Veris Residential, Inc. Reports Fourth Quarter and Full Year 2023 Results
|
Three Months Ended |
|
Twelve Months Ended |
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|
2023 |
2022 |
|
2023 |
2022 |
Net Income (Loss) per Diluted Share |
|
|
|
|
|
Core FFO per Diluted Share |
|
|
|
|
|
Dividends Declared per Share |
|
$— |
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$— |
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 inJanuary 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 .
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|
|
% 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 |
|
|
8.9 % |
SAME STORE PORTFOLIO PERFORMANCE
|
2023 Actual Growth |
Original Guidance |
Adjusted Guidance |
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 |
|
Twelve Months Ended |
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|
2023 |
2022 |
% |
|
2023 |
2022 |
% |
Total Property Revenue |
|
|
7.6 % |
|
|
|
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 |
|
|
15.7 % |
|
|
|
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
TRANSACTION ACTIVITY
In 2023, the Company closed over
Quarter |
Gross Price (000s) |
1Q |
|
2Q |
|
3Q |
|
4Q |
|
In
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
Currently,
FINANCE AND LIQUIDITY
As of
|
Three Months Ended |
|
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
The
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
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 |
|
— |
|
Add back: Depreciation per Share |
|
— |
|
Core FFO per Share |
|
— |
|
CONFERENCE CALL/SUPPLEMENTAL INFORMATION
An earnings conference call with management is scheduled for
The live conference call is also accessible by dialing (877) 451-6152 (domestic) or (201) 389-0879 (international) and requesting the
The conference call will be rebroadcast on
http://investors.verisresidential.com/ beginning at
A replay of the call will also be accessible
Copies of
In addition, once filed, these items will be available upon request from:
Harborside 3,
ABOUT THE COMPANY
For additional information on
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
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 |
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Media |
Anna Malhari |
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Chief Operating Officer |
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See additional details on Company Information.
Consolidated Balance Sheet |
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(in thousands) (unaudited) |
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ASSETS |
Multifamily |
Office/Corp. |
Total |
|
Rental property |
|
|
|
|
Land and leasehold interests |
|
|
|
|
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 |
|
|
|
|
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 |
|
|
|
|
Total Equity |
|
|
|
|
Total Liabilities and Equity |
|
|
|
|
_____________________________________________ |
1 Includes mark-to-market lease intangible net assets of |
2 Includes Prepaid Expenses and Other Assets attributable to Multifamily of |
Consolidated Statement of Operations |
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(In thousands, except per share amounts) (unaudited) 12 |
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|||||
|
Three Months Ended |
|
Twelve Months Ended |
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REVENUES |
2023 |
2022 |
|
2023 |
2022 |
Revenue from leases |
|
|
|
|
|
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 |
4,252 |
2,723 |
|
14,267 |
5,652 |
Noncontrolling interests in |
(3,776) |
(5,975) |
|
(3,872) |
(378) |
Redeemable noncontrolling interests |
(285) |
(6,366) |
|
(7,618) |
(25,534) |
Net (loss) income available to common shareholders |
|
|
|
|
|
Basic earnings per common share: |
|
|
|
|
|
Net loss available to common shareholders |
|
|
|
|
|
Diluted earnings per common share: |
|
|
|
|
|
Net loss available to common shareholders |
|
|
|
|
|
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 |
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(in thousands, except per share/unit amounts) |
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|
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|
Three Months Ended |
|
Twelve Months Ended |
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|
2023 |
2022 |
|
2023 |
2022 |
Net income (loss) available to common shareholders |
|
|
|
|
|
Add (deduct): Noncontrolling interests in |
(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) |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares/units outstanding(6) |
100,936 |
100,417 |
|
100,812 |
100,265 |
|
|
|
|
|
|
Funds from operations per share-diluted |
|
|
|
|
|
Core Funds from Operations per share/unit-diluted |
|
|
|
|
|
Dividends declared per common share |
|
— |
|
|
— |
See Core FFO per Diluted Share.
See Consolidated Statements of Operations Footnotes.
See Non GAAP Financial Definitions.
