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Veris Residential, Inc. Reports Third Quarter 2024 Results

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Veris Residential reported strong Q3 2024 results and raised its full-year guidance. The company achieved a 4.6% Same Store multifamily Blended Net Rental growth for the quarter and 8.4% year-over-year Normalized Same Store NOI growth. Notable improvements include reducing net debt by $227 million since September 2023 and refinancing $531 million of mortgage debt. The company raised its Core FFO guidance to $0.59-$0.60 and Same Store NOI guidance to 5.4%-6.2%. The portfolio maintained a 95.1% occupancy rate with an average rent per home of $3,980. The company's debt portfolio has a weighted average interest rate of 4.96% and maturity of 3.3 years.

Veris Residential ha riportato risultati solidi nel terzo trimestre del 2024 e ha aumentato le previsioni per l'intero anno. L'azienda ha registrato una crescita del 4,6% nel Blended Net Rental Same Store per il trimestre e una crescita del 8,4% anno su anno del NOI Normalized Same Store. Tra i miglioramenti rilevanti c'è la riduzione del debito netto di 227 milioni di dollari da settembre 2023 e il rifinanziamento di 531 milioni di dollari di debito ipotecario. L’azienda ha aumentato le previsioni per il Core FFO a $0,59-$0,60 e per il NOI Same Store a 5,4%-6,2%. Il portafoglio ha mantenuto un tasso di occupazione del 95,1% con un affitto medio per unità di $3,980. Il portafoglio debitorio della società ha un tasso d'interesse medio ponderato del 4,96% e una scadenza di 3,3 anni.

Veris Residential reportó resultados sólidos en el tercer trimestre de 2024 y aumentó su pronóstico para todo el año. La empresa logró un crecimiento del 4,6% en el alquiler neto mixto de Same Store para el trimestre y un crecimiento del 8,4% interanual en el NOI Normalizado de Same Store. Las mejoras notables incluyen la reducción de la deuda neta en 227 millones de dólares desde septiembre de 2023 y el refinanciamiento de 531 millones de dólares de deuda hipotecaria. La empresa aumentó su guía de Core FFO a $0,59-$0,60 y la guía de NOI de Same Store a un 5,4%-6,2%. El portafolio mantuvo un tasa de ocupación del 95,1% con un alquiler promedio por hogar de $3,980. El portafolio de deudas de la empresa tiene una tasa de interés promedio ponderada del 4,96% y un vencimiento de 3,3 años.

Veris Residential은 2024년 3분기 실적이 강력하다고 보고하며 연간 전망치를 상향 조정했습니다. 회사는 해당 분기에 4.6%의 동일 매장 혼합 순 임대 성장률을 달성했으며, 전년 대비 8.4%의 정상화된 동일 매장 NOI 성장률을 기록했습니다. 주목할 만한 개선 사항으로는 2023년 9월 이후 순부채를 2억 2700만 달러 줄이고 5억 3100만 달러의 모기지 부채를 재융자한 것입니다. 회사는 Core FFO 가이드를 $0.59~$0.60로, Same Store NOI 가이드를 5.4%~6.2%로 상향 조정했습니다. 포트폴리오는 95.1%의 점유율을 유지하며, 집당 평균 임대료는 $3,980입니다. 회사의 부채 포트폴리오는 4.96%의 가중 평균 금리와 3.3년의 만기를 갖고 있습니다.

Veris Residential a annoncé de bons résultats pour le troisième trimestre 2024 et a relevé ses prévisions pour l'année entière. L'entreprise a réalisé une croissance de 4,6% du loyer net mixte en Same Store pour le trimestre et une croissance de 8,4% d'une année sur l'autre du NOI normalisé en Same Store. Parmi les améliorations notables figure la réduction de la dette nette de 227 millions de dollars depuis septembre 2023 et le refinancement de 531 millions de dollars de dettes hypothécaires. L'entreprise a relevé ses prévisions de Core FFO à 0,59 $ - 0,60 $ et ses prévisions de NOI en Same Store à 5,4 % - 6,2 %. Le portefeuille a maintenu un taux d'occupation de 95,1% avec un loyer moyen par logement de 3 980 $. Le portefeuille de dettes de l'entreprise a un taux d'intérêt moyen pondéré de 4,96 % et une durée de 3,3 ans.

Veris Residential hat für das dritte Quartal 2024 starke Ergebnisse berichtet und seine Prognose für das Gesamtjahr angehoben. Das Unternehmen erzielte ein Wachstum der Blended Net Rental im Same Store von 4,6% für das Quartal und ein jährliches Wachstum des normalisierten Same Store NOI von 8,4%. Zu den bemerkenswerten Verbesserungen gehört die Reduzierung der Nettoverschuldung um 227 Millionen Dollar seit September 2023 sowie die Refinanzierung von 531 Millionen Dollar Hypothekenschulden. Das Unternehmen hat seine Leitlinie für Core FFO auf $0,59-$0,60 angehoben und die Leitlinie für Same Store NOI auf 5,4%-6,2%. Das Portfolio wies eine Belegungsrate von 95,1% auf, mit einer durchschnittlichen Miete pro Wohnung von 3.980 $. Das Schuldenportfolio des Unternehmens hat einen gewogenen durchschnittlichen Zinssatz von 4,96% und eine Laufzeit von 3,3 Jahren.

Positive
  • Core FFO per share increased 17% year-over-year in first nine months
  • Same Store NOI margin improved to 66.8%, up 130 basis points year-over-year
  • Net debt reduced by $227 million since September 2023
  • Average rent per home increased 1.5% quarter-over-quarter to $3,980
  • Dividend increased to $0.07 per share from $0.05 year-over-year
Negative
  • Net Loss per Diluted Share of $(0.10) in Q3 2024
  • Same Store Blended Rental Growth Rate declined 0.8% quarter-over-quarter
  • High leverage with Net Debt to EBITDA ratio at 11.7x

Insights

The Q3 2024 results demonstrate strong operational performance with several positive indicators. Core FFO per share increased 41.7% to $0.17 from $0.12 year-over-year, while Same Store NOI grew by 8.4%. The company's strategic debt management has improved its financial position, reducing net debt by $227 million since September 2023.

