Veris Residential(VRE) - 2025 Q2 - Quarterly Results

Earnings Release Veris Residential's Q2 2025 results show strong financial and operational progress, with strategic asset sales and raised guidance Second Quarter 2025 Results & Strategic Progress Veris Residential achieved $0.12 Net Income per diluted share in Q2 2025, driven by $448 million in asset sales and credit facility amendments | | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | 2025 | 2024 | | Net Income (loss) per Diluted Share | $0.12 | $0.03 | $0.00 | $(0.01) | | Core FFO per Diluted Share | $0.17 | $0.18 | $0.33 | $0.32 | | Core AFFO per Diluted Share | $0.19 | $0.21 | $0.36 | $0.39 | | Dividend per Diluted Share | $0.08 | $0.06 | $0.16 | $0.11 | - The company has completed or placed under binding contract $448 million of non-strategic asset sales year-to-date, advancing its goal to achieve Net Debt-to-EBITDA of around 10.0x by year-end 2025 and below 9.0x by year-end 2026[8] - An amendment to the company's Revolver and Term Loan agreement resulted in an immediate 55-basis-point interest rate reduction, with potential for further savings through deleveraging[7][8] - Operational strength was demonstrated by a 4.7% Same Store Blended Net Rental Growth Rate and 5.6% Same Store NOI growth for the quarter[8] Same Store Portfolio Performance The Same Store portfolio achieved 5.6% year-over-year NOI growth to $51.3 million in Q2 2025, with blended rental growth accelerating to 4.7% | | June 30, 2025 | March 31, 2025 | Change | | :--- | :--- | :--- | :--- | | Same Store Units | 7,491 | 7,491 | —% | | Same Store Occupancy | 93.9% | 94.0% | (0.1)% | | Same Store Blended Rental Growth Rate (Quarter) | 4.7% | 2.3% | 2.4% | | Average Rent per Home | $4,085 | $4,023 | 1.5% | | ($ in 000s) | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | | 2025 | 2024 | % | 2025 | 2024 | % | | Total Property Revenue | $75,999 | $74,160 | 2.5% | $151,378 | $147,768 | 2.4% | | Total Property Expenses | 24,690 | 25,569 | (3.4)% | 49,387 | 50,055 | (1.3)% | | Same Store NOI | $51,309 | $48,591 | 5.6% | $101,991 | $97,713 | 4.4% | Transaction Activity Year-to-date, Veris Residential completed $268 million in asset sales and acquired its partner's interest in Jersey City Urby for $38.5 million | Name ($ in 000s) | Date | Location | GAV | | :--- | :--- | :--- | :--- | | 65 Livingston | 1/24/2025 | Roseland, NJ | $7,300 | | Wall Land | 4/3/2025 | Wall Township, NJ | 31,000 | | PI - North Building and Metropolitan at 40 Park | 4/21/2025 | West New York, NJ and Morristown, NJ | 7,100 | | 1 Water | 4/29/2025 | White Plains, NY | 15,500 | | Signature Place | 7/9/2025 | Morris Plains, NJ | 85,000 | | 145 Front Street | 7/22/2025 | Worcester, MA | 122,200 | | Total Assets Sold in 2025-to-Date | | | $268,100 | - The company acquired its partner's interest in the Jersey City Urby for $38.5 million, eliminating a large unconsolidated joint venture. The property was rebranded to "Sable" and is expected to generate over one million dollars in annualized synergies[12] Finance and Liquidity As of July 22, 2025, the company held $181 million in liquidity with a 4.86% weighted average interest rate, and achieved 55-basis-point interest savings - As of July 22, 2025, the company had $181 million in liquidity, a weighted average effective interest rate of 4.86%, and a weighted average maturity of 2.6 years, with all debt either hedged or fixed[13] | Balance Sheet Metric ($ in 000s) | June 30, 2025 | March 31, 2025 | | :--- | :--- | :--- | | Weighted Average Interest Rate | 5.08% | 4.95% | | Weighted Average Years to Maturity | 2.6 | 3.1 | | TTM Interest Coverage Ratio | 1.7x | 1.7x | | Net Debt | $1,795,320 | $1,643,411 | | TTM Adjusted EBITDA (Normalized) | $159,162 | $144,659 | | Net Debt-to-EBITDA (Normalized) | 11.3x | 11.4x | - Subsequent to quarter-end, the company amended its $500 million credit facility, resulting in an immediate 55-basis-point reduction in the borrowing rate on its Revolver to SOFR + 1.50%[16] - The company fully repaid its $200 million Term Loan using proceeds from the sales of Signature Place and 145 Front Street[17] Dividend and Guidance Veris paid a $0.08 per share dividend and raised full-year 2025 guidance, with Core FFO per share now projected at $0.63-$0.64 - A dividend of $0.08 per share was paid on July 10, 2025, to shareholders of record as of June 30, 2025[18] | 2025 Guidance Ranges | Current Guidance | Initial Guidance | | :--- | :--- | :--- | | Same Store Revenue