AFFO and Adjusted EBITDA |
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($ in thousands, except per share amounts) (unaudited) |
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|
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|
Three Months Ended |
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Twelve Months Ended |
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|
2023 |
2022 |
|
2023 |
2022 |
Core FFO (calculated on previous page) |
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
Core FFO (calculated on previous page) |
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
|
|
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) |
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($ in thousands) (unaudited) |
||
|
||
|
Three Months Ended |
|
|
2023 |
2022 |
Net income (loss) available to common shareholders |
|
|
Add/(Deduct): |
|
|
Noncontrolling interests in |
(4,252) |
(2,723) |
Noncontrolling interests in |
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 |
|
|
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 |
|
|
(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 |
|
|
Depreciation in noncontrolling interest in consolidated joint ventures |
712 |
708 |
Funds from operations - noncontrolling interest in consolidated joint ventures |
|
|
Interest expense in noncontrolling interest in consolidated joint ventures |
789 |
791 |
Net operating income before debt service in consolidated joint ventures |
|
|
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 |
|
New Jersey Waterfront |
|
|
|
Restricted Cash |
26,572 |
|
25,280 |
25,280 |
|
Other Assets |
62,198 |
Other3 |
29,996 |
22,123 |
|
Subtotal Other Assets |
|
Total Multifamily NOI |
|
|
|
|
|
Commercial NOI4 |
6,396 |
5,174 |
|
Liabilities and Other Considerations |
|
Total NOI |
|
|
|
|
|
|
|
|
|
Operating - Consolidated Debt at Share |
|
Non-Strategic Assets |
|
Operating - Unconsolidated Debt at Share2 |
298,679 |
||
|
|
Other Liabilities |
82,597 |
||
Non-Strategic Assets Under Binding Contract5 |
|
|
|
Revolving Credit Facility6 |
— |
Estimated Land Value7 |
|
214,659 |
|
Term Loan6 |
— |
Subtotal Non-Strategic Assets |
|
|
|
Preferred Units8 |
19,299 |
|
|
|
|
Subtotal Liabilities and Other Considerations |
|
|
|
|
|
|
|
|
|
|
|
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
|
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 |
7 Based off 4,578 potential units, see Commercial, Developable Land & Other Non-Strategic Assets page for more details. |
8 In |
9 Common Shares Outstanding as of |
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 % |
|
|
|
|
|
|
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 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portside at |
100.0 % |
181 |
94.9 % |
92.6 % |
|
|
|
|
|
Portside 2 at |
100.0 % |
296 |
96.2 % |
95.8 % |
3,384 |
3,268 |
2,034 |
2,024 |
97,000 |
145 Front at |
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 % |
|
|
|
|
|
Other |
|
|
|
|
|
|
|
|
|
The |
100.0 % |
193 |
91.7 % |
92.7 % |
|
|
|
|
|
The James |
100.0 % |
240 |
96.3 % |
95.0 % |
3,052 |
3,026 |
1,330 |
1,461 |
— |
|
100.0 % |
197 |
97.5 % |
94.4 % |
3,174 |
3,195 |
974 |
1,081 |
43,000 |
|
100.0 % |
108 |
93.5 % |
93.5 % |
4,321 |
4,293 |
709 |
714 |
41,000 |
Riverpark at |
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 |
|
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 % |
|
|
|
|
|
Operating Portfolio34 |
85.0 % |
7,681 |
94.4 % |
95.3 % |
|
|
|
|
|
_________________________________________________ |
1 As of |
2 On |
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 |
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 |
|
70.0 % |
320,426 |
N/A |
N/A |
|
|
|
Port Imperial Garage North |
|
100.0 % |
304,617 |
N/A |
N/A |
36 |
(33) |
— |
Port Imperial Retail South |
|
70.0 % |
18,064 |
100.0 % |
100.0 % |
185 |
173 |
— |
Port Imperial Retail North |
|
100.0 % |
8,400 |
100.0 % |
100.0 % |
373 |
90 |
— |
Riverwalk at Port Imperial |
|
100.0 % |
30,426 |
59.2 % |
65.0 % |
221 |
158 |
— |
Shops at 40 Park |
|
25.0 % |
50,973 |
69.0 % |
69.0 % |
267 |
281 |
6,067 |
Commercial Total |
|
80.9 % |
732,906 |
73.8 % |
75.5 % |
|
|
|
Developable Land Parcels1 |
|
NJ Waterfront |
3,134 |
|
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 |
|
977,225 |
338,109 |
34.6 % |
|
Total Office Portfolio |
|
977,225 |
338,109 |
34.6 % |
|
_____________________________________________ |
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 |
|
|
(0.1) % |
94.7 % |
96.1 % |
(1.4) % |
6.3 % |
10.3 % |
|
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 |
|
|
17.5 % |
94.7 % |
95.7 % |
(1.0) % |
6.3 % |
18.7 % |
|
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 |
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
________________________________________________ |
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, |
See Non GAAP Financial Definitions.
