Filed Pursuant to Rule 424(b)(5)
Registration
No. 333-269995
Prospectus Supplement
(To Prospectus dated February 24, 2023)
$100,000,000
Veris Residential, Inc.
Common Stock
This prospectus supplement and the accompanying prospectus relate to
the offer and sale from time to time of shares of our common stock, par value $0.01 per share, having an aggregate gross sales price of
up to $100,000,000, to or through J.P. Morgan Securities LLC, BofA Securities, Inc., BNY Mellon Capital Markets, LLC, Capital One
Securities, Inc., Goldman Sachs & Co. LLC, R. Seelaus & Co., LLC and Samuel A. Ramirez & Company, Inc.,
as principal or as our exclusive sales agents (in such capacity, the "sales agents"), and through the forward sellers (as defined
below), pursuant to the terms of a Distribution Agreement (the "Distribution Agreement"), dated as of the date hereof, among
us, Veris Residential, L.P., the sales agents, the forward sellers and the forward purchasers (as defined below).
We may also enter into separate forward sale agreements with J.P. Morgan
Securities LLC, BofA Securities, Inc., BNY Mellon Capital Markets, LLC, Goldman Sachs & Co. LLC, or their respective affiliates
(in such capacity, the "forward purchasers"). If we enter into a forward sale agreement with any forward purchaser, we expect
that such forward purchaser (or its affiliate) will attempt to borrow from third parties and sell, through the related forward seller,
acting as sales agent for such forward purchaser, shares of our common stock to hedge such forward purchaser's exposure under such forward
sale agreement. A "forward seller" is a sales agent, acting as a sales agent for a particular forward purchaser (which will
be an affiliate of such sales agent or the same entity as such sales agent). Unless otherwise expressly stated or the context otherwise
requires, references herein to the "related," "applicable" or "relevant" forward purchaser mean, with respect
to a particular forward seller, the forward purchaser for which such forward seller is acting as sales agent. We will not receive any
proceeds from any sale of shares of our common stock borrowed by a forward purchaser (or its affiliate) and sold through a forward seller.
We currently expect to fully physically settle each forward sale agreement,
if any, with the relevant forward purchaser on one or more dates specified by us on or prior to the maturity date of such forward sale
agreement, in which case we expect to receive aggregate net cash proceeds at settlement equal to the number of shares specified in such
forward sale agreement multiplied by the relevant forward sale price per share. However, subject to certain exceptions, we may elect to
cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which case we may not receive
any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash
(in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant forward purchaser.
See "Plan of Distribution" in this prospectus supplement.
The shares of our common stock to which this prospectus supplement
relates may be offered and sold to or through the sales agents or through the forward sellers over a period of time and from time to time
in negotiated transactions, including block trades, or transactions that are deemed to be "at the market" offerings as defined
in Rule 415(a)(4) under the Securities Act of 1933, as amended (the "Securities Act"), by means of ordinary brokers'
transactions, including sales made directly on the New York Stock Exchange (the "NYSE") sales made to or through a market maker and sales made through other securities
exchanges or electronic communications networks or in other transactions permitted by law, pursuant to the Distribution Agreement. Accordingly,
an indeterminate number of shares of our common stock may be sold up to the number of shares of our common stock that will result in an
aggregate gross sales price of up to $100,000,000.
Our common stock is listed on the NYSE, under the symbol "VRE." On November 14, 2023, the last reported sale price of our common stock on the NYSE was $13.94 per
share.
We elected to qualify as a real estate investment trust (a "REIT")
for federal income tax purposes commencing with our taxable year ended December 31, 1994. To assist us in complying with U.S. federal
income tax requirements applicable to REITs, among other purposes, our charter contains certain restrictions on the transfer and ownership
of our common stock, including an ownership limit of 9.8% of our common stock. See "Description of Common Stock—Ownership
Limitations and Restrictions on Transfer" in the accompanying prospectus.
The sales agents and the forward sellers are not required to sell any
specific number or dollar amount of our common stock, but, subject to the terms and conditions of the Distribution Agreement, each of
the sales agents and the forward sellers will use its commercially reasonable efforts, consistent with its normal trading and sales practices,
to sell any shares of our common stock pursuant to the Distribution Agreement. We will pay each sales agent a commission that will not
exceed, but may be lower than, 2.0% of the gross sales price of the sale of shares of our common stock sold through such sales agent pursuant
to this prospectus supplement.
In connection with each forward sale agreement, we will pay the applicable
forward seller a commission, through a reduction to the initial forward sale price under the related forward sale agreement, at a mutually
agreed rate of up to 2.0% of the gross sales price per share of the borrowed shares of our common stock sold through such forward seller
during the applicable forward selling period for such shares (subject to certain possible adjustments to such gross sales price for daily
accruals and any quarterly dividends having an "ex-dividend" date during such forward selling period). In connection with the
sale of shares of our common stock, a sales agent or a forward seller may be deemed to be an "underwriter" within the meaning
of the Securities Act, and the compensation paid to a sales agent or a forward seller may be deemed to be underwriting commissions or
discounts.
Under the Distribution Agreement, we may also sell shares of our common
stock to a sales agent as principal for its own account, at a price to be agreed upon at the time of sale. If we sell shares to a sales
agent as principal, then we will enter into a separate terms agreement with such sales agent, and we will describe the agreement in a
separate prospectus supplement or pricing supplement. The net proceeds we receive will be the gross proceeds received from such sales
less the commissions and any other costs we may incur in issuing the shares of our common stock. See "Plan of Distribution"
for further information.
Investing in our common stock involves risks.
See "Risk Factors" beginning on page S-2 of this prospectus supplement and in our most recent Annual Report on Form 10-K
and any subsequent Quarterly Reports on Form 10-Q, which are incorporated by reference into this prospectus supplement and the accompanying
prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus
is truthful or complete. Any representation to the contrary is a criminal offense.
J.P. Morgan
BofA Securities
BNY Mellon Capital Markets, LLC
Capital One Securities
Goldman Sachs & Co. LLC
R. Seelaus & Co., LLC
Ramirez &
Co., Inc.
The date of this prospectus supplement is November 15,
2023.
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
You should rely only on the information contained in or incorporated
by reference in this prospectus supplement and the accompanying prospectus and any free writing prospectus prepared by us. Neither we
nor the sales agents, nor the forward sellers nor the forward purchasers have authorized any other person to provide you with additional
or different information. If anyone provides you with additional or different information, you should not rely on it. This prospectus
supplement and the accompanying prospectus do not constitute an offer to sell or a solicitation of an offer to buy any securities other
than the registered securities to which they relate, and this prospectus supplement and the accompanying prospectus do not constitute
an offer to sell or the solicitation of an offer to buy securities in any jurisdiction where, or to any person to whom, it is unlawful
to make such an offer or solicitation. You should assume that the information appearing in this prospectus supplement, the accompanying
prospectus, any free writing prospectus prepared by us and in the documents incorporated by reference in this prospectus supplement and
the accompanying prospectus is accurate only as of their respective dates or such other dates as may be specified therein. Our business,
financial condition, results of operations and prospects may have changed since those dates. References to documents "incorporated
by reference" in this prospectus supplement and the accompanying prospectus shall also include documents that are deemed to be incorporated
by reference herein and therein pursuant to applicable Securities and Exchange Commission ("SEC") rules.
ABOUT THIS PROSPECTUS SUPPLEMENT
You should read this prospectus supplement along with the accompanying
prospectus, as well as the information incorporated by reference herein and therein, carefully before you invest in our common stock.
These documents contain important information you should consider before making your investment decision. This prospectus supplement describes
the terms of the offer and sale from time to time of shares of our common stock pursuant to the Distribution Agreement. The accompanying
prospectus contains information about our securities generally, some of which does not apply shares of our common stock covered by this
prospectus supplement.
To the extent there is a conflict between the information contained
in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or the documents incorporated
by reference prior to the date hereof, on the other hand, you should rely on the information in this prospectus supplement. In addition,
information that we file with the SEC after the date of this prospectus supplement and that is incorporated by reference in this prospectus
supplement and the accompanying prospectus may add, update or change information contained in this prospectus supplement, the accompanying
prospectus or previously incorporated documents. Any information in such subsequent filings that is inconsistent with this prospectus
supplement, the accompanying prospectus or a previously incorporated document will supersede the earlier information.
Veris Residential, Inc. (the "Corporation") is a Maryland
corporation that operates as a self-managed and self-administered real estate investment trust ("REIT"). The Corporation owns
properties and conducts operations through Veris Residential, L.P., a Delaware limited partnership (the "Operating Partnership"),
of which the Corporation is the sole general partner and holds approximately 91.4% of the partnership interests as of September 30,
2023.
Unless this prospectus supplement otherwise indicates or the context
otherwise requires, all references in this prospectus supplement or the accompanying prospectus to "Veris," "Corporation,"
or "General Partner" mean Veris Residential, Inc., and references to the "Operating Partnership" mean Veris Residential,
L.P. and its consolidated subsidiaries in cases where it is important to distinguish between the Corporation and the Operating Partnership.
The Corporation and the Operating Partnership file combined periodic reports with the SEC, which are incorporated by reference herein.
We use the terms "we," "our" or "the company" to refer to the Corporation and its subsidiaries, including
the Operating Partnership together, unless the context indicates otherwise.
FORWARD-LOOKING STATEMENTS
We consider portions of this prospectus supplement and the accompanying
prospectus, including the documents incorporated by reference, to be forward- looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend
such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A
of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements relate to, without limitation, our future
economic performance, plans and objectives for future operations and projections of revenue and other financial items.
Forward-looking statements can be identified by the use of words such
as "may," "will," "plan," "potential," "projected," "should," "expect,"
"anticipate," "estimate," "target," "continue" or comparable terminology. Forward-looking statements
are inherently subject to certain risks, trends and uncertainties, many of which we cannot predict with accuracy and some of which we
might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable
assumptions at the time made, we can give no assurance that such expectations will be achieved.
Future events and actual results, financial and otherwise, may differ
materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking
statements.
Among the factors about which we have made assumptions and that, could
cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements are:
| · | risks and uncertainties affecting the general economic climate and conditions, which in turn may have a negative effect on the fundamentals
of our business and the financial condition of our tenants and residents; |
| · | the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt
financing secured by our properties or on an unsecured basis; |
| · | the extent of any tenant bankruptcies or of any early lease terminations; |
| · | our ability to lease or re-lease space at current or anticipated rents; |
| · | changes in the supply of and demand for our properties; |
| · | changes in interest rate levels and volatility in the securities markets; |
| · | our ability to complete construction and development activities on time and within budget, including without limitation obtaining
regulatory permits and the availability and cost of materials, labor and equipment; |
| · | our ability to attract, hire and retain qualified personnel; |
| · | forward-looking financial and operational information, including information relating to future development projects, potential acquisitions
or dispositions, leasing activities, capitalization rates, and projected revenue and income; |
| · | changes in operating costs; |
| · | our ability to obtain adequate insurance, including coverage for natural disasters and terrorist acts; |
| · | our credit worthiness and the availability of financing on attractive terms or at all, which may adversely impact our ability to pursue
acquisition and development opportunities and refinance existing debt and our future interest expense; |
| · | changes in governmental regulation, tax rates and similar matters; and |
| · | other risks associated with the development and acquisition of properties, including risks that the development may not be completed
on schedule, that the tenants or residents will not take occupancy or pay rent, or that development or operating costs may be greater
than anticipated. |
For further information on factors which could impact us and the statements
contained in this prospectus supplement and the accompanying prospectus, including the documents incorporated by reference, see the risk
factors discussed under the heading "Risk Factors" herein and in the accompanying prospectus and under the heading "Risk
Factors" in our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and in our other filings
with the SEC that are incorporated by reference in this prospectus supplement and in the accompanying prospectus. We caution you not to
place undue reliance on forward-looking statements, which reflect our analysis only and speak as of the date of this prospectus supplement
or the accompanying prospectus, as applicable, or as of the dates indicated in the statements. All of our forward-looking statements,
including those included and incorporated by reference in this prospectus supplement and the accompanying prospectus, such as our outlook
for 2023, are qualified in their entirety by this statement. We assume no obligation to update and supplement forward-looking statements
that become untrue because of subsequent events, new information or otherwise.
THE COMPANY
The Corporation is a fully-integrated self-administered, self-managed REIT. The Corporation controls the Operating Partnership as its sole general partner and owned
a 91.4 percent common unit interest in the Operating Partnership as of September 30, 2023. The Corporation's business is the ownership
of interests in and operation of the Operating Partnership and all of the Corporation's expenses are incurred for the benefit of the Operating
Partnership. The Corporation is reimbursed by the Operating Partnership for all expenses it incurs relating to the ownership and operation
of the Operating Partnership. The Operating Partnership conducts the business of providing management, leasing, acquisition, development
and tenant-related services for the Corporation. The Operating Partnership, through its operating divisions and subsidiaries, including
the Veris property-owning partnerships and limited liability companies, is the entity through which all of the Corporation's operations
are conducted.
As of September 30, 2023, we owned or had interests in 24 multifamily
rental properties as well as non-core assets comprised of two office properties and four parking/retail properties (collectively, the
"Properties"). The Properties are comprised of: (a) 22 wholly-owned or Company-controlled properties comprised of 17 multifamily
properties and five non-core assets, and (b) eight properties owned by unconsolidated joint ventures in which the Company has investment
interests, including seven multifamily properties and a non-core asset. The Properties are located in three states in the Northeast, plus
the District of Columbia.
The address of our principal executive office is Harborside 3, 210
Hudson Street, Suite 400, Jersey City, New Jersey 07311. Our telephone number is (732) 590-1010. Our Internet website address is
www.verisresidential.com. The information found on, or otherwise accessible through, our website is not incorporated into, and does not
form a part of, this prospectus supplement.
RISK FACTORS
Your investment in our common stock offered pursuant to this prospectus
supplement and the accompanying prospectus involves risks. In consultation with your own financial, tax and legal advisers, you should
carefully consider, among other matters, the factors set forth below including under the caption “Risks Related With Investment
– Certain provisions of Maryland law and the General Partner’s charter and bylaws could hinder, delay or present changes in
control” amending certain of the risk factors under the same caption in our most recent Annual Report on Form 10-K, as well
as the risk factors discussed in the accompanying prospectus, incorporated by reference herein from our most recent Annual Report on Form 10-K,
any subsequent Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and other information contained or incorporated
by reference in this prospectus supplement and the accompanying prospectus, as the same may be updated from time to time by our future
filings under the Exchange Act, before deciding whether an investment in our common stock is suitable for you. The occurrence of any of
these risks might cause you to lose all or part of your investment in the offered securities. For more information, see the section entitled
“Incorporation by Reference” in this prospectus supplement.
RISKS ASSOCIATED WITH THIS OFFERING
You may experience significant dilution as a result of this offering
and additional issuances of our securities, which could harm our stock price.
Our charter permits board of directors of the Corporation (the
“Board of Directors”) to authorize without stockholder approval the issuance of additional shares of our common stock or
preferred stock or securities convertible or exchangeable into equity securities. The registration statement of which this
prospectus supplement and related prospectus are part relates to the issuance of shares of our common stock, preferred stock or
other equity securities (including the shares of our common stock being offered pursuant to this prospectus supplement). We actively
monitor the markets for our common stock. From time to time and at any time, shares of our common stock may be offered and sold to
or through the sales agents or through the forward sellers as described herein, or otherwise, if and when, in our judgment, the
terms and conditions for any such offer and sale are favorable to us in light of all of the surrounding facts and circumstances. We
may also consider issuing additional securities that are convertible or exchangeable for, or that represent the right to receive,
common stock or preferred stock, or any substantially similar security. In addition, we will issue shares of our common stock
pursuant to existing and future employee benefit plans. The market price of our common stock could decline as a result of sales of a
large number of shares of our common stock in the market pursuant to this offering, or otherwise, or as a result of the perception
or expectation that such sales could occur.
Affiliates of the sales agents, the forward sellers or the forward
purchasers may receive benefits in connection with this offering.
As of the date of this prospectus supplement, affiliates of certain
of the sales agents, the forward sellers and the forward purchasers are lenders and, in certain cases, agents, under our revolving credit
and term loan agreement dated as of July 25, 2023, for our $60 million senior secured revolving credit and $115 million senior secured
term loan facility (collectively, the “Credit Facility”). To the extent that we use a portion of the net proceeds from this
offering or settlement of any forward sale agreement to repay the outstanding balance under the Credit Facility, such affiliates of the
applicable sales agents, the applicable forward sellers or the applicable forward purchasers will receive their proportionate share of
any amount that is repaid with such net proceeds. These transactions create potential conflicts of interest because the sales agents,
the forward sellers and the forward purchasers have an interest in the successful completion of this offering beyond the sales commissions
they may receive. These interests may influence the decision regarding the terms and circumstances under which the offering is completed.
RISK RELATED WITH THE FORWARD SALE AGREEMENTS
Provisions contained in a forward sale agreement could result in
substantial dilution to our earnings per share and funds from operations per share or result in substantial cash payment obligations.
Each forward purchaser will have the right to accelerate its forward
sale agreement (with respect to all or any portion of the transaction under such forward sale agreement (except with respect to events
specified in (1) and (3) below, where accelerated settlement is limited to the portion of shares whose settlement would address
the relevant event or that is affected by the relevant event)) that it enters into with us and require us to physically settle such shares
on a date specified by such forward purchaser if: (1) in such forward purchaser’s commercially reasonable judgment, it or its
affiliate (a) is unable to hedge (or maintain a hedge of) its exposure under such forward sale agreement because insufficient shares
of our common stock have been made available for borrowing by securities lenders or (b) would incur a stock borrow cost in excess
of a specified threshold; (2) we declare any distribution, issue or dividend on shares of our common stock that constitutes an extraordinary
dividend under the forward sale agreement or is payable in (a) cash in excess of specified amounts (unless it is an extraordinary
dividend), (b) securities of another company that we acquire or own (directly or indirectly) as a result of a spin-off or similar
transaction or (c) any other type of securities (other than shares of our common stock), rights, warrants or other assets for payment
at less than the prevailing market price; (3) certain ownership thresholds applicable to such forward purchaser and its affiliates
are or would be exceeded; (4) an event (a) is announced that if consummated would result in a specified extraordinary event
(including certain mergers, tender offers, certain events involving our nationalization, our insolvency or a delisting of our common stock)
or (b) occurs that would constitute a hedging disruption or change in law; or (5) certain other events of default or termination
events occur, including, among others, any material misrepresentation made by us in connection with such forward sale agreement (each
as more fully described in the relevant forward sale agreement).
A forward purchaser’s decision to exercise its right to accelerate
all or a portion of the settlement of any forward sale agreement and to require us to physically settle the relevant shares will be made
irrespective of our interests, including our need for capital. In such cases, we could be required to issue and deliver shares of our
common stock under the terms of the physical settlement provisions of the applicable forward sale agreement irrespective of our capital
needs, which would result in dilution to our earnings per share and funds from operations per share.
Each forward sale agreement will provide that the forward sale price
will be subject to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less a spread.
In addition, the forward sale price will be subject to decrease on certain dates specified in the relevant forward sale agreement by the
amount per share of quarterly dividends we expect to declare on our common stock during the term of such forward sale agreement. If the
specified daily rate is less than the applicable spread on any day, the interest rate factor will result in a daily reduction of the forward
sale price.
We will also generally have the right, in lieu of physical settlement
of any forward sale agreement, to elect cash or net share settlement in respect of any or all of the shares of our common stock subject
to such forward sale agreement. If we elect to cash or net share settle all or any part of any forward sale agreement, then we would expect
the relevant forward purchaser or one of its affiliates to purchase shares of our common stock in secondary market transactions over an
unwind period to:
| · | return shares of our common stock to securities lenders to unwind such forward purchaser’s hedge (after taking into consideration
any shares of our common stock to be delivered by us to such forward purchaser, in the case of net share settlement); and |
| · | if applicable, in the case of net share settlement, deliver shares of our common stock to us to the extent required upon settlement
of such forward sale agreement. |
If the price of our common stock at which these purchases are made
by such forward purchaser (or its affiliate) exceeds the applicable forward sale price, then we will pay such forward purchaser an amount
in cash equal to such difference (if we elect to cash settle) or we will deliver to such forward purchaser a number of shares of our common
stock having a market value equal to such difference (if we elect to net share settle). Any such difference could be significant and could
result in our receipt of a significant amount of cash or number of shares of our common stock from such forward purchaser or require us
to pay a significant amount of cash or deliver a significant number of shares of our common stock to such forward purchaser. See “Plan
of Distribution—Sales Through The Forward Sellers.”
In addition, the purchase of shares of our common stock by a forward
purchaser or its affiliate to unwind the forward purchaser’s hedge position could cause the price of our common stock to increase
above the price that would have prevailed in the absence of those purchases (or prevent a decrease in such price), thereby increasing
the amount of cash (in the case of cash settlement) or the number of shares (in the case of net share settlement) that we would owe such
forward purchaser upon settlement of the applicable forward sale agreement or decrease the amount of cash (in the case of cash settlement)
or the number of shares (in the case of net share settlement) that such forward purchaser would owe us upon settlement of the applicable
forward sale agreement.
In case of our bankruptcy or insolvency, any forward sale agreement
will automatically terminate, and we would not receive the expected net proceeds from any forward sales of our shares under such agreement.
If we or a regulatory authority with jurisdiction over us institutes,
or we consent to a proceeding seeking a judgment in bankruptcy or insolvency or any other relief under any bankruptcy or insolvency law
or other similar law affecting creditors’ rights, or we or a regulatory authority with jurisdiction over us presents a petition
for our winding-up or liquidation, or we consent to such a petition, any forward sale agreement that is then in effect will automatically
terminate. If any such forward sale agreement so terminates, then we would not be obligated to deliver to the relevant forward purchaser
any shares of our common stock not previously delivered, and the relevant forward purchaser would be discharged from its obligation to
pay the applicable forward sale price per share in respect of any shares of our common stock not previously settled under the applicable
forward sale agreement. Therefore, to the extent that there are any shares of our common stock with respect to which any forward sale
agreement has not been settled at the time of the commencement of any such bankruptcy or insolvency proceedings, we would not receive
the relevant forward sale price per share in respect of those shares of our common stock.
The U.S. federal income tax treatment of the cash that we might
receive from cash settlement of any forward sale agreement is unclear and could jeopardize our ability to meet the REIT qualification
requirements.
In the event that we elect to settle any forward sale agreement for
cash and the settlement price is below the applicable forward sale price, we would be entitled to receive a cash payment from the applicable
forward purchaser. Under Section 1032 of the Internal Revenue Code of 1986, as amended (the “Code”), generally, no gains
and losses are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures contract,”
as defined in the Code by reference to the Exchange Act. Although we believe that any amount received by us in exchange for our stock
would qualify for the exemption under Section 1032 of the Code, because it is not entirely clear whether a forward sale agreement
qualifies as a “securities futures contract,” the U.S. federal income tax treatment of any cash settlement payment we receive
is uncertain. While we do not anticipate electing the cash settlement option under any forward sale agreement, in the event that we recognize
a significant gain from the cash settlement of a forward sale agreement, we might not be able to satisfy the gross income requirements
applicable to REITs under the Code. In that case, we may be able to rely upon the relief provisions under the Code to avoid the loss of
our REIT status. Even if the relief provisions apply, we will be subject to a 100% tax on the greater of (1) the excess of 75% of
our gross income (excluding gross income from prohibited transactions) over the amount of such income attributable to sources that qualify
under the 75% test or (2) the excess of 95% of our gross income (excluding gross income from prohibited transactions) over the amount
of such gross income attributable to sources that qualify under the 95% test, as discussed in the accompanying prospectus under “U.S.
Federal Income Tax Considerations—Taxation of Our Company,” multiplied in either case by a fraction intended to reflect our
profitability. In the event that these relief provisions were not available, we could lose our REIT status under the Code.
RISKS RELATED WITH INVESTMENT
The market price of our common stock may be adversely affected by
market conditions affecting the stock markets in general, including price and trading fluctuations on the NYSE.
