Veris Residential, Inc. Reports Fourth Quarter and Year End 2021 Results
Veris Residential reported its Q4 and full year 2021 results, showing a net loss of $(0.32) per share in Q4 and $(1.39) for the year. Core FFO per share was $0.17 for Q4 and $0.68 for the full year. The multifamily portfolio's occupancy was 96.6%, with a 21% increase in Same Store NOI year-over-year. The company sold $741 million in suburban office properties and added 866 units to its multifamily portfolio. A rebranding effort underscores a strategic shift to a multifamily focus while maintaining efforts in sustainability. A CFO transition is planned for April 2022.
- Core Funds from Operations rose to $0.17 per share in Q4 2021.
- Multifamily portfolio occupancy reached 96.6% as of December 31, 2021.
- Same Store NOI increased by 21% year-over-year for the multifamily sector.
- Successfully sold $741 million in suburban office properties which strengthened the balance sheet.
- New long-term lease signed with Collectors Universe for 130,400 square feet.
- Net loss of $(1.39) per share for the full year 2021, worse than the previous year's $(0.70) per share.
- FFO decreased significantly to $(0.23) per share for 2021 from $0.68 per share in 2020.
JERSEY CITY, N.J., Feb. 23, 2022 /PRNewswire/ -- Veris Residential, Inc. (NYSE: VRE) (the "Company") today reported its results for the fourth quarter and full year 2021.
FOURTH QUARTER AND FULL YEAR 2021 HIGHLIGHTS
Operational Highlights
- Net income (loss) of
$(0.32) and$(1.39) per share for the fourth quarter and full year 2021, respectively - Core Funds from Operations ("Core FFO") per share of
$0.17 and$0.68 for the fourth quarter and full year 2021, respectively - The 6,691-unit operating multifamily portfolio was
96.6% occupied as of December 31, 2021. The Same Store 5,499-unit operating multifamily portfolio was96.4% occupied as of December 31, 2021,2.8% above pre-pandemic levels - Fourth quarter 2021 multifamily year-over-year and quarter-over-quarter Same Store Net Operating Income ("NOI") increased by
21.0% and7.0% , respectively, reflecting higher occupancy, scaling back of concessions and increasing market rents during the quarter - 181,500 square feet of office leases were signed in 2021, comprised of 85,500 square feet of new leases and 96,000 square feet of lease renewals and expansions
- New 15-year 130,400 square foot lease with Collectors Universe was executed in January 2022
- Amanda Lombard, who was appointed Chief Accounting Officer in January 2022, will transition to Chief Financial Officer on April 1, 2022
Progress in Transition to Pure-Play Multifamily REIT
- Multifamily portfolio accounts for
56% of the fourth quarter 2021 NOI following$741 million of suburban office sales and the$210 million disposal of 111 River Street in Hoboken, NJ, completed in January 2022 - As of February 23, 2022, 6 land parcels are under contract for a total gross value of approximately
$155 million - Strengthened balance sheet following redemption of
$575 million of unsecured corporate bonds and a new$250 million secured revolving credit facility entered into in May 2021 - Corporate rebranding to Veris Residential, Inc., signifies strategic shift to environmentally- and socially-conscious multifamily REIT
Mahbod Nia, Chief Executive Officer, commented: "2021 was a transformative year for our Company, during which we continued to execute on value-enhancing initiatives aligned with our strategic objective of transitioning into an environmentally- and socially-conscious, forward-thinking pure-play multifamily REIT. Our rebrand to Veris Residential, Inc. in the fourth quarter marked an important next step in our progress, with our new ethos and values grounded in transparency and corporate responsibility, now serving as our guiding compass for decision-making at the Company.
Mr. Nia continued: "We begin 2022 from a position of strength, with continued leasing momentum across our multifamily portfolio as well as a number of non-strategic asset sales that will generate significant liquidity and provide optionality during the course of the year as we seek to continue creating value for our shareholders."
