Veris Residential, Inc. Reports Second Quarter 2024 Results
JERSEY CITY, N.J., July 24, 2024 /PRNewswire/ -- Veris Residential, Inc. (NYSE: VRE) (the "Company"), a forward-thinking, environmentally and socially conscious multifamily REIT, today reported results for the second quarter 2024.
Three Months Ended June 30, | Six Months Ended June 30, | |||
2024 | 2023 | 2024 | 2023 | |
Net Income (Loss) per Diluted Share | $0.03 | $(0.30) | $(0.01) | $(0.56) |
Core FFO per Diluted Share | $0.18 | $0.16 | $0.32 | $0.30 |
Core AFFO per Diluted Share | $0.21 | $0.19 | $0.40 | $0.33 |
Dividend per Diluted Share | $0.06 | $— | $0.1125 | $— |
YEAR-TO-DATE HIGHLIGHTS
- Same Store multifamily Blended Net Rental Growth Rate of 5.4% for the quarter and 5.0% year to date.
- Same Store NOI growth of 7.9% year over year and 3.1% quarter over quarter, normalized for the impact of successful real estate tax appeals recognized in the prior year.
- Expanded occupancy 100 basis points sequentially to 95.1%.
- Completed the previously announced sales of three assets for $82 million, bringing the total gross proceeds from non-strategic asset sales this year to over $200 million.
- Secured a new $500 million revolver and delayed-draw term loan with a three-plus-one-year term.
- Repaid two mortgages, totaling approximately $220 million, utilizing cash on hand and $55 million of the aforementioned term loan.
- Raised Core FFO guidance range by approximately 4%, or $0.02, and tightened Same Store NOI guidance range by 50 basis points.
June 30, 2024 | March 31, 2024 | |
Same Store Units | 7,621 | 7,621 |
Same Store Occupancy | 95.1 % | 94.1 % |
Same Store Blended Rental Growth Rate (Quarter) | 5.4 % | 4.6 % |
Average Rent per Home | $3,923 | $3,899 |
Mahbod Nia, Chief Executive Officer, commented: "We are pleased to report another quarter of strong operational and financial results, leading to our decision to raise guidance once again.
"In April we secured a new $500 million credit facility and term loan, signaling a renewed, strategic approach to managing our balance sheet and providing us with substantial liquidity and financial flexibility going forward. We also reduced our overall debt by a further $168 million, primarily utilizing proceeds from non-strategic asset sales. Looking ahead, we remain well-positioned to execute our three-pronged approach to value creation as we seek to maximize value on behalf of our shareholders."
SAME STORE PORTFOLIO PERFORMANCE
The following table shows Same Store performance as well as the benefit of successful real estate tax appeals recognized in the second quarter of last year.
Three Months Ended June 30, | Six Months Ended June 30, | |||||
2024 | 2023 | % | 2024 | 2023 | % | |
Total Property Revenue | $74,745 | $71,215 | 5.0 % | $148,837 | $139,279 | 6.9 % |
Controllable Expenses | 13,424 | 12,361 | 8.6 % | 26,045 | 24,878 | 4.7 % |
Non-Controllable Expenses | 12,370 | 9,217 | 34.2 % | 24,451 | 21,534 | 13.5 % |
Total Property Expenses | 25,794 | 21,578 | 19.5 % | 50,496 | 46,412 | 8.8 % |
Same Store NOI | $48,951 | $49,637 | (1.4) % | $98,341 | $92,867 | 5.9 % |
Real Estate Tax Adjustments | — | 2,179 | — | 1,689 | ||
Normalized Same Store NOI | $48,951 | $47,458 | 3.1 % | $98,341 | $91,178 | 7.9 % |
Q2 2024 TRANSACTION ACTIVITY
As previously announced, the Company closed on the sale of 107 Morgan for $54 million, releasing approximately $50 million in net proceeds.
In addition, the Company closed on the sale of two land parcels, 6 Becker Farm and 85 Livingston, in April for $28 million, releasing approximately $28 million in net proceeds inclusive of a $500K reimbursement.
FINANCE AND LIQUIDITY
Virtually all (99.9%) of the Company's debt is hedged or fixed. The Company's total debt portfolio has a weighted average effective interest rate of 4.5% and weighted average maturity of 3.1 years.
Balance Sheet Metric ($ in 000s) | June 30, 2024 | March 31, 2024 |
Weighted Average Interest Rate | 4.5 % | 4.4 % |
Weighted Average Years to Maturity | 3.1 | 3.5 |
Interest Coverage Ratio | 1.7x | 1.5x |
Net Debt | $1,646,023 | $1,714,800 |
TTM EBITDA | $139,654 | $142,543 |
TTM Net Debt to EBITDA | 11.8x | 12.0x |
On April 22, 2024, the Company successfully replaced its existing revolving credit facility and term loan package with a new $500 million secured facility package, comprising a $200 million delayed-draw term loan and $300 million revolving credit facility. Both the revolving credit facility and term loan have a three-year term and a one-year extension option. The facility package includes sustainability KPI provisions and a $200 million accordion feature.
On May 22, 2024, the Company repaid the $63 million loan on 145 Front Street using cash on hand. In June, the property was added to the collateral pool of the new facility.
On June 28, 2024, the Company repaid the $158 million loan on Soho Lofts using a combination of cash on hand and a $55 million draw on the term loan. Subsequent to quarter end, the drawn balance of the term loan was hedged using a two-year interest rate cap with a strike rate of 3.5%.
DIVIDEND
The Company paid a dividend of $0.06 per share on July 14, 2024, a 14.3% sequential increase from $0.0525 per share.
ESG
During the quarter, the Company updated its progress towards ESG targets with new data from 2023. Compared to 2019 baseline measurements, the Company recorded a 66% reduction in Scope 1 & 2 emissions and a 22% reduction in Scope 3 emissions. Concurrently, it increased the share of Green-Certified properties in its portfolio to 78% by year-end 2023.
GUIDANCE
The Company is raising the low end of its Same Store NOI guidance range by 50 basis points, and is maintaining the high end of the NOI guidance range, reflecting favorable initial indications for insurance and real estate taxes.
Current Guidance | Initial Guidance | |||||
2024 Guidance Ranges | Low | High | Low | High | ||
Same Store Revenue Growth | 4.0 % | — | 5.0 % | 4.0 % | — | 5.0 % |
Same Store Expense Growth | 4.5 % | — | 5.5 % | 5.0 % | — | 6.0 % |
Same Store NOI Growth | 3.0 % | — | 5.0 % | 2.5 % | — | 5.0 % |
In addition, the Company is raising its Core FFO per share guidance range by $0.02 due to $0.01 of higher than projected deposit income, as a result of higher interest rates and average cash balances in the second quarter as asset sales closed sooner than expected, and $0.01 from the recognition of successful real estate tax appeals, net of recoveries, related to sold Harborside office properties.
Core FFO per Share Guidance | Low | High | |
Net Loss per Share | $(0.21) | — | $(0.17) |
Other FFO adjustments per share | $(0.16) | — | $(0.16) |
Depreciation per Share | $0.89 | — | $0.89 |
Core FFO per Share | $0.52 | — | $0.56 |
CONFERENCE CALL/SUPPLEMENTAL INFORMATION
An earnings conference call with management is scheduled for Thursday, July 25, 2024, at 8:30 a.m. Eastern Time and will be broadcast live via the Internet at: http://investors.verisresidential.com.
The live conference call is also accessible by dialing (877) 451-6152 (domestic) or (201) 389-0879 (international) and requesting the Veris Residential second quarter 2024 earnings conference call.
The conference call will be rebroadcast on Veris Residential, Inc.'s website at:
http://investors.verisresidential.com beginning at 8:30 a.m. Eastern Time on Thursday, July 25, 2024.
A replay of the call will also be accessible Thursday, July 25, 2024, through Sunday, August 25, 2024, by calling (844) 512-2921 (domestic) or (412) 317-6671 (international) and using the passcode, 13747451.
