Veris Residential, Inc. Reports Fourth Quarter and Full Year 2023 Results

Veris Residential, Inc. Reports Fourth Quarter and Full Year 2023 Results

PR Newswire

JERSEY CITY, N.J., Feb. 21, 2024 /PRNewswire/ -- Veris Residential, Inc. (NYSE: VRE) (the "Company"), a forward-thinking, environmentally and socially conscious multifamily REIT, today reported results for the fourth quarter and full year 2023.


Three Months Ended December 31,


Twelve Months Ended December 31,


2023

2022


2023

2022

Net Income (Loss) per Diluted Share

$(0.06)

$0.34


$(1.22)

$(0.63)

Core FFO per Diluted Share

$0.12

$0.05


$0.53

$0.44

Dividends Declared per Share

$0.0525

$—


$0.1025

$—

 

ANOTHER YEAR OF OPERATIONAL OUTPERFORMANCE

  • Grew Core FFO per share to $0.53, an increase of 20% compared to last year.
  • Exceeded upper end of NOI guidance, achieving 17.6% annual growth, driven by strong revenue growth and effective expense mitigation measures.
  • Further improved NOI margin to 64% from 62% in 2022 and 57% in 2021.
  • Same Store multifamily Blended Net Rental Growth Rate of 5.0% for the quarter and 9.3% for the year.
  • Reduced Core G&A by 13% compared to 2022.
  • Reinstated quarterly dividend, subsequently raising it by 5% in the fourth quarter.
  • Recognized by Nareit for leadership in sustainability and DEI efforts.

COMPLETED TRANSFORMATION TO A PURE-PLAY MULTIFAMILY REIT 

  • Sold over $700 million of non-strategic assets since the beginning of 2023, comprising eight properties and four land parcels.
  • Signed a binding contract to sell Harborside 5, our last office property, for $85 million in January 2024.
  • Negotiated the early redemption of Rockpoint's preferred interest for $520 million.
  • Refinanced $400 million of debt and reduced overall indebtedness by $50 million.

 


December 31, 2023

December 31, 2022

% Change

Operating Units

7,681

6,931

10.8 %

% Physical Occupancy

94.4 %

95.3 %

(1.0) %

Same Store Units

6,691

5,825

14.9 %

Same Store Occupancy

94.4 %

95.6 %

(1.3) %

Same Store Blended Rental Growth Rate

5.0 %

11.7 %

(57.3) %

Average Rent per Home

$3,792

$3,482

8.9 %

 

Mahbod Nia, Chief Executive Officer, commented: "Over the past three years, we have successfully transformed Veris Residential from a complex company to a pure-play multifamily REIT underpinned by a high-quality portfolio of Class A properties and a vertically integrated, best-in-class operating platform. While we have built a strong foundation to date, the potential for continued value creation and relative outperformance as we mature as a multifamily company is tremendous. We look forward to this next phase, during which we will work to further optimize our operations, capital and balance sheet to the benefit of our stakeholders."

SAME STORE PORTFOLIO PERFORMANCE


2023 Actual Growth

Original Guidance
Range for 2023

Adjusted Guidance
Range from Previous
Quarter

Same Store Revenue Growth

11.0 %

4-6%

9-10%

Same Store Expense Growth

0.4 %

4-6%

2-3%

Same Store NOI Growth

17.6 %

4-6%

14-15%

The following table presents a more detailed breakout of Same Store performance:


Three Months Ended December 31,


Twelve Months Ended December 31,


2023

2022

%


2023

2022

%

Total Property Revenue

$61,497

$57,133

7.6 %


$241,078

$217,284

11.0 %

Controllable Expenses

11,729

11,191

4.8 %


44,558

42,773

4.2 %

Non-Controllable Expenses

10,693

12,169

(12.1) %


40,260

41,669

(3.4) %

Total Property Expenses

22,422

23,360

(4.0) %


84,818

84,442

0.4 %

Same Store NOI

$39,075

$33,773

15.7 %


$156,260

$132,842

17.6 %

Haus25 and The James will be added to the Same Store pool in the first quarter of this year. These properties contributed over $8 million to NOI in the fourth quarter.

TRANSACTION ACTIVITY

In 2023, the Company closed over $660 million of non-strategic sales, including two hotel properties, five office properties and three land plots.

Quarter

Gross Price (000s)

1Q

$105,000

2Q

$420,000

3Q

$46,000

4Q

$89,000

In October 2023, the Company closed on the sales of Harborside 4, 3 Campus and 23 Main for a combined gross price of $89 million, releasing approximately $82 million in net proceeds.

Subsequent to year end, the Company closed on the sales of 2 Campus and The Metropolitan Lofts joint venture for a combined gross price of $40 million, releasing approximately $16 million in net proceeds.

Currently, $139 million of non-strategic assets remain under binding contract, including our last office property, Harborside 5.

FINANCE AND LIQUIDITY

As of February 20, 2024, available liquidity is approximately $95 million, taking into account cash on hand and the capacity of the Revolving Credit Facility ("Revolver"). Virtually all (99.9%) of the Company`s debt is hedged or fixed. The Company`s total debt portfolio has a weighted average rate of 4.5% and weighted average maturity of 3.7 years.


Three Months Ended December 31,

Balance Sheet Metric

2023

2022

Weighted Average Interest Rate

4.5 %

4.4 %

Weighted Average Years to Maturity

3.7 years

4.1 years

Net-Debt-to-Adjusted EBITDA

13.8x

13.5x

Annualized Adjusted EBITDA

129,992

137,892

Interest Coverage Ratio

1.5x

1.5x

In the fourth quarter, the Company reestablished an "ATM" (At-the-Market) program, through which the Company may issue and sell, from time to time, up to $100 million of shares of its common stock. The Company intends to use net proceeds from any sales of these shares under the ATM program for general corporate purposes.

The $60 million Revolver remains undrawn as of February 20, 2024.

ESG

Throughout the fourth quarter, the Company earned recognition from top real estate and business organizations for leadership in ESG, DEI and corporate stewardship. Most significantly, the Company was named a Leader in the Light by Nareit for superior sustainability efforts in the residential sector. The achievement partially reflects the results of the GRESB Annual Survey, through which the Company was honored as a Global Listed and Regional Sector Leader with a second-consecutive 5 Star rating. The Company was also awarded Nareit's Bronze Diversity, Equity & Inclusion Recognition.

DIVIDEND POLICY

As previously announced, the Company`s Board of Directors declared a quarterly dividend on its common stock for the fourth quarter 2023 in the amount of $0.0525 per share, an increase of 5% from the previous dividend. The dividend was paid on January 10th.