The market price of our common stock may be adversely affected by market
conditions affecting the stock markets in general, including price and trading fluctuations on the NYSE. These conditions may result in
volatility in the level of, and fluctuations in, the market prices of stocks generally and, in turn, our common stock and sales of substantial
amounts of our common stock in the market, in each case being unrelated or disproportionate to changes in our operating performance. Our
stock price can fluctuate as a result of a variety of factors, many of which are beyond our control. These factors may include:
| · | actual or anticipated variations in our operating results or dividends; |
| · | general market fluctuations, including potentially extreme increases or decreases in the market prices of certain of our publicly
traded tenants, industry factors and general economic and geopolitical conditions and events, such as economic slowdowns or recessions,
consumer confidence in the economy, ongoing military conflicts and terrorist attacks; |
| · | technical factors in the public trading market for our stock that may produce price movements that may or may not comport with macro,
industry or company-specific fundamentals, including, without limitation, the sentiment of retail investors (including as may be expressed
on financial trading and other social media sites), the amount and status of short interest in our securities and the potential for a
“short squeeze” whereby short sellers are forced to cover their open positions, access to margin debt, trading in options
and other derivatives on our common stock and other technical trading factors; |
| · | changes in our funds from operations or earnings estimates; |
| · | anchor or tenant bankruptcies, closures, mergers or consolidations; |
| · | local economic and real estate conditions in geographic locations where we have a high concentration of Properties; |
| · | the ability of our tenants to pay rent to us and meet their other obligations to us under current lease terms and our ability to lease
space on favorable terms; |
| · | the success of our acquisition and real estate development strategy; |
| · | our ability to comply with the financial covenants in our debt agreements and the impact of restrictive covenants in our debt agreements; |
| · | our access to financing; |
| · | inflation and increases in interest rates; |
| · | our ability to comply with current and future regulations with respect to our qualification as a REIT and restrictions imposed on
us and our business by those regulations; |
| · | the risk that if we fail to qualify as a REIT, we will have reduced funds available for distributions, will not be allowed a deduction
for distributions, and will be subject to U.S. federal income tax at regular corporate rates; |
| · | our ability to comply with our joint venture agreements and other risks associated with our joint venture investments; |
| · | possible uninsured losses, including losses from casualty events or natural disasters, and possible environmental liabilities; |
| · | our ability to access capital on attractive terms to fund our business activities, repay debt on a timely basis or renew, extend or
replace our credit facility upon its maturity in an amount equal to our expiring facility and on terms that are favorable to us; |
| · | the impact of an ownership limit and takeover defenses in our charter and bylaws and under Maryland law; |
| · | a decision by any of our significant stockholders to sell substantial amounts of our common stock; |
| · | any future issuances of equity securities; and |
| · | the realization of any of the other risk factors included in, or incorporated by reference to, this prospectus supplement. |
Certain provisions of Maryland law and the
General Partner’s charter and bylaws could hinder, delay or prevent changes in control.
Certain provisions of Maryland law and the General
Partner’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 which give effect to the June, 2023 amendments to the General Partner’s
charter and bylaws, as well as other provisions set forth in the risk factors in our most recent Annual Report on Form 10-K:
Removal
of Directors: Under the General Partner’s charter, as amended, 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 from office at any time, with or without cause, by the affirmative
vote of a majority of the votes entitled to be cast by our stockholders generally in the election of directors.
Number
of Directors; Board Vacancies, Terms of Office: The General Partner has, in its bylaws, elected to be subject to a certain
provision of Maryland law which vest in the Board of Directors the exclusive right to determine the number of directors. This provision
of Maryland law is applicable even if other provisions of Maryland law, the charter or the bylaws provide to the contrary. The General
Partner revoked its election to be subject to a certain other provision of Maryland law which vests in the Board of Directors the exclusive
right, by the affirmative vote of a majority of the remaining directors, to fill vacancies on the board. Thus under the General Partner’s
bylaws, as amended, and Maryland law, any vacancy on the Board of Directors for any cause other than an increase in the number of directors
may be filled by a majority of the remaining directors except that the stockholders have right to fill any vacancy resulting from removal
of a director; and any vacancy on the Board of Directors created by an increase in the number of directors may be filled by a majority
of the entire Board of Directors. Any director elected by the Board of Directors to fill a vacancy serves until the next annual meeting
of stockholders and until such director’s successor is elected and qualifies, and any director elected by the stockholders to fill
a vacancy resulting from removal of a director serves for the balance of the term of the removed director. The General Partner has, in
its corporate governance principles, adopted a mandatory retirement age of 80 years for directors.
Stockholder
Requested Special Meetings[.: ]The General Partner’s bylaws, as amended, 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 25% of all votes
entitled to be cast at such meeting, provided that unless requested by the stockholders entitled to cast a majority of all votes entitled
to be cast at such meeting, a special meeting need not be called to consider any matter which is substantially the same as a matter voted
on at any special meeting of stockholders held during the preceding 12 months.
USE OF PROCEEDS
Shares of our common stock having an aggregate gross sales price of
up to $100 million may be offered and sold from time to time. The amount of net proceeds from this offering and settlement of any forward
sale agreement will depend upon the number of shares of our common stock sold, the market price at which they are sold, interest rates
and other factors. There can be no assurance that any shares will be sold or that the Distribution Agreement will be fully utilized. We
intend to use the net proceeds from this offering and settlement of any forward sale agreement for general corporate purposes, which may
include repaying indebtedness (including amounts outstanding from time to time under the Credit Facility), and working capital. Pending
application of the net proceeds, we may invest the proceeds in short-term securities.
As of the date of this prospectus supplement, affiliates of certain
of the sales agents, the forward sellers and the forward purchasers are lenders and, in certain cases, agents, under the Credit Facility.
To the extent that we use a portion of the net proceeds from this offering or settlement of any forward sale agreement to repay the outstanding
balance under the Credit Facility, such affiliates of the applicable sales agents, the applicable forward sellers or the applicable forward
purchasers will receive their proportionate share of any amount that is repaid with such net proceeds. These transactions create potential
conflicts of interest because the sales agents, the forward sellers and the forward purchasers have an interest in the successful completion
of this offering beyond the sales commissions they may receive. These interests may influence the decision regarding the terms and circumstances
under which the offering is completed.
If we enter into a forward sale agreement with any forward purchaser,
we expect that such forward purchaser (or its affiliate) will attempt to borrow from third parties and sell, through the related forward
seller, acting as sales agent for such forward purchaser, shares of our common stock to hedge such forward purchaser's exposure under
such forward sale agreement. All of the net proceeds from the sale of any such borrowed shares will be paid to the applicable forward
purchaser (or its affiliate). Each forward purchaser will either be a forward seller or an affiliate of a forward seller. As a result,
a forward seller (or its affiliate) will receive the net proceeds from any sale of borrowed shares of our common stock made in connection
with any forward sale agreement.
For additional information, see "Plan of Distribution—Other
Relationships."
SUPPLEMENTAL DESCRIPTION OF CERTAIN PROVISIONS
OF MARYLAND LAW AND OUR CHARTER AND BYLAWS
The information appearing in the accompanying
prospectus under the caption “Certain Provisions of Maryland Law and Our Charter and Bylaws” has been supplemented and amended
by the amendments to our charter and bylaws set forth in the Articles of Amendment and the Fourth Amended and Restated Bylaws of the Corporation
included as Exhibits 3.1 and 3.2, respectively, to the Quarterly Report of the Corporation and the Operating Partnership for the fiscal
quarter ended June 30, 2023 filed with the SEC on July 26, 2023 which is expressly incorporated herein by reference. Under such
amendments to our charter and bylaws:
| · | We have revoked our election to be subject to, and are no longer subject to, the provision of Maryland
law described under the heading “Unsolicited Takeovers” in the accompanying prospectus which vests in the Board of Directors
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 of Directors regardless of the reason for such vacancies. This provision of Maryland law also
provides 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. Accordingly, now under our bylaws, as amended, and Maryland law, any vacancy on the Board of Directors for
any cause other than an increase in the number of directors may be filled by a majority of the remaining directors even if such majority
is less than a quorum except that the stockholders have the right to fill any vacancy created by the removal of a director, and any vacancy
on the Board of Directors created by an increase in the number of directors may be filled by a majority of the entire Board of Directors.
Any director elected by the Board of Directors to fill a vacancy serves until the next annual meeting of stockholders and until such director’s
successor is elected and qualifies, and any director elected by the stockholders to fill a vacancy resulting from removal of a director
serves for the balance of the term of the removed director. We may in the future elect to again be subject to the aforesaid provision
of Maryland law by resolution or amendment to our bylaws adopted by the Board of Directors and without approval by our stockholders, in
which case the Board of Directors would then again have the exclusive right to fill vacancies on the Board of Directors. |
| · | Our charter, as amended, now provides that directors may be removed from office at any time, with or without
cause, by the affirmative vote of a majority of the votes entitled to be cast by our stockholders generally in the election of directors. |
| · | Our bylaws, as amended, now provide that stockholders have the right to call a special meeting upon the
written request of the stockholders entitled to cast not less than 25% of all votes entitled to be cast at the special meeting, provided
that unless requested by the stockholders entitled to cast a majority of all votes entitled to be cast at such meeting, a special meeting
need not be called to consider any matter which is substantially the same as a matter voted on at any special meeting of stockholders
held during the preceding 12 months. |
PLAN OF DISTRIBUTION
We entered into the Distribution Agreement with the sales agents, the
forward sellers and the forward purchasers, under which shares of our common stock having an aggregate gross sales price of up to $100,000,000
may be offered and sold to or through the sales agents or through the forward sellers.
The shares of our common stock to which this prospectus supplement
relates may be offered and sold to or through the sales agents or through the forward sellers over a period of time and from time to time
in negotiated transactions, including block trades, or transactions that are deemed to be "at the market" offerings as defined
in Rule 415(a)(4) under the Securities Act, by means of ordinary brokers' transactions, including sales made directly on the
NYSE, sales made to or through a market maker and sales made through other securities exchanges or electronic communications networks
or in other transactions permitted by law, pursuant to the Distribution Agreement.
The sales agents and the forward sellers are not required to sell any
specific number or dollar amount of our common stock, but, subject to the terms and conditions of the Distribution Agreement, each of
the sales agents and the forward sellers will use its commercially reasonable efforts, consistent with its normal trading and sales practices,
to sell any shares of our common stock pursuant to the Distribution Agreement.
If we, any sales agent, any forward seller or any forward purchaser
have reason to believe that the exemptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are
not satisfied, then that party will promptly notify the others, and sales of our common stock under the Distribution Agreement will be
suspended until that or other exemptive provisions have been satisfied in the judgment of us, such sales agent, such forward seller and
such forward purchaser, as applicable.
In connection with the sale of shares of our common stock, a sales
agent or a forward seller may be deemed to be an "underwriter" within the meaning of the Securities Act, and the compensation
paid to a sales agent or a forward seller may be deemed to be underwriting commissions or discounts. We have agreed to indemnify the sales
agents, the forward sellers and the forward purchasers against specified liabilities, including liabilities under the Securities Act,
or to contribute to payments that a sales agent, a forward seller or a forward purchaser may be required to make because of those liabilities.
Each sales agent and each forward seller will provide written confirmation
to us following the close of trading on the NYSE each day on which shares of our common stock are sold through such sales agent or such
forward seller under the Distribution Agreement. Each confirmation will include the number of shares sold on that day, the gross sales
price per share and the net proceeds to us.
We will report at least quarterly the number of shares of our common
stock sold to or through the sales agents or through the forward sellers under the Distribution Agreement, the net proceeds to us and
the compensation paid by us in connection with the sales of shares of our common stock.
The offering of shares of our common stock pursuant to the Distribution
Agreement will terminate upon the earlier of (i) the sale of all shares of our common stock subject to the Distribution Agreement
or (ii) the termination of the Distribution Agreement by us or the sales agents, the forward sellers and the forward purchasers.
We estimate that the total expenses of the offering payable by us,
excluding discounts and commissions and other amounts payable to the sales agents, the forward sellers and the forward purchasers, will
be approximately $1.6 million over the term of the Distribution Agreement. We have also agreed to pay for the reasonable fees and disbursements
of the sales agents, the forward sellers and the forward purchasers in connection with the offering, subject to certain limits.
SALES BY OR THROUGH THE SALES AGENTS
Each sales agent will offer our common stock subject to the terms and
conditions of the Distribution Agreement on a daily basis or otherwise as agreed upon by us and such sales agent. We will determine the
amount of our shares to be sold together with such sales agent. We may instruct the sales agents not to sell our common stock if the sales
cannot be effected at or above the price designated by us in the relevant instruction. We or the applicable sales agent may also suspend
the offering of shares of our common stock under the Distribution Agreement upon proper notice and subject to other conditions.
We will pay each sales agent a commission that will not exceed, but
may be lower than, 2% of the gross sales price of the sale of shares of our common stock sold through such sales agent pursuant to this
prospectus supplement. The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any
governmental, regulatory or self-regulatory organization in connection with the sales, will equal our net proceeds for the sale of such
shares.
Settlement for sales of our common stock will occur, unless the parties
agree otherwise, on the second business day following the date on which any sales were made in return for payment of the net proceeds
to us. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
Under the Distribution Agreement, we may also sell shares of our common
stock to a sales agent as principal for its own account, at a price to be agreed upon at the time of sale. If we sell shares to a sales
agent as principal, then we will enter into a separate terms agreement with such sales agent, and we will describe the agreement in a
separate prospectus supplement or pricing supplement. The net proceeds we receive will be the gross proceeds received from such sales
less the commissions and any other costs we may incur in issuing the shares of our common stock.
SALES THROUGH THE FORWARD SELLERS
If we enter into a forward sale agreement with any forward purchaser,
we expect that such forward purchaser (or its affiliate) will attempt to borrow from third parties and sell, through the related forward
seller, acting as sales agent for such forward purchaser, shares of our common stock to hedge such forward purchaser's exposure under
such forward sale agreement.
In connection with any forward sale agreement, we will deliver instructions
to the relevant forward seller requesting it to sell the applicable borrowed shares of our common stock on behalf of the relevant forward
purchaser. Upon its acceptance, such forward seller has agreed to use its commercially reasonable efforts, consistent with its normal
trading and sales practices, to sell such shares of our common stock pursuant to the Distribution Agreement and the relevant forward sale
agreement. We may instruct the forward sellers not to sell our common stock if the sales cannot be effected at or above the price designated
by us in the relevant instruction. We or the applicable forward seller may also suspend the offering of shares of our common stock under
the Distribution Agreement upon proper notice and subject to other conditions.
We will pay the applicable forward seller a commission, through a reduction
to the initial forward sale price under the related forward sale agreement, at a mutually agreed rate of up to 2.0% of the gross sales
price per share of the borrowed shares of our common stock sold through such forward seller during the applicable forward selling period
for such shares (subject to certain possible adjustments to such gross sales price for daily accruals and any quarterly dividends having
an "ex-dividend" date during such forward selling period).
Pursuant to each forward sale agreement, if any, we will have the right
to issue and deliver to the forward purchaser party thereto a specified number of shares of our common stock on the terms and subject
to the conditions set forth therein, or to elect cash settlement or net share settlement for all or any portion of such shares. The initial
forward sale price per share under each forward sale agreement will equal the product of (1) an amount equal to one minus the applicable
forward selling commission and (2) the volume weighted average price per share at which the borrowed shares of our common stock were
sold pursuant to the Distribution Agreement by the relevant forward seller during the applicable forward selling period for such shares
to hedge the relevant forward purchaser's exposure under such forward sale agreement (subject to certain possible adjustments to such
gross sales price for daily accruals and any quarterly dividends having an "ex-dividend" date during such forward selling period).
Thereafter, the forward sale price will be subject to the price adjustment provisions of the applicable forward sale agreement. We will
not receive any proceeds from any sale of shares of our common stock borrowed by a forward purchaser (or its affiliate) and sold through
a forward seller, and all of such proceeds will be paid to the relevant forward purchaser (or one or more of its affiliates).
We currently expect to fully physically settle each forward sale agreement,
if any, with the relevant forward purchaser on one or more dates specified by us on or prior to the maturity date of such forward sale
agreement. Although, we will have the right, subject to certain exceptions, to elect cash settlement or net share settlement instead of
physical settlement for any of the shares we have agreed to sell under such forward sale agreement. If we elect or are deemed to have
elected to physically settle any forward sale agreement by delivering shares of our common stock, then we will receive an amount of cash
from the relevant forward purchaser equal to the product of (1) the forward sale price per share under such forward sale agreement
and (2) the number of shares of our common stock as to which we have elected or are deemed to have elected physical settlement, subject
to the price adjustment and other provisions of such forward sale agreement. Each forward sale agreement will provide that the forward
sale price will be subject to adjustment on a daily basis based on a floating interest rate factor equal to a specified daily rate less
a spread. In addition, the forward sale price will be subject to decrease on certain dates specified in the relevant forward sale agreement
by the amount per share of quarterly dividends that we expect to declare on our common stock during the term of such forward sale agreement.
If the specified daily rate is less than the applicable spread on any day, the interest rate factor will result in a daily reduction of
the forward sale price. If the specified daily rate is greater than the applicable spread on any day, the interest rate factor will result
in a daily increase of the forward sale price.
We will also generally have the right, in lieu of physical settlement
of any forward sale agreement, to elect cash or net share settlement in respect of any or all of the shares of our common stock subject
to such forward sale agreement. If we elect to cash or net share settle all or any part of any forward sale agreement, then we would expect
the relevant forward purchaser or one of its affiliates to purchase shares of our common stock in secondary market transactions over an
unwind period to:
| · | return shares of our common stock to securities lenders to unwind such forward purchaser's hedge (after taking into consideration
any shares of our common stock to be delivered by us to such forward purchaser, in the case of net share settlement); and |
| · | if applicable, in the case of net share settlement, deliver shares of our common stock to us to the extent required upon settlement
of such forward sale agreement. |
Before the
settlement of a forward sale agreement, we expect that the shares issuable upon settlement of such forward sale agreement will be reflected
in our diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of our common
stock used in calculating diluted earnings per share is deemed to be increased by the excess, if any, of the number of shares of our common
stock that would be issued upon full physical settlement of such forward sale agreement over the number of shares of our common stock
that could be purchased by us in the market (based on the average market price during the period) using the proceeds receivable upon full
physical settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, we anticipate that there
will be no dilutive effect on our earnings per share prior to physical or net share settlement of such forward sale agreement and subject
to the occurrence of certain events, except during periods when the average market price of our common stock is above the applicable forward
sale price, which is subject to increase or decrease based on a specified daily rate, less a spread to be mutually agreed by us and the
applicable forward purchaser, and subject to decrease by amounts related to expected dividends on shares of our common stock during the
term of such forward sale agreement. However, if we decide to physically settle or net share settle any forward sale agreement, then delivery
of shares of our common stock to the applicable forward purchaser on any such physical settlement or net share settlement date would result
in dilution to our earnings per share and other reported per share measures.
Each forward purchaser will have the right to accelerate its forward
sale agreement (with respect to all or any portion of the transaction under such forward sale agreement (except with respect to events
specified in (1) and (3) below, where accelerated settlement is limited to the portion of shares whose settlement would address
the relevant event or that is affected by the relevant event)) that it enters into with us and require us to physically settle such shares
on a date specified by such forward purchaser if: (1) in such forward purchaser's commercially reasonable judgment, it or its affiliate
(a) is unable to hedge (or maintain a hedge of) its exposure under such forward sale agreement because insufficient shares of our
common stock have been made available for borrowing by securities lenders or (b) would incur a stock borrow cost in excess of a specified
threshold; (2) we declare any distribution, issue or dividend on shares of our common stock that constitutes an extraordinary dividend
under the forward sale agreement or is payable in (a) cash in excess of specified amounts (unless it is an extraordinary dividend),
(b) securities of another company that we acquire or own (directly or indirectly) as a result of a spin-off or similar transaction
or (c) any other type of securities (other than shares of our common stock), rights, warrants or other assets for payment at less
than the prevailing market price; (3) certain ownership thresholds applicable to such forward purchaser and its affiliates are or
would be exceeded; (4) an event (a) is announced that if consummated would result in a specified extraordinary event (including
certain mergers, tender offers, certain events involving our nationalization, our insolvency or a delisting of our common stock) or (b) occurs
that would constitute a hedging disruption or change in law; or (5) certain other events of default or termination events occur,
including, among others, any material misrepresentation made by us in connection with such forward sale agreement (each as more fully
described in the relevant forward sale agreement).
A forward purchaser's decision to exercise its right to accelerate
all or a portion of the settlement of any forward sale agreement and to require us to physically settle the relevant shares will be made
irrespective of our interests, including our need for capital. In such cases, we could be required to issue and deliver shares of our
common stock under the terms of the physical settlement provisions of the applicable forward sale agreement irrespective of our capital
needs, which would result in dilution to our earnings per share and funds from operations per share.
If the price of our common stock at which these purchases by such forward
purchaser (or its affiliate) are made is below the relevant forward sale price, then such forward purchaser will pay us such difference
in cash (if we elect to cash settle) or deliver to us a number of shares of our common stock having a market value equal to such difference
(if we elect to net share settle). If the price of our common stock at which these purchases are made by such forward purchaser (or its
affiliate) exceeds the applicable forward sale price, then we will pay such forward purchaser an amount in cash equal to such difference
(if we elect to cash settle) or we will deliver to such forward purchaser a number of shares of our common stock having a market value
equal to such difference (if we elect to net share settle). Any such difference could be significant and could result in our receipt of
a significant amount of cash or number of shares of our common stock from such forward purchaser or require us to pay a significant amount
of cash or deliver a significant number of shares of our common stock to such forward purchaser.
The purchase of shares of our common stock by a forward purchaser or
its affiliate to unwind the forward purchaser's hedge position could also cause the price of our common stock to increase above the price
that would have prevailed in the absence of those purchases (or prevent a decrease in such price), thereby increasing the amount of cash
(in the case of cash settlement) or the number of shares (in the case of net share settlement) that we would owe such forward purchaser
upon settlement of the applicable forward sale agreement or decrease the amount of cash (in the case of cash settlement) or the number
of shares (in the case of net share settlement) that such forward purchaser would owe us upon settlement of the applicable forward sale
agreement.
In addition, upon certain events of bankruptcy or insolvency relating
to us, the forward sale agreements will terminate without further liability of the parties thereto. Following any such termination, we
would not issue any shares of our common stock pursuant to such forward sale agreements, and we would not receive any proceeds pursuant
to the forward sale agreements. See "Risk Factors—Risks Related with the Forward Sale Agreements."
The descriptions of certain provisions of the forward sale agreements
appearing above and elsewhere in this prospectus supplement are not complete and are subject to, and qualified in their entirety by reference
to, the terms and provisions of such forward sale agreements. A form of the forward sale agreement is included as an exhibit to the Distribution
Agreement, and the Distribution Agreement has been or will be filed as exhibits to a document incorporated by reference in the accompanying
prospectus and may be obtained as described under "Incorporation by Reference" in the accompanying
prospectus.
OTHER RELATIONSHIPS
The sales agents, the forward sellers, the forward purchasers and their
respective affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary
course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these
transactions.
As of the date of this prospectus supplement, affiliates of certain
of the sales agents, the forward sellers and the forward purchasers are lenders and, in certain cases, agents, under the Credit Facility.
To the extent that we use a portion of the net proceeds from this offering or settlement of any forward sale agreement to repay the outstanding
balance under the Credit Facility, such affiliates of the applicable sales agents, the applicable forward sellers or the applicable forward
purchasers will receive their proportionate share of any amount that is repaid with such net proceeds. These transactions create potential
conflicts of interest because the sales agents, the forward sellers and the forward purchasers have an interest in the successful completion
of this offering beyond the sales commissions they may receive. These interests may influence the decision regarding the terms and circumstances
under which the offering is completed.
In addition, in the ordinary course of their business activities, the
sales agents, the forward sellers, the forward purchasers and their respective affiliates may make or hold a broad array of investments
and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for
their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments
of ours or our affiliates. The sales agents, the forward sellers, the forward purchasers and their respective affiliates may also make
investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments
and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
Associated Investment Services, Inc., a Financial Industry Regulatory
Authority member and a subsidiary of Associated Banc-Corp, is being paid a referral fee by Samuel A. Ramirez & Company, Inc.
