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Veris Residential, Inc. Reports Second Quarter 2024 Results

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Veris Residential (NYSE: VRE) reported Q2 2024 results, showing robust financial and operational performance. Key metrics include a Net Income per Share of $0.03 versus a loss of $(0.30) in Q2 2023 and Core FFO per Share of $0.18, up from $0.16. Core AFFO per Share improved to $0.21 from $0.19. The company declared a quarterly dividend of $0.06 per share.

Year-to-date highlights: Same Store multifamily Blended Net Rental Growth Rate of 5.4% for the quarter and 5.0% year-to-date. Same Store NOI grew 7.9% year-over-year and 3.1% quarter-over-quarter. Occupancy increased by 100 basis points to 95.1%. Veris completed the sales of three assets for $82 million, making total non-strategic asset sales over $200 million.

Financial moves: Secured a new $500 million revolver and term loan, repaid $220 million in mortgages. Raised Core FFO guidance by 4% and NOI guidance by 50 basis points.

The company reported a 5.0% increase in Total Property Revenue to $74.7 million, while Total Property Expenses rose 19.5% to $25.8 million.

Positive
  • Net Income per Share increased to $0.03 from $(0.30) in Q2 2023.
  • Core FFO per Share grew to $0.18 from $0.16.
  • Core AFFO per Share increased to $0.21 from $0.19.
  • Declared quarterly dividend of $0.06 per share.
  • Same Store multifamily Blended Net Rental Growth Rate of 5.4% for the quarter.
  • Same Store NOI grew 7.9% year-over-year and 3.1% quarter-over-quarter.
  • Occupancy rate increased by 100 basis points to 95.1%.
  • Completed sales of three assets for $82 million, total non-strategic asset sales over $200 million.
  • Secured new $500 million revolver and term loan.
  • Repaid $220 million in mortgages.
  • Raised Core FFO guidance by 4%.
  • Raised Same Store NOI guidance by 50 basis points.
Negative
  • Total Property Expenses increased 19.5% to $25.8 million.
  • Non-Controllable Expenses surged 34.2% to $12.4 million.

Insights

Veris Residential's Q2 2024 results demonstrate solid performance and improved financial positioning. The company reported Core FFO per diluted share of $0.18, a 12.5% increase year-over-year. This growth, coupled with a Same Store NOI growth of 7.9% year-over-year (normalized for tax appeals), indicates strong operational execution.

Key highlights include:

  • Blended Net Rental Growth Rate of 5.4% for Q2
  • Occupancy improvement of 100 basis points to 95.1%
  • Non-strategic asset sales totaling over $200 million year-to-date
  • New $500 million credit facility secured, enhancing liquidity

The company's focus on deleveraging is evident, with debt reduction of $168 million primarily from non-strategic asset sales. However, the Net Debt to EBITDA ratio remains high at 11.8x, which may be a concern for some investors.

Veris has raised its Core FFO guidance, signaling confidence in its operational strategy. The dividend increase of 14.3% to $0.06 per share is a positive sign for shareholders, though the yield remains modest.

Overall, Veris Residential appears to be executing well on its strategic initiatives, with improving fundamentals and a strengthened balance sheet. However, investors should monitor the company's progress in further reducing leverage and sustaining NOI growth in the competitive multifamily REIT sector.

Veris Residential's Q2 2024 results reflect the resilience of the multifamily sector amidst broader economic uncertainties. The Same Store Blended Net Rental Growth Rate of 5.4% outpaces inflation, indicating strong demand and pricing power in their markets.

Several factors contribute to this positive performance:

  • Occupancy improvement to 95.1%, suggesting effective leasing strategies
  • Average rent per home reaching $3,923, a 0.6% increase from Q1
  • Same Store NOI growth of 7.9% year-over-year, normalized for tax appeals

The company's strategic focus on environmentally and socially conscious multifamily properties appears to be resonating with tenants. This positioning could provide a competitive advantage in attracting and retaining environmentally conscious renters, particularly in urban markets.

However, investors should note the increase in both controllable and non-controllable expenses, rising 8.6% and 34.2% respectively year-over-year. While some of this is due to the normalization of expenses post-pandemic, it will be important for Veris to manage these costs effectively to maintain NOI growth.

The company's asset recycling strategy, evidenced by the $82 million in asset sales this quarter, demonstrates a commitment to portfolio optimization. This approach could enhance long-term returns if capital is effectively redeployed into higher-yielding opportunities or used to strengthen the balance sheet.

Looking ahead, Veris's updated guidance suggests continued optimism, with Same Store NOI growth projected between 3.0% and 5.0% for 2024. This outlook, combined with the company's focus on ESG initiatives, positions Veris favorably in the competitive multifamily REIT landscape.

JERSEY CITY, N.J., July 24, 2024 /PRNewswire/ -- Veris Residential, Inc. (NYSE: VRE) (the "Company"), a forward-thinking, environmentally and socially conscious multifamily REIT, today reported results for the second quarter 2024.


Three Months Ended June 30,

Six Months Ended June 30,


2024

2023

2024

2023

Net Income (Loss) per Diluted Share

$0.03

$(0.30)

$(0.01)

$(0.56)

Core FFO per Diluted Share

$0.18

$0.16

$0.32

$0.30

Core AFFO per Diluted Share

$0.21

$0.19

$0.40

$0.33

Dividend per Diluted Share

$0.06

$—

$0.1125

$—

YEAR-TO-DATE HIGHLIGHTS

  • Same Store multifamily Blended Net Rental Growth Rate of 5.4% for the quarter and 5.0% year to date.
  • Same Store NOI growth of 7.9% year over year and 3.1% quarter over quarter, normalized for the impact of successful real estate tax appeals recognized in the prior year.
  • Expanded occupancy 100 basis points sequentially to 95.1%.
  • Completed the previously announced sales of three assets for $82 million, bringing the total gross proceeds from non-strategic asset sales this year to over $200 million.
  • Secured a new $500 million revolver and delayed-draw term loan with a three-plus-one-year term.
  • Repaid two mortgages, totaling approximately $220 million, utilizing cash on hand and $55 million of the aforementioned term loan.
  • Raised Core FFO guidance range by approximately 4%, or $0.02, and tightened Same Store NOI guidance range by 50 basis points.

June 30, 2024

March 31, 2024

Same Store Units

7,621

7,621

Same Store Occupancy

95.1 %

94.1 %

Same Store Blended Rental Growth Rate (Quarter)

5.4 %

4.6 %

Average Rent per Home

$3,923

$3,899

Mahbod Nia, Chief Executive Officer, commented: "We are pleased to report another quarter of strong operational and financial results, leading to our decision to raise guidance once again.

"In April we secured a new $500 million credit facility and term loan, signaling a renewed, strategic approach to managing our balance sheet and providing us with substantial liquidity and financial flexibility going forward. We also reduced our overall debt by a further $168 million, primarily utilizing proceeds from non-strategic asset sales. Looking ahead, we remain well-positioned to execute our three-pronged approach to value creation as we seek to maximize value on behalf of our shareholders."

SAME STORE PORTFOLIO PERFORMANCE

The following table shows Same Store performance as well as the benefit of successful real estate tax appeals recognized in the second quarter of last year.


Three Months Ended June 30,

Six Months Ended June 30,


2024

2023

%

2024

2023

%

Total Property Revenue

$74,745

$71,215

5.0 %

$148,837

$139,279

6.9 %

Controllable Expenses

13,424

12,361

8.6 %

26,045

24,878

4.7 %

Non-Controllable Expenses

12,370

9,217

34.2 %

24,451

21,534

13.5 %

Total Property Expenses

25,794

21,578

19.5 %

50,496

46,412

8.8 %

Same Store NOI

$48,951

$49,637

(1.4) %

$98,341

$92,867

5.9 %

Real Estate Tax Adjustments

—

2,179


—

1,689


Normalized Same Store NOI

$48,951

$47,458

3.1 %

$98,341

$91,178

7.9 %

Q2 2024 TRANSACTION ACTIVITY

As previously announced, the Company closed on the sale of 107 Morgan for $54 million, releasing approximately $50 million in net proceeds.