OPERATIONAL GUIDANCE

Recognizing the tremendous operational outperformance realized in 2023 while also considering the state of the current market and potential for Veris to achieve continued positive growth, the Company is establishing its 2024 guidance ranges in accordance with the following table:

2024 Guidance Ranges

Low


High

Same Store Revenue Growth

4.0 %

5.0 %

Same Store Expense Growth

5.0 %

6.0 %

Same Store NOI Growth

2.5 %

5.0 %

 

Core FFO per Share Guidance

Low


High

Net Loss per Share

$(0.40)

$(0.35)

Add back: Depreciation per Share

$0.88

$0.88

Core FFO per Share

$0.48

$0.53

CONFERENCE CALL/SUPPLEMENTAL INFORMATION 

An earnings conference call with management is scheduled for Thursday, February 22, 2024, at 8:30 a.m. Eastern Time and will be broadcast live via the Internet at: http://investors.verisresidential.com/.

The live conference call is also accessible by dialing (877) 451-6152 (domestic) or (201) 389-0879 (international) and requesting the Veris Residential fourth quarter 2023 earnings conference call.

The conference call will be rebroadcast on Veris Residential, Inc.'s website at:

http://investors.verisresidential.com/ beginning at 8:30 a.m. Eastern Time on Thursday, February 22, 2024.

A replay of the call will also be accessible Thursday, February 22, 2024, through Friday, March 22, 2024, by calling (844) 512-2921 (domestic) or (412) 317-6671 (international) and using the passcode, 13743562.

Copies of Veris Residential, Inc.'s 2023 Form 10-K and fourth quarter 2023 Supplemental Operating and Financial Data are available on Veris Residential, Inc.'s website: Financial Results.

In addition, once filed, these items will be available upon request from:

Veris Residential, Inc. Investor Relations Department

Harborside 3, 210 Hudson St., Ste. 400, Jersey City, New Jersey 07311

ABOUT THE COMPANY

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

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

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

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

Investors


Media

Anna Malhari


Amanda Shpiner/Grace Cartwright

Chief Operating Officer


Gasthalter & Co.

[email protected]


[email protected]

See additional details on Company Information.

  

Consolidated Balance Sheet

(in thousands) (unaudited)



December 31, 2023

December 31, 2022

ASSETS

Multifamily

Office/Corp.

Total


Rental property





Land and leasehold interests

$468,556

$5,943

$474,499

$492,204

Buildings and improvements

2,642,626

139,842

2,782,468

3,332,315

Tenant improvements

7,866

23,042

30,908

122,509

Furniture, fixtures and equipment

96,057

7,556

103,613

99,094


3,215,105

176,383

3,391,488

4,046,122

Less – accumulated depreciation and amortization

(345,386)

(98,395)

(443,781)

(631,910)


2,869,719

77,988

2,947,707

3,414,212

Real estate held for sale, net

58,608

58,608

193,933

Net investment in rental property

2,928,327

77,988

3,006,315

3,608,145

Cash and cash equivalents

6,685

21,322

28,007

26,782

Restricted cash

19,891

6,681

26,572

20,867

Investments in unconsolidated joint ventures

117,954

117,954

126,158

Unbilled rents receivable, net

1,558

3,942

5,500

39,734

Deferred charges and other assets, net12

43,392

10,564

53,956

96,162

Accounts receivable

1,796

946

2,742

2,920

Total Assets

$3,119,603

$121,443

$3,241,046

$3,920,768

LIABILITIES & EQUITY





Mortgages, loans payable and other obligations, net

1,853,897

1,853,897

1,903,977

Dividends and distributions payable

5,540

5,540

110

Accounts payable, accrued expenses and other liabilities

30,341

25,151

55,492

72,041

Rents received in advance and security deposits

11,590

3,395

14,985

22,941

Accrued interest payable

6,580

6,580

7,131

Total Liabilities

1,902,408

34,086

1,936,494

2,006,200

Redeemable noncontrolling interests

24,999

24,999

515,231

Total Stockholders'/Members Equity

1,182,056

(44,578)

1,137,478

1,235,685

Noncontrolling interests in subsidiaries:





Operating Partnership

107,206

107,206

126,109

Consolidated joint ventures

35,139

(270)

34,869

37,543

Total Noncontrolling Interests in Subsidiaries

$35,139

$106,936

$142,075

$163,652

Total Equity

$1,217,195

$62,358

$1,279,553

$1,399,337

Total Liabilities and Equity

$3,119,603

$121,443

$3,241,046

$3,920,768

_____________________________________________

1 Includes mark-to-market lease intangible net assets of $10,034 and mark-to-market lease intangible net liabilities of $298 as of 4Q 2023.  

2 Includes Prepaid Expenses and Other Assets attributable to Multifamily of $29,481 as follows: (i) deposits of $4,819, (i) other receivables of $14,544, (iii) other prepaid/assets of $8,882, and (iv) prepaid taxes of $1,236.

 

Consolidated Statement of Operations

(In thousands, except per share amounts) (unaudited) 12



Three Months Ended December 31,


Twelve Months Ended December 31,

REVENUES

2023

2022


2023

2022

Revenue from leases

$66,183

$60,032


$252,144

$206,052

Real estate services

1,084

888


3,868

3,581

Parking income

4,462

4,160


18,036

15,819

Other income

1,188

2,104


5,811

7,996

Total revenues

72,917

67,184


279,859

233,448

EXPENSES






Real estate taxes

11,077

12,447


40,810

39,112

Utilities

2,293

2,191


9,922

8,921

Operating services

16,364

13,443


57,925

52,797

Real estate services expenses

4,323

2,514


14,188

10,549

General and administrative

9,992

12,221


44,472

56,014

Transaction-related costs

576

2,119


7,627

3,468

Depreciation and amortization

23,046

23,619


93,589

85,434

Property impairments

32,516


32,516

Land and other impairments, net

5,928


9,324

9,368

Total expenses

106,115

68,554


310,373

265,663

OTHER (EXPENSE) INCOME






Interest expense

(21,933)

(21,215)


(89,355)

(66,381)

Interest cost of mandatorily redeemable noncontrolling interests


(49,782)

Interest and other investment income

232

102


5,515

729

Equity in earnings (loss) of unconsolidated joint ventures

260

(647)


3,102

1,200

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

(3)


Gain (loss) on disposition of developable land

7,090

(486)


7,068

57,262

    Loss from extinguishment of debt, net

(1,903)


(5,606)

(129)

Other income, net

77


2,871

Total other income (expense), net

(16,180)

(22,246)


(126,187)

(7,319)

Loss from continuing operations before income tax expense

(49,378)

(23,616)


(156,701)

(39,534)

Provision for income taxes

(199)


(492)

Loss from continuing operations after income tax expense

(49,577)

(23,616)


(157,193)

(39,534)

(Loss) income from discontinued operations

(140)

(12,547)


3,150

(64,704)

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

43,971

77,057


41,682

69,353

Total discontinued operations, net

43,831

64,510


44,832

4,649

Net (loss) income

(5,746)

40,894


(112,361)

(34,885)

Noncontrolling interest in consolidated joint ventures

504

595


2,319

3,079

Noncontrolling interests in Operating Partnership of income from continuing operations