The raised guidance is particularly noteworthy, with Core FFO guidance increased to $0.59-$0.60 per share, representing a significant 13% increase at the low end. The Same Store NOI margin of 66.8% shows strong operational efficiency, improving by 130 basis points year-over-year. The 4.6% blended rental growth rate and 95.1% occupancy rate indicate robust demand in their markets.

Raises Full-Year 2024 Guidance

JERSEY CITY, N.J., Oct. 30, 2024 /PRNewswire/ -- Veris Residential, Inc. (NYSE: VRE) (the "Company"), a forward-thinking, environmentally and socially conscious multifamily REIT, today reported results for the third quarter 2024.


Three Months Ended September 30,

Nine Months Ended September 30,


2024

2023

2024

2023

Net Income (Loss) per Diluted Share

$(0.10)

$(0.60)

$(0.12)

$(1.16)

Core FFO per Diluted Share

$0.17

$0.12

$0.49

$0.42

Core AFFO per Diluted Share

$0.19

$0.15

$0.58

$0.48

Dividend per Diluted Share

$0.07

$0.05

$0.18

$0.05

YEAR-TO-DATE HIGHLIGHTS

  • Same Store multifamily Blended Net Rental growth rate of 4.6% for the quarter and 4.8% year to date.
  • Year-over-year Normalized Same Store NOI growth of 8.4% for the third quarter and 8.0% year to date.
  • Year-to-date Normalized Same Store NOI margin of 66.8%, a 130 basis point improvement from the same period last year.
  • Reduced net debt by approximately $227 million since September 30, 2023, and refinanced $531 million of mortgage debt, leaving no remaining consolidated debt maturities until 2026.
  • Raised guidance as a result of the favorable resolutions of certain non-controllable expenses and better-than-expected revenue growth.
    • Core FFO guidance raised by over 13% at the low end and 7% at the high end, resulting in a revised range of $0.59 - $0.60.
    • Same Store NOI guidance raised by 240 basis points at the low end and 120 basis points at the high end, resulting in a revised range of 5.4% - 6.2%.
  • Named 2024 Regional Listed Sector Leader by GRESB for distinguished ESG leadership and performance, with the highest listed residential score in the U.S. and the third-best listed residential score worldwide.

September 30, 2024

June 30, 2024

Change

Same Store Units

7,621

7,621

— %

Same Store Occupancy

95.1 %

95.1 %

— %

Same Store Blended Rental Growth Rate (Quarter)

4.6 %

5.4 %

(0.8) %

Average Rent per Home

$3,980

$3,923

1.5 %

Mahbod Nia, Chief Executive Officer, commented, "Our portfolio continues to exhibit strong revenue growth, underpinned by robust demand for our premium properties and limited new supply in our key markets. I am extremely proud of the work our teams have done to mitigate controllable expense growth during a period of elevated inflation. These efforts, combined with a better than expected resolution of our non-controllable expenses last quarter, drove a substantial 17% year-over-year increase in Core FFO per share during the first nine months of the year, further improving our operating margin to 66.8% and allowing us to once again raise guidance."

SAME STORE PORTFOLIO PERFORMANCE

The following table shows Same Store performance:

($ in 000s)

Three Months Ended September 30,

Nine Months Ended September 30,


2024

2023

%

2024

2023

%

Total Property Revenue

$75,843

$72,948

4.0 %

$224,680

$212,227

5.9 %

Controllable Expenses

13,452

13,543

(0.7) %

39,499

38,421

2.8 %

Non-Controllable Expenses

10,572

11,596

(8.8) %

35,023

33,130

5.7 %

Total Property Expenses

24,024

25,139

(4.4) %

74,522

71,551

4.2 %

Same Store NOI

$51,819

$47,809

8.4 %

$150,158

$140,676

6.7 %

Less: Real Estate Tax Adjustments

—

20


—

1,689


Normalized Same Store NOI

$51,819

$47,789

8.4 %

$150,158

$138,987

8.0 %

In the third quarter, the Company renewed its property insurance program and finalized property taxes for its Jersey City assets, reducing Same Store non-controllable expenses by 8.8% for the quarter.

FINANCE AND LIQUIDITY

Approximately all of the Company's debt is hedged or fixed. The Company's total debt portfolio has a weighted average effective interest rate of 4.96% and weighted average maturity of 3.3 years.

Balance Sheet Metric ($ in 000s)

September 30, 2024

June 30, 2024

Weighted Average Interest Rate

4.96 %

4.51 %

Weighted Average Years to Maturity

3.3

3.1

Interest Coverage Ratio

1.7x

1.7x

Net Debt

$1,645,447

$1,646,023

TTM EBITDA

$140,682

$139,654

TTM Net Debt to EBITDA

11.7x

11.8x

During the third quarter, the Company repaid the $43 million mortgage on Signature Place and the $265 million mortgage on Liberty Towers using a combination of cash on hand, $145 million of additional draws on the Term Loan and a $157 million draw on the Secured Revolving Credit Facility. At quarter end, the Company had liquidity of approximately $170 million.

The $200 million Term Loan balance and $150 million of the Revolver were hedged with interest rate caps at a strike rate of 3.5%. The nine-month interest rate cap on the Revolver has not been designated as an effective accounting hedge to allow for flexibility should the Company repay a portion of the Revolver balance before the interest rate cap expires.

At the beginning of the third quarter, the Company successfully met Sustainable KPI provisions that resulted in a 5-basis-point spread reduction for all borrowings on the Term Loan and Revolver. 

ESG

The Company has again been recognized by global and national real estate organizations for its accomplishments in ESG and DEI. Most significantly, GRESB designated the Company as a Regional Listed Sector Leader in the Residential category, a recognition highlighting the top GRESB assessment performers in the Americas. The Company achieved the highest listed residential score in the U.S. and third-best listed residential score worldwide, earning its third-consecutive 5 Star rating.