In addition, the Company closed on the sale of two land parcels, 6 Becker Farm and 85 Livingston, in April for $28 million, releasing approximately $28 million in net proceeds inclusive of a $500K reimbursement. 

FINANCE AND LIQUIDITY

Virtually all (99.9%) of the Company's debt is hedged or fixed. The Company's total debt portfolio has a weighted average effective interest rate of 4.5% and weighted average maturity of 3.1 years.

Balance Sheet Metric ($ in 000s)

June 30, 2024

March 31, 2024

Weighted Average Interest Rate

4.5 %

4.4 %

Weighted Average Years to Maturity

3.1

3.5

Interest Coverage Ratio

1.7x

1.5x

Net Debt

$1,646,023

$1,714,800

TTM EBITDA

$139,654

$142,543

TTM Net Debt to EBITDA

11.8x

12.0x

On April 22, 2024, the Company successfully replaced its existing revolving credit facility and term loan package with a new $500 million secured facility package, comprising a $200 million delayed-draw term loan and $300 million revolving credit facility. Both the revolving credit facility and term loan have a three-year term and a one-year extension option. The facility package includes sustainability KPI provisions and a $200 million accordion feature.

On May 22, 2024, the Company repaid the $63 million loan on 145 Front Street using cash on hand. In June, the property was added to the collateral pool of the new facility.

On June 28, 2024, the Company repaid the $158 million loan on Soho Lofts using a combination of cash on hand and a $55 million draw on the term loan. Subsequent to quarter end, the drawn balance of the term loan was hedged using a two-year interest rate cap with a strike rate of 3.5%.

DIVIDEND

The Company paid a dividend of $0.06 per share on July 14, 2024, a 14.3% sequential increase from $0.0525 per share.

ESG

During the quarter, the Company updated its progress towards ESG targets with new data from 2023. Compared to 2019 baseline measurements, the Company recorded a 66% reduction in Scope 1 & 2 emissions and a 22% reduction in Scope 3 emissions. Concurrently, it increased the share of Green-Certified properties in its portfolio to 78% by year-end 2023.

GUIDANCE

The Company is raising the low end of its Same Store NOI guidance range by 50 basis points, and is maintaining the high end of the NOI guidance range, reflecting favorable initial indications for insurance and real estate taxes.


Current Guidance

Initial Guidance

2024 Guidance Ranges

Low


High

Low


High

Same Store Revenue Growth

4.0 %

—

5.0 %

4.0 %

—

5.0 %

Same Store Expense Growth

4.5 %

—

5.5 %

5.0 %

—

6.0 %

Same Store NOI Growth

3.0 %

—

5.0 %

2.5 %

—

5.0 %

In addition, the Company is raising its Core FFO per share guidance range by $0.02 due to $0.01 of higher than projected deposit income, as a result of higher interest rates and average cash balances in the second quarter as asset sales closed sooner than expected, and $0.01 from the recognition of successful real estate tax appeals, net of recoveries, related to sold Harborside office properties.

Core FFO per Share Guidance

Low


High

Net Loss per Share

$(0.21)

—

$(0.17)

Other FFO adjustments per share

$(0.16)

—

$(0.16)

Depreciation per Share

$0.89

—

$0.89

Core FFO per Share

$0.52

—

$0.56

CONFERENCE CALL/SUPPLEMENTAL INFORMATION 

An earnings conference call with management is scheduled for Thursday, July 25, 2024, at 8:30 a.m. Eastern Time and will be broadcast live via the Internet at: http://investors.verisresidential.com.

The live conference call is also accessible by dialing (877) 451-6152 (domestic) or (201) 389-0879 (international) and requesting the Veris Residential second quarter 2024 earnings conference call.

The conference call will be rebroadcast on Veris Residential, Inc.'s website at:
http://investors.verisresidential.com beginning at 8:30 a.m. Eastern Time on Thursday, July 25, 2024.

A replay of the call will also be accessible Thursday, July 25, 2024, through Sunday, August 25, 2024, by calling (844) 512-2921 (domestic) or (412) 317-6671 (international) and using the passcode, 13747451.

Copies of Veris Residential, Inc.'s second quarter 2024 Form 10-Q and second quarter 2024 Supplemental Operating and Financial Data are available on Veris Residential, Inc.'s website under Financial Results.

In addition, once filed, these items will be available upon request from:
Veris Residential, Inc. Investor Relations Department
Harborside 3, 210 Hudson St., Ste. 400, Jersey City, New Jersey 07311

ABOUT THE COMPANY 

Veris Residential, Inc. is a forward-thinking, environmentally and socially conscious real estate investment trust (REIT) that primarily owns, operates, acquires and develops holistically inspired, Class A multifamily properties that meet the sustainability-conscious lifestyle needs of today's residents while seeking to positively impact the communities it serves and the planet at large. The Company is guided by an experienced management team and Board of Directors and is underpinned by leading corporate governance principles; a best-in-class, sustainable approach to operations; and an inclusive culture based on equality and meritocratic empowerment.

For additional information on Veris Residential, Inc. and our properties available for lease, please visit http://www.verisresidential.com/.

The information in this press release must be read in conjunction with, and is modified in its entirety by, the Quarterly Report on Form 10-Q (the "10-Q") filed by the Company for the same period with the Securities and Exchange Commission (the "SEC") and all of the Company's other public filings with the SEC (the "Public Filings"). In particular, the financial information contained herein is subject to and qualified by reference to the financial statements contained in the 10-Q, the footnotes thereto and the limitations set forth therein. Investors may not rely on the press release without reference to the 10-Q and the Public Filings.

We consider portions of this information, including the documents incorporated by reference, to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of such act. Such forward-looking statements relate to, without limitation, our future economic performance, plans and objectives for future operations and projections of revenue and other financial items. Forward-looking statements can be identified by the use of words such as "may," "will," "plan," "potential," "projected," "should," "expect," "anticipate," "estimate," "target," "continue" or comparable terminology. Forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading "Disclosure Regarding Forward-Looking Statements" and "Risk Factors" in the Company's Annual Report on Form 10-K, as may be supplemented or amended by the Company's Quarterly Reports on Form 10-Q, which are incorporated herein by reference. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise, except as required under applicable law.

Investors


Media

Anna Malhari


Amanda Shpiner/Grace Cartwright

Chief Operating Officer


Gasthalter & Co.

investors@verisresidential.com 


veris-residential@gasthalter.com



Additional details on Company Information

 

Consolidated Balance Sheet

(in thousands) (unaudited)  



June 30, 2024

December 31, 2023

ASSETS



Rental property



Land and leasehold interests

$463,826

$474,499

Buildings and improvements

2,635,611

2,782,468

Tenant improvements

8,682

30,908

Furniture, fixtures and equipment

105,707

103,613


3,213,826

3,391,488

Less – accumulated depreciation and amortization

(390,556)

(443,781)