If we enter into a forward sale agreement with any forward purchaser,
we expect that such forward purchaser (or its affiliate) will attempt to borrow from third parties and sell, through the related forward
seller, acting as sales agent for such forward purchaser, shares of our common stock to hedge such forward purchaser's exposure under
such forward sale agreement. All of the net proceeds from the sale of any such borrowed shares will be paid to the applicable forward
purchaser (or its affiliate). Each forward purchaser will either be a forward seller or an affiliate of a forward seller. As a result,
a forward seller (or its affiliate) will receive the net proceeds from any sale of borrowed shares of our common stock made in connection
with any forward sale agreement.
LEGAL MATTERS
Certain legal matters relating to this offering will be passed on for
us by Seyfarth Shaw, LLP, New York, New York. Certain matters of Maryland law will be passed on for us by Ballard Spahr LLP, Baltimore,
Maryland and certain tax matters related to our qualification as a REIT will be passed on for us by Seyfarth Shaw, LLP, New York, New
York. Certain legal matters relating to this offering will be passed on for the sales agents, the forward sellers and the forward purchasers
by Sidley Austin, LLP, New York, New York.
EXPERTS
The financial statements and management's assessment of the effectiveness
of internal control over financial reporting (which is included in Management's Report on Internal Control over Financial Reporting) incorporated
in this prospectus supplement by reference to the Annual Report on Form 10-K for the year ended December 31, 2022 have been so incorporated
in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said
firm as experts in accounting and auditing.
INCORPORATION BY REFERENCE
The SEC's rules allow us to "incorporate by reference"
certain information into this prospectus supplement, which means that we can disclose important information to you by referring you to
another document filed separately with the SEC. The information that we incorporate by reference is deemed to be part of this prospectus
supplement, and subsequent information that we file later with the SEC prior to the termination of this offering will automatically update
and supersede the information contained in this prospectus supplement. We are not, however, incorporating by reference any documents or
portions thereof, whether specifically listed below or filed in the future, that are not deemed "filed" with the SEC.
We incorporate by reference the documents listed below and any filings
made by us with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus
supplement and prior to the termination of this offering (in each case, other than information in such documents that is deemed not to
be filed):
| · | The Combined Quarterly Reports of the Corporation and the Operating Partnership on Form 10-Q for the fiscal quarters ended March 31,
2023, June 30, 2023 and September 30, 2023, as filed with the SEC on April 26, 2023, July 26, 2023 and October 25, 2023, respectively; |
| · | registration statement on Form 8-A dated August 9, 1994, including any amendments thereto. |
The accompanying prospectus is part of a registration statement on
Form S-3 we have filed with the SEC under the Securities Act. Neither this prospectus supplement nor the accompanying prospectus
contains all of the information in the registration statement. We have omitted certain parts of the registration statement, as permitted
by the rules and regulations of the SEC. You may access the registration statement, including exhibits, on the SEC's website at http://www.sec.gov
or on our website at http://www.verisresidential.com. Information contained on our website is not and should not be deemed a part of this
prospectus supplement, the accompanying prospectus or any other report or filing filed with the SEC. Our statements in this prospectus
supplement concerning the contents of any contract or other document are not necessarily complete. You should refer to the copy of each
contract or other document we have filed as an exhibit to the registration statement for complete information.
Documents incorporated by reference are available from us without charge,
excluding all exhibits unless we have specifically incorporated by reference the exhibit in this prospectus supplement and the accompanying
prospectus. You may obtain documents incorporated by reference in this prospectus supplement and the accompanying prospectus by requesting
them in writing or by telephone from:
Veris Residential, Inc.
Harborside 3, 210 Hudson Street, Suite 400
Jersey City, New Jersey
07311
Attn: Secretary
Telephone: (732) 590-1010.
PROSPECTUS
$2,000,000,000
VERIS RESIDENTIAL, INC.
Common Stock, Preferred Stock, Depositary Shares
and Warrants
Veris Residential, Inc. may, from time to
time, in one or more series, offer the following securities:
| · | preferred stock represented by depositary shares; or |
| · | warrants to purchase common stock or preferred stock. |
We will describe the terms of any such offering
in a supplement to this prospectus. Such prospectus supplement will contain the following information about the offered securities:
| · | offering price, underwriting discounts and commissions and our
net proceeds; |
| · | any market listing and trading symbol; |
| · | names of lead or managing underwriters and description of underwriting
arrangements; and |
| · | the specific terms of the offered securities. |
Our common stock is listed on The New York Stock
Exchange under the symbol “VRE.” The closing price of our common stock as reported on The New York Stock Exchange on February 23,
2023 was $16.52 per share. If any other securities offered hereby will be listed on a national securities exchange, such listing will
be described in the applicable prospectus supplement.
You should carefully read and consider the
risk factors under Part I, Item 1A contained in our most recent Annual Report on Form 10-K for risks relating to investments
in our securities, as such risk factors may be supplemented or amended from time to time under Part II, Item 1A of our Quarterly
Reports on Form 10-Q.
Our mailing address and telephone number are:
Harborside 3, 210 Hudson St., Ste. 400
Jersey City, New Jersey 07311
(732) 590-1010
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus is February 24,
2023
TABLE OF CONTENTS
We have not authorized any person to give any
information or to make any representations other than those contained or incorporated by reference in this prospectus, and, if given
or made, you must not rely upon such information or representations as having been authorized. This prospectus does not constitute an
offer to sell or the solicitation of an offer to buy any securities other than the securities described in this prospectus or an offer
to sell or the solicitation to buy such securities in any circumstances in which such offer or solicitation is unlawful. Neither the
delivery of this prospectus nor any sale made under this prospectus will, under any circumstances, create any implication that there
has been no change in our affairs since the date of this prospectus or that the information contained or incorporated by reference in
this prospectus is correct as of any time subsequent to the date of such information.
Unless the context otherwise requires, all
references in this prospectus to the “registrant,” “General Partner,” “we,” “us,” “our,”
or “the Company” include Veris Residential, Inc., a Maryland corporation, and any subsidiaries or other entities controlled
by us, including Veris Residential, L.P., a Delaware limited partnership. All references in this prospectus to the “Operating
Partnership” include Veris Residential, L.P. and any subsidiaries or other entities that the Operating Partnership owns or controls.
All references in this prospectus to “common stock” refer to our common stock, par value $0.01 per share. All references
in this prospectus to “units” refer to the units of limited partnership interest in the Operating Partnership.
ABOUT THIS PROSPECTUS
This prospectus is part of an automatic shelf
registration statement on Form S-3. Under this shelf registration statement, we may sell, in one or more offerings for total proceeds
of up to $2,000,000,000, any combination of common stock, preferred stock, depositary shares or warrants of the Company. This prospectus
provides you with a general description of the securities we may offer. If required, each time we sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of that offering and those securities. The prospectus supplement
may add, update or change information contained in this prospectus. Before you buy any of our securities, it is important for you to
consider the information contained in this prospectus and any prospectus supplement together with additional information described under
the heading “Information About Us.”
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
We
consider portions of this prospectus, including the documents incorporated by reference, to be forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements
contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Such forward-looking statements
relate to, without limitation, our future economic performance, plans and objectives for future operations and projections of revenue
and other financial items. Forward-looking statements can be identified by the use of words such as “may,” “will,”
“plan,” “potential,” “projected,” “should,” “expect,” “anticipate,”
“estimate,” “target,” “continue,” or comparable terminology. Forward-looking statements are inherently
subject to certain risks, trends and uncertainties, many of which we cannot predict with accuracy and some of which we might not even
anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions
at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise,
may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance
on these forward-looking statements.
Among the factors about which we have made assumptions
are:
| · | risks
and uncertainties affecting the general economic climate and conditions, which in turn may
have a negative effect on the fundamentals of our business and the financial condition of
our tenants and residents; |
| · | the
value of our real estate assets, which may limit our ability to dispose of assets at attractive
prices or obtain or maintain debt financing secured by our properties or on an unsecured
basis; |
| · | the
extent of any tenant bankruptcies or of any early lease terminations; |
| · | our
ability to lease or re-lease space at current or anticipated rents; |
| · | changes
in the supply of and demand for our properties; |
| · | changes
in interest rate levels and volatility in the securities markets; |
| · | our
ability to complete construction and development activities on time and within budget, including
without limitation obtaining regulatory permits and the availability and cost of materials,
labor and equipment; |
| · | our
ability to attract, hire and retain qualified personnel; |
| · | forward-looking
financial and operational information, including information relating to future development
projects, potential acquisitions or dispositions, leasing activities, capitalization rates,
and projected revenue and income; |
| · | changes
in operating costs; |
| · | our
ability to obtain adequate insurance, including coverage for natural disasters and terrorist
acts; |
| · | our
credit worthiness and the availability of financing on attractive terms or at all, which
may adversely impact our ability to pursue acquisition and development opportunities and
refinance existing debt and our future interest expense; |
| · | changes
in governmental regulation, tax rates and similar matters; and |
| · | other
risks associated with the development and acquisition of properties, including risks that
the development may not be completed on schedule, that the tenants or residents will not
take occupancy or pay rent, or that development or operating costs may be greater than anticipated. |
For further information on factors which could
impact us and the statements contained herein, see the “Risk Factors” under Part I, Item 1A in our most recent
Annual Reports on Form 10-K for risks relating to investments in our securities, as such risk factors may be supplemented or amended
from time to time under Part II, Item 1A of our Quarterly Reports on Form 10-Q. We assume no obligation to update
and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
AVAILABLE INFORMATION
We file annual, quarterly and current reports
with the Securities and Exchange Commission. You may read and copy any documents filed by us at the Securities and Exchange Commission’s
public reference room located at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public
reference room of the Securities and Exchange Commission by calling the Securities and Exchange Commission at 1-800-SEC-0330. You also
can request copies of such documents, upon payment of a duplicating fee, by writing to the public reference room of the Securities and
Exchange Commission, 100 F Street, N.E., Washington, D.C. 20549. The Securities and Exchange Commission maintains a web site that contains
reports, proxy and information statements and other information regarding registrants that file electronically with the Securities and
Exchange Commission. The address of the Securities and Exchange Commission’s web site is: http://www.sec.gov. In addition,
our common stock is listed on The New York Stock Exchange, and similar information concerning us can be inspected and copied at the offices
of The New York Stock Exchange, 11 Wall Street, New York, New York 10005. In addition, copies of our annual, quarterly, and current reports
may be obtained from our website at http://www.verisresidential.com. The information available on or through our website
is not a part of this prospectus or any prospectus supplement.
We have filed with the Securities and Exchange
Commission an automatic shelf registration statement on Form S-3 (of which this prospectus is a part) under the Securities Act with
respect to the securities offered by this prospectus. This prospectus does not contain all of the information set forth in the registration
statement, certain portions of which have been omitted as permitted by the rules and regulations of the Securities and Exchange
Commission. Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete,
and in each instance please see the copy of such contract or other document filed as an exhibit to the registration statement, each such
statement being qualified in all respects by such reference and the exhibits and schedules thereto. For further information regarding
us and the securities offered by this prospectus, please refer to the registration statement and such exhibits and schedules which may
be obtained from the Securities and Exchange Commission at its principal office in Washington, D.C. upon payment of the fees prescribed
by the Securities and Exchange Commission, or from its web site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
In this document, we “incorporate by
reference” the information we file with the Securities and Exchange Commission, which means that we can disclose important
information to you by referring to that information. The information incorporated by reference is considered to be a part of this
prospectus, and later information filed with the Securities and Exchange Commission will update and supersede this information. We
incorporate by reference the documents listed below and any future filings made with the Securities and Exchange Commission under
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus until the offering is completed:
| (3) | The
description of our common stock and the description of certain provisions of Maryland Law
contained in: |
| i. | Our
Registration Statement on Form 8-A dated August 9, 1994; |
| v. | Any
amendments or reports filed for the purpose of updating such description. |
Except as otherwise indicated, all documents we
file with the Securities and Exchange Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent
to the date of this prospectus and prior to the filing of a post-effective amendment to the registration statement of which this prospectus
is a part that indicates that all securities offered have been sold or that deregisters all securities then remaining unsold will be
deemed to be incorporated by reference into this prospectus and to be part hereof from the date of filing of such documents. Any
statement contained in any document incorporated or deemed to be incorporated by reference herein will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently filed document which also
is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded
will not be deemed, except as modified or superseded, to constitute a part of this prospectus.
We will provide, free of charge, to any person,
including any beneficial owner, to whom a copy of this prospectus is delivered, upon written or oral request, a copy of any or all of
the documents incorporated by reference into this prospectus, other than exhibits to those documents unless specifically incorporated
by reference. To request a copy of those documents, you should contact us as set forth below under “Information About
Us.”
INFORMATION ABOUT US
Veris Residential, Inc., a Maryland corporation,
together with its subsidiaries (collectively the “General Partner”), is a fully-integrated, self-administered and self-managed
real estate investment trust (“REIT”).
The Company develops, owns and operates predominantly
multifamily rental properties located primarily in the Northeast, as well as a portfolio of Class A office properties. The Company
is in the process of transitioning to a pure-play multifamily REIT and is focused on conducting business in a socially, ethically, and
environmentally responsible manner, while seeking to maximize value for all stakeholders. Veris Residential, Inc. was incorporated
on May 24, 1994.
The General Partner controls Veris Residential,
L.P., a Delaware limited partnership, together with its subsidiaries (collectively, the “Operating Partnership”), as its
sole general partner and owned a 90.7 and 91.0 percent common unit interest in the Operating Partnership as of December 31, 2022
and 2021, respectively.
As of December 31, 2022, the Company owned
or had interests in 24 multifamily rental properties as well as non-core assets comprised of five office buildings, four parking/retail
properties and two hotels, plus developable land (collectively, the “Properties”). The Properties are comprised of: (a) 27
wholly-owned or Company-controlled properties comprised of 17 multifamily properties and 10 non-core assets, and, (b) eight properties
owned by unconsolidated joint ventures in which the Company has investment interests, including seven multifamily properties and a non-core
asset. The Properties are located in three states in the Northeast, plus the District of Columbia.
The General Partner’s shares of common stock
are listed on The New York Stock Exchange under the symbol “VRE.”
Our executive offices are located at Harborside
3, 210 Hudson Street, Suite 400, Jersey City, New Jersey 07311, and its telephone number is (732) 590-1010. We maintain an
Internet website at http://www.verisresidential.com. We have not incorporated by reference into this prospectus the information
in, or that can be accessed through, our website, and you should not consider it to be a part of this prospectus or any prospectus supplement.
USE OF PROCEEDS
Unless otherwise specified in the applicable
prospectus supplement, we intend to use the net proceeds from the sale of securities offered by this prospectus for general corporate
purposes and working capital. As required by the terms of the limited partnership agreement of the Operating Partnership, we must invest
the net proceeds of any sale of our common stock or preferred stock in the Operating Partnership in exchange for additional units of
limited partnership interest.
DESCRIPTION OF COMMON STOCK
The following description of our common stock
in this prospectus contains the general terms and provisions of our common stock. The particular terms of any offering of our common
stock will be described in a prospectus supplement relating to such offering. The prospectus supplement may provide that our common stock
will be issuable upon conversion of preferred stock or upon the exercise of warrants to purchase our common stock. The statements below
describing our common stock are subject to and qualified by, the applicable provisions of our charter and bylaws.
General
We are authorized under our charter to issue 190,000,000
shares of our common stock. Each outstanding share of common stock entitles the holder to one vote on all matters presented to stockholders
for a vote. Holders of common stock have no preemptive or cumulative voting rights. At February 15, 2023, 91,164,664 shares of our
common stock were issued and outstanding. Our common stock currently is listed for trading on the New York Stock Exchange under the symbol
“VRE.”
All shares of common stock to be outstanding following
this offering will be, upon our receipt of the consideration therefor, duly authorized, validly issued, fully paid and non-assessable.
We may pay dividends to the holders of our common stock if and when declared by our board of directors out of legally available funds.
Dividends depend on a variety of factors, and there can be no assurances that distributions will be made in the future.
Under Maryland law, our stockholders generally
are not liable for our debts or obligations. If we are liquidated, subject to the right of any holders of preferred stock to receive
preferential distributions, each outstanding share of common stock will participate pro rata in any assets remaining after our payment
of, or adequate provision for, all of our known debts and liabilities, including debts and liabilities arising out of our status as general
partner of Veris Residential, L.P. All shares of our common stock have equal distribution, liquidation and voting rights, and have no
preferences or exchange rights, subject to the ownership limits set forth in our charter or as permitted by our board of directors.
Ownership Limitations and Restrictions on Transfer
Generally, our charter provides that no person
may beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Internal Revenue Code of 1986, as
amended (the “Code”), more than 9.8% of our issued and outstanding capital stock. In addition, our charter and bylaws contain
provisions that would have the effect of delaying, deferring or preventing a change in control. See “Certain Provisions of
Maryland Law and our Charter and Bylaws.”
In order for us to maintain our REIT qualification
under the Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals
(including certain entities treated as individuals for these purposes) during the last half of a taxable year, and at least 100 persons
must beneficially own our outstanding capital stock for at least 335 days per 12 month taxable year, or during a proportionate
part of a taxable year of less than 12 months. To help ensure that we meet these tests, our charter provides that no holder may
beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Code, more than 9.8% of our issued and
outstanding capital stock. Our board of directors may waive this ownership limit if it receives evidence that ownership in excess of
the limit will not jeopardize our REIT status under the Code.
The ownership limitations and restrictions on
transfer will not apply if our board of directors determines that it is no longer in our best interest to attempt to qualify, or to continue
to qualify, as a REIT under the Code.
All certificates representing shares of our capital
stock will bear a legend referring to the restrictions described above.
If you beneficially own more than 5% of our outstanding
capital stock, you must file a written response to our request for stock ownership information, which we will mail to you no later
than January 30th of each year. This notice should contain your name and address, the number of shares of each class or series of
stock you beneficially own and a description of how you hold the shares. In addition, you must disclose to us in writing any additional
information we request in order to determine the effect of your ownership of such shares on our status as a REIT under the Code.
These ownership limitations could have the effect
of precluding a third party from obtaining control over us unless our board of directors and our stockholders determine that maintaining
REIT status is no longer desirable.
Operating Partnership Agreement
The partnership agreement of Veris Residential,
L.P. requires that the consent of the holders of at least 85% of Veris Residential, L.P.’s partnership units is required:
| · | to merge (or permit the merger of) Veris Residential, L.P. with
another unrelated entity, unless Veris Residential, L.P. shall be the surviving entity in such merger; |
| · | to dissolve, liquidate, or wind-up Veris Residential, L.P.;
or |
| · | to convey or otherwise transfer all or substantially all of
the assets of Veris Residential, L.P. |
As of December 31, 2022, the Company, as
general partner of Veris Residential, L.P., held approximately 90.7 percent of the outstanding common partnership units of Veris Residential,
L.P. Consequently, approval of any of the foregoing transactions currently would not require the consent of any of the limited partners
of Veris Residential, L.P.
The partnership agreement also contains provisions
restricting us from engaging in a merger or sale of substantially all of our assets, unless such transaction was one where all of the
limited partners received for each partnership unit, an amount of cash, securities, or other property equal to the number of shares of
common stock into which such partnership unit is convertible multiplied by the greatest amount of cash, securities or other property
paid to a holder of one share of common stock in consideration of one share of common stock. However, if, in connection with a
merger or sale of substantially all of our assets, a purchase, tender or exchange offer was made to all of the outstanding common stockholders,
each partnership unit holder would receive the greatest amount of cash, securities, or other property which such partnership unit holder
would have received had it exercised its redemption rights and received common stock in exchange for its partnership units immediately
before such purchase, tender or exchange offer expires.
We may merge with another entity, without any
of the restrictions identified in the immediately preceding paragraph, so long as each of the following requirements are satisfied:
| · | after a merger, substantially all of the assets owned by the
surviving entity, other than partnership units we hold, are owned by Veris Residential, L.P. or another limited partnership or limited
liability company which is the survivor of a merger with Veris Residential, L.P.; |
| · | the limited partners own a percentage interest of the surviving
partnership based on the fair market value of the net assets of Veris Residential, L.P. and the fair market value of the other net assets
of the surviving partnership before the transaction; |
| · | the rights, preferences and privileges of the limited partners
in the surviving partnership are at least as favorable as those in effect before the transaction; and |
| · | such rights of the limited partners include the right to exchange
their interests in the surviving partnership for at least one of: (A) the consideration available to such limited partners, or (B) if
the ultimate controlling person of the surviving partnership has publicly traded common equity securities, such common equity securities,
with an exchange ratio based on the relative fair market value of such securities and the common stock. |
Redemption Rights
Certain individuals who received common units in Veris Residential,
L.P. have the right to have their common units redeemed for cash, based upon the fair market value of an equivalent number of shares
of our common stock at the time of such redemption, or, at our election, shares of our common stock, on a one-for-one basis. However,
we may not pay for such redemption with shares of common stock if, after giving effect to such redemption, any person would beneficially
or constructively own shares in excess of the ownership limit described in “Ownership Limitations and Restrictions on Transfer.”
As of February 15, 2023, the limited partners of Veris Residential, L.P. owned 9,163,754 common units, 695,851 Long-Term Incentive
Plan Units that are convertible on a one-for-one basis into common units, 625,000 Class AO Long-Term Incentive Plan Units that are
convertible into common units in accordance with a formula based on the market price of the General Partner’s common stock subject
to the attainment of certain price-vesting conditions, 42,800 series A 3.5% preferred limited partnership units that are convertible
into up to 1,204,820 common units, and 9,213 series A-1 3.5% preferred limited partnership units that are convertible into up to 257,375
common units. All common units may be redeemed, at our election, for an equal number of shares of our common stock.
Transfer Agent
The transfer agent for our common stock is:
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233-5000
1-800-317-4445
www.computershare.com/investor
DESCRIPTION OF PREFERRED STOCK
The following description of our preferred stock
in this prospectus contains the general terms and provisions of our preferred stock. The particular terms of any offering of preferred
stock will be described in a prospectus supplement relating to such offering. The statements below describing our preferred stock are
subject to and qualified by, the applicable provisions of our charter, bylaws and any articles supplementary.
General
We are authorized to issue up to 5,000,000 shares
of preferred stock. Under our charter, we may issue shares of preferred stock from time to time, in one or more series, as authorized
by our board of directors. Before the issuance of shares of each series, our board of directors is required by Maryland law and our charter
to adopt resolutions and file articles supplementary with the State Department of Assessment and Taxation of Maryland, setting forth
for each such series: the designation of the series to distinguish it from other series and classes of our stock, the number of shares
to be included in the series and the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms or conditions of redemption of the shares of the series.
Because our board of directors has the power
to establish the terms and conditions of each series of preferred stock, it may afford the holders of any series of preferred stock powers,
preferences and rights, voting or otherwise, senior to the rights of holders of shares of our common stock. Our issuance of preferred
stock could have the effect of delaying or preventing a change in control.
Terms
When we issue preferred stock and receive the
consideration therefor, such preferred stock will be duly authorized, validly issued, fully paid and non-assessable. The preferred stock
will not have any preemptive rights.
Articles supplementary that will become part
of our charter will reflect the specific terms of any new series of preferred stock offered. A prospectus supplement will describe these
specific terms, including:
| · | the title and stated value; |
| · | the number of shares, liquidation preference and offering price; |
| · | the dividend rate, dividend periods and payment dates; |
| · | the date on which dividends begin to accrue or accumulate; |
| · | any auction and remarketing procedures; |
| · | any retirement or sinking fund requirement; |
| · | the price and the terms and conditions of any redemption right; |
| · | any listing on any securities exchange; |
| · | the price and the terms and conditions of any conversion or
exchange right; |
| · | whether interests will be represented by depositary shares; |
| · | the relative ranking and preferences as to dividends, liquidation,
dissolution or winding up; |
| · | any limitations on issuing any series of preferred stock ranking
senior to or on a parity with the series of preferred stock as to dividends, liquidation, dissolution or winding up; |
| · | any limitations on direct or beneficial ownership and restrictions
on transfer; |
| · | any U.S. federal income tax considerations, if appropriate;
and |
| · | any other specific terms, preferences, rights, limitations or
restrictions. |
Rank
Unless otherwise described in the prospectus
supplement, the preferred stock will have the following ranking as to dividends, liquidation, dissolution or winding up:
| · | senior to our common stock and to all other equity securities
ranking junior to the preferred stock; |
| · | on a parity with all equity securities issued by us which by
their terms rank on a parity with the preferred stock; and |
| · | junior to all equity securities issued by us which by their
terms rank senior to the preferred stock. |
Dividends
If declared by our board of directors, preferred
stockholders will be entitled to receive cash dividends at the rate set forth in the prospectus supplement. We will pay dividends to
stockholders of record on the record date fixed by our board of directors. The prospectus supplement will specify whether dividends on
any series of preferred stock are cumulative or non-cumulative. If dividends are cumulative, they will be cumulative from the date set
forth in the prospectus supplement. If dividends are non-cumulative and our board of directors does not declare a dividend payable on
a dividend payment date, then the holders of that series will have no right to receive a dividend, and we will not be obligated to pay
an accrued dividend later for the missed dividend period, whether or not our board of directors declares dividends on the series on any
future date.