The Company was also recognized by Nareit with the Mid Cap Diversity Impact Award for its social responsibility policies.

DIVIDEND

The Company paid a dividend of $0.07 per share on October 16, 2024, for shareholders of record as of September 30, 2024.

GUIDANCE

The Company has raised its 2024 guidance ranges to reflect the favorable outcome of certain non-controllable expenses that were finalized in the third quarter and continued multifamily outperformance.


Revised Guidance

Previous Guidance (July)

2024 Guidance Ranges

Low


High

Low


High

Same Store Revenue Growth

4.6 %

—

5.0 %

4.0 %

—

5.0 %

Same Store Expense Growth

2.5 %

—

3.0 %

4.5 %

—

5.5 %

Same Store NOI Growth

5.4 %

—

6.2 %

3.0 %

—

5.0 %

 

Core FFO per Share Guidance

Low


High

Net Loss per Share

$(0.15)

—

$(0.14)

Other FFO adjustments per share

$(0.16)

—

$(0.16)

Depreciation per Share

$0.90

—

$0.90

Core FFO per Share

$0.59

—

$0.60

CONFERENCE CALL/SUPPLEMENTAL INFORMATION 

An earnings conference call with management is scheduled for Thursday, October 31, 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 third 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, October 31, 2024.

A replay of the call will also be accessible Thursday, October 31, 2024, through Sunday, December 1, 2024, by calling (844) 512-2921 (domestic) or +1(412) 317-6671 (international) and using the passcode, 13747452.

Copies of Veris Residential, Inc.'s third quarter 2024 Form 10-Q and third 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, 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, available at https://investors.verisresidential.com/financial-information. 

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 may not 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 in Company Information.

Consolidated Balance Sheet

(in thousands) (unaudited)  

 



September 30, 2024

December 31, 2023

ASSETS



Rental property



Land and leasehold interests

$462,531

$474,499

Buildings and improvements

2,635,580

2,782,468

Tenant improvements

12,946

30,908

Furniture, fixtures and equipment

106,901

103,613


3,217,958

3,391,488

Less – accumulated depreciation and amortization

(411,537)

(443,781)


2,806,421

2,947,707

Real estate held for sale, net

—

58,608

Net investment in rental property

2,806,421

3,006,315

Cash and cash equivalents

12,782

28,007

Restricted cash

19,687

26,572

Investments in unconsolidated joint ventures

113,595

117,954

Unbilled rents receivable, net

2,204

5,500

Deferred charges and other assets, net

49,110

53,956

Accounts receivable

2,041

2,742

Total Assets

$3,005,840

$3,241,046

LIABILITIES & EQUITY



Revolving credit facility and term loans

353,580

—

Mortgages, loans payable and other obligations, net

1,324,336

1,853,897

Dividends and distributions payable

7,467

5,540

Accounts payable, accrued expenses and other liabilities

45,509

55,492

Rents received in advance and security deposits

10,993

14,985

Accrued interest payable

4,816

6,580

Total Liabilities

1,746,701

1,936,494

Redeemable noncontrolling interests

9,294

24,999

Total Stockholders' Equity

1,116,337

1,137,478

Noncontrolling interests in subsidiaries:



Operating Partnership

104,092

107,206

Consolidated joint ventures

31,811

34,869

Total Noncontrolling Interests in Subsidiaries

$135,903

$142,075

Total Equity

$1,249,845

$1,279,553

Total Liabilities and Equity

$3,005,840

$3,241,046

 

Consolidated Statement of Operations

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



Three Months Ended September 30,


Nine  Months Ended September 30,

REVENUES

2024

2023


2024

2023

Revenue from leases

$62,227

$59,935


$183,786

$174,223

Management fees

794

1,230


2,587

2,785

Parking income

3,903

3,947


11,570

11,673

Other income

1,251

1,361


5,048

4,596

Total revenues

68,175

66,473


202,991

193,277

EXPENSES






Real estate taxes

8,572

9,301


27,251

25,158

Utilities

2,129

2,039


6,196

5,863

Operating services

10,156

13,583


35,354

37,195

Property management

3,762

3,533


13,370

9,864

General and administrative

8,956

14,604


29,019

34,460

Transaction related costs

—

2,704


1,406

7,051

Depreciation and amortization

21,159

21,390


61,592

65,008

Land and other impairments, net

2,619

—


2,619

3,396

Total expenses

57,353

67,154


176,807

187,995

OTHER (EXPENSE) INCOME






Interest expense

(21,507)

(23,715)


(64,683)

(67,422)

Interest cost of mandatorily redeemable noncontrolling interests

—

(36,392)


—

(49,782)

Interest and other investment income

181

1,240


2,255

5,283

Equity in earnings (loss) of unconsolidated joint ventures

(268)

210


2,919

2,843

Gain (loss) on disposition of developable land

—

—


11,515

(23)

Gain on sale of unconsolidated joint venture interests

—

—


7,100

—

Gain (loss) from extinguishment of debt, net

8

(1,046)


(777)

(3,702)

Other income (expense), net

(310)

(57)


(305)

2,794

Total other (expense) income, net

(21,896)

(59,760)


(41,976)

(110,009)

Loss from continuing operations before income tax expense

(11,074)

(60,441)


(15,792)

(104,727)

Provision for income taxes

(39)

(293)


(274)

(293)

Loss from continuing operations after income tax expense

(11,113)

(60,734)


(16,066)

(105,020)

Income from discontinued operations

206

61


1,877

691

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

—

423


1,548

(2,286)

Total discontinued operations, net

206

484


3,425

(1,595)

Net loss

(10,907)

(60,250)


(12,641)

(106,615)

Noncontrolling interest in consolidated joint ventures

391

592


1,429

1,815

Noncontrolling interests in Operating Partnership of income from continuing operations

923

5,243


1,293

9,785

Noncontrolling interests in Operating Partnership in discontinued operations

(18)

