Veris Residential, Inc. Reports Fourth Quarter and Full Year 2023 Results
JERSEY CITY, N.J., Feb. 21, 2024 /PRNewswire/ -- Veris Residential, Inc. (NYSE: VRE) (the "Company"), a forward-thinking, environmentally and socially conscious multifamily REIT, today reported results for the fourth quarter and full year 2023.
Three Months Ended December Twelve Months Ended December
31, 31,
2023 2022 2023 2022
Net Income (Loss) per Diluted Share $(0.06) $0.34 $(1.22) $(0.63)
Core FFO per Diluted Share $0.12 $0.05 $0.53 $0.44
Dividends Declared per Share $0.0525
$- $0.1025
$-
ANOTHER YEAR OF OPERATIONAL OUTPERFORMANCE
-- Grew Core FFO per share to $0.53, an increase of 20% compared to last
year.
-- Exceeded upper end of NOI guidance, achieving 17.6% annual growth,
driven by strong revenue growth and effective expense mitigation
measures.
-- Further improved NOI margin to 64% from 62% in 2022 and 57% in 2021.
-- Same Store multifamily Blended Net Rental Growth Rate of 5.0% for the
quarter and 9.3% for the year.
-- Reduced Core G&A by 13% compared to 2022.
-- Reinstated quarterly dividend, subsequently raising it by 5% in the
fourth quarter.
-- Recognized by Nareit for leadership in sustainability and DEI efforts.
COMPLETED TRANSFORMATION TO A PURE-PLAY MULTIFAMILY REIT
-- Sold over $700 million of non-strategic assets since the beginning of
2023, comprising eight properties and four land parcels.
-- Signed a binding contract to sell Harborside 5, our last office
property, for $85 million in January 2024.
-- Negotiated the early redemption of Rockpoint's preferred interest for
$520 million.
-- Refinanced $400 million of debt and reduced overall indebtedness by $50
million.
December 31, 2023 December 31, 2022 % Change
Operating Units 7,681 6,931 10.8 %
% Physical Occupancy 94.4 % 95.3 % (1.0) %
Same Store Units 6,691 5,825 14.9 %
Same Store Occupancy 94.4 % 95.6 % (1.3) %
Same Store Blended Rental Growth Rate 5.0 % 11.7 % (57.3) %
Average Rent per Home $3,792 $3,482 8.9 %
Mahbod Nia, Chief Executive Officer, commented: "Over the past three years, we have successfully transformed Veris Residential from a complex company to a pure-play multifamily REIT underpinned by a high-quality portfolio of Class A properties and a vertically integrated, best-in-class operating platform. While we have built a strong foundation to date, the potential for continued value creation and relative outperformance as we mature as a multifamily company is tremendous. We look forward to this next phase, during which we will work to further optimize our operations, capital and balance sheet to the benefit of our stakeholders."
SAME STORE PORTFOLIO PERFORMANCE
2023 Actual Original
Growth Guidance Adjusted Guidance
Range for 2023 Range from Previous
Quarter
Same Store Revenue Growth 11.0 % 4-6% 9-10%
Same Store Expense Growth 0.4 % 4-6% 2-3%
Same Store NOI Growth 17.6 % 4-6% 14-15%
The following table presents a more detailed breakout of Same Store performance:
Three Months Ended December Twelve Months Ended December
31, 31,
2023 2022 2023 2022
% %
Total Property Revenue $61,497 $57,133 7.6 % $241,078 $217,284 11.0 %
Controllable Expenses 11,729 11,191 4.8 % 44,558 42,773 4.2 %
Non-Controllable Expenses 10,693 12,169 (12.1) % 40,260 41,669 (3.4) %
Total Property Expenses 22,422 23,360 (4.0) % 84,818 84,442 0.4 %
Same Store NOI $39,075 $33,773 15.7 % $156,260 $132,842 17.6 %
Haus25 and The James will be added to the Same Store pool in the first quarter of this year. These properties contributed over $8 million to NOI in the fourth quarter.
TRANSACTION ACTIVITY
In 2023, the Company closed over $660 million of non-strategic sales, including two hotel properties, five office properties and three land plots.
Quarter Gross Price
(000s)
1Q $105,000
2Q $420,000
3Q $46,000
4Q $89,000
In October 2023, the Company closed on the sales of Harborside 4, 3 Campus and 23 Main for a combined gross price of $89 million, releasing approximately $82 million in net proceeds.
Subsequent to year end, the Company closed on the sales of 2 Campus and The Metropolitan Lofts joint venture for a combined gross price of $40 million, releasing approximately $16 million in net proceeds.
Currently, $139 million of non-strategic assets remain under binding contract, including our last office property, Harborside 5.
FINANCE AND LIQUIDITY
As of February 20, 2024, available liquidity is approximately $95 million, taking into account cash on hand and the capacity of the Revolving Credit Facility ("Revolver"). Virtually all (99.9%) of the Company`s debt is hedged or fixed. The Company`s total debt portfolio has a weighted average rate of 4.5% and weighted average maturity of 3.7 years.
Three Months Ended December
31,
Balance Sheet Metric 2023 2022
Weighted Average Interest Rate 4.5 % 4.4 %
Weighted Average Years to Maturity 3.7 years 4.1 years
Net-Debt-to-Adjusted EBITDA 13.8x 13.5x
Annualized Adjusted EBITDA 129,992 137,892
Interest Coverage Ratio
1.5x
1.5x
In the fourth quarter, the Company reestablished an "ATM" (At-the-Market) program, through which the Company may issue and sell, from time to time, up to $100 million of shares of its common stock. The Company intends to use net proceeds from any sales of these shares under the ATM program for general corporate purposes.
The $60 million Revolver remains undrawn as of February 20, 2024.
ESG
Throughout the fourth quarter, the Company earned recognition from top real estate and business organizations for leadership in ESG, DEI and corporate stewardship. Most significantly, the Company was named a Leader in the Light by Nareit for superior sustainability efforts in the residential sector. The achievement partially reflects the results of the GRESB Annual Survey, through which the Company was honored as a Global Listed and Regional Sector Leader with a second-consecutive 5 Star rating. The Company was also awarded Nareit's Bronze Diversity, Equity & Inclusion Recognition.
DIVIDEND POLICY
As previously announced, the Company`s Board of Directors declared a quarterly dividend on its common stock for the fourth quarter 2023 in the amount of $0.0525 per share, an increase of 5% from the previous dividend. The dividend was paid on January 10th.
