Properties are located in seven states, primarily in the Northeast, and the District of Columbia. See Item 2: Properties.

On June 3, 2015, Mitchell E. Rudin joined the Corporation as its Chief Executive Officer and Michael J. DeMarco joined the Corporation as its President and Chief Operating Officer. The Corporation’s new management team assessed the Company’s historical strategy ~~has~~of ~~been~~focusing ~~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~~In ~~changing~~September ~~work~~2015, ~~force~~the ~~demographics~~Company ~~and~~announced ~~reduced~~a ~~demand~~three-year ~~for~~strategic ~~suburban~~initiative to transform into a more concentrated owner of New Jersey Hudson River waterfront and transit-oriented office properties inand ~~its~~a ~~markets~~regional owner of luxury multi-family residential properties. In furtherance of this strategy, the Company ~~intends~~has tocommenced ~~continue~~a tocomprehensive ~~leverage~~review of its ~~experience~~portfolio and ~~expertise~~operations inand ~~its~~is ~~core~~developing ~~Northeast~~a ~~markets~~business tostrategy ~~pursue~~that ~~multi-family~~focuses ~~rental~~on ~~investments~~reshaping inits ~~those~~portfolio ~~markets,~~over ~~primarily~~time. As ~~through~~part ~~development~~of this plan, ~~both~~the ~~wholly~~Company ~~owned~~anticipates ~~and~~that ~~through~~it ~~joint~~may ~~ventures. This~~dispose ~~strategy~~of ~~includes~~a ~~selectively~~significant ~~disposing~~portion of ~~office~~its ~~and~~properties ~~office/flex~~that ~~assets~~do ~~and~~not remeet its long-~~deploying~~term ~~proceeds~~goals, toand, ~~multi-family~~in ~~rental~~September ~~properties~~2015, ascompiled ~~well~~a list of its properties that it considers as non-core to its ongoing operations. Specifically, the ~~repositioning~~Company ofconsiders a ~~portion~~non-core property to have one or more of ~~its~~the ~~office~~following ~~properties~~attributes: (1) ~~and~~assets ~~land~~that ~~held~~do ~~for~~not ~~development~~offer an opportunity to ~~multi-family~~create ~~rental~~a competitive advantage; (2) assets that produce a low cash yield; (3) assets which have physical attributes that constrain their market competitiveness; and (4) assets located in low growth markets. The Company believes that the potential sales of these non-core properties over time would result in total estimated sales proceeds ranging from approximately $600 million to $800 million.

The Company believes that its Properties have excellent locations and access and are well-maintained and professionally managed. As a result, the Company believes that its Properties attract high quality tenants and residents, and achieve high rental, occupancy and tenant retention rates within their markets. The Company also believes that its extensive market knowledge provides it with a significant competitive advantage, which is further enhanced by its strong reputation for, and emphasis on, delivering highly responsive, professional management services. ~~See “Business Strategies.”~~

BUSINESS STRATEGIES

Operations

Reputation: The Company has established a reputation as a highly-regarded landlord with an emphasis on delivering quality customer service in buildings it owns and/or manages. The Company believes that its continued success depends in part on enhancing its reputation as an operator of choice, which will facilitate the retention of current tenants and residents and the attraction of new tenants and residents. The Company believes it provides a superior level of service to its customers, which should in turn, allow the Company to maintain occupancy rates, at or above market levels, as well as improve tenant retention.

Communication with tenants: The Company emphasizes frequent communication with its customers to ensure first-class service to the Properties. Property management personnel generally are located on site at the Properties to provide convenient access to management and to ensure that the Properties are well-maintained. Property management’s primary responsibility is to ensure that buildings are operated at peak efficiency in order to meet both the Company’s and tenants’ needs and expectations. Property management personnel additionally budget and oversee capital improvements and building system upgrades to enhance the Properties’ competitive advantages in their respective markets and to maintain the quality of the Properties.

The Company’s in-house leasing representatives for its office portfolio develop and maintain long-term relationships with the Company’s diverse tenant base and coordinate leasing, expansion, relocation and build-to-suit opportunities. This approach allows the Company to offer office space in the appropriate size and location to current or prospective tenants in any of its sub-markets.

The Company’s in-house multi-family rental management team emphasizes meticulous attention to detail and an unwavering commitment to customer service to complement the quality, design excellence and luxury living attributes of its multi-family rental properties. The Company believes this strategy will enable the Company to buttress management’s reputation with the market-leading designs, amenities and features of its multi-family rental properties to attract quality residents.

Portfolio Management: The Company plans to continue to own and operate a portfolio of office and office/flex properties in high-barrier-to-entry markets, with a primary focus in the Northeast. The Company also expects to continue to complement its core portfolio of office and office/flex properties by pursuing acquisition and development opportunities in the multi-family rental sector. The Company’s primary objectives are to maximize operating cash flow and to enhance the value of its portfolio through effective management, acquisition, development and property sales strategies.

The Company seeks to maximize the value of its existing office and office/flex portfolio through implementing operating strategies designed to produce the highest effective rental and occupancy rates and lowest tenant installation costs within the markets that it operates, and further within the parameters of those markets. The Company continues to pursue internal growth through leasing vacant space, re-leasing space at the highest possible effective rents in light of current market conditions with contractual rent increases and developing or redeveloping office space for its diverse base of high credit quality tenants, including Daiichi Sankyo, ~~National~~Bank ~~Union~~of ~~Fire~~Tokyo-Mitsubishi ~~Insurance~~FUJI Ltd and The United States of America - GSA. In addition, the Company seeks economies of scale through volume discounts to take advantage of its size and dominance in particular sub-markets, and operating efficiencies through the use of in-house management, leasing, marketing, financing, accounting, legal, development and construction services.

The Company continually reviews its portfolio and opportunities to divest office and office/flex properties that, among other things, no longer meet its long-term strategy, have reached their potential, are less efficient to operate or can be sold at attractive prices when market conditions are favorable. The Company anticipates redeploying the proceeds from sales of office and office/flex properties 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 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 properties at market returns. The Company anticipates that it will be several years before its multi-family development projects are income-producing. The long-term nature of the Company’s multi-family rental 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, development and repositioning of certain office properties into multi-family rental/mixed use properties will likely result in declining net operating income and cash flow 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 flow will stabilize at levels less than historical or current returns. The Company believes that the transition to a company with a greater proportion of its properties in the multi-family residential sector will ultimately result in the creation of greater shareholder value than remaining a primarily suburban commercial office company, in part due to the lower capitalization rates associated with the multi-family sector.

Acquisitions: The Company also believes that growth opportunities exist through acquiring operating properties or properties for redevelopment with attractive returns in its core Northeast sub-markets where, based on its expertise in leasing, managing and operating properties, it believes it is, or can become, a significant and preferred owner and operator. The Company intends either directly or through joint ventures to acquire, invest in or redevelop additional properties, ~~principally in the multi-family rental sector,~~ that: (i) are expected to provide attractive long-term yields; (ii) are well-located, of high quality and competitive in their respective sub-markets; (iii) are located in its existing sub-markets or in sub-markets in which the Company is or can become a significant and preferred owner and operator; and (iv) it believes have been under-managed or are otherwise capable of improved performance through intensive management, capital improvements and/or leasing that should result in increased effective rental and occupancy rates.

The Company has entered into and may continue in the future to enter into joint ventures (including limited liability companies and partnerships) through which it would own an indirect economic interest of less than 100 percent of a property owned directly by such joint ventures, and may include joint ventures that the Company does not control or manage, especially in connection with its expansion into the multi-family rental sector. The decision to pursue property acquisitions either directly or through joint ventures is based on a variety of factors and considerations, including: (i) the economic and tax terms required by a seller or co-developer of a property; (ii) the Company’s desire to diversify its portfolio by expanding into the multi-family rental sector and achieve a blended portfolio of office and multi-family rental properties by market and sub-market; (iii) the Company’s goal of maintaining a strong balance sheet; and (iv) the Company’s expectation that, in some circumstances, it will be able to achieve higher returns on its invested capital or reduce its risk if a joint venture vehicle is used. Investments in joint ventures are not limited to a specified percentage of the Company’s assets. Each joint venture agreement is individually negotiated, and the Company’s ability to operate and/or dispose of its interests in a joint venture in its sole discretion may be limited to varying degrees depending on the terms of the joint venture agreement. Many of the Company’s joint venture agreements entitle it to receive leasing, management, development and similar fees and/or a promoted interest if certain return thresholds are met. See Note 4: Investments in Unconsolidated Joint Ventures – to the Company’s Financial Statements.

Development: The Company seeks to selectively develop additional properties either directly or through joint ventures where it believes such development will result in a favorable risk-adjusted return on investment in coordination with the above operating strategies. The Company identifies development opportunities primarily through its local market presence. Such development primarily will occur: (i) in stable core Northeast sub-markets where the demand for such space exceeds available supply; and (ii) where the Company is, or can become, a significant and preferred owner and operator. As part of the Company’s strategy to expand its multi-family rental portfolio, the Company may consider development opportunities with respect to improved land with existing commercial uses and seek to rezone the sites for multi-family rental use and development. As a result of competitive market conditions for land suitable for development, the Company may be required to hold land prior to construction for extended periods while entitlements or rezoning is obtained. The Company also may undertake repositioning opportunities that may require the expenditure of significant amounts of capital.

Property Sales: While management’s principal intention is to own and operate its properties on a long-term basis, it periodically assesses the attributes of each of its properties, with a particular focus on the supply and demand fundamentals of the sub-markets in which they are located. ~~Based~~As ona ~~these~~result ~~ongoing~~of ~~assessments~~this assessment during 2015, the Company has identified non-core office properties that it may, ~~from~~sell over time tofor ~~time,~~total ~~decide~~estimated tosales ~~sell~~proceeds ~~any~~that ofit ~~its~~believes ~~properties~~may be between approximately $600 million and $800 million. The Company continually reviews its portfolio and opportunities to divest properties that, among other things, no longer meet its long-term strategy, have reached their potential, are less efficient to operate, or can be sold at attractive prices when market conditions are favorable.

Financial

The Company currently intends to maintain a ratio of debt-to-undepreciated assets (total debt of the Company as a percentage of total undepreciated assets) of 50 percent or less, however there can be no assurance that the Company will be successful in maintaining this ratio. As of December 31, ~~2014~~2015 and ~~2013~~2014, the Company’s total debt constituted approximately 3739.30 percent and 3937.93 percent of total undepreciated assets of the Company, respectively. Although there is no limit in the Company’s organizational documents on the amount of indebtedness that the Company may incur, the Company has entered into certain financial agreements which contain covenants that limit the Company’s ability to incur indebtedness under certain circumstances. The Company intends to utilize the most appropriate sources of capital for future acquisitions, development, capital improvements and other investments, which may include funds from operating activities, proceeds from property and land sales, joint venture capital, and short-term and long-term borrowings (including draws on the Company’s revolving credit facility), and the issuance of additional debt securities by the Company or equity securities by the Corporation.

EMPLOYEES

As of December 31, ~~2014~~2015, the Company had no employees. The Corporation had approximately ~~600~~530 full-time employees.

COMPETITION

The leasing of real estate is highly competitive. The Properties compete for tenants and residents with lessors and developers of similar properties located in their respective markets primarily on the basis of location, the quality of properties, leasing terms (including rent and other charges and allowances for tenant improvements), services or amenities provided, the design and condition of the Properties, and reputation as an owner and operator of quality properties in the relevant markets. Additionally, the number of competitive multi-family rental properties in a particular area could have a material effect on the Company’s ability to lease residential units and on rents charged. In addition, other forms of multi-family rental properties or single family housing provide alternatives to potential residents of multi-family properties. The Company competes with other entities, some of which may have significant resources or who may be willing to accept lower returns or pay higher prices than the Company in terms of acquisition and development opportunities. The Company also experiences competition when attempting to acquire or dispose of real estate, including competition from domestic and foreign financial institutions, other REITs, life insurance companies, pension trusts, trust funds, partnerships, individual investors and others.

REGULATIONS

Many laws and governmental regulations apply to the ownership and/or operation of the Properties and changes in these laws and regulations, or their interpretation by agencies and the courts, occur frequently.

Under various laws and regulations relating to the protection of the environment and human health, an owner of real estate may be held liable for the costs of removal or remediation of certain hazardous or toxic substances located on or in the property. These laws often impose liability without regard to whether the owner was responsible for, or even knew of, the presence of such substances. The presence of such substances may adversely affect the owner’s ability to rent or sell the property or to borrow using such property as collateral and may expose it to liability resulting from any release of, or exposure to, such substances. Persons who arrange for the disposal or treatment of hazardous or toxic substances at another location may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, whether or not such facility is owned or operated by such person. Certain environmental laws impose liability for the release of asbestos-containing materials into the air, and third parties may also seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials and other hazardous or toxic substances.

In connection with the ownership (direct or indirect), operation, management and development of real properties, the Company may be considered an owner or operator of such properties or as having arranged for the disposal or treatment of hazardous or toxic substances and, therefore, potentially liable for removal or remediation costs, as well as certain other related costs, including governmental penalties and injuries to persons and property.

There can be no assurance that (i) future laws, ordinances or regulations will not impose any material environmental liability, (ii) the current environmental condition of the Properties will not be affected by tenants, by the condition of land or operations in the vicinity of the Properties (such as the presence of underground storage tanks), or by third parties unrelated to the Company, or (iii) the Company’s assessments reveal all environmental liabilities and that there are no material environmental liabilities of which the Company is aware. If compliance with the various laws and regulations, now existing or hereafter adopted, exceeds the Company’s budgets for such items, the Company’s ability to make expected distributions to its unitholders or the Corporation’s ability to make expected distributions to its stockholders could be adversely affected.

There are no other laws or regulations which have a material effect on the Company’s operations, other than typical federal, state and local laws affecting the development and operation of real property, such as zoning laws.

INDUSTRY SEGMENTS

The Company operates in three industry segments: (i) commercial and other real estate, (ii) multi-family real estate, and (iii) multi-family services. As of December 31, ~~2014~~2015, the Company does not have any foreign operations and its business is not seasonal. Please see our financial statements attached hereto and incorporated by reference herein for financial information relating to our industry segments.

SIGNIFICANT TENANTS

As of December 31, 2015, no tenant accounted for more than 10 percent of the Company’s consolidated revenues.

RECENT DEVELOPMENTS

Acquisitions

On ~~April~~December 1023, ~~2014~~2015, the Company acquired ~~Andover~~a ~~Place~~vacant 147,241 ~~a 220~~square-~~unit~~foot ~~multi-family~~office ~~rental~~ property located in ~~Andover~~the Mack-Cali Business Campus in Parsippany, ~~Massachusetts~~New Jersey, for approximately $3710.73 million, inwhich ~~cash. The purchase price for the property~~ was funded primarily through borrowings under the Company’s unsecured revolving credit facility. This property is currently in redevelopment by the Company.

On December 2, 2014, the Company acquired developable land in Conshohocken, Pennsylvania, for approximately $15.3 million, which was funded using available cash.

~~Sales~~On November 12, 2015, the Company acquired a 196,128 square-foot, 95.6 percent leased office property adjacent to an existing Mack-Cali property located in Edison, New Jersey, for approximately $53.1 million, which was funded primarily through borrowings under the Company’s unsecured revolving credit facility.

~~The Company sold the following office properties during the year ended December 31, 2014 (dollars in thousands):~~Dispositions

				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
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

On June 26, 2015, the Company sold its 203,506 square foot office property located at 14 Sylvan Way in Parsippany, New Jersey for net sales proceeds of approximately $80 million, with a gain of approximately $24.7 million from the sale.

~~(a)~~Impairments ~~The~~on ~~Company~~Properties ~~completed~~Held ~~the sale of these properties for approximately $221 million, comprised of: $192.5 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 $7.3 million. Net sale proceeds from the sale aggregated $196.8 million which was comprised of the $221 million gross sales price less the subordinated equity interests of $21.2 million and $3 million in closing costs. The purchasers of these properties are unconsolidated joint ventures formed between the Company and the 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 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 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 subordinated equity interest at zero.Used

~~(b)~~In ~~The~~September 2015, the Company announced a three-year strategic initiative to transform the Company into a more concentrated owner of New Jersey Hudson River waterfront and transit-oriented office properties and a regional owner of luxury multi-family residential properties. In connection with the transformation of the Company’s portfolio, management began developing a disposition plan in September 2015, which will be an ongoing assessment process. Through this plan, the Company, in the coming years, expects to dispose of primarily office properties considered non-core to its ongoing operations. As a result, at September 30, 2015, the Company evaluated the recoverability of the carrying values of these non-core properties, and determined that due to the shortening of the expected periods of ownership, it was necessary to reduce the carrying values of 22 rental properties to their estimated fair values. Accordingly, the Company recorded an impairment charge of $20158.86 million onat September 30, 2015 reducing the aggregate carrying values of these properties atfrom $554.3 million to their estimated fair values of $395.7 million. At December 31, ~~2013~~2015, as ita ~~estimated~~result ~~that~~of its periodic evaluation of the recoverability of the carrying ~~value~~values resulting from its ongoing assessment of ~~the~~non-core properties, ~~may~~the ~~not~~Company berecorded ~~recoverable~~an ~~over~~additional ~~their~~impairment ~~anticipated~~charge ~~holding~~of ~~periods~~$33.7 million.

~~Unconsolidated~~Four ~~Joint~~of ~~Venture~~the ~~Activity~~Company’s office properties are collateral for a mortgage loan that matured on August 11, 2014, with a principal balance of $63.3 million as of December 31, 2015. The loan was not repaid at maturity and the Company is in discussions with the lender regarding potential options in satisfaction of the obligation (see Note 10: Mortgages, Loans Payable and Other Obligations). As of September 30, 2015, the Company estimated that the carrying value of three of these properties, aggregating 479,877 square feet and located in Roseland and Parsippany, New Jersey, may not be recoverable over their anticipated holding periods. In order to reduce the carrying values of the properties to their estimated fair values, the Company recorded impairment charges of $5.6 million at September 30, 2015, which resulted from the current decline in leasing activity and market rents of the properties identified. The Company had previously recorded impairment charges on these properties at September 30, 2013 of $12.5 million.

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 $65.1 million have been incurred by URL-Harborside through December 31, 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 December 31, 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 $59.1 million of the remaining development costs of the project, net of the loan financing.Activity

~~The~~On October 6, 2015, the Company ~~owns~~entered aninto 85a ~~percent~~joint ~~interest~~venture inpartnership ~~URL-Harborside~~with ~~and~~XS Port Imperial Hotel, LLC (“XS”) to form XS Hotel Urban Renewal Associates LLC (“XS Hotel URA”) for the ~~remaining~~development ~~interest~~and isownership ~~owned~~of bya ~~ISA,~~364-key ~~with~~dual ~~shared~~branded ~~control~~hotel ~~over~~property ~~major~~located ~~decisions~~in ~~such~~Weehawken, asNew Jersey (“Port Imperial Hotel”). Concurrently, ~~approval~~the ofCompany ~~budgets~~and XS entered into a separate joint venture partnership to form XS Hotel Associates, ~~property~~L.L.C. ~~financings~~(“XS Hotel”) for the management and ~~leasing~~operations ~~guidelines~~of the completed hotel development. ~~Upon~~The ~~entering~~Company ~~into~~holds a 90 percent interest and XS holds the remaining 10 percent interest in the consolidated joint ~~venture~~ventures, XS Hotel URA and XS Hotel, with the Company’s ~~initial~~having ~~contribution~~full ~~was~~and ~~$30.6~~complete ~~million~~authority, ~~which~~power, ~~included~~and adiscretion ~~capital~~to ~~credit~~manage ofand ~~$30~~control ~~per~~the ~~approved~~ventures’ ~~developable~~business, ~~square~~affairs, ~~foot~~and ~~for~~property. The ~~its~~construction ~~contributed~~of ~~land~~the ~~aggregating~~Port ~~approximately~~Imperial Hotel is estimated to cost a total of $20105.69 million, which will be funded by a $94 million construction loan with the balance ~~consisting~~to ofbe ~~previously~~funded ~~incurred~~with ~~development~~members’ ~~costs~~capital. Upon closing, ~~and ISA~~Mack-Cali’s initial contribution was ~~approximately~~ $527.43 million, which included a capital credit of $23. ~~Included~~7 inmillion ~~the~~for ~~Company~~its contributed Hotel Condominium Land unit, and XS Hotel’s ~~investment~~initial incontribution ~~the~~was ~~unconsolidated~~$3 ~~joint~~million. As ~~venture~~of isDecember ~~its~~31, ~~land~~2015, ~~contribution~~the ~~with~~Company aincurred ~~carrying~~development ~~amount~~costs of $51.5 million~~. The~~ ~~Company~~and ~~has~~estimates ~~funded~~it will need to fund an additional $193.23 million ~~in development costs~~ for the ~~venture~~completion ~~through~~of ~~December~~the ~~31, 2014~~project.

OnThe ~~June 6, 2014, the~~ Company ~~and~~owns andevelopable ~~affiliate~~land ofto ~~Keystone~~accommodate ~~Property~~a ~~Group~~multi-phase ~~(“KPG”)~~development ~~acquired~~project 50of ~~percent~~approximately ~~tenants~~1,034-inunit multi-~~common~~family ~~interests~~rental ~~each~~property ~~for~~located ~~$62.5 million~~ in ~~Curtis Center~~Malden, anMassachusetts. The ~~885,000~~initial ~~square~~phase ~~foot~~commenced ~~commercial~~construction ~~office~~of ~~property located~~292 atunits ~~601~~in ~~Walnut~~the ~~Street~~third inquarter ~~Philadelphia,~~of ~~Pennsylvania~~2015 (the “~~Curtis~~Chase ~~Center~~II ~~Property~~Project”),. The ~~which~~Chase ~~amounted~~II Project is estimated to cost a total ~~purchase price~~ of ~~approximately~~ $~~125~~74.09 million ~~for~~(of ~~the~~which ~~property. In connection with~~ the ~~transaction, the~~ Company ~~provided~~has ~~short-term~~incurred ~~loans to KPG affiliates, as follows: a 90-day,~~ $5222.31 million ~~loan~~through ~~which~~December ~~bore~~31, ~~interest~~2015) atand anis ~~annual~~expected ~~rate~~to ofbe ~~3.5~~ready ~~percent~~for ~~payable~~occupancy ~~at maturity, which was collateralized~~ by ~~the~~second ~~KPG~~quarter ~~affiliates’~~2017. The ~~interest~~Company inestimates ~~the~~it ~~Curtis~~will ~~Center~~need ~~Property;~~to ~~and~~fund aadditional ~~90-day,~~costs of $104.8 million ~~loan~~for ~~which~~the ~~also~~completion ~~bore interest at an annual rate~~ of ~~3.5~~the ~~percent~~Chase ~~payable~~II ~~at maturity~~Project. ~~The~~On ~~$10~~December ~~million~~16, ~~loan~~2015, ~~was~~the ~~repaid~~Company inobtained ~~full~~a onconstruction ~~September~~loan 2,with ~~2014~~a ~~and~~maximum ~~the~~borrowing amount of $~~52.3~~48 million ~~loan~~(with ~~was~~no ~~subsequently~~outstanding ~~repaid~~balance inas ~~full~~of onDecember ~~October~~31, 12015), ~~2014. The~~which ~~investments~~bears ~~were~~interest ~~funded~~at bya ~~the~~rate ~~Company~~of ~~primarily~~LIBOR ~~through~~plus ~~borrowing under its revolving credit facility~~2. ~~The~~25 ~~venture~~percent, ~~plans~~reducing to ~~reposition~~LIBOR ~~the~~plus ~~property~~2.0 ~~into~~percent asubject ~~mixed-use~~to ~~property~~achieving bycertain ~~converting~~conditions aand ~~portion~~matures ofin ~~existing~~December ~~office space into multi-family rental apartments~~2018.

~~Simultaneous~~On ~~with~~April 1, 2015, the ~~acquisition~~Company acquired vacant land to accommodate a two-phase development of ~~the~~365 ~~Curtis~~multi-family ~~Center~~residential ~~Property~~units located in Worcester, Massachusetts (“the ~~Company~~CitySquare ~~and~~Project”) for a ~~KPG~~purchase ~~affiliate~~price ~~formed~~of a$3.1 ~~new~~million ~~joint~~with ~~venture~~an ~~named~~additional ~~KPG-MCG~~$1.25 ~~Curtis~~million ~~JV,~~to ~~LLC~~be paid (~~the~~which ~~“Curtis~~is ~~Center~~accrued ~~JV”~~as of December 31, 2015), ~~which~~subject ~~master~~to ~~leased~~certain conditions, in accordance with the ~~Curtis~~terms ~~Center~~of ~~Property~~the ~~from~~purchase and sale agreement. The purchase price for the acquisition ~~entities~~was ~~for~~funded ~~approximately~~primarily 29through ~~years~~borrowing atunder ~~market-based~~the ~~terms~~Company’s unsecured revolving credit facility. The ~~Company~~first ~~and~~phase with 237 units started construction in the ~~KPG~~third ~~affiliate~~quarter ~~both~~2015 ~~own~~with anticipated initial deliveries in the second quarter 2017. The second phase, with 128 units, is projected to begin construction in 2017. On December 10, 2015, the Company obtained a 50construction ~~percent~~loan with a maximum borrowing amount of $41.5 million (with no outstanding balance as of December 31, 2015), which bears interest at a rate of LIBOR plus 2.5 percent, reducing to LIBOR plus 2.25 percent subject to achieving certain conditions and matures in December 2018. Total development costs are estimated to be approximately $92.5 million (of which $9.1 million was incurred by the ~~Curtis~~Company ~~Center~~through JVDecember 31, ~~with~~2015 ~~shared~~and ~~control~~estimates ~~over~~it ~~major~~will ~~decisions~~need to fund an additional $41.9 million for the completion of the project).

On ~~August~~May 621, 2014, the ~~Stamford~~Company SMentered 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 ~~received~~that ~~repayment~~will indevelop, ~~full~~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 ~~joint~~Company ~~venture’s~~at ~~senior~~its ~~mezzanine~~Harborside ~~note~~complex ~~receivable~~in Jersey City, ofNew ~~which~~Jersey (the “URL Project”). The Company ~~received~~owns an 85 percent interest in URL-Harborside and the remaining interest is owned by ISA, with shared control over major decisions such as approval of budgets, property financings and leasing guidelines. The construction of the URL Project is estimated to cost a ~~distribution~~total of approximately $37320 million (of which development costs of $210.82 million ~~from~~have been incurred by URL-Harborside through December 31, 2015). The URL Project is projected to be ready for occupancy by the fourth quarter of 2016. The venture ~~representing~~has ~~its~~a ~~share~~construction/permanent loan with a maximum borrowing amount of $192 million (with $63.9 million outstanding as of December 31, 2015), which bears interest at a rate of 5.197 percent and matures in August 2029. The Company does not expect to fund any future development costs of the ~~net~~project, ~~proceeds~~as future development costs will be funded by using the loan financing.

OnThe ~~August~~Company ~~15,~~owns ~~2014,~~a ~~the~~76.25 ~~Company~~percent ~~acquired~~interest ~~the~~in ~~equity~~a ~~interests~~consolidated ~~of its~~ joint venture ~~partner~~which inis ~~Overlook~~constructing ~~Ridge,~~a ~~L.L.C,~~108-unit ~~Overlook~~multi-family ~~Ridge~~development ~~JV,~~rental ~~L.L.C.~~property ~~and~~located ~~Overlook~~in ~~Ridge~~Eastchester, JVNew ~~2C/3B,~~York ~~L.L.C.~~(the ~~for~~“Eastchester ~~$16~~Project”).6 The ~~million,~~project ~~which~~is ~~was~~expected ~~funded~~to ~~primarily~~be ~~through~~ready ~~borrowing~~for ~~under~~occupancy by the ~~Company’s~~second ~~unsecured~~quarter ~~revolving~~of ~~credit facility~~2016. AsThe aEastchester ~~result,~~Project ~~the~~is ~~Company~~estimated ~~increased its ownership~~ to ~~100~~cost ~~percent~~a total of ~~the~~$50 ~~developable~~million ~~land~~(of ~~and~~which ~~now~~development ~~consolidates~~costs ~~these~~of ~~entities,~~$29.6 ~~which~~million ~~were~~have ~~previously~~been ~~accounted~~incurred ~~for~~ through ~~unconsolidated~~December ~~joint ventures (collectively~~31, ~~the “Consolidated Land”~~2015);. The ~~and~~venture ~~acquired~~has ana ~~additional~~$28.8 25million ~~percent,~~construction ~~for~~loan a(with ~~total~~$10.9 ofmillion 50outstanding ~~percent~~as of ~~its~~December ~~subordinated~~31, ~~unconsolidated~~2015). The ~~interests~~Company inexpects ~~two~~to ~~operating~~fund ~~multi-family~~approximately ~~properties~~$20.9 ~~owned~~million byfor ~~those~~the ~~entities. In~~development ~~conjunction~~of ~~with~~ the ~~Company’s~~project ~~acquisition~~(of which, as of ~~the~~December ~~Consolidated~~31, ~~Land~~2015, the Company ~~assumed~~has ~~loans~~incurred ~~with~~$14.7 amillion ~~total~~of ~~principal~~the ~~balance~~development ofcosts ~~$23.0~~and ~~million,~~estimates ~~which~~it ~~bear~~will ~~interest~~need into ~~the~~fund ~~range~~an ofadditional ~~LIBOR~~$6.2 ~~plus~~million ~~2.50~~for tothe ~~3.50~~completion ~~percent~~of the project.