(42)


(295)

134

Redeemable noncontrolling interests

(81)

(350)


(459)

(7,333)

Net loss available to common shareholders

$(9,692)

$(54,807)


$(10,673)

$(102,214)

Basic earnings per common share:






Net loss available to common shareholders

$(0.10)

$(0.60)


$(0.12)

$(1.16)

Diluted earnings per common share:






Net loss available to common shareholders

$(0.10)

$(0.60)


$(0.12)

$(1.16)

Basic weighted average shares outstanding

92,903

92,177


92,615

91,762

Diluted weighted average shares outstanding(6)

101,587

100,925


101,304

100,770


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 September 30,


Nine Months Ended September 30,


2024

2023


2024

2023

Net loss available to common shareholders

$          (9,692)

$         (54,807)


$      (10,673)

$       (102,214)

Add (deduct):  Noncontrolling interests in Operating Partnership

(923)

(5,243)


(1,293)

(9,785)

Noncontrolling interests in discontinued operations

18

42


295

(134)

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

23,401

23,746


68,547

72,087

Real estate-related depreciation and amortization on discontinued operations

—

1,926


668

10,870

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

—

(423)


(1,548)

2,286

FFO(2)

$         12,804

$         (34,759)


$       48,896

$         (26,890)







Add/(Deduct):






Gain (Loss) from extinguishment of debt, net

(8)

1,046


777

3,714

Land and other impairments

2,619

—


2,619

3,396

 (Gain) Loss on disposition of developable land

—

—


(11,515)

23

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

206

5,904


2,079

7,869

Rebranding and Severance/Compensation related costs (Property Management)

26

288


2,390

288

Severance/Compensation related costs (Operating Expenses)

—

649


—

649

Rockpoint buyout premium

—

34,775


—

34,775

Redemption value adjustments to mandatorily redeemable noncontrolling interests

—

—


—

7,641

Amortization of derivative premium(7)

1,303

999


3,093

3,751

Derivative mark to market adjustment

16

—


16

—

Transaction related costs

—

2,704


1,406

7,051

Core FFO

$         16,966

$           11,606


$       49,761

$           42,267







Add (Deduct) Non-Cash Items:






Straight-line rent adjustments(3)

(341)

781


(683)

421

Amortization of market lease intangibles, net

(9)

—


(25)

(79)

Amortization of lease inducements

—

37


7

52

Amortization of stock compensation

3,005

3,234


9,979

9,725

Non-real estate depreciation and amortization

165

228


594

813

Amortization of deferred financing costs

1,675

1,353


4,486

3,185

Deduct:






Non-incremental revenue generating capital expenditures:






Building improvements

(2,288)

(2,247)


(4,890)

(6,678)

Tenant improvements and leasing commissions(4)

(55)

(125)


(142)

(1,106)

Core AFFO(2)

$         19,118

$           14,867


$       59,087

$           48,600







Funds from Operations per share/unit-diluted

$0.13

$(0.35)


$0.48

$(0.27)

Core Funds from Operations per share/unit-diluted

$0.17

$0.12


$0.49

$0.42

Core Adjusted Funds from Operations per share/unit-diluted

$0.19

$0.15


$0.58

$0.48

Dividends declared per common share

$0.07

$0.05


$0.1825

$0.05

 

See Non-GAAP Financial Definitions.

See Consolidated Statements of Operations.  

 

Adjusted EBITDA 

($ in thousands) (unaudited)



Three Months Ended September 30,


Nine Months Ended September 30,


2024

2023


2024

2023

Core FFO (calculated on a previous page)

$         16,966

$          11,606


$         49,761

$         42,267

Deduct:






Equity in (earnings) loss of unconsolidated joint ventures

268

(210)


(3,181)

(2,843)

Equity in earnings share of depreciation and amortization

(2,407)

(2,584)


(7,549)

(7,740)

Add-back:






Interest expense

21,507

23,715


64,683

68,244

Amortization of derivative premium

(1,303)

(999)


(3,093)

(3,751)

Derivative mark to market adjustment

(16)

—


(16)

—

Recurring joint venture distributions

2,374

2,896


8,252

8,982

Noncontrolling interests in consolidated joint ventures

(391)

(592)


(1,429)

(1,815)

Interest cost for mandatorily redeemable noncontrolling interests

—

1,617


—

7,366

Redeemable noncontrolling interests

81

350


459

7,333

Income tax expense

39

293


297

293

Adjusted EBITDA

$         37,118

$          36,092


$       108,184

$       118,336

 

See Consolidated Statements of Operations and Non-GAAP Financial Footnotes.  

See Non-GAAP Financial Definitions.


 

Components of Net Asset Value

($ in thousands)

 


Real Estate Portfolio


Other Assets







Operating Multifamily NOI1

 Total 

 At Share 


Cash and Cash Equivalents

$12,782

New Jersey Waterfront

$173,720

$147,629


Restricted Cash

19,687

Massachusetts

26,032

26,032


Other Assets

53,355

Other

30,712

22,651


Subtotal Other Assets

$85,824

Total Multifamily NOI

$230,464

$196,312




Commercial NOI2

3,524

2,851


Liabilities and Other
Considerations


Total NOI

$233,988

$199,163








Operating - Consolidated Debt at Share

$1,262,734

Non-Strategic Assets


Operating - Unconsolidated Debt at Share

295,863



Other Liabilities

68,785

Estimated Land Value3


$187,311


Revolving Credit Facility4

157,000

Total Non-Strategic Assets


$187,311


Term Loan4

200,000





Preferred Units

9,294





Subtotal Liabilities and Other Considerations

$1,993,676











Outstanding Shares5












Diluted Weighted Average Shares
Outstanding for 3Q 2024  (in 000s)

102,312







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. As of September 30, 2024. the Term Loan was fully drawn and hedged at a strike rate of 3.5%, expiring in July 2026. The Revolver was $157 million drawn, $150 million of the Revolver is hedged at a strike rate of 3.5%, expiring in June 2025.  

