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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)

$105,000

$420,000

$46,000

$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

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.

investors@verisresidential.com

veris-residential@gasthalter.com

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

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

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

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

—

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

—

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)

(1,273)

502

157

Amortization of market lease intangibles, net

—

(30)

(80)

(155)

Amortization of lease inducements

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

—

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

Full story available on Benzinga.com

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

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