Veris Residential entered a binding agreement to sell Harborside 1, 2 and 3 in Jersey City for $420 million, subject to closing adjustments for several ongoing construction projects.
That move – along with the closing of the company’s $346 million sale of 101 Hudson St. and the pro-forma for the stabilization of Haus25 in the city – will see the former Mack-Cali Realty Corp. make further progress on its transition to a pure play multifamily REIT, with the sector now representing approximately 98% of net operating income, according to an Oct. 10 announcement from Veris — up from 39% at the end of the first quarter of 2021.
In a statement, CEO Mahbod Nia described the news as “significant milestones” in the company’s transition. “Looking ahead, the sizable proceeds anticipated from these transactions provide the company with meaningful liquidity and optionality as we enter the next phase of our transformation,” he said in a prepared statement.
Executed Sept. 22, Veris said the Harborside 1/2/3 deal is anticipated to close in the first quarter of 2023, subject to conditions and other terms.
The company said it expects to receive approximately $350 million and $90 million in respective net proceeds from the Harborside 1/2/3 and 101 Hudson St. sales.
“The sale of 101 Hudson is a historic transaction, made even more significant due to the challenging investment sales environment, with deals of this size and caliber rarely closing in any markets across the country right now,” CushWake Executive Vice Chairman Andy Merin said. “After months of hard work, we are thrilled to have arranged this momentous transaction on behalf of Veris, with this being one of the largest single-asset office sales in New Jersey history.”
Merin along with CushWake’s Adam Spies, David Bernhaut, Gary Gabriel, Kevin Donner, Frank DiTommaso, Ed Duenas and Ben Lushing arranged the 101 Hudson Street transaction. Merin, Spies, Bernhaut, Gabriel, DiTommaso and Max Helfman worked with CBRE to co-arrange the Harborside 1, 2 and 3 transaction.
In pursuit of its transition, Veris says it has closed on $1.4 billion of non-core assets, repaid more than $1.2 million of debt and added approximately 1,900 units to its residential portfolio since 2021.
“With our exit of the office sector nearly complete, we intend to continue streamlining operations as we become a pure-play multifamily REIT with a more resilient cashflow profile,” Tammy Jones, board chair, said in a statement. “In addition, notwithstanding the extraordinary market dislocation, the Strategic Review Committee and board will be evaluating the best opportunities to unlock the substantial value that has been created for our shareholders.”
At the end of Q2, Veris announced binding contracts totaling $132.25 million for the sales of The Hyatt Hotel in Jersey City and its last suburban office building, 23 Main St. in Monmouth County.
Editor’s note: This story was updated at 2:36 p.m. ET to include additional details from Cushman & Wakefield, including remarks from Executive Vice Chairman Andy Merin.