4,252

2,723


14,267

5,652

Noncontrolling interests in Operating Partnership in discontinued operations

(3,776)

(5,975)


(3,872)

(378)

Redeemable noncontrolling interests

(285)

(6,366)


(7,618)

(25,534)

Net (loss) income available to common shareholders

$(5,051)

$31,871


$(107,265)

$(52,066)

Basic earnings per common share:






Net loss available to common shareholders

$(0.06)

$0.34


$(1.22)

$(0.63)

Diluted earnings per common share:






Net loss available to common shareholders

$(0.06)

$0.34


$(1.22)

$(0.63)

Basic weighted average shares outstanding

92,240

91,115


91,883

91,046

Diluted weighted average shares outstanding

100,936

100,417


100,812

100,265

_______________________________________________

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

2 For detailed contribution breakout see Consolidated Statement of Operations (Year-End)

 

FFO and Core FFO

(in thousands, except per share/unit amounts) 



Three Months Ended December 31,


Twelve Months Ended December 31,


2023

2022


2023

2022

Net income (loss) available to common shareholders

$(5,051)

$31,871


$(107,265)

$(52,066)

Add (deduct):  Noncontrolling interests in Operating Partnership

(4,252)

(2,723)


(14,267)

(5,652)

Noncontrolling interests in discontinued operations

3,776

5,975


3,872

378

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

25,428

25,949


103,049

95,103

Real estate-related depreciation and amortization on discontinued operations

5,036


5,335

26,370

Property impairments on continuing operations

32,516


32,516

Property impairments on discontinued operations

10,302


94,811

Discontinued operations: Gain on sale from unconsolidated joint ventures

(7,677)


(7,677)

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

3


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

(4,700)

(69,380)


(2,411)

(61,676)

FFO(2)

$47,720

$(647)


$20,829

$89,591







Add/(Deduct):






Loss from extinguishment of debt, net

1,903

1,014


5,618

7,432

Land and other impairments

5,928


9,324

9,368

Loss (gain) on disposition of developable land

(46,361)

486


(46,339)

(57,262)

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

129

1,836


7,987

14,080

Rebranding and Severance/Compensation related costs (RE Services)

829


1,128

Rebranding and Severance/Compensation related costs (Operating Services)


649

Rockpoint buyout premium


34,775

Redemption value adjustment to mandatorily redeemable noncontrolling interests


7,641

Lease breakage fee, net


(22,664)

Amortization of derivative premium

902

500


4,654

287

Transaction related costs

576

2,119


7,627

3,468

Core FFO

$11,626

$5,308


$53,893

$44,300







Diluted weighted average shares/units outstanding(6)

100,936

100,417


100,812

100,265







Funds from operations per share-diluted

$0.47

$(0.01)


$0.21

$0.89

Core Funds from Operations per share/unit-diluted

$0.12

$0.05


$0.53

$0.44

Dividends declared per common share

$0.0525


$0.1025

See Core FFO per Diluted Share.
See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.

 

AFFO and Adjusted EBITDA

($ in thousands, except per share amounts) (unaudited)



Three Months Ended December 31,


Twelve Months Ended December 31,


2023

2022


2023

2022

Core FFO (calculated on previous page)

$11,626

$5,308


$53,893

$44,300

Add (Deduct) Non-Cash Items:






Straight-line rent adjustments(3)

81

(1,273)


502

157

Amortization of market lease intangibles, net

(30)


(80)

(155)

Amortization of lease inducements

5

16


57

129

Amortization of stock compensation

3,270

2,829


12,995

11,339

Non-real estate depreciation and amortization

216

395


1,028

1,328

Amortization of deferred financing costs

1,255

1,219


4,440

4,821

Deduct:






Non-incremental revenue generating capital expenditures:






Building improvements

(1,670)

(3,748)


(8,348)

(14,992)

Tenant improvements and leasing commissions(4)

(229)

(255)


(789)

(10,773)

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

(659)

(4,546)


(1,205)

(23,823)

Core AFFO(2)

$13,895

$(85)


$62,493

$12,331







Core FFO (calculated on previous page)

$11,626

$5,308


$53,893

$44,300

Deduct:






Equity in (earnings) loss of unconsolidated joint ventures

(260)

647


(3,102)

(1,200)

Equity in earnings share of depreciation and amortization

(2,597)

(2,574)


(10,337)

(10,392)

Add-back:






Interest expense

21,933

23,171


90,177

78,040

Amortization of derivative premium

(902)

(500)


(4,654)

(287)

Recurring joint venture distributions

2,718

2,471


11,700

12,000

Noncontrolling interests in consolidated joint ventures

(504)

(595)


(2,319)

(3,079)

Interest cost of mandatorily redeemable noncontrolling interests


7,366

Redeemable noncontrolling interests

285

6,366


7,618

25,534

Provision for income taxes

199

179


492

274

Adjusted EBITDA

$32,498

$34,473


$150,834

$145,190







Net debt at period end(5)

1,799,318

1,856,328


1,799,318

1,856,328

Net debt to Adjusted EBITDA

13.8x

13.5x


11.9x

12.8x

See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.

 

EBITDAre (Quarterly Comparison)

($ in thousands) (unaudited)



Three Months Ended December 31,


2023

2022

Net income (loss) available to common shareholders

$(5,051)

$31,871

Add/(Deduct):



Noncontrolling interests in Operating Partnership of income from continuing operations

(4,252)

(2,723)

Noncontrolling interests in Operating Partnership in discontinued operations

3,776

5,975

Noncontrolling interests in consolidated joint ventures(a)

(504)

(595)

Redeemable noncontrolling interests

285

6,366

Interest expense

21,933

23,171

Provision for income taxes

199

179

Depreciation and amortization

23,046

28,806

Deduct:



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

3

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

(4,700)

(69,380)

Discontinued operations: Gain on sale from unconsolidated joint ventures

(7,677)

Equity in (earnings) loss of unconsolidated joint ventures

(260)

647

Add:



Property impairments

32,516

10,302

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

7,768

6,694

EBITDAre

$74,759

$33,636

Add:



Loss from extinguishment of debt, net

1,903

1,014

Severance and compensation-related costs

129

1,836

Transaction-related costs

576

2,119

Land and other impairments, net

5,928

Gain on disposition of developable land

(46,361)

486

Amortization of derivative premium

902

500

Adjusted EBITDAre

$37,836

$39,591

(a) Noncontrolling interests in consolidated joint ventures:



BLVD 425

72

6

BLVD 401

(568)

(600)

Port Imperial Garage South

(12)

Port Imperial Retail South

29

16

Other consolidated joint ventures

(25)

(17)

Net losses in noncontrolling interests

$(504)

$(595)

Depreciation in noncontrolling interest in consolidated joint ventures

712

708

Funds from operations - noncontrolling interest in consolidated joint ventures

$208

$113

Interest expense in noncontrolling interest in consolidated joint ventures

789

791

Net operating income before debt service in consolidated joint ventures

$997

$904

See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.

