Veris Residential, Inc. Announces Public Offering of Common Stock
Veris Residential announced a public offering of 10.5 million shares of its common stock, managed by J.P. Morgan, Goldman Sachs, and BofA Securities. Underwriters have a 30-day option to purchase an additional 1.575 million shares. The proceeds will fund the acquisition of 55 Riverwalk Place, a residential and retail property in West New York, NJ. If the acquisition fails, funds may address general corporate needs and repay $157 million in mortgage debt for the Soho Lofts property in Jersey City, NJ. Shares are offered under the company's effective shelf registration statement filed with the SEC.
- Public offering aims to raise capital for strategic acquisition of 55 Riverwalk Place.
- Potential acquisition includes 348 residential units and 48,000 sq. ft. of retail space, enhancing real estate portfolio.
- Underwriters have a 30-day option to buy an additional 1.575 million shares, potentially increasing capital raised.
- Funds may also be used to repay $157 million in outstanding mortgage debt, improving financial health.
- Public offering can lead to shareholder dilution with 10.5 million new shares issued.
- Risk if the acquisition of 55 Riverwalk Place does not materialize, leading to alternative uses of funds.
- Potential for negative market reaction to increased stock supply.
Insights
The announced public offering of 10,500,000 shares of common stock by Veris Residential, Inc. is a major step with potentially significant implications for the company’s shareholders. The primary goal is to fund the acquisition of 55 Riverwalk Place, a new residential asset. This acquisition aligns with Veris' strategy to expand its portfolio on the Port Imperial waterfront.
Investors should note that net proceeds will also serve as a backup for general corporate purposes and working capital, including paying down a substantial amount of mortgage debt. This dual-purpose allocation indicates a flexible financial strategy but also implies that the acquisition is not guaranteed. The $157 million mortgage debt repayment could have a positive impact on the company’s balance sheet by reducing liabilities.
However, potential dilution of shares is a concern. Issuing a large number of new shares will likely dilute the value of existing shares, impacting current shareholders. Additionally, the 30-day option for underwriters to buy more shares adds an element of uncertainty regarding the total dilution effect.
In a broader context, public offerings can affect stock prices negatively in the short term due to dilution but might offer long-term benefits if the acquisition leads to profitable growth. Investors should weigh these short-term impacts against potential long-term gains from the acquisition.
The acquisition target, 55 Riverwalk Place, is situated in a lucrative real estate location on the Port Imperial waterfront. This area is known for its high demand for residential units due to its proximity to major urban centers like New York City. A new development here could yield substantial rental income and increase the company's asset value.
The 48,000 square feet of retail space further enhances its attractiveness by providing a mixed-use element, which is highly valued in urban real estate developments. This diversification not only generates additional revenue streams but also increases the property’s overall value and appeal.
However, the viability of this acquisition depends on several market factors, including the local real estate market’s health and rental demand. Given the current trends, demand for high-quality residential units in prime locations remains strong, suggesting the acquisition could be a sound investment.
J.P. Morgan, Goldman Sachs & Co. LLC and BofA Securities are acting as the joint book-running managers for the offering.
The underwriters are expected to be granted a 30-day option, exercisable in whole or in part from time to time, to purchase up to an additional 1,575,000 shares of the Company's common stock.
The Company intends to use the net proceeds from the offering to fund its pending acquisition of 55 Riverwalk Place, a 348 unit residential asset with 48,000 square feet of retail space located in the Port Imperial waterfront in
All of the shares of common stock will be offered pursuant to the Company's effective shelf registration statement filed with the Securities and Exchange Commission (the "SEC"). A preliminary prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC. A copy of the preliminary prospectus supplement and accompanying prospectus relating to the offering may be obtained from J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue,
This press release does not constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements relate to, without limitation, the Company's 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 the Company cannot predict with accuracy and some of which the Company might not even anticipate. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, the Company can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from what is expressed or forecast in this press release. Readers are cautioned not to place undue reliance on these forward-looking statements. Factors that could materially affect results of the Company include those risk factors contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, the Company's preliminary prospectus supplement relating to the offering under the sections titled "Forward-Looking Statements" and "Risk Factors", and the Company's other public filings. Copies of each filing may be obtained from the Company or the SEC. The Company assumes no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.
About Veris Residential, Inc.
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. As of March 31, 2024, the Company owned or had interests in 22 multifamily rental properties, as well as non-core assets comprised of four parking/retail properties, plus developable land.
Investor Contact
Amanda Lombard
Chief Financial Officer
732-590-1010
alombard@verisresidential.com
Anna Malhari
Chief Operating Officer
732-590-1010
amalhari@verisresidential.com
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SOURCE Veris Residential, Inc.
FAQ
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