Copies of Veris Residential, Inc.'s second quarter 2024 Form 10-Q and second quarter 2024 Supplemental Operating and Financial Data are available on Veris Residential, Inc.'s website under Financial Results.
In addition, once filed, these items will be available upon request from:
Veris Residential, Inc. Investor Relations Department
Harborside 3, 210 Hudson St., Ste. 400, Jersey City, New Jersey 07311
ABOUT THE COMPANY
Veris Residential, Inc. is a forward-thinking, environmentally and socially conscious real estate investment trust (REIT) that primarily owns, operates, acquires and develops holistically inspired, Class A multifamily properties that meet the sustainability-conscious lifestyle needs of today's residents while seeking to positively impact the communities it serves and the planet at large. The Company is guided by an experienced management team and Board of Directors and is underpinned by leading corporate governance principles; a best-in-class, sustainable approach to operations; and an inclusive culture based on equality and meritocratic empowerment.
For additional information on Veris Residential, Inc. and our properties available for lease, please visit http://www.verisresidential.com/.
The information in this press release must be read in conjunction with, and is modified in its entirety by, the Quarterly Report on Form 10-Q (the "10-Q") filed by the Company for the same period with the Securities and Exchange Commission (the "SEC") and all of the Company's other public filings with the SEC (the "Public Filings"). In particular, the financial information contained herein is subject to and qualified by reference to the financial statements contained in the 10-Q, the footnotes thereto and the limitations set forth therein. Investors may not rely on the press release without reference to the 10-Q and the Public Filings.
We consider portions of this information, including the documents incorporated by reference, to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of such act. Such forward-looking statements relate to, without limitation, our future economic performance, plans and objectives for future operations and projections of revenue and other financial items. Forward-looking statements can be identified by the use of words such as "may," "will," "plan," "potential," "projected," "should," "expect," "anticipate," "estimate," "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 and are advised to consider the factors listed above together with the additional factors under the heading "Disclosure Regarding Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q, which are incorporated herein by reference. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise, except as required under applicable law.
Investors | Media | |
Anna Malhari | Amanda Shpiner/Grace Cartwright | |
Chief Operating Officer | Gasthalter & Co. | |
Additional details on Company Information | ||
Consolidated Balance Sheet (in thousands) (unaudited) | ||
June 30, 2024 | December 31, 2023 | |
ASSETS | ||
Rental property | ||
Land and leasehold interests | $463,826 | $474,499 |
Buildings and improvements | 2,635,611 | 2,782,468 |
Tenant improvements | 8,682 | 30,908 |
Furniture, fixtures and equipment | 105,707 | 103,613 |
3,213,826 | 3,391,488 | |
Less – accumulated depreciation and amortization | (390,556) | (443,781) |
2,823,270 | 2,947,707 | |
Real estate held for sale, net | — | 58,608 |
Net investment in rental property | 2,823,270 | 3,006,315 |
Cash and cash equivalents | 18,398 | 28,007 |
Restricted cash | 22,533 | 26,572 |
Investments in unconsolidated joint ventures | 120,392 | 117,954 |
Unbilled rents receivable, net | 1,805 | 5,500 |
Deferred charges and other assets, net | 49,529 | 53,956 |
Accounts receivable | 1,998 | 2,742 |
Total Assets | $3,037,925 | $3,241,046 |
LIABILITIES & EQUITY | ||
Revolving credit facility and term loans | 54,189 | — |
Mortgages, loans payable and other obligations, net | 1,632,765 | 1,853,897 |
Dividends and distributions payable | 6,375 | 5,540 |
Accounts payable, accrued expenses and other liabilities | 47,117 | 55,492 |
Rents received in advance and security deposits | 11,280 | 14,985 |
Accrued interest payable | 5,833 | 6,580 |
Total Liabilities | 1,757,559 | 1,936,494 |
Redeemable noncontrolling interests | 9,294 | 24,999 |
Total Stockholders' Equity | 1,132,424 | 1,137,478 |
Noncontrolling interests in subsidiaries: | ||
Operating Partnership | 105,959 | 107,206 |
Consolidated joint ventures | 32,689 | 34,869 |
Total Noncontrolling Interests in Subsidiaries | $138,648 | $142,075 |
Total Equity | $1,271,072 | $1,279,553 |
Total Liabilities and Equity | $3,037,925 | $3,241,046 |
Consolidated Statement of Operations (In thousands, except per share amounts) (unaudited) 1 | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||
REVENUES | 2024 | 2023 | 2024 | 2023 | |
Revenue from leases | $60,917 | $58,192 | $121,559 | $114,289 | |
Real estate services | 871 | 643 | 1,793 | 1,554 | |
Parking income | 3,922 | 3,998 | 7,667 | 7,726 | |
Other income | 1,766 | 1,373 | 3,797 | 3,235 | |
Total revenues | 67,476 | 64,206 | 134,816 | 126,804 | |
EXPENSES | |||||
Real estate taxes | 9,502 | 6,298 | 18,679 | 15,857 | |
Utilities | 1,796 | 1,761 | 4,067 | 3,824 | |
Operating services | 12,628 | 12,232 | 25,198 | 23,615 | |
Real estate services expenses | 4,366 | 4,389 | 9,608 | 6,332 | |
General and administrative | 8,975 | 9,572 | 20,063 | 19,853 | |
Transaction related costs | 890 | 3,319 | 1,406 | 4,347 | |
Depreciation and amortization | 20,316 | 21,831 | 40,433 | 43,619 | |
Land and other impairments, net | — | — | — | 3,396 | |
Total expenses | 58,473 | 59,402 | 119,454 | 120,843 | |
OTHER (EXPENSE) INCOME | |||||
Interest expense | (21,676) | (21,692) | (43,176) | (43,706) | |
Interest cost of mandatorily redeemable noncontrolling interests | — | (13,390) | — | (13,390) | |
Interest and other investment income | 1,536 | 3,927 | 2,074 | 4,043 | |
Equity in earnings of unconsolidated joint ventures | 2,933 | 2,700 | 3,187 | 2,633 | |
Gain (loss) on disposition of developable land | 10,731 | — | 11,515 | (22) | |
Gain on sale of unconsolidated joint venture interests | — | — | 7,100 | — | |
Loss from extinguishment of debt, net | (785) | (2,657) | (785) | (2,657) | |
Other income (expense), net | (250) | 853 | 5 | 2,851 | |
Total other (expense) income, net | (7,511) | (30,259) | (20,080) | (50,248) | |
Loss from continuing operations before income tax expense | 1,492 | (25,455) | (4,718) | (44,287) | |
Provision for income taxes | (176) | — | (235) | — | |
Loss from continuing operations after income tax expense | 1,316 | (25,455) | (4,953) | (44,287) | |
Income from discontinued operations | 1,419 | (1,192) | 1,671 | 631 | |