 

Components of Net Asset Value  

($ in thousands) 


Real Estate Portfolio


Other Assets







Operating Multifamily NOI1

 Total 

 At Share 


Cash and Cash Equivalents2

$34,673

New Jersey Waterfront

$156,400

$132,910


Restricted Cash

26,572

Massachusetts

25,280

25,280


Other Assets

62,198

Other3

29,996

22,123


Subtotal Other Assets

$123,443

Total Multifamily NOI

$211,676

$180,313




Commercial NOI4

6,396

5,174


Liabilities and Other Considerations


Total NOI

$218,072

$185,488








Operating - Consolidated Debt at Share

$1,795,667

Non-Strategic Assets


Operating - Unconsolidated Debt at Share2

298,679



Other Liabilities

82,597

Non-Strategic Assets Under Binding Contract5


$139,000


Revolving Credit Facility6

Estimated Land Value7


214,659


Term Loan6

Subtotal Non-Strategic Assets


$353,659


Preferred Units8

19,299





Subtotal Liabilities and Other Considerations

$2,196,242











Outstanding Shares9












Diluted Weighted Average Shares Outstanding for 4Q 2023

100,936,000







________________________________________________

1 See Multifamily Operating Portfolio page for more details.

2 Pro forma for transaction activity completed subsequent to quarter end.

3 Metropolitan Lofts was sold on January 12, 2024 and is not reflected in this line.

4 See Commercial, Developable Land & Other Non-Strategic Assets page for more details.

5 Represents the gross price of two assets, Harborside 5 and 107 Morgan.

6 In July 2023, the Company entered into a transitional $60 million Revolving Credit Facility and $115 million Term Loan agreement to fund the buyout of Rockpoint`s interest and provide corporate liquidity, The Revolving Credit Facility and Term Loan were both fully repaid in October 2023.

7 Based off 4,578 potential units, see Commercial, Developable Land & Other Non-Strategic Assets page for more details.

8 In February 2024, $5.7 million of units were redeemed, and the Company was notified that an additional $10.0 million would be redeemed, to be paid out in March. 

9 Common Shares Outstanding as of December 31, 2023 were 92,229,424. 

See Non GAAP Financial Definitions.

        

Multifamily Operating Portfolio

(in thousands, except Revenue per home) 





Operating Highlights




Percentage

Occupied

Average Revenue

per Home

NOI

Debt

Balance


Ownership

Apartments

4Q 2023

3Q 2023

4Q 2023

3Q 2023

4Q 2023

3Q 2023

NJ Waterfront










Haus25

100.0 %

750

94.1 %

94.8 %

$4,665

$4,437

$6,884

$6,759

$343,061

Liberty Towers

100.0 %

648

93.2 %

95.2 %

4,220

4,124

4,930

4,727

265,000

BLVD 401

74.3 %

311

97.4 %

96.8 %

4,138

4,077

2,427

2,372

117,000

BLVD 425

74.3 %

412

95.6 %

97.3 %

3,987

4,012

3,038

3,026

131,000

BLVD 475

100.0 %

523

96.5 %

98.2 %

4,078

4,021

4,180

3,799

165,000

Soho Lofts

100.0 %

377

94.4 %

92.0 %

4,627

4,648

2,616

2,753

158,777

Urby Harborside

85.0 %

762

92.3 %

95.3 %

4,014

3,946

5,370

5,490

185,742

RiverHouse 9

100.0 %

313

96.2 %

97.8 %

4,148

4,027

2,358

2,450

110,000

RiverHouse 11

100.0 %

295

94.6 %

96.3 %

4,177

4,123

2,140

2,422

100,000

RiverTrace

22.5 %

316

95.6 %

96.5 %

3,711

3,682

2,184

2,120

82,000

Capstone

40.0 %

360

95.0 %

96.4 %

4,379

4,354

2,973

3,086

135,000

NJ Waterfront Subtotal

85.0 %

5,067

94.6 %

95.9 %

$4,219

$4,143

$39,100

$39,004

$1,792,580

Massachusetts










Portside at East Pier

100.0 %

181

94.9 %

92.6 %

$3,174

$3,216

$1,163

$1,266

$56,500

Portside 2 at East Pier

100.0 %

296

96.2 %

95.8 %

3,384

3,268

2,034

2,024

97,000

145 Front at City Square

100.0 %

365

92.9 %

93.7 %

2,576

2,671

1,608

1,711

63,000

The Emery

100.0 %

326

92.3 %

93.9 %

2,760

2,711

1,515

1,565

72,000

Massachusetts Subtotal

100.0 %

1,168

93.9 %

94.1 %

$2,925

$2,918

$6,320

$6,566

$288,500

Other










The Upton

100.0 %

193

91.7 %

92.7 %

$4,752

$4,820

$1,475

$1,578

$75,000

The James

100.0 %

240

96.3 %

95.0 %

3,052

3,026

1,330

1,461

Signature Place

100.0 %

197

97.5 %

94.4 %

3,174

3,195

974

1,081

43,000

Quarry Place at Tuckahoe

100.0 %

108

93.5 %

93.5 %

4,321

4,293

709

714

41,000

Riverpark at Harrison

45.0 %

141

92.2 %

94.0 %

2,885

2,772

577

526

30,192

Metropolitan at 40 Park1

25.0 %

130

95.4 %

93.8 %

3,613

3,568

721

784

34,100

Metropolitan Lofts2

50.0 %

59

94.4 %

94.9 %

3,725

3,610

319

303

17,200

Station House

50.0 %

378

92.1 %

94.7 %

2,562

2,757

1,713

1,513

89,440

Other Subtotal

72.8 %

1,446

94.0 %

94.2 %

$3,324

$3,361

$7,818

$7,960

$329,932

Operating Portfolio34

85.0 %

7,681

94.4 %

95.3 %

$3,854

$3,809

$53,238

$53,530

$2,411,012

_________________________________________________

1 As of December 31, 2023, Priority Capital included Metropolitan at $23,314,422 (Prudential). The Company paid down the loan $2.4M in the fourth quarter. 

2 On January 12, 2024, the joint venture was sold for a gross valuation of approximately $30 million, VRE`s share of net proceeds was $6 million.

3 Operating Portfolio includes properties that have achieved over 95% leased for six consecutive weeks. Excludes approximately 190,525 sqft of ground floor retail of which 137,477 sf was leased as of December 31, 2023.

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

See Non GAAP Financial Definitions.