2,823,270

2,947,707

Real estate held for sale, net

—

58,608

Net investment in rental property

2,823,270

3,006,315

Cash and cash equivalents

18,398

28,007

Restricted cash

22,533

26,572

Investments in unconsolidated joint ventures

120,392

117,954

Unbilled rents receivable, net

1,805

5,500

Deferred charges and other assets, net

49,529

53,956

Accounts receivable

1,998

2,742

Total Assets

$3,037,925

$3,241,046

LIABILITIES & EQUITY



Revolving credit facility and term loans

54,189

—

Mortgages, loans payable and other obligations, net

1,632,765

1,853,897

Dividends and distributions payable

6,375

5,540

Accounts payable, accrued expenses and other liabilities

47,117

55,492

Rents received in advance and security deposits

11,280

14,985

Accrued interest payable

5,833

6,580

Total Liabilities

1,757,559

1,936,494

Redeemable noncontrolling interests

9,294

24,999

Total Stockholders' Equity

1,132,424

1,137,478

Noncontrolling interests in subsidiaries:



Operating Partnership

105,959

107,206

Consolidated joint ventures

32,689

34,869

Total Noncontrolling Interests in Subsidiaries

$138,648

$142,075

Total Equity

$1,271,072

$1,279,553

Total Liabilities and Equity

$3,037,925

$3,241,046

 

Consolidated Statement of Operations

(In thousands, except per share amounts) (unaudited) 1



Three Months Ended June 30,


Six Months Ended June 30,

REVENUES

2024

2023


2024

2023

Revenue from leases

$60,917

$58,192


$121,559

$114,289

Real estate services

871

643


1,793

1,554

Parking income

3,922

3,998


7,667

7,726

Other income

1,766

1,373


3,797

3,235

Total revenues

67,476

64,206


134,816

126,804

EXPENSES






Real estate taxes

9,502

6,298


18,679

15,857

Utilities

1,796

1,761


4,067

3,824

Operating services

12,628

12,232


25,198

23,615

Real estate services expenses

4,366

4,389


9,608

6,332

General and administrative

8,975

9,572


20,063

19,853

Transaction related costs

890

3,319


1,406

4,347

Depreciation and amortization

20,316

21,831


40,433

43,619

Land and other impairments, net

—

—


—

3,396

Total expenses

58,473

59,402


119,454

120,843

OTHER (EXPENSE) INCOME






Interest expense

(21,676)

(21,692)


(43,176)

(43,706)

Interest cost of mandatorily redeemable noncontrolling interests

—

(13,390)


—

(13,390)

Interest and other investment income

1,536

3,927


2,074

4,043

Equity in earnings of unconsolidated joint ventures

2,933

2,700


3,187

2,633

Gain (loss) on disposition of developable land

10,731

—


11,515

(22)

Gain on sale of unconsolidated joint venture interests

—

—


7,100

—

Loss from extinguishment of debt, net

(785)

(2,657)


(785)

(2,657)

Other income (expense), net

(250)

853


5

2,851

Total other (expense) income, net

(7,511)

(30,259)


(20,080)

(50,248)

Loss from continuing operations before income tax expense

1,492

(25,455)


(4,718)

(44,287)

Provision for income taxes

(176)

—


(235)

—

Loss from continuing operations after income tax expense

1,316

(25,455)


(4,953)

(44,287)

Income from discontinued operations

1,419

(1,192)


1,671

631

Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net

—

(3,488)


1,548

(2,709)

Total discontinued operations, net

1,419

(4,680)


3,219

(2,078)

Net Income (loss)

2,735

(30,135)


(1,734)

(46,365)

Noncontrolling interest in consolidated joint ventures

543

636


1,038

1,223

Noncontrolling interests in Operating Partnership of income from continuing operations

(153)

2,265


370

4,542

Noncontrolling interests in Operating Partnership in discontinued operations

(122)

417


(277)

176

Redeemable noncontrolling interests

(81)

(617)


(378)

(6,983)

Net loss available to common shareholders

$2,922

$(27,434)


$(981)

$(47,407)

Basic earnings per common share:






Net income (loss) available to common shareholders

$0.03

$(0.30)


$(0.01)

$(0.56)

Diluted earnings per common share:






Net income (loss) available to common shareholders

$0.03

$(0.30)


$(0.01)

$(0.56)

Basic weighted average shares outstanding

92,663

91,873


92,469

91,551

Diluted weighted average shares outstanding(6)

101,952

100,854


101,160

100,691


1 For more details see Reconciliation to Net Income (Loss) to NOI

 

FFO, Core FFO and Core AFFO  

 (in thousands, except per share/unit amounts)



Three Months Ended June 30,


Six Months Ended June 30,


2024

2023


2024

2023

Net income (loss) available to common shareholders

$         2,922

$      (27,434)


$           (981)

$      (47,407)

Add (deduct):  Noncontrolling interests in Operating Partnership

153

(2,265)


(370)

(4,542)

Noncontrolling interests in discontinued operations

122

(417)


277

(176)

Real estate-related depreciation and amortization on continuing operations(1)

22,514

24,211


45,146

48,341

Real estate-related depreciation and amortization on discontinued operations

—

2,128


668

8,943

Continuing operations: Gain on sale from unconsolidated joint ventures

—

—


(7,100)

—

Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net

—

3,488


(1,548)

2,709

FFO(2)

$       25,711

$          (289)


$       36,092

$         7,868







Add/(Deduct):






Loss from extinguishment of debt, net

785

2,657


785

2,669

Land and other impairments

—

—


—

3,396

 (Gain) Loss on disposition of developable land

(10,731)

—


(11,515)

22

Rebranding and Severance/Compensation related costs (G&A)

236

817


1,873

1,781

Rebranding and Severance/Compensation related costs (RE Services)

838

—


2,364

—

Redemption value adjustments to mandatorily redeemable noncontrolling interests

—

7,641


—

7,641

Amortization of derivative premium

886

1,619


1,790

2,752

Transaction related costs

890

3,319


1,406

4,347

Core FFO

$       18,615

$       15,764


$       32,795

$       30,476







Add (Deduct) Non-Cash Items:






Straight-line rent adjustments(3)

(367)

893


(342)

(360)

Amortization of market lease intangibles, net

(9)

(49)


(16)

(79)

Amortization of lease inducements

—

—


7

15

Amortization of stock compensation

3,247

3,614


6,974

5,761

Non-real estate depreciation and amortization

219

199


429

584

Amortization of deferred financing costs

1,569

621


2,811

1,832

Deduct:






Non-incremental revenue generating capital expenditures:






Building improvements

(1,562)

(2,339)


(2,602)

(4,431)

Tenant improvements and leasing commissions(4)

(78)

(195)


(87)

(547)

Tenant improvements and leasing commissions on space vacant for more than one year

—

302


—

(434)

Core AFFO(2)

$       21,634

$       18,810


$       39,969

$       32,817







Funds from Operations per share/unit-diluted

$0.25

$0.00


$0.35

$0.08

Core Funds from Operations per share/unit-diluted

$0.18

$0.16


$0.32

$0.30

Dividends declared per common share

$0.06

—


$0.1125

—


See Non-GAAP Financial Definitions.