Same Store Performance |
||||||||||||||
($ in thousands) |
||||||||||||||
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
Sequential |
|||||||||
|
2023 |
2022 |
Change |
% |
|
2023 |
2022 |
Change |
% |
|
4Q 2023 |
3Q 2023 |
Change |
% |
Apartment Rental Income |
|
|
|
8.2 % |
|
|
|
|
11.1 % |
|
|
|
|
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 |
|
|
|
7.6 % |
|
|
|
|
11.0 % |
|
|
|
|
— % |
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 |
|
|
|
4.8 % |
|
|
|
|
4.2 % |
|
|
|
|
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 |
|
|
|
(12.1) % |
|
|
|
|
(3.4) % |
|
|
|
|
2.1 % |
Total Property Expenses |
|
|
|
(4.0) % |
|
|
|
|
0.4 % |
|
|
|
|
1.6 % |
Same Store GAAP NOI |
|
|
|
15.7 % |
|
|
|
|
17.6 % |
|
|
|
|
(0.9) % |
Real Estate Tax Adjustments3 |
— |
(1,456) |
1,456 |
|
|
1,689 |
(1,170) |
2,859 |
|
|
— |
20 |
(20) |
|
Normalized Same Store NOI |
|
|
|
10.9 % |
|
|
|
|
15.3 % |
|
|
|
|
(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) |
|
|
Date of Maturity |
Secured Permanent Loans |
|
|
|
|
|
|
|
N/A |
$— |
|
N/A |
|
|
3.74 % |
43,000 |
43,000 |
|
|
|
3.37 % |
265,000 |
265,000 |
|
Portside 2 at |
New York Life Insurance Co. |
4.56 % |
97,000 |
97,000 |
|
BLVD 425 |
New York Life Insurance Co. |
4.17 % |
131,000 |
131,000 |
|
BLVD 401 |
New York Life Insurance Co. |
4.29 % |
117,000 |
117,000 |
|
Portside at |
KKR |
SOFR + 2.75% |
56,500 |
58,998 |
|
The |
Bank of New York Mellon |
SOFR + 1.58% |
75,000 |
75,000 |
|
145 Front at |
|
SOFR + 1.84% |
63,000 |
63,000 |
|
RiverHouse 9(6) |
JP Morgan |
SOFR + 1.41% |
110,000 |
110,000 |
|
|
|
4.48 % |
41,000 |
41,000 |
|
BLVD 475 |
|
2.91 % |
165,000 |
165,000 |
|
Haus25(7) |
Freddie Mac |
6.04 % |
343,061 |
297,324 |
|
RiverHouse 11 |
|
4.52 % |
100,000 |
100,000 |
|
Soho Lofts |
|
3.77 % |
158,777 |
160,000 |
|
Port Imperial Garage South |
|
4.85 % |
31,645 |
32,166 |
|
The Emery |
|
3.21 % |
72,000 |
72,000 |
|
Principal Balance Outstanding |
|
|
|
|
|
Unamortized Deferred Financing Costs |
|
|
(15,086) |
(7,511) |
|
Total Secured Permanent Loans |
|
|
|
|
|
|
|
|
|
|
|
Secured RCF & Term Loans: |
|
|
|
|
|
Revolving Credit Facility(8) |
JP Morgan & Goldman Sachs |
SOFR + 3.85% |
$— |
$— |
|
Term Loan(8) |
JP Morgan & Goldman Sachs |
SOFR + 3.85% |
— |
— |
|
Total RCF & Term Loan Debt |
|
|
$— |
$— |
|
Total Debt |
|
|
|
|
|
See Debt Profile Footnotes.