 

Commercial, Developable Land and Other Non-Strategic Assets 


($ in thousands) 

Commercial

Location

Ownership

Rentable

SF

Percentage

Leased

4Q 2023

Percentage

Leased

3Q 2023

NOI

4Q 2023

NOI

3Q 2023

Debt

Balance

Port Imperial Garage South

Weehawken, NJ

70.0 %

320,426

N/A

N/A

$517

$541

$31,645

Port Imperial Garage North

Weehawken, NJ

100.0 %

304,617

N/A

N/A

36

(33)

Port Imperial Retail South

Weehawken, NJ

70.0 %

18,064

100.0 %

100.0 %

185

173

Port Imperial Retail North

Weehawken, NJ

100.0 %

8,400

100.0 %

100.0 %

373

90

Riverwalk at Port Imperial

West New York, NJ

100.0 %

30,426

59.2 %

65.0 %

221

158

Shops at 40 Park

Morristown, NJ

25.0 %

50,973

69.0 %

69.0 %

267

281

6,067

Commercial Total


80.9 %

732,906

73.8 %

75.5 %

$1,599

$1,210

$37,712

 

Developable Land Parcels1

NJ Waterfront

3,134

Massachusetts

849

Other

1,378

Developable Land Parcels Total             

5,361

Under Binding Contract for Sale

783

Total Less Under Binding Contract

4,578

One in-service office asset remains in the portfolio:






Avg. Base Rent

+ Escalations

Building

Location

Total SF

Leased SF

% Leased2

Harborside 53

Jersey City, NJ

977,225

338,109

34.6 %

$44.28

Total Office Portfolio


977,225

338,109

34.6 %

$44.28

_____________________________________________

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

2 Harborside 5 has 42,964 SF of leased space expiring in 2024 and 28,856 SF expiring in 2025.

3 Harborside 5 is currently under binding contract for sale.

See Non GAAP Financial Definitions.

                                                  

Same Store Market Information1


Sequential Quarter Comparison

(NOI in thousands)   




NOI

Occupancy

Blended Lease Rate


Apartments

4Q 2023

3Q 2023

Change

4Q 2023

3Q 2023

Change

4Q 2023

3Q 2023

New Jersey Waterfront

4,317

$32,216

$32,245

(0.1) %

94.7 %

96.1 %

(1.4) %

6.3 %

10.3 %

Massachusetts

1,168

6,320

6,566

(3.7) %

93.9 %

94.1 %

(0.3) %

0.5 %

7.8 %

Other2

1,206

6,488

6,499

(0.2) %

93.5 %

94.1 %

(0.6) %

3.5 %

7.9 %

Total

6,691

45,024

45,310

(0.6) %

94.4 %

95.4 %

(1.1) %

5.0 %

9.4 %

 

Year-over-Year Fourth Quarter Comparison

(NOI in thousands)




NOI

Occupancy

Blended Lease Rate


Apartments

4Q 2023

4Q 2022

Change

4Q 2023

4Q 2022

Change

4Q 2023

4Q 2022

New Jersey Waterfront

4,317

$32,216

$27,409

17.5 %

94.7 %

95.7 %

(1.0) %

6.3 %

18.7 %

Massachusetts

1,168

6,320

5,676

11.3 %

93.9 %

94.9 %

(1.1) %

0.5 %

3.7 %

Other2

1,206

6,488

6,255

3.7 %

93.5 %

94.2 %

(0.7) %

3.5 %

10.1 %

Total

6,691

45,024

39,340

14.4 %

94.4 %

95.3 %

(0.9) %

5.0 %

14.4 %

 

Average Revenue per Home (based on 6,691 units)



4Q 2023

3Q 2023

2Q 2023

1Q 2023

4Q 2022

4Q 2021

New Jersey Waterfront

$4,142

$4,092

$4,014

$3,863

$3,765

$3,194

Massachusetts

2,925

2,918

2,836

2,812

2,769

2,444

Other2

3,378

3,427

3,453

3,326

3,275

2,795

Total

$3,792

$3,767

$3,708

$3,583

$3,503

$2,974

________________________________________________

1 All statistics are based off the current 6,691 unit Same Store pool. Same Store 4Q22 and 4Q21 were actually 5,825 units when initially reported.

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

See Non GAAP Financial Definitions.

 

Same Store Performance 

($ in thousands) 


Multifamily Same Store1
















Three Months Ended December 31,


Twelve Months Ended December 31,


Sequential


2023

2022

Change

%


2023

2022

Change

%


4Q 2023

3Q 2023

Change

%

Apartment Rental Income

$55,456

$51,275

$4,181

8.2 %


$216,873

$195,267

$21,606

11.1 %


$55,456

$55,316

$140

0.3 %

Parking/Other Income

6,041

5,858

183

3.1 %


24,205

22,017

2,188

9.9 %


6,041

6,182

(141)

(2.3) %

Total Property Revenues2

$61,497

$57,133

$4,364

7.6 %


$241,078

$217,284

$23,794

11.0 %


$61,497

$61,498

$(1)

— %

Marketing & Administration

2,100

2,237

(137)

(6.1)


7,862

7,638

224

2.9 %


2,100

2,076

24

1.2 %

Utilities

1,917

1,790

127

7.1 %


7,765

7,626

139

1.8 %


1,917

2,020

(103)

(5.1) %

Payroll

4,026

3,852

174

4.5 %


15,600

14,945

655

4.4 %


4,026

4,074

(48)

(1.2) %

Repairs & Maintenance

3,686

3,312

374

11.3 %


13,331

12,564

767

6.1 %


3,686

3,417

269

7.9 %

Controllable Expenses

$11,729

$11,191

$538

4.8 %


$44,558

$42,773

$1,785

4.2 %


$11,729

$11,587

$142

1.2 %

Other Fixed Fees

738

531

207

39.0 %


2,957

2,556

401

15.7 %


738

764

(26)

(3.4) %

Insurance

1,469

1,513

(44)

(2.9) %


5,386

5,249

137

2.6 %


1,469

945

524

55.4 %

Real Estate Taxes

8,486

10,125

(1,639)

(16.2) %


31,917

33,864

(1,947)

(5.7) %


8,486

8,764

(278)

(3.2) %

Non-Controllable Expenses

$10,693

$12,169

$(1,476)

(12.1) %


$40,260

$41,669

$(1,409)

(3.4) %


$10,693

$10,473

$220

2.1 %

Total Property Expenses

$22,422

$23,360

$(938)

(4.0) %


$84,818

$84,442

$376

0.4 %


$22,422

$22,060

$362

1.6 %

Same Store GAAP NOI

$39,075

$33,773

$5,302

15.7 %


$156,260

$132,842

$23,418

17.6 %


$39,075

$39,438

$(363)

(0.9) %

Real Estate Tax Adjustments3

(1,456)

1,456



1,689

(1,170)

2,859



20

(20)


Normalized Same Store NOI

$39,075

$35,229

$3,846

10.9 %


$154,571

$134,012

$20,559

15.3 %


$39,075

$39,418

$(343)

(0.9) %

Total Units

6,691

6,691




6,691

6,691




6,691

6,691



% Ownership

82.7 %

82.7 %




82.7 %

82.7 %




82.7 %

82.7 %



% Occupied - Quarter End

94.4 %

95.3 %

(0.9) %



94.4 %

95.3 %

(0.9) %



94.4 %

95.4 %

(1.0) %


____________________________________________

1 Values represent the Company`s pro rata ownership of the operating portfolio.

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

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

See Non GAAP Financial Definitions.