FINANCIAL HIGHLIGHTS
For more information and a reconciliation of FFO, Core FFO, Adjusted EBITDA and NOI to net income (loss) attributable to common shareholders, please refer to the following pages and the Company's Supplemental Operating and Financial Data package for the fourth quarter 2021. Please note that all presented per share amounts are on a diluted basis.
Net income (loss) available to common shareholders for the quarter ended December 31, 2021 was
FFO for the quarter ended December 31, 2021 was
For the fourth quarter 2021, Core FFO was
MULTIFAMILY PORTFOLIO HIGHLIGHTS
The Company's operating multifamily portfolio, comprised of 6,691 units, was
The Same Store 5,499-unit operating multifamily portfolio was
Multifamily Same Store fourth quarter 2021 year-over-year and quarter-over-quarter NOI increased by
Multifamily Same Store full year NOI decreased by
Multifamily Development
The Company commenced lease-up and stabilized three properties in New Jersey during 2021, adding 866 units to the operating multifamily portfolio. The three properties contributed
Haus 25, a 750 unit property located at 25 Christopher Columbus in Jersey City, NJ, the only property currently under construction, is expected to start leasing in the second quarter 2022.
OFFICE PORTFOLIO HIGHLIGHTS
As of December 31, 2021, the Company's consolidated office portfolio was comprised of seven operational properties across 4.9 million rentable square feet and was
The Waterfront office portfolio was
The Company signed 181,500 square feet of new leases, renewals or expansions in 2021, including 5,400 square feet of renewals and expansions signed during the fourth quarter 2021.
In January 2022, a new 15-year 130,400 square foot lease was executed with Collectors Universe at Harborside 3, replacing and expanding into MUFG's space. MUFG was not in occupation of its full space and surrendered 100,300 square feet of its lease, paying a
Office Same Store full year revenue decreased by
Office Same Store fourth quarter 2021 year-over-year revenue increased by
TRANSACTION ACTIVITY
In 2021, the Company completed
Waterfront Office Dispositions
On January 21, 2022, the Company completed the disposal of 111 River Street in Hoboken, NJ, for
Suburban Office Dispositions
During the fourth quarter 2021, the Company completed the disposal of 4 Gatehall Drive in Parsippany, NJ, for
Land Dispositions
As of February 23, 2022, the Company had 6 land parcels with a total gross value of approximately
In 2021, the Company completed
BALANCE SHEET/CAPITAL MARKETS
At December 31, 2021, the Company had a debt-to-undepreciated assets ratio of
Refinancing
On December 22, 2021, the Company refinanced the
On October 27, 2021, the Company refinanced the
Corporate Debt
On May 6, 2021, the Company entered into a new
At-The-Market ("ATM")
On December 13, 2021, the Company established an At-The-Market program through which the Company may issue and sell, from time to time, up to
SUSTAINABILITY INITIATIVES
During the past 18 months, the Company has undertaken a number of initiatives at the property and corporate levels that align with its core values as an environmentally- and socially-conscious, forward-thinking multifamily company.
In 2021, the Company formally endorsed global sustainability initiatives, such as the Climate Group's EV 100 (the first U.S. real estate company to do so) on November 9, 2021. The Company also committed to further promoting diversity, equity and inclusion in the workplace, becoming a signatory of the CEO Action for Diversity & Inclusion Pledge in September 2021.
This past year, the Company took a number of steps at its headquarters and properties to reduce its overall carbon footprint – establishing thoughtfully-designed new developments, adopting cutting-edge technology to improve energy consumption, and upgrading building management systems to include smart meters and thermostats as well as remote energy conservation via mobile devices. As of December 31, 2021,
On November 12, 2021, the Company received WELL Health and Safety certification across all of its 14 wholly-owned multifamily properties and selectively began piloting a number of sustainable technologies, including hydroponic vegetable planting and net zero drinking water solutions, in addition to a wide range of health and wellbeing initiatives.