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net | — | (3,488) | 1,548 | (2,709) | |
Total discontinued operations, net | 1,419 | (4,680) | 3,219 | (2,078) | |
Net Income (loss) | 2,735 | (30,135) | (1,734) | (46,365) | |
Noncontrolling interest in consolidated joint ventures | 543 | 636 | 1,038 | 1,223 | |
Noncontrolling interests in Operating Partnership of income from continuing operations | (153) | 2,265 | 370 | 4,542 | |
Noncontrolling interests in Operating Partnership in discontinued operations | (122) | 417 | (277) | 176 | |
Redeemable noncontrolling interests | (81) | (617) | (378) | (6,983) | |
Net loss available to common shareholders | $2,922 | $(27,434) | $(981) | $(47,407) | |
Basic earnings per common share: | |||||
Net income (loss) available to common shareholders | $0.03 | $(0.30) | $(0.01) | $(0.56) | |
Diluted earnings per common share: | |||||
Net income (loss) available to common shareholders | $0.03 | $(0.30) | $(0.01) | $(0.56) | |
Basic weighted average shares outstanding | 92,663 | 91,873 | 92,469 | 91,551 | |
Diluted weighted average shares outstanding(6) | 101,952 | 100,854 | 101,160 | 100,691 | |
1 For more details see Reconciliation to Net Income (Loss) to NOI |
FFO, Core FFO and Core AFFO (in thousands, except per share/unit amounts) | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||
2024 | 2023 | 2024 | 2023 | ||
Net income (loss) available to common shareholders | $ 2,922 | $ (27,434) | $ (981) | $ (47,407) | |
Add (deduct): Noncontrolling interests in Operating Partnership | 153 | (2,265) | (370) | (4,542) | |
Noncontrolling interests in discontinued operations | 122 | (417) | 277 | (176) | |
Real estate-related depreciation and amortization on continuing operations(1) | 22,514 | 24,211 | 45,146 | 48,341 | |
Real estate-related depreciation and amortization on discontinued operations | — | 2,128 | 668 | 8,943 | |
Continuing operations: Gain on sale from unconsolidated joint ventures | — | — | (7,100) | — | |
Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net | — | 3,488 | (1,548) | 2,709 | |
FFO(2) | $ 25,711 | $ (289) | $ 36,092 | $ 7,868 | |
Add/(Deduct): | |||||
Loss from extinguishment of debt, net | 785 | 2,657 | 785 | 2,669 | |
Land and other impairments | — | — | — | 3,396 | |
(Gain) Loss on disposition of developable land | (10,731) | — | (11,515) | 22 | |
Rebranding and Severance/Compensation related costs (G&A) | 236 | 817 | 1,873 | 1,781 | |
Rebranding and Severance/Compensation related costs (RE Services) | 838 | — | 2,364 | — | |
Redemption value adjustments to mandatorily redeemable noncontrolling interests | — | 7,641 | — | 7,641 | |
Amortization of derivative premium | 886 | 1,619 | 1,790 | 2,752 | |
Transaction related costs | 890 | 3,319 | 1,406 | 4,347 | |
Core FFO | $ 18,615 | $ 15,764 | $ 32,795 | $ 30,476 | |
Add (Deduct) Non-Cash Items: | |||||
Straight-line rent adjustments(3) | (367) | 893 | (342) | (360) | |
Amortization of market lease intangibles, net | (9) | (49) | (16) | (79) | |
Amortization of lease inducements | — | — | 7 | 15 | |
Amortization of stock compensation | 3,247 | 3,614 | 6,974 | 5,761 | |
Non-real estate depreciation and amortization | 219 | 199 | 429 | 584 | |
Amortization of deferred financing costs | 1,569 | 621 | 2,811 | 1,832 | |
Deduct: | |||||
Non-incremental revenue generating capital expenditures: | |||||
Building improvements | (1,562) | (2,339) | (2,602) | (4,431) | |
Tenant improvements and leasing commissions(4) | (78) | (195) | (87) | (547) | |
Tenant improvements and leasing commissions on space vacant for more than one year | — | 302 | — | (434) | |
Core AFFO(2) | $ 21,634 | $ 18,810 | $ 39,969 | $ 32,817 | |
Funds from Operations per share/unit-diluted | $0.25 | $0.00 | $0.35 | $0.08 | |
Core Funds from Operations per share/unit-diluted | $0.18 | $0.16 | $0.32 | $0.30 | |
Dividends declared per common share | $0.06 | — | $0.1125 | — | |
See Non-GAAP Financial Definitions. |
See Consolidated Statements of Operations |
Adjusted EBITDA and EBITDAre ($ in thousands) (unaudited) | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||
2024 | 2023 | 2024 | 2023 | ||
Core FFO (calculated on a previous page) | $ 18,615 | $ 15,764 | $ 32,795 | $ 30,476 | |
Deduct: | |||||
Equity in earnings of unconsolidated joint ventures | (2,990) | (2,700) | (3,449) | (2,633) | |
Equity in earnings share of depreciation and amortization | (2,417) | (2,579) | (5,142) | (5,155) | |
Add-back: | |||||
Interest expense | 21,676 | 21,692 | 43,176 | 43,706 | |
Amortization of derivative premium | (886) | (1,619) | (1,790) | (2,752) | |
Recurring joint venture distributions | 4,177 | 4,539 | 5,878 | 6,086 | |
Noncontrolling interests in consolidated joint ventures | (543) | (636) | (1,038) | (1,223) | |
Interest cost for mandatorily redeemable noncontrolling interests | — | 5,749 | — | 5,749 | |
Redeemable noncontrolling interests | 81 | 617 | 378 | 6,983 | |
Income tax expense | 176 | (49) | 258 | 3 | |
Adjusted EBITDA | $ 37,889 | $ 40,778 | $ 71,066 | $ 81,240 | |
Net income (loss) available to common shareholders | $ 2,922 | $ (27,434) | $ (981) | $ (47,407) | |
Add/(Deduct): | |||||
Noncontrolling interests in Operating Partnership of income from continuing operations | 153 | (2,265) | (370) | (4,542) | |
Noncontrolling interests in Operating Partnership in discontinued operations | 122 | (417) | 277 | (176) | |
Noncontrolling interests in consolidated joint ventures(a) | (543) | (636) | (1,038) | (1,223) | |
Redeemable noncontrolling interests | 81 | 617 | 378 | 6,983 | |
Interest cost for mandatorily redeemable noncontrolling interests | — | 5,749 | — | 5,749 | |
Interest expense | 21,676 | 21,692 | 43,176 | 44,528 | |
Income tax expense | 176 | (49) | 258 | 2 | |
Depreciation and amortization | 20,316 | 23,959 | 41,101 | 52,713 | |
Deduct: | |||||
Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net | — | 3,488 | (1,548) | 2,708 | |
Equity in (earnings) loss of unconsolidated joint ventures | (2,933) | (2,700) | (3,187) | (2,632) | |
Add: | |||||
Company's share of property NOI's in unconsolidated joint ventures(1) | 10,235 | 10,287 | 17,963 | 23,668 | |
EBITDAre | $ 52,205 | $ 32,291 | $ 96,029 | $ 80,371 | |
Add: | |||||
Loss from extinguishment of debt, net | 785 | 2,657 | 785 | 2,669 | |
Severance and compensation-related costs | 1,074 | 817 | 2,711 | 1,965 | |
Transaction related costs | 890 | 3,319 | 1,406 | 4,347 | |
Land and other impairments, net | — | — | — | 3,396 | |
Gain on disposition of developable land | (10,731) | — | (11,515) | 22 | |
Amortization of derivative premium | 886 | 1,619 | 1,790 | 2,752 | |
Adjusted EBITDAre | $ 45,109 | $ 40,703 | $ 91,206 | $ 95,522 | |