Debt Summary and Maturity Schedule
99.9% of the Company`s total pro forma debt portfolio (consolidated and unconsolidated) is hedged or fixed. The Company`s total debt portfolio has a weighted average interest rate of 4.5% and a weighted average maturity of 3.7 years.
($ in thousands) |
||||
|
Balance |
% of Total |
Weighted Average Interest Rate |
Weighted Average Maturity in Years |
Fixed Rate & Hedged Debt |
|
|
|
|
Fixed Rate & Hedged Secured Debt |
|
100.0 % |
4.34 % |
3.5 |
Variable Rate Debt1 |
|
|
|
|
Variable Rate Debt |
— |
— % |
— % |
— |
Totals / Weighted Average |
|
100.0 % |
4.34 % |
3.5 |
Unamortized Deferred Financing Costs |
(15,086) |
|
|
|
Total Consolidated Debt, net |
|
|
|
|
Partners' Share |
(73,316) |
|
|
|
VRE Share of Total Consolidated Debt, net2 |
|
|
|
|
|
|
|
|
|
Unconsolidated Secured Debt |
|
|
|
|
VRE Share |
|
53.0 % |
4.83 % |
4.6 |
Partners' Share |
272,462 |
47.0 % |
4.83 % |
4.6 |
Total Unconsolidated Secured Debt |
|
100.0 % |
4.83 % |
4.6 |
|
|
|
|
|
Pro Rata Debt Portfolio |
|
|
|
|
Fixed Rate & Hedged Secured Debt |
|
99.9 % |
4.46 % |
3.7 |
Variable Rate Secured Debt |
1,517 |
0.1 % |
7.31 % |
1.0 |
Total Pro Rata Debt Portfolio |
|
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 |
|
|
|
|
Pro Forma Debt Portfolio Reconciliation |
|
|
4Q 2023 |
Total Consolidated Debt, net on 12/31 |
|
Partners Share of Consolidated Debt on 12/31 |
(73,316) |
VRE Share of Consolidated Debt on 12/31 |
|
VRE Share of Total Unconsolidated Debt on 12/31 |
307,279 |
|
(8,601) |
VRE Share of Unconsolidated Secured Debt |
|
Total Pro Rata Debt Portfolio |
|
Annex 1: Transaction Activity |
|||||
|
|||||
2023 |
|
|
|
|
|
$ in thousands except per SF |
|||||
|
Location |
Transaction Date |
Number of Buildings |
SF |
Gross Asset Value |
Hotels |
|
|
|
|
|
|
|
|
2 |
N/A |
|
|
|
|
2 |
|
|
Office |
|
|
|
|
|
Harborside 1, 2, & 3 |
|
|
3 |
1,886,800 |
|
Harborside 6 |
|
|
1 |
231,856 |
46,000 |
|
|
|
1 |
350,000 |
17,500 |
Subtotal Office |
|
|
5 |
2,468,656 |
|
Land |
|
|
|
|
|
|
|
|
N/A |
N/A |
|
Harborside 4 |
|
|
N/A |
N/A |
58,000 |
|
|
|
N/A |
N/A |
13,500 |
Subtotal Land |
|
|
|
|
|
|
|
|
2023 Total Dispositions |
|
2024 Dispositions to Date |
|
|
|
|
|
$ in thousands except per SF |
|||||
|
Location |
Transaction Date |
Number of |
SF |
Gross Asset Value |
Land |
|
|
|
|
|
|
|
|
N/A |
N/A |
|
Subtotal Land |
|
|
|
|
|
Multifamily |
|
|
|
|
|
|
|
|
1 |
54,683 |
|
Subtotal Multifamily |
|
|
1 |
54,683 |
|
|
|
|
2024 Dispositions to Date |
|
______________________________________________ |
1 The joint venture sold releasing approximately |
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 |
|
|
$— |
|
|
|
|
|
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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary of Consolidated Multifamily NOI by Type (unaudited): |
4Q 2023 |
3Q 2023 |
Total Consolidated Multifamily - Operating Portfolio |
|
|
Total Consolidated Commercial |
|
|
|
|
|
Total NOI from |
|
|
NOI (loss) from services, land/development/repurposing & other assets |
|
|
|
|
|
Total Consolidated Multifamily NOI |
|
|
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) |
Funds from operations is calculated in accordance with the definition of FFO of the |
(3) |
Includes free rent of |
(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 |
See Consolidated Statement of Operations.