~~Departures~~Appointment of ~~Executive~~executive ~~Officers~~officers

InOn ~~March~~June ~~2014~~3, 2015, the ~~Corporation~~Company ~~entered~~announced ~~into~~the ~~agreements~~appointments ~~with~~of ~~its~~Mitchell ~~Executive~~E. ~~Vice~~Rudin ~~President~~as ~~and~~chief ~~Chief~~executive ~~Financial~~officer ~~Officer~~ and ~~Executive~~Michael ~~Vice~~J. ~~President,~~DeMarco ~~General~~as ~~Counsel~~president and ~~Secretary~~chief ~~pursuant~~operating toofficer ~~which~~of ~~these two executive officers left~~ the Corporation~~. In November 2014~~, ~~the~~effective immediately. The Corporation entered into anemployment ~~agreement~~agreements ~~with~~dated ~~its~~June ~~President~~3, ~~and~~2015 ~~Chief~~with ~~Executive~~each ~~Officer pursuant to which he will step down as an officer and director~~ of ~~the Corporation in May 2015~~Messrs. ~~For~~ ~~further~~Rudin ~~information~~and ~~about~~DeMarco ~~these departures~~(together, ~~see~~the ~~Item~~“Executive 7:Employment ~~Management’s~~Agreements”) ~~Discussion~~that ~~and~~each ~~Analysis~~provide ofas ~~Financial Condition and Results of Operations - Departure of Executive Officers.~~follows:

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

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

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

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

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

Operations

~~The~~Several of the Company’s core office markets ~~continue~~have toshown besigns ~~weak~~of recent improvement. The percentage leased in the Company’s consolidated portfolio of stabilized operating commercial properties was 8486.2 percent at December 31, ~~2014~~2015, as compared to 8684.12 percent at December 31, ~~2013~~2014 and 8786.21 percent at December 31, ~~2012~~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 December 31, ~~2014~~2015, ~~2013~~2014 and ~~2012~~2013 aggregate ~~205~~69,~~220~~522, ~~690~~205,~~895~~220 and ~~378~~690,~~901~~895 square feet, respectively, or 0.83, 20.58 and 1.2.5 percentage of the net rentable square footage, respectively. The Company believes that commercial vacancy rates ~~may~~have ~~continue~~stabilized ~~to increase~~ in ~~some~~most of its markets ~~through 2015~~ and ~~possibly beyond. As a result, the Company’s future earnings and cash flow~~ may ~~continue~~decrease toin besome ~~negatively~~of ~~impacted~~its bymarkets ~~current~~through ~~market conditions~~2016.

The Company expects that the continued impact of the current state of the economy, including historically 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 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.

FINANCING ACTIVITY

On ~~February~~January 177, ~~2014~~2016, the Company ~~repaid~~obtained ~~its~~a new $~~200~~350 million ~~face~~unsecured ~~amount~~term ofloan, 5which matures in January 2019 with two one-year extension options.~~125~~ ~~percent~~The ~~senior~~interest ~~unsecured~~rate ~~notes~~for atthe ~~their~~new ~~maturity~~term loan is currently 140 basis points over LIBOR, ~~using~~subject ~~available~~to ~~cash~~adjustment ~~and~~on ~~borrowing~~a sliding scale based on the Company’'s unsecured debt ratings, or at the Company's option, a defined leverage ratio. The Company entered into interest rate swap arrangements to fix LIBOR for the duration of the term loan. Including costs, the loan provides for a current all-in fixed rate of 3.12 percent. The proceeds from the loan were used primarily to repay outstanding borrowings on its unsecured revolving credit facility and to repay the Company's $200 million, 5.8 percent senior unsecured notes that matured on January 15, 2016.

On April 10, 2014, the Company obtained a $27.5 million mortgage loan, collateralized by its multi-family 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.

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. 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 3.455 percent at December 31, 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 9.661 percent at December 31, 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.

On December 17, 2014, the Company redeemed $150 million principal amount of its 5.125 percent Notes due January 15, 2015 (the “Notes”). The redemption price, including a make-whole premium, was 100.380 percent of the principal amount of the Notes, plus all accrued and unpaid interest up to the Redemption Date. The Company funded the redemption price, including accrued and unpaid interest, of approximately $153.8 million using available cash and borrowings on the Company’s unsecured revolving credit facility. In connection with the redemption, the Company recorded approximately $0.6 million as a loss from early extinguishment of debt (including the write-off of unamortized deferred financing costs).

AVAILABLE INFORMATION

The Corporation’s internet website is www.mack-cali.com. The Company makes available free of charge on or through the Corporation’s website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after it electronically files or furnishes such materials to the Securities and Exchange Commission. In addition, the Corporation’s internet website includes other items related to corporate governance matters, including, among other things, the Corporation’s corporate governance principles, charters of various committees of its Board of Directors, and the Corporation’s code of business conduct and ethics applicable to all employees, officers and directors. The Corporation intends to disclose on its internet website any amendments to or waivers from its code of business conduct and ethics as well as any amendments to its corporate governance principles or the charters of various committees of the Board of Directors. Copies of these documents may be obtained, free of charge, from the Corporation’s internet website. Any shareholder also may obtain copies of these documents, free of charge, by sending a request in writing to: Mack-Cali Investor Relations Department, 343 Thornall Street, Edison, NJ 08837-2206.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

We consider portions of this report, 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 and residents;

·	the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis;

·	the extent of any tenant bankruptcies or of any early lease terminations;

·	our ability to lease or re-lease space at current or anticipated rents;

·	changes in the supply of and demand for our properties;

·	changes in interest rate levels and volatility in the securities markets;

·	our ability to complete construction and development activities on time and within budget, including without limitation obtaining regulatory permits and the availability and cost of materials, labor and equipment;

·	forward-looking financial and operational information, including information relating to future development projects, potential acquisitions or dispositions, and projected revenue and income;

·	changes in operating costs;

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

·	our credit worthiness and the availability of financing on attractive terms or at all, which may adversely impact our ability to pursue acquisition and development opportunities and refinance existing debt and our future interest expense;

·	changes in governmental regulation, tax rates and similar matters; and

·	other risks associated with the development and acquisition of properties, including risks that the development may not be completed on schedule, that the tenants or residents will not take occupancy or pay rent, or that development or operating costs may be greater than anticipated.

For further information on factors which could impact us and the statements contained herein, see Item 1A: Risk Factors. We assume no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

ITEM 1A. RISK FACTORS

Our results from operations and ability to make distributions toon our partners and debt service on our indebtedness may be affected by the risk factors set forth below. All investors should consider the following risk factors before deciding to purchase securities of the Company and the Corporation. The Company refers to itself as “we” or “our” in the following risk factors.

Adverse economic and geopolitical conditions in general and the Northeastern suburban office markets in particular could have a material adverse effect on our results of operations, financial condition and our ability to pay distributions to you.

Our business may be affected by the continuing volatility in the financial and credit markets, the general global economic conditions, continuing high unemployment, and other market or economic challenges experienced by the U.S. economy or the real estate industry as a whole. Our business also may be adversely affected by local economic conditions, as substantially all of our revenues are derived from our properties located in the Northeast, particularly in New Jersey and New York. Because our portfolio currently consists primarily of office and office/flex buildings (as compared to a more diversified real estate portfolio) located principally in the Northeast, if economic conditions persist or deteriorate, then our results of operations, financial condition and ability to service current debt and to pay distributions to our partners may be adversely affected by the following, among other potential conditions:

·	significant job losses in the financial and professional services industries may occur, which may decrease demand for our office space, causing market rental rates and property values to be negatively impacted;

our ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from both our existing operations and our acquisition and development activities and increase our future interest expense;

·	reduced values of our properties may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans;

the value and liquidity of our short-term investments and cash deposits could be reduced as a result of a deterioration of the financial condition of the institutions that hold our cash deposits or the institutions or assets in which we have made short-term investments, the dislocation of the markets for our short-term investments, increased volatility in market rates for such investments or other factors;

·	reduced liquidity in debt markets and increased credit risk premiums for certain market participants may impair our ability to access capital; and

·	one or more lenders under our line of credit could refuse or be unable to fund their financing commitment to us and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.

These conditions, which could have a material adverse effect on our results of operations, financial condition and ability to pay distributions, may continue or worsen in the future.

Our performance is subject to risks associated with the real estate industry.

General: Our business and our ability to make distributions or payments to our investors depend on the ability of our properties to generate funds in excess of operating expenses (including scheduled principal payments on debt and capital expenditures). Events or conditions that are beyond our control may adversely affect our operations and the value of our Properties. Such events or conditions could include:

·	changes in the general economic climate and conditions;

·	changes in local conditions, such as an oversupply of office space, a reduction in demand for office space, or reductions in office market rental rates;

·	an oversupply or reduced demand for multi-family apartments caused by a decline in household formation, decline in employment or otherwise;

· decreased attractiveness of our properties to tenants and residents;

· competition from other office and office/flex and multi-family properties;

· development by competitors of competing multi-family communities;

· unwillingness of tenants to pay rent increases;

·	rent control or rent stabilization laws, or other housing laws and regulations that could prevent us from raising multi-family rents to offset increases in operating costs;

· our inability to provide adequate maintenance;

·	increased operating costs, including insurance premiums, utilities and real estate taxes, due to inflation and other factors which may not necessarily be offset by increased rents;

·	changes in laws and regulations (including tax, environmental, zoning and building codes, landlord/tenant and other housing laws and regulations) and agency or court interpretations of such laws and regulations and the related costs of compliance;

·	changes in interest rate levels and the availability of financing;

·	the inability of a significant number of tenants or residents to pay rent;

·	our inability to rent office or multi-family rental space on favorable terms; and

·	civil unrest, earthquakes, acts of terrorism and other natural disasters or acts of God that may result in uninsured losses.

We may suffer adverse consequences if our revenues decline since our operating costs do not necessarily decline in proportion to our revenue: We earn a significant portion of our income from renting our properties. Our operating costs, however, do not necessarily fluctuate in relation to changes in our rental revenue. This means that our costs will not necessarily decline even if our revenues do. Our operating costs could also increase while our revenues do not. If our operating costs increase but our rental revenues do not, we may be forced to borrow to cover our costs and we may incur losses. Such losses may adversely affect our ability to make distributions or payments to our investors.

Financially distressed tenants may be unable to pay rent: If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord and protecting our investments. If a tenant files for bankruptcy, we cannot evict the tenant solely because of the bankruptcy and a potential court judgment rejecting and terminating such tenant’s lease (which would subject all future unpaid rent to a statutory cap) could adversely affect our ability to make distributions or payments to our investors as we may be unable to replace the defaulting tenant with a new tenant at a comparable rental rate without incurring significant expenses or a reduction in rental income.

Renewing leases or re-letting space could be costly: If a tenant does not renew its lease upon expiration or terminates its lease early, we may not be able to re-lease the space on favorable terms or at all. If a tenant does renew its lease or we re-lease the space, the terms of the renewal or new lease, including the cost of required renovations or concessions to the tenant, may be less favorable than the current lease terms, which could adversely affect our ability to make distributions or payments to our investors.

Adverse developments concerning some of our major tenants and industry concentrations could have a negative impact on our revenue: ~~Recent developments in the general economy and the global credit markets have had a significant adverse effect on many companies in numerous industries.~~ We have tenants concentrated in various industries that may be experiencing adverse effects of current economic conditions. For instance, 1314.68 percent of our revenue is derived from tenants in the Securities, Commodity Contracts and Other Financial industry, 10.17 percent from tenants in the Insurance Carriers and Related Activities industry and 7.5 percent from tenants in the Manufacturing industry. Our business could be adversely affected if any of these industries suffered a downturn and/or these tenants or any other tenants became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely manner or at all.

Our insurance coverage on our properties may be inadequate or our insurance providers may default on their obligations to pay claims: We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire and flood. We cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our properties. We cannot guarantee that we will be able to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, while our current insurance policies insure us against loss from terrorist acts and toxic mold, in the future, insurance companies may no longer offer coverage against these types of losses, or, if offered, these types of insurance may be prohibitively expensive. If any or all of the foregoing should occur, we may not have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. Should an uninsured loss or a loss in excess of our insured limits occur, we could lose all or a portion of the capital we have invested in a property or properties, as well as the anticipated future revenue from the property or properties. Nevertheless, we might remain obligated for any mortgage debt or other financial obligations related to the property or properties. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Such events could adversely affect our ability to make distributions or payments to our investors. If one or more of our insurance providers were to fail to pay a claim as a result of insolvency, bankruptcy or otherwise, the nonpayment of such claims could have an adverse effect on our financial condition and results of operations. In addition, if one or more of our insurance providers were to become subject to insolvency, bankruptcy or other proceedings and our insurance policies with the provider were terminated or canceled as a result of those proceedings, we cannot guarantee that we would be able to find alternative coverage in adequate amounts or at reasonable prices. In such case, we could experience a lapse in any or adequate insurance coverage with respect to one or more properties and be exposed to potential losses relating to any claims that may arise during such period of lapsed or inadequate coverage.

~~Illiquidity~~Our ofinsurance ~~real~~coverage ~~estate~~on ~~limits~~our properties may be inadequate or our ~~ability~~insurance providers may default on their obligations to ~~act~~pay ~~quickly~~claims: We ~~Real~~currently ~~estate~~carry ~~investments~~comprehensive ~~are~~insurance ~~relatively~~on ~~illiquid~~all of our properties, including insurance for liability, fire and flood. ~~Such~~We ~~illiquidity~~cannot ~~may~~guarantee ~~limit~~that ~~our~~the ~~ability~~limits toof ~~react~~our ~~quickly~~current inpolicies ~~response~~will tobe ~~changes~~sufficient in ~~economic~~the ~~and~~event ~~other~~of ~~conditions. If~~a wecatastrophe ~~want~~ to ~~sell~~our anproperties. We ~~investment,~~cannot weguarantee ~~might~~that ~~not~~we will be able to ~~dispose~~renew ofor ~~that~~duplicate ~~investment~~our current insurance coverage in ~~the~~adequate ~~time~~amounts ~~period~~or weat ~~desire~~reasonable prices. In addition, ~~and~~while ~~the~~our ~~sales~~current ~~price~~insurance ofpolicies ~~that~~insure ~~investment~~us ~~might~~against ~~not~~loss ~~recoup~~from orterrorist ~~exceed~~acts and toxic mold, in the ~~amount~~future, ofinsurance ~~our~~companies ~~investment. The~~may ~~prohibition~~no inlonger ~~the~~offer ~~Internal~~coverage ~~Revenue~~against ~~Code~~these types of ~~1986~~losses, asor, ~~amended~~if (offered, these types of insurance may be prohibitively expensive. If any or all of the ~~“Code”),~~foregoing ~~and~~should ~~related~~occur, ~~regulations~~we onmay anot ~~real~~have ~~estate~~insurance ~~investment~~coverage ~~trust~~against ~~holding~~certain ~~property~~types ~~for~~of ~~sale~~losses ~~also~~and/or there may ~~restrict~~be ~~our~~decreases ~~ability~~in tothe ~~sell~~limits ~~property~~of insurance available. InShould ~~addition,~~an weuninsured ~~acquired~~loss or a ~~significant~~loss ~~number~~in excess of our ~~properties~~insured ~~from~~limits ~~individuals~~occur, towe ~~whom~~could welose ~~issued~~all ~~Units~~or asa ~~part~~portion of the ~~purchase~~capital ~~price. In~~we ~~connection~~have ~~with~~invested ~~the~~in ~~acquisition~~a ofproperty ~~these~~or properties, inas ~~order~~well toas ~~preserve~~the ~~such~~anticipated ~~individual’s~~future ~~income~~revenue ~~tax~~from ~~deferral~~the property or properties. Nevertheless, we ~~contractually~~might ~~agreed~~remain ~~not~~obligated tofor ~~sell~~any mortgage debt or ~~otherwise~~other ~~transfer~~financial obligations related to the ~~properties~~property ~~for~~or aproperties. We ~~specified~~cannot ~~period~~guarantee ofthat ~~time,~~material ~~except~~losses in aexcess ~~manner~~of ~~which~~insurance ~~does~~proceeds will not ~~result~~occur in ~~recognition~~the offuture. If any ~~built-in-gain~~of ~~(which~~our ~~may~~properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in anlarge ~~income~~expenses ~~tax~~to ~~liability)~~repair or ~~which~~rebuild ~~reimburses~~ the ~~appropriate~~property. Such ~~individuals~~events ~~for~~could ~~the~~adversely ~~income~~affect ~~tax~~our ~~consequences~~ability ofto ~~the~~make ~~recognition~~distributions ofor ~~such~~payments ~~built-in-gains~~to our investors. AsIf one or more of ~~December~~our ~~31,~~insurance ~~2014,~~providers ~~seven~~were ofto ~~our~~fail ~~properties,~~to ~~with~~pay ana ~~aggregate~~claim ~~net~~as ~~book~~a ~~value~~result of ~~approximately~~insolvency, ~~$125.3~~bankruptcy ~~million~~or otherwise, ~~were~~the ~~subject~~nonpayment toof ~~these~~such ~~restrictions~~claims ~~which~~could ~~expire~~have ~~periodically~~an ~~through~~adverse ~~2016. For~~effect ~~those~~on ~~properties~~our ~~where~~financial ~~such~~condition ~~restrictions~~and ~~have~~results ~~lapsed~~of operations. In addition, weif ~~are~~one ~~generally~~or ~~required~~more toof ~~use~~our ~~commercially~~insurance ~~reasonable~~providers ~~efforts~~were to ~~prevent~~become ~~any~~subject ~~sale~~to insolvency, ~~transfer~~bankruptcy or other ~~disposition~~proceedings ofand our insurance policies with the ~~subject~~provider ~~properties~~were ~~from~~terminated ~~resulting~~or incanceled ~~the~~as ~~recognition~~a result of ~~built-in~~those ~~gain~~proceedings, towe ~~the~~cannot ~~appropriate~~guarantee ~~individuals. 110~~that ofwe ~~our~~would ~~properties,~~be ~~with~~able anto ~~aggregate~~find ~~net~~alternative ~~book~~coverage ~~value~~in ofadequate ~~approximately~~amounts $1or at reasonable prices.3 In ~~billion~~such case, ~~have~~we ~~lapsed~~could ~~restrictions~~experience ~~and~~a ~~are~~lapse ~~subject~~in any or adequate insurance coverage with respect to ~~these~~one ~~conditions. The~~or ~~above~~more ~~limitations~~properties onand ~~our~~be ~~ability~~exposed to ~~sell~~potential ~~our~~losses ~~investments~~relating ~~could~~to ~~adversely~~any ~~affect~~claims ~~our~~that ~~ability~~may toarise ~~make~~during ~~distributions~~such orperiod ~~payments~~of tolapsed ~~our~~or ~~investors~~inadequate coverage.

Illiquidity of real estate limits our ability to act quickly: Real estate investments are relatively illiquid. Such illiquidity may limit our ability to react quickly in response to changes in economic and other conditions. If we want to sell an investment, we might not be able to dispose of that investment in the time period we desire, and the sales price of that investment might not recoup or exceed the amount of our investment. The prohibition in the Internal Revenue Code of 1986, as amended (the “Code”), and related regulations on a real estate investment trust holding property for sale also may restrict our ability to sell property. In addition, we acquired a significant number of our properties from individuals to whom we issued Units as part of the purchase price. In connection with the acquisition of these properties, in order to preserve such individual’s income tax deferral, we contractually agreed not to sell or otherwise transfer the properties for a specified period of time, 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 individuals for the income tax consequences of the recognition of such built-in-gains. As of December 31, 2015, seven of our properties, with an aggregate net book value of approximately $57.1 million, were subject to these restrictions which expire in 2016. For those properties where such restrictions have lapsed, we are 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 appropriate individuals. 110 of our properties, with an aggregate net book value of approximately $1.3 billion, have lapsed restrictions and are subject to these conditions. The above limitations on our ability to sell our investments could adversely affect our ability to make distributions or payments to our investors.

We may not be able to dispose of non-core office assets within our anticipated timeframe or at favorable prices: In connection with our three year strategic initiative announced in September 2015, we identified non-core office properties that we may sell over time at total estimated sales proceeds we believe will range between $600 million and $800 million. While we intend to dispose of these properties opportunistically over time, there can be no assurance that these dispositions will be completed during the three year period of our strategic initiative. In addition, market conditions will impact our ability to dispose of these properties, and there can be no assurance that we will be successful in disposing of these properties for their estimated sales prices. A failure to dispose of these properties for their estimated market values as planned could have a material adverse effect on our ability to finance our acquisition and development plans.

New acquisitions, including acquisitions of multi-family rental real estate, may fail to perform as expected and will subject us to additional new risks: We intend to and may acquire new properties, primarily in the multi-family rental sector, assuming that we are able to obtain capital on favorable terms. Such newly acquired properties may not perform as expected and may subject us to unknown liability with respect to liabilities relating to such properties for clean-up of undisclosed environmental contamination or claims by tenants, residents, vendors or other persons against the former owners of the properties. Inaccurate assumptions regarding future rental or occupancy rates could result in overly optimistic estimates of future revenues. In addition, future operating expenses or the costs necessary to bring an acquired property up to standards established for its intended market position may be underestimated. The search for and process of acquiring such properties will also require a substantial amount of management’s time and attention. As our portfolio shifts from primarily commercial office properties to increasingly more multi-family rental properties we will face additional and new risks such as:

·	shorter-term leases of one-year on average for multi-family rental communities, which allow residents to leave after the term of the lease without penalty;

·	increased competition from other housing sources such as other multi-family rental communities, condominiums and single-family houses that are available for rent as well as for sale;

·	dependency on the convenience and attractiveness of the communities or neighborhoods in which our multi-family rental properties are located and the quality of local schools and other amenities;

·	dependency on the financial condition of Fannie Mae or Freddie Mac which provide a major source of financing to the multi-family rental sector; and

·	compliance with housing and other new regulations.

Americans with Disabilities Act compliance could be costly: Under the Americans with Disabilities Act of 1990 (“ADA”), all public accommodations and commercial facilities must meet certain federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could involve removal of structural barriers from certain disabled persons’ entrances. Other federal, state and local laws may require modifications to or restrict further renovations of our properties with respect to such accesses. Although we believe that our properties are substantially in compliance with present requirements, noncompliance with the ADA or related laws or regulations could result in the United States government imposing fines or private litigants being awarded damages against us. Such costs may adversely affect our ability to make distributions or payments to our investors.

Environmental problems are possible and may be costly: Various federal, state and local laws and regulations subject property owners or operators to liability for the costs of removal or remediation of certain hazardous or toxic substances located on or in the property. These laws often impose liability without regard to whether the owner or operator was responsible for or even knew of the presence of such substances. The presence of or failure to properly remediate hazardous or toxic substances (such as toxic mold, lead paint and asbestos) may adversely affect our ability to rent, sell or borrow against contaminated property and may impose liability upon us for personal injury to persons exposed to such substances. Various laws and regulations also impose liability on persons who arrange for the disposal or treatment of hazardous or toxic substances at another location for the costs of removal or remediation of such substances at the disposal or treatment facility. These laws often impose liability whether or not the person arranging for such disposal ever owned or operated the disposal facility. Certain other environmental laws and regulations impose liability on owners or operators of property for injuries relating to the release of asbestos-containing or other materials into the air, water or otherwise into the environment. As owners and operators of property and as potential arrangers for hazardous substance disposal, we may be liable under such laws and regulations for removal or remediation costs, governmental penalties, property damage, personal injuries and related expenses. Payment of such costs and expenses could adversely affect our ability to make distributions or payments to our investors.

12We face risks associated with property acquisitions: We have acquired in the past, and our long-term strategy is to continue to pursue the acquisition of properties and portfolios of properties in New Jersey, New York and Pennsylvania and in the Northeast generally, and particularly residential properties, including large real estate portfolios that could increase our size and result in alterations to our capital structure. We may be competing for investment opportunities with entities that have greater financial resources. Several developers and real estate companies may compete with us in seeking properties for acquisition, land for development and prospective tenants. Such competition may adversely affect our ability to make distributions or payments to our and the Corporation’s investors by:

We face risks associated with property acquisitions: We have acquired in the past, and our long-term strategy is to continue to pursue the acquisition of properties and portfolios of properties in New Jersey, New York and Pennsylvania and in the Northeast generally, and particularly residential properties, including large real estate portfolios that could increase our size and result in alterations to our capital structure. We may be competing for investment opportunities with entities that have greater financial resources. Several office building developers and real estate companies may compete with us in seeking properties for acquisition, land for development and prospective tenants. Such competition may adversely affect our ability to make distributions or payments to our and the Corporation’s investors by:

·	reducing the number of suitable investment opportunities offered to us;

·	increasing the bargaining power of property owners;

·	interfering with our ability to attract and retain tenants;

·	increasing vacancies which lowers market rental rates and limits our ability to negotiate rental rates; and/or

·	adversely affecting our ability to minimize expenses of operation.

Our acquisition activities and their success are subject to the following risks:

·	adequate financing to complete acquisitions may not be available on favorable terms or at all as a result of the continuing volatility in the financial and credit markets;

·	even if we enter into an acquisition agreement for a property, we may be unable to complete that acquisition and risk the loss of certain non-refundable deposits and incurring certain other acquisition-related costs;

·	the actual costs of repositioning or redeveloping acquired properties may be greater than our estimates;

·	any acquisition agreement will likely contain conditions to closing, including completion of due diligence investigations to our satisfaction or other conditions that are not within our control, which may not be satisfied; and

·	we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and acquired properties may fail to perform as expected; which may adversely affect our results of operations and financial condition.

Development of real estate, including the development of multi-family rental real estate could be costly: As part of our operating strategy, we may acquire land for development or construct on owned land, under certain conditions. Included among the risks of the real estate development business are the following, which may adversely affect our ability to make distributions or payments to our investors:

·	financing for development projects may not be available on favorable terms;

·	long-term financing may not be available upon completion of construction;

·	failure to complete construction and lease-up on schedule or within budget may increase debt service expense and construction and other costs; and

·	failure to rent the development at all or at rent levels originally contemplated.

Property ownership through joint ventures could subject us to the contrary business objectives of our co-venturers: We, from time to time, invest in joint ventures or partnerships in which we do not hold a controlling interest in the assets underlying the entities in which we invest, including joint ventures in which (i) we own a direct interest in an entity which controls such assets, or (ii) we own a direct interest in an entity which owns indirect interests, through one or more intermediaries, of such assets. These investments involve risks that do not exist with properties in which we own a controlling interest with respect to the underlying assets, including the possibility that (i) our co-venturers or partners may, at any time, become insolvent or otherwise refuse to make capital contributions when due, (ii) we may be responsible to our co-venturers or partners for indemnifiable losses, (iii) we may become liable with respect to guarantees of payment or performance by the joint ventures, (iv) we may become subject to buy-sell arrangements which could cause us to sell our interests or acquire our co-venturer’s or partner’s interests in a joint venture, or (v) our co-venturers or partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives. Because we lack a controlling interest, our co-venturers or partners may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives. While we seek protective rights against such contrary actions, there can be no assurance that we will be successful in procuring any such protective rights, or if procured, that the rights will be sufficient to fully protect us against contrary actions. Our organizational documents do not limit the amount of available funds that we may invest in joint ventures or partnerships. If the objectives of our co-venturers or partners are inconsistent with ours, it may adversely affect our ability to make distributions or payments to our investors.

Our performance is subject to risks associated with repositioning a significant portion of the Company’s portfolio from office to multi-family rental properties.

Repositioning the Company’s office portfolio may result in impairment charges or less than expected returns on office properties: There can be no assurance that the Company, as it seeks to reposition a portion of its portfolio from office to the multi-family rental sector will be able to sell office properties and purchase multi-family rental properties at prices that in the aggregate are profitable for the Company or are efficient use of its capital or that would not result in a reduction of the Company’s cash flow. Because real estate investments are relatively illiquid, it also may be difficult for the Company to promptly sell its office properties that are held or may be designated for sale promptly or on favorable terms, which could have a material adverse effect on the Company’s financial condition. In addition, as the Company identifies non-core office properties that may be held for sale or that it intends to hold for a shorter period of time than previously, it may determine that the carrying value of a property is not recoverable over the anticipated holding period of the property. As a result, the Company may incur impairment charges for certain of these properties to reduce their carrying values to the estimated fair market values. See Note 3: ~~Real~~Recent ~~Estate~~ Transactions – Impairments on Properties Held and Used. Moreover, as the Company seeks to reposition a portion of its portfolio from office to the multi-family rental sector, the Company may be subject to a Federal income tax on gain from sales of properties due to limitations in the Code and related regulations on a real estate investment trust’s ability to sell properties. The Company intends to structure its property dispositions in a tax-efficient manner and avoid the prohibition in the Code against a real estate investment trust holding properties for sale. There is no guaranty, however, that such dispositions can be achieved without the imposition of federal income tax on any gain recognized.

If costs of developing multi-family rental properties increase, we do not expect to achieve as high a return on our multi-family development properties as compared with our historical or current returns in the commercial sector: Our current strategy involves disposing of non-core office and office/flex properties and redeploying the proceeds from those dispositions to acquire multi-family rental properties, including development projects. Although there has been widespread instability in capitalization rates in all real estate sectors since the credit market disruptions and economic slowdown in 2008, generally capitalization rates are higher in the office sector but more stable (and lower) in the multi-family residential sector. 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 purchased a stabilized multi-family property at a lower anticipated return. However, if costs of developing a multi-family residential property increase, there could be less arbitrage between the costs to develop versus the price to purchase stabilized multi-family residential properties. Consequently, the Company does not expect as high a return on its multi-family residential development properties as with our historical or current returns in the commercial sector.14

Unfavorable changes in market and economic conditions could adversely affect multi-family rental occupancy, rental rates, operating expenses, and the overall market value of our assets, including joint ventures. Local conditions that may adversely affect conditions in multi-family residential markets include the following:

·	plant closings, industry slowdowns and other factors that adversely affect the local economy;

·	an oversupply of, or a reduced demand for, apartment units;

·	a decline in household formation or employment or lack of employment growth;

·	the inability or unwillingness of residents to pay rent increases;

·	rent control or rent stabilization laws, or other laws regulating housing, that could prevent us from raising rents to offset increases in operating costs; and

·	economic conditions that could cause an increase in our operating expenses, such as increases in property taxes, utilities, compensation of on-site associates and routine maintenance.