 

Debt Profile

($ in thousands)



Lender

Effective

Interest Rate(1)

December 31, 2023

December 31, 2022

Date of

Maturity

Secured Permanent Loans






Port Imperial Hotels(2)

Fifth Third Bank

N/A

$—

$84,000

N/A

Signature Place

Nationwide Life Insurance Company

3.74 %

43,000

43,000

08/01/24

Liberty Towers

American General Life Insurance Company

3.37 %

265,000

265,000

10/01/24

Portside 2 at East Pier

New York Life Insurance Co.

4.56 %

97,000

97,000

03/10/26

BLVD 425

New York Life Insurance Co.

4.17 %

131,000

131,000

08/10/26

BLVD 401

New York Life Insurance Co.

4.29 %

117,000

117,000

08/10/26

Portside at East Pier(3)

KKR

SOFR + 2.75%

56,500

58,998

09/07/26

The Upton(4)

Bank of New York Mellon

SOFR + 1.58%

75,000

75,000

10/27/26

145 Front at City Square(5)

US Bank

SOFR + 1.84%

63,000

63,000

12/10/26

RiverHouse 9(6)

JP Morgan

SOFR + 1.41%

110,000

110,000

06/21/27

Quarry Place at Tuckahoe

Natixis Real Estate Capital, LLC

4.48 %

41,000

41,000

08/05/27

BLVD 475

The Northwestern Mutual Life Insurance Co.

2.91 %

165,000

165,000

11/10/27

Haus25(7)

Freddie Mac

6.04 %

343,061

297,324

09/01/28

RiverHouse 11

The Northwestern Mutual Life Insurance Co.

4.52 %

100,000

100,000

01/10/29

Soho Lofts

New York Community Bank

3.77 %

158,777

160,000

07/01/29

Port Imperial Garage South

American General Life & A/G PC

4.85 %

31,645

32,166

12/01/29

The Emery

New York Community Bank

3.21 %

72,000

72,000

01/01/31

Principal Balance Outstanding



$1,868,983

$1,911,488


Unamortized Deferred Financing Costs



(15,086)

(7,511)


Total Secured Permanent Loans



$1,853,897

$1,903,977








Secured RCF & Term Loans:






Revolving Credit Facility(8)

JP Morgan & Goldman Sachs

SOFR + 3.85%

$—

$—

07/25/24

Term Loan(8)

JP Morgan & Goldman Sachs

SOFR + 3.85%

07/25/24

Total RCF & Term Loan Debt



$—

$—


Total Debt



$1,853,897

$1,903,977


See Debt Profile Footnotes.

 

Debt Summary and Maturity Schedule

99.9% of the Company`s total pro forma debt portfolio (consolidated and unconsolidated) is hedged or fixed. The Company`s total debt portfolio has a weighted average interest rate of 4.5% and a weighted average maturity of 3.7 years.                         

($ in thousands)


Balance

%

of Total

Weighted Average

Interest Rate

Weighted Average

Maturity in Years

Fixed Rate & Hedged Debt





Fixed Rate & Hedged Secured Debt

$1,868,983

100.0 %

4.34 %

3.5

Variable Rate Debt1





Variable Rate Debt

— %

— %

Totals / Weighted Average

$1,868,983

100.0 %

4.34 %

3.5

Unamortized Deferred Financing Costs

(15,086)




Total Consolidated Debt, net

$1,853,897




Partners' Share

(73,316)




VRE Share of Total Consolidated Debt, net2

$1,780,581









Unconsolidated Secured Debt





VRE Share

$307,279

53.0 %

4.83 %

4.6

Partners' Share

272,462

47.0 %

4.83 %

4.6

Total Unconsolidated Secured Debt

$579,741

100.0 %

4.83 %

4.6






Pro Rata Debt Portfolio





Fixed Rate & Hedged Secured Debt

$2,092,828

99.9 %

4.46 %

3.7

Variable Rate Secured Debt

1,517

0.1 %

7.31 %

1.0

Total Pro Rata Debt Portfolio

$2,094,345

100.0 %

4.47 %

3.7

_____________________________________________

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

2 Minority interest share of consolidated debt is comprised of $33.7 million at BLVD 425, $30.1 million at BLVD 401 and $9.5 million at Port Imperial South Garage.

 



Pro Forma Debt Portfolio Reconciliation



4Q 2023

Total Consolidated Debt, net on 12/31

$1,868,983

Partners Share of Consolidated Debt on 12/31

(73,316)

VRE Share of Consolidated Debt on 12/31

$1,795,667

VRE Share of Total Unconsolidated Debt on 12/31

307,279

Metropolitan Lofts Sale (VRE Share of Debt Extinguishment)

(8,601)

VRE Share of Unconsolidated Secured Debt

$298,678

Total Pro Rata Debt Portfolio

$2,094,345

 

Annex 1: Transaction Activity


2023






$ in thousands except per SF


Location

Transaction

Date

Number of

Buildings

SF

Gross Asset

Value

Hotels






Port Imperial Hotels

Weehawken, NJ

2/10/2023

2

N/A

$97,000

Subtotal Hotels



2


$97,000

Office






Harborside 1, 2, & 3

Jersey City, NJ

4/04/2023

3

1,886,800

$420,000

Harborside 6

Jersey City, NJ

9/13/2023

1

231,856

46,000

23 Main Street

Holmdel, NJ

10/13/2023

1

350,000

17,500

Subtotal Office



5

2,468,656

$483,500

Land






101 Columbia Rd.

Morris Plains, NJ

3/17/2023

N/A

N/A

$8,300

Harborside 4

Jersey City, NJ

10/05/2023

N/A

N/A

58,000

3 Campus Drive

Jersey City, NJ

10/12/2023

N/A

N/A

13,500

Subtotal Land





$79,800




2023 Total Dispositions

$660,300

 

2024 Dispositions to Date






$ in thousands except per SF


Location

Transaction

Date

Number of
Buildings

SF

Gross Asset

Value

Land






2 Campus Drive

Jersey City, NJ

1/3/2024

N/A

N/A

$9,700

Subtotal Land





$9,700

Multifamily






Metropolitan Lofts1

Morristown, NJ

1/12/2024

1

54,683

$30,300

Subtotal Multifamily



1

54,683

$30,300




2024 Dispositions to Date

$40,000

______________________________________________

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

 

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



4Q 2023


3Q 2023


Multifamily

Office / Corp

Disc. Ops

Total


Multifamily

Office / Corp

Total

Net loss

$(7,636)

$1,890

$—

$(5,746)


$(39,797)

$(20,453)

$(60,250)

Deduct:









Real estate services income

(1,084)

(1,084)


(1,230)

(1,230)