Annex 4: Detailed Consolidated Statement of Operations (Year-End) |
|||||||
|
|||||||
|
Twelve Months Ended |
|
Twelve Months Ended |
||||
REVENUES |
All Operations |
Less: Disc. Ops |
Total |
|
All Operations |
Less: Disc. Ops |
Total |
Revenue from leases |
|
|
|
|
|
|
|
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 |
14,267 |
— |
14,267 |
|
5,652 |
— |
5,652 |
Noncontrolling interests in |
(3,872) |
— |
(3,872) |
|
(378) |
— |
(378) |
Redeemable noncontrolling interests |
(7,618) |
— |
(7,618) |
|
(25,534) |
— |
(25,534) |
Net loss available to common shareholders |
|
$— |
|
|
|
$— |
|
See Consolidated Statement of Operations.
Annex 5: Core FFO per Diluted Share |
|||||
|
|||||
|
Three Months Ended |
|
Twelve Months Ended |
||
|
2023 |
2022 |
|
2023 |
2022 |
Net income (loss) available to common shareholders |
|
|
|
|
|
Add (deduct): Noncontrolling interests in |
(0.04) |
(0.03) |
|
(0.14) |
(0.06) |
Noncontrolling interests in discontinued operations |
0.04 |
0.06 |
|
0.04 |
— |
Real estate-related depreciation and amortization on continuing operations |
0.25 |
0.26 |
|
1.02 |
0.95 |
Real estate-related depreciation and amortization on discontinued operations |
— |
0.05 |
|
0.05 |
0.26 |
Property impairments on continuing operations |
0.32 |
— |
|
0.32 |
— |
Property impairments on discontinued operations |
— |
0.10 |
|
— |
0.95 |
Discontinued operations: Gain on sale from unconsolidated joint ventures |
— |
(0.08) |
|
— |
(0.08) |
Discontinued operations: Realized (gains) losses and unrealized (gains) losses on disposition of rental property, net |
(0.05) |
(0.69) |
|
(0.02) |
(0.61) |
FFO |
|
|
|
|
|
|
|
|
|
|
|
Add/(Deduct): |
|
|
|
|
|
Loss from extinguishment of debt, net |
0.02 |
0.01 |
|
0.06 |
0.07 |
Land and other impairments |
0.06 |
— |
|
0.09 |
0.09 |
Loss (gain) on disposition of developable land |
(0.46) |
— |
|
(0.46) |
(0.56) |
Rebranding and Severance/Compensation related costs (G&A) |
— |
0.02 |
|
0.07 |
0.14 |
Rebranding and Severance/Compensation related costs (RE Services) |
0.01 |
— |
|
0.01 |
— |
Rebranding and Severance/Compensation related costs (Operating Services) |
— |
— |
|
0.01 |
— |
Rockpoint buyout premium |
— |
— |
|
0.34 |
— |
Redemption value adjustment to mandatorily redeemable noncontrolling interests |
— |
— |
|
0.08 |
— |
Lease breakage fee, net |
— |
— |
|
— |
(0.23) |
Amortization of derivative premium |
0.01 |
— |
|
0.05 |
— |
Transaction related costs |
0.01 |
0.03 |
|
0.07 |
0.04 |
Core FFO |
|
|
|
|
|
|
|
|
|
|
|
See FFO and Core FFO.