Net debt at period end(5) | $ 1,646,023 | $ 1,396,428 | $ 1,646,023 | $ 1,396,428 | |
Net debt to Adjusted EBITDA | 10.9x | 8.6x | 11.6x | 8.6x | |
See Consolidated Statements of Operations and Non-GAAP Financial Footnotes |
Components of Net Asset Value ($ in thousands) | |||||
Real Estate Portfolio | Other Assets | ||||
Operating Multifamily NOI1 | Total | At Share | Cash and Cash Equivalents | $18,398 | |
New Jersey Waterfront | $162,420 | $138,026 | Restricted Cash | 22,533 | |
Massachusetts | 25,540 | 25,540 | Other Assets | 53,332 | |
Other | 29,464 | 21,730 | Subtotal Other Assets | $94,263 | |
Total Multifamily NOI | $217,424 | $185,297 | |||
Commercial NOI2 | 6,244 | 5,051 | Liabilities and Other | ||
Total NOI | $223,668 | $190,348 | |||
Operating - Consolidated Debt at Share | $1,571,951 | ||||
Non-Strategic Assets | Operating - Unconsolidated Debt at Share | 296,945 | |||
Other Liabilities | 70,605 | ||||
Estimated Land Value3 | $187,311 | Revolving Credit Facility4 | — | ||
Total Non-Strategic Assets | $187,311 | Term Loan4 | 55,000 | ||
Preferred Units | 9,294 | ||||
Subtotal Liabilities and Other | $2,003,795 | ||||
Outstanding Shares5 | |||||
Diluted Weighted Average Shares | 101,952 | ||||
1 | See Multifamily Operating Portfolio for more details. The Real Estate Portfolio table is reflective of the quarterly NOI annualized. |
2 | See Commercial Assets and Developable Land for more details. |
3 | Based off 4,139 potential units, see Commercial Assets and Developable Land for more details. |
4 | On April 22, 2024, the Company secured a $500 million facility comprised of a $300 million revolver and $200 million delayed-draw term loan. The facility has a three-year term with a one-year extension option and a $200 million accordion feature. The $55 million draw is capped at a strike rate of 3.5%, expiring in July 2026. |
5 | As of June 30, 2024, 92,821,785 common shares were outstanding. |
See Non-GAAP Financial Definitions | |
Multifamily Operating Portfolio | |||||||||
(in thousands, except Revenue per home) | |||||||||
Operating Highlights | |||||||||
Percentage Occupied | Average Revenue per Home | NOI | Debt Balance | ||||||
Ownership | Apartments | 2Q 2024 | 1Q 2024 | 2Q 2024 | 1Q 2024 | 2Q 2024 | 1Q 2024 | ||
NJ Waterfront | |||||||||
Haus25 | 100.0 % | 750 | 95.3 % | 91.4 % | $4,842 | $4,788 | $7,337 | $7,279 | $343,061 |
Liberty Towers | 100.0 % | 648 | 94.9 % | 94.7 % | 4,206 | 4,221 | 4,833 | 4,665 | 265,000 |
BLVD 401 | 74.3 % | 311 | 95.4 % | 95.0 % | 4,186 | 4,134 | 2,236 | 2,470 | 116,510 |
BLVD 425 | 74.3 % | 412 | 94.6 % | 95.7 % | 4,052 | 3,995 | 3,161 | 3,103 | 131,000 |
BLVD 475 | 100.0 % | 523 | 95.5 % | 96.4 % | 4,122 | 4,063 | 4,474 | 4,675 | 165,000 |
Soho Lofts | 100.0 % | 377 | 96.6 % | 95.9 % | 4,731 | 4,718 | 3,067 | 2,905 | — |
Urby Harborside | 85.0 % | 762 | 96.7 % | 90.7 % | 4,051 | 4,072 | 5,291 | 5,318 | 184,309 |
RiverHouse 9 | 100.0 % | 313 | 96.6 % | 94.8 % | 4,275 | 4,242 | 2,565 | 2,899 | 110,000 |
RiverHouse 11 | 100.0 % | 295 | 96.7 % | 95.9 % | 4,319 | 4,405 | 2,328 | 2,518 | 100,000 |
RiverTrace | 22.5 % | 316 | 94.7 % | 94.5 % | 3,764 | 3,804 | 2,176 | 2,273 | 82,000 |
Capstone | 40.0 % | 360 | 95.9 % | 96.6 % | 4,405 | 4,339 | 3,137 | 3,159 | 135,000 |
NJ Waterfront Subtotal | 85.0 % | 5,067 | 95.7 % | 94.2 % | $4,291 | $4,274 | $40,605 | $41,264 | $1,631,880 |
Massachusetts | |||||||||
Portside at East Pier | 100.0 % | 180 | 95.5 % | 94.4 % | $3,208 | $3,206 | $1,198 | $1,159 | $56,500 |
Portside 2 at East Pier | 100.0 % | 296 | 96.7 % | 95.7 % | 3,395 | 3,328 | 2,117 | 1,997 | 96,222 |
145 Front at City Square | 100.0 % | 365 | 93.0 % | 94.2 % | 2,535 | 2,531 | 1,540 | 1,549 | — |
The Emery | 100.0 % | 326 | 94.2 % | 96.1 % | 2,801 | 2,730 | 1,530 | 1,565 | 71,392 |
Massachusetts Subtotal | 100.0 % | 1,167 | 94.7 % | 95.1 % | $2,931 | $2,893 | $6,385 | $6,270 | $224,114 |
Other | |||||||||
The Upton | 100.0 % | 193 | 87.7 % | 91.8 % | $4,637 | $4,614 | $1,320 | $1,417 | $75,000 |
The James | 100.0 % | 240 | 94.5 % | 93.9 % | 3,113 | 3,027 | 1,365 | 1,380 | — |
Signature Place | 100.0 % | 197 | 93.7 % | 95.8 % | 3,210 | 3,157 | 978 | 1,017 | 43,000 |
Quarry Place at Tuckahoe | 100.0 % | 108 | 97.1 % | 93.9 % | 4,436 | 4,352 | 815 | 707 | 41,000 |
Riverpark at Harrison | 45.0 % | 141 | 93.6 % | 92.9 % | 2,923 | 2,886 | 526 | 514 | 30,192 |
Metropolitan at 40 Park1 | 25.0 % | 130 | 92.8 % | 89.9 % | 3,750 | 3,675 | 735 | 711 | 34,100 |
Station House | 50.0 % | 378 | 93.4 % | 91.5 % | 2,851 | 2,873 | 1,627 | 1,823 | 88,408 |
Other Subtotal | 73.8 % | 1,387 | 93.1 % | 92.7 % | $3,411 | $3,374 | $7,366 | $7,569 | $311,700 |
Operating Portfolio2,3 | 85.2 % | 7,621 | 95.1 % | 94.1 % | $3,923 | $3,899 | $54,356 | $55,103 | $2,167,694 |
Metropolitan Lofts4 | $— | $81 | |||||||
Total Portfolio | $54,356 | $55,184 | |||||||
1 | As of June 30, 2024, Priority Capital included Metropolitan at $23.3M (Prudential). |
2 | Excludes approximately 188,209 sqft of ground floor retail of which 139,872 sf was leased as of June 30, 2024. |
3 | See Unconsolidated Joint Ventures and Multifamily Property Information for more details. |
4 | In January 2024, the Company's joint venture sold Lofts at 40 Park ("Metropolitan Lofts") thus it is excluded from same store calculations. Proceeds from the sale were used to repay the outstanding loan balance. |
Commercial Assets and Developable Land
| ||||||||
($ in thousands) | ||||||||
Commercial | Location | Ownership | Rentable SF | Percentage Leased 2Q 2024 | Percentage Leased 1Q 2024 | NOI 2Q 2024 | NOI 1Q 2024 | Debt Balance |
Port Imperial Garage South | Weehawken, NJ | 70.0 % | 320,426 | N/A | N/A | $591 | $468 | $31,375 |
Port Imperial Garage North | Weehawken, NJ | 100.0 % | 304,617 | N/A | N/A | (1) | (57) | — |
Port Imperial Retail South | Weehawken, NJ | 70.0 % | 18,064 | 92.0 % | 100.0 % | 77 | 202 | — |
Port Imperial Retail North | Weehawken, NJ | 100.0 % | 8,400 | 100.0 % | 100.0 % | 127 | 72 | — |
Riverwalk at Port Imperial | West New York, NJ | 100.0 % | 29,923 | 80.0 % | 73.2 % | 111 | 177 | — |
Shops at 40 Park | Morristown, NJ | 25.0 % | 50,973 | 69.0 % | 69.0 % | 656 | 285 | 6,067 |
Commercial Total | 80.9 % | 732,403 | 78.4 % | 77.8 % | $1,561 | $1,147 | $37,442 | |
Developable Land Parcels1 | |
NJ Waterfront | 2,351 |
Massachusetts | 849 |
Other | 939 |
Developable Land Parcels Total | 4,139 |
1 The Company has an additional 13,775 SF of potential retail space within land developments that is not represented in this table. |
Same Store Market Information1 | |||||||||
Sequential Quarter Comparison (NOI in thousands) | |||||||||
NOI at Share | Occupancy | Blended Lease Rate2 | |||||||
Apartments | 2Q 2024 | 1Q 2024 | Change | 2Q 2024 | 1Q 2024 | Change | 2Q 2024 | 1Q 2024 | |