OPERATIONAL GUIDANCE
Recognizing the tremendous operational outperformance realized in 2023 while also considering the state of the current market and potential for Veris to achieve continued positive growth, the Company is establishing its 2024 guidance ranges in accordance with the following table:
2024 Guidance Ranges Low High
Same Store Revenue Growth 4.0 % 5.0 %
Same Store Expense Growth 5.0 % 6.0 %
Same Store NOI Growth 2.5 % 5.0 %
Core FFO per Share Guidance Low High
Net Loss per Share $(0.40) $(0.35)
Add back: Depreciation per Share $0.88 $0.88
Core FFO per Share $0.48 $0.53
CONFERENCE CALL/SUPPLEMENTAL INFORMATION
An earnings conference call with management is scheduled for Thursday, February 22, 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 fourth quarter 2023 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, February 22, 2024.
A replay of the call will also be accessible Thursday, February 22, 2024, through Friday, March 22, 2024, by calling (844) 512-2921 (domestic) or (412) 317-6671 (international) and using the passcode, 13743562.
Copies of Veris Residential, Inc.'s 2023 Form 10-K and fourth quarter 2023 Supplemental Operating and Financial Data are available on Veris Residential, Inc.'s website: 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 principle; a best-in-class and 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-K (the "10-K") 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-K, the footnotes thereto and the limitations set forth therein. Investors may not rely on the press release without reference to the 10-K 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.
investors@verisresidential.com veris-
residential@gasthalter.com
See additional details on Company Information.
Consolidated Balance Sheet
(in thousands) (unaudited)
December 31, 2023 December 31, 2022
ASSETS Multifamily Office/
Corp. Total
---
Rental property
---
Land and leasehold interests $468,556 $5,943 $474,499 $492,204
Buildings and improvements 2,642,626 139,842 2,782,468 3,332,315
Tenant improvements 7,866 23,042 30,908 122,509
Furniture, fixtures and equipment 96,057 7,556 103,613 99,094
3,215,105 176,383 3,391,488 4,046,122
Less - accumulated depreciation and amortization (345,386) (98,395) (443,781) (631,910)
2,869,719 77,988 2,947,707 3,414,212
Real estate held for sale, net 58,608 58,608 193,933
Net investment in rental property 2,928,327 77,988 3,006,315 3,608,145
Cash and cash equivalents 6,685 21,322 28,007 26,782
Restricted cash 19,891 6,681 26,572 20,867
Investments in unconsolidated joint ventures 117,954 117,954 126,158
Unbilled rents receivable, net 1,558 3,942 5,500 39,734
Deferred charges and other assets, net12 43,392 10,564 53,956 96,162
Accounts receivable 1,796 946 2,742 2,920
Total Assets $3,119,603 $121,443 $3,241,046 $3,920,768
LIABILITIES & EQUITY
---
Mortgages, loans payable and other obligations, net 1,853,897 1,853,897 1,903,977
Dividends and distributions payable - 5,540 5,540 110
Accounts payable, accrued expenses and other liabilities 30,341 25,151 55,492 72,041
Rents received in advance and security deposits 11,590 3,395 14,985 22,941
Accrued interest payable 6,580 6,580 7,131
Total Liabilities 1,902,408 34,086 1,936,494 2,006,200
Redeemable noncontrolling interests - 24,999 24,999 515,231
Total Stockholders'/Members Equity 1,182,056 (44,578) 1,137,478 1,235,685
Noncontrolling interests in subsidiaries:
Operating Partnership - 107,206 107,206 126,109
Consolidated joint ventures 35,139 (270) 34,869 37,543
Total Noncontrolling Interests in Subsidiaries $35,139 $106,936 $142,075 $163,652
Total Equity $1,217,195 $62,358 $1,279,553 $1,399,337
Total Liabilities and Equity $3,119,603 $121,443 $3,241,046 $3,920,768
_____________________________________________
(1) Includes mark-to-market lease intangible net assets of $10,034 and mark-to-market lease intangible net liabilities of $298 as of 4Q 2023.
(2) Includes Prepaid Expenses and Other Assets attributable to Multifamily of $29,481 as follows: (i) deposits of $4,819, (i) other receivables of $14,544, (iii) other prepaid/assets of $8,882, and (iv) prepaid taxes of $1,236.
Consolidated Statement of Operations
(In thousands, except per share amounts) (unaudited) 12
Three Months Ended December Twelve Months Ended December
31, 31,
REVENUES 2023 2022 2023 2022
---
Revenue from leases $66,183 $60,032 $252,144 $206,052
Real estate services 1,084 888 3,868 3,581
Parking income 4,462 4,160 18,036 15,819
Other income 1,188 2,104 5,811 7,996
Total revenues 72,917 67,184 279,859 233,448
EXPENSES
---
Real estate taxes 11,077 12,447 40,810 39,112
Utilities 2,293 2,191 9,922 8,921
Operating services 16,364 13,443 57,925 52,797
Real estate services expenses 4,323 2,514 14,188 10,549
General and administrative 9,992 12,221 44,472 56,014
Transaction-related costs 576 2,119 7,627 3,468
Depreciation and amortization 23,046 23,619 93,589 85,434
Property impairments 32,516 32,516
Land and other impairments, net 5,928 9,324 9,368
Total expenses 106,115 68,554 310,373 265,663
OTHER (EXPENSE) INCOME
---
Interest expense (21,933) (21,215) (89,355) (66,381)
Interest cost of mandatorily redeemable noncontrolling interests - (49,782)
Interest and other investment income 232 102 5,515 729
Equity in earnings (loss) of unconsolidated joint ventures 260 (647) 3,102 1,200
Realized gains (losses) and unrealized gains (losses) on disposition of rental property, net (3)
Gain (loss) on disposition of developable land 7,090 (486) 7,068 57,262
Loss from extinguishment of debt, net (1,903) (5,606) (129)
Other income, net 77 2,871
Total other income (expense), net (16,180) (22,246) (126,187) (7,319)
Loss from continuing operations before income tax expense (49,378) (23,616) (156,701) (39,534)
Provision for income taxes (199) (492)
Loss from continuing operations after income tax expense (49,577) (23,616) (157,193) (39,534)
(Loss) income from discontinued operations (140) (12,547) 3,150 (64,704)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net 43,971 77,057 41,682 69,353
Total discontinued operations, net 43,831 64,510 44,832 4,649
Net (loss) income (5,746) 40,894 (112,361) (34,885)
Noncontrolling interest in consolidated joint ventures 504 595 2,319 3,079
Noncontrolling interests in Operating Partnership of income from continuing operations 4,252 2,723 14,267 5,652
Noncontrolling interests in Operating Partnership in discontinued operations (3,776) (5,975) (3,872) (378)
Redeemable noncontrolling interests (285) (6,366) (7,618) (25,534)
Net (loss) income available to common shareholders $(5,051) $31,871 $(107,265) $(52,066)
Basic earnings per common share:
Net loss available to common shareholders $(0.06) $0.34 $(1.22) $(0.63)
Diluted earnings per common share:
Net loss available to common shareholders $(0.06) $0.34 $(1.22) $(0.63)
Basic weighted average shares outstanding 92,240 91,115 91,883 91,046
Diluted weighted average shares outstanding 100,936 100,417 100,812 100,265
_______________________________________________
(1) For more details see Reconciliation to Net Income (Loss) to NOI
(2) For detailed contribution breakout see Consolidated Statement of Operations (Year-End)
FFO and Core FFO
(in thousands, except per share/unit amounts)
Three Months Ended December Twelve Months Ended December
31, 31,
2023 2022 2023 2022
Net income (loss) available to common shareholders $(5,051) $31,871 $(107,265) $(52,066)
Add (deduct): Noncontrolling interests in Operating Partnership (4,252) (2,723) (14,267) (5,652)
Noncontrolling interests in discontinued operations 3,776 5,975 3,872 378
Real estate-related depreciation and amortization on continuing operations(1) 25,428 25,949 103,049 95,103
Real estate-related depreciation and amortization on discontinued operations - 5,036 5,335 26,370
Property impairments on continuing operations 32,516 32,516
Property impairments on discontinued operations - 10,302 94,811
Discontinued operations: Gain on sale from unconsolidated joint ventures - (7,677) (7,677)
Continuing operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net 3
Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net (4,700) (69,380) (2,411) (61,676)
FFO(2) $47,720 $(647) $20,829 $89,591
Add/(Deduct):
---
Loss from extinguishment of debt, net 1,903 1,014 5,618 7,432
Land and other impairments 5,928 9,324 9,368
Loss (gain) on disposition of developable land (46,361) 486 (46,339) (57,262)
Rebranding and Severance/Compensation related costs (G&A) 129 1,836 7,987 14,080
Rebranding and Severance/Compensation related costs (RE Services) 829 1,128
Rebranding and Severance/Compensation related costs (Operating Services) - 649
Rockpoint buyout premium - 34,775
Redemption value adjustment to mandatorily redeemable noncontrolling interests - 7,641
Lease breakage fee, net - (22,664)
Amortization of derivative premium 902 500 4,654 287
Transaction related costs 576 2,119 7,627 3,468
Core FFO $11,626 $5,308 $53,893 $44,300
Diluted weighted average shares/units outstanding(6) 100,936 100,417 100,812 100,265
Funds from operations per share-diluted $0.47 $(0.01) $0.21 $0.89
Core Funds from Operations per share/unit-diluted $0.12 $0.05 $0.53 $0.44
Dividends declared per common share $0.0525 $0.1025
See Core FFO per Diluted Share.
See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.
AFFO and Adjusted EBITDA
($ in thousands, except per share amounts) (unaudited)
Three Months Ended December 31, Twelve Months Ended December
31,
2023 2022 2023 2022
Core FFO (calculated on previous page) $11,626 $5,308 $53,893 $44,300
Add (Deduct) Non-Cash Items:
---
Straight-line rent adjustments(3) 81 (1,273) 502 157
Amortization of market lease intangibles, net - (30) (80) (155)
Amortization of lease inducements 5 16 57 129
Amortization of stock compensation 3,270 2,829 12,995 11,339
Non-real estate depreciation and amortization 216 395 1,028 1,328
Amortization of deferred financing costs 1,255 1,219 4,440 4,821
Deduct:
---
Non-incremental revenue generating capital expenditures:
Building improvements (1,670) (3,748) (8,348) (14,992)
Tenant improvements and leasing commissions(4) (229) (255) (789) (10,773)
Tenant improvements and leasing commissions on space vacant for more than one year (659) (4,546) (1,205) (23,823)
Core AFFO(2) $13,895 $(85) $62,493 $12,331
Core FFO (calculated on previous page) $11,626 $5,308 $53,893 $44,300
Deduct:
---
Equity in (earnings) loss of unconsolidated joint ventures (260) 647 (3,102) (1,200)
Equity in earnings share of depreciation and amortization (2,597) (2,574) (10,337) (10,392)
Add-back:
---
Interest expense 21,933 23,171 90,177 78,040
Amortization of derivative premium (902) (500) (4,654) (287)
Recurring joint venture distributions 2,718 2,471 11,700 12,000
Noncontrolling interests in consolidated joint ventures (504) (595) (2,319) (3,079)
Interest cost of mandatorily redeemable noncontrolling interests - 7,366
Redeemable noncontrolling interests 285 6,366 7,618 25,534
Provision for income taxes 199 179 492 274
Adjusted EBITDA $32,498 $34,473 $150,834 $145,190
Net debt at period end(5) 1,799,318 1,856,328 1,799,318 1,856,328
Net debt to Adjusted EBITDA 13.8x 13.5x 11.9x
12.8x
See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.
EBITDAre (Quarterly Comparison)
($ in thousands) (unaudited)
Three Months Ended December
31,
2023 2022
Net income (loss) available to common shareholders $(5,051) $31,871
Add/(Deduct):
---
Noncontrolling interests in Operating Partnership of income from continuing operations (4,252) (2,723)
Noncontrolling interests in Operating Partnership in discontinued operations 3,776 5,975
Noncontrolling interests in consolidated joint ventures(a) (504) (595)
Redeemable noncontrolling interests 285 6,366
Interest expense 21,933 23,171
Provision for income taxes 199 179
Depreciation and amortization 23,046 28,806
Deduct:
---
Continuing operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net 3
Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net (4,700) (69,380)
Discontinued operations: Gain on sale from unconsolidated joint ventures - (7,677)
Equity in (earnings) loss of unconsolidated joint ventures (260) 647
Add:
---
Property impairments 32,516 10,302
Company's share of property NOI's in unconsolidated joint ventures(1) 7,768 6,694
EBITDAre $74,759 $33,636
Add:
---
Loss from extinguishment of debt, net 1,903 1,014
Severance and compensation-related costs 129 1,836
Transaction-related costs 576 2,119
Land and other impairments, net 5,928
Gain on disposition of developable land (46,361) 486
Amortization of derivative premium 902 500
Adjusted EBITDAre $37,836 $39,591
(a) Noncontrolling interests in consolidated joint ventures:
---
BLVD 425 72 6
BLVD 401 (568) (600)
Port Imperial Garage South (12)
Port Imperial Retail South 29 16
Other consolidated joint ventures (25) (17)
Net losses in noncontrolling interests $(504) $(595)
Depreciation in noncontrolling interest in consolidated joint ventures 712 708
Funds from operations - noncontrolling interest in consolidated joint ventures $208 $113
Interest expense in noncontrolling interest in consolidated joint ventures 789 791
Net operating income before debt service in consolidated joint ventures $997 $904
See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.