If any preferred stock is outstanding, we will
not declare or pay dividends on, or redeem, purchase or otherwise acquire any shares of, our common stock or any capital stock ranking
junior to a series of preferred stock, other than dividends paid in, or conversions or exchanges for, common stock or other capital stock
junior to the preferred stock, unless:
| · | if the series of preferred stock has cumulative dividends, we
have declared and paid full cumulative dividends for all past dividend periods or declared and reserved funds for payment therefor before
or at the same time as the declaration and payment on the junior series; or |
| · | if the series of preferred stock does not have cumulative dividends,
we have declared and paid full dividends for the current dividend period or declared and reserved funds for payment therefor before or
at the same time as the declaration and payment on the junior series. |
Unless the prospectus supplement provides otherwise,
when we do not pay dividends on shares from more than one series of preferred stock ranking in parity as to dividends in full (or we
have not reserved a sufficient sum for full payment), all of these dividends will be declared pro rata so that the amount of dividends
declared per share in each series will in all cases bear the same ratio of accrued dividends owed. These pro rata payments per share
will not include interest, nor will they include any accumulated unpaid dividends from prior periods if the dividends in question are
non-cumulative.
Redemption
If specified in the prospectus supplement, we
will have the right to redeem all or any part of the preferred stock in each series at our option, or the preferred stock will be subject
to mandatory redemption.
If the series of preferred stock is subject to
mandatory redemption, the prospectus supplement will specify:
| · | the number of shares we will redeem in each year; |
| · | the date after which we may or must commence the redemption;
and |
| · | the redemption price per share, which will include all accrued
and unpaid dividends other than non-cumulative dividends for prior dividend periods. |
Except as otherwise provided in the prospectus
supplement, the redemption price may be payable in cash or other property.
Unless the prospectus supplement provides otherwise,
we will not redeem less than all of a series of preferred stock, or purchase or acquire any shares of a series of preferred stock, other
than conversions or exchanges for common stock or other capital stock junior to the preferred stock, unless:
| · | if the series of preferred stock has cumulative dividends, we
have declared and paid full cumulative dividends for all past and current dividend periods for this series or declared and reserved funds
for payment; or |
| · | if the series of preferred stock does not have cumulative dividends,
we have declared and paid full dividends for the current dividend period or declared and reserved funds for payment. |
We may, however, purchase or acquire preferred
stock of any series to preserve our status as a REIT under the Code or pursuant to an offer made on the same terms to all holders of
preferred stock of that series.
If we redeem fewer than all outstanding shares
of preferred stock of any series, we will determine the number of shares to be redeemed and whether we will redeem shares pro rata by
shares held or shares requested to be redeemed or by lot in a manner that we determine.
We will mail redemption notices at least 30 days,
but not more than 60 days, before the redemption date to each holder of record of a series of preferred stock to be redeemed at
the address shown on the share transfer books. Each notice will state:
| · | the number of shares and series of the preferred stock to be
redeemed; |
| · | the place to surrender certificates for payment of the redemption
price; |
| · | that dividends on the shares redeemed will cease to accrue on
the redemption date; and |
| · | the date upon which any conversion rights will terminate. |
If we redeem fewer than all outstanding shares
of a series of preferred stock, the notice also will specify the number of shares we will redeem from each holder. If we give notice
of redemption and have set aside sufficient funds necessary for the redemption in trust for the benefit of stock we will redeem, then
dividends will thereafter cease to accrue and all rights of the holders of the shares will terminate, except the right to receive the
redemption price.
Liquidation Preference
If we liquidate, dissolve or wind up our affairs,
then holders of each series of preferred stock will receive out of our legally available assets a liquidating distribution in the amount
of the liquidation preference per share for that series as specified in the prospectus supplement, plus an amount equal to all dividends
accrued and unpaid, but not including amounts from prior periods for non-cumulative dividends, before we make any distributions to holders
of our common stock or any other capital stock ranking junior to the preferred stock. Once holders of outstanding preferred stock receive
their respective liquidating distributions, they will have no right or claim to any of our remaining assets. In the event that our assets
are not sufficient to pay the full liquidating distributions to the holders of all outstanding preferred stock and all other classes
or series of its capital stock ranking on a parity with our preferred stock, then we will distribute our assets to those holders in proportion
to the full liquidating distributions to which they would otherwise have received.
After we have paid liquidating distributions
in full to all holders of our preferred stock, we will distribute our remaining assets among holders of any other capital stock ranking
junior to the preferred stock according to their respective rights and preferences and number of shares. For this purpose, our consolidation
or merger with any other corporation or entity, or a sale of all or substantially all of our property or business, does not constitute
a liquidation, dissolution or winding up of our affairs.
Voting Rights
Holders of preferred stock will not have any
voting rights, except as set forth below or otherwise set forth in the prospectus supplement.
Unless the prospectus supplement provides otherwise,
whenever we have not paid dividends on any shares of preferred stock for six or more consecutive quarterly periods, the holders of such
shares may vote, separately as a class with all other series of preferred stock on which we have not paid dividends, for the election
of two additional directors to our board of directors. In this event, our board of directors will be increased by two directors. The
holders of a series of preferred stock on which we have not paid dividends may vote for the additional directors at our next annual meeting
of stockholders and at each subsequent annual meeting until:
| · | if the series of preferred stock has a cumulative dividend,
we have fully paid all unpaid dividends on the shares for the past dividend periods and the then current dividend period, or we have
declared the unpaid dividends and set apart a sufficient sum for their payment; or |
| · | if the series of preferred stock does not have a cumulative
dividend, we have fully paid four consecutive quarterly dividends, or we have declared the dividends and set apart a sufficient sum for
their payment. |
Unless the prospectus supplement provides otherwise,
we cannot take any of the following actions without the affirmative vote of holders of at least two-thirds of the outstanding shares
of each series of preferred stock:
| · | authorize, create or increase the authorized or issued amount
of any class or series of capital stock ranking senior to the series of preferred stock as to dividends or liquidation distributions; |
| · | reclassify any authorized capital stock into shares ranking
senior to the series of preferred stock as to dividends or liquidation distributions; |
| · | issue any obligation or security convertible into or evidencing
the right to purchase any share ranking senior to the series of preferred stock as to dividends or liquidation distributions; or |
| · | amend, alter or repeal any provision of our charter in a manner
that materially and adversely affects any right, preference, privilege or voting power of the series of preferred stock. |
For these purposes, the following events do not
materially and adversely affect a series of preferred stock, unless otherwise provided in an applicable prospectus supplement:
| · | an increase in the amount of the authorized shares of preferred
stock; |
| · | the creation or issuance of any other series of preferred stock
ranking the same as or junior to such series as to dividends and liquidation distributions; or |
| · | an increase in the amount of authorized shares of the series
of preferred stock or any other series of preferred stock ranking the same as or junior to such series as to dividends and liquidation
distributions. |
The holders of a series of preferred stock will
have such voting rights as provided for in the articles supplementary establishing any such series of preferred stock and as described
in the applicable prospectus supplement, however, if we redeem or call for redemption all outstanding shares of a series and deposit
sufficient funds in a trust to effect the redemption on or before the occurrence of the act requiring the vote, such holders of a series
of preferred stock will have no voting rights.
Conversion Rights
If any series of preferred stock is convertible
into common stock, the prospectus supplement will describe the following terms:
| · | the number of shares of common stock into which the shares of
preferred stock are convertible; |
| · | the conversion price or manner by which we will calculate the
conversion price; |
| · | whether conversion will be at our option or the option of the
holders of the preferred stock; |
| · | any events requiring an adjustment of the conversion price;
and |
| · | provisions affecting conversion in the event of the redemption
of the series of preferred stock. |
Ownership Limitations and Restrictions on Transfer
As further discussed under “Description
of Common Stock—Ownership Limitations and Restrictions on Transfer,” in order for us to maintain our REIT qualification under
the Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals
(including certain entities treated as individuals for these purposes) during the last half of a taxable year. As a result, our charter
provides that no person may beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Code, more
than 9.8% of our issued and outstanding shares of capital stock. Accordingly, the articles supplementary designating the terms of each
series of preferred stock may contain provisions restricting the ownership and transfer of the preferred stock. The prospectus supplement
will specify any additional ownership limitations and restrictions on transfer relating to a series of preferred stock. Our board of
directors may waive this ownership limit if it receives evidence that ownership in excess of the limit will not jeopardize our REIT status
under the Code.
These ownership limitations could have the effect
of discouraging a takeover or other transaction in which holders of some shares of our capital stock might receive a premium for their
shares over the then prevailing market price or which such holders might believe to be otherwise in their best interest.
Stockholder Liability
Under Maryland law, none of the holders of our
outstanding stock, including holders of preferred stock, will be personally liable for our acts and obligations solely as a result of
their status as holders of such stock, and our funds and property are the only recourse for our acts or obligations.
Transfer Agent
The prospectus supplement will identify the transfer
agent for the preferred stock.
DESCRIPTION OF DEPOSITARY SHARES
The following description of our depositary shares
in this prospectus contains the general terms and provisions of the depositary shares. The particular terms of any offering of depositary
shares will be described in a prospectus supplement relating to such offering. The statements below describing the depositary shares
are subject to and qualified by, the applicable provisions of our charter, bylaws and any articles supplementary.
General
We may offer and sell depositary shares, each
of which would represent a fractional interest of a share of a particular series of preferred stock. We will issue shares of preferred
stock to be represented by depositary shares and deposit such shares of preferred stock with a preferred stock depositary under a separate
deposit agreement among us, a preferred stock depositary and the holders of the depositary shares. Subject to the terms of the deposit
agreement and as further set forth in an applicable prospectus supplement, each owner of a depositary share will possess, in proportion
to the fractional interest of a share of preferred stock represented by the depositary share, all the rights and preferences of the preferred
stock represented by the depositary shares.
Depositary receipts will evidence the depositary
shares issued pursuant to the deposit agreement. Immediately after we issue and deliver preferred stock to a preferred stock depositary,
the preferred stock depositary will issue the depositary receipts.
Dividends and Other Distributions
The preferred stock depositary will distribute
all cash dividends on the preferred stock to the record holders of the depositary shares. Holders of depositary shares generally must
file proofs, certificates and other information and pay charges and expenses of the preferred stock depositary in connection with distributions.
Unless otherwise provided in the deposit agreement
or an applicable prospectus supplement, if a distribution on the preferred stock is other than in cash and it is feasible for the preferred
stock depositary to distribute the property it receives, the preferred stock depositary will distribute the property to the record holders
of the depositary shares. If such a distribution is not feasible and we approve, the preferred stock depositary may sell the property
and distribute the net proceeds from the sale to the record holders of the depositary shares.
No distribution will be made on any depositary
share to the extent that it represents any class or series of preferred stock that has been converted or exchanged.
Withdrawal of Stock
Unless we have previously called the depositary
shares for redemption or the holder of the depositary shares has converted such shares and unless otherwise provided in an applicable
prospectus supplement, a holder of depositary shares may surrender them at the corporate trust office of the preferred stock depositary
in exchange for whole or fractional shares of the underlying preferred stock together with any money or other property represented by
the depositary shares. Once a holder has exchanged the depositary shares, the holder may not redeposit the preferred shares and receive
depositary shares again. If a depositary receipt presented for exchange into preferred stock represents more shares of preferred stock
than the number to be withdrawn, the preferred stock depositary will deliver a new depositary receipt for the excess number of depositary
shares.
Redemption of Depositary Shares
Unless otherwise provided in an applicable prospectus
supplement, whenever we redeem shares of preferred stock held by a depositary, the depositary will redeem the corresponding amount of
depositary shares. The redemption price per depositary share will be equal to the applicable fraction of the redemption price and any
other amounts payable with respect to the preferred stock. If we intend to redeem fewer than all of the depositary shares, we and the
preferred stock depositary will select the depositary shares to be redeemed as nearly pro rata as practicable without creating fractional
depositary shares or by any other equitable method that we determine preserves our REIT status.
On the redemption date:
| · | all dividends relating to the shares of preferred stock called
for redemption will cease to accrue; |
| · | we and the preferred stock depositary will no longer deem the
depositary shares called for redemption to be outstanding; and |
| · | all rights of the holders of the depositary shares called for
redemption will cease, except the right to receive any money payable upon redemption and any money or other property to which the holders
of the depositary shares are entitled upon redemption. |
Voting of the Preferred Stock
When a preferred stock depositary receives notice
regarding a meeting at which the holders of the underlying preferred stock have the right to vote, it will mail that information to the
holders of the depositary shares. Each record holder of depositary shares on the record date may then instruct the preferred stock depositary
to exercise its voting rights for the amount of preferred stock represented by that holder’s depositary shares. The preferred stock
depositary will vote in accordance with these instructions. The preferred stock depositary will abstain from voting to the extent it
does not receive specific instructions from the holders of depositary shares. A preferred stock depositary will not be responsible for
any failure to carry out any instruction to vote, or for the manner or effect of any vote, as long as any action or non-action is in
good faith and does not result from negligence or willful misconduct of the preferred stock depositary.
Liquidation Preference
In the event of our liquidation, dissolution
or winding up, a holder of depositary shares will receive the fraction of the liquidation preference accorded each share of underlying
preferred stock represented by the depositary share, as described in the applicable prospectus supplement.
Conversion of Depositary Shares
Depositary shares will not themselves be convertible
into common stock or any other of our securities or property, except in connection with preserving our status as a REIT under the Code,
unless otherwise provided in an applicable prospectus supplement. However, if the underlying preferred stock is convertible, as described
in the applicable prospectus supplement, holders of depositary shares may surrender them to the preferred stock depositary with written
instructions to convert the preferred stock represented by their depositary shares into whole shares of common stock, other shares of
our preferred stock or other shares of stock, as applicable. Upon receipt of these instructions and any amounts payable in connection
with a conversion, we will convert the preferred stock using the same procedures as those provided for delivery of preferred stock. If
a holder of depositary shares converts only part of its depositary shares, the preferred stock depositary will issue a new depositary
receipt for any depositary shares not converted. We will not issue fractional shares of common stock upon conversion. If a conversion
will result in the issuance of a fractional share, we will pay an amount in cash equal to the value of the fractional interest based
upon the closing price of the common stock on the last business day prior to the conversion.
Amendment and Termination of a Deposit Agreement
Unless otherwise provided in an applicable prospectus
supplement, we and the preferred stock depositary may amend any form of depositary receipt evidencing depositary shares and any provision
of a deposit agreement. However, unless the existing holders of at least two-thirds of the applicable depositary shares then outstanding
have approved the amendment, or unless otherwise provided in an applicable prospectus supplement, we and the preferred stock depositary
may not make any amendment that:
| · | would materially and adversely alter the rights of the holders
of depositary shares; or |
| · | would be materially and adversely inconsistent with the rights
granted to the holders of the underlying preferred stock. |
Subject to exceptions in the deposit agreements
and unless otherwise provided in an applicable prospectus supplement, and except in order to comply with the law, no amendment may impair
the right of any holder of depositary shares to surrender their depositary shares with instructions to deliver the underlying preferred
stock and all money and other property represented by the depositary shares. Every holder of outstanding depositary shares at the time
any amendment becomes effective who continues to hold the depositary shares will be deemed to consent and agree to the amendment and
to be bound by the amended deposit agreement.
Unless otherwise provided in an applicable prospectus
supplement, we may terminate a deposit agreement upon not less than 30 days’ prior written notice to the preferred stock depositary
if the termination is necessary to preserve our status as a REIT under the Code. If we terminate a deposit agreement to preserve our
status as a REIT under the Code, then we will use our best efforts to list the preferred stock issued upon surrender of the related depositary
shares on a national securities exchange.
In addition, a deposit agreement will automatically
terminate if:
| · | we have redeemed all outstanding depositary shares subject to
the agreement; |
| · | a final distribution of the underlying preferred stock in connection
with any liquidation, dissolution or winding up has occurred, and the preferred stock depositary has distributed the distribution to
the holders of the depositary shares; or |
| · | each share of the underlying preferred stock has been converted
into other of our capital stock not represented by depositary shares or has been exchanged for debt securities. |
Charges of a Preferred Stock Depositary
We will pay all transfer and other taxes and
governmental charges arising out of a deposit agreement. In addition, we generally will pay the fees and expenses of a preferred stock
depositary in connection with the performance of its duties. However, holders of depositary shares will pay the fees and expenses of
a preferred stock depositary for any duties requested by the holders that the deposit agreement does not expressly require the preferred
stock depositary to perform.
Resignation and Removal of Preferred Stock Depositary
A preferred stock depositary may resign at any
time by delivering to us notice of its election to resign. We also may remove a preferred stock depositary at any time. Any resignation
or removal will take effect upon the appointment of a successor preferred stock depositary. We will appoint a successor preferred stock
depositary within 60 days after delivery of the notice of resignation or removal. The successor must be a bank or trust company
with its principal office in the United States and have a combined capital and surplus of at least the amount set forth in the deposit
agreement.
Miscellaneous
The preferred stock depositary will forward to
the holders of depositary shares any reports and communications from us with respect to the underlying preferred stock.
We and the preferred stock depositary will not
be liable if any law or any circumstances beyond our control prevent or delay us from performing our obligations under a deposit agreement.
Unless otherwise provided in an applicable prospectus supplement, our obligations and the obligations of a preferred stock depositary
under a deposit agreement will be limited to performing duties in good faith and without negligence in regard to voting of preferred
stock, gross negligence or willful misconduct. We and a preferred stock depositary may not be required to prosecute or defend any legal
proceeding with respect to any depositary shares or the underlying preferred stock unless we are furnished with satisfactory indemnity.
We and any preferred stock depositary may rely
on the written advice of counsel or accountants, or information provided by persons presenting shares of preferred stock for deposit,
holders of depositary shares or other persons we believe in good faith to be competent, and on documents we believe in good faith to
be genuine and signed by a proper party.
Ownership Limitations and Restrictions on Transfer
As further discussed under “Description
of Common Stock—Ownership Limitations and Restrictions on Transfer,” in order for us to maintain our REIT qualification under
the Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals
(including certain entities treated as individuals for these purposes) during the last half of a taxable year. As a result, our charter
provides that no person may beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Code, more
than 9.8% of our issued and outstanding shares of capital stock. Accordingly, the articles supplementary designating the terms of each
series of preferred stock and the deposit agreement under which any depositary shares representing such series are issued may contain
provisions restricting the ownership and transfer of the depositary shares representing a fractional interest in a series of preferred
stock. The prospectus supplement will specify any additional ownership limitations and restrictions on transfer relating to any
depositary shares. Our board of directors may waive this ownership limit if it receives evidence that ownership in excess of the limit
will not jeopardize our REIT status under the Code.
These ownership limitations could have the effect
of discouraging a takeover or other transaction in which holders of some shares of our capital stock might receive a premium for their
shares over the then prevailing market price or which such holders might believe to be otherwise in their best interest.
Depositary
The prospectus supplement will identify the preferred
stock depositary for the depositary shares.
DESCRIPTION OF WARRANTS
The following description of our warrants for
the purchase of preferred stock or common stock in this prospectus contains the general terms and provisions of the warrants. The particular
terms of any offering of warrants will be described in a prospectus supplement relating to such offering. The statements below describing
the warrants are subject to and qualified by, the applicable provisions of our charter, bylaws and articles supplementary.
General
We may issue warrants for the purchase of our
preferred stock or common stock. We may issue warrants independently or together with any of our securities, and warrants also may be
attached to our securities or independent of them. We will issue series of warrants under a separate warrant agreement between us and
a specified warrant agent described in the prospectus supplement. The warrant agent will act solely as our agent in connection with the
warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants.
Terms
A prospectus supplement will describe the specific
terms of any warrants that we issue or offer, including:
| · | the title of the warrants; |
| · | the aggregate number of warrants; |
| · | the price or prices at which the warrants will be issued; |
| · | the currencies in which the price or prices of the warrants
may be payable; |
| · | the designation, amount and terms of our capital stock purchasable
upon exercise of the warrants; |
| · | the designation and terms of our other securities, if any, that
may be issued in connection with the warrants, and the number of warrants issued with each corresponding security; |
| · | if applicable, the date that the warrants and the securities
purchasable upon exercise of the warrants will be separately transferable; |
| · | the prices and currencies for which the securities purchasable
upon exercise of the warrants may be purchased; |
| · | the date that the warrants may first be exercised; |
| · | the date that the warrants expire; |
| · | the minimum or maximum amount of warrants that may be exercised
at any one time; |
| · | information with respect to book-entry procedures, if any; |
| · | a discussion of certain U.S. federal income tax considerations;
and |
| · | any other material terms of the warrants, including terms, procedures
and limitations relating to the exchange and exercise of the warrants. |
Ownership Limitations and Restrictions on Transfer
As further discussed under “Description
of Common Stock—Ownership Limitations and Restrictions on Transfer,” in order for us to maintain our REIT qualification under
the Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals
(including certain entities treated as individuals for these purposes) during the last half of a taxable year. As a result, our charter
provides that no person may beneficially own or be deemed to beneficially own by virtue of the attribution rules of the Code, more
than 9.8% of our issued and outstanding shares of capital stock. Our board of directors may waive this ownership limit if it receives
evidence that ownership in excess of the limit will not jeopardize our REIT status under the Code.
These ownership limitations could have the effect
of discouraging a takeover or other transaction in which holders of some shares of our capital stock might receive a premium for their
shares over the then prevailing market price or which such holders might believe to be otherwise in their best interest.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus
from time to time in one or more transactions, including without limitation:
| · | to or through underwriters, brokers or dealers; |
| · | to the public through underwriting syndicates led by one or
more managing underwriters; |
| · | To one or more underwriters acting alone for resale to investors
or to the public; |
| · | through a combination of any of these methods. |
A distribution of the securities offered by this
prospectus may also be effected through the issuance of derivative securities, including without limitation, warrants, subscriptions,
exchangeable securities, forward delivery contracts and the writing of options.
In addition, the manner in which we may sell
some or all of the securities covered by this prospectus includes, without limitation, through:
| · | a block trade in which a broker-dealer will attempt to sell
as agent, but may position or resell a portion of the block, as principal, in order to facilitate the transaction; |
| · | purchases by a broker-dealer, as principal, and resale by the
broker-dealer for its account; |
| · | ordinary brokerage transactions and transactions in which a
broker solicits purchasers; |
| · | privately negotiated transactions; or |
| · | any combination of any of these methods. |
We may also enter into hedging transactions.
For example, we may:
| · | enter into transactions with a broker-dealer or affiliate thereof
in connection with which such broker-dealer or affiliate will engage in short sales of the common stock pursuant to this prospectus,
in which case such broker-dealer or affiliate may use shares of common stock received from us to close out its short positions; |
| · | enter into option or other types of transactions that require
us to deliver common stock to a broker-dealer or an affiliate thereof, who will then resell or transfer the common stock under this prospectus; |
| · | loan or pledge the common stock to a broker-dealer or an affiliate
thereof, who may sell the loaned shares or, in an event of default in the case of a pledge, sell the pledged shares pursuant to this
prospectus; or |
| · | engage in any combination of any of the foregoing transactions. |
In addition, we may enter into derivative or
hedging transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
In connection with such a transaction, the third parties may sell securities covered by and pursuant to this prospectus and an applicable
prospectus supplement or pricing supplement, as the case may be. If so, the third party may use securities borrowed from us or others
to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities
covered by this prospectus and any applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event
of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement
or pricing supplement, as the case may be.