Changes in applicable laws, or noncompliance with applicable laws, could adversely affect our operations or expose us to liability: We must develop, construct and operate our communities in compliance with numerous federal, state and local laws and regulations, some of which may conflict with one another or be subject to limited judicial or regulatory interpretations. These laws and regulations may include zoning laws, building codes, landlord tenant laws and other laws generally applicable to business operations. Noncompliance with applicable laws could expose us to liability. Lower revenue growth or significant unanticipated expenditures may result from our need to comply with changes in (i) laws imposing remediation requirements and the potential liability for environmental conditions existing on properties or the restrictions on discharges or other conditions, (ii) rent control or rent stabilization laws or other residential landlord/tenant laws, or (iii) other governmental rules and regulations or enforcement policies affecting the development, use and operation of our communities, including changes to building codes and fire and life-safety codes.

Failure to succeed in new markets, or with new brands and community formats, or in activities other than the development, ownership and operation of residential rental communities may have adverse consequences: We are actively engaged in development and acquisition activity in new submarkets within our core, Northeast markets where we have owned and operated our historical portfolio of office properties. Our historical experience with properties in our core, Northeast markets in developing, owning and operating properties does not ensure that we will be able to operate successfully in the new multi-family submarkets. We will be exposed to a variety of risks in the multi-family submarkets, including:

·	an inability to accurately evaluate local apartment market conditions;

·	an inability to obtain land for development or to identify appropriate acquisition opportunities;

·	an acquired property may fail to perform as we expected in analyzing our investment;

·	our estimate of the costs of repositioning or developing an acquired property may prove inaccurate; and

·	lack of familiarity with local governmental and permitting procedures.

Our real estate construction management activities are subject to risks particular to third-party construction projects.

As we may perform fixed price construction services for third parties, we are subject to a variety of risks unique to these activities. If construction costs of a project exceed original estimates, such costs may have to be absorbed by us, thereby making the project less profitable than originally estimated, or possibly not profitable at all. In addition, a construction project may be delayed due to government or regulatory approvals, supply shortages, or other events and circumstances beyond our control, or the time required to complete a construction project may be greater than originally anticipated. If any such excess costs or project delays were to be material, such events may adversely ~~effect~~affect our cash flow and liquidity and thereby impact our ability to make distributions or payments to our investors.

Debt financing could adversely affect our economic performance.

Scheduled debt payments and refinancing could adversely affect our financial condition: We are subject to the risks normally associated with debt financing. These risks, including the following, may adversely affect our ability to make distributions or payments to our investors:

·	our cash flow may be insufficient to meet required payments of principal and interest;

·	payments of principal and interest on borrowings may leave us with insufficient cash resources to pay operating expenses;

·	we may not be able to refinance indebtedness on our properties at maturity; and

·	if refinanced, the terms of refinancing may not be as favorable as the original terms of the related indebtedness.

As of December 31, ~~2014~~2015, we had total outstanding indebtedness of $2.12 billion comprised of $1.3 billion of senior unsecured notes, outstanding borrowings of $155 million under our unsecured revolving credit facility and approximately $~~821~~731 million of mortgages, loans payable and other obligations. We may have to refinance the principal due on our current or future indebtedness at maturity, and we may not be able to do so.

If we are unable to refinance our indebtedness on acceptable terms, or at all, events or conditions that may adversely affect our ability to make distributions or payments to our investors include the following:

·	we may need to dispose of one or more of our properties upon disadvantageous terms or adjust our capital expenditures in general or with respect to our strategy of acquiring multi-family residential properties and development opportunities in particular;

·	prevailing interest rates or other factors at the time of refinancing could increase interest rates and, therefore, our interest expense;

·	we may be subject to an event of default pursuant to covenants for our indebtedness;

·	if we mortgage property to secure payment of indebtedness and are unable to meet mortgage payments, the mortgagee could foreclose upon such property or appoint a receiver to receive an assignment of our rents and leases; and

·	foreclosures upon mortgaged property could create taxable income without accompanying cash proceeds and, therefore, hinder our ability to meet the real estate investment trust distribution requirements of the Code.

15We are obligated to comply with financial covenants in our indebtedness that could restrict our range of operating activities: The mortgages on our properties contain customary negative covenants, including limitations on our ability, without the prior consent of the lender, to further mortgage the property, to enter into new leases outside of stipulated guidelines or to materially modify existing leases. In addition, our revolving credit facility and unsecured term loan each contains customary requirements, including restrictions and other limitations on our ability to incur debt, debt to assets ratios, secured debt to total assets ratios, interest coverage ratios and minimum ratios of unencumbered assets to unsecured debt. The indentures under which our senior unsecured debt have been issued contain financial and operating covenants including coverage ratios and limitations on our ability to incur secured and unsecured debt. These covenants limit our flexibility in conducting our operations and create a risk of default on our indebtedness if we cannot continue to satisfy them. Some of our debt instruments are cross-collateralized and contain cross default provisions with other debt instruments. Due to this cross-collateralization, a failure or default with respect to certain debt instruments or properties could have an adverse impact on us or our properties that are subject to the cross-collateralization under the applicable debt instrument. Failure to comply with these covenants could cause a default under the agreements and, in certain circumstances, our lenders may be entitled to accelerate our debt obligations. Defaults under our debt agreements could materially and adversely affect our financial condition and results of operations.

WeRising ~~are~~interest ~~obligated~~rates tomay ~~comply~~adversely ~~with~~affect ~~financial covenants in~~ our ~~indebtedness~~cash ~~that could restrict our range of operating activities~~flow: ~~The~~As ~~mortgages on our properties contain customary negative covenants, including limitations on our ability, without the prior consent~~ of ~~the~~December ~~lender~~31, ~~to further mortgage the property~~2015, tooutstanding ~~enter~~borrowings ~~into new leases outside~~ of ~~stipulated~~approximately ~~guidelines~~$155 ormillion tounder ~~materially modify existing leases. In addition,~~ our revolving credit facility ~~contains customary requirements, including restrictions~~ and ~~other~~approximately ~~limitations~~$137 onmillion of our ~~ability~~mortgage toindebtedness ~~incur~~bear ~~debt, debt to assets ratios, secured debt to total assets ratios,~~ interest ~~coverage~~at ~~ratios~~variable ~~and minimum ratios of unencumbered assets to unsecured debt~~rates. ~~The~~We ~~indentures~~may ~~under which our senior unsecured debt have been issued contain financial and operating covenants including coverage ratios and limitations on our ability to~~ incur ~~secured~~additional ~~and~~indebtedness ~~unsecured debt. These covenants limit our flexibility~~ in ~~conducting~~the ~~our~~future ~~operations~~that ~~and~~bears ~~create~~interest aat ~~risk~~variable ~~of default on our indebtedness if we cannot continue to satisfy them~~rates. ~~Some~~Variable ofrate ~~our~~ debt ~~instruments~~creates ~~are~~higher ~~cross-collateralized~~debt ~~and~~service ~~contain~~requirements ~~cross~~if ~~default~~market ~~provisions~~interest ~~with~~rates ~~other debt instruments~~increase. ~~Due~~Higher ~~to this cross-collateralization, a failure or default with respect to certain~~ debt ~~instruments~~service orrequirements ~~properties~~ could ~~have~~adversely anaffect ~~adverse impact on us or~~ our ~~properties~~ability ~~that are subject~~ to ~~the~~make ~~cross-collateralization~~distributions ~~under~~or ~~the~~payments ~~applicable debt instrument. Failure~~ to ~~comply~~our ~~with~~investors ~~these~~and/or ~~covenants could~~ cause aus to default under ~~the agreements and, in~~ certain ~~circumstances, our lenders may be entitled to accelerate our~~ debt ~~obligations~~covenants. ~~Defaults under our debt agreements could materially and adversely affect our financial condition and results of operations.~~

Rising interest rates may adversely affect our cash flow: As of December 31, 2014, outstanding borrowings of approximately $160 million of our mortgage indebtedness bear interest at variable rates. We may incur additional indebtedness in the future that bears interest at variable rates. Variable rate debt creates higher debt service requirements if market interest rates increase. Higher debt service requirements could adversely affect our ability to make distributions or payments to our investors and/or cause us to default under certain debt covenants.

Our degree of leverage could adversely affect our cash flow: We fund acquisition opportunities and development partially through short-term borrowings (including our revolving credit facility), as well as from proceeds from property sales and undistributed cash. We expect to refinance projects purchased with short-term debt either with long-term indebtedness or equity financing depending upon the economic conditions at the time of refinancing. The Corporation’s Board of Directors has a general policy of limiting the ratio of our indebtedness to total undepreciated assets (total debt as a percentage of total undepreciated assets) to 50 percent or less, although there is no limit in the Corporation’s or our organizational documents on the amount of indebtedness that we may incur. However, we have entered into certain financial agreements which contain financial and operating covenants that limit our ability under certain circumstances to incur additional secured and unsecured indebtedness. The Corporation’s Board of Directors could alter or eliminate its current policy on borrowing at any time at its discretion. If this policy were changed, we could become more highly leveraged, resulting in an increase in debt service that could adversely affect our cash flow and our ability to make distributions or payments to our investors and/or could cause an increased risk of default on our obligations.

We are dependent on external sources of capital for future growth: To qualify as a real estate investment trust under the Code, the Corporation must distribute to its shareholders each year at least 90 percent of its net taxable income, excluding any net capital gain. Because of this distribution requirement, it is not likely that we will be able to fund all future capital needs, including for acquisitions and developments, from income from operations. Therefore, we will have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market’s perception of our growth potential and our current and potential future earnings. Moreover, additional equity offerings may result in substantial dilution of the Corporation’s shareholders’ interests and the interests of our limited partners, and additional debt financing may substantially increase our leverage.

Adverse changes in our credit ratings could adversely affect our business and financial condition: The credit ratings assigned to our senior unsecured notes by nationally recognized statistical rating organizations (the “NRSROs”) are based on our operating performance, liquidity and leverage ratios, overall financial position and other factors employed by the NRSROs in their rating analyses of us. These ratings and similar ratings of us and any debt or preferred securities we may issue are subject to ongoing evaluation by the NRSROs, and we cannot assure you that any such ratings will not be changed by the NRSROs if, in their judgment, circumstances warrant. Our credit ratings can affect the amount of capital we can access, as well as the terms of any financings we may obtain. There can be no assurance that we will be able to maintain our current credit ratings, and in the event our current credit ratings are downgraded, we would likely incur higher borrowing costs and may encounter difficulty in obtaining additional financing.

Competition for skilled personnel could increase our labor costs.

We compete with various other companies in attracting and retaining qualified and skilled personnel ~~and are currently conducting a search for a new chief executive officer to succeed the Corporation’s current chief executive officer who will step down in May 2015~~. We depend on our ability to attract and retain skilled management personnel who are responsible for the day-to-day operations of our company. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be harmed.

We are dependent on our key personnel whose continued service is not guaranteed.

We are dependent upon the Corporation’s key personnel for strategic business direction and real estate experience, including the Corporation’s chief executive officer, athe ~~successor~~Corporation’s president and chief ~~executive~~operating officer, ~~expected~~the toCorporation’s bechief ~~selected~~financial ~~in 2015~~officer, ~~and~~ the Corporation’s chief ~~financial~~investment officer, ~~and~~ the Corporation’s chief legal officer and chairman of Roseland. While we believe that we could find replacements for these key personnel, loss of their services could adversely affect our operations. The Corporation does not have key man life insurance for its key personnel. In addition, as the Company seeks to reposition a portion of its portfolio from office to the multi-family rental sector, the Company may become increasingly dependent on the Corporation’s non-executive personnel with residential development and leasing expertise to effectively execute the Company’s long-term strategy.

Certain provisions of Maryland law and the Corporation’s charter and bylaws could hinder, delay or prevent changes in control.

Certain provisions of Maryland law, and the Corporation’s charter and bylaws have the effect of discouraging, delaying or preventing transactions that involve an actual or threatened change in control. These provisions include the following:

Classified Board of Directors: The Corporation’s Board of Directors is divided into three classes with staggered terms of office of three years each. At the Corporation’s 2014 annual meeting of stockholders, stockholders approved amendments to the Corporation’s charter and bylaws to declassify its Board of Directors over a three year period from 2015 through 2017 such that each director whose term expires at the annual meeting of stockholders in 2015 through 2017 will be elected to hold office until the next annual meeting of stockholders following their election, instead of the third-succeeding annual meeting, and until their successors are elected and qualify. During this transition period, the Corporation’s Board of Directors will remain classified with respect to the directors whose three year terms have not yet expired during such period, and Maryland law permits the Board of Directors to re-classify the Board of Directors at any time. The classification and staggered terms of office of the Corporation’s directors make it more difficult for a third party to gain control of its board of directors. At least two annual meetings of stockholders, instead of one, generally would be required to affect a change in a majority of the board of directors.

Removal of Directors: Under the Corporation’s charter, subject to the rights of one or more classes or series of preferred stock to elect one or more directors, a director may be removed only for cause and only by the affirmative vote of at least two-thirds of all votes entitled to be cast by the Corporation’s stockholders generally in the election of directors. Neither the Maryland General Corporation Law nor the Corporation’s charter define the term “cause.” As a result, removal for “cause” is subject to Maryland common law and to judicial interpretation and review in the context of the facts and circumstances of any particular situation.

Number of Directors, Board Vacancies, Terms of Office: The Corporation has, in its bylaws, elected to be subject to certain provisions of Maryland law which vest in its Board of Directors the exclusive right to determine the number of directors and the exclusive right, by the affirmative vote of a majority of the remaining directors, even if the remaining directors do not constitute a quorum, to fill vacancies on the board. These provisions of Maryland law, which are applicable even if other provisions of Maryland law or the charter or bylaws provide to the contrary, also provide that any director elected to fill a vacancy shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, rather than the next annual meeting of stockholders as would otherwise be the case, and until his or her successor is elected and qualifies. The Corporation has, in its corporate governance principles, adopted a mandatory retirement age of 80 years old for directors.

Stockholder Requested Special Meetings: The Corporation’s bylaws provide that its stockholders have the right to call a special meeting only upon the written request of the stockholders entitled to cast not less than a majority of all the votes entitled to be cast by the stockholders at such meeting.

Advance Notice Provisions for Stockholder Nominations and Proposals: The Corporation’s bylaws require advance written notice for stockholders to nominate persons for election as directors at, or to bring other business before, any meeting of stockholders. This bylaw provision limits the ability of stockholders to make nominations of persons for election as directors or to introduce other proposals unless the Corporation is notified in a timely manner prior to the meeting.

Exclusive Authority of the Board to Amend the Bylaws: The Corporation’s bylaws provide that its board of directors has the exclusive power to adopt, alter or repeal any provision of the bylaws or to make new bylaws. Thus, its stockholders may not effect any changes to its bylaws.

Preferred Stock: Under the Corporation’s charter, its Board of Directors has authority to issue preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of its stockholders. As a result, the Corporation’s Board of Directors may establish a series of preferred stock that could delay or prevent a transaction or a change in control.

Duties of Directors with Respect to Unsolicited Takeovers: Maryland law provides protection for Maryland corporations against unsolicited takeovers by limiting, among other things, the duties of the directors in unsolicited takeover situations. The duties of directors of Maryland corporations do not require them to (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any stockholders rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act, or (d) act or fail to act solely because of the effect the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an acquisition. Maryland law also contains a statutory presumption that an act of a director of a Maryland corporation satisfies the applicable standards of conduct for directors under Maryland law.

Ownership Limit: In order to preserve the Corporation’s status as a real estate investment trust under the Code, its charter generally prohibits any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8 percent of its outstanding capital stock unless its Board of Directors waives or modifies this ownership limit.

Maryland Business Combination Act: The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in certain business combinations, including mergers, consolidations, share exchanges or, in circumstances specified in the statute, asset transfers, issuances or reclassifications of shares of stock and other specified transactions, with an “interested stockholder” or an affiliate of an interested stockholder, for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10 percent or more of the voting power of the outstanding stock of the Maryland corporation. The Corporation’s board of directors has exempted from this statute business combinations between it and certain of its affiliated individuals and entities. However, unless the Corporation’s board adopts other exemptions, the provisions of the Maryland Business Combination Act will be applicable to business combinations with other persons.

Maryland Control Share Acquisition Act: Maryland law provides that holders of “control shares” of a corporation acquired in a “control share acquisition” shall have no voting rights with respect to the control shares except to the extent approved by a vote of two-thirds of the votes eligible to cast on the matter under the Maryland Control Share Acquisition Act. “Control shares” means shares of stock that, if aggregated with all other shares of stock previously acquired by the acquirer, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of the voting power: one-tenth or more but less than one-third, one-third or more but less than a majority or a majority or more of all voting power. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions.

If voting rights of control shares acquired in a control share acquisition are not approved at a stockholder’s meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value. If voting rights of such control shares are approved at a stockholder’s meeting and the acquirer becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights. The Corporation’s bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any acquisitions of shares by certain affiliated individuals and entities, any directors, officers or employees of the Corporation and any person approved by the board of directors prior to the acquisition by such person of control shares. Any control shares acquired in a control share acquisition which are not exempt under the foregoing provisions of the Corporation’s bylaws will be subject to the Maryland Control Share Acquisition Act.

Consequences of the Corporation’s failure to qualify as a real estate investment trust could adversely affect our financial condition.

Failure to maintain ownership limits could cause the Corporation to lose its qualification as a real estate investment trust: In order for the Corporation to maintain its qualification as a real estate investment trust under the Code, not more than 50 percent in value of its outstanding stock may be actually and/or constructively owned by five or fewer individuals (as defined in the Code to include certain entities). The Corporation has limited the ownership of its outstanding shares of common stock by any single stockholder to 9.8 percent of the outstanding shares of its common stock. The Corporation’s Board of Directors could waive this restriction if they were satisfied, based upon the advice of tax counsel or otherwise, that such action would be in its best interests and would not affect its qualification as a real estate investment trust under the Code. Common stock acquired or transferred in breach of the limitation may be redeemed by the Corporation for the lesser of the price paid and the average closing price for the 10 trading days immediately preceding redemption or sold at the direction of the Corporation. The Corporation may elect to redeem such shares of common stock for Units, which are nontransferable except in very limited circumstances. Any transfer of shares of common stock which, as a result of such transfer, causes the Corporation to be in violation of any ownership limit, will be deemed void. Although the Corporation currently intends to continue to operate in a manner which will enable it to continue to qualify as a real estate investment trust under the Code, it is possible that future economic, market, legal, tax or other considerations may cause the Corporation’s Board of Directors to revoke the election for it to qualify as a real estate investment trust. Under the Corporation’s organizational documents, its Board of Directors can make such revocation without the consent of its stockholders.

18In addition, the consent of the holders of at least 85 percent of our partnership units is required: (i) to merge (or permit the merger of) us with another unrelated person, pursuant to a transaction in which we are not the surviving entity; (ii) to dissolve, liquidate or wind up the Company; or (iii) to convey or otherwise transfer all or substantially all of its assets. As of February 22, 2016, the Corporation, as general partner, owns approximately 89.5 percent of our outstanding common partnership units.

In addition, the consent of the holders of at least 85 percent of our partnership units is required: (i) to merge (or permit the merger of) us with another unrelated person, pursuant to a transaction in which we are not the surviving entity; (ii) to dissolve, liquidate or wind up the Company; or (iii) to convey or otherwise transfer all or substantially all of its assets. As of February 13, 2015, the Corporation, as general partner, owns approximately 88.9 percent of our outstanding common partnership units.

Tax liabilities as a consequence of failure to qualify as a real estate investment trust: The Corporation has elected to be treated and have operated so as to qualify as a real estate investment trust for federal income tax purposes since its taxable year ended December 31, 1994. Although the Corporation believes it will continue to operate in such manner, it cannot guarantee that it will do so. Qualification as a real estate investment trust involves the satisfaction of various requirements (some on an annual and some on a quarterly basis) established under highly technical and complex tax provisions of the Code. Because few judicial or administrative interpretations of such provisions exist and qualification determinations are fact sensitive, the Corporation cannot assure you that it will qualify as a real estate investment trust for any taxable year.

If the Corporation fails to qualify as a real estate investment trust in any taxable year, it will be subject to the following:

·	it will not be allowed a deduction for dividends paid to shareholders;

·	it will be subject to federal income tax at regular corporate rates, including any alternative minimum tax, if applicable; and

·	unless it is entitled to relief under certain statutory provisions, it will not be permitted to qualify as a real estate investment trust for the four taxable years following the year during which it was disqualified.

A loss of the Corporation’s status as a real estate investment trust could have an adverse effect on us. Failure to qualify as a real estate investment trust also would eliminate the requirement that the Corporation pay dividends to its stockholders.

Other tax liabilities: Even if the Corporation qualifies as a real estate investment trust under the Code, it is subject to certain federal, state and local taxes on our income and property and, in some circumstances, certain other state and local taxes. From time to time changes in state and local tax laws or regulations are enacted, which may result in an increase in our tax liability. A shortfall in tax revenues for states and municipalities in which we operate may lead to an increase in the frequency and amount of such increase. These actions could adversely affect our financial condition and results of operations. In addition, our taxable REIT subsidiaries will be subject to federal, state and local income tax for income received in connection with certain non-customary services performed for tenants and/or third parties.

Risk of changes in the tax law applicable to real estate investment trusts: Since the Internal Revenue Service, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any such legislative action may prospectively or retroactively modify our and the Corporation’s tax treatment and, therefore, may adversely affect taxation of us, the Corporation, and/or our investors.

Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our tenants and business partners, including personally identifiable information of our tenants and employees, in our data centers and on our networks. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, and damage our reputation, which could adversely affect our business.

We face possible risks associated with the physical effects of climate change.

We cannot predict with certainty whether climate change is occurring and, if so, at what rate. However, the physical effects of climate change could have a material adverse effect on our properties, operations and business. For example, many of our properties are located along the East coast, particularly those in New Jersey, New York and Connecticut. To the extent climate change causes changes in weather patterns, our markets could experience increases in storm intensity and rising sea-levels. Over time, these conditions could result in declining demand for office space in our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal or related costs at our properties. Proposed legislation to address climate change could increase utility and other costs of operating our properties which, if not offset by rising rental income, would reduce our net income. There can be no assurance that climate change will not have a material adverse effect on our properties, operations or business.

Changes in market conditions could adversely affect the market price of the Corporation’s common stock.

As with other publicly traded equity securities, the value of the Corporation’s common stock depends on various market conditions, which may change from time to time. The market price of the Corporation’s common stock could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. Among the market conditions that may affect the value of the Corporation’s common stock are the following:

·	the extent of your interest in us;

·	the general reputation of REITs and the attractiveness of the Corporation’s equity securities in comparison to other equity securities, including securities issued by other real estate-based companies;

·	our financial performance; and

·	general stock and bond market conditions.

The market value of the Corporation’s common stock is based primarily upon the market’s perception of our growth potential and our current and potential future earnings and the Corporation‘s cash dividends. Consequently, the Corporation’s common stock may trade at prices that are higher or lower than its net asset value per share of common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

PROPERTY LIST

As of December 31, ~~2014~~2015, the Company’s Consolidated Properties consisted of ~~219~~217 in-service office, ~~office/flex~~ and ~~industrial/warehouse~~flex properties, as well as six multi-family properties~~, three stand-alone retail properties and three land leases~~. The Consolidated Properties are located primarily in the Northeast. The Consolidated Properties are easily accessible from major thoroughfares and are in close proximity to numerous amenities. The Consolidated Properties contain a total of approximately 2524.32 million square feet of commercial space and 1,301 apartments with the individual commercial properties ranging from 6,216 to 1,246,283 square feet. The Consolidated Properties, managed by on-site employees, generally have attractively landscaped sites and atriums in addition to quality design and construction. The Company’s commercial tenants include many service sector employers, including a large number of professional firms and national and international businesses. The Company believes that all of its properties are well-maintained and do not require significant capital improvements.

Office Properties
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
NEW JERSEY
BERGEN COUNTY
Fort Lee
One Bridge Plaza	1981	200,000	9092.52	4,~~729~~642	0.9697	2625.1317	22.9330
2115 Linwood Avenue	1981	68,000	8798.82	1,~~042~~171	0.2124	17.4554	1413.5793
Lyndhurst
210 Clay Avenue	1981	121,203	82.4	2,377	0.48	23.80	21.55
Montvale
135 Chestnut Ridge Road	1981	66,150	66.6	~~925~~922	0.19	2120.0093	1718.7009
Paramus
15 East Midland Avenue	1988	259,823	5453.26	3,~~146~~105	0.6465	22.3430	18.7365
140 East Ridgewood Avenue	1981	239,680	71100.90	34,~~885~~116	0.7986	2217.5417	1813.5681
461 From Road	1988	253,554	9198.1	24,~~583~~210	0.5288	1116.1893	913.8094
650 From Road	1978	348,510	8679.14	6,~~554~~102	1.3327	2122.8405	18.1826
61 South Paramus Road (f)	1985	269,191	6081.17	4,~~396~~171	0.8987	2718.1797	2216.3136
Rochelle Park
120 West Passaic Street	1972	52,000	9946.62	~~1,502~~709	0.3015	29.0051	2627.9976
365 West Passaic Street	1976	212,578	82.39	3,~~534~~535	0.7274	20.2006	17.2689
395 West Passaic Street	1979	100,589	6275.56	1,~~140~~376	0.2329	18.1309	1415.4027
Upper Saddle River
1 Lake Street	1973/94	474,801	100.0	7,467	1.52	15.73	15.73
10 Mountainview Road	1986	192,000	63.6	2,954	0.62	24.19	20.55
10 Mountainview Road	1986	192,000	77.2	3,066	0.62	20.68	17.41
Woodcliff Lake
400 Chestnut Ridge Road	1982	89,200	100.0	12,~~950~~142	0.4045	2124.8601	1921.1404
50 Tice Boulevard	1984	235,000	8995.06	5,~~426~~544	1.1016	2524.9468	2221.5630
300 Tice Boulevard	1991	230,000	~~100~~95.04	56,~~806~~069	1.1827	2527.2466	2224.7290
ESSEX COUNTY
Millburn
150 J.F. Kennedy Parkway	1980	247,476	6497.02	4,~~557~~758	0.9299	2819.7778	2216.8307
Borough of Roseland
4 Becker Farm Road	1983	281,762	94.9	6,975	1.4245	26.09	24.9597
5 Becker Farm Road	1982	118,343	67.9	1,861	0.38	23.16	22.03
6 Becker Farm Road	1982	129,732	77.5	2,567	0.54	25.53	24.36
6 Becker Farm Road	1982	129,732	78.3	2,575	0.52	25.35	24.99
101 Eisenhower Parkway	1980	237,000	80.6	4,394	0.92	23.00	18.86
101 Eisenhower Parkway	1980	237,000	80.3	4,618	0.94	24.27	20.18
103 Eisenhower Parkway	1985	151,545	77.7	2,402	0.50	20.40	16.23
103 Eisenhower Parkway	1985	151,545	73.5	2,580	0.52	23.16	18.72
105 Eisenhower Parkway	2001	220,000	38.1	2,065	0.43	24.64	18.47
105 Eisenhower Parkway	2001	220,000	38.1	2,490	0.51	29.71	17.14
75 Livingston Avenue	1985	94,221	64.2	1,253	0.26	20.71	18.47
75 Livingston Avenue	1985	94,221	64.2	1,268	0.26	20.96	18.42
85 Livingston Avenue	1985	124,595	81.8	2,462	0.51	24.16	22.06
85 Livingston Avenue	1985	124,595	81.8	2,599	0.53	25.50	24.90
HUDSON COUNTY
Jersey City
Harborside Plaza 1	1983	400,000	100.0	11,~~239~~331	2.2836	28.1033	24.4467
Harborside Plaza 2	1990	761,200	5758.31	911,~~891~~281	2.0135	2225.6851	1821.4529
Harborside Plaza 3	1990	725,600	7883.45	19,~~997~~650	4.0610	3532.1543	3229.0650
Harborside Plaza 4-A	2000	207,670	~~100~~98.06	6,~~591~~546	1.3336	31.7497	2324.7972
Harborside Plaza 5	2002	977,225	8799.0	3132,~~740~~442	6.4477	~~37.~~33.53	3229.7563
101 Hudson Street	1992	1,246,283	8790.02	2829,~~952~~668	56.8819	26.7039	23.9829
MERCER COUNTY
Hamilton Township
3 AAA Drive	1981	35,270	83.0	617	0.13	21.08	15.61
600 Horizon Drive	2002	95,000	100.0	1,191	0.24	12.54	11.74
700 Horizon Drive	2007	120,000	100.0	2,459	0.50	20.49	18.33
2 South Gold Drive	1974	33,962	72.0	483	0.10	19.75	17.38