5  Outstanding shares for the quarter ended September 30, 2024 is comprised of the following (in 000s): 92,903 weighted average common shares outstanding, 8,684 weighted average Operating Partnership common and vested LTIP units outstanding, and 725 shares representing the dilutive effect of stock-based compensation awards.


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

3Q 2024

2Q 2024

3Q 2024

2Q 2024

3Q 2024

2Q 2024

NJ Waterfront










Haus25

100.0 %

750

95.8 %

95.3 %

$4,950

$4,842

$7,931

$7,337

$343,061

Liberty Towers*

100.0 %

648

91.7 %

94.9 %

4,237

4,206

5,506

4,833

—

BLVD 401

74.3 %

311

94.7 %

95.4 %

4,304

4,186

2,592

2,236

116,016

BLVD 425

74.3 %

412

95.2 %

94.6 %

4,147

4,052

3,413

3,161

131,000

BLVD 475

100.0 %

523

96.8 %

95.5 %

4,241

4,122

4,319

4,474

165,000

Soho Lofts*

100.0 %

377

95.6 %

96.6 %

4,832

4,731

3,375

3,067

—

Urby Harborside

85.0 %

762

96.5 %

96.7 %

4,094

4,051

5,866

5,291

183,362

RiverHouse 9

100.0 %

313

96.2 %

96.6 %

4,392

4,275

2,661

2,565

110,000

RiverHouse 11

100.0 %

295

96.3 %

96.7 %

4,363

4,319

2,500

2,328

100,000

RiverTrace

22.5 %

316

95.3 %

94.7 %

3,829

3,764

2,113

2,176

82,000

Capstone

40.0 %

360

94.4 %

95.9 %

4,471

4,405

3,154

3,137

135,000

NJ Waterfront Subtotal

85.0 %

5,067

95.3 %

95.7 %

$4,371

$4,291

$43,430

$40,605

$1,365,439

Massachusetts










Portside at East Pier

100.0 %

180

95.9 %

95.5 %

$3,269

$3,208

$1,245

$1,198

$56,500

Portside 2 at East Pier

100.0 %

296

94.8 %

96.7 %

3,446

3,395

2,108

2,117

95,827

145 Front at City Square*

100.0 %

365

95.1 %

93.0 %

2,475

2,535

1,467

1,540

—

The Emery

100.0 %

326

94.0 %

94.2 %

2,840

2,801

1,688

1,530

71,024

Massachusetts Subtotal

100.0 %

1,167

94.8 %

94.7 %

$2,946

$2,931

$6,508

$6,385

$223,351

Other










The Upton

100.0 %

193

88.8 %

87.7 %

$4,525

$4,637

$1,392

$1,320

$75,000

The James*

100.0 %

240

93.8 %

94.5 %

3,148

3,113

1,535

1,365

—

Signature Place*

100.0 %

197

96.1 %

93.7 %

3,201

3,210

1,022

978

—

Quarry Place at Tuckahoe

100.0 %

108

98.1 %

97.1 %

4,293

4,436

723

815

41,000

Riverpark at Harrison

45.0 %

141

97.2 %

93.6 %

2,823

2,923

570

526

30,192

Metropolitan at 40 Park1

25.0 %

130

95.6 %

92.8 %

3,722

3,750

731

735

34,100

Station House

50.0 %

378

94.7 %

93.4 %

3,017

2,851

1,705

1,627

87,883

Other Subtotal

73.8 %

1,387

94.5 %

93.1 %

$3,421

$3,411

$7,678

$7,366

$268,175

Operating Portfolio23

85.2 %

7,621

95.1 %

95.1 %

$3,980

$3,923

$57,616

$54,356

$1,856,965


1 As of September 30, 2024, Priority Capital included Metropolitan at $23.3 million (Prudential).

2 Rental revenue associated with retail leases is included in the NOI disclosure above. Total sf outlined on Annex 6: Multifamily Operating Portfolio excludes approximately 189,367 sqft of ground floor retail, of which 142,739 sf was leased as of September 30, 2024.

3 See Unconsolidated Joint Ventures and Annex 6: Multifamily Operating Portfolio for more details.

*Properties that are currently in the collateral pool for the Term Loan and Revolving Credit Facility.


See Non-GAAP Financial Definitions.

 

Commercial Assets and Developable Land

($ in thousands)

 

 

Commercial

Location

Ownership

Rentable

SF

Percentage

Leased

3Q 2024

Percentage

Leased

2Q 2024

NOI

3Q 2024

NOI

2Q 2024

Debt

Balance

Port Imperial Garage South

Weehawken, NJ

70.0 %

320,426

N/A

N/A

$590

$591

$31,237

Port Imperial Garage North

Weehawken, NJ

100.0 %

304,617

N/A

N/A

12

(1)

—

Port Imperial Retail South

Weehawken, NJ

70.0 %

18,064

92.0 %

92.0 %

115

77

—

Port Imperial Retail North

Weehawken, NJ

100.0 %

8,400

100.0 %

100.0 %

46

127

—

Riverwalk at Port Imperial

West New York, NJ

100.0 %

29,923

80.0 %

80.0 %

164

111

—

Shops at 40 Park1

Morristown, NJ

25.0 %

50,973

69.0 %

69.0 %

(46)

656

6,010

Commercial Total


80.9 %

732,403

78.4 %

78.4 %

$881

$1,561

$37,247

 

Developable Land Parcel Units2

NJ Waterfront

2,351

Massachusetts

849

Other

939

Developable Land Parcel Units Total       

4,139


1 The Company sold this joint venture on October 22, 2024.

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


See Non-GAAP Financial Definitions.