THIRD PARTY MANAGEMENT
The Company has a strong multifamily operational platform that until recently managed properties for a number of blue-chip institutional clients. We are committed to further developing our operational capabilities as we seek to become a truly best-in-class leader in the multifamily sector. During the past year, we have taken several steps to reshape and enhance our operational architecture, while investing in people and technologies that will further elevate the Company. This is a priority and, as such, we have taken the decision to terminate all third party management activities effective year-end 2021, focusing solely on managing our owned properties.
DIVIDEND POLICY
The Company anticipates its regular quarterly common dividend to remain suspended while it seeks to conclude its transition into a pure-play multifamily REIT.
FINANCIAL LEADERSHIP TRANSITION
On January 12, 2022, pursuant to the Company's transition plan for its financial leadership, Amanda Lombard was named Chief Accounting Officer, effective January 18, 2022, and will transition to Chief Financial Officer on April 1, 2022. Concurrently, Gwen Marnell, the current Senior Vice President – Corporate Controller, who has been with the Company for 17 years will become Chief Accounting Officer. Prior to joining Veris Residential, Inc. in 2004, Ms. Marnell worked at Vornado Realty Trust as the portfolio controller responsible for the financial reporting of the New York Office Division.
CONFERENCE CALL/SUPPLEMENTAL INFORMATION
An earnings conference call with management is scheduled for February 24, 2022 at 8:30 a.m. Eastern Time, which will be broadcast live via the Internet at: http://investors.verisresidential.com/corporate-overview.
The live conference call is also accessible by calling (646) 828-8073 and requesting the Veris Residential, Inc. earnings conference call or by using passcode, 7660439.
The conference call will be rebroadcast on Veris Residential, Inc.'s website at http://investors.verisresidential.com/corporate-overview beginning at 10:30 a.m. Eastern Time on February 24, 2022.
A replay of the call will also be accessible February 24, 2022 through March 3, 2022 by calling (719) 457-0820 and using the passcode, 7660439.
Copies of Veris Residential, Inc.'s 2021 Form 10-K and fourth quarter Supplemental Operating and Financial Data are available on Veris Residential, Inc.'s website, as follows:
2021 Form 10-K:
http://investors.verisresidential.com/sec-filings
Fourth Quarter 2021 Supplemental Operating and Financial Data:
http://investors.verisresidential.com/quarterly-supplementals
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
NON-GAAP FINANCIAL MEASURES
Included in this press release 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, 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 an useful measure of its performance which is further defined below.
For reconciliation of FFO and Core FFO to Net Income (Loss), please refer to the following pages. For reconciliation of NOI, and Adjusted EBITDA to Net Income (Loss), please refer to the Company's disclosure in the Quarterly Financial and Operating Data package for the fourth quarter 2021.
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.
Core FFO
Core FFO is defined as FFO, as adjusted for certain items to facilitate comparative measurement of the Company's performance over time. Core FFO is 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 is a non-GAAP financial measure that is not intended to represent cash flow and is 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, the Company's measures of Core FFO may not be comparable to the Core FFO reported by other REITs. A reconciliation of net income per share to Core FFO in dollars and 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.
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 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 Annual 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 report, 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.
In addition, the extent to which the ongoing COVID-19 pandemic impacts us and our tenants and residents will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.
Investors
investors@verisresidential.com
Media
Amanda Shpiner/Grace Cartwright
Gasthalter & Co.