Office Properties
(Continued)
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
MERCER COUNTY
Hamilton Township
3 AAA Drive	1981	35,270	83.0	611	0.13	20.87	16.36
600 Horizon Drive	2002	95,000	100.0	1,191	0.25	12.54	11.53
700 Horizon Drive	2007	120,000	100.0	2,529	0.53	21.08	18.73
2 South Gold Drive	1974	33,962	72.0	575	0.12	23.51	20.37
Princeton
103 Carnegie Center	1984	96,000	9190.93	2,~~148~~183	0.4446	2425.3518	1920.9680
2 Independence Way	1981	67,401	~~100~~0.0	~~1,537~~333	0.3107	220.8000	220.2400
3 Independence Way	1983	111,300	100.0	12,~~828~~278	0.3748	1620.4247	1114.4984
100 Overlook Center	1988	149,600	89.6	3,~~766~~804	0.7679	28.1038	25.0137
5 Vaughn Drive	1987	98,500	~~100~~91.09	2,~~588~~619	0.5355	2628.2793	2225.0922
MIDDLESEX COUNTY
East Brunswick
377 Summerhill Road	1977	40,000	100.0	372	0.08	9.30	8.98
Edison
343 Thornall Street (c)	1991	195,709	98.4	3,774	0.77	19.60	16.35
333 Thornall Street (g) (h)	1984	196,128	95.6	733	0.15	28.54	25.27
343 Thornall Street (c)	1991	195,709	100.0	4,002	0.84	20.45	17.06
Plainsboro
500 College Road East (f)	1984	158,235	8955.18	32,~~140~~019	0.6442	22.2787	1719.9260
Woodbridge
581 Main Street	1991	200,000	99.3	5,~~202~~169	1.0608	26.1903	22.3207
MONMOUTH COUNTY
Freehold
2 Paragon Way	1989	44,524	5962.56	~~501~~538	0.1011	1819.9130	1516.6343
3 Paragon Way	1991	66,898	8889.2	1,~~176~~181	0.2425	19.9379	17.3413
4 Paragon Way	2002	63,989	5091.17	~~450~~679	0.0914	1411.0457	1310.1952
100 Willow Brook Road	1988	60,557	5755.40	~~772~~830	0.1617	2224.2192	1922.7488
Holmdel
23 Main Street	1977	350,000	100.0	4,~~012~~178	0.8187	11.4694	89.6411
Middletown
One River Centre Bldg 1	1983	122,594	9697.6	23,~~975~~030	0.6063	25.1232	21.0203
One River Centre Bldg 2	1983	120,360	97.5	2,~~658~~881	0.5460	2224.6555	1920.5139
One River Centre Bldg 3 and 4	1984	214,518	9388.37	4,~~859~~551	0.9995	2423.2892	2221.4457
Neptune
3600 Route 66	1989	180,000	100.0	34,~~395~~165	0.6987	1823.8614	1417.97
Wall Township
1305 Campus Parkway	1988	23,350	92.4	~~501~~503	0.10	23.2231	18.0826
1350 Campus Parkway	1990	79,747	99.9	~~953~~920	0.19	11.9655	1110.3597
MORRIS COUNTY
Florham Park
325 Columbia Turnpike	1987	168,144	100.0	43,~~006~~916	0.8182	23.8229	2019.1766
Morris Plains
201 Littleton Road	1979	88,369	75.4	1,~~286~~254	0.26	1918.3082	1514.0880
Parsippany
4 Campus Drive	1983	147,475	7278.58	2,~~195~~136	0.45	2018.5338	1614.8230
6 Campus Drive	1983	148,291	7779.34	2,~~415~~588	0.4954	21.0798	1718.6568
7 Campus Drive	1982	154,395	86.3	2,~~880~~889	0.5860	21.6168	1718.9404
8 Campus Drive	1987	215,265	6769.45	3,~~746~~799	0.7679	25.8239	22.5920
9 Campus Drive	1983	156,495	3787.41	~~1,003~~962	0.20	177.1406	146.6805
4 Century Drive	1981	100,036	52.83	1,~~025~~060	0.2122	1920.4126	1517.1328
5 Century Drive	1981	79,739	59.7	~~959~~1,009	0.1921	2021.1520	1518.3836
6 Century Drive	1981	100,036	4550.5	~~1,016~~837	0.2117	2216.3257	1814.7271
2 Dryden Way	1990	6,216	100.0	99	0.02	15.93	14.64
4 Gatehall Drive	1988	248,480	8493.90	45,~~564~~302	01.9311	2122.6394	1819.6292

Office Properties
(Continued)
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
2 Hilton Court	1991	181,592	100.0	6,~~528~~525	1.3336	35.9593	32.8384
1633 Littleton Road	1978	57,722	0.0	377	0.08	0.00	0.00
600 Parsippany Road	1978	96,000	95.5	1,717	0.36	18.73	15.59
600 Parsippany Road	1978	96,000	93.2	1,638	0.33	18.31	14.81
1 Sylvan Way	1989	150,557	97.7	4,178	0.87	28.40	22.90
1 Sylvan Way	1989	150,557	96.0	4,089	0.83	28.29	22.62
5 Sylvan Way	1989	151,383	85.8	2,992	0.62	23.04	20.25
4 Sylvan Way	1984	105,135	100.0	1,548	0.31	14.72	14.35
5 Sylvan Way	1989	151,383	76.6	2,501	0.51	21.57	19.10
7 Sylvan Way	1987	145,983	0.0	10	0.00	0.00	0.00
14 Sylvan Way	2013	203,506	100.0	5,068	1.03	24.90	22.67
20 Waterview Boulevard	1988	225,550	95.0	4,734	0.99	22.09	19.97
20 Waterview Boulevard	1988	225,550	93.8	4,725	0.96	22.33	20.13
35 Waterview Boulevard	1990	172,498	95.7	4,062	0.85	24.61	22.23
35 Waterview Boulevard	1990	172,498	87.0	3,907	0.79	26.03	23.64
5 Wood Hollow Road	1979	317,040	98.6	4,102	0.86	13.12	10.21
5 Wood Hollow Road	1979	317,040	60.5	4,834	0.98	25.20	19.68
PASSAIC COUNTY
Totowa
999 Riverview Drive	1988	56,066	9186.84	~~890~~885	0.18	1718.2927	1314.8566
SOMERSET COUNTY
Basking Ridge
222 Mount Airy Road	1986	49,000	7582.12	~~705~~810	0.1417	1920.1611	1415.3599
233 Mount Airy Road	1987	66,000	67.5	~~886~~903	0.1819	1920.8927	16.3059
Bridgewater
440 Route 22 East	1990	198,376	9091.21	4,~~711~~662	0.9697	2625.3380	2221.4164
721 Route 202/206	1989	192,741	9897.65	4,~~414~~596	0.9096	2324.2346	1621.6963
Warren
10 Indepedence Boulevard	1988	120,528	92.6	2,816	0.57	25.23	24.04
UNION COUNTY
Clark
100 Walnut Avenue	1985	182,555	9094.1	4,~~301~~361	0.8791	2625.1539	22.7438
Cranford
6 Commerce Drive	1973	56,000	9588.47	1,~~046~~095	0.2123	1922.5804	1618.9862
11 Commerce Drive	1981	90,000	7967.60	1,~~865~~577	0.3833	26.0315	22.2975
12 Commerce Drive	1967	72,260	84.7	~~928~~929	0.19	15.1618	13.1517
14 Commerce Drive	1971	67,189	88100.80	1,~~168~~295	0.2427	19.5827	16.6840
20 Commerce Drive	1990	176,600	98100.30	34,~~970~~123	0.8186	2223.8735	2019.0199
25 Commerce Drive	1971	67,749	8177.92	1,~~298~~179	0.2625	2322.3954	19.9962
65 Jackson Drive	1984	82,778	5334.92	~~990~~847	0.2018	2229.1992	1823.7649
New Providence
890 Mountain Avenue	1977	80,000	7749.16	1,~~251~~207	0.25	2030.2842	1727.9695
Total New Jersey Office		1715,~~040~~750,~~194~~852	8285.20	~~340~~323,~~476~~076	6967.1241	24.3105	2120.0375
NEW YORK
NEW YORK COUNTY
New York
125 Broad Street	1970	524,476	100.0	1817,~~301~~745	3.7170	3433.8983	2928.1413
WESTCHESTER COUNTY
Elmsford
100 Clearbrook Road (c)	1975	60,000	91.7	1,~~058~~048	0.2122	19.2305	17.5634
101 Executive Boulevard	1971	50,000	0.0	52	0.01	0.00	0.00
Hawthorne
1 Skyline Drive	1980	20,400	99.0	~~415~~423	0.0809	20.5594	2019.2086
2 Skyline Drive	1987	30,000	100.0	~~543~~542	0.11	18.1007	13.7073

Office Properties
(Continued)
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
7 Skyline Drive	1987	109,000	7885.49	2,~~059~~121	0.4244	2422.0965	19.2032
17 Skyline Drive (f)	1989	85,000	100.0	1,~~461~~932	0.3040	1722.1973	1622.7628
White Plains
1 Barker Avenue	1975	68,000	87.83	1,~~488~~483	0.3031	24.9298	22.6329
3 Barker Avenue	1983	65,300	9593.9	1,~~479~~377	0.3029	2322.6246	2119.9168
50 Main Street	1985	309,000	7986.14	7,~~735~~593	1.5758	3128.6544	2823.0381
11 Martine Avenue	1987	180,000	7770.7	4,~~331~~117	0.8886	3032.9735	2628.9237
1 Water Street	1979	45,700	6657.96	~~793~~748	0.16	2528.9442	2224.2188
Yonkers
1 Executive Boulevard	1982	112,000	100.0	2,~~868~~764	0.58	2524.6168	22.7327
3 Executive Boulevard	1987	58,000	100.0	1,~~697~~719	0.3536	29.2664	27.5071
Total New York Office		1,~~716~~666,876	8791.82	4443,~~280~~612	89.9810	2928.3870	2524.4466
DISTRICT OF COLUMBIA
WASHINGTON
1201 Connecticut Avenue, NW	1940	169,549	8992.16	6,~~671~~736	1.3541	4442.1690	3937.2574
1400 L Street, NW	1987	159,000	100.0	56,~~895~~238	1.2130	3739.0823	3135.4816
Total District of Columbia Office		328,549	9496.42	12,~~566~~974	2.5671	4041.5306	3536.2644
MARYLAND
PRINCE GEORGE'S COUNTY
Greenbelt
9200 Edmonston Road	1973	38,690	100.0	1,057	0.2122	27.32	26.0578
6301 Ivy Lane	1979	112,003	68.58	1,~~513~~646	0.3134	1921.7236	1619.8331
6303 Ivy Lane	1980	112,047	17.7	~~497~~415	0.1009	2520.0693	2118.7366
6305 Ivy Lane	1982	112,022	8782.2	1,~~965~~912	0.40	20.1276	1718.3331
6404 Ivy Lane	1987	165,234	7268.28	2,~~522~~561	0.5154	2122.1453	1618.4475
6406 Ivy Lane	1991	163,857	77.0	12,~~559~~995	0.3262	1223.3674	919.5705
6411 Ivy Lane	1984	138,405	7174.7	2,~~243~~311	0.4648	22.6035	19.0936
Lanham
4200 Parliament Place	1989	122,000	9731.48	21,~~904~~768	0.5937	2445.4457	2243.4851
Total Maryland Office		964,258	7263.2	14,~~260~~665	23.9006	2024.4705	1721.4600
TOTAL OFFICE PROPERTIES		2018,~~049~~994,~~877~~767	8284.46	~~411~~394,~~582~~327	8382.5628	24.9282	21.5544

Office/Flex Properties
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
NEW JERSEY
BURLINGTON COUNTY
Burlington
3 Terri Lane	1991	64,500	~~100~~93.02	~~460~~568	0.0912	79.1345	68.2827
5 Terri Lane	1992	74,555	100.0	~~623~~621	0.13	8.3633	6.6572
Moorestown
2 Commerce Drive	1986	49,000	74.1	~~222~~232	0.05	6.1139	5.1545
101 Commerce Drive	1988	64,700	100.0	275	0.06	4.25	3.85
102 Commerce Drive	1987	38,400	100.0	~~259~~269	0.0506	67.7401	5.8657
201 Commerce Drive	1986	38,400	6045.48	58103	0.0102	25.5086	24.2909
202 Commerce Drive	1988	51,200	2583.06	59136	0.0103	43.6118	42.3894
1 Executive Drive	1989	20,570	100.0	~~206~~208	0.04	10.0111	7.1929
2 Executive Drive	1988	60,800	7381.29	~~310~~382	0.0608	67.9767	5.8980
101 Executive Drive	1990	29,355	99.7	~~296~~300	0.06	10.1125	89.3436
102 Executive Drive	1990	64,000	100.0	474	0.10	7.41	7.30
225 Executive Drive	1990	50,600	4564.86	~~163~~149	0.03	74.0356	43.6270
97 Foster Road	1982	43,200	~~100~~83.03	~~170~~148	0.03	34.9411	3.0631
1507 Lancer Drive	1995	32,700	100.0	146	0.03	4.46	3.43
1245 North Church Street	1998	52,810	7783.83	~~169~~221	0.0305	45.1102	34.1927
1247 North Church Street	1998	52,790	7793.68	~~227~~230	0.05	54.5464	43.6970
1256 North Church Street	1984	63,495	100.0	477	0.10	7.51	6.58
840 North Lenola Road	1995	38,300	47.0	~~143~~145	0.03	78.9406	7.1139
844 North Lenola Road	1995	28,670	100.0	~~204~~206	0.04	7.1219	5.7293
915 North Lenola Road	1998	52,488	100.0	~~292~~291	0.06	5.5654	45.5701
2 Twosome Drive	2000	48,600	100.0	~~404~~411	0.0809	8.3146	7.4357
30 Twosome Drive	1997	39,675	7499.80	~~211~~260	0.0405	76.1162	5.6312
31 Twosome Drive	1998	84,200	100.0	~~429~~423	0.09	5.1002	4.5650
40 Twosome Drive	1996	40,265	100.0	~~312~~317	0.0607	7.7587	6.6693
41 Twosome Drive	1998	43,050	~~100~~88.09	~~283~~273	0.06	67.5713	5.3277
50 Twosome Drive	1997	34,075	56.0	122	0.02	6.39	5.87
GLOUCESTER COUNTY
West Deptford
1451 Metropolitan Drive	1996	21,600	100.0	134	0.03	6.20	5.60
MERCER COUNTY
Hamilton Township
100 Horizon Center Boulevard	1989	13,275	100.0	~~158~~151	0.03	11.9037	76.3178
200 Horizon Drive	1991	45,770	~~100~~92.09	~~695~~706	0.1415	1516.1860	1314.3384
300 Horizon Drive	1989	69,780	5374.2	~~530~~574	0.1112	1411.2809	108.8692
500 Horizon Drive	1990	41,205	93.8	577	0.12	14.93	1213.8801
MONMOUTH COUNTY
Wall Township
1325 Campus Parkway	1988	35,000	100.0	612	0.1213	17.49	14.20
1340 Campus Parkway	1992	72,502	7568.18	~~771~~898	0.1619	1418.1600	1115.2850
1345 Campus Parkway	1995	76,300	~~100~~87.06	~~966~~949	0.20	1214.6620	911.9048
1433 Highway 34	1985	69,020	98.1	~~616~~702	0.1315	9.10.37	67.8261
1320 Wyckoff Avenue	1986	20,336	100.0	~~222~~228	0.05	1011.9221	8.3665
1324 Wyckoff Avenue	1987	21,168	~~100~~92.07	~~188~~185	0.04	89.8843	6.7678
PASSAIC COUNTY
Totowa
1 Center Court	1999	38,961	100.0	~~592~~571	0.12	1514.1966	12.8855
2 Center Court	1998	30,600	100.0	~~224~~389	0.0508	712.3271	6.7311
11 Commerce Way	1989	47,025	100.0	~~548~~552	0.11	11.6574	8.5168
20 Commerce Way	1992	42,540	95.5	~~335~~477	0.0710	811.2574	710.9598

Office/Flex Properties
(Continued)
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
29 Commerce Way	1990	48,930	100.0	~~384~~584	0.0812	711.8594	69.9983
40 Commerce Way	1987	50,576	86.3	~~569~~559	0.12	1312.0481	9.10
45 Commerce Way	1992	51,207	100.0	~~529~~575	0.1112	1011.3323	89.4892
60 Commerce Way	1988	50,333	8744.31	~~393~~359	0.0806	816.9417	611.8389
80 Commerce Way	1996	22,500	100.0	~~246~~264	0.05	1011.9373	89.9373
100 Commerce Way	1996	24,600	88.6	~~268~~288	0.0506	1213.3021	10.0997
120 Commerce Way	1994	9,024	100.0	106	0.02	11.75	10.3142
140 Commerce Way	1994	26,881	99.5	317	0.0607	11.85	10.5154
Total New Jersey Office/Flex		2,~~189~~167,~~531~~931	8889.52	1618,~~974~~010	3.4676	89.7631	7.2369
NEW YORK
WESTCHESTER COUNTY
Elmsford
11 Clearbrook Road	1974	31,800	100.0	~~416~~407	0.0908	1312.0880	119.6494
75 Clearbrook Road	1990	32,720	100.0	~~516~~205	0.1004	156.7727	145.8844
125 Clearbrook Road	2002	33,000	100.0	~~450~~576	0.0912	1317.6445	1011.2733
150 Clearbrook Road	1975	74,900	99100.30	~~770~~996	0.1621	1013.3530	911.0171
175 Clearbrook Road	1973	98,900	96.7	1,~~186~~575	0.2433	1216.4047	1114.4190
200 Clearbrook Road	1974	94,000	9993.85	1,~~234~~248	0.2526	1314.1520	1112.4172
250 Clearbrook Road	1973	155,000	9596.18	~~900~~1,265	0.1826	68.1143	47.6208
50 Executive Boulevard	1969	45,200	6062.8	~~257~~274	0.0506	9.3565	78.8610
77 Executive Boulevard	1977	13,000	100.0	~~244~~249	0.05	1819.7715	1617.6277
85 Executive Boulevard	1968	31,000	4050.60	26217	0.0104	214.0700	110.1139
300 Executive Boulevard	1970	60,000	100.0	~~609~~729	0.1215	1012.15	911.1018
350 Executive Boulevard	1970	15,400	99.4	230	0.05	15.03	12.80
399 Executive Boulevard	1962	80,000	100.0	1,~~047~~063	0.2122	13.0929	12.5171
400 Executive Boulevard	1970	42,200	7163.1	~~559~~528	0.11	1819.6383	15.0074
500 Executive Boulevard	1970	41,600	100.0	~~762~~765	0.1516	18.3239	16.5173
525 Executive Boulevard	1972	61,700	100.0	1,~~000~~049	0.2022	1617.2100	1415.8646
1 Westchester Plaza	1967	25,000	100.0	352	0.07	14.08	11.16
2 Westchester Plaza	1968	25,000	100.0	~~380~~397	0.08	15.2088	12.1248
3 Westchester Plaza	1969	93,500	9785.91	~~992~~852	0.2018	10.8471	98.0032
4 Westchester Plaza	1969	44,700	100.0	~~682~~705	0.1415	15.2677	12.3368
5 Westchester Plaza	1969	20,000	100.0	~~279~~308	0.06	1315.9540	1012.5065
6 Westchester Plaza	1968	20,000	100.0	~~302~~287	0.06	1514.1035	1310.2580
7 Westchester Plaza	1972	46,200	100.0	~~661~~720	0.1315	1415.3158	1314.6885
8 Westchester Plaza	1971	67,200	~~100~~99.07	1,~~284~~225	0.26	1918.1128	1615.2630
Hawthorne
200 Saw Mill River Road	1965	51,100	100.0	~~725~~726	0.15	14.1921	1213.9403
4 Skyline Drive	1987	80,600	93.0	1,~~282~~280	0.2627	17.1008	1413.7170
5 Skyline Drive	1980	124,022	99.8	1,~~571~~851	0.3239	1214.6995	1013.8612
6 Skyline Drive	1980	44,155	72100.80	~~565~~530	0.11	1712.5800	127.2393
8 Skyline Drive	1985	50,000	8548.41	~~821~~667	0.1714	1927.2373	1623.4649
10 Skyline Drive	1985	20,000	100.0	392	0.08	19.60	1615.3575
11 Skyline Drive (f)	1989	45,000	100.0	~~999~~997	0.2021	22.2016	21.6247
12 Skyline Drive (f)	1999	46,850	7185.71	~~555~~588	0.1112	1614.5275	1413.8819
15 Skyline Drive (f)	1989	55,000	5586.56	~~196~~364	0.0408	67.4264	47.3601
Yonkers
100 Corporate Boulevard	1987	78,000	98.3	1,~~570~~572	0.3233	20.4850	19.3924
200 Corporate Boulevard South	1990	84,000	58.2	~~1,413~~931	0.2919	2819.9004	2515.3867
4 Executive Plaza	1986	80,000	100.0	1,~~507~~523	0.3132	1819.8404	1516.9949
6 Executive Plaza	1987	80,000	~~100~~95.08	1,~~636~~680	0.3335	2021.4592	19.0396
1 Odell Plaza	1980	106,000	93100.70	1,~~556~~725	0.3236	1516.6727	14.2583
3 Odell Plaza	1984	71,065	100.0	1,596	0.3233	22.46	20.83

Office/Flex Properties (continued)
and Industrial/Warehouse, Retail Properties, and Land Leases
			Percentage	~~2014~~2015		~~2014~~2015	~~2014~~2015
		Net	Leased	Base		Average	Average
		Rentable	as of	Rent	Percentage	Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015	Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)	($) (c) (d)	($) (c) (e)
5 Odell Plaza	1983	38,400	99.6	650	0.1314	17.00	15.5045
7 Odell Plaza	1984	42,600	100.0	~~895~~699	0.1815	2116.0141	1913.3097
Total New York Office/Flex		2,348,812	9293.81	33,~~067~~993	67.7009	15.1655	13.3455
CONNECTICUT
FAIRFIELD COUNTY
Stamford
419 West Avenue	1986	88,000	100.0	1,~~576~~550	0.32	17.9161	1514.2798
500 West Avenue	1988	25,000	100.0	~~371~~482	0.0810	1419.8428	1216.8400
550 West Avenue	1990	54,000	81.3	~~782~~794	0.1617	1718.8109	16.9286
600 West Avenue	1999	66,000	100.0	670	0.14	10.15	9.3055
650 West Avenue	1998	40,000	100.0	~~561~~600	0.1113	1415.0300	11.1875
Total Connecticut Office/Flex		273,000	96.3	34,~~960~~096	0.8186	15.0658	13.2053
TOTAL OFFICE/FLEX PROPERTIES		4,~~811~~789,~~343~~743	91.15	5456,~~001~~099	1011.9771	12.3380	10.6396
NEW YORK
WESTCHESTER COUNTY
Elmsford
1 Warehouse Lane (f)	1957	6,600	100.0	107	0.02	16.21	15.00
2 Warehouse Lane (f)	1957	10,900	100.0	~~158~~160	0.03	14.5068	1213.4876
3 Warehouse Lane (f)	1957	77,200	100.0	399	0.08	5.17	4.96
4 Warehouse Lane (f)	1957	195,500	97.0	2,~~025~~236	0.4147	1011.6879	710.6050
5 Warehouse Lane (f)	1957	75,100	97.1	~~958~~962	0.1920	13.1419	11.93
6 Warehouse Lane (f)	1982	22,100	100.0	555	0.1112	25.11	2324.9843
Total Industrial/Warehouse Properties		387,400	97.9	4,~~202~~419	0.8492	11.0865	910.1263
NEW JERSEY
HUDSON COUNTY
Weehawken
500 Avenue at Port Imperial	2013	16,736	5261.2	0	0.00	0.00	0.00
Total New Jersey Retail Properties		16,736	5261.2	0	0.00	0.00	0.00
NEW YORK
WESTCHESTER COUNTY
Tarrytown
230 White Plains Road	1984	9,300	0100.0	~~119~~67	0.0201	07.0020	06.0099
Yonkers
2 Executive Boulevard	1986	8,000	100.0	305	0.0607	38.13	3837.1388
Total New York Retail Properties		17,300	46100.20	~~424~~372	0.08	5321.0050	5221.8827
Total Retail Properties		34,036	4980.29	~~424~~372	0.08	2513.3351	2513.2736
NEW YORK
WESTCHESTER COUNTY
Elmsford
700 Executive Boulevard	-	-	-	160	0.03	-	--

Land Leases
(continued)
			Percentage	~~2014~~2015			~~2014~~2015	~~2014~~2015
		Net	Leased	Base			Average	Average
		Rentable	as of	Rent	Percentage		Base Rent	Effective Rent
	Year	Area	12/31/1415	($000’s)	of Total ~~2014~~2015		Per Sq. Ft.	Per Sq. Ft.
Property Location	Built	(Sq. Ft.)	(%) (a)	(b) (c)	Base Rent (%)		($) (c) (d)	($) (c) (e)
Yonkers
1 Enterprise Boulevard	-	-	-	~~185~~197	0.04		-	-
Total New York Land Leases		-	-	~~345~~357	0.07		-	-
MARYLAND
PRINCE GEORGE'S COUNTY
Greenbelt
Capital Office Park Parcel A	-	-	-	153	0.03		-	-
Total Maryland Land Leases		-	-	153	0.03		-	-
Total Land Leases		-	-	~~498~~510	0.10		-	-
TOTAL COMMERCIAL PROPERTIES		2524,~~282~~205,~~656~~946	8486.2	~~470~~455,~~707~~727	95.5509		22.1007	19.1106
Multi-Family Properties
		Net		Percentage	~~2014~~2015		Percentage	~~2014~~2015
		Rentable		Leased	Base		of Total	Average
		Commercial		as of	Rent		~~2014~~2015	Base Rent
	Year	Area	Number	12/31/1415	($000’s)		Base Rent	Per Home
	Built	(Sq. Ft.)	of Units	(%) (a)	(b) (c)		(%)	($) (c) (i)
NEW JERSEY
MIDDLESEX COUNTY
New Brunswick
Richmond Court	1997	-	82	~~100~~95.01	1,~~466~~444		0.30	1,~~490~~543
Riverwatch Commons	1995	-	118	9893.32	2,~~093~~080		0.4243	1,~~504~~576
UNION COUNTY
Rahway
Park Square	2011	5,934	159	9695.90	3,~~659~~679		0.7477	12,~~980~~030
Total New Jersey Multi-Family		5,934	359	9894.14	7,~~218~~203		1.4650	1,~~709~~771
MASSACHUSETTS
ESSEX COUNTY
Andover
Andover Place (g) (h)	1988	-	220	94.5	2,350		0.48	1,292
Andover Place	1988	-	220	99.1	3,396		0.71	1,298
SUFFOLK COUNTY
Revere
Alterra at Overlook Ridge IA	2004	-	310	9695.58	5,~~265~~511		1.0715	1,~~467~~546
Alterra at Overlook Ridge IB	2008	-	412	9597.1	7,~~117~~439		1.4455	1,~~513~~550
Total Massachusetts Multi-Family		-	942	9597.41	1416,~~732~~346		23.9941	1,~~447~~489
Total Multi-Family Properties		5,934	1,301	96.24	2123,~~950~~549		4.4591	1,~~520~~565
TOTAL PROPERTIES		2524,~~288~~211,~~590~~880	1,301		~~492~~479,~~657~~276	(j)	100.00

Footnotes to Property List (dollars in thousands except per square foot amounts):

(a) Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates in the future and leases expiring December 31, ~~2014~~2015 aggregating ~~205~~69,~~220~~522 square feet (representing 0.83 percent of the Company’s total net rentable square footage) for which no new leases were signed. (b) Total base rent for the 12 months ended December 31, ~~2014~~2015, determined in accordance with generally accepted accounting principles (“GAAP”). 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. For the 12 months ended December 31, ~~2014~~2015, total escalations and recoveries from tenants were: $6149,~~255~~480, or $3.7111 per leased square foot, for office properties; $910,~~797~~213, or $2.2433 per leased square foot, for office/flex properties; and $1,~~810~~769, or $4.5430 per leased square foot, for other properties. (c) Excludes space leased by the Company. (d) Base rent for the 12 months ended December 31, ~~2014~~2015 divided by net rentable commercial square feet leased at December 31, ~~2014~~2015. (e) Total base rent for ~~2014~~2015 minus ~~2014~~2015 amortization of tenant improvements, leasing commissions and other concessions and costs, determined in accordance with GAAP, divided by net rentable square feet leased at December 31, ~~2014~~2015. (f) This property is located on land leased by the Company. (g) As this property was acquired, commenced initial operations or initially consolidated by the Company during the 12 months ended December 31, ~~2014~~2015, the amounts represented in ~~2014~~2015 base rent reflect only that portion of those 12 months during which the Company owned or consolidated the property. Accordingly, these amounts may not be indicative of the property’s full year results. For comparison purposes, the amounts represented in ~~2014~~2015 average base rent per sq. ft. and per unit for this property have been calculated by taking the 12 months ended December 31, ~~2014~~2015 base rent for such property and annualizing these partial-year results, dividing such annualized amounts by the net rentable square feet leased or occupied units at December 31, ~~2014~~2015. These annualized per square foot and per unit amounts may not be indicative of the property’s results had the Company owned or consolidated the property for the entirety of the 12 months ended December 31, ~~2014~~2015. (h) Acquired on ~~April~~November 1012, ~~2014~~2015. Amounts reflect period of ownership. (i) Annualized base rent for the 12 months ended December 31, ~~2014~~2015 divided by units occupied at December 31, ~~2014~~2015, divided by 12. (j) Excludes $247.18 million from properties which were sold during the year ended December 31, ~~2014~~2015.

PERCENTAGE LEASED

The following table sets forth the year-end percentages of commercial square feet leased in the Company’s stabilized operating Consolidated Properties for the last five years:

	Percentage of
December 31,	Square Feet Leased (%) (a)
2015	86.2
2014	84.2
2013	86.1
2012	87.2
2011	88.3
2010	89.1

(a) Percentage of square-feet leased includes all leases in effect as of the period end date, some of which have commencement dates in the future and leases that expire at the period end date. Excludes properties being prepared for lease up.