                                                           

Same Store Market Information1


Sequential Quarter Comparison

(NOI in thousands)  














NOI at Share

Occupancy

Blended Lease Rate2


Apartments

3Q 2024

2Q 2024

Change

3Q 2024

2Q 2024

Change

3Q 2024

2Q 2024

Change

New Jersey Waterfront

5,067

$38,836

$36,180

7.3 %

95.3 %

95.7 %

(0.4) %

6.6 %

6.0 %

0.6 %

Massachusetts

1,167

6,765

6,636

1.9 %

94.8 %

94.7 %

0.1 %

0.7 %

5.0 %

(4.3) %

Other3

1,387

6,218

6,135

1.4 %

94.5 %

93.1 %

1.4 %

0.5 %

3.0 %

(2.5) %

Total

7,621

$51,819

$48,951

5.9 %

95.1 %

95.1 %

— %

4.6 %

5.4 %

(0.8) %

 

Year-over-Year Third Quarter Comparison

(NOI in thousands) 














NOI at Share

Occupancy

Blended Lease Rate2 


Apartments

3Q 2024

3Q 2023

Change

3Q 2024

3Q 2023

Change

3Q 2024

3Q 2023

Change

New Jersey Waterfront

5,067

$38,836

$34,591

12.3 %

95.3 %

95.9 %

(0.6) %

6.6 %

10.3 %

(3.7) %

Massachusetts

1,167

6,765

6,822

(0.8) %

94.8 %

94.1 %

0.7 %

0.7 %

7.3 %

(6.6) %

Other3

1,387

6,218

6,376

(2.5) %

94.5 %

94.2 %

0.3 %

0.5 %

8.3 %

(7.8) %

Total

7,621

$51,819

$47,789

8.4 %

95.1 %

95.3 %

(0.2) %

4.6 %

9.6 %

(5.0) %

 

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










Apartments

3Q 2024

2Q 2024

1Q 2024

4Q 2023

3Q 2023

2Q 2023

New Jersey Waterfront

5,067

$4,371

$4,291

$4,274

$4,219

$4,084

$4,048

Massachusetts

1,167

2,946

2,931

2,893

2,925

2,918

2,836

Other3

1,387

3,421

3,411

3,374

3,307

3,350

3,356

Total

7,621

$3,980

$3,923

$3,899

$3,855

$3,772

$3,736


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.

See Non-GAAP Financial Definitions.

                     

Same Store Performance 

 ($ in thousands)

 


Multifamily Same Store1
















Three Months Ended September 30,


Nine Months Ended September 30,


Sequential


2024

2023

Change

%


2024

2023

Change

%


3Q24

2Q24

Change

%

Apartment Rental Income

$68,830

$66,061

$2,769

4.2 %


$203,111

$192,212

$10,899

5.7 %


$68,830

$67,584

$1,246

1.8 %

Parking/Other Income

7,013

6,887

126

1.8 %


21,569

20,015

1,554

7.8 %


7,013

7,161

(148)

(2.1) %

Total Property Revenues2

$75,843

$72,948

$2,895

4.0 %


$224,680

$212,227

$12,453

5.9 %


$75,843

$74,745

$1,098

1.5 %

Marketing & Administration

2,447

2,520

(73)

(2.9) %


7,120

7,188

(68)

(0.9) %


2,447

2,535

(88)

(3.5) %

Utilities

2,503

2,415

88

3.6 %


7,265

6,894

371

5.4 %


2,503

2,188

315

14.4 %

Payroll

4,399

4,666

(267)

(5.7) %


13,012

13,297

(285)

(2.1) %


4,399

4,315

84

1.9 %

Repairs & Maintenance

4,103

3,942

161

4.1 %


12,102

11,042

1,060

9.6 %


4,103

4,386

(283)

(6.5) %

Controllable Expenses

$13,452

$13,543

$(91)

(0.7) %


$39,499

$38,421

$1,078

2.8 %


$13,452

$13,424

$28

0.2 %

Other Fixed Fees

755

763

(8)

(1.0) %


2,188

2,216

(28)

(1.3) %


755

712

43

6.0 %

Insurance

703

1,163

(460)

(39.6) %


4,264

4,724

(460)

(9.7) %


703

1,781

(1,078)

(60.5) %

Real Estate Taxes

9,114

9,670

(556)

(5.7) %


28,571

26,190

2,381

9.1 %


9,114

9,877

(763)

(7.7) %

Non-Controllable Expenses

$10,572

$11,596

$(1,024)

(8.8) %


$35,023

$33,130

$1,893

5.7 %


$10,572

$12,370

$(1,798)

(14.5) %

Total Property Expenses

$24,024

$25,139

$(1,115)

(4.4) %


$74,522

$71,551

$2,971

4.2 %


$24,024

$25,794

$(1,770)

(6.9) %

Same Store GAAP NOI

$51,819

$47,809

$4,010

8.4 %


$150,158

$140,676

$9,482

6.7 %


$51,819

$48,951

$2,868

5.9 %

Real Estate Tax Adjustments3

—

20

(20)



—

1,689

(1,689)



—

—

—


Normalized Same Store NOI

$51,819

$47,789

$4,030

8.4 %


$150,158

$138,987

$11,171

8.0 %


$51,819

$48,951

$2,868

5.9 %
















Normalized SS NOI Margin

68.3 %

65.5 %

2.8 %



66.8 %

65.5 %

1.3 %



68.3 %

65.5 %

2.8 %


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 %

95.3 %

(0.2) %



95.1 %

95.3 %

(0.2) %



95.1 %

95.1 %

— %



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.

 

Debt Profile

($ in thousands)



Lender

Effective

Interest Rate(1)

September 30, 2024

December 31, 2023

Date of

Maturity

Repaid Permanent Loans in 2024






Soho Lofts(2)

Flagstar Bank

3.77 %

—

158,777

07/01/29

145 Front at City Square(3)

US Bank

SOFR+1.84%

—

63,000

12/10/26

Signature Place(4)

Nationwide Life Insurance Company

3.74 %

—

43,000

08/01/24

Liberty Towers(5)

American General Life Insurance Company

3.37 %

—

265,000

10/01/24

Repaid Permanent Loans in 2024



$—

$529,777


Secured Permanent Loans






Portside 2 at East Pier

New York Life Insurance Co.

