Veris Residential, Inc. Reports Fourth Quarter and Full Year 2023 Results
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:
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.
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
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.
4
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
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.
Port Imperial Hotels sold on February 10, 2023.
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%.
The Upton loan has been capped at a strike rate of 1.0%, expiring in October 2024.
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.
The loan on RiverHouse 9 is capped at a strike rate of 3.0%, expiring in June 2024.
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.
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.