See Consolidated Statements of Operations  

 

Adjusted EBITDA and EBITDAre 

($ in thousands) (unaudited)



Three Months Ended June 30,


Six Months Ended June 30,


2024

2023


2024

2023

Core FFO (calculated on a previous page)

$          18,615

$          15,764


$          32,795

$          30,476

Deduct:






Equity in earnings of unconsolidated joint ventures

(2,990)

(2,700)


(3,449)

(2,633)

Equity in earnings share of depreciation and amortization

(2,417)

(2,579)


(5,142)

(5,155)

Add-back:






Interest expense

21,676

21,692


43,176

43,706

Amortization of derivative premium

(886)

(1,619)


(1,790)

(2,752)

Recurring joint venture distributions

4,177

4,539


5,878

6,086

Noncontrolling interests in consolidated joint ventures

(543)

(636)


(1,038)

(1,223)

Interest cost for mandatorily redeemable noncontrolling interests

—

5,749


—

5,749

Redeemable noncontrolling interests

81

617


378

6,983

Income tax expense

176

(49)


258

3

Adjusted EBITDA

$         37,889

$         40,778


$         71,066

$         81,240







Net income (loss) available to common shareholders

$           2,922

$        (27,434)


$             (981)

$        (47,407)

Add/(Deduct):






Noncontrolling interests in Operating Partnership of income from continuing operations

153

(2,265)


(370)

(4,542)

Noncontrolling interests in Operating Partnership in discontinued operations

122

(417)


277

(176)

Noncontrolling interests in consolidated joint ventures(a)

(543)

(636)


(1,038)

(1,223)

Redeemable noncontrolling interests

81

617


378

6,983

Interest cost for mandatorily redeemable noncontrolling interests

—

5,749


—

5,749

Interest expense

21,676

21,692


43,176

44,528

Income tax expense

176

(49)


258

2

Depreciation and amortization

20,316

23,959


41,101

52,713

Deduct:






Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net

—

3,488


(1,548)

2,708

Equity in (earnings) loss of unconsolidated joint ventures

(2,933)

(2,700)


(3,187)

(2,632)

Add:






Company's share of property NOI's in unconsolidated joint ventures(1)

10,235

10,287


17,963

23,668

EBITDAre

$         52,205

$         32,291


$         96,029

$         80,371

Add:






Loss from extinguishment of debt, net

785

2,657


785

2,669

Severance and compensation-related costs

1,074

817


2,711

1,965

Transaction related costs

890

3,319


1,406

4,347

Land and other impairments, net

—

—


—

3,396

Gain on disposition of developable land

(10,731)

—


(11,515)

22

Amortization of derivative premium

886

1,619


1,790

2,752

Adjusted EBITDAre

$         45,109

$         40,703


$         91,206

$         95,522







Net debt at period end(5)

$     1,646,023

$     1,396,428


$     1,646,023

$     1,396,428

Net debt to Adjusted EBITDA

10.9x

8.6x


11.6x

8.6x


See Consolidated Statements of Operations and Non-GAAP Financial Footnotes  
See Non-GAAP Financial Definitions
a) See Noncontrolling Interests in Consolidated Joint Ventures  

 

Components of Net Asset Value

($ in thousands)

 


Real Estate Portfolio


Other Assets







Operating Multifamily NOI1

 Total 

 At Share 


Cash and Cash Equivalents

$18,398

New Jersey Waterfront

$162,420

$138,026


Restricted Cash

22,533

Massachusetts

25,540

25,540


Other Assets

53,332

Other

29,464

21,730


Subtotal Other Assets

$94,263

Total Multifamily NOI

$217,424

$185,297




Commercial NOI2

6,244

5,051


Liabilities and Other
Considerations


Total NOI

$223,668

$190,348








Operating - Consolidated Debt at Share

$1,571,951

Non-Strategic Assets


Operating - Unconsolidated Debt at Share

296,945



Other Liabilities

70,605

Estimated Land Value3


$187,311


Revolving Credit Facility4

—

Total Non-Strategic Assets


$187,311


Term Loan4

55,000





Preferred Units

9,294





Subtotal Liabilities and Other
Considerations

$2,003,795











Outstanding Shares5












Diluted Weighted Average Shares
Outstanding for 2Q 2024  (in 000s)

101,952







1

See Multifamily Operating Portfolio for more details.  The Real Estate Portfolio table is reflective of the quarterly NOI annualized.

2

See Commercial Assets and Developable Land for more details.

3

Based off 4,139 potential units, see Commercial Assets and Developable Land for more details.

4

On April 22, 2024, the Company secured a $500 million facility comprised of a $300 million revolver and $200 million delayed-draw term loan. The facility has a three-year term with a one-year extension option and a $200 million accordion feature. The $55 million draw is capped at a strike rate of 3.5%, expiring in July 2026.

5 

As of June 30, 2024, 92,821,785 common shares were outstanding.



See Non-GAAP Financial Definitions

 

Multifamily Operating Portfolio

(in thousands, except Revenue per home)        




Operating Highlights




Percentage

Occupied

Average Revenue

per Home

NOI

Debt

Balance


Ownership

Apartments

2Q 2024

1Q 2024

2Q 2024

1Q 2024

2Q 2024

1Q 2024

NJ Waterfront










Haus25

100.0 %

750

95.3 %

91.4 %

$4,842

$4,788

$7,337

$7,279

$343,061

Liberty Towers

100.0 %

648

94.9 %

94.7 %

4,206

4,221

4,833

4,665

265,000

BLVD 401

74.3 %

311

95.4 %

95.0 %

4,186

4,134

2,236

2,470

116,510

BLVD 425

74.3 %

412

94.6 %

95.7 %

4,052

3,995

3,161

3,103

131,000

BLVD 475

100.0 %

523

95.5 %

96.4 %

4,122

4,063

4,474

4,675

165,000

Soho Lofts

100.0 %

377

96.6 %

95.9 %

4,731

4,718

3,067

2,905

—

Urby Harborside

85.0 %

762

96.7 %

90.7 %

4,051

4,072

5,291

5,318

184,309

RiverHouse 9

100.0 %

313

96.6 %

94.8 %

4,275

4,242

2,565

2,899

110,000

RiverHouse 11

100.0 %

295

96.7 %

95.9 %

4,319

4,405

2,328

2,518

100,000

RiverTrace

22.5 %

316

94.7 %

94.5 %

3,764

3,804

2,176

2,273

82,000

Capstone

40.0 %

360

95.9 %

96.6 %

4,405

4,339

3,137

3,159

135,000

NJ Waterfront Subtotal

85.0 %

5,067

95.7 %

94.2 %

$4,291

$4,274

$40,605

$41,264

$1,631,880

Massachusetts










Portside at East Pier

100.0 %

180

95.5 %

94.4 %

$3,208

$3,206

$1,198

$1,159

$56,500

Portside 2 at East Pier

100.0 %

296

96.7 %

95.7 %

3,395

3,328

2,117

1,997

96,222

145 Front at City Square

100.0 %

365

93.0 %

94.2 %

2,535

2,531

1,540

1,549

—

The Emery

100.0 %

326

94.2 %

96.1 %

2,801

2,730

1,530

1,565

71,392

Massachusetts Subtotal

100.0 %

1,167

94.7 %

95.1 %

$2,931

$2,893

$6,385

$6,270

$224,114

Other










The Upton

100.0 %

193

87.7 %

91.8 %

$4,637

$4,614

$1,320

$1,417

$75,000

The James

100.0 %

240

94.5 %

93.9 %

3,113

3,027

1,365

1,380

—

Signature Place

100.0 %

197

93.7 %

95.8 %

3,210

3,157

978

1,017

43,000

Quarry Place at Tuckahoe

100.0 %

108

97.1 %

93.9 %

4,436

4,352

815

707

41,000

Riverpark at Harrison

45.0 %

141

93.6 %

92.9 %

2,923

2,886

526

514

30,192

Metropolitan at 40 Park1

25.0 %

130

92.8 %

89.9 %

3,750

3,675

735

711

34,100

Station House

50.0 %

378

93.4 %

91.5 %

2,851

2,873

1,627

1,823

88,408

Other Subtotal

73.8 %

1,387

93.1 %

92.7 %

$3,411

$3,374

$7,366

$7,569

$311,700

Operating Portfolio2,3

85.2 %

7,621

95.1 %

94.1 %

$3,923

$3,899

$54,356

$55,103

$2,167,694

Metropolitan Lofts4







$—

$81


Total Portfolio







$54,356

$55,184




1

As of June 30, 2024, Priority Capital included Metropolitan at $23.3M (Prudential).

2

Excludes approximately 188,209 sqft of ground floor retail of which 139,872 sf was leased as of June 30, 2024.

3 

See Unconsolidated Joint Ventures and Multifamily Property Information for more details.