New Jersey Waterfront | 5,067 | $36,180 | $36,697 | (1.4) % | 95.7 % | 94.2 % | 1.5 % | 6.0 % | 4.1 % |
Massachusetts | 1,167 | 6,636 | 6,520 | 1.8 % | 94.7 % | 95.1 % | (0.4) % | 5.0 % | 2.9 % |
Other3 | 1,387 | 6,135 | 6,170 | (0.6) % | 93.1 % | 92.7 % | 0.4 % | 3.0 % | 4.8 % |
Total | 7,621 | $48,951 | $49,387 | (0.9) % | 95.1 % | 94.1 % | 1.0 % | 5.4 % | 4.6 % |
Year-over-Year Second Quarter Comparison (NOI in thousands) | |||||||||
NOI at Share | Occupancy | Blended Lease Rate2 | |||||||
Apartments | 2Q 2024 | 2Q 2023 | Change | 2Q 2024 | 2Q 2023 | Change | 2Q 2024 | 2Q 2023 | |
New Jersey Waterfront | 5,067 | $36,180 | $36,963 | (2.1) % | 95.7 % | 95.8 % | (0.1) % | 6.0 % | 12.4 % |
Massachusetts | 1,167 | 6,636 | 6,278 | 5.7 % | 94.7 % | 95.2 % | (0.5) % | 5.0 % | 10.0 % |
Other3 | 1,387 | 6,135 | 6,396 | (4.1) % | 93.1 % | 95.0 % | (1.9) % | 3.0 % | 9.6 % |
Total | 7,621 | $48,951 | $49,637 | (1.4) % | 95.1 % | 95.6 % | (0.5) % | 5.4 % | 11.6 % |
Average Revenue per Home (based on 7,621 units) | ||||||
2Q 2024 | 1Q 2024 | 4Q 2023 | 3Q 2023 | 2Q 2023 | 1Q 2023 | |
New Jersey Waterfront | $4,291 | $4,274 | $4,219 | $4,084 | $4,048 | $3,919 |
Massachusetts | 2,931 | 2,893 | 2,925 | 2,918 | 2,836 | 2,798 |
Other3 | 3,411 | 3,374 | 3,307 | 3,350 | 3,356 | 3,227 |
Total | $3,923 | $3,899 | $3,855 | $3,772 | $3,736 | $3,622 |
1 | All statistics are based off the current 7,621 Same Store pool. |
2 | Blended lease rates exclude properties not managed by Veris. |
3 | "Other" includes properties in Suburban NJ, New York, and Washington, DC. See Multifamily Operating Portfolio for breakout. |
Same Store Performance ($ in thousands) | ||||||||||||||
Multifamily Same Store1 | ||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | Sequential | ||||||||||||
2024 | 2023 | Change | % | 2024 | 2023 | Change | % | 2Q24 | 1Q24 | Change | % | |||
Apartment Rental Income | $67,584 | $64,277 | $3,307 | 5.1 % | $134,281 | $126,151 | $8,130 | 6.4 % | $67,584 | $66,697 | $887 | 1.3 % | ||
Parking/Other Income | 7,161 | 6,938 | 223 | 3.2 % | 14,556 | 13,128 | 1,428 | 10.9 % | 7,161 | 7,395 | (234) | (3.2) % | ||
Total Property Revenues2 | $74,745 | $71,215 | $3,530 | 5.0 % | $148,837 | $139,279 | $9,558 | 6.9 % | $74,745 | $74,092 | $653 | 0.9 % | ||
Marketing & Administration | 2,535 | 2,324 | 211 | 9.1 % | 4,673 | 4,668 | 5 | 0.1 % | 2,535 | 2,138 | 397 | 18.6 % | ||
Utilities | 2,188 | 2,055 | 133 | 6.5 % | 4,761 | 4,479 | 282 | 6.3 % | 2,188 | 2,573 | (385) | (15.0) % | ||
Payroll | 4,315 | 4,185 | 130 | 3.1 % | 8,612 | 8,631 | (19) | (0.2) % | 4,315 | 4,298 | 17 | 0.4 % | ||
Repairs & Maintenance | 4,386 | 3,797 | 589 | 15.5 % | 7,999 | 7,100 | 899 | 12.7 % | 4,386 | 3,613 | 773 | 21.4 % | ||
Controllable Expenses | $13,424 | $12,361 | $1,063 | 8.6 % | $26,045 | $24,878 | $1,167 | 4.7 % | $13,424 | $12,622 | $802 | 6.4 % | ||
Other Fixed Fees | 712 | 737 | (25) | (3.4) % | 1,433 | 1,453 | (20) | (1.4) % | 712 | 722 | (10) | (1.4) % | ||
Insurance | 1,781 | 1,780 | 1 | 0.1 % | 3,561 | 3,561 | — | — % | 1,781 | 1,780 | 1 | 0.1 % | ||
Real Estate Taxes | 9,877 | 6,700 | 3,177 | 47.4 % | 19,457 | 16,520 | 2,937 | 17.8 % | 9,877 | 9,581 | 296 | 3.1 % | ||
Non-Controllable Expenses | $12,370 | $9,217 | $3,153 | 34.2 % | $24,451 | $21,534 | $2,917 | 13.5 % | $12,370 | $12,083 | $287 | 2.4 % | ||
Total Property Expenses | $25,794 | $21,578 | $4,216 | 19.5 % | $50,496 | $46,412 | $4,084 | 8.8 % | $25,794 | $24,705 | $1,089 | 4.4 % | ||
Same Store GAAP NOI | $48,951 | $49,637 | $(686) | (1.4) % | $98,341 | $92,867 | $5,474 | 5.9 % | $48,951 | $49,387 | $(436) | (0.9) % | ||
Real Estate Tax Adjustments3 | — | 2,179 | (2,179) | — | 1,689 | (1,689) | — | — | — | |||||
Normalized Same Store NOI | $48,951 | $47,458 | $1,493 | 3.1 % | $98,341 | $91,178 | $7,163 | 7.9 % | $48,951 | $49,387 | $(436) | (0.9) % | ||
Total Units | 7,621 | 7,621 | 7,621 | 7,621 | 7,621 | 7,621 | ||||||||
% Ownership | 85.2 % | 85.2 % | 85.2 % | 85.2 % | 85.2 % | 85.2 % | ||||||||
% Occupied - Quarter End | 95.1 % | 95.6 % | (0.5) % | 95.1 % | 95.6 % | (0.5) % | 95.1 % | 94.1 % | 1.0 % | |||||
1 | Values represent the Company`s pro rata ownership of the operating portfolio. The James and Haus25 were added to the Same Store pool in 1Q 2024. |
2 | Revenues reported based on Generally Accepted Accounting Principals or "GAAP". |
3 | Represents tax settlements and final tax rate adjustments recognized that are applicable to prior periods. |
See Non-GAAP Financial Definitions | |
Debt Profile ($ in thousands) | |||||
Lender | Effective Interest Rate(1) | June 30, 2024 | December 31, 2023 | Date of Maturity | |
Secured Permanent Loans | |||||
Soho Lofts(2) | — | 158,777 | |||
145 Front at City Square(3) | — | 63,000 | |||
Signature Place | Nationwide Life Insurance Company | 3.74 % | 43,000 | 43,000 | 08/01/24 |
Liberty Towers | American General Life Insurance Company | 3.37 % | 265,000 | 265,000 | 10/01/24 |
Portside 2 at East Pier | New York Life Insurance Co. | 4.56 % | 96,222 | 97,000 | 03/10/26 |
BLVD 425 | New York Life Insurance Co. | 4.17 % | 131,000 | 131,000 | 08/10/26 |
BLVD 401 | New York Life Insurance Co. | 4.29 % | 116,510 | 117,000 | 08/10/26 |
Portside at East Pier(4) | KKR | SOFR + 2.75% | 56,500 | 56,500 | 09/07/26 |
The Upton(5) | Bank of New York Mellon | SOFR + 1.58% | 75,000 | 75,000 | 10/27/26 |
RiverHouse 9(6) | JP Morgan | SOFR + 1.41% | 110,000 | 110,000 | 06/21/27 |
Quarry Place at Tuckahoe | Natixis Real Estate Capital, LLC | 4.48 % | 41,000 | 41,000 | 08/05/27 |
BLVD 475 | The Northwestern Mutual Life Insurance Co. | 2.91 % | 165,000 | 165,000 | 11/10/27 |
Haus25 | Freddie Mac | 6.04 % | 343,061 | 343,061 | 09/01/28 |
RiverHouse 11 | The Northwestern Mutual Life Insurance Co. | 4.52 % | 100,000 | 100,000 | 01/10/29 |
Port Imperial Garage South | American General Life & A/G PC | 4.85 % | 31,375 | 31,645 | 12/01/29 |
The Emery | Flagstar Bank | 3.21 % | 71,392 | 72,000 | 01/01/31 |
Principal Balance Outstanding | $1,645,060 | $1,868,983 | |||
Unamortized Deferred Financing Costs | (12,295) | (15,086) | |||
Total Secured Permanent Loans | $1,632,765 | $1,853,897 | |||
Secured RCF & Term Loans: | |||||
Revolving Credit Facility(7) | JP Morgan and Bank of New York Mellon | SOFR + 2.10% | $— | $— | 04/22/27 |
Term Loan(7) | JP Morgan and Bank of New York Mellon | SOFR + 2.62% | 55,000 | — | 04/22/27 |
RCF & Term Loan Balances | $55,000 | $— | |||
Unamortized Deferred Financing Costs | (811) | — | |||
Total RCF & Term Loan Debt | $54,189 | $— | |||
Total Debt | $1,686,954 | $1,853,897 | |||
See to Debt Profile Footnotes |
Debt Summary and Maturity Schedule | ||||