See Non GAAP Financial Definitions.
Annex 6: |
|||||||
($ 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 % |
|
|
|
|
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 |
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 |
|
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 % |
|
|
|
|
Retail |
|
|
|
|
|
|
|
Shops at 40 Park |
N/A |
69.0 % |
25.0 % |
|
6,067 |
67 |
1,517 |
Total Retail |
N/A |
69.0 % |
25.0 % |
|
|
|
|
Total UJV |
|
|
|
|
|
|
|
_________________________________________________ |
|
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 |
4 |
On |
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 onFebruary 10, 2023 . - In
August 2023 , the fixed rate Freddie Mac loan on Portside atEast 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 atCity 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 ofDecember 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 inOctober 2023 .
See Debt Profile.
Annex 8: Multifamily Property Information |
||||||
|
||||||
|
Location |
Ownership |
Apartments |
Rentable SF |
Average Size |
Year Complete |
NJ Waterfront |
|
|
|
|
|
|
Haus25 |
|
100.0 % |
750 |
617,787 |
824 |
2022 |
|
|
100.0 % |
648 |
602,210 |
929 |
2003 |
BLVD 401 |
|
74.3 % |
311 |
273,132 |
878 |
2016 |
BLVD 425 |
|
74.3 % |
412 |
369,515 |
897 |
2003 |
BLVD 475 |
|
100.0 % |
523 |
475,459 |
909 |
2011 |
Soho Lofts |
|
100.0 % |
377 |
449,067 |
1,191 |
2017 |
Urby Harborside |
|
85.0 % |
762 |
474,476 |
623 |
2017 |
RiverHouse 9 |
|
100.0 % |
313 |
245,127 |
783 |
2021 |
RiverHouse 11 |
|
100.0 % |
295 |
250,591 |
849 |
2018 |
RiverTrace |
|
22.5 % |
316 |
295,767 |
936 |
2014 |
Capstone |
|
40.0 % |
360 |
337,991 |
939 |
2021 |
NJ Waterfront Subtotal |
|
85.0 % |
5,067 |
4,391,122 |
867 |
|
|
|
|
|
|
|
|
Portside at |
|
100.0 % |
181 |
156,091 |
862 |
2015 |
Portside 2 at |
|
100.0 % |
296 |
230,614 |
779 |
2018 |
145 Front at |
|
100.0 % |
365 |
304,936 |
835 |
2018 |
The Emery |
|
100.0 % |
326 |
273,140 |
838 |
2020 |
Massachusetts Subtotal |
|
100.0 % |
1,168 |
964,781 |
826 |
|
Other |
|
|
|
|
|
|
The |
|
100.0 % |
193 |
217,030 |
1,125 |
2021 |
The James |
|
100.0 % |
240 |
215,283 |
897 |
2021 |
|
|
100.0 % |
197 |
203,716 |
1,034 |
2018 |
|
|
100.0 % |
108 |
105,551 |
977 |
2016 |
Riverpark at |
|
45.0 % |
141 |
124,774 |
885 |
2014 |
Metropolitan at 40 Park |
|
25.0 % |
130 |
124,237 |
956 |
2010 |
|
|
50.0 % |
59 |
54,683 |
927 |
2018 |
Station House |
|
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
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
Funds From Operations ("FFO")
FFO is defined as net income (loss) before noncontrolling interests in
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
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 |
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Corporate Headquarters |
Stock Exchange Listing |
Contact Information |
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Investor Relations Department |
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Trading Symbol |
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(732) 590-1010 |
Common Shares: VRE |
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Anna Malhari |
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Chief Operating Officer |
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E-Mail: amalhari@verisresidential.com |
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Executive Officers |
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Chief Executive Officer |
Chief Financial Officer |
General Counsel and Secretary |
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Anna Malhari |
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Chief Operating Officer |
EVP & Chief Investment Officer |
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Equity Research Coverage |
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Citigroup |
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JP Morgan |
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Truist |
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View original content to download multimedia:https://www.prnewswire.com/news-releases/veris-residential-inc-reports-fourth-quarter-and-full-year-2023-results-302068138.html
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