Components of Net Asset Value
($ in thousands)
Real Estate Portfolio
Other Assets
Operating Multifamily NOI(1) Total At Share
Cash and Cash Equivalents(2) $34,673
New Jersey Waterfront $156,400 $132,910
Restricted Cash 26,572
Massachusetts 25,280 25,280
Other Assets 62,198
Other(3) 29,996 22,123
Subtotal Other Assets $123,443
Total Multifamily NOI $211,676 $180,313
Commercial NOI4 6,396 5,174 Liabilities and Other Considerations
Total NOI $218,072 $185,488
Operating -Consolidated Debt at Share $1,795,667
Non-Strategic Assets Operating -Unconsolidated Debt at Share(2) 298,679
Other Liabilities 82,597
Non-Strategic Assets Under Binding Contract5 $139,000
Revolving Credit Facility6
Estimated Land Value7 214,659
Term Loan6
Subtotal Non-Strategic Assets $353,659
Preferred Units8 19,299
Subtotal Liabilities and Other Considerations $2,196,242
Outstanding Shares9
Diluted Weighted Average Shares Outstanding for
4Q 2023 100,936,000
________________________________________________
(1) See Multifamily Operating Portfolio page for more details.
(2) Pro forma for transaction activity completed subsequent to quarter end.
(3) Metropolitan Lofts was sold on January 12, 2024 and is not reflected in this line.
4 See Commercial, Developable Land & Other Non-Strategic Assets page for more details.
5 Represents the gross price of two assets, Harborside 5 and 107 Morgan.
6 In July 2023, the Company entered into a transitional $60 million Revolving Credit Facility and $115 million Term Loan agreement to fund the buyout of Rockpoint`s interest and provide corporate liquidity, The Revolving Credit Facility and Term Loan were both fully repaid in October 2023.
7 Based off 4,578 potential units, see Commercial, Developable Land & Other Non-Strategic Assets page for more details.
8 In February 2024, $5.7 million of units were redeemed, and the Company was notified that an additional $10.0 million would be redeemed, to be paid out in March.
9 Common Shares Outstanding as of December 31, 2023 were 92,229,424.
See Non GAAP Financial Definitions.
Multifamily Operating Portfolio
(in thousands, except Revenue per home)
Operating Highlights
Percentage Average Revenue NOI Debt
Occupied per Home Balance
Ownership Apartments 4Q 2023 3Q 2023 4Q 2023 3Q 2023 4Q 2023 3Q 2023
NJ Waterfront
---
Haus25 100.0 % 750 94.1 % 94.8 % $4,665 $4,437 $6,884 $6,759 $343,061
Liberty Towers 100.0 % 648 93.2 % 95.2 % 4,220 4,124 4,930 4,727 265,000
BLVD 401 74.3 % 311 97.4 % 96.8 % 4,138 4,077 2,427 2,372 117,000
BLVD 425 74.3 % 412 95.6 % 97.3 % 3,987 4,012 3,038 3,026 131,000
BLVD 475 100.0 % 523 96.5 % 98.2 % 4,078 4,021 4,180 3,799 165,000
Soho Lofts 100.0 % 377 94.4 % 92.0 % 4,627 4,648 2,616 2,753 158,777
Urby Harborside 85.0 % 762 92.3 % 95.3 % 4,014 3,946 5,370 5,490 185,742
RiverHouse 9 100.0 % 313 96.2 % 97.8 % 4,148 4,027 2,358 2,450 110,000
RiverHouse 11 100.0 % 295 94.6 % 96.3 % 4,177 4,123 2,140 2,422 100,000
RiverTrace 22.5 % 316 95.6 % 96.5 % 3,711 3,682 2,184 2,120 82,000
Capstone 40.0 % 360 95.0 % 96.4 % 4,379 4,354 2,973 3,086 135,000
NJ Waterfront Subtotal 85.0 % 5,067 94.6 % 95.9 % $4,219 $4,143 $39,100 $39,004 $1,792,580
Massachusetts
---
Portside at East Pier 100.0 % 181 94.9 % 92.6 % $3,174 $3,216 $1,163 $1,266 $56,500
Portside 2 at East Pier 100.0 % 296 96.2 % 95.8 % 3,384 3,268 2,034 2,024 97,000
145 Front at City Square 100.0 % 365 92.9 % 93.7 % 2,576 2,671 1,608 1,711 63,000
The Emery 100.0 % 326 92.3 % 93.9 % 2,760 2,711 1,515 1,565 72,000
Massachusetts Subtotal 100.0 % 1,168 93.9 % 94.1 % $2,925 $2,918 $6,320 $6,566 $288,500
Other
---
The Upton 100.0 % 193 91.7 % 92.7 % $4,752 $4,820 $1,475 $1,578 $75,000
The James 100.0 % 240 96.3 % 95.0 % 3,052 3,026 1,330 1,461
Signature Place 100.0 % 197 97.5 % 94.4 % 3,174 3,195 974 1,081 43,000
Quarry Place at Tuckahoe 100.0 % 108 93.5 % 93.5 % 4,321 4,293 709 714 41,000
Riverpark at Harrison 45.0 % 141 92.2 % 94.0 % 2,885 2,772 577 526 30,192
Metropolitan at 40 Park(1) 25.0 % 130 95.4 % 93.8 % 3,613 3,568 721 784 34,100
Metropolitan Lofts(2) 50.0 % 59 94.4 % 94.9 % 3,725 3,610 319 303 17,200
Station House 50.0 % 378 92.1 % 94.7 % 2,562 2,757 1,713 1,513 89,440
Other Subtotal 72.8 % 1,446 94.0 % 94.2 % $3,324 $3,361 $7,818 $7,960 $329,932
Operating Portfolio34 85.0 % 7,681 94.4 % 95.3 % $3,854 $3,809 $53,238 $53,530 $2,411,012
_________________________________________________
(1) As of December 31, 2023, Priority Capital included Metropolitan at $23,314,422 (Prudential). The Company paid down the loan $2.4M in the fourth quarter.