A prospectus supplement with respect to each
series of securities will state the terms of the offering of the securities, including:
| · | the terms of the offering; |
| · | the name or names of any underwriters or agents and the amounts
of securities underwritten or purchased by each of them, if any; |
| · | the public offering price or purchase price of the securities
and the net proceeds to be received by us from the sale; |
| · | any delayed delivery arrangements; |
| · | any initial public offering price; |
| · | any underwriting discounts or agency fees and other items constituting
underwriters’ or agents’ compensation; |
| · | any discounts or concessions allowed or reallowed or paid to
dealers; and |
| · | any securities exchange on which the securities may be listed. |
The offer and sale of the securities described
in this prospectus by us, the underwriters or the third parties described above may be effected from time to time in one or more transactions,
including privately negotiated transactions, either:
| · | at a fixed price or prices, which may be changed; |
| · | at market prices prevailing at the time of sale, including in
“at the market offerings” within the meaning of Rule 415(a)(4) of the Securities Act by the issuer or through a
designated agent; |
| · | at prices related to the prevailing market prices; or |
Our common stock or preferred stock may be issued
upon the exchange of debt securities of the Operating Partnership or in exchange for other securities.
General
Any public offering price and any discounts,
commissions, concessions or other items constituting compensation allowed or re-allowed or paid to underwriters, dealers, agents or remarketing
firms may be changed from time to time. Underwriters, dealers, agents and remarketing firms that participate in the distribution of the
offered securities may be “underwriters” as defined in the Securities Act. Any discounts or commissions they receive from
us and any profits they receive on the resale of the offered securities may be treated as underwriting discounts and commissions under
the Securities Act. We will identify any underwriters, agents or dealers and describe their commissions, fees or discounts in the applicable
prospectus supplement or pricing supplement, as the case may be.
Underwriters and Agents
If underwriters are used in a sale, they will
acquire the offered securities for their own account. The underwriters may resell the offered securities in one or more transactions,
including negotiated transactions. These sales may be made at a fixed public offering price or prices, which may be changed, at market
prices prevailing at the time of the sale, at prices related to such prevailing market price or at negotiated prices. We may offer the
securities to the public through an underwriting syndicate or through a single underwriter. The underwriters in any particular offering
will be mentioned in the applicable prospectus supplement or pricing supplement, as the case may be.
Unless otherwise specified in connection with
any particular offering of securities, the obligations of the underwriters to purchase the offered securities will be subject to certain
conditions contained in an underwriting agreement that we will enter into with the underwriters at the time of the sale to them. The
underwriters will be obligated to purchase all of the securities of the series offered if any of the securities are purchased, unless
otherwise specified in connection with any particular offering of securities. Any initial public offering price and any discounts or
concessions allowed, reallowed or paid to dealers may be changed from time to time.
We may designate agents to sell the offered securities.
Unless otherwise specified in connection with any particular offering of securities, the agents will agree to use their best efforts
to solicit purchases for the period of their appointment. We may also sell the offered securities to one or more remarketing firms, acting
as principals for their own accounts or as agents for us. These firms will remarket the offered securities upon purchasing them in accordance
with a redemption or repayment pursuant to the terms of the offered securities. A prospectus supplement or pricing supplement, as the
case may be, will identify any remarketing firm and will describe the terms of its agreement, if any, with us and its compensation.
In connection with offerings made through underwriters
or agents, we may enter into agreements with such underwriters or agents pursuant to which we receive our outstanding securities in consideration
for the securities being offered to the public for cash. In connection with these arrangements, the underwriters or agents may also sell
securities covered by this prospectus to hedge their positions in these outstanding securities, including in short sale transactions.
If so, the underwriters or agents may use the securities received from us under these arrangements to close out any related open borrowings
of securities.
Dealers
We may sell the offered securities to dealers
as principals. We may negotiate and pay dealers’ commissions, discounts or concessions for their services. The dealer may then
resell such securities to the public either at varying prices to be determined by the dealer or at a fixed offering price agreed to with
us at the time of resale. Dealers engaged by us may allow other dealers to participate in resales.
Direct Sales
We may choose to sell the offered securities
directly. In this case, no underwriters or agents would be involved.
Institutional Purchasers
We may authorize agents, dealers or underwriters
to solicit certain institutional investors to purchase offered securities on a delayed delivery basis pursuant to delayed delivery contracts
providing for payment and delivery on a specified future date. The applicable prospectus supplement or pricing supplement, as the case
may be will provide the details of any such arrangement, including the offering price and commissions payable on the solicitations.
We will enter into such delayed contracts only
with institutional purchasers that we approve. These institutions may include commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions.
Indemnification; Other Relationships
We may have agreements with agents, underwriters,
dealers and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act. Agents,
underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with, or perform services for, us in the
ordinary course of business. This includes commercial banking and investment banking transactions.
Market Making, Stabilization and Other Transactions
There is currently no market for any of the offered
securities other than the common stock, which is listed on the New York Stock Exchange. If the offered securities are traded after their
initial issuance, they may trade at a discount from their initial offering price, depending upon prevailing interest rates, the market
for similar securities and other factors. While it is possible that an underwriter could inform us that it intended to make a market
in the offered securities, such underwriter would not be obligated to do so, and any such market making could be discontinued at any
time without notice. Therefore, no assurance can be given as to whether an active trading market will develop for the offered securities.
We have no current plans for listing of the debt securities, preferred stock, warrants or other securities issued pursuant to the registration
statement of which this prospectus forms a part on any securities exchange; any such listing will be described in the applicable prospectus
supplement or pricing supplement, as the case may be.
In connection with any offering, the underwriters
may purchase and sell shares of common stock in the open market. These transactions may include short sales, syndicate covering transactions
and stabilizing transactions. Short sales involve syndicate sales of common stock in excess of the number of shares to be purchased by
the underwriters in the offering, which creates a syndicate short position. “Covered” short sales are sales of shares made
in an amount up to the number of shares represented by the underwriters’ over-allotment option. In determining the source of shares
to close out the covered syndicate short position, the underwriters will consider, among other things, the price of shares available
for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. Transactions
to close out the covered syndicate short involve either purchases of the common stock in the open market after the distribution has been
completed or the exercise of the over-allotment option. The underwriters may also make “naked” short sales of shares in excess
of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open
market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on
the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing
transactions consist of bids for or purchases of shares in the open market while the offering is in progress for the purpose of pegging,
fixing or maintaining the price of the securities.
In connection with any offering, the underwriters
may also engage in penalty bids. Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the
securities originally sold by the syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions.
Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it
would be in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
CERTAIN PROVISIONS OF MARYLAND LAW AND OUR
CHARTER AND BYLAWS
The following description is a summary of certain
provisions of Maryland law and of our charter and bylaws. This summary does not purport to be complete and is subject to and qualified
in its entirety by the provisions of our charter and bylaws which are incorporated by reference as exhibits to the registration statement
of which this prospectus is a part, and the Maryland General Corporation Law.
Board of Directors
Number;
Vacancies. Our bylaws provide that the number of our directors shall be established by the board of directors but
shall never be less than the minimum number required by the Maryland General Corporation Law (which is not less than one), nor more than
fifteen. We have also, in our bylaws, elected to be subject to certain provisions of Maryland law described below under the heading “Unsolicited
Takeovers” which vest in the 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 regardless of the reason for such vacancies. These provisions of Maryland law, which are applicable even if other
provisions of Maryland law or our 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 until the next
annual meeting of stockholders as would otherwise be the case, and until his or her successor is elected and qualifies.
Removal
of Directors. Our charter provides that directors may be removed from office only for cause and only
by the affirmative vote of at least two-thirds of all votes entitled to be cast by our stockholders generally in the election of directors.
Neither the Maryland General Corporation Law nor our 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.
The requirement of cause and a substantial stockholder
vote for removal of any of our directors, and the exclusive right of the remaining directors to fill vacancies on the board make it more
difficult for a third party to gain control of our board of directors and may discourage offers to acquire us even when an acquisition
may be in the best interest of our stockholders.
Maryland Business Combination Act
Under the Maryland Business Combination Act, unless
an exemption applies, any “business combination” between a Maryland corporation and an interested stockholder or an affiliate
of an interested stockholder is prohibited for five years after the most recent date on which the interested stockholder becomes an interested
stockholder. These business combinations generally include mergers, consolidations, share exchanges, or, in circumstances specified in
the statute, asset transfers or issuances or reclassifications of equity securities. An interested stockholder is defined as:
| · | any person who beneficially owns, directly or indirectly, 10%
or more of the voting power of the corporation’s outstanding shares; or |
| · | an affiliate or associate of the corporation who, at any time
within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting
power of the then outstanding voting stock of the corporation. |
A person is not an interested stockholder under
the statute if the board of directors approved in advance the transaction by which such person otherwise would have become an interested
stockholder. In approving such a transaction, however, the board of directors may provide that its approval is subject to compliance,
at or after the time of approval, with any terms and conditions determined by the board.
After the five-year prohibition, any business
combination between a Maryland corporation and an interested stockholder generally must be recommended by the board of directors of the
corporation and approved by the affirmative vote of at least:
| · | 80% of the votes entitled to be cast by holders of outstanding
shares of voting stock of the corporation, voting together as a single voting group; and |
| · | two-thirds of the votes entitled to be cast by holders of voting
stock of the corporation other than voting stock held by the interested stockholder with whom or with whose affiliate the business combination
is to be effected or held by an affiliate or associate of the interested stockholder. |
These super-majority vote requirements do not
apply if the corporation’s common stockholders receive a minimum price, as defined under the Maryland Business Combination Act,
for their shares in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its
shares.
The statute permits various exemptions from its
provisions, including business combinations with an interested stockholder that are exempted by the board of directors before the time
that the interested stockholder becomes an interested stockholder. Our board of directors has exempted from the Maryland Business Combination
Act, business combinations between certain affiliated individuals and entities and us. However, unless our board of directors adopts
further exemptions, the provisions of the Maryland Business Combination Act will be applicable to business combinations between other
persons and us.
Maryland Control Share Acquisition Act
The Maryland Control Share Acquisition Act provides
that holders of control shares of a Maryland corporation acquired in a control share acquisition have no voting rights with respect to
the control shares except to the extent approved by a vote of two-thirds of the votes entitled to be cast by our stockholders on the
matter. Shares owned by the acquiring person, by officers or by directors who are employees of the corporation are excluded from shares
entitled to vote on the matter. Control shares are voting shares of stock which, if aggregated with all other shares of stock owned by
the acquiring person or in respect of which the acquiring person is able to exercise or direct the exercise of voting power (except solely
by virtue of a revocable proxy), would entitle the acquiring person to exercise voting power in electing directors within one of the
following ranges of 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. |
Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition means the
acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control
share acquisition may compel the board of directors of the corporation to call a special meeting of stockholders to be held within 50 days
of demand to consider the voting rights of the shares. The right to compel the calling of a special meeting is subject to the satisfaction
of certain conditions, including an undertaking to pay the expenses of the meeting. If no request for a meeting is made, the corporation
may itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting
or if the acquiring person does not deliver an acquiring person statement as required by the statute, then the corporation may redeem
for fair value any or all of the control shares, except those for which voting rights have previously been approved. The right of the
corporation to redeem control shares is subject to certain conditions and limitations. Fair value is determined, without regard to the
absence of voting rights for the control shares, as of the date of the last control share acquisition by the acquirer or of any meeting
of stockholders at which the voting rights of the shares are considered and not approved. If voting rights for control shares are approved
at a stockholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all other stockholders
may exercise appraisal rights. The fair value of the shares as determined for purposes of appraisal rights may not be less than the highest
price per share paid by the acquirer in the control share acquisition.
The Maryland Control Share Acquisition Act does
not apply to:
| · | shares acquired in a merger, consolidation or share exchange
if the corporation is a party to the transaction; or |
| · | acquisitions approved or exempted by the charter or bylaws of
the corporation. |
Our bylaws currently contain a provision exempting
from the Maryland Control Share Acquisition Act any acquisitions of shares of our stock by any person. However, our board of directors
or our stockholders may amend our bylaws in the future to repeal or modify this exemption, in which case any of our control shares acquired
in a control share acquisition could be subject to the Maryland Control Share Acquisition Act.
Unsolicited Takeovers
Under certain provisions of Maryland law described
in part above under “Board of Directors - Number; Vacancies”, relating to unsolicited takeovers, a Maryland
corporation with a class of equity securities registered under the Securities Exchange Act of 1934, as amended, and at least three independent
directors may elect to be subject to certain statutory provisions relating to unsolicited takeovers which, among other things, would
automatically classify the corporation’s board of directors into three classes with staggered terms of three years each and vest
in the 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, to fill vacancies on the board of directors even if the remaining directors do not constitute
a quorum.
These statutory provisions 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 qualified, and that the affirmative vote of at least two-thirds of all votes entitled to be cast by the stockholders generally in
the election of directors shall be required in order to remove a director. Finally, these statutory provisions provide that a special
meeting of stockholders need be called only upon the written request of stockholders entitled to cast at least a majority of the votes
entitled to be cast at the special meeting.
An election to be subject to any or all of the
foregoing statutory provisions may be made in the corporation’s charter or bylaws, or by resolution of its board of directors.
Any such statutory provision to which a corporation elects to be subject will apply even if other provisions of Maryland law or the corporation’s
charter or bylaws provide to the contrary.
Through provisions in our charter and bylaws unrelated
to the foregoing statutory provisions, (a) a two-thirds stockholder vote, as well as cause, is required to remove any director
from our board of directors and (b) unless called by our chief executive officer, our president and chief operating officer, or
our board, the written request of the holders of shares entitled to cast not less than a majority of the votes entitled to be cast at
such meeting is required to call a special meeting of stockholders. We have also elected in our bylaws to be subject to certain
of the statutory provisions described above so that, as stated above under “Board of Directors — Number; Vacancies”,
our board of directors has the exclusive right to determine the number of our directors and the exclusive right to fill vacancies on
our board of directors, and any director elected to fill a vacancy will hold office for the remainder of the full term of the class of
directors in which the vacancy occurred. In addition, our board of directors has adopted a resolution prohibiting us from electing to
be subject to the foregoing statutory provision relating to unsolicited takeovers which would automatically classify our board of directors
into three classes with staggered terms of three years each, unless such election is first approved by our stockholders by the affirmative
vote of a majority of all votes entitled to be cast on the matter.
Limitation of Liability and Indemnification of Directors and Officers
As permitted by the Maryland General Corporation
Law, our charter contains a provision limiting the liability of our directors and officers to us or our stockholders for money damages
to the maximum extent permitted by Maryland law. Under Maryland law, the liability of our directors and officers to us or our stockholders
for money damages may be limited except to the extent that:
| · | it is proved that the director or officer actually received
an improper benefit in money, property or services; or |
| · | a judgment or other final adjudication was entered in a proceeding
based on a finding that the director’s or officer’s action, or failure to act, was the result of active and deliberate dishonesty
and was material to the cause of action adjudicated in the proceeding. |
We are authorized under our charter, and obligated
under our bylaws and existing indemnification agreements, to indemnify our present and former directors and officers against expense
or liability in an action to the fullest extent permitted by Maryland law. Maryland law permits a corporation to indemnify its
present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses they
incur in connection with any proceeding to which they are a party because of their service as an officer, director or other similar capacity.
However, Maryland law prohibits indemnification if it is established that:
| · | the act or omission of the director or officer was material
to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty; |
| · | the director or officer actually received an improper personal
benefit in money, property or services; or |
| · | in the case of any criminal proceeding, the director or officer
had reasonable cause to believe that the act or omission was unlawful. |
Also, under Maryland law, a Maryland corporation
may not provide indemnification for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability
on the basis that personal benefit was improperly received, unless, in either case, a court orders indemnification, and then only for
expenses.
In addition to the circumstances in which Maryland
law permits a corporation to indemnify its directors and officers, Maryland law requires that unless limited by the charter of the corporation,
a director or officer who has been successful on the merits or otherwise in the defense of any proceeding or in the defense of any claim,
issue or matter in a proceeding, to which he is made a party by reason of his services as a director or officer, shall be indemnified
against reasonable expenses incurred by him in connection with the proceeding, claim, issue or matter in which the director or officer
has been successful. Our charter does not alter this requirement.
We also maintain a policy of directors and officers
liability insurance covering certain liabilities incurred by our directors and officers in connection with the performance of their duties.
The above indemnification provisions could operate
to indemnify directors, officers or other persons who exert control over us against liabilities arising under the Securities Act.
Insofar as the above provisions may allow that type of indemnification, the Securities and Exchange Commission has informed us that,
in their opinion, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Amendment of Charter and Bylaws
Our charter may generally be amended only if such
amendment is declared advisable by our board of directors and approved by our stockholders by the affirmative vote of at least a majority
of all votes entitled to be cast by our stockholders on the amendment. However, any amendment to the provisions in our charter relating
to the removal of directors requires approval by our stockholders by the affirmative vote of not less than two-thirds of all votes entitled
to be cast.
Our board of directors has the power to adopt,
alter or repeal any provision of our bylaws and to make new bylaws. In addition, our stockholders may alter or repeal any provision of
our bylaws and adopt new bylaws if any such alternation, repeal or adoption is approved by the affirmative vote of a majority of all
votes entitled to be cast by our stockholders on the matter, except that our stockholders do not have the power to alter or repeal the
provisions of our bylaws relating to indemnification of our directors and officers or the provisions of our bylaws relating to amendments
thereto without the approval of our board of directors.
Mergers, Share Exchanges, Transfers of Assets
Pursuant to our charter and Maryland law, with
certain exceptions we cannot engage in a merger or consolidation, enter into a statutory share exchange in which we are not the surviving
entity or sell all or substantially all of our assets, unless our board of directors adopts a resolution declaring the proposed transaction
advisable, and the transaction is approved by our stockholders by the affirmative vote of a majority of all votes entitled to be cast
on the matter. In addition, the partnership agreement of Veris Residential, L.P. limits our ability to merge or sell substantially
all of our assets under certain circumstances. See “Description of Common Stock — Operating Partnership Agreement.”
Dissolution of the Company
We may be dissolved only if the dissolution is
declared advisable by a majority of the entire board of directors and approved by our stockholders by the affirmative vote of a majority
of all votes entitled to be cast on the dissolution.
Advance Notice of Director Nominations and New Business
Our bylaws provide that with respect to an annual
meeting of stockholders, nominations of persons for election to the board of directors and the proposal of business to be considered
by stockholders may be made only:
| · | pursuant to our notice of the meeting; |
| · | by, or at the direction of, the board of directors; or |
| · | by any stockholder of the Company who was a stockholder of record
both as of the time notice of such nomination or proposal of business is given by the stockholder as set forth in our bylaws and as of
the time of the annual meeting in question, who is entitled to vote at such annual meeting and who complies with the advance notice procedures
set forth in our bylaws. |
Any stockholder who seeks to make such a nomination
or to bring any matter before an annual meeting, or his representative, must be present in person at the annual meeting.
Anti-takeover Effect of Certain Provisions of Maryland Law and
Our Charter and Bylaws
The Maryland Business Combination Act, the Maryland
Control Share Acquisition Act (if the provision in our bylaws exempting us from this statute is modified or repealed), the provisions
of Maryland law relating to unsolicited takeovers, the advance notice provisions of our bylaws, the provisions of our charter on removal
of directors and certain other provisions of Maryland law and our charter and bylaws could delay, defer or prevent a transaction or our
change in control which might involve a premium price for holders of shares of our capital stock or otherwise be in their best interest.
MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following discussion describes certain of
the material U.S. federal income tax considerations relating to our taxation as a REIT under the Internal Revenue Code of 1986, as amended
(the “Code”), and the ownership and disposition of our common stock.
If we offer one or more additional series of
common stock or preferred stock (including stock represented by depositary shares), guarantees of debt securities issued by Veris Residential,
L.P. or one or more series of warrants to purchase common stock or preferred stock, the prospectus supplement would include information
about certain material U.S. federal income tax consequences to holders of any of the foregoing.
Because this summary is only intended to address
certain of the material U.S. federal income tax considerations relating to the ownership and disposition of our common stock, it may
not contain all the information that may be important to you. As you review this discussion, you should keep in mind that:
| · | the tax consequences to you may vary depending on your particular
tax situation; |
| · | you may be a person that is subject to special tax treatment
or special rules under the Code (e.g., regulated investment companies, insurance companies, tax-exempt entities, financial
institutions or broker-dealers, expatriates, persons subject to the alternative minimum tax and partnerships, trusts, estates or other
pass through entities) that the discussion below does not address; |
| · | the discussion below does not address any state, local or non-U.S.
tax considerations; and |
| · | the discussion below deals only with stockholders that hold
our common stock as a “capital asset,” within the meaning of Section 1221 of the Code. |
We urge you to consult with your own tax advisors
regarding the specific tax consequences to you of acquiring, owning and selling our common stock, including the federal, state, local
and foreign tax consequences of acquiring, owning and selling our common stock in your particular circumstances and potential changes
in applicable laws or interpretations thereof.
The information in this section is based on the
Code, final, temporary and proposed Treasury Regulations promulgated thereunder, the legislative history of the Code, current administrative
interpretations and practices of the Internal Revenue Service (the “IRS”) (including in private letter rulings and other
non-binding guidance issued by the IRS), as well as court decisions all as of the date hereof. No assurance can be given that future
legislation, Treasury Regulations, administrative interpretations and court decisions will not significantly change current law or adversely
affect existing interpretations of current law, or that any such change would not apply retroactively to transactions or events preceding
the date of the change. We have not obtained, and do not intend to obtain, any rulings from the IRS concerning the U.S. federal income
tax treatment of the matters discussed below. Furthermore, neither the IRS nor any court is bound by any of the statements set forth
herein and no assurance can be given that the IRS will not assert any position contrary to statements set forth herein or that a court
will not sustain such position.
Taxation of the Company as a REIT
Seyfarth Shaw LLP, which has acted as our
tax counsel, has reviewed the following discussion and is of the opinion that it fairly summarizes the material U.S. federal income tax
considerations relevant to our status as a REIT under the Code. The following summary of certain U.S. federal income tax considerations
is based on current law, is for general information only, and is not intended to be (and is not) tax advice.
It is the opinion of Seyfarth Shaw LLP that
we have been organized in conformity with the requirements for qualification and taxation as a REIT under the Code, commencing with our
initial taxable year ended December 31, 1994, through and including our taxable year ended December 31, 2022, and that our
current method of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT under the Code.
We must emphasize that this opinion of Seyfarth Shaw LLP is based on various assumptions and certain representations and statements
made by our officers and our accountants as to factual matters and is conditioned upon such assumptions, representations and statements
being accurate and complete. Seyfarth Shaw LLP is not aware of any facts or circumstances that are not consistent with these representations,
assumptions and statements. Potential purchasers of the securities should be aware, however, that opinions of counsel are not binding
upon the IRS or any court. In general, our qualification and taxation as a REIT depends upon our ability to satisfy, through actual operating
results, distribution, diversity of stock ownership, and other requirements imposed under the Code, none of which has been, or will be,
reviewed by Seyfarth Shaw LLP. Accordingly, while we intend to continue to qualify to be taxed as a REIT under the Code no assurance
can be given that the actual results of our operations for any particular taxable year has satisfied, or will satisfy, the requirements
for REIT qualification.
Commencing with our taxable year ended December 31,
1994, we have elected to be taxed as a REIT under the Code. We believe that commencing with our taxable year ended December 31,
1994, and for all of our subsequent taxable years through and including our taxable year ended December 31, 2022, we have been organized
and have operated in such a manner so as to qualify as a REIT under the Code, and we intend to continue to operate in such a manner.
However, we cannot assure you that we will, in fact, continue to operate in such a manner or continue to so qualify as a REIT under the
Code.