4.56 %

95,827

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 %

116,016

117,000

08/10/26

Portside at East Pier(6)

KKR

SOFR + 2.75%

56,500

56,500

09/07/26

The Upton(7)

Bank of New York Mellon

SOFR + 1.58%

75,000

75,000

10/27/26

RiverHouse 9(8)

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 %

31,237

31,645

12/01/29

The Emery

Flagstar Bank

3.21 %

71,024

72,000

01/01/31

Secured Permanent Loans Outstanding



$1,335,665

$1,339,206


Secured and/or  Repaid Permanent Loans



$1,335,665

$1,868,983


Unamortized Deferred Financing Costs



(11,329)

(15,086)


Secured Permanent Loans



$1,324,336

$1,853,897


Secured RCF & Term Loans:






Revolving Credit Facility(9)

Various Lenders

SOFR + 2.71%

$157,000

$—

04/22/27

Term Loan(9)

Various Lenders

SOFR + 2.71%

200,000

—

04/22/27

RCF & Term Loan Balances



$357,000

$—


Unamortized Deferred Financing Costs



(3,420)

—


Total RCF & Term Loan Debt



$353,580

$—


Total Debt



$1,677,916

$1,853,897



See Debt Profile Footnotes.

           

Debt Summary and Maturity Schedule

($ in thousands)


As of September 30, 99.6% 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 4.96% and a weighted average maturity of 3.3 years.



Balance

%

of Total

Weighted Average

Interest Rate

Weighted Average

Maturity in Years

Fixed Rate & Hedged Debt





Fixed Rate & Hedged Secured Debt

$1,685,665

99.6 %

4.93 %

3.0

Variable Rate Debt





Variable Rate Debt1

7,000

0.4 %

7.65 %

2.6

Totals / Weighted Average

$1,692,665

100.0 %

4.94 %

3.0

Unamortized Deferred Financing Costs

(14,749)




Total Consolidated Debt, net

$1,677,916




Partners' Share

(72,941)




VRE Share of Total Consolidated Debt, net2

$1,604,975









Unconsolidated Secured Debt





VRE Share

$295,863

53.0 %

4.88 %

4.5

Partners' Share

262,684

47.0 %

4.88 %

4.5

Total Unconsolidated Secured Debt

$558,547

100.0 %

4.88 %

4.5






Pro Rata Debt Portfolio





Fixed Rate & Hedged Secured Debt

$1,907,280

99.6 %

4.95 %

3.3

Variable Rate Secured Debt

8,503

0.4 %

7.59 %

2.2

Total Pro Rata Debt Portfolio

$1,915,783

100.0 %

4.96 %

3.3

 

Debt Maturity Schedule as of September 3034 



2024

2025

2026

2027

2028

2029

2030

2031

Secured Debt



$474

$316

$343

$131


$71

Term Loan Draw





$200




Revolver





$157




Unused Revolver Capacity





$143





1 Variable rate debt includes the unhedged balance on the Revolver.

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 Term Loan, Revolver and Unused Revolver Capacity are are shown with the one-year extension option utilized on the new facilities. At quarter end, the Term Loan was fully drawn and hedged at a strike of 3.5%, expiring July 2026. The Revolver is partially capped with $150 million notional capped at a strike rate of 3.5%, expiring in June 2025.

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

Retail






Shops at 40 Park2

Morristown, NJ

10/22/2024

1

50,973

$15,700

Subtotal Retail



1

50,973

$15,700




2024 Dispositions to Date

$222,600


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

2 The joint venture sold the property for $15.7 million, of which the Company did not receive any net proceeds after repayment of property-level debt,, selling expenses, and preferred return to our joint venture partner.

 

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



3Q 2024


2Q 2024


Total


Total

Net Income (Loss)

$                 (10,907)


$                     2,735

Deduct:




Income from discontinued operations

(206)


(1,419)

Management Fees

(794)


(871)

Interest and other investment income

(181)


(1,536)

Equity in (earnings) loss of unconsolidated joint ventures

268


(2,933)

(Gain) loss on disposition of developable land

—


(10,731)

(Gain) loss from extinguishment of debt, net

(8)


785

Other income, net

310


250

Add:




Property management

3,762


4,366

General and administrative

8,956


8,975

Transaction related costs

—


890

Depreciation and amortization

21,159


20,316

Interest expense

21,507


21,676

Provision for income taxes

39


176

Net Operating Income (NOI)

$                   41,286


$                   42,679

 

Summary of Consolidated Multifamily NOI by Type (unaudited):

3Q 2024


2Q 2024

Total Consolidated Multifamily - Operating Portfolio

$                   43,477


$                   40,864

Total Consolidated Commercial

927


905

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

$                   44,404


$                   41,769

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

427


1,166

Total Consolidated Multifamily NOI

$                   44,831


$                   42,935






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



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 September 30, 2024 and 2023, respectively, and $7.5 million and $7.7 million for the nine months ended September 30, 2024 and 2023, respectively. Excludes non-real estate-related depreciation and amortization of $0.2 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and $0.6 million and $0.8 million for the nine months ended September 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.

3.

Includes the Company's share from unconsolidated joint ventures of $58 thousand and $40 thousand for the three months ended September 30, 2024 and 2023, respectively, and ($35) thousand and $26 thousand for the nine months ended September 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 8,684 and 8,748 shares for the three months ended September 30, 2024 and 2023, respectively, and 8,689 and 9,007 for the nine months ended September 30, 2024 and 2023, respectively, plus dilutive Common Stock Equivalents (i.e. stock options).

7.

Includes the Company's share from unconsolidated joint ventures of $72 thousand for the three months and nine months ended September 30, 2024.



  See Consolidated Statement of Operations.

  See FFO, Core FFO and Core AFFO.

  See Adjusted EBITDA.