(2) On January 12, 2024, the joint venture was sold for a gross valuation of approximately $30 million, VRE`s share of net proceeds was $6 million.
(3) Operating Portfolio includes properties that have achieved over 95% leased for six consecutive weeks. Excludes approximately 190,525 sqft of ground floor retail of which 137,477 sf was leased as of December 31, 2023.
4 See Unconsolidated Joint Ventures and Multifamily Property Information pages for more details.
See Non GAAP Financial Definitions.
Commercial, Developable Land and Other Non-Strategic Assets
($ in thousands)
Commercial Location Ownership Rentable Percentage Percentage NOI NOI Debt
SF Leased Leased 4Q 2023 3Q 2023 Balance
4Q 2023 3Q 2023
Port Imperial Garage South Weehawken, NJ 70.0 % 320,426 N/A N/A $517 $541 $31,645
Port Imperial Garage North Weehawken, NJ 100.0 % 304,617 N/A N/A 36 (33)
Port Imperial Retail South Weehawken, NJ 70.0 % 18,064 100.0 % 100.0 % 185 173
Port Imperial Retail North Weehawken, NJ 100.0 % 8,400 100.0 % 100.0 % 373 90
Riverwalk at Port Imperial West New York,
NJ 100.0 % 30,426 59.2 % 65.0 % 221 158
Shops at 40 Park Morristown, NJ 25.0 % 50,973 69.0 % 69.0 % 267 281 6,067
Commercial Total 80.9 % 732,906 73.8 % 75.5 % $1,599 $1,210 $37,712
Developable Land Parcels1
NJ Waterfront 3,134
Massachusetts 849
Other 1,378
Developable Land Parcels Total 5,361
Under Binding Contract for Sale 783
Total Less Under Binding Contract 4,578
One in-service office asset remains in the portfolio:
Avg. Base Rent
+ Escalations
Building Location Total SF Leased SF %
Leased(2)
Harborside Jersey City,
5(3) NJ 977,225 338,109 34.6 % $44.28
Total Office
Portfolio 977,225 338,109 34.6 % $44.28
_____________________________________________
(1) The Company has an additional 13,775 SF of potential retail space within land developments that is not represented in this table.
(2) Harborside 5 has 42,964 SF of leased space expiring in 2024 and 28,856 SF expiring in 2025.
(3) Harborside 5 is currently under binding contract for sale.
See Non GAAP Financial Definitions.
Same Store Market Information(1)
Sequential Quarter Comparison
(NOI in thousands)
NOI Occupancy Blended Lease Rate
Apartments 4Q 2023 3Q 2023 Change 4Q 2023 3Q 2023 Change 4Q 2023 3Q 2023
New Jersey Waterfront 4,317 $32,216 $32,245 (0.1) % 94.7 % 96.1 % (1.4) % 6.3 % 10.3 %
Massachusetts 1,168 6,320 6,566 (3.7) % 93.9 % 94.1 % (0.3) % 0.5 % 7.8 %
Other(2) 1,206 6,488 6,499 (0.2) % 93.5 % 94.1 % (0.6) % 3.5 % 7.9 %
Total 6,691 45,024 45,310 (0.6) % 94.4 % 95.4 % (1.1) % 5.0 % 9.4 %
Year-over-Year Fourth Quarter Comparison
(NOI in thousands)
NOI Occupancy Blended Lease Rate
Apartments 4Q 2023 4Q 2022 Change 4Q 2023 4Q 2022 Change 4Q 2023 4Q 2022
New Jersey Waterfront 4,317 $32,216 $27,409 17.5 % 94.7 % 95.7 % (1.0) % 6.3 % 18.7 %
Massachusetts 1,168 6,320 5,676 11.3 % 93.9 % 94.9 % (1.1) % 0.5 % 3.7 %
Other(2) 1,206 6,488 6,255 3.7 % 93.5 % 94.2 % (0.7) % 3.5 % 10.1 %
Total 6,691 45,024 39,340 14.4 % 94.4 % 95.3 % (0.9) % 5.0 % 14.4 %
Average Revenue per Home (based on 6,691 units)
4Q 2023 3Q 2023 2Q 2023 1Q 2023 4Q 2022 4Q 2021
New Jersey Waterfront $4,142 $4,092 $4,014 $3,863 $3,765 $3,194
Massachusetts 2,925 2,918 2,836 2,812 2,769 2,444
Other(2) 3,378 3,427 3,453 3,326 3,275 2,795
Total $3,792 $3,767 $3,708 $3,583 $3,503 $2,974
________________________________________________
(1) All statistics are based off the current 6,691 unit Same Store pool. Same Store 4Q22 and 4Q21 were actually 5,825 units when initially reported.
(2) "Other" includes properties in Suburban NJ, New York, and Washington, DC. See Multifamily Operating Portfolio page for breakout.
See Non GAAP Financial Definitions.