If we qualify for taxation as a REIT under the
Code, we generally will not be subject to a corporate-level tax on our net income that we distribute currently to our stockholders. This
treatment substantially eliminates the “double taxation” (i.e., a corporate-level and stockholder-level tax) that
generally results from investment in a regular subchapter C corporation. However, we will be subject to U.S. federal income tax
as follows:
| · | First, we would be taxed at regular corporate rates on any of
our undistributed REIT taxable income, including our undistributed net capital gains (although, to the extent so designated by us, stockholders
would receive an offsetting credit against their own U.S. federal income tax liability for U.S. federal income taxes paid by us with
respect to any such gains). |
| · | Second, if we have (a) net income from the sale or other
disposition of “foreclosure property,” which is, in general, property acquired on foreclosure or otherwise on default on
a loan secured by such real property or a lease of such property, which is held primarily for sale to customers in the ordinary course
of business or (b) other nonqualifying income from foreclosure property, we will be subject to tax at the highest corporate rate
on such income. |
| · | Third, if we have net income from prohibited transactions such
income will be subject to a 100% tax. Prohibited transactions are, in general, certain sales or other dispositions of property held primarily
for sale to customers in the ordinary course of business other than foreclosure property. |
| · | Fourth, if we should fail to satisfy the annual 75% gross income
test or 95% gross income test (as discussed below), but nonetheless maintain our qualification as a REIT under the Code because certain
other requirements have been met, we will have to pay a 100% tax on an amount equal to (a) the gross income attributable to the
greater of (i) 75% of our gross income over the amount of gross income that is qualifying income for purposes of the 75% test, and
(ii) 95% of our gross income over the amount of gross income that is qualifying income for purposes of the 95% test, multiplied
by (b) a fraction intended to reflect our profitability. |
| · | Fifth, if we should fail to distribute during each calendar
year at least the sum of (i) 85% of our REIT ordinary income for such year, (ii) 95% of our REIT capital gain net income for
such year, and (iii) any undistributed taxable income from prior years, we would be subject to a 4% excise tax on the excess of
such required distribution over the amount actually distributed by us. |
| · | Sixth, if we were to acquire an asset from a corporation which
is or has been a subchapter C corporation in a transaction in which the basis of the asset in our hands is determined by reference
to the basis of the asset in the hands of the subchapter C corporation, and we subsequently recognize gain on the disposition of
the asset within the five-year period beginning on the day that we acquired the asset, then we will have to pay tax on the built-in gain
at the highest regular corporate rate. The results described in this paragraph assume that no election will be made under Treasury Regulations
Section 1.337(d)-7 for the subchapter C corporation to be subject to an immediate tax when the asset is acquired. Under applicable
Treasury Regulations, any gain from the sale of property we acquired in an exchange under Section 1031 (a like-kind exchange) or
Section 1033 (an involuntary conversion) of the Code generally is excluded from the application of this built-in gains tax. |
| · | Seventh, we could be subject to a 100% tax on certain payments
that we receive from one of our “taxable REIT subsidiaries,” or on certain expenses deducted by one of our “taxable
REIT subsidiaries” (each, a “TRS”) if the economic arrangement between us, the taxable REIT subsidiary and the tenants
at our properties are not comparable to similar arrangements among unrelated parties. |
| · | Eighth, if we fail to satisfy a REIT asset test, as described
below, due to reasonable cause and we nonetheless maintain our REIT qualification under the Code because of specified cure provisions,
we will generally be required to pay a tax equal to the greater of $50,000 or the highest corporate tax rate multiplied by the net income
generated by the nonqualifying assets that caused us to fail such test. |
| · | Ninth, if we fail to satisfy any provision of the Code that
would result in our failure to qualify as a REIT (other than a violation of the REIT gross income tests or a violation of the asset tests
described below) and the violation is due to reasonable cause, we may retain our REIT qualification but will be required to pay a penalty
of $50,000 for each such failure. |
| · | Tenth, if we fail to comply with the requirement to send annual
letters to our stockholders holding at least a certain percentage of our stock, as determined by Treasury Regulations, requesting information
regarding the actual ownership of our stock, and the failure is not due to reasonable cause or due to willful neglect, we will be subject
to a $25,000 penalty, or if the failure is intentional, a $50,000 penalty |
| · | Eleventh, we may elect to retain and pay income tax on our net
capital gain. In that case, a stockholder would include its proportionate share of our undistributed capital gain (to the extent we make
a timely designation of such gain to the stockholder) in its income, would be deemed to have paid the tax that we paid on such gain,
and would be allowed a credit for its proportionate share of the tax deemed to have been paid, and an adjustment would be made to increase
the tax basis of the stockholder in our capital stock. |
Finally, the earnings of our lower-tier entities
that are subchapter C corporations, including TRSs but excluding our QRSs (as defined below), are subject to federal corporate income
tax.
In addition, we may be subject to a variety of
taxes, including payroll taxes and state, local and foreign income, property and other taxes on our assets and operations. We could also
be subject to tax in situations and on transactions not presently contemplated.
Requirements for REIT Qualification—In General
To qualify as a REIT under the Code, we must
elect to be treated as a REIT and must satisfy the income, asset, distribution, diversity of share ownership and other requirements imposed
under the Code. In general, the Code defines a REIT as a corporation, trust or association:
(1)which
is managed by one or more trustees or directors;
(2)the beneficial ownership of which is evidenced by transferable shares, or by transferable certificates of beneficial interest;
(3)that would otherwise be taxable as a domestic corporation, but for Sections 856 through 859 of the Code;
(4)that is neither a financial institution nor an insurance company to which certain provisions of the Code apply;
(5)the beneficial ownership of which is held by 100
or more persons;
(6)during
the last half of each taxable year, not more than 50% in value of the outstanding stock of which is owned, directly or constructively,
by five or fewer individuals, as defined in the Code to include certain entities;
(7)that makes an election to be taxable as a REIT,
or has made this election for a previous taxable year, which has not been revoked or terminated, and satisfied all relevant filing and
other administrative requirements established by the IRS that must be met to elect and maintain REIT status;
(8)that
uses a calendar year for U.S. federal income tax purposes and complies with the recordkeeping requirements of the Code and regulations
promulgated thereunder; and
(9)that
meets certain other tests, described below, regarding the nature of its income and assets.
The Code provides that requirements (1)-(4),
(8) and (9) above must be met during the entire taxable year and that requirements (5) and (6) above do not apply
to the first taxable year for which a REIT election is made and, thereafter, requirement (5) must be met during at least 335 days
of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. For purposes of requirement
(6) above, generally (although subject to certain exceptions that should not apply with respect to us), any stock held by a trust
described in Section 401(a) of the Code and exempt from tax under Section 501(a) of the Code is treated as not held
by the trust itself but directly by the trust beneficiaries in proportion to their actuarial interests in the trust.
We believe that we have satisfied the requirements
above for REIT qualification. In addition, our charter currently includes restrictions regarding the ownership and transfer of our common
stock, which restrictions are intended to assist us in satisfying some of these requirements (and, in particular requirements (5) and
(6) above). The ownership and transfer restrictions pertaining to our common stock are described herein under the heading “Description
of Common Stock—Ownership Limitations and Restrictions on Transfer.”
In applying the REIT gross income and asset tests,
all of the assets, liabilities and items of income, deduction and credit of a corporate subsidiary of a REIT that is a “qualified
REIT subsidiary” (as defined in Section 856(i)(2) of the Code) (“QRS”) are treated as the assets, liabilities
and items of income, deduction and credit of the REIT itself. Moreover, the separate existence of a QRS is disregarded for U.S. federal
income tax purposes and the QRS is not subject to U.S. federal corporate income tax (although it may be subject to state and local tax
in some states and localities). In general, a QRS is any corporation if all of the stock of such corporation is held by the REIT, except
that it does not include any corporation that is a TRS of the REIT. Thus, for U.S. federal income tax purposes, our QRSs are disregarded,
and all assets, liabilities and items of income, deduction and credit of these QRSs are treated as our assets, liabilities and items
of income, deduction and credit.
A TRS is any corporation in which a REIT directly
or indirectly owns stock, provided that the REIT and that corporation make a joint election to treat that corporation as a TRS. The election
can be revoked at any time as long as the REIT and the TRS revoke such election jointly. In addition, if a TRS holds, directly or indirectly,
more than 35% of the securities of any other corporation other than a REIT (by vote or by value), then that other corporation is also
treated as a TRS. A TRS is subject to U.S. federal income tax at regular corporate rates (currently a maximum rate of 21%), and may also
be subject to state and local tax. Any dividends paid or deemed paid to us by any one of our TRSs will also be taxable, either (1) to
us to the extent the dividend is retained by us, or (2) to our stockholders to the extent the dividends received from the TRS are
paid to our stockholders. We may hold more than 10% of the stock of a TRS without jeopardizing our qualification as a REIT notwithstanding
the rule described below under “—REIT Asset Tests” that generally precludes ownership of more than 10% of any
issuer’s securities. However, as noted below, in order to qualify as a REIT, the securities of all of our TRSs in which we have
invested either directly or indirectly may not represent more than 20% for taxable years beginning after December 31, 2017 of the
total value of our assets. We expect that the aggregate value of all of our interests in TRSs will represent less than 20% (for tax years
beginning after December 31, 2017 through our tax year ending on December 31, 2022) of the total value of our assets; however,
we cannot assure that this will always be true.
A TRS may generally engage in any business including
the provision of customary or non-customary services to tenants of the parent REIT, which, if performed by the REIT itself, could cause
rents received by the REIT to be disqualified as “rents from real property.” However, a TRS may not directly or indirectly
operate or manage any hotels or health care facilities or provide rights to any brand name under which any hotel or health care facility
is operated, unless such rights are provided to an “eligible independent contractor” to operate or manage a hotel if such
rights are held by the TRS as a franchisee, licensee, or in a similar capacity and such hotel is either owned by the TRS or leased to
the TRS by its parent REIT. However, for taxable years beginning after July 30, 2008, a TRS may provide rights to a brand name under
which a health care facility is operated, if such rights are provided to an “eligible independent contractor” to operate
or manage the health care facility and such health care facility is either owned by the TRS or leased to the TRS by its parent REIT.
A TRS will not be considered to operate or manage a qualified health care property or a qualified lodging facility solely because the
TRS (i) directly or indirectly possesses a license, permit, or similar instrument enabling it to do so, or (ii) employs individuals
working at such facility or property located outside the U.S., but only if an “eligible independent contractor” is responsible
for the daily supervision and direction of such individuals on behalf of the TRS pursuant to a management agreement or similar service
contract. Additionally, the Code contains several provisions which address the arrangements between a REIT and its TRSs which are intended
to ensure that a TRS recognizes an appropriate amount of taxable income and is subject to an appropriate level of U.S. federal income
tax. For example, a TRS is limited in its ability to deduct interest payments made to the REIT. In addition, a REIT would be subject
to a 100% penalty on some payments that it receives from a TRS, or on certain expenses deducted by the TRS if the economic arrangements
between the REIT, the REIT’s tenants and the TRS are not comparable to similar arrangements among unrelated parties. We have several
TRSs and will endeavor to structure any arrangement between ourselves, our TRSs and our tenants so as to minimize the risk of disallowance
of interest expense deductions or of the 100% penalty being imposed. Notwithstanding the foregoing, however, it cannot be assured that
the IRS would not challenge any such arrangement.
Pursuant
to Section 172 of the Code, as amended by Pub. L. No. 115-97 (informally known as the Tax Cuts and Jobs Act (the “TCJA”)),
to the extent one or more of our TRSs have net operating loss carryforwards with respect to taxable years beginning after December 31,
2017, the deduction for any such carryforward in a taxable year will be limited to 80% of such TRS’s “adjusted taxable income”
with respect to such taxable year. Any unused portion of such losses may be carried forward indefinitely, but may not be carried back
to a prior taxable year.
A REIT that is a partner in a partnership is
deemed to own its proportionate share of each of the assets of the partnership and is deemed to be entitled to income of the partnership
attributable to such share. For purposes of Section 856 of the Code, the interest of a REIT in the assets of a partnership of which
it is a partner is determined in accordance with the REIT’s capital interest in the partnership and the character of the assets
and items of gross income of the partnership retain the same character in the hands of the REIT. For example, if the partnership holds
any property primarily for sale to customers in the ordinary course of its trade or business, the REIT is treated as holding its proportionate
share of such property primarily for such purpose. Thus, our proportionate share (based on capital) of the assets, liabilities and items
of income of any partnership in which we are a partner, including Veris Residential, L.P. (and our indirect share of the assets, liabilities
and items of income of each lower-tier partnership), will be treated as our assets, liabilities and items of income for purposes of applying
the requirements described in this section. For purposes of the 10% Value Test (described under “REIT Asset Tests” below)
our proportionate share is based on our proportionate interest in the equity interests and certain debt securities issued by a partnership.
Also, actions taken by Veris Residential, L.P. or other lower-tier partnerships can affect our ability to satisfy the REIT gross income
and asset tests and the determination of whether we have net income from a prohibited transaction. For purposes of this section any reference
to “partnership” refers to and includes any partnership, limited liability company, joint venture, business trust and other
entity or arrangement that is treated as a partnership for federal tax purposes, and any reference to “partner” refers to
and includes a partner, member, joint venturer and other beneficial owner of any such partnership, limited liability company, joint venture,
business trust and other entity or arrangement.
REIT
Gross Income Tests: In order to maintain our qualification as a REIT under the Code, we must satisfy,
on an annual basis, two gross income tests.
·
First, at least 75% of our gross income, excluding gross income from prohibited transactions and certain “hedging transactions,”
for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property,
including “rents from real property,” gains on the disposition of real estate, dividends paid by another REIT and interest
on obligations secured by mortgages on real property or on interests in real property, or from some types of temporary investments. Interest
and gain on debt instruments issued by publicly offered REITs that are not secured by mortgages on real property or interests in real
property are not qualifying income for purposes of the 75% test.
· Second, at least 95% of our gross income, excluding gross income from prohibited transactions and certain “hedging transactions,”
for each taxable year must be derived from any combination of income qualifying under the 75% test and dividends, interest, and gain
from the sale or disposition of stock or securities.
For this purpose the term “rents from real
property” includes: (a) rents from interests in real property; (b) charges for services customarily furnished or rendered
in connection with the rental of real property, whether or not such charges are separately stated; and (c) rent attributable to
personal property which is leased under, or in connection with, a lease of real property, but only if the rent attributable to such personal
property for the taxable year does not exceed 15% of the total rent for the taxable year attributable to both the real and personal property
leased under, or in connection with, such lease. For purposes of (c), the rent attributable to personal property is equal to that amount
which bears the same ratio to total rent for the taxable year as the average of the fair market values of the personal property at the
beginning and at the end of the taxable year bears to the average of the aggregate fair market values of both the real property and the
personal property at the beginning and at the end of such taxable year.
However, in order for rent received or accrued,
directly or indirectly, with respect to any real or personal property, to qualify as “rents from real property,” the following
conditions must be satisfied:
·
such rent must not be based in whole or in part on the income or profits derived by any person from the property (although the
rent may be based on a fixed percentage of receipts or sales); and
· such rent may not be received or accrued, directly or indirectly, from any person if the REIT owns, directly or indirectly (including
by attribution, upon the application of certain attribution rules): (i) in the case of any person which is a corporation, at least
10% of such person’s voting stock or at least 10% of the value of such person’s stock; or (ii) in the case of any person
which is not a corporation, an interest of at least 10% in the assets or net profits of such person, except that under certain circumstances,
rents received from a TRS will not be disqualified as “rents from real property” even if we own more than 10% of the TRS.
In addition, all amounts (including rents that
would otherwise qualify as “rents from real property”) received or accrued during a taxable year directly or indirectly by
a REIT with respect to a property, will constitute “impermissible tenant services income” (and, thus, will not qualify as
“rents from real property”) if the amount received or accrued directly or indirectly by the REIT for: (x) noncustomary
services furnished or rendered by the REIT to tenants of the property; or (y) managing or operating the property ((x) and (y) collectively,
“Impermissible Services”) exceeds 1% of all amounts received or accrued during such taxable year directly or indirectly by
the REIT with respect to the property. For this purpose, however, the following services and activities are not treated as Impermissible
Services: (i) services furnished or rendered, or management or operation provided, through an independent contractor from whom the
REIT itself does not derive or receive any income or through a TRS; and (ii) services usually or customarily rendered in connection
with the rental of space for occupancy (such as, for example, the furnishing of heat and light, the cleaning of public entrances, and
the collection of trash), as opposed to services rendered primarily to a tenant for the tenant’s convenience. If the amount treated
as being received or accrued for Impermissible Services does not exceed the 1% threshold, then only the amount attributable to the Impermissible
Services (and not, for example, all tenant rents received or accrued that otherwise qualify as “rents from real property”)
will fail to qualify as “rents from real property.” For purposes of the 1% threshold, the amount that we will be deemed to
have received for performing Impermissible Services will be the greater of the actual amounts so received or 150% of the direct cost
to us of providing those services.
We (through Veris Residential, L.P. and other
affiliated entities) provide some services at the properties, which services we believe do not constitute Impermissible Services or,
otherwise, do not cause any rents or other amounts received that otherwise qualify as “rents from real property” to fail
to so qualify. If we or Veris Residential, L.P. or other affiliated entities were to consider offering services in the future which could
cause any such rents or other amounts to fail to qualify as “rents from real property” then we would endeavor to arrange
for such services to be provided through one or more independent contractors and/or TRSs or, otherwise, in such a manner so as to minimize
the risk of such services being treated as Impermissible Services.
In addition, we (through Veris Residential, L.P.
and other affiliated entities) have received fees for property management and administrative services provided with respect to certain
properties not owned, either directly or indirectly, entirely by us and/or Veris Residential, L.P. These fees do not constitute qualifying
income for purposes of either the 75% gross income test or 95% gross income test. We (through Veris Residential, L.P. and other affiliated
entities) also receive other types of income that do not constitute qualifying income for purposes of either of these two tests. We believe
that our share of the aggregate amount of these fees and other non-qualifying income so received or accrued has not caused us to fail
to satisfy either of the gross income tests. We anticipate that we may continue to receive or accrue a certain amount of non-qualifying
fees and other income. In the event that our share of the amount of such fees and other income could jeopardize our ability to satisfy
these gross income tests, then we would endeavor to arrange for the services in respect of which such fees and other income are received
to be provided by one or more independent contractors and/or TRSs or, otherwise, in such manner so as to minimize the risk of failing
either of the gross income tests.
Interest income constitutes qualifying mortgage
interest for purposes of the 75% gross income test (as described above) to the extent that the obligation is secured by a mortgage on
real property. If we receive interest income with respect to a mortgage loan that is secured by both real property and other property,
and the highest principal amount of the loan outstanding during a taxable year exceeds the fair market value of the real property on
the date that we have a binding commitment to acquire or originate the mortgage loan, the interest income will be apportioned between
the real property and the other collateral, and its income from the arrangement (except as provided below) will qualify for purposes
of the 75% gross income test only to the extent that the interest is allocable to the real property. Even if a loan is not secured by
real property, or is undersecured, the income that it generates may nonetheless qualify for purposes of the 95% gross income test. In
the case of mortgage loans secured by both real property and personal property, if the fair market value of the personal property does
not exceed 15% of the total fair market value of all property securing the loan, then the personal property securing the loan will be
treated as real property for purposes of determining whether the mortgage loan is a qualifying asset for the 75% asset test and whether
the related interest income qualifies for purposes of the 75% gross income test.
We and our affiliates or subsidiaries have or
may originate and acquire mezzanine loans, which are loans secured by equity interests in an entity that directly or indirectly owns
real property, rather than by a direct mortgage of such real property. Revenue Procedure 2003-65 provides a safe harbor pursuant to which
a mezzanine loan, if it meets each of the requirements contained in the Revenue Procedure, will be treated by the IRS as a real estate
asset for purposes of the REIT asset tests described in the section entitled “REIT Asset Tests,” and interest derived from
it will be treated as qualifying mortgage interest for purposes of the 75% gross income test. Although the Revenue Procedure provides
a safe harbor on which REITs may rely, it does not prescribe rules of substantive tax law. Moreover, not all of the mezzanine loans
in which we invest meet or will meet each of the requirements for reliance on this safe harbor. To the extent that mezzanine loans do
not qualify for the safe harbor described above, the interest income from such loans will be qualifying income for purposes of the 95%
gross income test, but there is a risk that such interest income will not be qualifying income for purposes of the 75% gross income test
and that such loans will not constitute real estate assets for purposes of the REIT asset tests. We have invested, and will continue
to invest, in mezzanine loans in a manner that will enable us to continue to satisfy the REIT gross income and asset tests.
From time to time, we may enter into hedging
transactions with respect to one or more of our assets or liabilities. Income and gain from “hedging transactions” are
excluded from gross income for purposes of both the 75% and 95% gross income tests. For this purpose, a “hedging transaction”
means (1) any transaction entered into in the normal course of our trade or business primarily to manage the risk of interest rate,
price changes, or currency fluctuations with respect to borrowings made or to be made, or ordinary obligations incurred or to be incurred,
to acquire or carry real estate assets, (2) any transaction entered into primarily to manage the risk of currency fluctuations
with respect to any item of income or gain that would be qualifying income under the 75% or 95% gross income test (or any property which
generates such income or gain), or (3) generally, any transaction entered into in connection with the extinguishment of borrowings
or the disposition of property with respect to which hedging transactions described in items (1) or (2) were entered into and
such transaction is a hedging transaction with respect to such hedging transaction . We will be required to clearly identify any such
hedging transaction before the close of the day on which it was acquired, originated, or entered into and to satisfy other identification
requirements. We intend to structure any hedging transactions in a manner that does not jeopardize our status as a REIT under the Code.
A REIT will incur a 100% tax on the net income
derived from any sale or other disposition of property, other than foreclosure property, that the REIT holds primarily for sale to customers
in the ordinary course of a trade or business. We believe that none of our assets are held primarily for sale to customers and that a
sale of any of our assets will not be in the ordinary course of our business. Whether a REIT holds an asset “primarily for sale
to customers in the ordinary course of a trade or business” depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular asset. A safe harbor to the characterization of the sale of property by a REIT as a
prohibited transaction and the 100% prohibited transaction tax is available if the following requirements are met:
·
the REIT has held the property for not less than two years;
· the aggregate capital expenditures made by the REIT, or any partner of the REIT, during the two-year period preceding the date
of the sale that are includable in the basis of the property do not exceed 30% of the selling price of the property;
· either (1) during the year in question, the
REIT did not make more than seven sales of property other than foreclosure property or sales to which Section 1033 of the Internal
Revenue Code applies, (2) the aggregate adjusted bases of all such properties sold by the REIT during the year did not exceed 10%
of the aggregate bases of all of the assets of the REIT at the beginning of the year, (3) the aggregate fair market value of all
such properties sold by the REIT during the year did not exceed 10% of the aggregate fair market value of all of the assets of the REIT
at the beginning of the year, (4) the aggregate adjusted bases of all such properties sold by the REIT during the year did not
exceed 20% of the aggregate bases of all of the assets of the REIT at the beginning of the year (provided that the aggregate adjusted
bases of all such properties sold by the REIT during a three-year period, including the taxable year at issue and the two immediately
preceding taxable years, does not exceed 10% of the aggregate bases of all of the assets of the REIT), or (5) the aggregate fair
market value of all such properties sold by the REIT during the year did not exceed 20% of the aggregate fair market value of all of
the assets of the REIT at the beginning of the year (provided that the aggregate fair market value of all such properties sold by the
REIT during a three-year period, including the taxable year at issues and the two immediately preceding taxable years, does not exceed
10% of the aggregate fair market value of all of the assets of the REIT);
·
in the case of property not acquired through foreclosure or lease termination, the REIT has held the property for at least two
years for the production of rental income; and
· if the REIT has made more than seven sales of non-foreclosure property during the taxable year, substantially all of the marketing
and development expenditures with respect to the property were made through an independent contractor from whom the REIT derives no income
or through taxable REIT subsidiaries.
We will attempt to comply with the terms of safe-harbor
provisions in the U.S. federal income tax laws prescribing when an asset sale will not be characterized as a prohibited transaction.
We cannot assure you, however, that we can comply with the safe-harbor provision or that we will avoid owning property that may be characterized
as property that we hold “primarily for sale to customers in the ordinary course of a trade or business.” The 100% tax will
not apply to gains from the sale of property that is held through a TRS or other taxable corporation, although such income will be taxed
to such corporation at regular corporate income tax rates.