 

Annex 4: Unconsolidated Joint Ventures

($ in thousands)

 


Property

Units

Physical

Occupancy

VRE's Nominal

Ownership1

3Q 2024

NOI2

Total

Debt

VRE Share

of 3Q NOI

VRE Share

of Debt

Multifamily








Urby Harborside

762

96.5 %

85.0 %

$5,866

$183,362

$4,986

$155,858

RiverTrace at Port Imperial

316

95.3 %

22.5 %

2,113

82,000

475

18,450

Capstone at Port Imperial

360

94.4 %

40.0 %

3,154

135,000

1,262

54,000

Riverpark at Harrison

141

97.2 %

45.0 %

570

30,192

257

13,586

Metropolitan at 40 Park

130

95.6 %

25.0 %

731

34,100

183

8,525

Station House

378

94.7 %

50.0 %

1,705

87,883

853

43,942

Total Multifamily

2,087

95.6 %

55.0 %

$14,139

$552,537

$8,015

$294,361

Retail








Shops at 40 Park3

N/A

69.0 %

25.0 %

(46)

6,010

(12)

1,503

Total Retail

N/A

69.0 %

25.0 %

$(46)

$6,010

$(12)

$1,503

Total UJV

2,087


55.0 %

$14,093

$558,547

$8,003

$295,863


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

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

3 The Company sold this joint venture on October 22, 2024.

 

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, through a $55 million Term Loan draw.

3.

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

4.

The loan on Signature Place was repaid in full at maturity on August 1, 2024, through a $43 million Term Loan draw.

5.

The loan on Liberty Towers was repaid in full at maturity on September 30, 2024, through a combination of a $102 million Term Loan draw,  $157 million Revolver draw and cash on hand.

6.

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

7.

The loan on Upton is capped at a strike rate of 1.0%, expiring in October 2024. The Company intends to place a new cap on this loan at expiration.

8.

The loan on RiverHouse 9 is capped at a strike rate of 3.5%, expiring in July 2026.

9.

The Company's facilities consist of a $300 million Revolver and $200 million delayed-draw Term Loan and are supported by a group of eight lenders. The eight lenders consists of JP Morgan Chase and Bank of New York Mellon as Joint Bookrunners; Bank of America Securities, Capital One, Goldman Sachs Bank USA, and RBC Capital Markets as Joint Lead Arrangers; and Associated Bank and Eastern Bank as participants. The facilities have a three-year term ending April 2027,  with a one-year extension option. The Term Loan was accessed three times ($55 million in June, $43 million in August and $102 million in September) and was fully drawn as of September 30, 2024. The three Term Loan tranches are capped at a strike rate of 3.5%, expiring in July 2026. As of September 30, 2024, the Revolver was $157 million drawn, of which $150 million was capped at a strike rate of 3.5%, expiring in June 2025.

                                       


Balance as of
September 30,
2024

Initial
Spread

Deferred
Financing
Costs

5 bps
reduction
KPI

Updated
Spread

SOFR or
SOFR Cap

All In
Rate

Secured Revolving Credit Facility (Unhedged)

$7,000,000

2.10 %

0.66 %

(0.05) %

2.71 %

4.94 %

7.65 %

Secured Revolving Credit Facility

$150,000,000

2.10 %

0.66 %

(0.05) %

2.71 %

3.50 %

6.21 %

Secured Term Loan

$200,000,000

2.10 %

0.66 %

(0.05) %

2.71 %

3.50 %

6.21 %


See 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 %

412

369,515

897

2003

BLVD 425

Jersey City, NJ

100.0 %

523

475,459

909

2011

BLVD 475

Jersey City, NJ

74.3 %

311

273,132

878

2016

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

862

2015

Portside 2 at East Pier

East Boston, MA

100.0 %

296

230,614

779

2018

145 Front at City Square

Worcester, MA

100.0 %

365

304,936

835

2018

The Emery

Revere, MA

100.0 %

326

273,140

838

2020

Massachusetts Subtotal


100.0 %

1,167

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 Portfolio1


85.2 %

7,621

6,635,610

871





See Multifamily Operating Portfolio.




1 Total sf outlined excludes approximately 189,367 sqft of ground floor retail, of which 142,739 sf was leased as of September 30, 2024.

 

Annex 7: Noncontrolling Interests in Consolidated Joint Ventures



Three Months Ended September 30,


Nine Months Ended September 30,


2024

2023


2024

2023

BLVD 425

$              155

$                59


$              327

$              130

BLVD 401

(528)

(672)


(1,687)

(1,919)

Port Imperial Garage South

12

21


(3)

(40)

Port Imperial Retail South

5

21


34

84

Other consolidated joint ventures

(35)

(21)


(100)

(70)

Net losses in noncontrolling interests

$            (391)

$            (592)


$          (1,429)

$          (1,815)

Depreciation in noncontrolling interests

721

715


2,179

2,141

Funds from operations - noncontrolling interest in consolidated joint ventures

$              330

$              123


$              750

$              326

Interest expense in noncontrolling interest in consolidated joint ventures

787

790


2,359

2,374

Net operating income before debt service in consolidated joint ventures

$           1,117

$              913


$           3,109

$           2,700


See Adjusted EBITDA .

 

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, 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.

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 was Veris Residential's (VRE) Core FFO per share in Q3 2024?

Veris Residential's Core FFO per share was $0.17 in Q3 2024, compared to $0.12 in Q3 2023.

What is VRE's revised Core FFO guidance for 2024?

Veris Residential raised its Core FFO guidance for 2024 to a range of $0.59-$0.60 per share.

What was VRE's Same Store occupancy rate in Q3 2024?

Veris Residential maintained a Same Store occupancy rate of 95.1% in Q3 2024.

How much did VRE reduce its net debt since September 2023?

Veris Residential reduced its net debt by approximately $227 million since September 30, 2023.

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Veris Residential, Inc.

NYSE:VRE

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VRE Latest News

Nov 13, 2024
Veris Residential Declares Quarterly Cash Dividend
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 24, 2024
Veris Residential, Inc. Reports Second Quarter 2024 Results
Jul 8, 2024
Veris Residential, Inc. Announces Dates for Second Quarter 2024 Financial Results and Webcast

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