Same Store Performance
($ in thousands)
Multifamily Same Store1
Three Months Ended December 31, Twelve Months Ended December 31, Sequential
2023 2022 Change % 2023 2022 Change % 4Q 2023 3Q 2023 Change %
Apartment Rental Income $55,456 $51,275 $4,181 8.2 % $216,873 $195,267 $21,606 11.1 % $55,456 $55,316 $140 0.3 %
Parking/Other Income 6,041 5,858 183 3.1 % 24,205 22,017 2,188 9.9 % 6,041 6,182 (141) (2.3) %
Total Property Revenues2 $61,497 $57,133 $4,364 7.6 % $241,078 $217,284 $23,794 11.0 % $61,497 $61,498 $(1) - %
Marketing & Administration 2,100 2,237 (137) (6.1) 7,862 7,638 224 2.9 % 2,100 2,076 24 1.2 %
Utilities 1,917 1,790 127 7.1 % 7,765 7,626 139 1.8 % 1,917 2,020 (103) (5.1) %
Payroll 4,026 3,852 174 4.5 % 15,600 14,945 655 4.4 % 4,026 4,074 (48) (1.2) %
Repairs & Maintenance 3,686 3,312 374 11.3 % 13,331 12,564 767 6.1 % 3,686 3,417 269 7.9 %
Controllable Expenses $11,729 $11,191 $538 4.8 % $44,558 $42,773 $1,785 4.2 % $11,729 $11,587 $142 1.2 %
Other Fixed Fees 738 531 207 39.0 % 2,957 2,556 401 15.7 % 738 764 (26) (3.4) %
Insurance 1,469 1,513 (44) (2.9) % 5,386 5,249 137 2.6 % 1,469 945 524 55.4 %
Real Estate Taxes 8,486 10,125 (1,639) (16.2) % 31,917 33,864 (1,947) (5.7) % 8,486 8,764 (278) (3.2) %
Non-Controllable Expenses $10,693 $12,169 $(1,476) (12.1) % $40,260 $41,669 $(1,409) (3.4) % $10,693 $10,473 $220 2.1 %
Total Property Expenses $22,422 $23,360 $(938) (4.0) % $84,818 $84,442 $376 0.4 % $22,422 $22,060 $362 1.6 %
Same Store GAAP NOI $39,075 $33,773 $5,302 15.7 % $156,260 $132,842 $23,418 17.6 % $39,075 $39,438 $(363) (0.9) %
Real Estate Tax Adjustments(3) - (1,456) 1,456 1,689 (1,170) 2,859 20 (20)
Normalized Same Store NOI $39,075 $35,229 $3,846 10.9 % $154,571 $134,012 $20,559 15.3 % $39,075 $39,418 $(343) (0.9) %
Total Units 6,691 6,691 6,691 6,691 6,691 6,691
% Ownership 82.7 % 82.7 % 82.7 % 82.7 % 82.7 % 82.7 %
% Occupied - Quarter End 94.4 % 95.3 % (0.9) % 94.4 % 95.3 % (0.9) % 94.4 % 95.4 % (1.0) %
____________________________________________
(1) Values represent the Company`s pro rata ownership of the operating portfolio.
(2) Revenues reported based on Generally Accepted Accounting Principals or "GAAP".
(3) Represents tax settlements and final tax rate adjustments recognized that are applicable to prior periods.
See Non GAAP Financial Definitions.
Debt Profile
($ in thousands)
Lender Effective December 31, 2023 December 31, 2022 Date of
Interest
Rate(1) Maturity
Secured Permanent Loans
---
Port Imperial Hotels(2)
Fifth Third Bank N/A
$- $84,000 N/A
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 % 97,000 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 % 117,000 117,000 08/10/26
Portside at East Pier(3)
KKR SOFR + 2.75% 56,500 58,998 09/07/26
The Upton(4)
Bank of New York Mellon SOFR + 1.58% 75,000 75,000 10/27/26
145 Front at City Square(5)
US Bank SOFR + 1.84% 63,000 63,000 12/10/26
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(7)
Freddie Mac 6.04 % 343,061 297,324 09/01/28
RiverHouse 11 The Northwestern Mutual Life
Insurance Co. 4.52 % 100,000 100,000 01/10/29
Soho Lofts
New York Community Bank 3.77 % 158,777 160,000 07/01/29
Port Imperial Garage South American General Life & A/G PC 4.85 % 31,645 32,166 12/01/29
The Emery
New York Community Bank 3.21 % 72,000 72,000 01/01/31
Principal Balance Outstanding $1,868,983 $1,911,488
Unamortized Deferred Financing Costs (15,086) (7,511)
Total Secured Permanent Loans $1,853,897 $1,903,977
Secured RCF & Term Loans:
---
Revolving Credit Facility(8)
JP Morgan & Goldman Sachs SOFR + 3.85%
$-
$- 07/25/24
Term Loan(8)
JP Morgan & Goldman Sachs SOFR + 3.85% 07/25/24
Total RCF & Term Loan Debt
$-
$-
Total Debt $1,853,897 $1,903,977
See Debt Profile Footnotes.
Debt Summary and Maturity Schedule
99.9% of the Company`s total pro forma debt portfolio (consolidated and unconsolidated) is hedged or fixed. The Company`s total debt portfolio has a weighted average interest rate of 4.5% and a weighted average maturity of 3.7 years.
($ in thousands)
Balance % Weighted Average Weighted Average
of Interest Rate Maturity in
Total Years
Fixed Rate & Hedged Debt
---
Fixed Rate & Hedged Secured Debt $1,868,983 100.0 % 4.34 % 3.5
Variable Rate Debt1
---
Variable Rate Debt - % - %
Totals / Weighted Average $1,868,983 100.0 % 4.34 % 3.5
Unamortized Deferred Financing Costs (15,086)
Total Consolidated Debt, net $1,853,897
Partners' Share (73,316)
VRE Share of Total Consolidated Debt, net2 $1,780,581
Unconsolidated Secured Debt
VRE Share $307,279 53.0 % 4.83 % 4.6
Partners' Share 272,462 47.0 % 4.83 % 4.6
Total Unconsolidated Secured Debt $579,741 100.0 % 4.83 % 4.6
Pro Rata Debt Portfolio
Fixed Rate & Hedged Secured Debt $2,092,828 99.9 % 4.46 % 3.7
Variable Rate Secured Debt 1,517 0.1 % 7.31 % 1.0
Total Pro Rata Debt Portfolio $2,094,345 100.0 % 4.47 % 3.7
_____________________________________________
(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, $30.1 million at BLVD 401 and $9.5 million at Port Imperial South Garage.
Pro Forma Debt Portfolio Reconciliation
4Q 2023
Total Consolidated Debt, net on 12/31 $1,868,983
Partners Share of Consolidated Debt on 12/31 (73,316)
VRE Share of Consolidated Debt on 12/31 $1,795,667
VRE Share of Total Unconsolidated Debt on 12/31 307,279
Metropolitan Lofts Sale (VRE Share of Debt Extinguishment) (8,601)