4

In January 2024, the Company's joint venture sold Lofts at 40 Park ("Metropolitan Lofts") thus it is excluded from same store calculations. Proceeds from the sale were used to repay the outstanding loan balance.

 

Commercial Assets and Developable Land

 

($ in thousands)

Commercial

Location

Ownership

Rentable

SF

Percentage

Leased

2Q 2024

Percentage

Leased

1Q 2024

NOI

2Q 2024

NOI

1Q 2024

Debt

Balance

Port Imperial Garage South

Weehawken, NJ

70.0 %

320,426

N/A

N/A

$591

$468

$31,375

Port Imperial Garage North

Weehawken, NJ

100.0 %

304,617

N/A

N/A

(1)

(57)

—

Port Imperial Retail South

Weehawken, NJ

70.0 %

18,064

92.0 %

100.0 %

77

202

—

Port Imperial Retail North

Weehawken, NJ

100.0 %

8,400

100.0 %

100.0 %

127

72

—

Riverwalk at Port Imperial

West New York, NJ

100.0 %

29,923

80.0 %

73.2 %

111

177

—

Shops at 40 Park

Morristown, NJ

25.0 %

50,973

69.0 %

69.0 %

656

285

6,067

Commercial Total


80.9 %

732,403

78.4 %

77.8 %

$1,561

$1,147

$37,442

 

Developable Land Parcels1

NJ Waterfront

2,351

Massachusetts

849

Other

939

Developable Land Parcels Total                                               

4,139


1 The Company has an additional 13,775 SF of potential retail space within land developments that is not represented in this table.

 

Same Store Market Information1

Sequential Quarter Comparison

(NOI in thousands)     













NOI at Share

Occupancy

Blended Lease Rate2


Apartments

2Q 2024

1Q 2024

Change

2Q 2024

1Q 2024

Change

2Q 2024

1Q 2024

New Jersey Waterfront

5,067

$36,180

$36,697

(1.4) %

95.7 %

94.2 %

1.5 %

6.0 %

4.1 %

Massachusetts

1,167

6,636

6,520

1.8 %

94.7 %

95.1 %

(0.4) %

5.0 %

2.9 %

Other3

1,387

6,135

6,170

(0.6) %

93.1 %

92.7 %

0.4 %

3.0 %

4.8 %

Total

7,621

$48,951

$49,387

(0.9) %

95.1 %

94.1 %

1.0 %

5.4 %

4.6 %

 

Year-over-Year Second Quarter Comparison 

(NOI in thousands) 













NOI at Share

Occupancy

Blended Lease Rate2 


Apartments

2Q 2024

2Q 2023

Change

2Q 2024

2Q 2023

Change

2Q 2024

2Q 2023

New Jersey Waterfront

5,067

$36,180

$36,963

(2.1) %

95.7 %

95.8 %

(0.1) %

6.0 %

12.4 %

Massachusetts

1,167

6,636

6,278

5.7 %

94.7 %

95.2 %

(0.5) %

5.0 %

10.0 %

Other3

1,387

6,135

6,396

(4.1) %

93.1 %

95.0 %

(1.9) %

3.0 %

9.6 %

Total

7,621

$48,951

$49,637

(1.4) %

95.1 %

95.6 %

(0.5) %

5.4 %

11.6 %

 

Average Revenue per Home (based on 7,621 units)









2Q 2024

1Q 2024

4Q 2023

3Q 2023

2Q 2023

1Q 2023

New Jersey Waterfront

$4,291

$4,274

$4,219

$4,084

$4,048

$3,919

Massachusetts

2,931

2,893

2,925

2,918

2,836

2,798

Other3

3,411

3,374

3,307

3,350

3,356

3,227

Total

$3,923

$3,899

$3,855

$3,772

$3,736

$3,622



1 

All statistics are based off the current 7,621 Same Store pool.

2

Blended lease rates exclude properties not managed by Veris.

3

"Other" includes properties in Suburban NJ, New York, and Washington, DC. See Multifamily Operating Portfolio for breakout.

 

Same Store Performance

($ in thousands)

 

Multifamily Same Store1
















Three Months Ended June 30,


Six Months Ended June 30,


Sequential


2024

2023

Change

%


2024

2023

Change

%


2Q24

1Q24

Change

%

Apartment Rental Income

$67,584

$64,277

$3,307

5.1 %


$134,281

$126,151

$8,130

6.4 %


$67,584

$66,697

$887

1.3 %

Parking/Other Income

7,161

6,938

223

3.2 %


14,556

13,128

1,428

10.9 %


7,161

7,395

(234)

(3.2) %

Total Property Revenues2

$74,745

$71,215

$3,530

5.0 %


$148,837

$139,279

$9,558

6.9 %


$74,745

$74,092

$653

0.9 %

Marketing & Administration

2,535

2,324

211

9.1 %


4,673

4,668

5

0.1 %


2,535

2,138

397

18.6 %

Utilities

2,188

2,055

133

6.5 %


4,761

4,479

282

6.3 %


2,188

2,573

(385)

(15.0) %

Payroll

4,315

4,185

130

3.1 %


8,612

8,631

(19)

(0.2) %


4,315

4,298

17

0.4 %

Repairs & Maintenance

4,386

3,797

589

15.5 %


7,999

7,100

899

12.7 %


4,386

3,613

773

21.4 %

Controllable Expenses

$13,424

$12,361

$1,063

8.6 %


$26,045

$24,878

$1,167

4.7 %


$13,424

$12,622

$802

6.4 %

Other Fixed Fees

712

737

(25)

(3.4) %


1,433

1,453

(20)

(1.4) %


712

722

(10)

(1.4) %

Insurance

1,781

1,780

1

0.1 %


3,561

3,561

—

— %


1,781

1,780

1

0.1 %

Real Estate Taxes

9,877

6,700

3,177

47.4 %


19,457

16,520

2,937

17.8 %


9,877

9,581

296

3.1 %

Non-Controllable Expenses

$12,370

$9,217

$3,153

34.2 %


$24,451

$21,534

$2,917

13.5 %


$12,370

$12,083

$287

2.4 %

Total Property Expenses

$25,794

$21,578

$4,216

19.5 %


$50,496

$46,412

$4,084

8.8 %


$25,794

$24,705

$1,089

4.4 %

Same Store GAAP NOI

$48,951

$49,637

$(686)

(1.4) %


$98,341

$92,867

$5,474

5.9 %


$48,951

$49,387

$(436)

(0.9) %

Real Estate Tax Adjustments3

—

2,179

(2,179)



—

1,689

(1,689)



—

—

—


Normalized Same Store NOI

$48,951

$47,458

$1,493

3.1 %


$98,341

$91,178

$7,163

7.9 %


$48,951

$49,387

$(436)

(0.9) %

Total Units

7,621

7,621




7,621

7,621




7,621

7,621



% Ownership

85.2 %

85.2 %




85.2 %

85.2 %




85.2 %

85.2 %



% Occupied - Quarter End

95.1 %

95.6 %

(0.5) %



95.1 %

95.6 %

(0.5) %



95.1 %

94.1 %

1.0 %




1 

Values represent the Company`s pro rata ownership of the operating portfolio. The James and Haus25 were added to the Same Store pool in 1Q 2024.

2

Revenues reported based on Generally Accepted Accounting Principals or "GAAP".

3

Represents tax settlements and final tax rate adjustments recognized that are applicable to prior periods.



See Non-GAAP Financial Definitions

 

Debt Profile

($ in thousands)



Lender

Effective

Interest Rate(1)

June 30, 2024

December 31, 2023

Date of

Maturity

Secured Permanent Loans






Soho Lofts(2)



—

158,777


145 Front at City Square(3)



—

63,000


Signature Place

Nationwide Life Insurance Company

3.74 %

43,000

43,000

08/01/24

Liberty Towers

American General Life Insurance Company

3.37 %

265,000

265,000

10/01/24

Portside 2 at East Pier

New York Life Insurance Co.

