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Veris Residential Inc.’s $85 million sale of Harborside 5 in Jersey City marks its completed transformation into a pure-play multifamily REIT.

The milestone, announced in the company’s fourth quarter and full year 2023 results Feb. 21, signifies the end of a transition that began in December 2021, when it rebranded from Mack-Cali Realty Corp.

According to the Jersey City-based company, it sold more than $700 million of non-strategic assets in 2023. A binding contract for the Harborside 5 sale was signed in January. The buyer was not disclosed and Veris Residential did not immediately respond to a request for comment.

Including that Harborside 5 deal, $139 million of non-strategic assets are under binding contracts, Veris reported.

2023 sales:

• Port Imperial Hotels in Weehawken – $97 million
  Two buildings; 372 keys
• Harborside 1, 2 & 3 in Jersey City – $420 million
  Three buildings; 1.89 million square feet
• Harborside 6 in Jersey City – $46 million
  One building; 2312,000 square feet
• 23 Main St. in Holmdel – $17.5 million
  One building; 350,000 square feet

Additionally, a filing with the U.S. Security and Exchange Commission detailed land sales (101 Columbia Road in Morris Plains as well as Harborside 4 and 3 campus Drive in Jersey City) totaling $79.8 million.

According to the company, the combined gross price of the Harborside 4, 3 Campus Drive and 23 Main St. sales released approximately $82 million in net proceeds.

“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,” said CEO Mahbod Nia. “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.”

Overall, Veris reported outperforming expectations in 2023. Total revenues for Q4 were up by $72.92 million (versus $67.18 million in Q4 2022). For the full year, revenues were $279.86 million (versus $233.45 million in FY 2022).

Top lines

• Increased Core Funds From Operations per share to $0.53, a gain of 20% compared to last year.
• Exceeded upper end of Notice of Intent guidance, achieving 17.6% annual growth. That was attributed to 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.
• Negotiated the early redemption of Rockpoint’s preferred interest for $520 million.
• Refinanced $400 million of debt and reduced overall indebtedness by $50 million.

Doing good

As of Feb. 20, Veris said its available liquidity is approximately $95 million. Virtually all (99.9%) of the company’s debt is hedged or fixed and the company’s total debt portfolio has a weighted average rate of 4.5% and weighted average maturity of 3.7 years, Veris reported.

In its pivot to becoming Veris, the company also adopted a more “green” outlook. At launch, Veris said it would dedicate itself to meeting “the sustainability-conscious lifestyle needs of its residents by operating in a socially, ethically, and environmentally responsible manner, while seeking to maximize value for all stakeholders.”

In 2023, the National Association of Real Estate Investment Trusts recognized Veris for its leadership in sustainability and DEI efforts. The company also earned Nareit’s Bronze Diversity, Equity & Inclusion Recognition.

An earnings conference call with management is scheduled for Feb. 22, at 8:30 a.m. Eastern Time and will be broadcast live here.