VRE Share of Unconsolidated Secured Debt $298,678
Total Pro Rata Debt Portfolio $2,094,345
Annex 1: Transaction Activity
2023
$ in thousands except per SF
Location Transaction Number of SF Gross Asset
Date Buildings Value
Hotels
Port Imperial Hotels Weehawken, NJ 2/10/2023 2 N/A $97,000
Subtotal Hotels 2 $97,000
Office
Harborside 1, 2, & 3 Jersey City,
NJ 4/04/2023 3 1,886,800 $420,000
Harborside 6 Jersey City,
NJ 9/13/2023 1 231,856 46,000
23 Main Street Holmdel, NJ 10/13/2023 1 350,000 17,500
Subtotal Office 5 2,468,656 $483,500
Land
101 Columbia Rd. Morris Plains,
NJ 3/17/2023 N/A N/A $8,300
Harborside 4 Jersey City,
NJ 10/05/2023 N/A N/A 58,000
3 Campus Drive Jersey City,
NJ 10/12/2023 N/A N/A 13,500
Subtotal Land $79,800
2023 Total
Dispositions $660,300
2024 Dispositions to Date
$ in thousands except per SF
Location Transaction Number of SF Gross Asset
Buildings
Date Value
Land
2 Campus Drive Jersey City,
NJ 1/3/2024 N/A N/A $9,700
Subtotal Land $9,700
Multifamily
Metropolitan Lofts(1) Morristown,
NJ 1/12/2024 1 54,683 $30,300
Subtotal Multifamily 1 54,683 $30,300
2024 Dispositions to
Date $40,000
______________________________________________
1 The joint venture sold releasing approximately $6 million of net proceeds to the Company.
Annex 2: Reconciliation of Net Income (Loss) to NOI (three months ended)
4Q 2023
3Q 2023
Multifamily Office / Disc. Ops Total Multifamily Office /
Corp Corp Total
Net loss $(7,636) $1,890
$- $(5,746) $(39,797) $(20,453) $(60,250)
Deduct:
Real estate services income (1,084) (1,084) (1,230) (1,230)
Interest and other investment loss (income) (1) (231) (232) (1) (1,239) (1,240)
Equity in (earnings) loss of unconsolidated joint ventures (260) (260) (210) (210)
Realized and unrealized (gains) losses on dispositions - (4,697) 4,700 3
(Gain) loss on disposition of developable land (1,690) (44,671) 39,271 (7,090)
Loss from early extinguishment of debt, net - 1,903 1,903 1,046 1,046
Other Income - (77) (77) 57 57
Add:
Real estate services expenses 3,025 1,298 4,323 2,106 1,427 3,533
General and administrative 437 9,555 9,992 327 14,293 14,620
Transaction-related costs 132 444 576 2,704 2,704
Depreciation and amortization 20,943 2,103 23,046 21,115 2,097 23,212
Interest expense 21,568 365 21,933 57,664 2,443 60,107
Provision for income taxes 11 188 199 45 248 293
Property impairments - 32,516 32,516
Land and other impairments, net 5,928 5,928
Net operating income (NOI) $41,373 $586 $43,971 $85,930 $41,065 $1,577 $42,642
Summary of Consolidated Multifamily NOI by Type (unaudited): 4Q 2023 3Q 2023
---
Total Consolidated Multifamily - Operating Portfolio $39,381 $39,708
Total Consolidated Commercial $1,332 $929
Total NOI from Consolidated Properties (excl. unconsolidated JVs/subordinated interests) $40,713 $40,637
NOI (loss) from services, land/development/repurposing & other assets $660 $428
Total Consolidated Multifamily NOI $41,373 $41,065
See Consolidated Statement of Operations.
See Non GAAP Financial Definitions.
Annex 3: Consolidated Statement of Operations 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 $2,597 and $2,574 for the three months ended December 31, 2023 and 2022, respectively and
$10,337 and $10,392 for the twelve months ended December 31, 2023 and 2022, respectively. Excludes non-real estate-related depreciation and amortization of $216 and $395 for the three months ended
December 31, 2023 and 2022, respectively, and $1,028 and $1,328 for the twelve months ended December 31, 2023 and 2022, 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 free rent of $56 and $3,252 for the three months ended December 31, 2023 and 2022, respectively and $4,414 and $13,312 for the twelve months ended December 31, 2023 and 2022, respectively. Also
includes the Company's share from unconsolidated joint ventures of $23 and $4 for the three months ended December 31, 2023 and 2022, respectively and $(4) and $(815) for the twelve months ended December
31, 2023 and 2022, respectively.
(4)
Excludes expenditures for tenant spaces in properties that have not been owned by the Company for at least a year and excludes Collector`s Universe.
(5) Net Debt calculated by taking the sum of senior unsecured notes, unsecured revolving credit facility, 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 8,420 and 8,656 shares for the three months ended December 31,
2023 and 2022, respectively, and 8,669 and 8,639 for the twelve months ended December 31, 2023 and 2022, respectively, plus dilutive Common Stock Equivalents (i.e. stock options).
See Consolidated Statement of Operations.
Annex 4: Detailed Consolidated Statement of Operations (Year-End)
Twelve Months Ended December 31, 2023 Twelve Months Ended December 31, 2022
REVENUES All Less: Disc. Total All Less: Disc.
Operations Ops Operations Ops Total
---
Revenue from leases $271,873 $(19,729) $252,144 $290,033 $(83,981) $206,052
Real estate services 3,868 3,868 3,581 3,581
Parking income 18,942 (906) 18,036 18,556 (2,737) 15,819
Hotel income 594 (594) 15,506 (15,506)
Other income 5,668 143 5,811 33,314 (25,318) 7,996
Total revenues 300,945 (21,086) 279,859 360,990 (127,542) 233,448
EXPENSES
---
Real estate taxes 45,531 (4,721) 40,810 59,235 (20,123) 39,112
Utilities 11,033 (1,111) 9,922 14,343 (5,422) 8,921
Operating services 63,693 (5,768) 57,925 78,589 (25,792) 52,797
Real estate services expenses 14,188 14,188 10,549 10,549
General and administrative 44,521 (49) 44,472 56,176 (162) 56,014
Transaction-related costs 7,627 7,627 3,468 3,468
Depreciation and amortization 99,075 (5,486) 93,589 112,408 (26,974) 85,434
Property Impairments 32,516 32,516 94,811 (94,811)
Land and other impairments, net 9,324 9,324 9,368 9,368
Total expenses 327,508 (17,135) 310,373 438,947 (173,284) 265,663
Operating income (expense) (26,563) (3,951) (30,514) (77,957) 45,742 (32,215)
OTHER (EXPENSE) INCOME
---
Interest expense (90,177) 822 (89,355) (78,040) 11,659 (66,381)
Interest cost of mandatorily redeemable noncontrolling interests (49,782) (49,782)
Interest and other investment income (loss) 5,548 (33) 5,515 729 729
Equity in earnings (loss) of unconsolidated joint ventures 3,102 3,102 1,200 1,200
Realized gains (losses) and unrealized gains (losses) on disposition of rental property, net 2,411 (2,411) 61,676 (61,676)
Gain (loss) on disposition of developable land 46,339 (39,271) 7,068 57,262 57,262
Gain (loss) on sale of unconsolidated joint venture interests - 7,677 (7,677)
Gain (loss) from extinguishment of debt, net (5,618) 12 (5,606) (7,432) 7,303 (129)
Other Income, net 2,871 2,871
Total other income (expense), net (85,306) (40,881) (126,187) 43,072 (50,391) (7,319)
Loss from continuing operations before income tax expense (111,869) (44,832) (156,701) (34,885) (4,649) (39,534)
Provision for income taxes (492) (492)
Income from continuing operations after income tax expense (112,361) (44,832) (157,193) (34,885) (4,649) (39,534)
Income (loss) from discontinued operations - 3,150 3,150 (64,704) (64,704)
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net - 41,682 41,682 69,353 69,353
Total discontinued operations - 44,832 44,832 4,649 4,649
Net Loss (112,361) (112,361) (34,885) (34,885)
Noncontrolling interests in consolidated joint ventures 2,319 2,319 3,079 3,079
Noncontrolling interests in Operating Partnership of income from continuing operations 14,267 14,267 5,652 5,652
Noncontrolling interests in Operating Partnership in discontinued operations (3,872) (3,872) (378) (378)
Redeemable noncontrolling interests (7,618) (7,618) (25,534) (25,534)
Net loss available to common shareholders $(107,265)
$- $(107,265) $(52,066)
$- $(52,066)
See Consolidated Statement of Operations.