4.56 %

96,222

97,000

03/10/26

BLVD 425

New York Life Insurance Co.

4.17 %

131,000

131,000

08/10/26

BLVD 401

New York Life Insurance Co.

4.29 %

116,510

117,000

08/10/26

Portside at East Pier(4)

KKR

SOFR + 2.75%

56,500

56,500

09/07/26

The Upton(5)

Bank of New York Mellon

SOFR + 1.58%

75,000

75,000

10/27/26

RiverHouse 9(6)

JP Morgan

SOFR + 1.41%

110,000

110,000

06/21/27

Quarry Place at Tuckahoe

Natixis Real Estate Capital, LLC

4.48 %

41,000

41,000

08/05/27

BLVD 475

The Northwestern Mutual Life Insurance Co.

2.91 %

165,000

165,000

11/10/27

Haus25

Freddie Mac

6.04 %

343,061

343,061

09/01/28

RiverHouse 11

The Northwestern Mutual Life Insurance Co.

4.52 %

100,000

100,000

01/10/29

Port Imperial Garage South

American General Life & A/G PC

4.85 %

31,375

31,645

12/01/29

The Emery

Flagstar Bank

3.21 %

71,392

72,000

01/01/31

Principal Balance Outstanding



$1,645,060

$1,868,983


Unamortized Deferred Financing Costs



(12,295)

(15,086)


Total Secured Permanent Loans



$1,632,765

$1,853,897








Secured RCF & Term Loans:






Revolving Credit Facility(7)

JP Morgan and Bank of New York Mellon

SOFR + 2.10%

$—

$—

04/22/27

Term Loan(7)

JP Morgan and Bank of New York Mellon

SOFR + 2.62%

55,000

—

04/22/27

RCF & Term Loan Balances



$55,000

$—


Unamortized Deferred Financing Costs



(811)

—


Total RCF & Term Loan Debt



$54,189

$—


Total Debt



$1,686,954

$1,853,897



See to Debt Profile Footnotes

  

Debt Summary and Maturity Schedule


As of June 30, 99.9% of the Company`s total pro forma debt portfolio (consolidated and unconsolidated) is hedged or fixed. The Company`s total debt portfolio has a weighted average interest rate of 4.5% and a weighted average maturity of 3.1 years.

 

 ($ in thousands)      



Balance

%

of Total

Weighted Average

Interest Rate

Weighted Average

Maturity in Years

Fixed Rate & Hedged Debt





Fixed Rate & Hedged Secured Debt

$1,700,060

100.0 %

4.43 %

2.8

Variable Rate Debt





Variable Rate Debt1

—

— %

— %

—

Totals / Weighted Average

$1,700,060

100.0 %

4.43 %

2.8

Unamortized Deferred Financing Costs

(13,106)




Total Consolidated Debt, net

$1,686,954




Partners' Share

(73,109)




VRE Share of Total Consolidated Debt, net2

$1,613,845









Unconsolidated Secured Debt





VRE Share

$296,945

53.0 %

4.89 %

4.8

Partners' Share

263,131

47.0 %

4.89 %

4.8

Total Unconsolidated Secured Debt

$560,076

100.0 %

4.89 %

4.8






Pro Rata Debt Portfolio





Fixed Rate & Hedged Secured Debt

$1,922,379

99.9 %

4.50 %

3.1

Variable Rate Secured Debt

1,517

0.1 %

7.33 %

0.5

Total Pro Rata Debt Portfolio

$1,923,896

100.0 %

4.51 %

3.1

 

Pro Forma Debt Maturity Schedule3, 4
 ($ in millions)




Planned 2024 Refinancings

Secured Debt

Term Loan Draw

Unused Term Loan Capacity

Unused Revolver Capacity

2024

$308





2025






2026


$475




2027


$316




2028


$343

$55

$145

$300

2029


$131




2030






2031


$71






1

Variable rate debt includes the Revolver and reflects the balances on the Revolver and Term Loan.

2

Minority interest share of consolidated debt is comprised of $33.7 million at BLVD 425, $29.9 million at BLVD 401 and $9.4 million at Port Imperial South Garage.

3

The Unused Term Loan and Unused Revolver Capacity balances are shown with the one-year extension option utilized on the new facilities. The $55 million term loan draw facilitated the repayment of the loan on Soho Lofts on June 28. This draw is capped at 3.5% for two years, expiring July 2026. 

4

The graphic reflects consolidated debt balances only.

 

Annex 1: Transaction Activity


2024 Dispositions to Date






$ in thousands except per SF


Location

Transaction

Date

Number of Buildings

SF

Gross Asset

Value

Land






2 Campus Drive

Parsippany-Troy Hills, NJ

1/3/2024

N/A

N/A

$9,700

107 Morgan

Jersey City, NJ

4/16/2024

N/A

N/A

54,000

6 Becker/85 Livingston

Roseland, NJ

4/30/2024

N/A

N/A

27,900

Subtotal Land





$91,600

Multifamily






Metropolitan Lofts1

Morristown, NJ

1/12/2024

1

54,683

$30,300

Subtotal Multifamily



1

54,683

$30,300

Office






Harborside 5

Jersey City, NJ

3/20/2024

1

977,225

$85,000

Subtotal Office



1

977,225

$85,000




2024 Dispositions to Date

$206,900


1 The joint venture sold the property; releasing approximately $6 million of net proceeds to the Company.

 

Annex 2: Reconciliation of Net Income (Loss) to NOI (three months ended)



2Q 2024


1Q 2024


Total


Total

Net Income (Loss)

$                     2,735


$                   (4,469)

Deduct:




Income from discontinued operations

(1,419)


(252)

Realized gains and unrealized gains on disposition of rental property and impairments, net

—


(1,548)

Real estate services income

(871)


(922)

Interest and other investment income

(1,536)


(538)

Equity in (earnings) losses of unconsolidated joint ventures

(2,933)


(254)

(Gain) loss on disposition of developable land

(10,731)


(784)

Loss from extinguishment of debt, net

785


—

Gain on sale of unconsolidated joint venture interests



(7,100)

Other income, net

250


(255)

Add:




Real estate services expenses

4,366


5,242

General and administrative

8,975


11,088

Transaction related costs

890


516

Depreciation and amortization

20,316


20,117

Interest expense

21,676


21,500

Provision for income taxes

176


59

Net Operating Income (NOI)

$                   42,679


$                   42,400





Summary of Consolidated Multifamily NOI by Type (unaudited):

2Q 2024


1Q 2024

Total Consolidated Multifamily - Operating Portfolio

$                   40,864


$                   41,305

Total Consolidated Commercial

905


862

Total NOI from Consolidated Properties (excl. unconsolidated JVs/subordinated interests)

$                   41,769


$                   42,167

NOI (loss) from services, land/development/repurposing & other assets

1,166


875

Total Consolidated Multifamily NOI

$                   42,935


$                   43,042





 

See Consolidated Statement of Operations

See Non-GAAP Financial Definitions



Annex 3: Consolidated Statement of Operations and Non-GAAP Financial Footnotes

FFO, Core FFO, AFFO, NOI, Adjusted EBITDA, & EBITDAre

 

1.

Includes the Company's share from unconsolidated joint ventures, and adjustments for noncontrolling interest of $2.4 million and $2.6 million for the three months ended June 30, 2024 and 2023, respectively, and $5.1 million and $5.2 million for the six months ended June 30, 2024 and 2023, respectively. Excludes non-real estate-related depreciation and amortization of $0.2 million for each of the three months ended June 30, 2024 and 2023, respectively, respectively, and $0.4 million and $0.6 million for the six months ended June 30, 2024 and 2023, respectively.