212-257-4170
veris-residential@gasthalter.com
Veris Residential, Inc. Consolidated Statements of Operations (In thousands, except per share amounts) (unaudited) | |||||||||||
Three Months Ended | Year Ended | ||||||||||
December 31, | December 31, | ||||||||||
REVENUES | 2021 | 2020 | 2021 | 2020 | |||||||
Revenue from leases | $ | 75,841 | $ | 67,238 | $ | 282,791 | $ | 272,970 | |||
Real estate services | 1,848 | 2,766 | 9,596 | 11,390 | |||||||
Parking income | 4,483 | 3,272 | 15,003 | 15,604 | |||||||
Hotel income | 3,833 | 997 | 10,618 | 4,287 | |||||||
Other income | 2,228 | 2,291 | 11,309 | 9,311 | |||||||
Total revenues | 88,233 | 76,564 | 329,317 | 313,562 | |||||||
EXPENSES | |||||||||||
Real estate taxes | 11,901 | 12,881 | 47,859 | 45,801 | |||||||
Utilities | 3,986 | 3,153 | 14,802 | 13,717 | |||||||
Operating services | 20,020 | 17,134 | 71,851 | 68,313 | |||||||
Real estate services expenses | 3,019 | 3,448 | 12,857 | 13,555 | |||||||
General and administrative | 13,851 | 11,636 | 57,198 | 71,058 | |||||||
Dead deal and transaction-related costs | 5,805 | - | 12,221 | 2,583 | |||||||
Depreciation and amortization | 25,208 | 28,931 | 111,618 | 122,035 | |||||||
Property impairments | 7,426 | - | 13,467 | 36,582 | |||||||
Land and other impairments, net | 12,386 | (6,584) | 23,719 | 16,817 | |||||||
Total expenses | 103,602 | 70,599 | 365,592 | 390,461 | |||||||
OTHER (EXPENSE) INCOME | |||||||||||
Interest expense | (15,828) | (19,197) | (65,192) | (80,991) | |||||||
Interest and other investment income (loss) | 5,144 | 1 | 524 | 43 | |||||||
Equity in earnings (loss) of unconsolidated joint ventures | (1,420) | (3,551) | (4,251) | (3,832) | |||||||
Realized gains (losses) and unrealized gains (losses) on disposition of | |||||||||||
rental property, net | 2,501 | 13,396 | 3,022 | 5,481 | |||||||
Gain on disposition of developable land | 2,004 | 974 | 2,115 | 5,787 | |||||||
Gain (loss) on sale of unconsolidated joint ventures | - | 35,184 | (1,886) | 35,184 | |||||||
Loss from extinguishment of debt, net | (343) | (272) | (47,078) | (272) | |||||||
Total other income (expense) | (7,942) | 26,535 | (112,746) | (38,600) | |||||||
Income (loss) from continuing operations | (23,311) | 32,500 | (149,021) | (115,499) | |||||||
Discontinued operations: | |||||||||||
Income from discontinued operations | (9) | 10,697 | 13,930 | 70,700 | |||||||
Realized gains (losses) and unrealized gains (losses) on | |||||||||||
disposition of rental property and impairments, net | 83 | 35,101 | 25,552 | 11,201 | |||||||
Total discontinued operations, net | 74 | 45,798 | 39,482 | 81,901 | |||||||
Net income (loss) | (23,237) | 78,298 | (109,539) | (33,598) | |||||||
Noncontrolling interests in consolidated joint ventures | 925 | 795 | 4,595 | 2,695 | |||||||
Noncontrolling interest in Operating Partnership of income | |||||||||||
from continuing operations | 2,611 | (2,582) | 15,469 | 13,277 | |||||||
Noncontrolling interests in Operating Partnership in discontinued operations | (7) | (4,409) | (3,590) | (7,878) | |||||||
Redeemable noncontrolling interests | (6,564) | (6,470) | (25,977) | (25,883) | |||||||
Net income (loss) available to common shareholders | $ | (26,272) | $ | 65,632 | $ | (119,042) | $ | (51,387) | |||
Basic earnings per common share: | |||||||||||
Income (loss) from continuing operations | $ | (0.32) | $ | 0.22 | $ | (1.79) | $ | (1.51) | |||
Discontinued operations | - | 0.45 | 0.40 | 0.81 | |||||||
Net income (loss) available to common shareholders | $ | (0.32) | $ | 0.67 | $ | (1.39) | $ | (0.70) | |||
Diluted earnings per common share: | |||||||||||