Interest and other investment loss (income)

(1)

(231)

(232)


(1)

(1,239)

(1,240)

Equity in (earnings) loss of unconsolidated joint ventures

(260)

(260)


(210)

(210)

Realized and unrealized (gains) losses on dispositions

(4,697)

4,700

3


(Gain) loss on disposition of developable land

(1,690)

(44,671)

39,271

(7,090)


Loss from early extinguishment of debt, net

1,903

1,903


1,046

1,046

Other Income

(77)

(77)


57

57

Add:









Real estate services expenses

3,025

1,298

4,323


2,106

1,427

3,533

General and administrative

437

9,555

9,992


327

14,293

14,620

Transaction-related costs

132

444

576


2,704

2,704

Depreciation and amortization

20,943

2,103


23,046


21,115

2,097

23,212

Interest expense

21,568

365

21,933


57,664

2,443

60,107

Provision for income taxes

11

188

199


45

248

293

Property impairments

32,516

32,516


Land and other impairments, net

5,928

5,928


Net operating income (NOI)

$41,373

$586

$43,971

$85,930


$41,065

$1,577

$42,642



















 

Summary of Consolidated Multifamily NOI by Type (unaudited):

4Q 2023

3Q 2023

Total Consolidated Multifamily - Operating Portfolio

$39,381

$39,708

Total Consolidated Commercial

$1,332

$929




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

$40,713

$40,637

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

$660

$428




Total Consolidated Multifamily NOI

$41,373

$41,065

See Consolidated Statement of Operations.
See Non GAAP Financial Definitions.

Annex 3: Consolidated Statement of Operations Footnotes

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

(1)

Includes the Company's share from unconsolidated joint ventures, and adjustments for noncontrolling interest of $2,597 and $2,574 for the three months ended December 31, 2023 and 2022, respectively and $10,337 and $10,392 for the twelve months ended December 31, 2023 and 2022, respectively. Excludes non-real estate-related depreciation and amortization of $216 and $395 for the three months ended December 31, 2023 and 2022, respectively, and $1,028 and $1,328 for the twelve months ended December 31, 2023 and 2022, respectively.

(2)

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

(3)

Includes free rent of $56 and $3,252 for the three months ended December 31, 2023 and 2022, respectively and $4,414 and $13,312 for the twelve months ended December 31, 2023 and 2022, respectively. Also includes the Company's share from unconsolidated joint ventures of $23 and $4 for the three months ended December 31, 2023 and 2022, respectively and $(4) and $(815) for the twelve months ended December 31, 2023 and 2022, respectively.

(4)

Excludes expenditures for tenant spaces in properties that have not been owned by the Company for at least a year and excludes Collector`s Universe.

(5)

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

(6)

Calculated based on weighted average common shares outstanding, assuming redemption of Operating Partnership common units into common shares 8,420 and 8,656 shares for the three months ended December 31, 2023 and 2022, respectively, and 8,669 and 8,639 for the twelve months ended December 31, 2023 and 2022, respectively, plus dilutive Common Stock Equivalents (i.e. stock options).

See Consolidated Statement of Operations.

 

Annex 4: Detailed Consolidated Statement of Operations (Year-End)



Twelve Months Ended December 31, 2023


Twelve Months Ended December 31, 2022

REVENUES

All Operations

Less: Disc. Ops

Total


All Operations

Less: Disc. Ops

Total

Revenue from leases

$271,873

$(19,729)

$252,144


$290,033

$(83,981)

$206,052

Real estate services

3,868

3,868


3,581

3,581

Parking income

18,942

(906)

18,036


18,556

(2,737)

15,819

Hotel income

594

(594)


15,506

(15,506)

Other income

5,668

143

5,811


33,314

(25,318)

7,996

Total revenues

300,945

(21,086)

279,859


360,990

(127,542)

233,448

EXPENSES








Real estate taxes

45,531

(4,721)

40,810


59,235

(20,123)

39,112

Utilities

11,033

(1,111)

9,922


14,343

(5,422)

8,921

Operating services

63,693

(5,768)

57,925


78,589

(25,792)

52,797

Real estate services expenses

14,188

14,188


10,549

10,549

General and administrative

44,521

(49)

44,472


56,176

(162)

56,014

Transaction-related costs

7,627

7,627


3,468

3,468

Depreciation and amortization

99,075

(5,486)

93,589


112,408

(26,974)

85,434

Property Impairments

32,516

32,516


94,811

(94,811)

Land and other impairments, net

9,324

9,324


9,368

9,368

Total expenses

327,508

(17,135)

310,373


438,947

(173,284)

265,663

Operating income (expense)

(26,563)

(3,951)

(30,514)


(77,957)

45,742

(32,215)

OTHER (EXPENSE) INCOME








Interest expense

(90,177)

822

(89,355)


(78,040)

11,659

(66,381)

Interest cost of mandatorily redeemable noncontrolling interests

(49,782)

(49,782)


Interest and other investment income (loss)

5,548

(33)

5,515


729

729

Equity in earnings (loss) of unconsolidated joint ventures

3,102

3,102


1,200

1,200

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

2,411

(2,411)


61,676

(61,676)

Gain (loss) on disposition of developable land

46,339

(39,271)

7,068


57,262

57,262

Gain (loss) on sale of unconsolidated joint venture interests


7,677

(7,677)

    Gain (loss) from extinguishment of debt, net

(5,618)

12

(5,606)


(7,432)

7,303

(129)

Other Income, net

2,871

2,871


Total other income (expense), net

(85,306)

(40,881)

(126,187)


43,072

(50,391)

(7,319)

Loss from continuing operations before income tax expense

(111,869)

(44,832)

(156,701)


(34,885)

(4,649)

(39,534)

Provision for income taxes

(492)

(492)


Income from continuing operations after income tax expense

(112,361)

(44,832)

(157,193)


(34,885)

(4,649)

(39,534)

Income (loss) from discontinued operations

3,150

3,150


(64,704)

(64,704)

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

41,682

41,682


69,353

69,353

Total discontinued operations

44,832

44,832


4,649

4,649

Net Loss

(112,361)

(112,361)


(34,885)

(34,885)

Noncontrolling interests in consolidated joint ventures

2,319

2,319


3,079

3,079

Noncontrolling interests in Operating Partnership of income from continuing operations

14,267

14,267


5,652

5,652

Noncontrolling interests in Operating Partnership in discontinued operations

(3,872)

(3,872)


(378)

(378)

Redeemable noncontrolling interests

(7,618)

(7,618)


(25,534)

(25,534)

Net loss available to common shareholders

$(107,265)

$—

$(107,265)


$(52,066)

$—

$(52,066)

See Consolidated Statement of Operations.