As of June 30, 99.9% of the Company`s total pro forma debt portfolio (consolidated and unconsolidated) is hedged or fixed. The Company`s total debt portfolio has a weighted average interest rate of 4.5% and a weighted average maturity of 3.1 years.
($ in thousands) | ||||
Balance | % of Total | Weighted Average Interest Rate | Weighted Average Maturity in Years | |
Fixed Rate & Hedged Debt | ||||
Fixed Rate & Hedged Secured Debt | $1,700,060 | 100.0 % | 4.43 % | 2.8 |
Variable Rate Debt | ||||
Variable Rate Debt1 | — | — % | — % | — |
Totals / Weighted Average | $1,700,060 | 100.0 % | 4.43 % | 2.8 |
Unamortized Deferred Financing Costs | (13,106) | |||
Total Consolidated Debt, net | $1,686,954 | |||
Partners' Share | (73,109) | |||
VRE Share of Total Consolidated Debt, net2 | $1,613,845 | |||
Unconsolidated Secured Debt | ||||
VRE Share | $296,945 | 53.0 % | 4.89 % | 4.8 |
Partners' Share | 263,131 | 47.0 % | 4.89 % | 4.8 |
Total Unconsolidated Secured Debt | $560,076 | 100.0 % | 4.89 % | 4.8 |
Pro Rata Debt Portfolio | ||||
Fixed Rate & Hedged Secured Debt | $1,922,379 | 99.9 % | 4.50 % | 3.1 |
Variable Rate Secured Debt | 1,517 | 0.1 % | 7.33 % | 0.5 |
Total Pro Rata Debt Portfolio | $1,923,896 | 100.0 % | 4.51 % | 3.1 |
Pro Forma Debt Maturity Schedule3, 4 | |||||
Planned 2024 Refinancings | Secured Debt | Term Loan Draw | Unused Term Loan Capacity | Unused Revolver Capacity | |
2024 | $308 | ||||
2025 | |||||
2026 | $475 | ||||
2027 | $316 | ||||
2028 | $343 | $55 | $145 | $300 | |
2029 | $131 | ||||
2030 | |||||
2031 | $71 | ||||
1 | Variable rate debt includes the Revolver and reflects the balances on the Revolver and Term Loan. |
2 | Minority interest share of consolidated debt is comprised of $33.7 million at BLVD 425, $29.9 million at BLVD 401 and $9.4 million at Port Imperial South Garage. |
3 | The Unused Term Loan and Unused Revolver Capacity balances are shown with the one-year extension option utilized on the new facilities. The $55 million term loan draw facilitated the repayment of the loan on Soho Lofts on June 28. This draw is capped at 3.5% for two years, expiring July 2026. |
4 | The graphic reflects consolidated debt balances only. |
Annex 1: Transaction Activity | |||||
2024 Dispositions to Date | |||||
$ in thousands except per SF | |||||
Location | Transaction Date | Number of Buildings | SF | Gross Asset Value | |
Land | |||||
2 Campus Drive | Parsippany-Troy Hills, NJ | 1/3/2024 | N/A | N/A | $9,700 |
107 Morgan | Jersey City, NJ | 4/16/2024 | N/A | N/A | 54,000 |
6 Becker/85 Livingston | Roseland, NJ | 4/30/2024 | N/A | N/A | 27,900 |
Subtotal Land | $91,600 | ||||
Multifamily | |||||
Metropolitan Lofts1 | Morristown, NJ | 1/12/2024 | 1 | 54,683 | $30,300 |
Subtotal Multifamily | 1 | 54,683 | $30,300 | ||
Office | |||||
Harborside 5 | Jersey City, NJ | 3/20/2024 | 1 | 977,225 | $85,000 |
Subtotal Office | 1 | 977,225 | $85,000 | ||
2024 Dispositions to Date | $206,900 | ||||
1 The joint venture sold the property; releasing approximately $6 million of net proceeds to the Company. |
Annex 2: Reconciliation of Net Income (Loss) to NOI (three months ended) | |||
2Q 2024 | 1Q 2024 | ||
Total | Total | ||
Net Income (Loss) | $ 2,735 | $ (4,469) | |
Deduct: | |||
Income from discontinued operations | (1,419) | (252) | |
Realized gains and unrealized gains on disposition of rental property and impairments, net | — | (1,548) | |
Real estate services income | (871) | (922) | |
Interest and other investment income | (1,536) | (538) | |
Equity in (earnings) losses of unconsolidated joint ventures | (2,933) | (254) | |
(Gain) loss on disposition of developable land | (10,731) | (784) | |
Loss from extinguishment of debt, net | 785 | — | |
Gain on sale of unconsolidated joint venture interests | (7,100) | ||
Other income, net | 250 | (255) | |
Add: | |||
Real estate services expenses | 4,366 | 5,242 | |
General and administrative | 8,975 | 11,088 | |
Transaction related costs | 890 | 516 | |
Depreciation and amortization | 20,316 | 20,117 | |
Interest expense | 21,676 | 21,500 | |
Provision for income taxes | 176 | 59 | |
Net Operating Income (NOI) | $ 42,679 | $ 42,400 | |
Summary of Consolidated Multifamily NOI by Type (unaudited): | 2Q 2024 | 1Q 2024 | |
Total Consolidated Multifamily - Operating Portfolio | $ 40,864 | $ 41,305 | |
Total Consolidated Commercial | 905 | 862 | |
Total NOI from Consolidated Properties (excl. unconsolidated JVs/subordinated interests) | $ 41,769 | $ 42,167 | |
NOI (loss) from services, land/development/repurposing & other assets | 1,166 | 875 | |
Total Consolidated Multifamily NOI | $ 42,935 | $ 43,042 | |
See Consolidated Statement of Operations |
See Non-GAAP Financial Definitions |
Annex 3: Consolidated Statement of Operations and Non-GAAP Financial Footnotes | |
FFO, Core FFO, AFFO, NOI, Adjusted EBITDA, & EBITDAre
| |
1. | Includes the Company's share from unconsolidated joint ventures, and adjustments for noncontrolling interest of $2.4 million and $2.6 million for the three months ended June 30, 2024 and 2023, respectively, and $5.1 million and $5.2 million for the six months ended June 30, 2024 and 2023, respectively. Excludes non-real estate-related depreciation and amortization of $0.2 million for each of the three months ended June 30, 2024 and 2023, respectively, respectively, and $0.4 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively. |
2. | Funds from operations is calculated in accordance with the definition of FFO of the National Association of Real Estate Investment Trusts (Nareit). See Non-GAAP Financial Definitions for information About FFO, Core FFO, AFFO, NOI, Adjusted EBITDA & EBITDAre. |
3. | Includes the Company's share from unconsolidated joint ventures of $102 thousand and ($13) thousand for the three months ended June 30, 2024 and 2023, respectively, and $93 thousand and $13 thousand for the six months ended June 30, 2024 and 2023, respectively. |
4. | Excludes expenditures for tenant spaces in properties that have not been owned by the Company for at least a year. |
5. | Net Debt calculated by taking the sum of secured revolving credit facility, secured term loan, and mortgages, loans payable and other obligations, and deducting cash and cash equivalents and restricted cash, all at period end. |
6. | Calculated based on weighted average common shares outstanding, assuming redemption of Operating Partnership common units into common shares 8,689 and 8,981 shares for the three months ended June 30, 2024 and 2023, respectively, and 8,691 and 9,140 for the six months ended June 30, 2024 and 2023, respectively, plus dilutive Common Stock Equivalents (i.e. stock options). |
Back to Consolidated Statement of Operations |
Back to FFO, Core FFO and Core AFFO |
Back to Adjusted EBITDA and EBITDAre |