SIGNIFICANT TENANTS

The following table sets forth a schedule of the Company’s 50 largest commercial tenants for the Consolidated Properties as of December 31, ~~2014~~2015 based upon annualized base rental revenue:

			Percentage of
		Annualized	Company	Square	Percentage	Year of
	Number of	Base Rental	Annualized Base	Feet	Total Company	Lease
	Properties	Revenue ($) (a)	Rental Revenue (%)	Leased	Leased Sq. Ft. (%)	Expiration
DB Services New Jersey, Inc.	2	12,335,~~217~~216	2.5	409,166	2.0	2017
National Union Fire Insurance
Company of Pittsburgh, PA	2	1011,~~956~~191,~~822~~057	2.23	388,651	1.9	(b)
Bank Of Tokyo-Mitsubishi FUJI, Ltd.	1	10,540,716	2.1	282,606	1.4	(c)
Forest Research Institute, Inc.	1	9,070,892	1.8	215,659	1.0	2017
United States of America-GSA	12	9,357,707	1.9	287,169	1.4	(d)
United States of America-GSA	11	8,803,753	1.8	285,343	1.4	(d)
Forest Research Institute, Inc.	1	9,070,892	1.8	215,659	1.1	2017
Prentice-Hall, Inc.	1	8,643,699	1.7	474,801	2.3	2015
ICAP Securities USA, LLC	2	7,608,702	1.5	180,946	0.9	(e)
Montefiore Medical Center	7	7,~~369~~432,~~543~~828	1.5	~~312~~314,~~824~~049	1.5	(ef)
ICAP Securities USA, LLC	1	6,904,128	1.4	159,834	0.8	2017
KPMG, LLP	3	6,483,411	1.3	224,364	1.1	(g)
TD Ameritrade Online Holdings	1	6,294,189	1.3	188,776	0.9	2020
Daiichi Sankyo, Inc.	1	6,381,982	1.3	171,900	0.8	2022
Daiichi Sankyo, Inc.	1	6,256,513	1.3	171,900	0.8	2022
TD Ameritrade Online Holdings	1	6,223,323	1.3	188,776	0.9	2020
Merrill Lynch Pierce Fenner	12	56,~~883~~173,~~780~~816	1.2	~~294~~303,~~189~~545	1.45	~~2017~~(h)
Wyndham Worldwide Operations	1	4,983,862	1.0	203,506	1.0	2029
CohnReznick, LLP	3	4,983,681	1.0	170,141	0.8	(i)
New Cingular Wireless PCS, LLC	2	4,841,564	1.0	212,816	1.0	~~2018~~(j)
KPMG, LLP	2	4,676,177	0.9	170,023	0.8	(f)
HQ Global Workplaces, LLC	15	4,691,873	0.9	244,120	1.2	(k)
Vonage America, Inc.	1	4,~~427~~515,~~500~~000	0.9	350,000	1.7	~~2017~~2023
CohnReznick, LLP	2	4,333,954	0.9	155,056	0.7	(g)
HQ Global Workplaces, LLC	14	4,177,984	0.8	228,214	1.1	(h)
Arch Insurance Company	1	4,005,563	0.8	106,815	0.5	2024
AECOM Technology Corporation	1	3,707,752	0.7	91,414	0.4	2029
Allstate Insurance Company	6	3,364,195	0.7	141,164	0.7	(i)
Brown Brothers Harriman & Co.	1	3,673,536	0.7	114,798	0.6	2026
Morgan Stanley Smith Barney	3	3,665,965	0.7	129,896	0.6	(l)
UBS Financial Services, Inc.	3	3,606,759	0.7	127,429	0.6	(m)
Allstate Insurance Company	5	3,250,962	0.7	135,816	0.7	(n)
SunAmerica Asset Management, LLC	1	3,167,756	0.6	69,621	0.3	2018
Alpharma, LLC	1	3,142,580	0.6	112,235	0.6	2018
Tullett Prebon Holdings Corp.	1	3,127,970	0.6	100,759	0.5	2023
United Water Management & Services, Inc.	2	3,116,100	0.6	141,260	0.7	(j)
TierPoint New York, LLC	2	3,014,150	0.6	131,078	0.6	2024
Morgan Stanley Smith Barney	3	3,099,988	0.6	103,173	0.5	(k)
Alpharma, LLC	1	3,098,092	0.6	112,235	0.5	2018
Xand Operations, LLC	2	3,014,150	0.6	131,078	0.6	2024
Plymouth Rock Management Company
of New Jersey	2	2,961,873	0.6	116,889	0.6	(l)
E*Trade Financial Corporation	1	2,930,757	0.6	106,573	0.5	2022
Natixis North America, Inc.	1	2,823,569	0.6	89,907	0.4	2021
Continental Casualty Company	2	2,784,736	0.6	100,712	0.5	(m)
AAA Mid-Atlantic, Inc.	2	2,779,829	0.6	129,784	0.6	(o)
AAA Mid-Atlantic, Inc.	2	2,772,589	0.6	129,784	0.6	(n)
SUEZ Water Management & Services Inc.	1	2,727,383	0.6	121,217	0.6	(p)
Tradeweb Markets, LLC	1	2,721,070	0.5	65,242	0.3	2027
Plymouth Rock Management Company
Connell Foley, LLP	2	2,657,218	0.5	97,822	0.5	(o)
of New Jersey	2	2,725,811	0.6	106,618	0.5	2020
Virgin Mobile USA, LP	1	2,614,528	0.5	93,376	0.4	2016
Tradeweb Markets, LLC	1	2,721,070	0.6	65,242	0.3	2027
New Jersey Turnpike Authority	1	2,605,798	0.5	100,223	0.5	2017
Lowenstein Sandler LLP	1	2,540,933	0.5	98,677	0.5	2017
Continental Casualty Company	2	2,596,584	0.5	94,224	0.5	(q)
Savvis Communications Corporation	1	2,430,116	0.5	71,474	0.3	2025
Lowenstein Sandler LLP	1	2,565,602	0.5	98,677	0.5	2017
UBS Financial Services, Inc.	3	2,391,327	0.5	82,413	0.4	(p)
Connell Foley, LLP	2	2,475,314	0.5	95,130	0.5	(r)
Tower Insurance Company of New York	1	2,306,760	0.5	76,892	0.4	2023
Bunge Management Services, Inc.	1	2,372,387	0.5	91,509	0.4	(s)
Bozzuto & Associates, Inc.	1	2,301,992	0.5	104,636	0.5	2025
Movado Group, Inc.	1	2,359,824	0.5	98,326	0.5	2018
Movado Group, Inc.	1	2,261,498	0.5	98,326	0.5	2018
Bozzuto & Associates, Inc.	1	2,359,542	0.5	104,636	0.5	2025
Norris, McLaughlin & Marcus, PA	1	2,259,736	0.5	86,913	0.4	2017
Herzfeld & Rubin, P.C.	1	2,337,363	0.5	56,322	0.3	2030
Pitney Bowes Software, Inc.	1	2,253,645	0.5	73,379	0.4	2015
AMTrust Financial Services, Inc.	1	2,306,760	0.5	76,892	0.4	2023
Bunge Management Services, Inc.	1	2,221,151	0.4	66,303	0.3	2020
Savvis Communications Corporation	1	2,287,168	0.5	71,474	0.4	2025
Barr Laboratories, Inc.	1	2,209,107	0.4	89,510	0.4	2015
Norris, McLaughlin & Marcus, PA	1	2,259,738	0.5	86,913	0.4	2017
Barr Laboratories, Inc.	1	2,209,107	0.4	89,510	0.4	2016
Sumitomo Mitsui Banking Corp.	2	2,170,167	0.4	71,153	0.3	2021
Herzfeld & Rubin, P.C.	1	2,140,236	0.4	56,322	0.3	2030
New Jersey City University	1	2,084,614	0.4	68,348	0.3	2035
Sun Chemical Management, LLC	1	2,034,798	0.4	66,065	0.3	2019
Syncsort, Inc.	1	1,991,439	0.4	73,757	0.4	2018
Totals		208,671,516	41.9	7,585,579	36.4
Jeffries, LLC	1	1,945,653	0.4	62,763	0.3	2023
American General Life Insurance Company	1	1,854,975	0.4	74,199	0.4	2024
Bressler, Amery & Ross, P.C.	1	1,766,850	0.4	70,674	0.3	2023
Totals		205,486,863	41.5	7,233,905	35.1

See footnotes on subsequent page.

Significant Tenants Footnotes

(a) Annualized base rental revenue is based on actual December ~~2014~~2015 billings times 12. For leases whose rent commences after January 1, ~~2015~~2016, annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above. (b) 271,533 square feet expire in 2018; 117,118 square feet expire in 2019. (c) 20,649 square feet expire in 2018; 24,607 square feet expire in 2019; 237,350 square feet expire in 2029. (d) ~~194~~70,~~872~~163 square feet expire in ~~2015; 15,851 square feet expire in~~ 2016; 7147,~~046~~606 square feet expire in 2018; 2628,~~276~~102 square feet expire in 2020; 21,596 square feet expire in 2022; 19,702 square feet expire in 2023. (e) 21159,~~110~~834 square feet expire in ~~2015~~2017; 2021,~~712~~112 square feet expire in 2025. (f) 26,535 square feet expire in 2016; 5975,~~302~~814 square feet expire in 2017; 36,385 square feet expire in 2018; 133,763 square feet expire in 2019; 8,600 square feet expire in 2020; 14,842 square feet expire in 2021; 9,610 square feet expire in 2022; 8,500 square feet expire in 2023. (fg) 88,652 square feet expire in 2017; 81,371 square feet expire in 2019; 54,341 square feet expire in 2026. (gh) 294,189 square feet expire in 2017; 9,356 square feet expire in 2019. (i) 15,085 square feet expire in 2017; 1,021 square feet expire in 2018; 154,035 square feet expire in 2020. (hj) 2265,~~279~~751 square feet expire in ~~2015~~2016; 147,065 square feet expire in 2018. (k) 12,407 square feet expire in 2017; 41,549 square feet expire in 2019; 21,008 square feet expire in 2020; 1432,~~724~~579 square feet expire in 2021; 3615,~~158~~523 square feet expire in 2023; 80105,~~089~~646 square feet expire in 2024; 15,408 square feet expire in 2027. (il) 526,~~348~~262 square feet expire in ~~2015~~2018; 461,~~014~~239 square feet expire in ~~2016~~2025; 7542,~~740~~395 square feet expire in ~~2017;~~2026. 51(m) 42,~~606~~360 square feet expire in ~~2018~~2016; 413,~~456~~340 square feet expire in ~~2019.~~2022; ~~(j) 24~~26,~~900~~713 square feet expire in ~~2015~~2024; ~~116~~45,~~360~~016 square feet expire in ~~2035~~2026. (kn) 264,~~262~~014 square feet expire in ~~2018~~2016; 3475,~~516~~740 square feet expire in ~~2025~~2017; 4251,~~395~~606 square feet expire in ~~2026.~~2018; ~~(l) 10~~4,~~271~~456 square feet expire in ~~2015;~~2019. ~~106~~(o) 9,~~618~~784 square feet expire in ~~2020.~~2017; ~~(m) 6~~120,~~488~~000 square feet expire in ~~2015;~~2027. 19(p) 4,~~416~~857 square feet expire in 2016; 74116,~~808~~360 square feet expire in ~~2031~~2035. (nq) 919,~~784~~416 square feet expire in ~~2017~~2016; ~~120~~74,~~000~~808 square feet expire in ~~2022~~2031. (or) 8477,~~835~~719 square feet expire in ~~2015~~2016; 1217,~~987~~411 square feet expire in 2026. (ps) 4225,~~360~~206 square feet expire in 2016; 1366,~~340~~303 square feet expire in ~~2022; 26,713 square feet expire in 2024~~2025.

SCHEDULE OF LEASE EXPIRATIONS~~: ALL CONSOLIDATED PROPERTIES~~

The following table sets forth a schedule of lease expirations for the total of the Company’s office, office/flex, industrial/warehouse and stand-alone retail properties included in the Consolidated Properties beginning January 1, ~~2015~~2016, assuming that none of the tenants exercise renewal or termination options:

						Average
						Annual Base
			Percentage Of			Rent Per Net
		Net Rentable	Total Leased		Annualized	Rentable	Percentage Of
		Area Subject	Square Feet		Base Rental	Square Foot	Annual Base
	Number Of	To Expiring	Represented		Revenue Under	Represented	Rent Under
Year Of	Leases	Leases	By Expiring		Expiring	By Expiring	Expiring
Expiration	Expiring (a)	(Sq. Ft.)	Leases (%)		Leases ($) (b)	Leases ($)	Leases (%)
2015	268	2,249,007		10.9	49,665,016	22.08	10.1
2016	267	1,572,681		7.7	36,045,597	22.92	7.3
2016	308	2,415,019		11.6	54,613,393	22.61	11.1
2017	329	3,591,173		17.6	90,429,372	25.18	18.3
2017	293	3,541,656		17.0	84,454,331	23.85	17.0
2018	297	2,893,301		14.2	66,931,429	23.13	13.5
2018	257	2,440,884		11.7	55,229,167	22.63	11.1
2019	252	2,459,708		12.1	53,078,243	21.58	10.7
2019	217	2,181,594		10.5	47,051,967	21.57	9.5
2020	218	1,748,600		8.6	38,862,232	22.22	7.9
2020	178	1,636,918		7.9	36,339,022	22.20	7.3
2021	156	1,511,466		7.4	39,344,311	26.03	8.0
2021	89	1,189,736		5.7	31,737,140	26.68	6.4
2022	104	1,100,641		5.4	27,239,446	24.75	5.5
2022	80	1,107,309		5.3	27,298,832	24.65	5.5
2023	77	1,580,626		7.8	36,177,980	22.89	7.3
2023	46	1,050,586		5.0	26,970,030	25.67	5.4
2024	63	1,127,620		5.5	28,279,528	25.08	5.7
2024	55	1,069,540		5.1	26,755,463	25.02	5.4
2025	37	679,680		3.3	15,737,169	23.15	3.2
2025	33	585,206		2.8	12,976,959	22.18	2.6
2026	39	803,722		4.0	22,626,630	28.15	4.6
2026 and thereafter	31	1,358,723		6.5	42,680,036	31.41	8.6
2027 and thereafter	29	1,303,149		6.4	39,674,099	30.44	8.0
Totals/Weighted
Average	1,~~855~~868	20,~~826~~372,~~178~~367	(c) (d)	100.0	~~495~~494,~~771~~426,~~356~~036	2324.8127	100.0

(a)	Includes office, office/flex, industrial/warehouse and stand-alone retail property tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(b) Annualized base rental revenue is based on actual December ~~2014~~2015 billings times 12. For leases whose rent commences after January 1, ~~2015~~2016 annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.

(c) Includes leases expiring December 31, ~~2014~~2015 aggregating ~~184~~69,~~140~~522 square feet and representing annualized rent of $41,~~455~~564,~~355~~211 for which no new leases were signed.

(d)	Reconciliation to Company’s total net rentable commercial square footage is as follows:

		Square Feet
Square footage leased to commercial tenants		20,~~826~~372,~~178~~367
Square footage used for corporate offices, management offices, building use, retail tenants, food services, other ancillary service tenants and occupancy adjustments		~~472~~492,~~559~~866
Square footage unleased		3,~~989~~346,~~853~~647
Total net rentable commercial square footage (does not include land leases)		2524,~~288~~211,~~590~~880

SCHEDULE OF LEASE EXPIRATIONS: OFFICE PROPERTIES

The following table sets forth a schedule of lease expirations for the office properties beginning January 1, 2015, assuming that none of the tenants exercise renewal or termination options:

						Average
						Annual Base
			Percentage Of			Rent Per Net
		Net Rentable	Total Leased		Annualized	Rentable	Percentage Of
		Area Subject	Square Feet		Base Rental	Square Foot	Annual Base
	Number Of	To Expiring	Represented By		Revenue Under	Represented	Rent Under
Year Of	Leases	Leases	Expiring		Expiring	By Expiring	Expiring
Expiration	Expiring (a)	(Sq. Ft.)	Leases (%)		Leases ($) (b)	Leases ($)	Leases (%)
2015	212	1,819,461		11.2	44,880,149	24.67	10.4
2016	225	1,630,800		10.2	43,292,379	26.55	10.0
2017	217	2,932,320		18.3	76,144,181	25.97	17.6
2018	168	1,589,362		9.9	44,842,544	28.21	10.4
2019	161	1,453,549		9.1	36,781,619	25.30	8.5
2020	133	1,245,356		7.8	31,136,002	25.00	7.2
2021	75	1,031,652		6.4	29,557,295	28.65	6.8
2022	68	968,505		6.0	25,357,427	26.18	5.9
2023	36	835,658		5.2	24,075,147	28.81	5.6
2024	39	848,266		5.3	23,320,054	27.49	5.4
2025	17	373,419		2.3	10,241,533	27.43	2.4
2026 and thereafter	30	1,338,438		8.3	42,265,816	31.58	9.8
Totals/Weighted
Average	1,381	16,066,786	(c)	100.0	431,894,146	26.88	100.0

(a) Includes office tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(b) Annualized base rental revenue is based on actual December 2014 billings times 12. For leases whose rent commences after January 1, 2015 annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.

(c) Includes leases expiring December 31, 2014 aggregating 180,810 square feet and representing annualized rent of $4,420,390 for which no new leases were signed.

SCHEDULE OF LEASE EXPIRATIONS: OFFICE/FLEX PROPERTIES

The following table sets forth a schedule of lease expirations for the office/flex properties beginning January 1, 2015, assuming that none of the tenants exercise renewal or termination options:

						Average
						Annual Base
			Percentage Of			Rent Per Net
		Net Rentable	Total Leased		Annualized	Rentable	Percentage Of
		Area Subject	Square Feet		Base Rental	Square Foot	Annual Base
	Number Of	To Expiring	Represented By		Revenue Under	Represented	Rent Under
Year Of	Leases	Leases	Expiring		Expiring	By Expiring	Expiring
Expiration	Expiring (a)	(Sq. Ft.)	Leases (%)		Leases ($) (b)	Leases ($)	Leases (%)
2015	53	418,832		9.6	4,574,567	10.92	7.7
2016	79	763,971		17.5	11,045,354	14.46	18.7
2017	76	609,336		14.0	8,310,150	13.64	14.1
2018	86	758,039		17.4	9,790,650	12.92	16.6
2019	53	683,600		15.7	9,460,932	13.84	16.0
2020	42	310,440		7.1	4,101,977	13.21	7.0
2021	14	158,084		3.6	2,179,845	13.79	3.7
2022	12	138,804		3.2	1,941,405	13.99	3.3
2023	7	127,407		2.9	1,921,530	15.08	3.3
2024	15	175,274		4.0	3,018,649	17.22	5.1
2025	14	195,051		4.5	2,265,106	11.61	3.8
2026 and thereafter	1	20,285		0.5	414,220	20.42	0.7
Totals/Weighted
Average	452	4,359,123	(c)	100.0	59,024,385	13.54	100.0

(a) Includes office/flex tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(b) Annualized base rental revenue is based on actual December 2014 billings times 12. For leases whose rent commences after January 1, 2015, annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above. Includes office/flex tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(c) Includes leases expiring December 31, 2014 aggregating 3,330 square feet and representing annualized rent of $34,965 for which no new leases were signed.

SCHEDULE OF LEASE EXPIRATIONS: INDUSTRIAL/WAREHOUSE PROPERTIES

The following table sets forth a schedule of lease expirations for the industrial/warehouse properties beginning January 1, 2015, assuming that none of the tenants exercise renewal or termination options:

						Average
						Annual Base
			Percentage Of			Rent Per Net
		Net Rentable	Total Leased		Annualized	Rentable	Percentage Of
		Area Subject	Square Feet		Base Rental	Square Foot	Annual Base
	Number Of	To Expiring	Represented By		Revenue Under	Represented	Rent Under
Year Of	Leases	Leases	Expiring		Expiring	By Expiring	Expiring
Expiration	Expiring (a)	(Sq. Ft.)	Leases (%)		Leases ($) (b)	Leases ($)	Leases (%)
2015	1	7,700		2.0	138,600	18.00	3.2
2016	3	19,188		5.1	251,804	13.12	5.9
2018	3	93,483		24.6	595,973	6.38	13.9
2019	3	44,445		11.7	809,416	18.21	18.9
2020	3	81,122		21.4	1,101,043	13.57	25.7
2023	3	87,521		23.1	973,353	11.12	22.7
2024	1	46,000		12.1	416,760	9.06	9.7
Totals/Weighted
Average	17	379,459		100.0	4,286,949	11.30	100.0

(a) Includes industrial/warehouse tenants only. Excludes leases for amenity, retail, parking and month-to-month industrial/warehouse tenants. Some tenants have multiple leases.

(b) Annualized base rental revenue is based on actual December 2014 billings times 12. For leases whose rent commences after January 1, 2015, annualized base rental revenue is based on the first full month’s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, the historical results may differ from those set forth above.

SCHEDULE OF LEASE EXPIRATIONS: STAND-ALONE RETAIL PROPERTIES

The following table sets forth a schedule of lease expirations for the stand-alone retail properties beginning January 1, 2015 assuming that none of the tenants exercise renewal or termination options:

						Average
						Annual Base
			Percentage Of			Rent Per Net
		Net Rentable	Total Leased		Annualized	Rentable	Percentage Of
		Area Subject	Square Feet		Base Rental	Square Foot	Annual Base
	Number Of	To Expiring	Represented By		Revenue Under	Represented	Rent Under
Year Of	Leases	Leases	Expiring		Expiring	By Expiring	Expiring
Expiration	Expiring (a)	(Sq. Ft.)	Leases (%)		Leases ($) (b)	Leases ($)	Leases (%)
2015	2	3,014		14.5	71,700	23.79	12.7
2016	1	1,060		5.1	23,856	22.51	4.2
2025	2	16,736		80.4	470,320	28.10	83.1
Totals/Weighted
Average	5	20,810		100.0	565,876	27.19	100.0

(a) Includes stand-alone retail property tenants only.

INDUSTRY DIVERSIFICATION

The following table lists the Company’s 30 largest commercial tenants industry classifications based on annualized contractual base rent of the Consolidated Properties:

	Annualized	Percentage of		Percentage of
	Base Rental	Company	Square	Total Company
	Revenue	Annualized Base	Feet Leased	Leased
Industry Classification (a)	($) (b) (c) (d)	Rental Revenue (%)	(c) (d)	Sq. Ft. (%)
Securities, Commodity Contracts & Other Financial	6773,~~022~~300,~~645~~946	1314.68	2,~~214~~411,~~666~~919	1011.78
Insurance Carriers & Related Activities	4953,~~707~~005,~~674~~697	10.17	1,~~830~~909,~~595~~858	8.9.4
Manufacturing	37,~~019~~064,~~351~~034	7.5	1,~~732~~727,~~265~~033	8.35
Legal Services	3433,~~368~~985,~~512~~830	6.9	1,~~283~~256,~~503~~507	6.2
Credit Intermediation & Related Activities	31,~~667~~980,~~951~~298	6.45	1,~~041~~043,~~002~~929	5.01
Telecommunications	21,423,813	4.3	1,128,014	5.4
Computer System Design Services	23,435,938	4.7	998,329	4.9
Computer System Design Svcs.	21,394,596	4.3	940,671	4.5
Accounting/Tax Prep.	22,512,824	4.6	811,535	4.0
Health Care & Social Assistance	1921,~~568~~929,~~374~~119	34.94	1,~~047~~141,~~300~~578	5.06
Accounting/Tax Prep.	19,139,241	3.9	715,463	3.4
Wholesale Trade	17,043,454	3.4	1,145,478	5.6
Wholesale Trade	17,961,068	3.6	1,210,602	5.8
Telecommunications	16,633,309	3.4	904,012	4.4
Scientific Research/Development	1415,~~949~~345,~~699~~895	3.01	~~489~~506,~~757~~622	2.45
Public Administration	1415,~~362~~001,~~713~~287	23.90	~~530~~532,~~258~~084	2.56
Architectural/Engineering	13,~~495~~795,~~108~~448	2.78	~~521~~535,~~491~~368	2.56
Admin & Support, Waste Mgt. & Remediation Svcs.	12,618,315	2.5	616,428	3.0
Admin & Support, Waste Mgt. & Remediation Services	13,677,967	2.8	669,030	3.3
Arts, Entertainment & Recreation	11,871,083	2.4	709,503	3.4
Management/Scientific	11,518,092	2.3	440,580	2.2
Other Professional	11,545,871	2.3	505,500	2.4
Other Services (except Public Administration)	11,505,422	2.3	464,951	2.3
Other Services (except Public Administration)	11,148,055	2.2	446,654	2.1
Other Professional	10,851,013	2.2	495,727	2.4
Management/Scientific	11,003,200	2.2	427,923	2.1
Real Estate & Rental & Leasing	8,304,371	1.7	441,061	2.2
Real Estate & Rental & Leasing	8,408,224	1.7	452,853	2.2
Advertising/Related Services	7,942,701	1.6	286,754	1.4
Advertising/Related Services	7,752,453	1.6	288,134	1.4
Retail Trade	7,842,352	1.6	467,833	2.3
Retail Trade	7,684,538	1.6	478,344	2.3
Utilities	7,376,726	1.5	325,889	1.6
Utilities	6,845,346	1.4	292,220	1.4
Transportation	6,309,982	1.3	315,484	1.5
Accommodation & Food Services	6,329,326	1.3	270,962	1.3
Construction	4,983,050	1.0	276,448	1.4
Transportation	5,607,017	1.1	282,731	1.4
Educational Services	4,651,356	0.9	192,576	0.9
Broadcasting	4,799,462	1.0	173,323	0.8
Data Processing Services	3,963,335	0.8	144,947	0.7
Construction	4,575,212	0.9	262,651	1.3
Publishing Industries	3,776,840	0.8	185,577	0.9
Educational Services	4,547,641	0.9	192,979	0.9
Arts, Entertainment & Recreation	3,300,499	0.7	240,102	1.2
Data Processing Services	4,094,078	0.8	144,448	0.7
Agriculture, Forestry, Fishing & Hunting	2,372,387	0.5	91,509	0.4
Publishing Industries	3,908,541	0.8	193,519	0.9
Information Services	2,031,789	0.4	67,021	0.3
Information Services	3,708,762	0.7	132,619	0.6
Broadcasting	1,812,224	0.4	52,732	0.3
Other	7,~~243~~171,~~487~~851	1.54	~~269~~289,~~800~~894	1.25
TOTAL	~~495~~494,~~771~~426,~~356~~036	100.0	20,~~826~~372,~~178~~367	100.0

(a)	The Company’s tenants are classified according to the U.S. Government’s North American Industrial Classification System (NAICS).

(b) Annualized base rental revenue is based on actual December ~~2014~~2015 billings times 12. For leases whose rent commences after January 1, ~~2015~~2016, annualized base rental revenue is based on the first full month’'s billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.

(c) Includes leases in effect as of the period end date, some of which have commencement dates in the future, and leases expiring December 31, ~~2014~~2015 aggregating ~~184~~69,~~140~~522 square feet and representing annualized rent of $41,~~455~~564,~~355~~211 for which no new leases were signed.

(d)	Includes office, office/flex, industrial/warehouse and stand-alone retail tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

3935

MARKET DIVERSIFICATION

The following table lists the Company’s markets ~~(MSAs)~~, based on annualized commercial contractual base rent of the Consolidated Properties:

		Percentage Of
		Company
	Annualized Base	Annualized	Total Property
	Rental Revenue	Base Rental	Size Rentable	Percentage Of
Market (MSA)	($) (a) (b) (c)	Revenue (%)	Area (b) (c)	Rentable Area (%)
Market	($) (a) (b) (c)	Revenue (%)	Area (b) (c)	Rentable Area (%)
Jersey City, NJ	~~112~~119,~~273~~195,~~764~~761	2224.61	4,334,714	17.09
Newark, NJ
(Essex-Morris-Union Counties)	~~109~~110,~~519~~195,~~236~~104	22.13	5,~~905~~420,~~646~~940	2322.4
Bergen-Passaic, NJ	72,193,675	14.6	3,911,522	15.5
Westchester-Rockland, NY	69,084,337	14.0	3,895,912	16.1
Westchester-Rockland, NY	67,999,671	13.7	3,945,912	15.6
Bergen-Passaic, NJ	63,016,235	12.7	3,315,518	13.7
Washington, DC-MD-VA-WV	28,503,264	5.7	1,292,807	5.1
Middlesex-Somerset-Hunterdon, NJ	29,242,482	5.9	1,316,655	5.4
Monmouth-Ocean, NJ	28,~~093~~543,~~138~~735	5.78	1,620,863	6.47
Middlesex-Somerset-Hunterdon, NJ	27,672,167	5.6	1,241,055	4.9
Washington, DC-MD-VA-WV	26,863,635	5.4	1,292,807	5.3
Trenton, NJ	1918,~~747~~347,~~125~~675	43.07	956,597	34.80
New York (Manhattan)	17,~~874~~966,~~043~~697	3.6	524,476	2.12
Philadelphia, PA-NJ	7,739,929	1.6	1,281,998	5.1
Southern NJ	7,746,322	1.6	1,260,398	5.2
Stamford-Norwalk, CT	4,~~155~~224,~~344~~053	0.89	273,000	1.1
Totals	~~495~~494,~~771~~426,~~356~~036	100.0	2524,~~288~~211,~~590~~880	100.0

(b) Includes leases in effect as of the period end date, some of which have commencement dates in the future, and leases expiring December 31, ~~2014~~2015 aggregating ~~184~~69,~~140~~522 square feet and representing annualized rent of $41,~~455~~564,~~355~~211 for which no new leases were signed.