2.

Funds from operations is calculated in accordance with the definition of FFO of the National Association of Real Estate Investment Trusts (Nareit). See Non-GAAP Financial Definitions for information About FFO, Core FFO, AFFO, NOI, Adjusted EBITDA & EBITDAre.

3.

Includes the Company's share from unconsolidated joint ventures of $102 thousand and ($13) thousand for the three months ended June 30, 2024 and 2023, respectively, and $93 thousand and $13 thousand for the six months ended June 30, 2024 and 2023, respectively.

4.

Excludes expenditures for tenant spaces in properties that have not been owned by the Company for at least a year.

5.

Net Debt calculated by taking the sum of secured revolving credit facility, secured term loan, and mortgages, loans payable and other obligations, and deducting cash and cash equivalents and restricted cash, all at period end.

6.

Calculated based on weighted average common shares outstanding, assuming redemption of Operating Partnership common units into common shares 8,689 and 8,981 shares for the three months ended June 30, 2024 and 2023, respectively, and 8,691 and 9,140 for the six months ended June 30, 2024 and 2023, respectively, plus dilutive Common Stock Equivalents (i.e. stock options).



  Back to Consolidated Statement of Operations

  Back to FFO, Core FFO and Core AFFO

  Back to Adjusted EBITDA and EBITDAre

 

Annex 4: Unconsolidated Joint Ventures

($ in thousands)


Property

Units

Physical

Occupancy

VRE's Nominal

Ownership1

2Q 2024

NOI2

Total

Debt

VRE Share

of 2Q NOI

VRE Share

of Debt

Multifamily








Urby Harborside

762

96.7 %

85.0 %

$5,291

$184,309

$4,497

$156,663

RiverTrace at Port Imperial

316

94.7 %

22.5 %

2,176

82,000

490

18,450

Capstone at Port Imperial

360

95.9 %

40.0 %

3,137

135,000

1,255

54,000

Riverpark at Harrison

141

93.6 %

45.0 %

526

30,192

237

13,586

Metropolitan at 40 Park

130

92.8 %

25.0 %

735

34,100

184

8,525

Station House

378

93.4 %

50.0 %

1,627

88,408

814

44,204

Total Multifamily

2,087

95.2 %

55.0 %

$13,492

$554,009

$7,476

$295,428

Retail








Shops at 40 Park

N/A

69.0 %

25.0 %

656

6,067

164

1,517

Total Retail

N/A

69.0 %

25.0 %

$656

$6,067

$164

$1,517

Total UJV




$14,148

$560,076

$7,640

$296,945



1

Amounts represent the Company's share based on ownership percentage.

2

The sum of property level revenue, straight line and ASC 805 adjustments; less: operating expenses, real estate taxes and utilities.

 

Annex 5: Debt Profile Footnotes


1.

Effective rate of debt, including deferred financing costs, comprised of the cost of terminated treasury lock agreements (if any), debt initiation costs, mark-to-market adjustment of acquired debt and other transaction costs, as applicable.

2.

The loan on Soho Lofts was repaid in full on June 28, 2024. The term loan was drawn $55 million to assist with this repayment.

3.

The loan on 145 Front Street was repaid in full on May 22, 2024.

4.

The loan on Portside at East Pier is capped at a strike rate of 3.5%, expiring in September 2026.

5.

The loan on Upton is capped at a strike rate of 1.0%, expiring in October 2024.

6.

The loan on RiverHouse 9 was capped at a strike rate of 3.0% that expired July 1. Subsequent to quarter end, the Company entered into an interest-rate cap agreement to hedge this mortgage with a strike rate of 3.5%, expiring in July 2026.

7.

The facility consists of a $500 million facility with a group of eight lenders, comprised of a $300 million revolver and $200 million delayed-draw term loan. The facility has a three-year term ending April 2027,  with a one-year extension option. The $55 million draw is capped at a strike rate of 3.5%, expiring in July 2026. The effective rate on the term loan is the sum of amortization of deferred financing costs of 0.052%, applicable margin of 2.00%, SOFR adjustment of 0.10%, and cap strike rate of 3.50%. Subsequent to quarter-end, the Company successfully met its Sustainability KPI provisions under the revolver and term loan. Effective immediately, the applicable margin on our facility borrowings will decrease by 5 basis points.

 

Back to Debt Profile

 

Annex 6: Multifamily Property Information



Location

Ownership

Apartments

Rentable SF

Average Size

Year Complete

NJ Waterfront







Haus25

Jersey City, NJ

100.0 %

750

617,787

824

2022

Liberty Towers

Jersey City, NJ

100.0 %

648

602,210

929

2003

BLVD 401

Jersey City, NJ

74.3 %

311

273,132

878

2016

BLVD 425

Jersey City, NJ

74.3 %

412

369,515

897

2003

BLVD 475

Jersey City, NJ

100.0 %

523

475,459

909

2011

Soho Lofts

Jersey City, NJ

100.0 %

377

449,067

1,191

2017

Urby Harborside

Jersey City, NJ

85.0 %

762

474,476

623

2017

RiverHouse 9

Weehawken, NJ

100.0 %

313

245,127

783

2021

RiverHouse 11

Weehawken, NJ

100.0 %

295

250,591

849

2018

RiverTrace

West New York, NJ

22.5 %

316

295,767

936

2014

Capstone

West New York, NJ

40.0 %

360

337,991

939

2021

NJ Waterfront Subtotal


85.0 %

5,067

4,391,122

867


Massachusetts







Portside at East Pier

East Boston, MA

100.0 %

180

154,859

860

2015

Portside 2 at East Pier

East Boston, MA

100.0 %

296

230,614

779

2018

145 Front at City Square

Worcester, MA

100.0 %

365

304,936

835

2018

The Emery

Revere, MA

100.0 %

326

273,140

838

2020

Massachusetts Subtotal


100.0 %

1,167

963,549

826


Other







The Upton

Short Hills, NJ

100.0 %

193

217,030

1,125

2021

The James

Park Ridge, NJ

100.0 %

240

215,283

897

2021

Signature Place

Morris Plains, NJ

100.0 %

197

203,716

1,034

2018

Quarry Place at Tuckahoe

Eastchester, NY

100.0 %

108

105,551

977

2016

Riverpark at Harrison

Harrison, NJ

45.0 %

141

124,774

885

2014

Metropolitan at 40 Park

Morristown, NJ

25.0 %

130

124,237

956

2010

Station House

Washington, DC

50.0 %

378

290,348

768

2015

Other Subtotal


73.8 %

1,387

1,280,939

924


Operating Portfolio


85.2 %

7,621

6,635,610

871



Back to Multifamily Operating Portfolio

 

Annex 7: Noncontrolling Interests in Consolidated Joint Ventures



Three Months Ended June 30,


Six Months Ended June 30,


2024

2023


2024

2023

BLVD 425

$                92

$                54


$              172

$                71

BLVD 401

(607)

(689)


(1,159)

(1,247)

Port Imperial Garage South

11

(16)


(15)

(61)

Port Imperial Retail South

(5)

38


29

63

Other consolidated joint ventures

(34)

(23)


(65)

(49)

Net losses in noncontrolling interests

$            (543)

$            (636)


$          (1,038)

$          (1,223)

Depreciation in noncontrolling interests

737

714


1,458

1,426

Funds from operations - noncontrolling interest in consolidated joint ventures

$              194

$                78


$              420

$              203

Interest expense in noncontrolling interest in consolidated joint ventures

784

792


1,572

1,584

Net operating income before debt service in consolidated joint ventures

$              978

$              870


$           1,992

$           1,787


Back to Adjusted EBITDA and EBITDAre

Non-GAAP Financial Definitions

NON-GAAP FINANCIAL MEASURES 

Included in this financial package are Funds from Operations, or FFO, Core Funds from Operations, or Core FFO, net operating income, or NOI and Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization, or Adjusted EBITDA, and EBIDAre or Earnings Before Interest, Taxes, Depreciation, Amortization and Rent Costs, each a "non-GAAP financial measure," measuring Veris Residential, Inc.'s historical or future financial performance that is different from measures calculated and presented in accordance with generally accepted accounting principles ("U.S. GAAP"), within the meaning of the applicable Securities and Exchange Commission rules. Veris Residential, Inc. believes these metrics can be a useful measure of its performance which is further defined.

Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (Adjusted "EBITDA")
The Company defines Adjusted EBITDA as Core FFO, plus interest expense, plus income tax expense, plus income (loss) in noncontrolling interest in consolidated joint ventures, and plus adjustments to reflect the entity's share of Adjusted EBITDA of unconsolidated joint ventures. The Company presents Adjusted EBITDA because the Company believes that Adjusted EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of the Company's ability to incur and service debt. Adjusted EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company's financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company's liquidity.

Blended Net Rental Growth Rate or Blended Lease Rate
Weighted average of the net effective change in rent (inclusive of concessions) for a lease with a new resident or for a renewed lease compared to the rent for the prior lease of the identical apartment unit.

Core FFO and Adjusted FFO ("AFFO")
Core FFO is defined as FFO, as adjusted for certain items to facilitate comparative measurement of the Company's performance over time. Adjusted FFO ("AFFO") is defined as Core FFO less (i) recurring tenant improvements, leasing commissions, and capital expenditures, (ii) straight-line rents and amortization of acquired above/below market leases, net, and (iii) other non-cash income, plus (iv) other non-cash charges. Core FFO and Adjusted AFFO are presented solely as supplemental disclosure that the Company's management believes provides useful information to investors and analysts of its results, after adjusting for certain items to facilitate comparability of its performance from period to period. Core FFO and Adjusted FFO are non-GAAP financial measures that are not intended to represent cash flow and are not indicative of cash flows provided by operating activities as determined in accordance with GAAP. As there is not a generally accepted definition established for Core FFO and Adjusted FFO, the Company's measures of Core FFO may not be comparable to the Core FFO and Adjusted FFO reported by other REITs. A reconciliation of net income per share to Core FFO and Adjusted FFO in dollars and per share are included in the financial tables accompanying this press release.

Earnings Before Interest, Tax, Depreciation, Amortization, and Rent Costs ("EBITDAre")
The Company computes EBITDAre in accordance with standards established by the National Association of Real Estate Investment Trusts, or Nareit, which may not be comparable to EBITDAre reported by other REITs that do not compute EBITDAre in accordance with the Nareit definition, or that interpret the Nareit definition differently than the Company does. The White Paper on EBITDAre approved by the Board of Governors of Nareit in September 2017 defines EBITDAre as net income (loss) (computed in accordance with Generally Accepted Accounting Principles, or GAAP), plus interest expense, plus income tax expense, plus depreciation and amortization, plus (minus) losses and gains on the disposition of depreciated property, plus impairment write-downs of depreciated property and investments in unconsolidated joint ventures, plus adjustments to reflect the entity's share of EBITDAre of unconsolidated joint ventures. The Company presents EBITDAre, because the Company believes that EBITDAre, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of the Company's ability to incur and service debt. EBITDAre should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company's financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of the Company's liquidity.

Funds From Operations ("FFO")
FFO is defined as net income (loss) before noncontrolling interests in Operating Partnership, computed in accordance with U.S. GAAP, excluding gains or losses from depreciable rental property transactions (including both acquisitions and dispositions), and impairments related to depreciable rental property, plus real estate-related depreciation and amortization. The Company believes that FFO per share is helpful to investors as one of several measures of the performance of an equity REIT. The Company further believes that as FFO per share excludes the effect of depreciation, gains (or losses) from property transactions and impairments related to depreciable rental property (all of which are based on historical costs which may be of limited relevance in evaluating current performance), FFO per share can facilitate comparison of operating performance between equity REITs.

FFO per share should not be considered as an alternative to net income available to common shareholders per share as an indication of the Company's performance or to cash flows as a measure of liquidity. FFO per share presented herein is not necessarily comparable to FFO per share presented by other real estate companies due to the fact that not all real estate companies use the same definition. However, the Company's FFO per share is comparable to the FFO per share of real estate companies that use the current definition of the National Association of Real Estate Investment Trusts ("Nareit"). A reconciliation of net income per share to FFO per share is included in the financial tables accompanying this press release.

NOI and Same Store NOI
NOI represents total revenues less total operating expenses, as reconciled to net income above. The Company considers NOI to be a meaningful non-GAAP financial measure for making decisions and assessing unlevered performance of its property types and markets, as it relates to total return on assets, as opposed to levered return on equity. As properties are considered for sale and acquisition based on NOI estimates and projections, the Company utilizes this measure to make investment decisions, as well as compare the performance of its assets to those of its peers. NOI should not be considered a substitute for net income, and the Company's use of NOI may not be comparable to similarly titled measures used by other companies. The Company calculates NOI before any allocations to noncontrolling interests, as those interests do not affect the overall performance of the individual assets being measured and assessed.

Same Store NOI is presented for the same store portfolio, which comprises all properties that were owned by the Company throughout both of the reporting periods.

 

Company Information

 

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






Mahbod Nia

Amanda Lombard

Taryn Fielder

Chief Executive Officer

Chief Financial Officer

General Counsel and Secretary




Anna Malhari

Jeff Turkanis


Chief Operating Officer

EVP & Chief Investment Officer











Equity Research Coverage






Bank of America Merrill Lynch

BTIG, LLC

Citigroup

Josh Dennerlein

Thomas Catherwood

Nicholas Joseph




Evercore ISI

Green Street Advisors

JP Morgan

Steve Sakwa

John Pawlowski

Anthony Paolone




Truist



Michael R. Lewis



 

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SOURCE Veris Residential, Inc.

FAQ

What were Veris Residential's (VRE) Q2 2024 earnings?

Veris Residential reported a Net Income per Share of $0.03, Core FFO per Share of $0.18, and Core AFFO per Share of $0.21 for Q2 2024.

What is Veris Residential's (VRE) updated guidance for 2024?

Veris Residential raised its Core FFO guidance range by $0.02 and tightened Same Store NOI guidance range by 50 basis points.

How did Veris Residential (VRE) perform in terms of occupancy in Q2 2024?

Veris Residential's occupancy rate increased by 100 basis points to 95.1% in Q2 2024.

What is the dividend declared by Veris Residential (VRE) in Q2 2024?

Veris Residential declared a quarterly dividend of $0.06 per share for Q2 2024.

How much did Veris Residential (VRE) gain from non-strategic asset sales in 2024?

Veris Residential completed non-strategic asset sales totaling over $200 million in 2024.

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Veris Residential, Inc.

NYSE:VRE

VRE Rankings

#2188 Ranked by Market Cap
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VRE Latest News

Nov 13, 2024
Veris Residential Declares Quarterly Cash Dividend
Oct 30, 2024
Veris Residential, Inc. Reports Third Quarter 2024 Results
Oct 10, 2024
Veris Residential, Inc. Announces Dates for Third Quarter 2024 Financial Results and Webcast
Aug 5, 2024
Veris Residential Declares Quarterly Cash Dividend
Jul 8, 2024
Veris Residential, Inc. Announces Dates for Second Quarter 2024 Financial Results and Webcast

VRE Stock Data

1.52B
78.12M
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101.77%
4.26%
REIT - Residential
Real Estate Investment Trusts
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United States of America
JERSEY CITY