                      

Annex 5: Core FFO per Diluted Share  



Three Months Ended September 30,


Twelve Months Ended December 31,


2023

2022


2023

2022

Net income (loss) available to common shareholders

$(0.05)

$0.32


$(1.06)

$(0.52)

Add (deduct):  Noncontrolling interests in Operating Partnership

(0.04)

(0.03)


(0.14)

(0.06)

Noncontrolling interests in discontinued operations

0.04

0.06


0.04

Real estate-related depreciation and amortization on continuing operations

0.25

0.26


1.02

0.95

Real estate-related depreciation and amortization on discontinued operations

0.05


0.05

0.26

Property impairments on continuing operations

0.32


0.32

Property impairments on discontinued operations

0.10


0.95

Discontinued operations: Gain on sale from unconsolidated joint ventures

(0.08)


(0.08)

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

(0.05)

(0.69)


(0.02)

(0.61)

FFO

$0.47

$(0.01)


$0.21

$0.89







Add/(Deduct):






Loss from extinguishment of debt, net

0.02

0.01


0.06

0.07

Land and other impairments

0.06


0.09

0.09

Loss (gain) on disposition of developable land

(0.46)


(0.46)

(0.56)

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

0.02


0.07

0.14

Rebranding and Severance/Compensation related costs (RE Services)

0.01


0.01

Rebranding and Severance/Compensation related costs (Operating Services)


0.01

Rockpoint buyout premium


0.34

Redemption value adjustment to mandatorily redeemable noncontrolling interests


0.08

Lease breakage fee, net


(0.23)

Amortization of derivative premium

0.01


0.05

Transaction related costs

0.01

0.03


0.07

0.04

Core FFO

$0.12

$0.05


$0.53

$0.44







See FFO and Core FFO.

See Non GAAP Financial Definitions.

 

Annex 6: Unconsolidated Joint Ventures 

($ in thousands) 


Property

Units

Physical

Occupancy

VRE's Nominal

Ownership1

4Q 2023

NOI2

Total

Debt

VRE Share

of 4Q NOI

VRE Share

of Debt

Multifamily








Urby Harborside

762

92.3 %

85.0 %

$5,370

$185,742

$4,565

$157,881

RiverTrace at Port Imperial

316

95.6 %

22.5 %

2,184

82,000

491

18,450

Capstone at Port Imperial

360

95.0 %

40.0 %

2,973

135,000

1,189

54,000

Riverpark at Harrison

141

92.2 %

45.0 %

577

30,192

260

13,586

Metropolitan at 40 Park3

130

95.4 %

25.0 %

721

34,100

180

8,525

Metropolitan Lofts4

59

94.4 %

50.0 %

319

17,200

160

8,600

Station House

378

92.1 %

50.0 %

1,713

89,440

857

44,720

Total Multifamily

2,146

93.4 %

54.9 %

$13,857

$573,674

$7,701

$305,762

Retail








Shops at 40 Park

N/A

69.0 %

25.0 %

$267

6,067

67

1,517

Total Retail

N/A

69.0 %

25.0 %

$267

$6,067

$67

$1,517

Total UJV




$14,124

$579,741

$7,768

$307,279

_________________________________________________

1 

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

2 

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

3 

The Company paid down the loan balance $2.1 million in 4Q 2023.

On January 12, 2024, the joint venture was sold for a gross valuation of approximately $30 million, VRE`s share of net proceeds was $6 million.    

See Non GAAP Financial Definitions.

Annex 7: Debt Profile Footnotes

  1. Effective rate of debt, including deferred financing costs, comprised of the cost of terminated treasury lock agreements (if any), debt initiation costs, mark-to-market adjustment of acquired debt and other transaction costs, as applicable.
  2. Port Imperial Hotels sold on February 10, 2023.
  3. In August 2023, the fixed rate Freddie Mac loan on Portside at East Pier was refinanced and placed a 3- year SOFR cap at a strike rate of 3.5%.
  4. The Upton loan has been capped at a strike rate of 1.0%, expiring in October 2024.
  5. In September 2023, the Company placed a 9 month SOFR cap at a strike rate of 4.0% on the loan at 145 Front at City Square.
  6. The loan on RiverHouse 9 is capped at a strike rate of 3.0%, expiring in June 2024.
  7. In August 2023, the Company fully repaid its construction loan on Haus25 with a new permanent financing provided by Freddie Mac. The balance shown as of December 31, 2022 ($297M) reflects the outstanding construction loan provided by QuadReal at that time.
  8. In July 2023, the Company purchased Rockpoint`s interest in the Company. Concurrently, the Company entered into a $175 million transitional facility package. The entire $115 million Term Loan and initial draw of $52 million on the Revolving Credit Facility were fully repaid in October 2023.

See Debt Profile.

Annex 8: Multifamily Property Information



Location

Ownership

Apartments

Rentable SF

Average Size

Year Complete

NJ Waterfront







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 %

181

156,091

862

2015

Portside 2 at East Pier

East Boston, MA

100.0 %

296

230,614

779

2018

145 Front at City Square

Worcester, MA

100.0 %

365

304,936

835

2018

The Emery

Revere, MA

100.0 %

326

273,140

838

2020

Massachusetts Subtotal


100.0 %

1,168

964,781

826


Other







The Upton

Short Hills, NJ

100.0 %

193

217,030

1,125

2021

The James

Park Ridge, NJ

100.0 %

240

215,283

897

2021

Signature Place

Morris Plains, NJ

100.0 %

197

203,716

1,034

2018

Quarry Place at Tuckahoe

Eastchester, NY

100.0 %

108

105,551

977

2016

Riverpark at Harrison

Harrison, NJ

45.0 %

141

124,774

885

2014

Metropolitan at 40 Park

Morristown, NJ

25.0 %

130

124,237

956

2010

Metropolitan Lofts

Morristown, NJ

50.0 %

59

54,683

927

2018

Station House

Washington, DC

50.0 %

378

290,348

768

2015

Other Subtotal


72.8 %

1,446

1,335,622

924


Operating Portfolio


85.0 %

7,681

6,691,525

871


See Multifamily Operating Portfolio.

Non-GAAP Financial Definitions

NON-GAAP FINANCIAL MEASURES 

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

Adjusted Earnings Before Interest, Tax, Depreciation and Amortization (Adjusted "EBITDA")

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

Blended Net Rental Growth Rate or Blended Lease Rate

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

Core FFO and Adjusted FFO ("AFFO")

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

Earnings Before Interest, Tax, Depreciation, Amortization, and Rent Costs ("EBITDAre")

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

Funds From Operations ("FFO") 

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

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

NOI and Same Store NOI 

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

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

Company Information

Company Information






Corporate Headquarters

Stock Exchange Listing

Contact Information

Veris Residential, Inc.

New York Stock Exchange

Veris Residential, Inc.

210 Hudson St., Suite 400


Investor Relations Department

Jersey City, New Jersey 07311

Trading Symbol

210 Hudson St., Suite 400

(732) 590-1010

Common Shares: VRE

Jersey City, New Jersey 07311






Anna Malhari



Chief Operating Officer



E-Mail:  [email protected]



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.

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