(c)	Includes office, office/flex, industrial/warehouse and stand-alone retail tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

4036

ITEM 3. LEGAL PROCEEDINGS

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

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

4137

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

MARKET INFORMATION

The shares of the Corporation’s ~~Common~~common ~~Stock~~stock are traded on the New York Stock Exchange (“NYSE”) under the symbol “CLI.” There is no established public trading market for the Company’s common units.

On ~~June~~May 918, ~~2014~~2015, the Corporation filed with the NYSE its annual CEO Certification and Annual Written Affirmation pursuant to Section 303A.12 of the NYSE Listed Company Manual, each certifying that the Corporation was in compliance with all of the listing standards of the NYSE.

HOLDERS

On February 1322, ~~2015~~2016, the Company had ~~113~~99 owners of limited partnership units and one owner of General Partnership units.

RECENT SALES OF UNREGISTERED SECURITIES; USES OF PROCEEDS FROM REGISTERED SECURITIES

During the three months ended December 31, ~~2014~~2015, the Corporation issued 8273,~~168~~298 shares of ~~Common~~common ~~Stock~~stock to holders of common units in the Company upon the redemption of such common units in private offerings pursuant to Section 4(a)(2) of the Securities Act. The holders of the common units were limited partners of the Company and accredited investors under Rule 501 of the Securities Act. The common units were converted into an equal number of shares of ~~Common~~common ~~Stock~~stock. The Corporation has registered the resale of such shares under the Securities Act.

DIVIDENDS AND DISTRIBUTIONS

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

4238

PERFORMANCE GRAPH

The following graph compares total stockholder returns of the Corporation from the last five fiscal years to the Standard & Poor’s 500 Index (“S&P 500”) and to the National Association of Real Estate Investment Trusts, Inc.’s FTSE NAREIT Equity REIT Index (“NAREIT”). The graph assumes that the value of the investment in the Corporation’s Common Stock and in the S&P 500 and NAREIT indices was $100 at December 31, ~~2009~~2010 and that all dividends were reinvested. The price of the Corporation’s Common Stock on December 31, ~~2009~~2010 (on which the graph is based) was $3433.5706. The past stockholder return shown on the following graph is not necessarily indicative of future performance.

Comparison of Five-Year Cumulative Total Return

4339

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Equity Compensation Plan Information

The following table summarizes information, as of December 31, ~~2014~~2015, relating to equity compensation plans of the Corporation (including individual compensation arrangements) pursuant to which equity securities of the Corporation are authorized for issuance.

Plan Category	(a) Number of Securities to be Issued Upon Exercise of Outstanding Options and Rights		(b) Weighted-Average Exercise Price of Outstanding Options and Rights		(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column(a))
Equity Compensation Plans
Approved by
Stockholders……………………	~~356~~1,~~946~~056,213	(2)	3317.3633	(3)	43,~~424~~416,~~013~~581
Equity Compensation Plans
Not Approved by
Stockholders(1)…………………	~~157~~178,~~730~~039		N/A		N/A	(4)
Total	~~514~~1,~~676~~234,252		N/A		43,~~424~~416,~~013~~581

(1) The only plan included in the table that was adopted without stockholder approval was the Directors’ Deferred Compensation Plan. See Note 1115: Mack-Cali Realty, L.P.’s Partners’ Capital - Deferred Stock Compensation Plan For Directors.

(2) Includes ~~346~~98,~~946~~669 shares of unvested restricted ~~Common~~common ~~Stock~~stock, 805,000 unvested options, 38,136 unvested restricted stock units (RSUs), including unvested dividend equivalents thereon, and 114,408 unvested performance share units (PSUs), including unvested dividend equivalents thereon.

(3) Weighted- average exercise price of outstanding options; excludes restricted ~~Common~~common ~~Stock~~stock, RSUs and PSUs.

(4)

The Directors’ Deferred Compensation Plan does not limit the number of stock units issuable thereunder, but applicable SEC and NYSE rules restricted the aggregate number of stock units issuable thereunder to one percent (1%) of the Corporation’s outstanding shares when the plan commenced on January 1, 1999.

4440

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data on a consolidated basis for the Company. The consolidated selected operating and balance sheet data of the Company as of December 31, 2015, 2014, 2013, 2012, ~~2011~~ and ~~2010~~2011, and for the years then ended have been derived from the Company’s financial statements for the respective periods.

Operating Data (a)		~~Year Ended December 31,~~		Year Ended December 31,
In thousands, except per unit data		~~2014~~2015		~~2013~~2014		~~2012~~2013		~~2011~~2012		~~2010~~2011
Total revenues	$	~~636~~594,~~799~~883	$	~~667~~636,~~031~~799	$	~~650~~667,~~632~~031	$	~~652~~650,~~235~~632	$	~~715~~652,~~492~~235
Property expenses (b)	$	~~276~~246,~~193~~604	$	~~254~~276,~~474~~193	$	~~241~~254,~~955~~474	$	~~248~~241,~~107~~955	$	~~250~~248,~~763~~107
Direct construction costs	$	-	$	~~14,945~~-	$	1214,~~647~~945	$	1112,~~458~~647	$	6011,~~255~~458
Real estate services expenses	$	2625,~~136~~583	$	2226,~~716~~136	$	322,~~746~~716	$	13,~~065~~746	$	1,~~719~~065
General and administrative (c)	$	7349,~~169~~147	$	4771,~~682~~051	$	47,~~664~~040	$	3541,~~137~~891	$	3435,~~464~~137
Interest expense	$	112,878	$	123,701	$	122,039	$	123,858	$	148,033
Impairments	$	197,919	$	-	$	110,853	$	9,845	$	-
Income (loss) from continuing operations	$	31,391	$	(89,686)	$	37,566	$	59,499	$	46,431
Interest expense	$	103,051	$	112,878	$	123,701	$	122,039	$	123,858
Net income (loss) available to common unitholders	$	32,169	$	(16,859)	$	46,599	$	80,053	$	61,701
Realized gains (losses) on disposition of
rental property, net	$	53,261	$	54,848	$	-	$	-	$	-
Income (loss) from continuing operations	$	(142,052)	$	31,391	$	(89,686)	$	37,566	$	59,499
Discontinued operations: Realized gains (losses)
and unrealized losses on disposition of
rental property and impairments, net	$	-	$	-	$	59,520	$	(13,175)	$	-
Net income (loss) available to common unitholders	$	(141,008)	$	32,169	$	(16,859)	$	46,599	$	80,053
Income (loss) from continuing operations
per unit – basic	$	0(1.3241)	$	(0.~~88)~~32	$	(0.3888)	$	0.5938	$	0.4859
Income (loss) from continuing operations
per unit – diluted	$	0(1.3241)	$	(0.~~88)~~32	$	(0.3888)	$	0.5938	$	0.4859
Net income (loss) per unit – basic	$	0(1.3241)	$	(0.~~17)~~32	$	(0.4717)	$	0.8147	$	0.6781
Net income (loss) per unit – diluted	$	0(1.3241)	$	(0.~~17)~~32	$	(0.4717)	$	0.8147	$	0.6781
Distributions declared per common unit	$	0.7560	$	10.3575	$	1.8035	$	1.80	$	1.80
Basic weighted average units outstanding		99100,~~999~~222		99,~~785~~999		99,~~922~~785		9899,~~855~~922		9298,~~373~~855
Diluted weighted average units outstanding		100,~~041~~222		99100,~~785~~041		99,~~996~~785		9899,~~962~~996		9298,~~477~~962
Balance Sheet Data		~~December 31,~~		December 31,
In thousands		~~2014~~2015		~~2013~~2014		~~2012~~2013		~~2011~~2012		~~2010~~2011
Rental property, before accumulated
depreciation and amortization	$	4,~~958~~807,~~179~~718	$	54,~~129~~958,~~933~~179	$	5,~~379~~129,~~436~~933	$	5,~~279~~379,~~770~~436	$	5,~~216~~279,~~720~~770
Total assets	$	4,~~192~~063,~~247~~490	$	4,~~515~~192,~~328~~247	$	4,~~526~~515,~~045~~328	$	4,~~295~~526,~~759~~045	$	4,~~362~~295,~~466~~759
Total debt (d)	$	2,~~088~~154,~~654~~920	$	2,~~362~~088,~~766~~654	$	2,~~204~~362,~~389~~766	$	12,~~914~~204,~~215~~389	$	21,~~089~~914,~~494~~215
Total liabilities	$	2,~~310~~379,~~236~~782	$	2,~~596~~310,~~873~~236	$	2,~~457~~596,~~538~~873	$	2,~~141~~457,~~759~~538	$	2,~~318~~141,~~529~~759
Total equity	$	1,~~882~~683,~~011~~708	$	1,~~918~~882,~~455~~011	$	21,~~068~~918,~~507~~455	$	2,~~154~~068,~~000~~507	$	2,~~043~~154,~~937~~000

(a)	Certain reclassifications have been made to prior period amounts in order to conform with current period presentation.

(b)	Property expenses is calculated by taking the sum of real estate taxes, utilities and operating services for each of the periods presented.

(c) Amount for the year ended December 31, 2014 includes $23.8 million of severance costs related to the ~~pending~~ departure of the Corporation’s ~~Chief~~former ~~Executive~~chief ~~Officer~~executive officer and departure of certain of the Corporation’s other executive officers in 2014.

(d)	Total debt is calculated by taking the sum of senior unsecured notes, revolving credit facilities, and mortgages, loans payable and other obligations.

4541

ITEM 7. 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. The Company owns or has interests in ~~283~~275 properties (collectively, the “Properties”), consisting of ~~264~~147 ~~commercial~~office and 109 flex properties, primarily class A office and office/flex buildings, totaling approximately 3129.09 million square feet, leased to approximately 21,~~000~~900 commercial tenants and 19 multi-family rental properties containing 5,~~484~~644 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 5.73 million square feet of additional commercial space and upapproximately ~~to 8~~11,~~104~~300 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~~In ~~changing~~September ~~work~~2015, ~~force~~the ~~demographics~~Company ~~and~~announced ~~reduced~~a ~~demand~~three-year ~~for~~strategic ~~suburban~~initiative to transform into a more concentrated owner of New Jersey Hudson River waterfront and transit-oriented office properties inand ~~its~~a ~~current~~regional ~~markets~~owner of luxury multi-family residential properties. In furtherance of this strategy, the Company ~~intends~~has tocommenced ~~continue~~a tocomprehensive ~~leverage~~review of its ~~experience~~portfolio and ~~expertise~~operations inand is developing a business strategy that focuses on reshaping its ~~core~~portfolio ~~Northeast~~over ~~markets~~time. As topart ~~pursue~~of ~~multi~~this plan, the Company anticipates that it may dispose of a significant number of its properties that do not meet its long-~~family~~term ~~rental~~goals, ~~investments~~and, in ~~those~~September ~~markets~~2015, ~~both~~compiled ~~through~~a ~~acquisitions~~list ~~and~~of ~~developments,~~its ~~both~~properties ~~wholly~~that ~~owned~~it ~~and~~considers ~~through~~as ~~joint~~non-core ~~ventures~~to its ongoing operations. ~~This~~Specifically, ~~strategy~~the ~~includes~~Company ~~selectively~~considers ~~disposing~~a non-core property to have one or more of ~~office~~the ~~and~~following ~~office/flex~~attributes: (1) assets ~~and~~that ~~re-deploying~~do ~~proceeds~~not tooffer ~~multi-family~~an ~~rental~~opportunity ~~properties,~~to ascreate ~~well~~a ascompetitive ~~the~~advantage; ~~repositioning~~(2) ofassets that produce a ~~portion~~low ofcash ~~its~~yield; ~~office~~(3) ~~properties~~assets which have physical attributes that constrain their market competitiveness; and ~~land~~(4) ~~held~~assets ~~for~~located ~~development~~in tolow ~~multi-family~~growth ~~rental~~markets. The Company believes that the potential sales of these non-core properties over time would result in total estimated sales proceeds ranging from approximately $600 million to $800 million.

As ana ~~owner~~result of ~~real~~this ~~estate~~disposition strategy, ~~almost~~for ~~all~~the ofyear ended December 31, 2015, the Company’s ~~earnings~~evaluated ~~and~~the ~~cash~~recoverability ~~flow~~of isthe ~~derived~~carrying ~~from~~values ~~rental~~of ~~revenue~~non-core ~~received~~properties ~~pursuant~~and determined that due to ~~leased~~the ~~space~~shortening atof the ~~Properties. Key~~expected ~~factors~~periods ~~that~~of ~~affect~~ownership it was necessary to reduce the ~~Company’s~~carrying ~~business~~values of 22 rental properties to their estimated fair values and ~~financial~~recorded ~~results~~an ~~include~~impairment ~~the~~charge ~~following:~~ on these properties of $192.3 million.

·As ~~the~~an ~~general~~owner ~~economic climate; · the occupancy rates~~ of ~~the~~real ~~Properties;~~estate, ·almost ~~rental~~all ~~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~~Company’s ofearnings ~~our office properties~~ and ~~the~~ cash flow ~~from~~are ~~the~~derived ~~sale~~from ofrental ~~such~~revenue ~~properties;~~received ·pursuant ~~operating~~to ~~expenses;~~leased ·space ~~anticipated~~at ~~acquisition and development costs for multi-family rental properties and~~ the ~~revenues~~Properties. Key ~~and~~factors ~~earnings~~that ~~from~~affect ~~these properties; · cost of capital; and ·~~ the ~~extent~~Company’s ofbusiness ~~acquisitions, development~~ and ~~sales~~financial ofresults ~~real~~include ~~estate.~~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 office and 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, including the execution of the Company’s current strategic initiative.

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~~Of the Company’s 10 core office markets, ~~continue~~several tohave berecently ~~weak~~shown signs of improvement, while others have stabilized. The percentage leased in the Company’s consolidated portfolio of stabilized operating commercial properties aggregating 2524 million, 2825 million and 3128 million square feet at December 31, ~~2014~~2015, ~~2013~~2014 and ~~2012~~2013, respectively, was 8486.2 percent leased at December 31, ~~2014~~2015, as compared to 8684.12 percent leased at December 31, ~~2013~~2014 and 8786.21 percent leased at December 31, ~~2012~~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 December 31, ~~2014~~2015, ~~2013~~2014 and ~~2012~~2013 aggregate ~~205~~69,~~220~~522, ~~690~~205,~~895~~220 and ~~378~~690,~~901~~895 square feet, respectively, or 0.83, 20.58 and 1.2.5 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 year ended December 31, ~~2014~~2015 (on 12,~~649~~513,~~145~~087 square feet of renewals) ~~decreased~~increased an average of 40.72 percent compared to rates that were in effect under the prior leases, as compared to a 74.17 percent decrease during ~~2013~~2014 (on 21,~~420~~649,~~483~~145 square feet of renewals) and a 27.41 percent decrease in ~~2012~~2013 (on 2,~~221~~420,~~503~~483 square feet of renewals). Estimated lease costs for the renewed leases in ~~2014~~2015 averaged $2.3385 per square foot per year for a weighted average lease term of 43.06 years, estimated lease costs for the renewed leases in ~~2013~~2014 averaged $2.2233 per square foot per year for a weighted average lease term of 34.80 years and estimated lease costs for the renewed leases in ~~2012~~2013 averaged $2.0622 per square foot per year for a weighted average lease term of 43.08 years. The Company has achieved positive leasing results in its core markets recently. It believes that commercial vacancy rates may ~~continue~~decrease ~~to increase~~ and commercial rental rates may ~~continue~~increase ~~to decline~~ in some of its markets in ~~2015~~2016 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 in the near-term is not renewing its lease.~~ As of December 31, ~~2014~~2015, commercial leases which comprise approximately 107.13 and 18.3 percent of the Company’s annualized base rent are scheduled to expire during the ~~year~~years ended December 31, ~~2015~~2016 and 2017, respectively. With the ~~decline~~positive ofleasing ~~rental~~results ~~rates in~~ the Company’s ~~office~~has ~~markets~~achieved ~~over the past few years, as leases expire~~ in ~~2015,~~many ~~assuming~~of noits ~~further~~markets ~~changes in current market rental rates~~recently, the Company ~~expects~~believes that ~~the~~ rental rates it is likely to achieve on new leases will generally be, on average, not lower than ~~the~~ rates currently being paid,. Although ~~thereby~~the ~~resulting~~Company has recently achieved positive leasing activity, primarily in ~~less~~its ~~revenue~~core ~~from~~markets, if the ~~same~~recent ~~space. As~~leasing aresults ~~result~~do ofnot ~~the~~prove ~~above~~to ~~factors~~be sustaining during 2016 and beyond, the Company’s ~~future~~rental ~~earnings~~rates ~~and~~it ~~cash~~may ~~flow~~achieve ~~may~~on ~~continue~~new toleases may be ~~negatively~~lower ~~impacted~~than bythe ~~current~~rates ~~market~~currently ~~conditions~~being ~~affecting~~paid, ~~its~~resulting ~~commercial~~in ~~portfolio~~the potential for less revenue from the same space.

46As part of its strategic initiative described above, the Company may dispose of properties it considers non-core, and it may actively asset manage other low-growth real estate assets in a different way. The Company will selectively purchase assets in markets that it believes will offer above market returns. 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 Company ~~expects~~believes that ~~the~~there ~~continued~~is ~~impact~~a ofpotential ~~the~~for ~~current~~Moody’s ~~state~~or ofStandard ~~the~~& ~~economy,~~Poor’s ~~including~~to ~~historically~~lower ~~weak~~their ~~employment~~current ininvestment ~~certain~~grade ofratings ~~its~~on ~~markets~~the ~~will~~Company’s ~~continue~~senior unsecured debt to ~~have~~sub-investment agrade. Amongst ~~negative~~other ~~effect~~things, onany ~~the~~such ~~fundamentals~~downgrade ofby ~~its~~both ~~business,~~Moody’s ~~including~~and inStandard ~~particular~~& ~~lower~~Poor’s ~~occupancy~~will ~~and~~increase ~~reduced~~the ~~effective~~interest ~~rents,~~rate inon ~~respect~~outstanding ofborrowings under the Company’s ~~commercial~~$600 ~~properties. These~~million ~~conditions~~unsecured ~~would~~revolving ~~negatively~~credit ~~affect~~facility ~~the~~from ~~Company’s~~LIBOR ~~future~~plus ~~earnings~~130 ~~and~~basis ~~cash~~points to ~~flow~~LIBOR plus 170 basis points and ~~could~~the ~~have~~annual credit facility fee it pays will increase from 30 to 35 basis points. In addition, a ~~material~~downgrade ~~adverse~~in ~~effect~~its ratings to sub-investment grade would result in higher interest rates on senior unsecured debt that the Company’s ~~financial~~may ~~condition~~issue in the future as compared to issuing such debt with investment grade ratings.

As a result of the continued weakness in the Company's core office markets, the Company intends to continue 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 flow 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 flow will stabilize at levels less than historical or current returns.

As a result of the factors described above, the Company believes that there is a potential for one or more of the three nationally recognized statistical rating organizations to lower their current investment grade ratings on the Company’s senior unsecured debt to sub-investment grade in 2015. Amongst other things, any such downgrade will increase the interest rate on outstanding borrowings under the Company’s $600 million unsecured revolving credit facility from LIBOR plus 130 basis points to LIBOR plus 170 basis points and the annual credit facility fee it pays will increase from 30 to 35 basis points. In addition, a downgrade in its ratings to sub-investment grade would result in higher interest rates on senior unsecured debt that the Company may issue in the future as compared to issuing such debt with investment grade ratings.

Extended winter freeze conditions in early 2014 resulted in record electricity demand, as well as reduced natural gas production and distribution disruptions in the Company’s northeast markets. These conditions in turn resulted in significant increases in the utility costs at most of the Company’s properties (including both natural gas and electricity prices – the latter now being heavily dependent on gas fired power plants). The pricing situation has since stabilized and did not reoccur for the remainder of 2014 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 year ended December 31, ~~2014~~2015 as compared to the year ended December 31, ~~2013~~2014; · results of operations for the year ended December 31, ~~2013~~2014 as compared to the year ended December 31, ~~2012~~2013; and · liquidity and capital resources.

4743

Recent Transactions

Acquisitions

On ~~April~~January 105, ~~2014~~2016, the Company, ~~acquired~~which ~~Andover~~held ~~Place,~~ a ~~220-unit~~50 ~~multi-family~~percent ~~rental~~interest ~~property~~in ~~located~~the inproperty-owning ~~Andover~~entity, ~~Massachusetts,~~Overlook ~~for~~Ridge ~~approximately~~Apartment ~~$37.7~~Investors ~~million~~LLC, inacquired ~~cash.~~its ~~The~~remaining ~~purchase~~interest ~~price~~in ~~for~~a ~~the~~371-unit ~~property~~multi-family ~~was~~operating ~~funded~~property ~~primarily~~located ~~through~~in ~~borrowings~~Malden, ~~under~~Massachusetts ~~the~~for ~~Company’s~~$39.8 ~~unsecured revolving credit facility~~million.

On December 223, ~~2014~~2015, the Company acquired ~~developable~~a ~~land~~vacant 147,241 square-foot office property located in ~~Conshohocken~~the Mack-Cali Business Campus in Parsippany, ~~Pennsylvania~~New Jersey, for approximately $1510.3 million, which was funded ~~using~~primarily ~~available~~through ~~cash~~borrowings under the Company’s unsecured revolving credit facility. This property is currently in redevelopment by the Company.

~~The Company sold the following office properties during the year ended December 31, 2014 (dollars in thousands):~~Dispositions

				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
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

The Company disposed of the following office properties during the year ended December 31, 2015 (dollars in thousands):

(a) The Company completed the sale of these properties for approximately $221 million, comprised of: $192.5 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 $7.3 million. Net sale proceeds from the sale aggregated $196.8 million which was comprised of the $221 million gross sales price less the subordinated equity interests of $21.2 million and $3 million in closing costs. The purchasers of these properties are unconsolidated joint ventures formed between the Company and the 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 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 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 subordinated equity interest at zero.


				Rentable		Net			Net
Disposition			# of	Square		Sales			Book		Realized
Date	Property/Address	Location	Bldgs.	Feet		Proceeds			Value		Gain
01/15/15	1451 Metropolitan Drive	West Deptford, New Jersey	1	21,600	$	1,072		$	929	$	143
05/27/15	10 Independence Blvd	Warren, New Jersey	1	120,528		18,351	(a)		15,114		3,237
06/11/15	4 Sylvan Way	Parsippany, New Jersey	1	105,135		15,961	(a)		9,522		6,439
06/26/15	14 Sylvan Way	Parsippany, New Jersey	1	203,506		79,977			55,253		24,724
07/21/15	210 Clay Ave	Lyndhurst, New Jersey	1	121,203		14,766	(a)		5,202		9,564
08/24/15	5 Becker Farm Rd	Roseland, New Jersey	1	118,343		18,129	(a)		8,975		9,154

Totals			6	690,315	$	148,256		$	94,995	$	53,261

(a) The Company transferred the deeds for these properties to the lender in satisfaction of its mortgage loan obligations totaling $59.7 million. The Company recorded an impairment charge of $25.2 million during the year ended December 31, 2013 as it estimated that the carrying value of the properties may not be recoverable over their anticipated holding periods.

~~(b)~~On ~~The~~January 1, 2014, the Company ~~recorded~~adopted anthe ~~impairment~~new ~~charge~~discontinued ofoperations ~~$20.8~~accounting ~~million~~standard onand ~~these~~as the properties atdisposed of during the year ended December 31, ~~2013~~2015 asdid itnot ~~estimated~~represent ~~that~~a strategic shift (as the ~~carrying~~Company ~~value~~is ofnot ~~the~~entirely ~~properties~~exiting ~~may~~markets or property types), they have not bebeen ~~recoverable~~reflected ~~over~~as ~~their~~part ~~anticipated~~of ~~holding~~discontinued ~~periods~~operations.

OnImpairments ~~January~~on 1,Properties ~~2014,~~Held ~~the Company early adopted the new discontinued operations accounting standard~~ and as the properties sold during the year ended December 31, 2014 did 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.Used

~~Unconsolidated~~In ~~Joint~~September ~~Venture~~2015, ~~Activity~~the Company announced a three-year strategic initiative to transform the Company into a more concentrated owner of New Jersey Hudson River waterfront and transit-oriented office properties and a regional owner of luxury multi-family residential properties. In connection with the transformation of the Company’s portfolio, management began developing a disposition plan in September 2015, which will be an ongoing assessment process. Through this plan, the Company, in the coming years, expects to dispose of primarily office properties considered non-core to its ongoing operations. As a result, at September 30, 2015, the Company evaluated the recoverability of the carrying values of these non-core properties, and determined that due to the shortening of the expected periods of ownership, it was necessary to reduce the carrying values of 22 rental properties to their estimated fair values. Accordingly, the Company recorded an impairment charge of $158.6 million at September 30, 2015 reducing the aggregate carrying values of these properties from $554.3 million to their estimated fair values of $395.7 million. At December 31, 2015, as a result of its periodic evaluation of the recoverability of the carrying values resulting from its ongoing assessment of non-core properties, the Company recorded an additional impairment charge of $33.7 million.

OnFour ~~May~~of ~~21, 2014,~~ the Company’s ~~entered~~office ~~into~~properties aare ~~joint~~collateral ~~venture~~for ~~agreement~~a ~~with~~mortgage ~~Ironstate~~loan ~~Harborside-A~~that ~~LLC~~matured ~~(“ISA”)~~on toAugust ~~form Harborside Unit A Urban Renewal~~11, ~~L.L.C. (“URL-Harborside”)~~2014, awith ~~newly-formed joint venture that will develop, own and operate~~ a ~~high-rise~~principal ~~tower~~balance of ~~approximately~~$63.3 ~~763~~million ~~multi-family~~as ~~apartment~~of ~~units~~December ~~above~~31, a2015. ~~parking~~The ~~pedestal~~loan towas benot ~~located~~repaid onat ~~land~~maturity ~~contributed~~and by the Company atis ~~its Harborside complex~~ in ~~Jersey~~discussions ~~City,~~with ~~New Jersey (~~the ~~“URL~~lender ~~Project”). The~~regarding ~~construction~~potential ofoptions ~~the~~in ~~URL~~satisfaction ~~Project is estimated to cost a total~~ of ~~approximately~~the ~~$320~~obligation ~~million~~ (ofsee ~~which~~Note ~~development~~10: ~~costs~~Mortgages, ofLoans ~~$65.1~~Payable ~~million~~and ~~have~~Other ~~been incurred by URL-Harborside through December 31, 2014~~Obligations). ~~The~~ As ~~URL~~of ~~Project~~September is30, ~~projected~~2015, tothe beCompany ~~ready~~estimated ~~for~~that ~~occupancy by~~ the ~~fourth~~carrying ~~quarter~~value of ~~2016. The~~three ~~URL~~of ~~Project~~these ~~has~~properties, ~~been~~aggregating ~~awarded~~479,877 upsquare tofeet ~~$33~~and ~~million~~located in ~~future~~Roseland ~~tax~~and ~~credits (“URL Tax Credits”)~~Parsippany, ~~subject to certain conditions, from the~~ New Jersey, ~~Economic~~may ~~Development~~not ~~Authority. The~~be ~~venture~~recoverable ~~has~~over antheir ~~agreement~~anticipated toholding ~~sell~~periods. ~~these~~In ~~credits,~~order ~~subject~~ to ~~certain~~reduce ~~conditions. On~~the ~~August~~carrying 1,values ~~2014,~~of the ~~venture~~properties ~~obtained~~to atheir ~~construction/permanent~~estimated ~~loan~~fair ~~with~~values, athe ~~maximum~~Company ~~borrowing~~recorded ~~amount~~impairment charges of $~~192~~5.6 million ~~(with~~at noSeptember ~~balance currently outstanding as of December 31~~30, ~~2014)~~2015, which ~~bears~~resulted ~~interest~~from atthe acurrent ~~rate~~decline ofin ~~5.197~~leasing ~~percent~~activity and ~~matures~~market inrents ~~August~~of ~~2029~~the properties identified. The Company ~~currently~~had ~~expects~~previously ~~that~~recorded itimpairment ~~will~~charges ~~fund~~on ~~approximately~~these ~~$59.1~~properties ~~million~~at ofSeptember ~~the remaining development costs of the project~~30, ~~net~~2013 of ~~the~~$12.5 ~~loan financing~~million.

The Company owns an 85 percent interest in URL-Harborside and the remaining interest is 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 its land contribution with a carrying amount of $5.5 million. The Company has funded an additional $19.2 million in development costs for the venture through December 31, 2014.44

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 price 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 $10 million loan was repaid in full on September 2, 2014 and the $52.3 million loan was 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 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.

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 $23.0 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 year ended December 31, 2014, included in general and administrative expense was an aggregate of approximately $2.1 million in transactions costs related to the Company’s property and joint venture acquisitions.