Annex 4: Unconsolidated Joint Ventures ($ in thousands) | |||||||
Property | Units | Physical Occupancy | VRE's Nominal Ownership1 | 2Q 2024 NOI2 | Total Debt | VRE Share of 2Q NOI | VRE Share of Debt |
Multifamily | |||||||
Urby Harborside | 762 | 96.7 % | 85.0 % | $5,291 | $184,309 | $4,497 | $156,663 |
RiverTrace at Port Imperial | 316 | 94.7 % | 22.5 % | 2,176 | 82,000 | 490 | 18,450 |
Capstone at Port Imperial | 360 | 95.9 % | 40.0 % | 3,137 | 135,000 | 1,255 | 54,000 |
Riverpark at Harrison | 141 | 93.6 % | 45.0 % | 526 | 30,192 | 237 | 13,586 |
Metropolitan at 40 Park | 130 | 92.8 % | 25.0 % | 735 | 34,100 | 184 | 8,525 |
Station House | 378 | 93.4 % | 50.0 % | 1,627 | 88,408 | 814 | 44,204 |
Total Multifamily | 2,087 | 95.2 % | 55.0 % | $13,492 | $554,009 | $7,476 | $295,428 |
Retail | |||||||
Shops at 40 Park | N/A | 69.0 % | 25.0 % | 656 | 6,067 | 164 | 1,517 |
Total Retail | N/A | 69.0 % | 25.0 % | $656 | $6,067 | $164 | $1,517 |
Total UJV | $14,148 | $560,076 | $7,640 | $296,945 | |||
1 | Amounts represent the Company's share based on ownership percentage. |
2 | The sum of property level revenue, straight line and ASC 805 adjustments; less: operating expenses, real estate taxes and utilities. |
Annex 5: Debt Profile Footnotes | |
1. | Effective rate of debt, including deferred financing costs, comprised of the cost of terminated treasury lock agreements (if any), debt initiation costs, mark-to-market adjustment of acquired debt and other transaction costs, as applicable. |
2. | The loan on Soho Lofts was repaid in full on June 28, 2024. The term loan was drawn $55 million to assist with this repayment. |
3. | The loan on 145 Front Street was repaid in full on May 22, 2024. |
4. | The loan on Portside at East Pier is capped at a strike rate of 3.5%, expiring in September 2026. |
5. | The loan on Upton is capped at a strike rate of 1.0%, expiring in October 2024. |
6. | The loan on RiverHouse 9 was capped at a strike rate of 3.0% that expired July 1. Subsequent to quarter end, the Company entered into an interest-rate cap agreement to hedge this mortgage with a strike rate of 3.5%, expiring in July 2026. |
7. | The facility consists of a $500 million facility with a group of eight lenders, comprised of a $300 million revolver and $200 million delayed-draw term loan. The facility has a three-year term ending April 2027, with a one-year extension option. The $55 million draw is capped at a strike rate of 3.5%, expiring in July 2026. The effective rate on the term loan is the sum of amortization of deferred financing costs of 0.052%, applicable margin of 2.00%, SOFR adjustment of 0.10%, and cap strike rate of 3.50%. Subsequent to quarter-end, the Company successfully met its Sustainability KPI provisions under the revolver and term loan. Effective immediately, the applicable margin on our facility borrowings will decrease by 5 basis points. |
Back to Debt Profile |
Annex 6: Multifamily Property Information | ||||||
Location | Ownership | Apartments | Rentable SF | Average Size | Year Complete | |
NJ Waterfront | ||||||
Haus25 | Jersey City, NJ | 100.0 % | 750 | 617,787 | 824 | 2022 |
Liberty Towers | Jersey City, NJ | 100.0 % | 648 | 602,210 | 929 | 2003 |
BLVD 401 | Jersey City, NJ | 74.3 % | 311 | 273,132 | 878 | 2016 |
BLVD 425 | Jersey City, NJ | 74.3 % | 412 | 369,515 | 897 | 2003 |
BLVD 475 | Jersey City, NJ | 100.0 % | 523 | 475,459 | 909 | 2011 |
Soho Lofts | Jersey City, NJ | 100.0 % | 377 | 449,067 | 1,191 | 2017 |
Urby Harborside | Jersey City, NJ | 85.0 % | 762 | 474,476 | 623 | 2017 |
RiverHouse 9 | Weehawken, NJ | 100.0 % | 313 | 245,127 | 783 | 2021 |
RiverHouse 11 | Weehawken, NJ | 100.0 % | 295 | 250,591 | 849 | 2018 |
RiverTrace | West New York, NJ | 22.5 % | 316 | 295,767 | 936 | 2014 |
Capstone | West New York, NJ | 40.0 % | 360 | 337,991 | 939 | 2021 |
NJ Waterfront Subtotal | 85.0 % | 5,067 | 4,391,122 | 867 | ||
Massachusetts | ||||||
Portside at East Pier | East Boston, MA | 100.0 % | 180 | 154,859 | 860 | 2015 |
Portside 2 at East Pier | East Boston, MA | 100.0 % | 296 | 230,614 | 779 | 2018 |
145 Front at City Square | Worcester, MA | 100.0 % | 365 | 304,936 | 835 | 2018 |
The Emery | Revere, MA | 100.0 % | 326 | 273,140 | 838 | 2020 |
Massachusetts Subtotal | 100.0 % | 1,167 | 963,549 | 826 | ||
Other | ||||||
The Upton | Short Hills, NJ | 100.0 % | 193 | 217,030 | 1,125 | 2021 |
The James | Park Ridge, NJ | 100.0 % | 240 | 215,283 | 897 | 2021 |
Signature Place | Morris Plains, NJ | 100.0 % | 197 | 203,716 | 1,034 | 2018 |
Quarry Place at Tuckahoe | Eastchester, NY | 100.0 % | 108 | 105,551 | 977 | 2016 |
Riverpark at Harrison | Harrison, NJ | 45.0 % | 141 | 124,774 | 885 | 2014 |
Metropolitan at 40 Park | Morristown, NJ | 25.0 % | 130 | 124,237 | 956 | 2010 |
Station House | Washington, DC | 50.0 % | 378 | 290,348 | 768 | 2015 |
Other Subtotal | 73.8 % | 1,387 | 1,280,939 | 924 | ||
Operating Portfolio | 85.2 % | 7,621 | 6,635,610 | 871 | ||
Back to Multifamily Operating Portfolio |
Annex 7: Noncontrolling Interests in Consolidated Joint Ventures | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||
2024 | 2023 | 2024 | 2023 | ||
BLVD 425 | $ 92 | $ 54 | $ 172 | $ 71 | |
BLVD 401 | (607) | (689) | (1,159) | (1,247) | |
Port Imperial Garage South | 11 | (16) | (15) | (61) | |
Port Imperial Retail South | (5) | 38 | 29 | 63 | |
Other consolidated joint ventures | (34) | (23) | (65) | (49) | |
Net losses in noncontrolling interests | $ (543) | $ (636) | $ (1,038) | $ (1,223) | |
Depreciation in noncontrolling interests | 737 | 714 | 1,458 | 1,426 | |
Funds from operations - noncontrolling interest in consolidated joint ventures | $ 194 | $ 78 | $ 420 | $ 203 | |
Interest expense in noncontrolling interest in consolidated joint ventures | 784 | 792 | 1,572 | 1,584 | |
Net operating income before debt service in consolidated joint ventures | $ 978 | $ 870 | $ 1,992 | $ 1,787 | |
Back to Adjusted EBITDA and EBITDAre |
Non-GAAP Financial Definitions
NON-GAAP FINANCIAL MEASURES
Included in this financial package are Funds from Operations, or FFO, Core Funds from Operations, or Core FFO, net operating income, or NOI and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization, or Adjusted EBITDA, and EBIDAre or Earnings Before Interest, Taxes, Depreciation, Amortization and Rent Costs, each a "non-GAAP financial measure," measuring Veris Residential, Inc.'s historical or future financial performance that is different from measures calculated and presented in accordance with generally accepted accounting principles ("U.S. GAAP"), within the meaning of the applicable Securities and Exchange Commission rules. Veris Residential, Inc. believes these metrics can be a useful measure of its performance which is further defined.
Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (Adjusted "EBITDA")
The Company defines Adjusted EBITDA as Core FFO, plus interest expense, plus income tax expense, plus income (loss) in noncontrolling interest in consolidated joint ventures, and plus adjustments to reflect the entity's share of Adjusted EBITDA of unconsolidated joint ventures. The Company presents Adjusted EBITDA because the Company believes that Adjusted EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of the Company's ability to incur and service debt. Adjusted EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company's financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company's liquidity.
Blended Net Rental Growth Rate or Blended Lease Rate
Weighted average of the net effective change in rent (inclusive of concessions) for a lease with a new resident or for a renewed lease compared to the rent for the prior lease of the identical apartment unit.
Core FFO and Adjusted FFO ("AFFO")
Core FFO is defined as FFO, as adjusted for certain items to facilitate comparative measurement of the Company's performance over time. Adjusted FFO ("AFFO") is defined as Core FFO less (i) recurring tenant improvements, leasing commissions, and capital expenditures, (ii) straight-line rents and amortization of acquired above/below market leases, net, and (iii) other non-cash income, plus (iv) other non-cash charges. Core FFO and Adjusted AFFO are presented solely as supplemental disclosure that the Company's management believes provides useful information to investors and analysts of its results, after adjusting for certain items to facilitate comparability of its performance from period to period. Core FFO and Adjusted FFO are non-GAAP financial measures that are not intended to represent cash flow and are not indicative of cash flows provided by operating activities as determined in accordance with GAAP. As there is not a generally accepted definition established for Core FFO and Adjusted FFO, the Company's measures of Core FFO may not be comparable to the Core FFO and Adjusted FFO reported by other REITs. A reconciliation of net income per share to Core FFO and Adjusted FFO in dollars and per share are included in the financial tables accompanying this press release.
Earnings Before Interest, Tax, Depreciation, Amortization, and Rent Costs ("EBITDAre")
The Company computes EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts, or Nareit, which may not be comparable to EBITDAre reported by other REITs that do not compute EBITDAre in accordance with the Nareit definition, or that interpret the Nareit definition differently than the Company does. The White Paper on EBITDAre approved by the Board of Governors of Nareit in September 2017 defines EBITDAre as net income (loss) (computed in accordance with Generally Accepted Accounting Principles, or GAAP), plus interest expense, plus income tax expense, plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated joint ventures, plus adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. The Company presents EBITDAre, because the Company believes that EBITDAre, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of the Company's ability to incur and service debt. EBITDAre should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company's financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company's liquidity.
Funds From Operations ("FFO")
FFO is defined as net income (loss) before noncontrolling interests in Operating Partnership, computed in accordance with U.S. GAAP, excluding gains or losses from depreciable rental property transactions (including both acquisitions and dispositions), and impairments related to depreciable rental property, plus real estate-related depreciation and amortization. The Company believes that FFO per share is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that as FFO per share excludes the effect of depreciation, gains (or losses) from property transactions and impairments related to depreciable rental property (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO per share can facilitate comparison of operating performance between equity REITs.
FFO per share should not be considered as an alternative to net income available to common shareholders per share as an indication of the Company's performance or to cash flows as a measure of liquidity. FFO per share presented herein is not necessarily comparable to FFO per share presented by other real estate companies due to the fact that not all real estate companies use the same definition. However, the Company's FFO per share is comparable to the FFO per share of real estate companies that use the current definition of the National Association of Real Estate Investment Trusts ("Nareit"). A reconciliation of net income per share to FFO per share is included in the financial tables accompanying this press release.
NOI and Same Store NOI
NOI represents total revenues less total operating expenses, as reconciled to net income above. The Company considers NOI to be a meaningful non-GAAP financial measure for making decisions and assessing unlevered performance of its property types and markets, as it relates to total return on assets, as opposed to levered return on equity. As properties are considered for sale and acquisition based on NOI estimates and projections, the Company utilizes this measure to make investment decisions, as well as compare the performance of its assets to those of its peers. NOI should not be considered a substitute for net income, and the Company's use of NOI may not be comparable to similarly titled measures used by other companies. The Company calculates NOI before any allocations to noncontrolling interests, as those interests do not affect the overall performance of the individual assets being measured and assessed.
Same Store NOI is presented for the same store portfolio, which comprises all properties that were owned by the Company throughout both of the reporting periods.
Company Information
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Company Information | ||
Corporate Headquarters | Stock Exchange Listing | Contact Information |
Veris Residential, Inc. | New York Stock Exchange | Veris Residential, Inc. |
210 Hudson St., Suite 400 | Investor Relations Department | |
Jersey City, New Jersey 07311 | Trading Symbol | 210 Hudson St., Suite 400 |
(732) 590-1010 | Common Shares: VRE | Jersey City, New Jersey 07311 |
Anna Malhari | ||
Chief Operating Officer | ||
E-Mail: [email protected] | ||
Web: www.verisresidential.com | ||
Executive Officers | ||
Mahbod Nia | Amanda Lombard | Taryn Fielder |
Chief Executive Officer | Chief Financial Officer | General Counsel and Secretary |
Anna Malhari | Jeff Turkanis | |
Chief Operating Officer | EVP & Chief Investment Officer | |
Equity Research Coverage | ||
Bank of America Merrill Lynch | BTIG, LLC | Citigroup |
Josh Dennerlein | Thomas Catherwood | Nicholas Joseph |
Evercore ISI | Green Street Advisors | JP Morgan |
Steve Sakwa | John Pawlowski | Anthony Paolone |
Truist | ||
Michael R. Lewis | ||
SOURCE Veris Residential, Inc.
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