Veris ends hospitality run with $97M Port Imperial Hotels sales

Veris Residential has taken another step closer toward its goal to become a pure-play multifamily REIT, closing the $97 million sale of the Port Imperial Hotels, two Marriot brand hotels located along the Hudson River in Weekhawken.

Totaling 372 keys, JLL represented Veris in the all-equity sale of EnVue Autograph Collection Port Imperial and Residence Inn Port Imperial to Navika Capital Group LLC. The firm announced the transaction Feb. 23. According to Veris Residential’s Fiscal Year 2022 year-end and fourth quarter results, released that same day, the deal closed Feb. 10.

JLL said the hotels were offered unencumbered by management.

The 164-key Residence Inn and 208-key Envue hotels opened in 2018 and 2019, respectively. They operate under a singular building complex at the center of the $4 billion mixed-use development nearing completion at Port Imperial, JLL said, which features a collective 15,000 square feet of outdoor space, more than 27,000 square feet of meeting and conference space, a fully equipped fitness center and unobstructed views of Manhattan.

Veris’ completed exit from the hospitality sector was also punctuated by the $117 million sale of The Hyatt Regency Jersey City, which closed in November 2022. According to that firm’s 2022 reporting, the trio of transactions released more than $22 million of net proceeds in aggregate.

“2022 marked another year of significant progress on our path to becoming a pure-play multifamily company,” Veris CEO Mahbod Nia said of the firm’s results. “We continued to successfully execute on non-core asset sales despite substantial market volatility. Our multifamily portfolio continues to outperform, reflecting the high quality of our properties and dedication of our team to delivering excellence. We begin 2023 in a position of strength, as we seek to conclude our transformation and continue creating value for shareholders.”

Making a haus a home

The day before its earnings release, Veris Residential announced another achievement, with the stabilization of its 750-unit luxury apartment tower in downtown Jersey City, Haus25 — three months ahead of schedule, according to the company.

Leasing launched at the 56-story, LEED Silver-certified property last April. Before that, Veris said 150 leases were signed during appointment-only previews.

As of Feb. 22, Haus25 was more than 95% leased and nearly 93% occupied, Veris said.

“The rapid stabilization of Haus25 speaks to our commitment to building innovative spaces that align with the needs of our residents, employees and the communities we serve while generating value for our shareholders,” Nia said in a prepared statement.

According to Veris, it was also able to achieve asking rents at nearly 14% over initial underwriting.

In its 2022 results, the company reported $1.4 billion in non-strategic asset sales since the beginning of 2022, including $437 million under binding contract, with Harborside 1, 2 and 3, announced in October, representing $420 million. Over the course of last year, Veris said it sold $831 million of non-strategic assets. That resulted in releasing approximately $301 million of proceeds, which was used to repay debt and acquire The James, a 240-unit property named for “The Sopranos” star James Gandolfini.

All the while, across the tail-end of 2022, Veris carried on a public back-and-forth with Kushner Cos., following that New York-based company’s attempts to acquire the REIT, which began with a hostile bid in October. Though Veris has maintained it would evaluate any deal that was beneficial to its profitability and shareholders — and that Kushner’s offers undervalue the company — a January update from the target indicated the pursuer was no longer interested in the deal. In response, Kushner Cos. issued a letter to Veris shareholders at the end of the month reaffirming its intent, for now:

“Despite your board’s ongoing intransigence, our objective has not changed—we are prepared to execute a transaction at a price that fairly values your shares. Our fully financed all-cash offer for $18.50 remains outstanding, as does, for now, our willingness to constructively engage with the Board to see if we can go higher. Our patience, however, is not endless, and we are actively considering all other alternatives.”