Critical Accounting Policies and Estimates

The ~~Financial~~accompanying ~~Statements~~consolidated ~~have~~financial ~~been~~statements ~~prepared~~include inall ~~conformity~~accounts ~~with generally accepted accounting principles. The preparation~~ of the ~~Financial~~Company, ~~Statements~~its ~~requires~~majority-owned ~~management to make estimates~~ and/or ~~assumptions~~controlled ~~that~~subsidiaries ~~affect the reported amounts of assets~~ and ~~liabilities~~variable ~~and~~interest ~~disclosure~~entities offor ~~contingent~~which ~~assets~~the ~~and~~Company ~~liabilities~~has atdetermined ~~the~~itself ~~date~~to ofbe the ~~Financial~~primary ~~Statements~~beneficiary, ~~and~~if ~~the reported amounts of revenues and expenses during the reported period~~any. ~~These~~See ~~estimates~~Note ~~and~~2: ~~assumptions~~Significant ~~are~~Accounting ~~based~~Policies on– ~~management’s~~Investments ~~historical~~in ~~experience~~Unconsolidated ~~that~~Joint ~~are~~Ventures ~~believed~~– to ~~be reasonable at~~ the ~~time. However,~~Financial ~~because future events and their effects cannot be determined with certainty~~Statements, ~~the~~for ~~determination of estimates requires~~ the ~~exercise of judgment. The~~ Company’s ~~critical~~treatment ~~accounting~~of ~~policies~~unconsolidated ~~are~~joint ~~those~~venture ~~which require assumptions to be made about matters that are highly uncertain~~interests. ~~Different~~Intercompany ~~estimates~~accounts ~~could have a material effect on the Company’s financial results. Judgments~~ and ~~uncertainties~~transactions ~~affecting~~have ~~the~~been ~~application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances~~eliminated.

Accounting Standards Codification (“ASC”) 810, Consolidation, provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack (i) the ability to make decisions about the entity's activities through voting or similar rights, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance: and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE.

The Financial Statements have been prepared in conformity with generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements, and the reported amounts of revenues and expenses during the reported period. Actual results could differ from these estimates. Certain reclassifications have been made to prior period amounts in order to conform with current period presentation. 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 years ended December 31, ~~2014~~2015, ~~2013~~2014 and ~~2012~~2013 was $1516.5 2 million, $1215.95 million and $412.3 9 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.

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~~value 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. See Note 3: Recent Transactions – Impairments on Properties Held and Used – to the Financial Statements.

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~~value 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~~value 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 – to the Financial Statements.

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.

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.

51Real estate services revenue includes property management, development, construction 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.

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.

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.

Discontinued Operations:

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

Results From Operations

The following comparisons for the year ended December 31, ~~2014~~2015 (“~~2014~~2015”), as compared to the year ended December 31, ~~2013~~2014 (“~~2013~~2014”), and for ~~2013~~2014 as compared to the year ended December 31, ~~2012~~2013 (“~~2012~~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 December 31, ~~2012~~2013, (for the ~~2014~~2015 versus ~~2013~~2014 comparisons), and which represent all in-service properties owned by the Company at December 31, ~~2011~~2012 (for the ~~2013~~2014 versus ~~2012~~2013 comparisons), excluding properties sold, disposed of, removed from service, or being redeveloped or repositioned from January 1, 2014 through December 31, ~~2014~~2015; (ii) the effect of the “Acquired Properties,” which represent all properties acquired by the Company or commencing initial operation from January 1, ~~2013~~2014 through December 31, ~~2014~~2015 (for the ~~2014~~2015 versus ~~2013~~2014 comparisons), and which represents all properties acquired by the Company or commencing initial operations from January 1, ~~2012~~2013 through December 31, ~~2013~~2014 (for the ~~2013~~2014 versus ~~2012~~2013 comparisons), and (iii) the effect of “Properties Sold ~~in 2014,~~” which represent properties sold, disposed of, or removed from service (including properties being redeveloped or repositioned) by the Company ~~during~~from ~~the~~January ~~year~~1, ~~ended~~2014 through December 31, 2015. During the 2015 and 2014 periods, four office properties, aggregating 657,523 square feet, were removed from service as they were being redeveloped by the Company.

Year Ended December 31, 2015 Compared to Year Ended December 31, 2014



		Year Ended
		December 31,				Dollar	Percent
(dollars in thousands)		2015		2014		Change	Change
Revenue from rental operations and other:
Base rents	$	487,041	$	516,727	$	(29,686)	(5.7)	%
Escalations and recoveries from tenants		62,481		78,554		(16,073)	(20.5)
Parking income		11,124		9,107		2,017	22.1
Other income		4,617		3,773		844	22.4
Total revenues from rental operations		565,263		608,161		(42,898)	(7.1)

Property expenses:
Real estate taxes		82,688		90,750		(8,062)	(8.9)
Utilities		55,965		72,822		(16,857)	(23.1)
Operating services		107,951		112,621		(4,670)	(4.1)
Total property expenses		246,604		276,193		(29,589)	(10.7)

Non-property revenues:
Real estate services		29,620		28,638		982	3.4
Total non-property revenues		29,620		28,638		982	3.4

Non-property expenses:
Real estate services expenses		25,583		26,136		(553)	(2.1)
General and administrative		49,147		71,051		(21,904)	(30.8)
Acquisition-related costs		1,560		2,118		(558)	(26.3)
Depreciation and amortization		170,402		172,490		(2,088)	(1.2)
Impairments		197,919		-		197,919	-
Total non-property expenses		444,611		271,795		172,816	63.6
Operating income (loss)		(96,332)		88,811		(185,143)	(208.5)
Other (expense) income:
Interest expense		(103,051)		(112,878)		9,827	8.7
Interest and other investment income		794		3,615		(2,821)	(78.0)
Equity in earnings (loss) of unconsolidated joint ventures		(3,172)		(2,423)		(749)	(30.9)
Realized gains (losses) on disposition
of rental property, net		53,261		54,848		(1,587)	(2.9)
Gain on sale of investment in unconsolidated joint venture		6,448		-		6,448	-
Loss from early extinguishment of debt		-		(582)		582	100.0
Total other (expense) income		(45,720)		(57,420)		11,700	20.4
Net income (loss)		(142,052)		31,391		(173,443)	(552.5)
Noncontrolling interest in consolidated joint ventures		1,044		778		266	34.2
Net income (loss) available to common unitholders	$	(141,008)	$	32,169	$	(173,177)	(538.3)	%

The following is a summary of the changes in revenue from rental operations and property expenses in 2015 as compared to 2014 divided into Same-Store Properties, Acquired Properties and Properties Sold in 2014 and 2015:


		Total				Same-Store				Acquired				Properties
		Company				Properties				Properties				Sold in 2014 and 2015
		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	$	(29,686)	(5.7)	%	$	6,660	1.3	%	$	1,780	0.3	%	$	(38,126)	(7.3)	%
Escalations and recoveries
from tenants		(16,073)	(20.5)			(9,166)	(11.7)			128	0.2			(7,035)	(9.0)
Parking income		2,017	22.1			1,100	12.1			915	10.0			2	-
Other income		844	22.4			547	14.5			(24)	(0.6)			321	8.5
Total	$	(42,898)	(7.1)	%	$	(859)	(0.1)	%	$	2,799	0.5	%	$	(44,838)	(7.5)	%

Property expenses:
Real estate taxes	$	(8,062)	(8.9)	%	$	(5,314)	(5.9)	%	$	2,034	2.2	%	$	(4,782)	(5.2)	%
Utilities		(16,857)	(23.1)			(10,701)	(14.7)			218	0.3			(6,374)	(8.7)
Operating services		(4,670)	(4.1)			1,545	1.4			1,268	1.1			(7,483)	(6.6)
Total	$	(29,589)	(10.7)	%	$	(14,470)	(5.2)	%	$	3,520	1.3	%	$	(18,639)	(6.8)	%

OTHER DATA:
Number of Consolidated Properties		223				221				2				26
Commercial Square feet (in thousands)		24,212				24,016				196				3,959
Multi-family portfolio (number of units)		1,301				1,081				220				-

Base rents. Base rents for the Same-Store Properties increased $6.7 million, or 1.3 percent, for 2015 as compared to 2014, due primarily to an increase in occupancy in 2015 as compared to 2014, which resulted from a 90 basis point increase in the average same store percent leased to 85.0 percent from 84.1 percent and an increase in average rental rents per square foot to $22.27 from $22.23.

Escalations and recoveries. Escalations and recoveries from tenants for the Same-Store Properties decreased $9.2 million, or 11.7 percent, for 2015 over 2014 due primarily to recoveries from tenants of higher electric expenses in 2014 which the Company partially recovers from tenants pursuant to the terms of most of its leases with significantly lower expenses to recover in 2015.

Parking income. Parking income for the Same-Store Properties increased $1.1 million, or 12.1 percent for 2015 as compared to 2014 due primarily to increased usage.

Other income. Other income for the Same-Store Properties increased $0.5 million, or 14.5 percent due primarily to various small income items in 2015.

Real estate taxes. Real estate taxes on the Same-Store Properties decreased $5.3 million, or 5.9 percent, for 2015 as compared to 2014. The change in real estate taxes principally results from an increase in tax appeal proceeds received in 2015 as compared to 2014. Real estate taxes, without the effect of net tax appeal proceeds, increased $2.7 million, or 3.2 percent, for 2015 as compared to 2014 due primarily to increased rates.

Utilities. Utilities for the year decreased $10.7 million, or 14.7 percent, for 2015 as compared to 2014. Extended winter freeze conditions in early 2014 caused record electricity demand, and combined with reduced natural gas production and distribution disruptions, resulted in significant market price increases for electricity during the 2014 period.

Operating services. Operating services for the Same-Store Properties increased $1.5 million, or 1.4 percent, due primarily to an increase in snow removal and other service costs for 2015 as compared to 2014.

Real estate services revenue. Real estate services revenues (primarily reimbursement of property personnel costs) increased $1.0 million, or 3.4 percent, for 2015 as compared to 2014, due primarily to increased third party development and management activity in multi-family services in 2015 as compared to 2014.

Real estate services expenses. Real estate services expenses decreased $0.6 million, or 2.1 percent, for 2015 as compared to 2014. This decrease was due primarily to decreased compensation and related costs.

General and administrative. General and administrative expenses decreased $21.9 million, or 30.8 percent, in 2015 as compared to 2014, which was primarily due to severance costs in 2014 of $23.8 million related to the departure of the Corporation’s Chief Executive Officer and certain of the Corporation’s other executive officers.

Acquisition-related costs. The Company incurred transaction costs of $1.6 million in 2015 and $2.1 million in 2014 related to the Company’s property and joint venture acquisitions. See Note 3 to the Financial Statements: Recent Transactions – Acquisitions.

Depreciation and amortization. Depreciation and amortization decreased $2.1 million, or 1.2 percent, for 2015 over 2014. This decrease was due primarily to assets of Same-Store Properties becoming fully amortized, and depreciation in 2014 for properties sold in 2014 and early 2015. These were partially offset by accelerated depreciation in 2015 for properties being removed from service.

Impairments. The Company recorded $197.9 million in impairment charges in 2015 on certain properties to reduce the carrying values to their estimated fair market values, with no such charges taken in 2014. See Note 3: Recent Transactions – to the Financial Statements.

Interest expense. Interest expense decreased $9.8 million, or 8.7 percent, for 2015 as compared to 2014. This decrease was primarily the result of lower overall average debt balances in 2015 as compared to 2014.

Interest and other investment income. Interest and other investment income decreased $2.8 million, or 78.0 percent, for 2015 as compared to 2014. This was primarily due to interest income on lower average notes receivable balances in 2015.

Equity in earnings (loss) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures decreased $0.7 million, or 30.9 percent, for 2015 as compared to 2014. The decrease was due primarily to a loss of $3.7 million in 2015 from the Capitol Place Mezz venture (which commenced operations in 2015), and a gain of $2.3 million in 2014 from the Stanford SM venture (the venture’s note receivable was repaid in 2014). These were partially offset by income of $3.8 million in 2015 from distributions received from the Keystone-Penn joint venture due to a loan refinancing of the venture’s property and a decreased loss from the Rosewood Lafayette Holdings joint venture (in which the Company sold its interest in 2015) of $0.8 million for 2015 as compared to 2014.

Realized gains (losses) on disposition of rental property, net. The Company had realized gains on disposition of rental property of $53.3 million in 2015 and $54.8 million in 2014. See Note 3: Recent Transactions – Dispositions – to the Financial Statements.

Gain on sale of investment in unconsolidated joint venture. The Company realized a gain of $6.4 million in 2015 on the sale of its equity interest in the Rosewood Lafayette Holdings L.L.C. joint venture.

Loss from early extinguishment of debt. In 2014, the Company recognized a loss from early extinguishment of debt of $582,000 due to the early redemption of $150 million principal amount of 5.125 percent Notes in December 2014, which were scheduled to mature in January 2015.

Net income (loss). Net income decreased to a loss of approximately $142.0 million in 2015 from income of $31.4 million in 2014. The decrease of $173.4 million was due to the factors discussed above.

Net income (loss) available to common unitholders. Net income available to common unitholders decreased by $173.2 million, or 538.3 percent, from income of $32.2 million in 2014 to a loss of $141.0 million in 2015. The decrease was primarily due to a decrease in net income of $173.4 million for 2015 as compared to 2014 (primarily due to the impairment charges in 2015 of $197.9 million). This was partially offset by an increase in noncontrolling interest in consolidated joint ventures of approximately $0.2 million for 2015 as compared to 2014.

Year Ended December 31, 2014 Compared to Year Ended December 31, 2013


		Year Ended
		December 31,				Dollar	Percent
(dollars in thousands)		2014		2013		Change	Change
Revenue from rental operations and other:
Base rents	$	516,727	$	540,165	$	(23,438)	(4.3)	%
Escalations and recoveries from tenants		78,554		72,758		5,796	8.0
Parking income		9,107		6,840		2,267	33.1
Other income		3,773		4,683		(910)	(19.4)
Total revenues from rental operations		608,161		624,446		(16,285)	(2.6)

Property expenses:
Real estate taxes		90,750		85,574		5,176	6.0
Utilities		72,822		63,622		9,200	14.5
Operating services		112,621		105,278		7,343	7.0
Total property expenses		276,193		254,474		21,719	8.5

Non-property revenues:
Construction services		-		15,650		(15,650)	(100.0)
Real estate services		28,638		26,935		1,703	6.3
Total non-property revenues		28,638		42,585		(13,947)	(32.8)

Non-property expenses:
Direct construction costs		-		14,945		(14,945)	(100.0)
Real estate services expenses		26,136		22,716		3,420	15.1
General and administrative		71,051		47,040		24,011	51.0
Acquisition-related costs		2,118		642		1,476	229.9
Depreciation and amortization		172,490		182,766		(10,276)	(5.6)
Impairments		-		110,853		(110,853)	(100.0)
Total non-property expenses		271,795		378,962		(107,167)	(28.3)
Operating income (loss)		88,811		33,595		55,216	164.4
Other (expense) income:
Interest expense		(112,878)		(123,701)		10,823	8.7
Interest and other investment income		3,615		2,903		712	24.5
Equity in earnings (loss) of unconsolidated joint ventures		(2,423)		(2,327)		(96)	(4.1)
Realized gains (losses) on disposition
of rental property, net		54,848		-		54,848	-
Loss from early extinguishment of debt		(582)		(156)		(426)	(273.1)
Total other (expense) income		(57,420)		(123,281)		65,861	53.4
Income (loss) from continuing operations		31,391		(89,686)		121,077	135.0
Discontinued operations:
Income from discontinued operations		-		11,811		(11,811)	(100.0)
Loss from early extinguishment of debt		-		(703)		703	100.0
Realized gains (losses) and unrealized losses on		-		-
disposition of rental property and impairments, net		-		59,520		(59,520)	(100.0)
Total discontinued operations, net		-		70,628		(70,628)	(100.0)
Net income (loss)		31,391		(19,058)		50,449	264.7
Noncontrolling interest in consolidated joint ventures		778		2,199		(1,421)	(64.6)
Net income (loss) available to common unitholders	$	32,169	$	(16,859)	$	49,028	290.8	%

Year Ended December 31, 2014 Compared to Year Ended December 30, 2013

		Year Ended
		December 31,				Dollar	Percent
(dollars in thousands)		2014		2013		Change	Change
Revenue from rental operations and other:
Base rents	$	516,727	$	540,165	$	(23,438)	(4.3)	%
Escalations and recoveries from tenants		78,554		72,758		5,796	8.0
Parking income		9,107		6,840		2,267	33.1
Other income		3,773		4,683		(910)	(19.4)
Total revenues from rental operations		608,161		624,446		(16,285)	(2.6)
Property expenses:
Real estate taxes		90,750		85,574		5,176	6.0
Utilities		72,822		63,622		9,200	14.5
Operating services		112,621		105,278		7,343	7.0
Total property expenses		276,193		254,474		21,719	8.5
Non-property revenues:
Construction services		-		15,650		(15,650)	(100.0)
Real estate services		28,638		26,935		1,703	6.3
Total non-property revenues		28,638		42,585		(13,947)	(32.8)
Non-property expenses:
Direct construction costs		-		14,945		(14,945)	(100.0)
Real estate services expenses		26,136		22,716		3,420	15.1
General and administrative		73,169		47,682		25,487	53.5
Depreciation and amortization		172,490		182,766		(10,276)	(5.6)
Impairments		-		110,853		(110,853)	(100.0)
Total non-property expenses		271,795		378,962		(107,167)	(28.3)
Operating income (loss)		88,811		33,595		55,216	164.4
Other (expense) income:
Interest expense		(112,878)		(123,701)		10,823	8.7
Interest and other investment income		3,615		2,903		712	24.5
Equity in earnings (loss) of unconsolidated joint ventures		(2,423)		(2,327)		(96)	(4.1)
Realized gains (losses) on disposition
of rental property, net		54,848		-		54,848	-
Loss from early extinguishment of debt		(582)		(156)		(426)	(273.1)
Total other (expense) income		(57,420)		(123,281)		65,861	53.4
Income (loss) from continuing operations		31,391		(89,686)		121,077	135.0
Discontinued operations:
Income from discontinued operations		-		11,811		(11,811)	(100.0)
Loss on early extinguishment of debt		-		(703)		703	100.0
Realized gains (losses) and unrealized losses on
disposition of rental property and impairments, net		-		59,520		(59,520)	(100.0)
Total discontinued operations, net		-		70,628		(70,628)	(100.0)
Net income		31,391		(19,058)		50,449	264.7
Noncontrolling interest in consolidated joint ventures		778		2,199		(1,421)	(64.6)
Net income available to common unitholders	$	32,169	$	(16,859)	$	49,028	290.8	%

The following is a summary of the changes in revenue from rental operations and property expenses in 2014 as compared to 2013 divided into Same-Store Properties, Acquired Properties and Properties Sold 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	$	(23,438)	(4.3)	%	$	(13,831)	(2.5)	%	$	13,073	2.4	%	$	(22,680)	(4.2)	%
Escalations and recoveries
from tenants		5,796	8.0			8,840	12.2			1,042	1.4			(4,086)	(5.6)
Parking income		2,267	33.1			(210)	(3.1)			2,485	36.3			(8)	(0.1)
Other income		(910)	(19.4)			(1,475)	(31.5)			644	13.8			(79)	(1.7)
Total	$	(16,285)	(2.6)	%	$	(6,676)	(1.0)	%	$	17,244	2.7	%	$	(26,853)	(4.3)	%

Property expenses:
Real estate taxes	$	5,176	6.0	%	$	6,113	7.1	%	$	2,483	2.9	%	$	(3,420)	(4.0)	%
Utilities		9,200	14.5			11,025	17.3			862	1.4			(2,687)	(4.2)
Operating services		7,343	7.0			9,149	8.7			2,732	2.6			(4,538)	(4.3)
Total	$	21,719	8.5	%	$	26,287	10.3	%	$	6,077	2.4	%	$	(10,645)	(4.2)	%

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				-

Base rents. Base rents for the Same-Store Properties decreased $13.8 million, or 2.5 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 $8.8 million, or 12.2 percent, for 2014 over 2013 due primarily to recoveries from tenants of higher electric expenses in 2014 which the Company partially recovers from tenants pursuant to the terms of most of its leases. Related to the Company’s recovery from tenants of the increases in 2014 of real estate taxes and operating services, the portion the Company is recovering of those expenses has generally been reduced in 2014 primarily as a result of lower occupancies, in conjunction with the re-set of base years on new and renewed leases, in 2014. Parking income for the Same-Store Properties was relatively unchanged for 2014 as compared to 2013. Other income for the Same-Store Properties decreased $1.5 million, or 31.5 percent, due primarily to a decrease in lease breakage fees recognized in 2014 as compared to 2013.

~~Real~~Escalations ~~estate~~and ~~taxes~~recoveries. Escalations onand recoveries from tenants for the Same-Store Properties increased $68.18 million, or 712.12 percent, for 2014 asover ~~compared to~~ 2013. ~~The~~due ~~change~~primarily into ~~real~~recoveries ~~estate taxes principally results~~ from atenants ~~decrease~~of inhigher ~~tax~~electric ~~appeal~~expenses ~~proceeds received~~ in 2014 aswhich ~~compared to 2013. Real estate taxes, without~~ the ~~effect~~Company ofpartially ~~net~~recovers ~~tax~~from ~~appeal~~tenants ~~proceeds,~~pursuant ~~increased $0.7 million, or 0.9 percent, for 2014 as compared~~ to ~~2013 due primarily to increased rates. Utilities for~~ the ~~Same-Store~~terms ~~Properties~~of ~~increased~~most ~~$11.0~~of ~~million,~~its ~~or 17~~leases.3 Related ~~percent, for 2014 as compared~~ to ~~2013. As more fully discussed in~~ the ~~“Executive~~Company’s ~~Overview”,~~recovery ~~extended~~from ~~winter~~tenants ~~freeze~~of ~~conditions~~the increases in ~~early~~ 2014 ~~caused~~of ~~record~~real ~~electricity~~estate ~~demand,~~taxes and ~~combined~~operating ~~with reduced natural gas production and distribution disruptions~~services, ~~resulted~~the inportion ~~significant~~the ~~market~~Company ~~price~~is ~~increases~~recovering ~~for~~of ~~electricity~~those ~~during~~expenses ~~the~~has ~~period. Operating~~generally ~~services~~been ~~for~~reduced ~~the~~in ~~Same-Store~~2014 ~~Properties~~primarily ~~increased~~as ~~$9.1~~a ~~million,~~result orof ~~8.7~~lower ~~percent~~occupancies, ~~due~~in ~~primarily~~conjunction towith anthe ~~increase~~re-set inof ~~repairs~~base ~~and~~years ~~maintenance,~~on ~~snow~~new ~~removal~~ and ~~insurance~~renewed ~~costs~~leases, ~~for~~in 2014 ~~as compared to 2013~~.

~~Construction~~Parking ~~services revenue decreased $15~~income.~~7 million to zero and direct construction costs decreased $14.9 million to zero in 2014 as compared to 2013 due to the Company’s phase out of this business segment.~~ ~~Real~~Parking ~~estate~~income ~~services revenues (primarily reimbursement of property personnel costs) increased by $1.7 million, or 6.3 percent,~~ for ~~2014~~the ~~as compared to 2013, due primarily to increased development and management activity in multi~~Same-~~family~~Store ~~services~~Properties inwas ~~2014~~relatively asunchanged ~~compared to 2013. Real estate services expenses increased $3.4 million, or 15.1 percent,~~ for 2014 as compared to 2013. ~~This increase was due primarily to increased compensation and related costs from increased development and management activity in multifamily services in 2014 as compared to 2013.~~

~~General~~Other ~~and~~income. Other ~~administrative~~income ~~expenses~~for ~~increased~~the Same-Store Properties decreased $251.5 million, inor ~~2014~~31.5 ~~as compared to 2013~~percent, ~~which~~due ~~was~~ primarily ~~due~~ to ~~severance~~a ~~costs~~decrease ~~related~~in tolease ~~the~~breakage ~~pending~~fees ~~departure~~recognized ofin ~~the~~2014 ~~Corporation’s~~as ~~Chief~~compared ~~Executive~~to ~~Officer and the departure of certain of the Corporation’s other executive officers in 2014~~2013.

Real estate taxes. Real estate taxes on the Same-Store Properties increased $6.1 million, or 7.1 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, increased $0.7 million, or 0.9 percent, for 2014 as compared to 2013 due primarily to increased rates.

Utilities. Utilities for the Same-Store Properties increased $11.0 million, or 17.3 percent, for 2014 as compared to 2013. Extended winter freeze conditions in early 2014 caused record electricity demand, and combined with reduced natural gas production and distribution disruptions, resulted in significant market price increases for electricity during the period.

Operating services. Operating services for the Same-Store Properties increased $9.1 million, or 8.7 percent, due primarily to an increase in repairs and maintenance, snow removal and insurance costs for 2014 as compared to 2013.

Construction services revenue. Construction services revenue decreased $15.7 million to zero and direct construction costs decreased $14.9 million to zero in 2014 as compared to 2013 due to the Company’s phase out of this business segment.

Real estate services revenue. Real estate services revenues (primarily reimbursement of property personnel costs) increased by $1.7 million, or 6.3 percent, for 2014 as compared to 2013, due primarily to increased development and management activity in multi-family services in 2014 as compared to 2013.

Real estate services expenses. Real estate services expenses increased $3.4 million, or 15.1 percent, for 2014 as compared to 2013. This increase was due primarily to increased compensation and related costs from increased development and management activity in multifamily services in 2014 as compared to 2013.

General and administrative. General and administrative expenses increased $24.0 million in 2014 as compared to 2013, which was primarily due to severance costs related to the pending departure of the Corporation’s Chief Executive Officer and the departure of certain of the Corporation’s other executive officers in 2014.

Acquisition-related costs. The Company incurred transaction costs of $2.1 million in 2014 and $0.6 million in 2013 related to the Company’s property and joint venture acquisitions. See Note 3 to the Financial Statements: Recent Transactions – Acquisitions.

Depreciation and amortization. Depreciation and amortization decreased by $10.3 million, or 5.6 percent, for 2014 over 2013. This decrease was due primarily to a decrease of $4.6 million for the Same-Store Properties due to assets becoming fully amortized, and a decrease of $8.7 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.

Impairments. The Company recorded $110.9 million in impairment charges in 2013, primarily on 18 properties to reduce their carrying values to their estimated fair market values, with no such charges taken in 2014.

Interest expense. Interest expense decreased by $10.8 million, or 8.7 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. Interest and other investment income increased $0.7 million, or 24.5 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 (loss) of unconsolidated joint ventures. Equity in earnings of unconsolidated joint ventures decreased $0.1 million, or 4.1 percent, for 2014 as compared to 2013. The Company had decreased income in 2014 of $1.4 million from the Stamford SM venture (due to the venture’s note receivable being repaid in 2014), and an increased loss of $1.2 million in 2014 from the PruRose Riverwalk G venture. These were partially offset by increased income of $2.5 million from the Crystal House Apartments Investors venture in 2014 (as a result of the joint venture being entered into in March 2013).

Realized gains (losses) on disposition of rental property, net. 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: Recent Transactions – Dispositions – to the Financial Statements.

Loss from early extinguishment of debt. In 2014, the Company recognized losses from early extinguishment of debt of $582,000 as compared to $156,000 in 2013. The 2014 amount was due to the early redemption of $150 million principal amount of 5.125 percent Notes in December 2014, which were scheduled to mature in January 2015. The 2013 amount was due to the partial early termination and extension of the Company’s revolving credit facility as a result of decreased participation of certain lenders in the facility.

Net income (loss). Income from continuing operations increased to $31.4 million in 2014 from a loss of $89.7 million in 2013. The increase of $121.1 million was due to the factors discussed above.

Net income (loss) available to common unitholders. Net income available to common unitholders increased by $49.0 million, or 290.8 percent, from a loss of approximately $16.8 million in 2013 to income of $32.2 million in 2014. The increase was primarily due to an increase in income from continuing operations of $121.1 million for 2014 as compared to 2013 (mostly due to the impairment charges in 2013 of $110.9 million), an impairment charge of $23.9 million on discontinued operations in 2013, and a loss on early extinguishment of debt of $0.7 million in 2013. These were partially offset by realized gains on disposition of rental property, net of $83.4 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 approximately $1.5 million for 2014 as compared to 2013.

Depreciation and amortization decreased by $10.3 million, or 5.6 percent, for 2014 over 2013. This decrease was due primarily to a decrease of $4.6 million for the Same-Store Properties due to assets becoming fully amortized, and a decrease of $8.7 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 $110.9 million in impairment charges in 2013, primarily on 18 properties to reduce their carrying values to their estimated fair market values, with no such charges taken in 2014.

Interest expense decreased by $10.8 million, or 8.7 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 24.5 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 $0.1 million, or 4.1 percent, for 2014 as compared to 2013. The Company had decreased income in 2014 of $1.4 million from the Stamford SM venture (due to the venture’s note receivable being repaid in 2014), and an increased loss of $1.2 million in 2014 from the PruRose Riverwalk G venture. These were partially offset by increased income of $2.5 million from the Crystal House Apartments Investors venture in 2014 (as a result of the joint venture being entered into in March 2013).

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.

In 2014, the Company recognized losses from early extinguishment of debt of $582,000 as compared to $156,000 in 2013. The 2014 amount was due to the early redemption of $150 million principal amount of 5.125 percent Notes in December 2014, which were scheduled to mature in January 2015. The 2013 amount was due to the partial early termination and extension of the Company’s revolving credit facility as a result of decreased participation of certain lenders in the facility.

Income from continuing operations increased to $31.4 million in 2014 from a loss of $89.7 million in 2013. The increase of $121.1 million was due to the factors discussed above.

Net income available to common unitholders increased by $49.0 million, or 290.8 percent, from a loss of approximately $16.8 million in 2013 to income of $32.2 million in 2014. The increase was primarily due to an increase in income from continuing operations of $121.1 million for 2014 as compared to 2013 (mostly due to the impairment charges in 2013 of $110.9 million) an impairment charge of $23.9 million on discontinued operations in 2013, and a loss on early extinguishment of debt of $0.7 million in 2013. These were partially offset by realized gains on disposition of rental property, net of $83.4 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 approximately $1.5 million for 2014 as compared to 2013.

