10.

Commitments and Contingencies

Legal

July 3, 2017,

the Supreme Court of the State of New York (the “Court”) ruled in favor of

present or former tenants of apartment units at the Company’s buildings located at

Murray Street and

Park Place in Manhattan, New York, who brought an action against the Company alleging that they were subject to applicable rent stabilization laws with the result that rental payments charged by the Company exceeded amounts permitted under these laws because the buildings were receiving certain tax abatements under Real Property Tax Law (“RPTL”)

421

-g. The Court also awarded the plaintiffs-tenants their attorney’s fees and costs. The Court declared that the plaintiffs-tenants were subject to rent stabilization requirements and referred the matter to a special referee to determine the amount of rent over-charges, if any. On

July 18, 2017,

the Court, pursuant to the parties’ agreement, stayed the Court’s ruling; the Company subsequently appealed the decision to the Appellate Division, First Department. On

January 18, 2018,

the Appellate Division unanimously reversed the Court’s ruling and ruled in favor of the Company, holding that the Company acted properly in de-regulating the apartments. The plaintiffs-tenants thereafter moved for leave to appeal to the Court of Appeals, which motion was granted on

April 24, 2018.

June 25, 2019,

the New York Court of Appeals reversed the Appellate Division’s order and ruled in favor of the plaintiffs-tenants, holding that apartments in buildings receiving RPTL

421

-g tax benefits are

not

subject to luxury deregulation. The Court of Appeals also remitted the matter for further proceedings consistent with its opinion. As a result of the Court of Appeals’ order, Company management believes that payments

may

be required to be made to the

present or former tenants comprising the plaintiff group, that other tenants

may

attempt to make similar claims, and that the special referee process referred to above will be used to determine the timing and the amount of any claims that must be paid. On

July 25, 2019,

the Company filed a motion for reargument with the New York Court of Appeals, which was denied on

September 12, 2019.

August 13, 2019,

the Court, in effect, reinstated its prior order and referred the calculation of rent overcharges and attorneys’ fees for a hearing before a special referee. The special referee’s hearing was scheduled for

October 23, 2019.

October 17, 2019,

the Company made a motion in the Appellate Division for a stay of the special referee’s hearing pending the Company’s appeal from the

August 13

order. On such date, the Appellate Division granted an interim stay of the special referee’s hearing, pending the determination of the underlying motion. On

January 7, 2020,

the Appellate Division granted the Company’s motion for a full stay of the special referee’s hearing pending appeal. Currently, the appeal is scheduled to be argued during the

May 2020

term. On

October 24, 2019,

the Company filed a Petition for a Writ of Certiorari with the United States Supreme Court, seeking permission to have that Court hear the Company’s appeal on Constitutional grounds from the Court of Appeals’ order. On

January 13, 2020,

the United States Supreme Court denied the Company’s Petition for a Writ of Certiorari, meaning that the Court of Appeals’ order is final. The Company cannot predict what the timing or ultimate resolution of this matter will be, and accordingly, at this time, the Company has

not

recorded any liability for the potential settlement of this matter.

In addition to the above, the Company is subject to certain legal proceedings and claims arising in connection with its business, including a claim under the Americans with Disabilities Act of

1990

at the

141

Livingston Street property. Management believes, based in part upon consultation with legal counsel, that the ultimate resolution of all such claims will

not

have a material adverse effect on the Company’s consolidated results of operations, financial position or cash flows.

Commitments

The Company is obligated to provide parking availability through

August 2025

under certain lease agreements with a tenant at the

250

Livingston Street property; the current cost to the Company is approximately

$205

per year.

Concentrations

The Company’s properties are located in the Boroughs of Manhattan and Brooklyn in New York City, which exposes the Company to greater economic risks than if it owned a more geographically dispersed portfolio.

The breakdown between commercial and residential revenue is as follows:

	Commercial			Residential			Total
Year ended December 31, 2019		25	%		75	%		100	%
Year ended December 31, 2018		26	%		74	%		100	%
Year ended December 31, 2017		28	%		72	%		100	%