Income (loss) from continuing operations | $ | (0.32) | $ | 0.22 | $ | (1.79) | $ | (1.51) | |||
Discontinued operations | - | 0.45 | 0.40 | 0.81 | |||||||
Net income (loss) available to common shareholders | $ | (0.32) | $ | 0.67 | $ | (1.39) | $ | (0.70) | |||
Basic weighted average shares outstanding | 90,946 | 90,677 | 90,839 | 90,648 | |||||||
Diluted weighted average shares outstanding | 99,963 | 100,338 | 99,893 | 100,260 | |||||||
Veris Residential, Inc. Statements of Funds from Operations and Core FFO (in thousands, except per share/unit amounts) (unaudited) | |||||||||||
Three Months Ended | Year Ended | ||||||||||
December 31, | December 31, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Net income (loss) available to common shareholders | $ | (26,272) | $ | 65,632 | $ | (119,042) | $ | (51,387) | |||
Add (deduct): Noncontrolling interests in Operating Partnership | (2,611) | 2,582 | (15,469) | (13,277) | |||||||
Noncontrolling interests in discontinued operations | 7 | 4,409 | 3,590 | 7,878 | |||||||
Real estate-related depreciation and amortization | |||||||||||
on continuing operations (a) | 27,574 | 30,960 | 120,416 | 132,816 | |||||||
Real estate-related depreciation and amortization | |||||||||||
on discontinued operations | 9 | 831 | 974 | 4,806 | |||||||
Property Impairments on continuing operations | 7,426 | - | 13,467 | 36,582 | |||||||
Impairment of unconsolidated joint venture investment | |||||||||||
(included in Equity in earnings) | - | 2,562 | (2) | 2,562 | |||||||
(Gain) loss on sale from unconsolidated joint ventures | - | (35,184) | 1,886 | (35,184) | |||||||
Continuing operations: Realized (gains) losses and unrealized (gains) | |||||||||||
losses on disposition of rental property, net | (2,501) | (13,396) | (3,022) | (5,481) | |||||||
Discontinued operations: Realized (gains) losses and unrealized (gains) | |||||||||||
losses on disposition of rental property, net | (83) | (35,101) | (25,552) | (11,201) | |||||||
Funds from operations (b) | $ | 3,549 | $ | 23,295 | $ | (22,754) | $ | 68,114 | |||
Add (Deduct): | |||||||||||
(Gain) loss from early extinguishment of debt, net | 343 | 272 | 47,078 | 272 | |||||||
Dead deal and post sales items in Other Income/expense | - | - | (2,957) | 277 | |||||||
Dead deal and transaction-related costs | 5,805 | - | 12,221 | 2,583 | |||||||
Land and other impairments | 12,386 | (6,584) | 23,719 | 16,817 | |||||||
Loan receivable loss allowance | (4,906) | - | 246 | - | |||||||
(Gain) on disposition of developable land | (2,004) | (974) | (2,115) | (5,787) | |||||||
CEO and related management change costs | - | - | 2,089 | - | |||||||
Severance/Management restructuring/Rebranding | 1,938 | 191 | 10,634 | 11,929 | |||||||
Reporting system conversion costs | - | - | - | 363 | |||||||
Proxy fight costs | - | - | - | 12,770 | |||||||
Core FFO | $ | 17,111 | $ | 16,200 | $ | 68,161 | $ | 107,338 | |||
Diluted weighted average shares/units outstanding (c) | 99,963 | 100,338 | 99,893 | 100,260 | |||||||
Funds from operations per share/unit-diluted | $ | 0.04 | $ | 0.23 | $ | (0.23) | $ | 0.68 | |||
Core funds from operations per share/unit diluted | $ | 0.17 | $ | 0.16 | $ | 0.68 | $ | 1.07 | |||
Dividends declared per common share | $ | - | $ | - | $ | - | $ | 0.40 | |||
Supplemental Information: | |||||||||||
Non-incremental revenue generating capital expenditures: | |||||||||||
Building improvements | $ | (2,295) | $ | (4,365) | $ | (13,301) | $ | (11,690) | |||
Tenant improvements & leasing commissions (d) | (930) | (6,248) | (3,338) | (21,300) | |||||||
Tenant improvements & leasing commissions | |||||||||||