Year Ended December 31, 2013 Compared to Year Ended December 31, 2012

		Year Ended
		December 31,				Dollar	Percent
(dollars in thousands)		2013		2012		Change	Change
Revenue from rental operations and other:
Base rents	$	540,165	$	535,822	$	4,343	0.8	%
Escalations and recoveries from tenants		72,758		74,535		(1,777)	(2.4)
Parking income		6,840		6,021		819	13.6
Other income		4,683		12,091		(7,408)	(61.3)
Total revenues from rental operations		624,446		628,469		(4,023)	(0.6)
Property expenses:
Real estate taxes		85,574		86,683		(1,109)	(1.3)
Utilities		63,622		58,267		5,355	9.2
Operating services		105,278		97,005		8,273	8.5
Total property expenses		254,474		241,955		12,519	5.2
Non-property revenues:
Construction services		15,650		13,557		2,093	15.4
Real estate services		26,935		8,606		18,329	213.0
Total non-property revenues		42,585		22,163		20,422	92.1
Non-property expenses:
Direct construction costs		14,945		12,647		2,298	18.2
Real estate services expenses		22,716		3,746		18,970	506.4
General and administrative		47,682		47,664		18	0.0
Depreciation and amortization		182,766		174,333		8,433	4.8
Impairments		110,853		9,845		101,008	1,026.0
Total non-property expenses		378,962		248,235		130,727	52.7
Operating income		33,595		160,442		(126,847)	(79.1)
Other (expense) income:
Interest expense		(123,701)		(122,039)		(1,662)	(1.4)
Interest and other investment income		2,903		34		2,869	8,438.2
Equity in earnings (loss) of unconsolidated joint ventures		(2,327)		4,089		(6,416)	(156.9)
Loss from early extinguishment of debt		(156)		(4,960)		4,804	96.9
Total other (expense) income		(123,281)		(122,876)		(405)	(0.3)
Income (loss) from continuing operations		(89,686)		37,566		(127,252)	(338.7)
Discontinued operations:
Income from discontinued operations		11,811		21,878		(10,067)	(46.0)
Loss from early extinguishment of debt		(703)		-		(703)	-
Realized gains (losses) and unrealized losses on
disposition of rental property and impairments, net		59,520		(13,175)		72,695	551.8
Total discontinued operations, net		70,628		8,703		61,925	711.5
Net income (loss)		(19,058)		46,269		(65,327)	(141.2)
Noncontrolling interest in consolidated joint ventures		2,199		330		1,869	566.4
Net income (loss) available to common unitholders	$	(16,859)	$	46,599	$	(63,458)	(136.2)	%

The following is a summary of the changes in revenue from rental operations and property expenses in 2013 as compared to 2012 divided into Same-Store Properties and Acquired Properties:

		Total				Same-Store				Acquired
		Company				Properties				Properties
		Dollar	Percent			Dollar	Percent			Dollar	Percent
(dollars in thousands)		Change	Change			Change	Change			Change	Change
Revenue from rental
operations and other:
Base rents	$	4,343	0.8	%	$	(9,602)	(1.8)	%	$	13,945	2.6	%
Escalations and recoveries
from tenants		(1,777)	(2.4)			(2,700)	(3.6)			923	1.2
Parking income		819	13.6			(335)	(5.6)			1,154	19.2
Other income		(7,408)	(61.3)			(7,998)	(66.2)			590	4.9
Total	$	(4,023)	(0.6)	%	$	(20,635)	(3.3)	%	$	16,612	2.7	%
Property expenses:
Real estate taxes	$	(1,109)	(1.3)	%	$	(3,161)	(3.7)	%	$	2,052	2.4	%
Utilities		5,355	9.2			4,326	7.4			1,029	1.8
Operating services		8,273	8.5			6,380	6.6			1,893	1.9
Total	$	12,519	5.2	%	$	7,545	3.1	%	$	4,974	2.1	%
OTHER DATA:
Number of Consolidated Properties		247				240				7
Commercial Square feet (in thousands)		27,975				27,749				226
Multi-family portfolio (number of units)		1,081				-				1,081

Base rents for the Same-Store Properties decreased $9.6 million, or 1.8 percent, for 2013 as compared to 2012, due primarily to a decrease in occupancy and rental rates in 2013 as compared to 2012. Escalations and recoveries from tenants for the Same-Store Properties decreased $2.7 million, or 3.6 percent, for 2013 over 2012, due primarily to lower recoveries from tenants in 2013 (as a result of lower occupancies and the re-set of base years on new and renewed leases) as well as reimbursing tenants for their share of the tax appeal proceeds received in the periods. Parking income for the Same-Store Properties decreased $0.3 million, or 5.6 percent, due primarily to decreased usage in 2013 as compared to 2012. Other income for the Same-Store Properties decreased $8.0 million, or 66.2 percent, due primarily to a decrease in lease breakage fees recognized in 2013 as compared to 2012.

Real estate taxes on the Same-Store Properties decreased $3.2 million, or 3.7 percent, for 2013 as compared to 2012. The change in real estate taxes principally results from tax appeal proceeds, net of associated professional fees, increasing by approximately $3.2 million from 2012 to 2013. Real estate taxes, without the effect of net tax appeal proceeds, did not increase significantly in 2013 compared to 2012. Utilities for the Same-Store Properties increased $4.3 million, or 7.4 percent, for 2013 as compared to 2012, due primarily to increased rates in 2013 as compared to 2012. Operating services for the Same-Store Properties increased $6.4 million, or 6.6 percent, due primarily to an increase in snow removal costs of $3.1 million and in maintenance costs of $2.5 million for 2013 as compared to 2012.

Construction services revenue increased $2.1 million, or 15.4 percent, in 2013 as compared to 2012, due primarily to increased revenue from construction contracts in 2013. Real estate services revenues (primarily reimbursement of property personnel costs) increased by $18.3 million, or 213.0 percent, for 2013 as compared to 2012, due primarily to the full year effect of Roseland (which was acquired in 2012).

Direct construction costs increased $2.3 million, or 18.2 percent, in 2013 as compared to 2012, due primarily to increased costs from construction contracts in 2013.

Real estate services expenses increased $19.0 million, or 506.4 percent, for 2013 as compared to 2012. This increase was due primarily to compensation costs related to Roseland (which was acquired in late 2012).

General and administrative expenses was relatively unchanged for 2013 as compared to 2012. Roseland general and administrative expenses increased by $8.2 million for 2013 as compared to 2012 due to the full year effect of Roseland (which was acquired in late 2012). This was partially offset by transaction costs incurred of $5.8 million in 2012 in conjunction with the Roseland Transaction, and $1.4 million in costs related to the departure of one of the Corporation’s executive vice presidents in 2012.

Depreciation and amortization increased by $8.4 million, or 4.8 percent, for 2013 over 2012. This increase was due primarily to an increase of $11.7 million for 2013 as compared to 2012 related to depreciation and amortization on assets from Roseland and the Acquired Properties, partially offset by assets becoming fully amortized in 2013.

The Company recorded $110.9 million in impairment charges in 2013 on 18 properties in order to reduce their carrying values to their estimated fair market values.

In 2012, the Company incurred impairment charges totaling $9.8 million, consisting of: (i) an impairment charge on other investments of $6.3 million in connection with a write-down of the Company’s development rights in an East Rutherford, New Jersey mixed use development project; (ii) an impairment charge of approximately $3.0 million on one of its properties in Greenbelt, Maryland; and (iii) an impairment charge on another rental property investment of $0.5 million related to an office property in Newark, New Jersey.

Interest expense increased $1.7 million, or 1.4 percent, for 2013 as compared to 2012. This increase was primarily as a result of higher average debt balances in 2013, partially offset by higher capitalized interest in 2013, as a result of increased development activity in 2013.

Interest and other investment income increased $2.9 million for 2013 as compared to 2012. This was primarily due to a benefit of $2.3 million in 2013 related to changes in the Roseland Transaction Earn-Out.

Equity in earnings of unconsolidated joint ventures decreased $6.4 million, or 156.9 percent, for 2013 as compared to 2012. The decrease was due primarily to increased losses of $6.2 million from the joint venture interests acquired in the Roseland Transaction in late 2012 and a loss in 2013 of $2.6 million from the Crystal House Apartments venture (which was entered into in March 2013), partially offset by increased income of $1.1 million from the sale of the Boston Downtown Crossing venture for 2013 as compared to 2012.

In 2012, the Company recognized losses from early extinguishment of debt of $5.0 million compared to $156,000 in 2013. The 2012 losses resulted primarily from approximately $4.4 million due to the early redemption of senior unsecured notes and approximately $0.5 million for the early repayment of a mortgage loan on the Company’s property in Woodbridge, New Jersey. The 2013 amount was due to the partial early termination and extension of the Company’s revolving credit facility as a result of decreased participation of certain lenders in the facility.

Income from continuing operations decreased to a loss of $89.7 million in 2013 from income of $37.6 million in 2012. The decrease of $127.3 million was due to the factors discussed above.

Net income available to common unitholders decreased by $63.5 million, or 136.2 percent, from income of $46.6 million in 2012 to a loss of $16.9 million in 2013. The decrease was primarily the result of a decrease in income from continuing operations of $127.3 million for 2013 as compared to 2012, an impairment charge of $23.9 million on discontinued operations in 2013, a decrease in income from discontinued operations of $10.1 million for 2013 as compared to 2012, realized gains on disposition of rental property of $2.3 million in 2012, and a loss on early extinguishment of debt on discontinued operations of $0.7 million in 2013. These were partially offset by a realized gain on disposition of rental property of $83.4 million in 2013, an impairment charge on discontinued operations of $8.4 million in 2012, an unrealized loss on disposition of rental property of $7.1 million in 2012 and an increase in noncontrolling interest in consolidated joint ventures of $1.9 million for 2013 as compared to 2012.

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 reduced demand for suburban office properties 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~~As ~~Company~~described ~~continually~~earlier ~~reviews~~relative to its current strategic initiative, management has been reviewing the Company’s portfolio and identifying opportunities to divest of non-core 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~~non-core ofrental ~~office~~property ~~and~~sales ~~office/flex properties~~ in the near-term to acquire office properties, enhance amenities and infrastructure at existing office properties, develop, redevelop and acquire multi-family rental properties, as well as reposition certain office properties into multi-family residential and/or 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~~. ~~In continuation of this strategy, the Company entered into the following transactions:~~

Construction Projects:

On ~~May~~October 216, ~~2014~~2015, the Company entered into a joint venture ~~agreement~~partnership with ~~Ironstate~~XS ~~Harborside-A~~Port Imperial Hotel, LLC (“~~ISA~~XS”) to form ~~Harborside~~XS ~~Unit~~Hotel A Urban Renewal, ~~L.L.C.~~Associates LLC (“~~URL-Harborside~~XS Hotel URA”), afor ~~newly-formed~~the ~~joint~~development ~~venture that will develop, own~~ and ~~operate~~ownership ~~a high-rise tower~~ of ~~approximately~~a ~~763 multi~~364-~~family~~key ~~apartment~~dual ~~units~~branded ~~above~~hotel aproperty ~~parking pedestal to be~~ located ~~on land contributed by the Company at its Harborside complex~~ in ~~Jersey City~~Weehawken, New Jersey (~~the~~ “~~URL~~Port ~~Project~~Imperial Hotel”). ~~The~~Concurrently, ~~construction of~~ the ~~URL~~Company ~~Project~~and isXS ~~estimated~~entered tointo ~~cost~~ a ~~total~~separate ofjoint ~~approximately~~venture ~~$320~~partnership ~~million~~to ~~(of~~form ~~which~~XS ~~development~~Hotel ~~costs~~Associates, ~~of $65~~L.1L.C. ~~million~~(“XS ~~have~~Hotel”) ~~been~~for ~~incurred~~the bymanagement ~~URL-Harborside~~and ~~through~~operations ~~December~~of ~~31,~~the ~~2014)~~completed hotel development. The ~~URL~~Company ~~Project~~holds isa ~~projected~~90 topercent beinterest ~~ready~~and ~~for~~XS ~~occupancy~~holds by the ~~fourth~~remaining ~~quarter~~10 ofpercent ~~2016. The~~interest ~~URL~~in ~~Project~~the ~~has~~consolidated ~~been~~joint ~~awarded~~ventures, upXS toHotel ~~$33~~URA ~~million~~and inXS ~~future~~Hotel, ~~tax~~with ~~credits~~the ~~(“URL~~Company ~~Tax~~having ~~Credits”)~~full and complete authority, ~~subject~~power, and discretion to ~~certain~~manage ~~conditions,~~and ~~from~~control the ~~New~~ventures’ ~~Jersey~~business, ~~Economic~~affairs, ~~Development~~and ~~Authority~~property. The ~~venture~~construction ~~has~~of anthe ~~agreement~~Port toImperial ~~sell~~Hotel ~~these~~is ~~credits,~~estimated ~~subject~~ to ~~certain~~cost ~~conditions. On~~a ~~August~~total 1,of ~~2014~~$105.9 million, ~~the~~which ~~venture~~will ~~obtained~~be funded by a $94 million construction~~/permanent~~ loan with athe ~~maximum~~balance ~~borrowing~~to ~~amount~~be offunded ~~$192 million (~~with nomembers’ ~~balance~~capital. Upon ~~currently~~closing, ~~outstanding~~Mack-Cali’s asinitial ofcontribution ~~December~~was ~~31,~~$27.3 ~~2014)~~million, which ~~bears~~included ~~interest at~~ a ~~rate~~capital credit of 5$23.~~197~~7 ~~percent~~million ~~and~~for ~~matures~~its incontributed ~~August~~Hotel ~~2029. The~~Condominium ~~Company~~Land ~~currently~~unit, ~~expects~~and ~~that~~XS itHotel’s ~~will~~initial ~~fund~~contribution ~~approximately~~was $~~59.1~~3 million. As of December 31, 2015, the ~~remaining~~Company incurred development costs of ~~the~~$1.5 ~~project,~~million ~~net~~and ofestimates it will need to fund an additional $3.3 million for the ~~loan~~completion ~~financing~~of the project.

The Company owns andevelopable 85land ~~percent~~to ~~interest~~accommodate ina ~~URL~~multi-~~Harborside~~phase ~~and~~development ~~the~~project ~~remaining~~of ~~interest~~approximately is1,034-unit ~~owned~~multi-family byrental ~~ISA~~property located in Malden, ~~with~~Massachusetts. The ~~shared~~initial ~~control~~phase ~~over~~commenced ~~major~~construction ~~decisions~~of ~~such~~292 ~~as,~~units ~~approval~~in ofthe ~~budgets,~~third ~~property~~quarter ~~financings~~of ~~and~~2015 ~~leasing~~(the ~~guidelines~~“Chase II Project”). ~~Upon~~The ~~entering~~Chase ~~into~~II ~~the~~Project ~~joint~~is ~~venture,~~estimated ~~the~~to ~~Company’s~~cost ~~initial~~a ~~contribution~~total ~~was~~of $3074.69 million, (of which ~~included~~the aCompany ~~capital~~has ~~credit~~incurred of $3022.1 ~~per~~million ~~approved~~through ~~developable~~December ~~square~~31, ~~foot~~2015) ~~for~~and ~~its~~is ~~contributed~~expected ~~land~~to ~~aggregating~~be ~~approximately~~ready ~~$20.6~~for ~~million~~occupancy ~~with~~by ~~the~~second ~~balance~~quarter ~~consisting~~2017. The ofCompany ~~previously~~estimates ~~incurred~~it ~~development~~will ~~costs,~~need ~~and~~to ~~ISA’s~~fund ~~initial~~additional ~~contribution~~costs ~~was~~of ~~approximately~~ $5.4.8 million~~. Included~~ infor the ~~Company’s~~completion ~~investment~~of in the ~~unconsolidated~~Chase ~~joint~~II ~~venture~~Project. On isDecember ~~its~~16, ~~land~~2015, ~~contribution~~the Company obtained a construction loan with a ~~carrying~~maximum borrowing amount of $~~5.5~~48 million~~. The~~ ~~Company~~(with ~~has~~no ~~funded~~outstanding anbalance ~~additional~~as ~~$19~~of December 31, 2015), which bears interest at a rate of LIBOR plus 2.25 percent, reducing to LIBOR plus 2.0 ~~million~~percent insubject ~~development~~to ~~costs~~achieving ~~for~~certain ~~the~~conditions ~~venture~~and ~~through~~matures in December ~~31, 2014~~2018.

InOn ~~July~~April ~~2012~~1, 2015, the Company ~~entered~~acquired ~~into~~vacant land to accommodate a ~~ground~~two-phase ~~lease~~development ~~with~~of ~~Wegmans~~the ~~Food~~CitySquare ~~Markets,~~Project ~~Inc~~for a purchase price of $3.1 million with an additional $1.25 million to be paid (~~“Wegmans”~~which is accrued as of December 31, 2015), atsubject to certain conditions, in accordance with the terms of the purchase and sale agreement. The purchase price for the acquisition was funded primarily through borrowing under the Company’s ~~undeveloped~~unsecured ~~site~~revolving ~~located~~credit atfacility. The ~~Sylvan~~first ~~Way~~phase ~~and~~with ~~Ridgedale~~237 ~~Avenue~~units instarted ~~Hanover~~construction ~~Township,~~in ~~New~~the ~~Jersey.~~third ~~Subject~~quarter to2015 ~~receiving~~with ~~all~~anticipated ~~necessary~~initial ~~governmental~~deliveries ~~approvals,~~in ~~Wegmans~~the ~~intends~~second toquarter ~~construct~~2017. The asecond ~~store~~phase, ofwith ~~approximately~~128 ~~140~~units,~~000~~ ~~square~~is ~~feet~~projected onto abegin ~~finished~~construction ~~pad~~in ~~scheduled~~2017. Total development costs are estimated to be ~~completed~~approximately in$92.5 ~~late~~million ~~2016~~(of which $9. ~~The~~1 million was incurred by the Company ~~expects~~through toDecember ~~incur~~31, ~~costs~~2015 ofand ~~approximately~~estimates it will need to fund an additional $2541.39 million for the ~~development~~completion of the ~~site~~project). On ~~(of~~December ~~which~~10, 2015, the Company ~~has~~obtained ~~incurred~~a construction loan with a maximum borrowing amount of $841.05 million ~~through~~(with no outstanding balance as of December 31, ~~2014~~2015), which bears interest at a rate of LIBOR plus 2. 5 percent, reducing to LIBOR plus 2.25 percent subject to achieving certain conditions and matures in December 2018.

5955

On ~~August~~May 2221, ~~2013~~2014, the Company ~~contributed~~entered aninto ~~additional~~a ~~$4.9~~joint ~~million~~venture ~~and~~agreement ~~the~~with ~~operating~~Ironstate ~~agreement~~Harborside-A ofLLC ~~Eastchester~~(“ISA”) ~~was~~to ~~modified~~form ~~which~~Harborside ~~increased~~Unit ~~the~~A ~~Company’s~~Urban ~~effective~~Renewal, ~~ownership~~L.L.C. to(“URL-Harborside”), ~~76.25~~a ~~percent~~newly-formed joint venture that will develop, ~~with~~own ~~the~~and ~~remaining~~operate ~~23.75~~a ~~percent~~high-rise ~~owned~~tower byof ~~HVLH. The~~approximately ~~agreement~~763 ~~also~~multi-family ~~provided~~apartment ~~the~~units ~~Company~~above ~~with~~a ~~control~~parking ofpedestal ~~all~~to ~~major~~be ~~decisions. Accordingly,~~located ~~effective~~on ~~August~~land ~~22,~~contributed ~~2013,~~by the Company ~~consolidated~~at ~~Eastchester~~its ~~under~~Harborside ~~the~~complex ~~provisions~~in ofJersey ~~ASC 810~~City, ~~Consolidation~~New Jersey (the “URL Project”). AsThe ~~the~~Company ~~carrying~~owns ~~value~~an ~~approximated~~85 ~~the~~percent ~~fair~~interest ~~value~~in ofURL-Harborside and the ~~net~~remaining ~~assets~~interest ~~acquired,~~is ~~there~~owned ~~was~~by noISA, ~~holding~~with ~~period~~shared ~~gain~~control orover ~~loss~~major ~~recognized~~decisions onsuch ~~this~~as ~~transaction. The~~approval ~~Company~~of ~~had~~budgets, ~~acquired~~property afinancings 26and leasing guidelines.25 The ~~percent~~construction ~~interest~~of inthe aURL ~~to-be-built,~~Project ~~108-unit~~is ~~multi-family~~estimated ~~rental~~to ~~property~~cost ~~located~~a intotal ~~Eastchester,~~of ~~New~~approximately ~~York~~$320 million (~~the~~of ~~“Eastchester~~which ~~Project”)~~development ~~for~~costs ~~approximately~~of $2210.12 million~~. The~~ ~~remaining~~have ~~interests~~been inincurred ~~the~~by ~~development project~~URL-~~owning~~Harborside ~~entity,~~through ~~150~~December ~~Main Street~~31, ~~L.L.C. (“Eastchester”~~2015) ~~was owned 26~~.25 The ~~percent~~URL byProject ~~JMP~~is ~~Eastchester,~~projected ~~L.L.C.~~to ~~and~~be ~~47.5~~ready ~~percent~~for occupancy by ~~Hudson~~the ~~Valley~~fourth ~~Land~~quarter ~~Holdings,~~of L2016.~~L.C. (“HVLH”).~~ The ~~Eastchester~~venture ~~Project~~has ~~began~~a construction/permanent inloan ~~late~~with ~~2013. Estimated~~a ~~total~~maximum ~~development~~borrowing ~~costs~~amount of $50192 million (ofwith ~~which~~ $1363.9 million ~~have~~outstanding ~~been~~as ~~incurred~~of ~~through~~ December 31, ~~2014~~2015), ~~are~~which ~~expected~~bears tointerest beat ~~funded~~a ~~with~~rate aof ~~$28~~5.8197 ~~million~~percent ~~construction loan~~ and ~~the~~matures ~~balance~~in ofAugust ~~$21~~2029.2 The ~~million~~Company ~~from~~does ~~member’s~~not ~~capital,~~expect ofto ~~which~~fund any future development costs of the ~~Company’s~~project, ~~share~~as isfuture ~~$20.9~~development ~~million~~costs will be funded by using the loan financing.

The Company owns a 76.25 percent interest in a consolidated joint venture which is constructing a 108-unit multi-family development rental property located in Eastchester, New York (the “Eastchester Project”). The project is expected to be ready for occupancy by the second quarter of 2016. The Eastchester Project is estimated to cost a total of $50 million (of which development costs of $29.6 million have been incurred through December 31, 2015). The venture has a $28.8 million construction loan (with $10.9 million outstanding as of December 31, 2015). The Company expects to fund approximately $20.9 million for the development of the project (of which, as of December 31, 2015, the Company has incurred $14.7 million of the development costs and estimates it will need to fund an additional $6.2 million for the completion of the project.

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~~distributions 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 $53.48 million ($60.1 million, including common units in the Company held by parties other than the Corporation) on an annualized basis. However, any such distributions, whether for federal income tax purposes or otherwise, would be paid out of available cash, including borrowings and other sources, after meeting operating requirements, preferred stock dividends and distributions, and scheduled debt service on the Company’s debt. If and to the extent the Company retains and does not distribute any net capital gains, the 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~~carrying value of approximately $~~125~~57.31 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~~in ~~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; and 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 December 31, ~~2014~~2015, 110 of the Company’s properties, with an aggregate net book value of approximately $1.3 billion, have lapsed restrictions and are subject to these conditions.

Unencumbered Properties:

As of December 31, ~~2014~~2015, the Company had ~~206~~204 unencumbered properties with a carrying ~~amount~~value of $2.54 billion representing 8991.20 percent of the Company’s total consolidated property count.

Cash Flows

Cash and cash equivalents ~~decreased~~increased by $~~192~~7.15 million to $2937.61 million at December 31, ~~2014~~2015, compared to $~~221~~29.76 million at December 31, ~~2013~~2014. This ~~decrease~~increase is comprised of the following net cash flow items:

(1) $159.3 million provided by operating activities.


(1)	$169.5 million provided by operating activities.

(2)	$222.5 million used in investing activities, consisting primarily of the following:

		(a)	$78 million used for investments in unconsolidated joint ventures; plus
		(b)	$70.5 million used for rental property acquisitions and related intangibles; plus
		(c)	$94.1 million used for additions to rental property and improvements; plus
		(d)	$81.1 million used for the development of rental property, other related costs and deposits; plus
		(e)	$1.1 million used for restricted cash; minus
		(f)	$81 million from proceeds from the sales of rental property; minus
		(g)	$8.3 million received from payments of notes receivables; minus
		(h)	$6.4 million from proceeds from the sale of investment in unconsolidated joint venture; minus
		(i)	$6.4 million received from distributions in excess of cumulative earnings from unconsolidated joint ventures.

(3)	$60.6 million provided by financing activities, consisting primarily of the following:

		(a)	$334 million from borrowings under the revolving credit facility; plus
		(b)	$10.8 million from proceeds received from mortgages and loans payable; plus
		(c)	$2.1 million from contributions from noncontrolling interests; minus
		(d)	$179 million used for repayments of revolving credit facility; minus
		(e)	$60 million used for payments of distributions; minus
		(f)	$43.1 million used for repayments of mortgages, loans payable and other obligations; minus
		(g)	$3 million used for repayment of finance costs.

(2) $50.3 million provided by investing activities, consisting primarily of the following:

(a) $274.8 million from proceeds from the sale of rental property; plus

(b) $62.5 million from repayments of notes receivable; plus

(d) $91.8 million used for additions to rental property and improvements; minus

(e) $67.3 million used for investments in unconsolidated joint ventures; minus

(f) $62.3 million used for the issuance of notes and mortgage receivables; minus

(g) $61.9 million used for rental property acquisitions and related intangibles; minus

(h) $25.1 million used for the development of rental property, other related costs and deposits; minus

(i) $14.5 million used for restricted cash.

(3) $401.7 million used in financing activities, consisting primarily of the following:

(a) $350.0 million used for repayments of senior unsecured notes; plus

(b) $277.3 million used for repayments of revolving credit facility borrowings; plus

(d) $83.8 million used for repayments of mortgages, loans payable and other obligations; plus

(e) $5.2 million used for the payments of contingent consideration payments; plus

(f) $3.1 million used for payment of finance costs; minus

(g) $277.3 million from borrowings under the revolving credit facility; minus

(h) $130.1 million from proceeds received from mortgages; minus

(i) $145,000 from cash received from noncontrolling interests.

Debt Financing

Summary of Debt:

The following is a breakdown of the Company’s debt between fixed and variable-rate financing as of December 31, ~~2014~~2015:

		Balance			Weighted Average			Weighted Average
		($000’s)	% of Total		Interest Rate (a)			Maturity in Years
Fixed Rate Unsecured Debt and
Other Obligations	$	1,~~267~~268,~~744~~844	6058.7088	%	4.88	%		54.16
Fixed Rate Secured Debt		~~661~~593,~~050~~677	3127.6555	%	7.5315	%		32.1956
Variable Rate Secured Debt		~~159~~137,~~860~~399	76.6538	%	34.8309	%		1.6913
Totals/Weighted Average:	$	2,088,654	100.00	%	5.64	%	(b)	4.27
Variable Rate Unsecured Debt (b)		155,000	7.19	%	1.66	%		1.58
Totals/Weighted Average:	$	2,154,920	100.00	%	5.22	%	(b)	3.34

(a) The actual weighted average LIBOR rate for the Company’s outstanding variable rate debt was 0.1735 percent as of December 31, ~~2014~~2015, plus the applicable spread.

(b) Excludes amortized deferred financing costs pertaining to the Company’s unsecured revolving credit facility which amounted to $23.72 million for the year ended December 31, ~~2014~~2015.

6157

Debt Maturities:

Scheduled principal payments and related weighted average annual effective interest rates for the Company’s debt as of December 31, ~~2014~~2015 are as follows:

		Scheduled		Principal			Weighted Avg.
		Amortization		Maturities		Total	Effective Interest Rate of
Period		($000’s)		($000’s)		($000’s)	Future Repayments (a)
2015		8,811		167,589		176,400	7.03	%
2016	$	8,125	$	406,465	$	414,590	6.67	%
2016		8,311		333,272		341,583	6.94	%
2017 (b)		7,275		557,088		564,363	3.41	%
2017		7,275		392,345		399,620	4.11	%
2018		7,311		231,536		238,847	6.67	%
2019		723		331,567		332,290	7.4445	%
Thereafter		6,329		605,205		611,534	4.13	%
2020		569		-		569	4.82	%
Sub-total		38,760		2,061,514		2,100,274
Thereafter		5,759		605,206		610,965	4.13	%
Sub-total		29,762		2,131,862		2,161,624
Adjustment for unamortized debt
discount/premium, net, as of
December 31, 2014		(11,620)		-		(11,620)
December 31, 2015		(6,704)		-		(6,704)
Totals/Weighted Average	$	2723,~~140~~058	$	2,~~061~~131,~~514~~862	$	2,~~088~~154,~~654~~920	5.6422	%	(bc)

(a) The actual weighted average LIBOR rate for the Company’s outstanding variable rate debt was 0.1735 percent as of December 31, ~~2014~~2015, plus the applicable spread.

(b) ~~Excludes~~Includes ~~amortized~~outstanding ~~deferred~~borrowings ~~financing~~of ~~costs pertaining to~~ the Company’s unsecured revolving credit facility of $155 million which ~~amounted~~matures toin ~~$2.7~~2017 ~~million~~with ~~for~~two ~~the<~~

Filing Compare · Veris Residential, L.P.