Notwithstanding the foregoing, the Secretary
of the Treasury may determine that any item of income or gain not otherwise qualifying for purposes of the 75% and 95% gross income tests
may be considered as not constituting gross income for purposes of those tests, and that any item of income or gain that otherwise constitutes
nonqualifying income may be considered as qualifying income for purposes of such tests.
If we fail to satisfy either or both of the 75%
or 95% gross income tests for any taxable year, we may nevertheless qualify as a REIT for that year pursuant to a special relief provision
of the Code which may be available to us if:
·
our failure to meet these tests was due to reasonable cause and not due to willful neglect;
· we attach a schedule of the nature and amount of each item of income to our U.S. federal income tax return; and
· the inclusion of any incorrect information on the schedule is not due to fraud with intent to evade tax.
We cannot state whether in all circumstances,
if we were to fail to satisfy either of the gross income tests, we would still be entitled to the benefit of this relief provision. Even
if this relief provision were to apply, we would nonetheless be subject to a 100% tax on the gross income attributable to the greater
of (1) the amount by which we fail the 75% gross income test and (2) the amount by which 95% of our income exceeds the amount
of qualifying income under the 95% gross income test, in each case, multiplied by a fraction intended to reflect our profitability.
REIT
Asset Tests: At the close of each quarter of our taxable year, we must also satisfy the following tests
relating to the nature and diversification of our assets (collectively, the “Asset Tests”):
·
at least 75% of the value of our total assets must be represented by “real estate assets” (which also includes any
property attributable to the temporary investment of new capital, but only if such property is stock or a debt instrument and only for
the 1-year period beginning on the date the REIT receives such proceeds), cash and cash items (including receivables) and government
securities (“75% Value Test”);
· not more than 25% of the value of our total assets may be represented by securities other than securities that constitute qualifying
assets for purposes of the 75% Value Test;
· except with respect to securities of a TRS or QRS and securities that constitute qualifying assets for purposes of the 75% Value
Test:
· not more than 5% of the value of our total assets may
be represented by securities of any one issuer (the “5% Value Test”);
· we may not hold securities possessing more than 10%
of the total voting power of the outstanding securities of any one issuer (the “10% Vote Test”);
·
we may not hold securities having a value of more than 10% of the total value of the outstanding securities of any one issuer
(the “10% Value Test”); and
· not more than 20% of the value of our total assets may be represented by securities of one or more TRSs.
After initially meeting the Asset Tests at the
close of any quarter of our taxable year, we would not lose our status as a REIT under the Code for failure to satisfy these tests at
the end of a later quarter solely by reason of changes in asset values. If the failure to satisfy the Asset Tests results from an acquisition
of securities or other property during a quarter, we can cure the failure by disposing of a sufficient amount of non-qualifying assets
within 30 days after the close of that quarter. We intend to maintain adequate records of the value of our assets to facilitate
compliance with the Asset Tests and to take such other actions within 30 days after the close of any quarter as necessary to cure
any noncompliance.
In applying the Asset Tests, we are treated as
owning all of the assets held by any of our QRSs and our proportionate share of the assets held by Veris Residential, L.P. (including
Veris Residential, L.P.’s share of the assets held by any lower-tier partnership in which Veris Residential, L.P. holds a direct
or indirect interest).
For purposes of the 5% Value Test, the 10% Vote
Test or 10% Value Test, the term “securities” does not include shares in another REIT, equity or debt securities of a QRS
or TRS, mortgage loans that constitute real estate assets, or equity interests in a partnership. Securities, for purposes of the Asset
Tests, may include debt that we hold in other issuers. However, the Code specifically provides that the following types of debt will
not be taken into account as securities for purposes of the 10% Value Test: (1) securities that meet the “straight debt”
safe harbor; (2) loans to individuals or estates; (3) obligations to pay rents from real property; (4) rental agreements
described in Section 467 of the Code (other than such agreements with related party tenants); (5) securities issued by other
REITs; (6) debt issued by partnerships that derive at least 75% of their gross income from sources that constitute qualifying income
for purposes of the 75% gross income test; (7) any debt not otherwise described in this paragraph that is issued by a partnership,
but only to the extent of our interest as a partner in the partnership; (8) certain securities issued by a state, the District of
Columbia, a foreign government, or a political subdivision of any of the foregoing, or the Commonwealth of Puerto Rico; and (9) any
other arrangement described in future Treasury Regulations. For purposes of the 10% Value Test, our proportionate share of the assets
of a partnership is our proportionate interest in any securities issued by the partnership, without regard to the securities described
in (6) and (7) above.
Based on our regular quarterly asset tests, we
believe that we have not violated any of the Asset Tests. However, we cannot provide any assurance that the IRS would concur with our
beliefs in this regard.
If
we fail to satisfy the Asset Tests at the end of a calendar quarter, we will not lose our REIT qualification if (i) we satisfied
the Asset Tests at the end of the preceding calendar quarter; and (ii) the discrepancy between the value of our assets and the Asset
Test requirements arose from changes in the market values of our assets and was not wholly or partly caused by the acquisition of one
or more non-qualifying assets. If we did not satisfy the condition described in item (ii) above, we still could avoid disqualification
by eliminating any discrepancy within 30 days after the close of the calendar quarter in which it arose.
If at the end of any calendar quarter, we violate
the 5% Value Test or the 10% Vote or Value Tests described above, we will not lose our REIT qualification if (1) the failure is
de minimis (up to the lesser of 1% of our assets or $10 million) and (2) we dispose of assets or otherwise comply with the Asset
Tests within six months after the last day of the quarter in which we identify such failure. In the event of a failure of any of the
Asset Tests (other than de minimis failures described in the preceding sentence), as long as the failure was due to reasonable cause
and not to willful neglect, we will not lose our REIT status if we (1) dispose of assets or otherwise comply with the Asset Tests
within six months after the last day of the quarter in which we identify the failure, (2) we file a description of each asset causing
the failure with the IRS and (3) pay a tax equal to the greater of $50,000 or 21% of the net income from the nonqualifying assets
during the period in which we failed to satisfy the Asset Tests.
REIT
Distribution Requirements: To qualify for taxation as a REIT, we must, each year, make distributions
(other than capital gain distributions) to our stockholders in an amount at least equal to (1) the sum of: (A) 90% of our “REIT
taxable income,” computed without regard to the dividends paid deduction and our net capital gain, and (B) 90% of the net
income, after tax, from foreclosure property, minus (2) the sum of certain specified items of noncash income. In addition, if we
were to dispose of any asset acquired from a subchapter C corporation in a “carryover basis” transaction within five
years of the acquisition, we would be required to distribute at least 90% of the after-tax “built-in gain” recognized on
the disposition of such asset.
We must pay dividend distributions in the taxable
year to which they relate. Dividends paid in the subsequent year, however, will be treated as if paid in the prior year for purposes
of the prior year’s distribution requirement if one of the following two sets of criteria are satisfied:
·
the dividends are declared in October, November or December and are made payable to stockholders of record on a specified
date in any of these months, and such dividends are actually paid during January of the following year; or
·
the dividends are declared before we timely file our U.S. federal income tax return for such year, the dividends are paid in the
12-month period following the close of the year and not later than the first regular dividend payment after the declaration, and we elect
on our U.S. federal income tax return for such year to have a specified amount of the subsequent dividend treated as if paid in such
year.
In certain circumstances, relevant Treasury Regulations
provide that if we give an option to each of our shareholders to receive a distribution either in cash or shares of equivalent value,
distributions of stock pursuant to an election by shareholders to receive stock may be taxable to such shareholders and such distribution
of stock may be treated as distributions for purposes of our distribution requirements. Any such taxable stock distributions may be limited
pursuant to applicable guidance by the IRS.
Even if we satisfy our distribution requirements
for maintaining our REIT status, we will nonetheless be subject to a corporate-level tax on any of our net capital gain or REIT taxable
income that we do not distribute to our stockholders. In addition, we will be subject to a 4% excise tax to the extent that we fail to
distribute during any calendar year (or by the end of January of the following calendar year in the case of distributions with declaration
and record dates falling in the last 3 months of the calendar year) an amount at least equal to the sum of:
·
85% of our ordinary income for such year;
· 95% of our capital gain net income for such year; and
· any undistributed taxable income required to be distributed from prior periods.
As discussed below, we may retain, rather than
distribute, all or a portion of our net capital gains and pay the tax on the gains and may elect to have our stockholders include their
proportionate share of such undistributed gains as long-term capital gain income on their own income tax returns and receive a credit
for their share of the tax paid by us. For purposes of the 4% excise tax described above, any such retained gains would be treated as
having been distributed by us.
We intend to make timely distributions sufficient
to satisfy our annual distribution requirements for REIT qualification under the Code and which are eligible for the dividends-paid deduction.
In this regard, the partnership agreement of Veris Residential, L.P. authorizes us, as the general partner of Veris Residential, L.P.,
to take such steps as may be necessary to cause Veris Residential, L.P. to make distributions to its partners at such times and which
are sufficient in amount to enable us to satisfy the annual REIT distribution requirements.
We expect that our cash flow will exceed our
REIT taxable income due to the allowance of depreciation and other non-cash deductions allowed in computing REIT taxable income. Accordingly,
in general, we anticipate that we should have sufficient cash or liquid assets to enable us to satisfy the 90% distribution requirement
for REIT qualification under the Code. It is possible, however, that we, from time to time, may not have sufficient cash or other liquid
assets to meet this requirement or to distribute an amount sufficient to enable us to avoid income and/or excise taxes. In such event,
we may find it necessary to arrange for borrowings to raise cash or, if possible, make taxable stock dividends in order to make such
distributions.
Pursuant to Section 451 of the Code, as
amended by the TCJA, subject to certain exceptions, we must accrue income for U.S. federal income tax purposes no later than when such
income is taken into account as revenue in our financial statements, which could create additional differences between REIT taxable income
and the receipt of cash attributable to such income. In addition, Section 162(m) of the Code places a per-employee limit of
$1 million on the amount of compensation that a publicly held corporation may deduct in any one year with respect to its chief executive
officer and certain other highly compensated executive officers. As amended by the TCJA, Section 162(m) no longer includes
an exception that formerly permitted certain performance-based compensation to be deducted even if such compensation exceeded $1 million.
This change may have the effect of increasing our REIT taxable income relative to the amount determinable under prior law.
Commencing with taxable years beginning after
December 31, 2017, Section 163(j) of the Code, as amended by the TCJA, limits the deductibility of net interest expense
paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” subject to certain
exceptions. Any deduction in excess of the limitation is carried forward and may be used in a subsequent year, subject to the 30% limitation.
Adjusted taxable income is determined without regard to certain deductions, including those for net business interest expense, net operating
losses and, for taxable years beginning before January 1, 2022, depreciation, amortization and depletion. Provided that a taxpayer
makes a timely election (which is irrevocable), the 30% limitation does not apply to an “electing real property trade or business”,
which is a trade or business involving real property development, redevelopment, construction, reconstruction, rental, operation, acquisition,
conversion, management, leasing or brokerage, within the meaning of Section 469(c)(7)(C) of the Code. If such an election is
made, depreciable real property (including certain improvements) held by such electing real property trade or business must be depreciated
under the alternative depreciation system under the Code, which is generally less favorable than the generally applicable system of depreciation
under the Code. We believe that Veris Residential, L.P. constitutes a real property trade or business, and that we may accordingly cause
Veris Residential, L.P. to elect not to have the interest deduction limitation apply to it. If we do not cause Veris Residential, L.P.
to make such an election, or if the election is determined to be unavailable with respect to all, or certain, of Veris Residential, L.P.’s
business activities, the new interest deduction limitation could result in us having more REIT taxable income and thus increase the amount
of distributions we must make to comply with the REIT distribution requirements and avoid incurring corporate level tax. Similarly, the
limitation could cause our TRSs to have greater taxable income and thus potentially greater corporate tax liability than they would otherwise
have.
In the event that we are subject to an adjustment
to our REIT taxable income (as defined in Section 860(d)(2) of the Code) resulting from an adverse determination by either
a final court decision, a closing agreement between us and the IRS under Section 7121 of the Code, or an agreement as to tax liability
between us and an IRS district director, we may be able to rectify any resulting failure to meet the 90% distribution requirement by
paying “deficiency dividends” to stockholders that relate to the adjusted year but that are paid in a subsequent year. To
qualify as a deficiency dividend, we must make the distribution within 90 days of the adverse determination and we also must satisfy
other procedural requirements. If we satisfy the statutory requirements of Section 860 of the Code, a deduction is allowed for any
deficiency dividend subsequently paid by us to offset an increase in our REIT taxable income resulting from the adverse determination.
We, however, must pay statutory interest on the amount of any deduction taken for deficiency dividends to compensate for the deferral
of the tax liability.
Recordkeeping
Requirements: We must maintain certain records in order to qualify as a REIT. In addition, to avoid a monetary penalty, we
must request on an annual basis information from our shareholders designed to disclose the actual ownership of our outstanding shares
of beneficial interest. We have complied, and we intend to continue to comply, with these requirements.
Failure
to Qualify as a REIT: If we would otherwise fail to qualify as a REIT under the Code because of a violation
of one of the requirements described above, our qualification as a REIT will not be terminated if the violation is due to reasonable
cause and not willful neglect and we pay a penalty tax of $50,000 for the violation. The immediately preceding sentence does not apply
to violations of the gross income tests described above or a violation of the asset tests described above each of which have specific
relief provisions that are described above.
If we fail to qualify for taxation as a REIT
under the Code in any taxable year, and the relief provisions do not apply, we will have to pay tax on our taxable income at regular
corporate rates. We will not be able to deduct distributions to stockholders in any year in which we fail to qualify, nor will we be
required to make distributions to stockholders. In this event, to the extent of current and accumulated earnings and profits, all distributions
to stockholders will be taxable to the stockholders as dividend income (which may be subject to tax at preferential rates) and corporate
distributees may be eligible for the dividends received deduction if they satisfy the relevant provisions of the Code. Unless entitled
to relief under specific statutory provisions, we will also be disqualified from taxation as a REIT for the four taxable years following
the year during which qualification was lost. We might not be entitled to the statutory relief described in this paragraph in all circumstances.
Taxation of U.S. Stockholders
When we refer to the term U.S. Stockholders,
we mean a holder of our common stock that is, for U.S. federal income tax purposes:
·
a citizen or resident of the United States;
· a domestic corporation;
· an estate the income of which is subject to U.S. federal income taxation regardless of its source; or
· a trust if a court within the United States can exercise primary supervision over the administration of the trust, and one or
more United States persons have the authority to control all substantial decisions of the trust.
If a partnership, entity or arrangement treated
as a partnership for U.S. federal income tax purposes holds our common stock, the U.S. federal income tax treatment of a partner in the
partnership will generally depend on the status of the partner and the activities of the partnership. If you are a partner in a partnership
holding our common stock, you should consult your tax advisor regarding the consequences of the ownership and disposition of our common
stock by the partnership.
Distributions
Generally: For any taxable year for which we qualify for taxation as a REIT under the Code, amounts
distributed to taxable U.S. Stockholders will be taxed as discussed below.
As
long as we qualify as a REIT, distributions made by us out of our current or accumulated earnings and profits, and not designated as
capital gain dividends, will constitute dividends taxable to our taxable U.S. Stockholders as ordinary income, but potentially
qualify for a 20% deduction, as described below. A noncorporate U.S. Stockholder taxed at individual rates will generally not be entitled
to the reduced tax rate applicable to “qualified dividend income” except with respect to the portion of any distribution
(a) that represents income from dividends received from a non-REIT corporation in which it owns shares (but only if such dividends
would be eligible for the lower rate on dividends if paid by the corporation to its individual stockholders), or (b) that is equal
to our REIT taxable income (taking into account the dividends paid deduction available to us) for our previous taxable year less any
taxes paid by us during the previous taxable year, provided that certain holding period and other requirements are satisfied at both
the REIT and individual stockholder level.
Under
current law, the highest marginal individual income tax rate on ordinary income is 37% (reduced from 39.6% for tax years beginning
after December 31, 2017 through tax years beginning before January 1, 2026) while the highest individual income tax rate on
long-term capital gains is generally 20%. However, pursuant to the TCJA, stockholders that are individuals, trusts, or estates, may,
for taxable years beginning prior to January 1, 2026, deduct up to 20% of a “qualified REIT dividend” (generally, a
dividend from a REIT that is not a capital gain dividend and is not “qualified dividend income”), resulting in an effective
maximum U.S. federal income tax rate on such dividends of 29.6%, if allowed in full, which reflects a 20% deduction with respect to the
current maximum tax rate of 37% on ordinary income. Pursuant to recently finalized Treasury Regulations, in order for a dividend paid
by a REIT to be eligible to be treated as a “qualified REIT dividend,” the shareholder must meet two holding period-related
requirements. First, the shareholder must hold the REIT shares for a minimum of 46 days during the 91-day period that begins 45 days
before the date on which the REIT share becomes ex-dividend with respect to the dividend. Second, the qualifying portion of the REIT
dividend is reduced to the extent that the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to make
related payments with respect to positions in substantially similar or related property. Distributions may also be subject to the 3.8%
Medicare tax, as described below. Noncorporate U.S. Stockholders should consult their own tax advisors to determine the impact of tax
rates on dividends received from us.
Distributions
will not be eligible for the dividends received deduction in the case of U.S. Stockholders that are corporations, but, under the
TCJA, will be subject to U.S. federal income tax on our dividends at a maximum rate of 21%.
Distributions made by us that we properly designate
as capital gain dividends will be taxable to U.S. Stockholders as gain from the sale of a capital asset held for more than one year,
to the extent that they do not exceed our actual net capital gain for the taxable year, without regard to the period for which a U.S.
Stockholder has held its common stock. Thus, with certain limitations, capital gain dividends received by an individual U.S. Stockholder
may be eligible for preferential rates of taxation. U.S. Stockholders that are corporations may, however, be required to treat up to
20% of certain capital gain dividends as ordinary income.
To the extent that we make distributions, not
designated as capital gain dividends, in excess of our current and accumulated earnings and profits, these distributions will be treated
first as a tax-free return of capital to each U.S. Stockholder. Thus, these distributions will reduce the adjusted basis which the U.S.
Stockholder has in its shares for tax purposes by the amount of the distribution, but not below zero. Distributions in excess of a U.S.
Stockholder’s adjusted basis in its shares will be taxable as capital gains, provided that the shares have been held as a capital
asset. For purposes of determining the portion of distributions on separate classes of shares that will be treated as dividends for U.S.
federal income tax purposes, current and accumulated earnings and profits will be allocated to distributions resulting from priority
rights of preferred shares before being allocated to other distributions.
Dividends authorized by us in October, November,
or December of any year and payable to a stockholder of record on a specified date in any of these months will be treated as both
paid by us and received by the stockholder on December 31 of that year, provided that we actually pay the dividend on or before
January 31 of the following calendar year. Stockholders may not include in their own income tax returns any of our net operating
losses or capital losses.
U.S. Stockholders holding shares at the close
of our taxable year will be required to include, in computing their long-term capital gains for the taxable year in which the last day
of our taxable year falls, the amount of our undistributed capital gains that we elect to retain and designate as capital gain dividends
in a written notice mailed to our stockholders. We may not designate amounts in excess of our undistributed net capital gain for the
taxable year (including for this purpose any amounts of undistributed capital gain dividends that we so designate). Each U.S. Stockholder
required to include the designated amount in determining the U.S. Stockholder’s long-term capital gains will be deemed to have
paid, in the taxable year of the inclusion, the tax paid by us in respect of the undistributed net capital gains. U.S. Stockholders to
whom these rules apply will be allowed a credit or a refund, as the case may be, for the tax they are deemed to have paid. U.S.
Stockholders will increase their basis in their shares by the difference between the amount of the includible gains and the tax deemed
paid by the stockholder in respect of these gains.
A U.S. Stockholder that is an individual or estate,
or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% “Medicare tax”
on “net investment income,” which includes, among other things, dividends on gains from the sale or other dispositions of
stock. If you are a U.S. Stockholder that is an individual, estate or trust, you are urged to consult your tax adviser regarding the
applicability of the Medicare tax to your income and gains in respect of your investment in the Company.
Passive
Activity Loss and Investment Interest Limitations: Distributions from us and gain from the disposition
of our stock will not be treated as passive activity income and, therefore, a U.S. Stockholder will not be able to offset any of this
income with any passive losses of the stockholder from other activities. Dividends received by a U.S. Stockholder from us generally will
be treated as investment income for purposes of the investment interest limitation. Net capital gain from the disposition of shares of
our stock or capital gain dividends generally will be excluded from investment income unless the stockholder elects to have the gain
taxed at ordinary income rates.
Sale/Other
Taxable Disposition of Company Stock: In general, a U.S. Stockholder will recognize gain or loss on
its sale or other taxable disposition of our stock equal to the difference between the amount of cash and the fair market value of any
other property received in such sale or other taxable disposition and the stockholder’s adjusted basis in said stock at such time.
This gain or loss will be a capital gain or loss if the shares have been held by the U.S. Stockholder as a capital asset. The applicable
tax rate will depend on the stockholder’s holding period in the asset (generally, if an asset has been held for more than one year
it will produce long-term capital gain) and the stockholder’s tax bracket. The IRS has the authority to prescribe, but has not
yet prescribed, regulations that would apply a capital gain tax rate of 25% (which is generally higher than the long-term capital gain
tax rates for non-corporate stockholders) to a portion of capital gain realized by a non-corporate stockholder on the sale of REIT stock
that would correspond to the REIT’s “unrecaptured Section 1250 gain.” In addition, as described above, capital
gains may be subject to the 3.8% Medicare tax. U.S. Stockholders should consult with their tax advisors with respect to their capital
gain tax liability. A corporate U.S. Stockholder will be subject to tax at a maximum rate of 21% on capital gain from the sale of our
common stock. In general, any loss recognized by a U.S. Stockholder upon the sale or other disposition of shares that have been held
for six months or less, after applying the holding period rules, will be treated as a long-term capital loss, to the extent of distributions
received by the U.S. Stockholder from us that were required to be treated as long-term capital gains.
Stockholders should consult with their own tax
advisors with respect to their capital gain tax liability in respect of distributions received from us and gains recognized upon the
sale or other disposition of shares of our common stock.
Treatment
of Tax-Exempt Stockholders: Based upon published rulings by the IRS, distributions by us to a U.S.
Stockholder that is a tax-exempt entity generally will not constitute “unrelated business taxable income” (“UBTI”),
provided that the tax-exempt entity has not financed the acquisition of its shares with “acquisition indebtedness,” within
the meaning of the Code, and the shares are not otherwise used in an unrelated trade or business of the tax-exempt entity. Similarly,
income from the sale of shares of our common stock will not constitute UBTI, provided that the tax-exempt entity has not financed the
acquisition of its shares with “acquisition indebtedness” and the shares are not otherwise used in an unrelated trade or
business of the tax-exempt entity.
For tax-exempt U.S. Stockholders which are social
clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts, and qualified group legal services plans, exempt
from U.S. federal income taxation under Code Sections 501(c)(7), (9), (17) and (20), respectively, income from an investment
in shares of our common stock will constitute UBTI unless the organization is able to properly deduct amounts set aside or placed in
reserve for certain purposes so as to offset the income generated by its shares of our common stock. Such prospective investors should
consult their own tax advisors concerning these “set-aside” and reserve requirements.
Notwithstanding the above, however, a portion
of the dividends paid by a “pension-held REIT” is treated as UBTI as to any trust which (i) is described in Section 401(a) of
the Code, (ii) is tax-exempt under Section 501(a) of the Code and (iii) holds more than 10% (by value) of the interests
in the REIT. Tax-exempt pension funds that are described in Section 401(a) of the Code and exempt from tax under Section 501(a) of
the Code are referred to below as “qualified trusts.”