on space vacant for more than a year | (4,507) | (2,479) | (19,142) | (13,131) | |||||||
Straight-line rent adjustments (e) | 169 | (2,184) | (7,681) | (3,928) | |||||||
Amortization of (above)/below market lease intangibles, net | (525) | (1,048) | (2,712) | (3,709) | |||||||
Amortization of stock compensation | 3,167 | 2,019 | 11,161 | 7,926 | |||||||
Amortization of lease inducements | 17 | (21) | (10) | 55 | |||||||
Non real estate depreciation and amortization | 325 | 342 | 1,304 | 1,610 | |||||||
Amortization of debt discount/(premium) and mark-to-market, net | - | (373) | 231 | (1,086) | |||||||
Amortization of deferred financing costs | 1,199 | 1,467 | 4,568 | 4,625 | |||||||
(a) | Includes the Company's share from unconsolidated joint ventures, and adjustments for noncontrolling interest, of |
(b) | Funds from operations is calculated in accordance with the definition of FFO of the National Association of Real Estate Investment Trusts (NAREIT). See "Information About FFO" in this release. |
(c) | Calculated based on weighted average common shares outstanding, assuming redemption of Operating Partnership common units into common shares (8,690 and 9,412 shares for the three months ended December 31, 2021 and 2020, respectively, and 8,741 and 9,411 for the twelve months ended December 31, 2021 and 2020, respectively), plus dilutive Common Stock Equivalents (i.e. stock options). |
(d) | Excludes expenditures for tenant spaces that have not been owned for at least a year. |
(e) | Includes free rent of |
Statements of Funds from Operations (FFO) and Core FFO per Diluted Share (amounts are per diluted share, except share counts in thousands) (unaudited) | |||||||||||
Three Months Ended | Year Ended | ||||||||||
December 31, | December 31, | ||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||
Net income (loss) available to common shareholders | $ | (0.32) | $ | 0.67 | $ | (1.39) | $ | (0.70) | |||
Add (deduct): Real estate-related depreciation and amortization | |||||||||||
on continuing operations (a) | 0.28 | 0.31 | 1.21 | 1.32 | |||||||
Real estate-related depreciation and amortization | |||||||||||
on discontinued operations | - | 0.01 | 0.01 | 0.05 | |||||||
Redemption value adjustment to redeemable noncontrolling interests | 0.03 | 0.05 | 0.08 | 0.13 | |||||||
Property impairments on continuing operations | 0.07 | - | 0.13 | 0.36 | |||||||
Joint venture impairments | - | 0.03 | - | 0.03 | |||||||
(Gain) loss on sale from unconsolidated joint ventures | - | (0.35) | 0.02 | (0.35) | |||||||
Continuing operations: Realized (gains) losses and unrealized (gains) losses | |||||||||||
on disposition of rental property, net | (0.03) | (0.13) | (0.03) | (0.05) | |||||||
Discontinued operations: Realized (gains) losses and unrealized (gains) losses | |||||||||||
on disposition of rental property, net | - | (0.35) | (0.26) | (0.11) | |||||||
Noncontrolling interest/rounding adjustment | 0.01 | (0.01) | - | - | |||||||
Funds from operations (b) | $ | 0.04 | $ | 0.23 | $ | (0.23) | $ | 0.68 | |||
Add (Deduct): | |||||||||||
(Gain) loss on extinguishment of debt | - | - | 0.47 | - | |||||||
Land and other impairments | 0.12 | (0.07) | 0.24 | 0.17 | |||||||
Dead deal and transaction-related costs | 0.06 | - | 0.12 | 0.03 | |||||||
Loan receivable loss allowance | (0.05) | - | - | - | |||||||
(Gain) on disposition of developable land | (0.02) | (0.01) | (0.02) | (0.06) | |||||||
Severance/Management restructuring/Rebranding | 0.02 | - | 0.11 | 0.12 | |||||||
CEO and related management change costs | - | - | 0.02 | - | |||||||
Proxy fight costs | - | - | - | 0.13 | |||||||
Dead deal and post sales items in Other Income/expense | - | - | (0.03) | - | |||||||
