Company: VRE
Filing Date: 2025-02-24
Form Type: 10-K
Source: 0000924901-25-000011
Chunk: 61

Company: Veris Residential, Inc.
Filing Date: 2025-02-24
Form: 10-K
Item: Item 16
Chunk 61
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12.5 percent for years 22-30; as defined.At the conclusion of the above-referenced agreements, it is expected that the properties will be assessed by the municipality and be subject to real estate taxes at the then prevailing rates.LITIGATIONThe Company is a defendant in litigation arising in the normal course of its business activities. Management does not believe that the ultimate resolution of these matters will have a materially adverse effect upon the Company’s financial condition taken as whole.OFFICE AND GROUND LEASE AGREEMENTSFuture minimum rental payments under the terms of all non-cancelable office and ground leases under which the Company is the lessee, as of December 31, 2024, are as follows (dollars in thousands):As of December 31, 2024YearAmount2025$1,27920261,27920271,280202849420292222030 through 210131,225Total lease payments35,779Less: imputed interest(29,235)Total$6,544As of December 31, 2023YearAmount2024$1,27220251,27920261,27920271,28020284942029 through 210131,447Total lease payments37,051Less: imputed interest(29,700)Total$7,351Office and ground lease expense incurred by the Company for the years ended December 31, 2024, 2023 and 2022 amounted to $2.6 million, $2.0 million and $0.9 million, respectively. 

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The Company had  operating lease assets for one office and two ground leases, which had balances of $3.2 million and $1.9 million, respectively, at December 31, 2024. Such amounts represent the net present value (“NPV”) of future payments detailed above. The office and two ground leases used incremental borrowing rates of 6.0 percent and 7.6 percent, respectively, to arrive at the NPV and have weighted average remaining lease terms of 3.3 years and 76.6 years, respectively. These rates were arrived at by adjusting the fixed rates of the Company’s mortgage debt with debt having terms approximating the remaining lease term of the Company’s office and ground leases and calculating notional rates for fully-collateralized loans. The initial recognition of a lease liability and right-of-use asset in an amount of $4.7 million for the office lease is a noncash activity during the