A REIT is a “pension-held REIT” if
(i) it would not have qualified as a REIT under the Code but for the fact that Section 856(h)(3) of the Code provides
that stock owned by qualified trusts shall beis treated, for purposes of the “not closely held” requirement, as owned by
the beneficiaries of the trust (rather than by the trust itself), and (ii) either (a) at least one such qualified trust holds
more than 25% (by value) of the interests in the REIT or (b) one or more such qualified trusts, each of whom owns more than 10%
(by value) of the interests in the REIT, hold in the aggregate more than 50% (by value) of the interests in the REIT. The percentage
of any REIT dividend treated as UBTI is equal to the ratio of (i) the gross income of the REIT from unrelated trades or businesses,
determined as though the REIT were a qualified trust, less direct expenses related to this gross income, to (ii) the total gross
income of the REIT, less direct expenses related to the total gross income. The provisions requiring qualified trusts to treat a portion
of REIT distributions as UBTI will not apply if the REIT is able to satisfy the “not closely held” requirement without relying
upon the “look-through” exception with respect to qualified trusts. We do not expect to be classified as a “pension-held
REIT.”
Pursuant to the TCJA, tax-exempt organizations
must compute UBTI separately for each unrelated trade or business, which prevents a tax-exempt organization from applying losses from
one unrelated trade or business against income derived from another unrelated trade or business. It remains unclear, however, how this
rule applies to any UBTI resulting from an investment in our stock, and tax-exempt U.S. Shareholders should be aware that the requirement
to compute UBTI separately for each unrelated trade or business may increase their overall UBTI.
The rules described above under the heading
“Taxation of U.S. Stockholders” concerning the inclusion of our designated undistributed net capital gains in the income
of its stockholders will apply to tax-exempt entities. Thus, tax-exempt entities will be allowed a credit or refund of the tax deemed
paid by these entities in respect of the includible gains.
Special Tax Considerations For Non-U.S. Stockholders
Taxation
of Non-U.S. Stockholders: The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships and other foreign stockholders (collectively, “Non-U.S. Stockholders”)
are complex, and no attempt will be made herein to provide more than a limited summary of such rules. Prospective Non-U.S. Stockholders
should consult with their tax advisors to determine the impact of U.S. federal, state and local income tax laws with regard to an investment
in our stock, including any reporting requirements.
Distributions by us to a Non-U.S. Stockholder
that are neither attributable to gain from sales or exchanges by us of United States real property interests (“USRPI”) nor
designated by us as capital gain dividends will be treated as dividends of ordinary income to the extent that they are made out of our
current or accumulated earnings and profits. Such distributions will ordinarily be subject to a withholding tax equal to 30% of the gross
amount of the distribution unless an applicable tax treaty reduces that tax. Under certain treaties, lower withholding rates generally
applicable to dividends do not apply to dividends from a REIT. However, if income from the investment in the stock is treated as effectively
connected with the Non-U.S. Stockholder’s conduct of a U.S. trade or business or is attributable to a permanent establishment that
the Non-U.S. Stockholder maintains in the United States (if that is required by an applicable income tax treaty as a condition for subjecting
the Non-U.S. Stockholder to U.S. taxation on a net income basis) the Non-U.S. Stockholder generally will be subject to tax at graduated
rates, in the same manner as U.S. Stockholders are taxed with respect to such income and is generally not subject to withholding. Any
such effectively connected distributions received by a Non-U.S. Stockholder that is a corporation may also be subject to an additional
branch profits tax at a 30% rate or such lower rate as may be specified by an applicable income tax treaty. We expect to withhold U.S.
federal income tax at the rate of 30% on the gross amount of any dividends paid to a Non-U.S. Stockholder, other than dividends treated
as attributable to gain from sales or exchanges of USRPIs and capital gain dividends, paid to a Non-U.S. Stockholder, unless (a) a
lower treaty rate applies and the required form evidencing eligibility for that reduced rate is submitted to us or the appropriate withholding
agent or (b) the Non-U.S. Stockholder submits an IRS Form W-8 ECI (or a successor form) to us or the appropriate withholding
agent claiming that the distributions are effectively connected with the Non-U.S. Stockholder’s conduct of a U.S. trade or business
and, in either case, other applicable requirements were met.
Distributions in excess of our current and accumulated
earnings and profits will not be taxable to a Non-U.S. Stockholder to the extent that they do not exceed the adjusted basis of the Non-U.S.
Stockholder’s shares, but rather will reduce the adjusted basis of such shares. For FIRPTA withholding purposes (discussed below)
such distribution will be treated as consideration for the sale or exchange of shares of stock. To the extent that such distributions
exceed the adjusted basis of a Non-U.S. Stockholder’s shares, these distributions will give rise to tax liability if the Non-U.S.
Stockholder would otherwise be subject to tax on any gain from the sale or disposition of its shares, as described below. If it cannot
be determined at the time a distribution is made whether or not such distribution will be in excess of current and accumulated earnings
and profits, the distribution will be subject to withholding at the rate applicable to dividends. However, the Non-U.S. Stockholder may
seek a refund of such amounts from the IRS if it is subsequently determined that such distribution was, in fact, in excess of our current
and accumulated earnings and profits.
Distributions to a Non-U.S. Stockholder that
are designated by us at the time of distribution as capital gain dividends (other than those arising from the disposition of a USRPIs)
generally will not be subject to U.S. federal income taxation unless (i) investment in the stock is effectively connected with the
Non-U.S. Stockholder’s U.S. trade or business, in which case the Non-U.S. Stockholder will be subject to the same treatment as
a U.S. Stockholder with respect to such gain (except that a corporate Non-U.S. Stockholder may also be subject to the 30% branch profits
tax, as discussed above), or (ii) the Non-U.S. Stockholder is a nonresident alien individual who is present in the United States
for 183 days or more during the taxable year and has a “tax home” in the United States, in which case such stockholder
will be subject to a 30% tax on his or her capital gains.
For any year in which we qualify as a REIT, distributions
that are attributable to gain from sales or exchanges by us of USRPIs will be taxed to a Non-U.S. Stockholder under the provisions of
the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). A USRPI includes certain interests in real property and
stock in corporations at least 50% of whose assets consist of interests in real property. Under FIRPTA, and subject to the exception
described below, these distributions are taxed to a Non-U.S. Stockholder as if such gain were effectively connected with a U.S. business.
Thus, Non-U.S. Stockholders would be taxed at the normal capital gain rates applicable to U.S. Stockholders (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of nonresident alien individuals). Also, distributions subject to FIRPTA
may be subject to a 30% branch profits tax in the hands of a corporate Non-U.S. Stockholder not entitled to treaty relief or exemption.
We are generally required by applicable Treasury Regulations to withhold 21% of any distribution to a Non-U.S. Stockholder that could
be designated by us as a capital gain dividend. This amount is creditable against the Non-U.S. Stockholder’s U.S. federal income
tax liability. We or any nominee (e.g., a broker holding shares in street name) may rely on a certificate of Non-U.S. Stockholder
status on IRS Form W-8 to determine whether withholding is required on gains realized from the disposition of USRPIs. A U.S. Stockholder
who holds shares of stock on behalf of a Non-U.S. Stockholder will bear the burden of withholding, provided that we have properly designated
the appropriate portion of a distribution as a capital gain dividend.
Capital gain distributions to Non-U.S. Stockholders
that are attributable to our sale of real property will be treated as ordinary dividends rather than as gain from the sale of a USRPI,
as long as (1) our common stock continues to be treated as being “regularly traded” on an established securities market
in the United States and (2) the Non-U.S. Stockholder did not own more than 10 percent of our common stock at any time during the
one-year period preceding the distribution. As a result, Non-U.S. Stockholders owning 10 percent or less of our common stock generally
will be subject to withholding tax on such capital gain distributions in the same manner as they are subject to withholding tax on ordinary
dividends. If our common stock ceases to be regularly traded on an established securities market in the United States or the Non-U.S.
Stockholder owned more than 10 percent of our common stock at any time during the one-year period preceding the distribution, capital
gain distributions that are attributable to our sale of real property would be subject to tax under FIRPTA, as described above.
If a Non-U.S. Stockholder owning more than 10
percent of our common stock disposes of such common stock during the 30-day period preceding the ex-dividend date of any dividend payment,
and such Non-U.S. Stockholder (or a person related to such Non-U.S. Stockholder) acquires or enters into a contract or option to acquire
our common stock within 61 days of the first day of such 30-day period described above, and any portion of such dividend payment would,
but for the disposition, be treated as USRPI capital gain to such Non-U.S. Stockholder under FIRPTA, then such Non-U.S Stockholder will
be treated as having USRPI capital gain in an amount that, but for the disposition, would have been treated as USRPI capital gain.
Gain recognized by a Non-U.S. Stockholder upon
a sale of stock of a REIT generally will not be taxed under FIRPTA if the REIT is a “domestically-controlled REIT” (generally,
a REIT in which at all times during a specified testing period less than 50% in value of its stock is held directly or indirectly by
foreign persons). Since it is currently anticipated that we will be a “domestically-controlled REIT,” a Non-U.S. Stockholder’s
sale of our common stock should not be subject to taxation under FIRPTA. Because our common stock is publicly-traded, under recently
enacted rules, we may rely on certain assumptions (absent actual knowledge to the contrary) to determine that we are a “domestically-controlled
REIT.” However, because our common stock is publicly-traded, no assurance can be given that we will continue to be a “domestically-controlled
REIT.” Notwithstanding the foregoing, gain from the sale of our common stock that is not subject to FIRPTA will be taxable to a
Non-U.S. Stockholder if (i) the Non-U.S. Stockholder’s investment in the stock is “effectively connected” with
the Non-U.S. Stockholder’s U.S. trade or business, in which case the Non-U.S. Stockholder will be subject to the same treatment
as a U.S. Stockholder with respect to such gain (a Non-U.S. Stockholder that is a foreign corporation may also be subject to a 30% branch
profits tax, as discussed above), or (ii) the Non-U.S. Stockholder is a nonresident alien individual who was present in the United
States for 183 days or more during the taxable year and has a “tax home” in the United States, in which case the nonresident
alien individual will be subject to a 30% tax on the individual’s capital gains.
If we are not, or cease to be, a “domestically-controlled
REIT,” whether gain arising from the sale or exchange of stock by a Non-U.S. Stockholder would be subject to United States taxation
under FIRPTA as a sale of a USRPI will depend on whether any class of our stock is “regularly traded” (as defined by applicable
Treasury Regulations) on an established securities market (e.g., the New York Stock Exchange), as is the case with our common stock,
and on the size of the selling Non-U.S. Stockholder’s interest in us. In the case where we are not, or cease to be, a “domestically-controlled
REIT” and any class of our stock is “regularly traded” on an established securities market at any time during the calendar
year, a sale of shares of that class by a Non-U.S. Stockholder will only be treated as a sale of a USRPI (and thus subject to taxation
under FIRPTA) if such selling stockholder beneficially owns (including by attribution) more than 10%) of the total fair market value
of all of the shares of such class at any time during the five-year period ending either on the date of such sale or other applicable
determination date. To the extent we have one or more classes of stock outstanding that are “regularly traded,” but the Non-U.S.
Stockholder sells shares of a class of our stock that is not “regularly traded,” the sale of shares of such class would be
treated as a sale of a USRPI under the foregoing rule only if the shares of such latter class acquired by the Non-U.S. Stockholder
have a total net market value on the date they are acquired that is greater than 10% of the total fair market value of the “regularly
traded” class of our stock having the lowest fair market value (or with respect to a nontraded class of our stock convertible into
a “regularly traded” market value on the date of acquisition of the total fair market value of the “regularly traded”
class into which it is convertible).If the gain on the sale of stock were to be subject to taxation under FIRPTA, the Non-U.S. Stockholder
would be subject to the same treatment as a U.S. Stockholder with respect to such gain (subject to applicable alternative minimum tax,
possible withholding tax and a special alternative minimum tax in the case of nonresident alien individuals); provided, however, that
deductions otherwise allowable will be allowed as deductions only if the tax returns were filed within the time prescribed by law. In
general, the purchaser of the stock would be required to withhold and remit to the IRS 15% of the amount realized by the seller on the
sale of such stock.
Under recently enacted rules, Non-U.S. Stockholders
that are “qualified foreign pension funds” or certain “qualified collective investment vehicles” that qualify
as “qualified shareholders” are not subject to the FIRPTA rules described in this section. Non-U.S. Stockholders
should consult with their own tax advisors to determine if they are eligible for either of these exceptions to the FIRPTA rules.
FATCA.
The Foreign Account Tax Compliance Act (“FATCA”) generally requires withholding at a rate of 30% on dividends in respect
of shares of our common stock held by or through certain foreign financial institutions (including investment funds), unless such institution
enters into an agreement with the Secretary of the Treasury (or unless alternative procedures apply pursuant to an applicable intergovernmental
agreement between the United States and the relevant foreign government) to report, on an annual basis, information with respect to shares
in, and accounts maintained by, the institution to the extent such shares or accounts are held by certain United States persons or by
certain non-U.S. entities that are wholly or partially owned by United States persons. Accordingly, the entity through which our common
stock is held will affect the determination of whether such withholding is required. Similarly, dividends in respect of shares of our
common stock held by an investor that is a non-financial non-U.S. entity will be subject to withholding at a rate of 30%, unless such
entity either (i) certifies to us that such entity does not have any “substantial United States owners” or (ii) provides
certain information regarding the entity’s “substantial United States owners,” which we will in turn provide to the
Secretary of the Treasury (or unless alternative procedures apply pursuant to an applicable intergovernmental agreement between the United
States and the relevant foreign government). While withholding under FATCA would have applied to payments of gross proceeds from the
sale or other disposition of our common shares on or after January 1, 2019, recently proposed Treasury Regulations eliminate FATCA
withholding on payments of gross proceeds entirely. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury
Regulations are issued. Foreign investors are encouraged to consult with their tax advisers regarding the possible implications of these
rules on their investment in our common stock.
Information Reporting Requirements and Backup Withholding Tax
U.S.
Stockholders: We will report to our U.S. Stockholders and the IRS the amount of dividends paid during
each calendar year, and the amount of tax withheld, if any. Under the backup withholding rules, backup withholding may apply to a U.S.
Stockholder with respect to dividends paid unless the U.S. Stockholder (a) is a corporation or comes within certain other exempt
categories and, when required, demonstrates this fact, or (b) provides a taxpayer identification number, certifies as to no loss
of exemption from backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. The IRS may
also impose penalties on a U.S. Stockholder that does not provide us with its correct taxpayer identification number. A U.S. Stockholder
may credit any amount paid as backup withholding against the stockholder’s U.S. federal income tax liability. In addition, we may
be required to withhold a portion of capital gain distributions to any U.S. Stockholder who fails to certify to us its non-foreign status.
Non-U.S.
Stockholders: If you are a Non-U.S. Stockholder, you are generally exempt from backup withholding and
information reporting requirements with respect to:
·
dividend payments; and
·
the payment of the proceeds from the sale of common stock effected at a United States office of a broker, as long as the income
associated with these payments is otherwise exempt from U.S. federal income tax and:
·
the payor or broker does not have actual knowledge or reason to know that you are a United States person and you have furnished
to the payor or broker:
·
a valid IRS Form W-8BEN or an acceptable substitute form upon which you certify, under penalties of perjury, that you are
a non-United States person, or
· other documentation upon which it may rely to treat the payments as made to a non-United States person in accordance with Treasury
Regulations, or
· you otherwise establish your right to an exemption.
Payment of the proceeds from the sale of common
stock effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However,
a sale of common stock that is effected at a foreign office of a broker will be subject to information reporting and backup withholding
if:
·
the proceeds are transferred to an account maintained by you in the United States;
· the payment of proceeds or the confirmation of the sale is mailed to you at a United States address; or
· the sale has some other specified connection with the United States as provided in the Treasury Regulations, unless the broker
does not have actual knowledge or reason to know that you are a United States person and the documentation requirements described above
are met or you otherwise establish an exemption.
In addition, a sale of common stock will be subject
to information reporting if it is effected at a foreign office of a broker that is:
·
a United States person;
· a controlled foreign corporation for United States tax purposes;
· a foreign person 50% or more of whose gross income is effectively connected with the conduct of a United States trade or business
for a specified three-year period; or
· a foreign partnership, if at any time during its
tax year:
·
one or more of its partners are “U.S. persons,” as defined in Treasury Regulations, who in the aggregate hold more
than 50% of the income or capital interest in the partnership; or
· such foreign partnership is engaged in the conduct of a United States trade or business,
unless the broker does not have actual knowledge or reason to know
that you are a United States person and the documentation requirements described above are met or you otherwise establish your right
to an exemption. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that
you are a United States person.
You generally may obtain a refund of any amounts
withheld under the backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with the
IRS.
Tax Aspects of Veris Residential, L.P.
General: Veris
Residential, L.P. holds substantially all of our investments. In general, partnerships are “pass-through” entities that are
not subject to U.S. federal income tax. Rather, partners are allocated their proportionate shares of the items of income, gain, loss,
deduction and credit of their partnership, and are potentially subject to tax thereon, without regard to whether distributions are made
to them by the partnership. We include in our income our proportionate share of these Veris Residential, L.P. items (including our proportionate
share of such items attributable to partnerships in which Veris Residential, L.P. owns a direct or indirect interest) for purposes of
the various REIT gross income tests and in the computation of its REIT taxable income. Moreover, for purposes of the REIT Asset Tests,
we include our proportionate share of assets held by Veris Residential, L.P. and by partnerships in which Veris Residential, L.P. owns
a direct or indirect interest.
Tax
Allocations with respect to Contributed Properties (Effects of Section 704(c) of the Code): Pursuant
to Section 704(c) of the Code, income, gain, loss and deduction attributable to appreciated or depreciated property that is
contributed to a partnership in exchange for an interest in the partnership, must be allocated in a manner such that the contributing
partner is charged with the unrealized gain, or benefits from the unrealized loss, associated with the property at the time of the contribution.
The amount of the unrealized gain or unrealized loss is generally equal to the difference between the fair market value of the contributed
property at the time of contribution and the adjusted tax basis of the property at such time (said difference, the “Book-Tax Difference”).
Additionally, upon the occurrence of certain events (including but not limited to the issuance of additional interests in the partnership),
a partnership may adjust the Section 704(b) book basis of its assets to reflect their then-current fair market values, thereby
creating additional Book-Tax Differences under Section 704(c). These allocations are solely for U.S. federal income tax purposes
and do not affect the book capital accounts of, or other economic or legal arrangements among, the partners. Veris Residential, L.P.
was formed by way of, and has since formation received, contributions of appreciated property (including interests in partnerships that
have appreciated property), and has adjusted the Section 704(b) book basis of its assets. Consequently, in accordance with
Section 704(c) of the Code and Veris Residential, L.P.’s partnership agreement, Veris Residential, L.P. makes allocations
to its partners in a manner consistent with Section 704(c) of the Code and the Treasury Regulations thereunder.
In general, those partners who have contributed
to Veris Residential, L.P. property (including interests in partnerships that own property) that has a fair market value in excess of
basis at the time of such contribution have been allocated lower amounts of depreciation deductions for tax purposes than would have
been the case if such allocations were made pro rata. In addition, in the event of the disposition of any such property, all taxable
income and gain attributable to such property’s Book-Tax Difference generally will be allocated to the contributing partners, and
we generally will be allocated only our share (and on a pro rata basis) of any capital gain attributable to post-contribution appreciation,
if any. The foregoing allocations would tend to eliminate a property’s Book-Tax Difference over Veris Residential, L.P.’s
life. However, the special allocation rules of Section 704(c) of the Code do not always entirely eliminate a property’s
Book-Tax Difference and could prolong a noncontributing partner’s Book-Tax Difference with respect to such property. Thus, the
carryover basis of a contributed property in the hands of Veris Residential, L.P. may cause us to be allocated: (a) lower tax depreciation
and other deductions than our economic or book depreciation and other deductions allocable to us; and/or (b) more taxable income
or gain upon a sale of the property than the economic or book income or gain allocable to us as a result of the sale. Such differing
tax allocations may cause us to recognize taxable income or gain in excess of cash proceeds, which might adversely affect our ability
to comply with the REIT distribution requirements.
Treasury Regulations under Section 704(c) of
the Code provide partnerships with a choice of several methods of accounting for Book-Tax Differences (e.g., the “traditional
method,” the “traditional method with curative allocations,” and the “remedial method”). Some of these
methods could prolong the period required to eliminate the Book-Tax Difference as compared to other permissible methods (or could, in
fact, result in a portion of the Book-Tax Difference to remain unaccounted for). We and Veris Residential, L.P. have determined to use
the “traditional method” for accounting for Book-Tax Differences with respect to previously-contributed properties. As a
result of this determination, distributions to our stockholders could be comprised of more taxable income than would otherwise be the
case. However, property that may hereafter be contributed to Veris Residential, L.P. is not bound to use the “traditional method.”
We and Veris Residential, L.P. have not determined whether Veris Residential, L.P. will use the “traditional method,” or
some other permissible method, to account for any Book-Tax Difference with respect to any such hereafter contributed property. With respect
to any purchased property that is not “replacement property” in a tax-free like-kind exchange under Section 1031 of
the Code, such property initially would have a tax basis equal to its fair market value and Section 704(c) of the Code would
not apply.
Basis
in Partnership Interests in Veris Residential, L.P.: Our adjusted tax basis in our interest in Veris
Residential, L.P. generally equals the amount of cash and the basis of any other property contributed by us to Veris Residential, L.P.
(1) increased by our allocable share of the income and indebtedness of Veris Residential, L.P., and (2) decreased (but not
below zero) by: (a) our allocable share of losses of Veris Residential, L.P.; (b) the amount of cash and adjusted basis of
property distributed by Veris Residential, L.P. to us; and (c) the reduction in our allocable share of Veris Residential, L.P.’s
indebtedness.
If the allocation of our distributive share of
Veris Residential, L.P.’s losses exceeds the adjusted tax basis of our partnership interest in Veris Residential, L.P., the recognition
of such excess losses would be deferred to the extent that we have adjusted tax basis in our interest in Veris Residential, L.P. To the
extent that Veris Residential, L.P.’s distributions, or any decrease in our allocable share of indebtedness (such decreases being
considered a constructive cash distribution to the partners), exceeds our adjusted tax basis in our interest in Veris Residential, L.P.,
such excess distributions (including such constructive distributions) will constitute taxable income to us. Such taxable income would
normally be characterized as capital gain, and if our interest in Veris Residential, L.P. has been held for longer than the long-term
capital gain holding period (currently more than one year), such distributions and constructive distributions would constitute long-term
capital gain income.
Sale
of the Properties: Our distributive share of any gain realized by Veris Residential, L.P. on its sale
of any property held by it as inventory or primarily for sale to customers in the ordinary course of its trade or business would be treated
as income from a prohibited transaction that is subject to a 100% penalty tax. Prohibited transaction income may also have an adverse
effect on our ability to satisfy the REIT gross income tests. Under existing law, whether Veris Residential, L.P. holds its property
as inventory or primarily for sale to customers in the ordinary course of its trade or business is a question of fact that depends on
all the facts and circumstances with respect to the particular transaction. Veris Residential, L.P. intends to hold its properties for
investment with a view to long-term appreciation, to engage in the business of acquiring, developing, owning, renting and otherwise operating
the properties, and to make such occasional sales of the properties, including peripheral land, as are consistent with Veris Residential,
L.P.’s investment objectives.
State and Local Tax
We and our stockholders may be subject to state
and local tax in various states and localities, including those in which we or they transact business, own property or reside. Our tax
treatment and that of our stockholders in such jurisdictions may differ from the U.S. federal income tax treatment described above. Consequently,
prospective stockholders should consult their own tax advisors regarding the effect of state and local tax laws on an investment in our
common stock.
EXPERTS
The financial statements and management’s
assessment of the effectiveness of internal control over financial reporting (which is included in Management’s Report on Internal
Control over Financial Reporting) incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 2022 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting.
LEGAL MATTERS
Ballard
Spahr, LLP, Baltimore, Maryland, issued an opinion to us regarding certain Maryland law matters, including the validity of the issuance
of the equity securities offered by this prospectus. Seyfarth Shaw LLP, New York, New York, issued an opinion to us regarding certain
tax matters, including the qualification and taxation of us as a REIT under the Code.
$100,000,000
Veris Residential, Inc.
Common Stock
PROSPECTUS SUPPLEMENT
J.P. Morgan
BofA Securities
BNY Mellon Capital Markets,
LLC
Capital One Securities
Goldman Sachs &
Co. LLC
R. Seelaus & Co., LLC
Ramirez & Co., Inc.
November 15, 2023
Veris Residential (NYSE:VRE)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Veris Residential (NYSE:VRE)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024