Annex 5: Core FFO per Diluted Share
Three Months Ended September Twelve Months Ended December
30, 31,
2023 2022 2023 2022
Net income (loss) available to common shareholders $(0.05) $0.32 $(1.06) $(0.52)
Add (deduct): Noncontrolling interests in Operating Partnership (0.04) (0.03) (0.14) (0.06)
Noncontrolling interests in discontinued operations 0.04 0.06 0.04
Real estate-related depreciation and amortization on continuing operations 0.25 0.26 1.02 0.95
Real estate-related depreciation and amortization on discontinued operations - 0.05 0.05 0.26
Property impairments on continuing operations 0.32 0.32
Property impairments on discontinued operations - 0.10 0.95
Discontinued operations: Gain on sale from unconsolidated joint ventures - (0.08) (0.08)
Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net (0.05) (0.69) (0.02) (0.61)
FFO $0.47 $(0.01) $0.21 $0.89
Add/(Deduct):
---
Loss from extinguishment of debt, net 0.02 0.01 0.06 0.07
Land and other impairments 0.06 0.09 0.09
Loss (gain) on disposition of developable land (0.46) (0.46) (0.56)
Rebranding and Severance/Compensation related costs (G&A) - 0.02 0.07 0.14
Rebranding and Severance/Compensation related costs (RE Services) 0.01 0.01
Rebranding and Severance/Compensation related costs (Operating Services) - 0.01
Rockpoint buyout premium - 0.34
Redemption value adjustment to mandatorily redeemable noncontrolling interests - 0.08
Lease breakage fee, net - (0.23)
Amortization of derivative premium 0.01 0.05
Transaction related costs 0.01 0.03 0.07 0.04
Core FFO $0.12 $0.05 $0.53 $0.44
See FFO and Core FFO.
See Non GAAP Financial Definitions.
Annex 6: Unconsolidated Joint Ventures
($ in thousands)
Property Units Physical VRE's Nominal 4Q 2023 Total VRE Share VRE Share
Occupancy Ownership1 NOI2 Debt of 4Q NOI of Debt
Multifamily
Urby Harborside 762 92.3 % 85.0 % $5,370 $185,742 $4,565 $157,881
RiverTrace at Port Imperial 316 95.6 % 22.5 % 2,184 82,000 491 18,450
Capstone at Port Imperial 360 95.0 % 40.0 % 2,973 135,000 1,189 54,000
Riverpark at Harrison 141 92.2 % 45.0 % 577 30,192 260 13,586
Metropolitan at 40 Park(3) 130 95.4 % 25.0 % 721 34,100 180 8,525
Metropolitan Lofts4 59 94.4 % 50.0 % 319 17,200 160 8,600
Station House 378 92.1 % 50.0 % 1,713 89,440 857 44,720
Total Multifamily 2,146 93.4 % 54.9 % $13,857 $573,674 $7,701 $305,762
Retail
Shops at 40 Park N/A 69.0 % 25.0 % $267 6,067 67 1,517
Total Retail N/A 69.0 % 25.0 % $267 $6,067 $67 $1,517
Total UJV $14,124 $579,741 $7,768 $307,279
_________________________________________________
(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.
(3)
The Company paid down the loan balance $2.1 million in 4Q 2023.
4 On January 12, 2024, the joint venture was sold for a gross valuation of approximately $30 million, VRE`s share of
net proceeds was $6 million.
See Non GAAP Financial Definitions.
Annex 7: 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. Port Imperial Hotels sold on February 10, 2023.
3. In August 2023, the fixed rate Freddie Mac loan on Portside at East Pier
was refinanced and placed a 3- year SOFR cap at a strike rate of 3.5%.
4. The Upton loan has been capped at a strike rate of 1.0%, expiring in
October 2024.
5. In September 2023, the Company placed a 9 month SOFR cap at a strike rate
of 4.0% on the loan at 145 Front at City Square.
6. The loan on RiverHouse 9 is capped at a strike rate of 3.0%, expiring in
June 2024.
7. In August 2023, the Company fully repaid its construction loan on Haus25
with a new permanent financing provided by Freddie Mac. The balance shown
as of December 31, 2022 ($297M) reflects the outstanding construction
loan provided by QuadReal at that time.
8. In July 2023, the Company purchased Rockpoint`s interest in the Company.
Concurrently, the Company entered into a $175 million transitional
facility package. The entire $115 million Term Loan and initial draw of
$52 million on the Revolving Credit Facility were fully repaid in October
2023.
See Debt Profile.
Annex 8: Multifamily Property Information
Location Ownership Apartments Rentable SF Average Size Year Complete
NJ Waterfront
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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
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Portside at East Pier East Boston, MA 100.0 % 181 156,091 862 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 % 1,168 964,781 826
Other
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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
Metropolitan Lofts Morristown, NJ 50.0 % 59 54,683 927 2018
Station House Washington, DC 50.0 % 378 290,348 768 2015
Other Subtotal 72.8 % 1,446 1,335,622 924
Operating Portfolio 85.0 % 7,681 6,691,525 871
See Multifamily Operating Portfolio.
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
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:
amalhari@verisresidential.com
Web: www.verisresidential.com
Executive Officers
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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
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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
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SOURCE Veris Residential, Inc.