Noncontrolling interest share on consolidated joint ventures | - | - | - | - | |||||||
Noncontrolling interest/rounding adjustment | - | 0.01 | - | - | |||||||
Core FFO | $ | 0.17 | $ | 0.16 | $ | 0.68 | $ | 1.07 | |||
Diluted weighted average shares/units outstanding (c) | 99,963 | 100,338 | 99,893 | 100,260 | |||||||
(a) | Includes the Company's share from unconsolidated joint ventures, and adjustments for noncontrolling interest, of |
(b) | Funds from operations is calculated in accordance with the definition of FFO of the National Association of Real Estate Investment Trusts (NAREIT). See "Information About FFO" in this release. |
(c) | Calculated based on weighted average common shares outstanding, assuming redemption of Operating Partnership common units into common shares (8,690 and 9,412 shares for the three months ended December 31, 2021 and 2020, respectively, and 8,741 and 9,411 for the twelve months ended December 31, 2021 and 2020, respectively), plus dilutive Common Stock Equivalents (i.e. stock options). |
Veris Residential, Inc. Consolidated Balance Sheets (in thousands, except per share amounts) (unaudited) | |||||
December 31, | December 31, | ||||
Assets | 2021 | 2020 | |||
Rental property | |||||
Land and leasehold interests | $ | 494,935 | $ | 639,636 | |
Buildings and improvements | 3,375,266 | 3,743,831 | |||
Tenant improvements | 106,654 | 171,623 | |||
Furniture, fixtures and equipment | 100,011 | 83,553 | |||
4,076,866 | 4,638,643 | ||||
Less – accumulated depreciation and amortization | (583,416) | (656,331) | |||
3,493,450 | 3,982,312 | ||||
Rental property held for sale, net | 618,646 | 656,963 | |||
Net investment in rental property | 4,112,096 | 4,639,275 | |||
Cash and cash equivalents | 31,754 | 38,096 | |||
Restricted cash | 19,701 | 14,207 | |||
Investments in unconsolidated joint ventures | 137,772 | 162,382 | |||
Unbilled rents receivable, net | 72,285 | 84,907 | |||
Deferred charges, goodwill and other assets, net | 151,347 | 199,541 | |||
Accounts receivable | 2,363 | 9,378 | |||
Total assets | $ | 4,527,318 | $ | 5,147,786 | |
Liabilities and Equity | |||||
Senior unsecured notes, net | $ | - | $ | 572,653 | |
Revolving credit facility and term loans | 148,000 | 25,000 | |||
Mortgages, loans payable and other obligations, net | 2,241,070 | 2,204,144 | |||
Dividends and distributions payable | 384 | 1,493 | |||
Accounts payable, accrued expenses and other liabilities | 134,977 | 194,717 | |||
Rents received in advance and security deposits | 26,396 | 34,101 | |||
Accrued interest payable | 5,760 | 10,001 | |||
Total liabilities | 2,556,587 | 3,042,109 | |||
Commitments and contingencies | |||||
Redeemable noncontrolling interests | 521,313 | 513,297 | |||
Equity: | |||||
Veris Residential, Inc. stockholders' equity: | |||||
Common stock, | |||||
90,948,008 and 90,712,417 shares outstanding | 909 | 907 | |||
Additional paid-in capital | 2,530,383 | 2,528,187 | |||
Dividends in excess of net earnings | (1,249,319) | (1,130,277) | |||
Accumulated other comprehensive income (loss) | 9 | - | |||
Total Veris Residential, Inc. stockholders' equity | 1,281,982 | 1,398,817 | |||
Noncontrolling interests in subsidiaries: | |||||
Operating Partnership | 127,053 | 148,791 | |||
Consolidated joint ventures | 40,383 | 44,772 | |||
Total noncontrolling interests in subsidiaries | 167,436 | 193,563 | |||
Total equity | 1,449,418 | 1,592,380 | |||
Total liabilities and equity | $ | 4,527,318 | $ | 5,147,786 | |
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SOURCE Veris Residential, Inc.
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