Growth | 2.2% — 2.7% | 2.1% — 2.7% | | Same Store Expense Growth | 2.4% — 2.8% | 2.6% — 3.0% | | Same Store NOI Growth | 2.0% — 2.8% | 1.7% — 2.7% | | Core FFO per Share Guidance | Current Guidance | Initial Guidance | | :--- | :--- | :--- | | Net Loss per Share | $(0.22) — $(0.21) | $(0.24) — $(0.22) | | Depreciation per Share | $0.85 — $0.85 | $0.85 — $0.85 | | Core FFO per Share | $0.63 — $0.64 | $0.61 — $0.63 | Key Financial Data This section presents Veris Residential's consolidated financial statements, including balance sheet, operations, FFO, EBITDA, and net asset value Consolidated Balance Sheet As of June 30, 2025, total assets increased to $3.13 billion, driven by real estate held for sale, with total liabilities at $1.90 billion | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net investment in rental property | $2,995,913 | $2,795,012 | | Total assets | $3,126,980 | $2,982,727 | | Total liabilities | $1,903,121 | $1,740,364 | | Total equity | $1,214,565 | $1,233,069 | | Total liabilities and equity | $3,126,980 | $2,982,727 | Consolidated Statement of Operations Q2 2025 total revenues reached $75.9 million, with net income available to common shareholders improving to $10.9 million ($0.12 per diluted share) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenues | $75,928 | $67,476 | | Total expenses | $75,296 | $58,473 | | Net income (loss) | $11,843 | $2,735 | | Net income (loss) available to common shareholders | $10,904 | $2,922 | | Diluted earnings per common share | $0.12 | $0.03 | FFO, Core FFO and Core AFFO Q2 2025 FFO increased to $36.9 million ($0.36/share), with Core FFO at $17.8 million ($0.17/share) and Core AFFO at $19.1 million ($0.19/share) | (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | FFO | $36,897 | $25,711 | | Core FFO | $17,757 | $18,615 | | Core AFFO | $19,149 | $21,634 | | FFO per share/unit-diluted | $0.36 | $0.25 | | Core FFO per share/unit-diluted | $0.17 | $0.18 | | Core AFFO per share/unit-diluted | $0.19 | $0.21 | Adjusted EBITDA Q2 2025 Adjusted EBITDA rose to $42.2 million, with TTM Adjusted EBITDA (Normalized) at $159.2 million, resulting in a 11.3x Net Debt-to-EBITDA (Normalized) ratio | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Adjusted EBITDA | $42,202 | $37,889 | | ($ in thousands) | As of June 30, 2025 | | :--- | :--- | | TTM Adjusted EBITDA | $148,504 | | Net Debt-to-EBITDA | 12.1x | | TTM Adjusted EBITDA (Normalized) | $159,162 | | Net Debt-to-EBITDA (Normalized) | 11.3x | Components of Net Asset Value As of July 22, 2025, total operating multifamily NOI is $209.6 million annualized, with $1.57 billion in operating debt and 102.3 million diluted shares | ($ in thousands) | Total | At Share | | :--- | :--- | :--- | | Total Multifamily NOI as of 7/22 | $209,556 | $182,544 | | Commercial NOI | 4,732 | 3,792 | | Total NOI as of 7/22 | $214,288 | $186,336 | - The estimated value of remaining land and non-strategic assets is $134.2 million[43][46] | Liabilities and Other Considerations ($ in thousands) | Amount | | :--- | :--- | | Operating - Consolidated Debt at Share | $1,438,479 | | Operating - Unconsolidated Debt at Share | $129,170 | | Revolving Credit Facility | $126,000 | | Subtotal Liabilities and Other Considerations | $1,780,725 | Operating Portfolio This section details Veris Residential's multifamily and commercial operating portfolio performance, including occupancy, revenue, and NOI Multifamily Operating Portfolio The operating portfolio comprises 7,491 apartment units with 93.9% occupancy in Q2 2025, generating $56.8 million in NOI | | Ownership | Apartments | 2Q 2025 Occupancy | 2Q 2025 Avg Revenue per Home | 2Q 2025 NOI (in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | NJ Waterfront Subtotal | 87.2% | 5,067 | 93.2% | $4,499 | $42,502 | | Massachusetts Subtotal | 100.0% | 1,167 | 95.6% | $3,010 | $6,769 | | Other Subtotal | 78.8% | 1,257 | 95.3% | $3,413 | $7,516 | | Operating Portfolio Total | 87.8% | 7,491 | 93.9% | $4,085 | $56,787 | Commercial Assets and Developable Land The commercial portfolio generated $1.18 million in NOI in Q2 2025, with developable land holding potential for 2,419 total units - The commercial portfolio, with 56,387 rentable square feet, was 86.3% leased as of Q2 2025 and generated $1.18 million in NOI for the quarter[52] | Developable Land Parcel Units | Total Units | VRE Share | | :--- | :--- | :--- | | NJ Waterfront | 1,522 | 1,400 | | Massachusetts | 737 | 737 | | Other | 160 | 160 | | Total | 2,419 | 2,297 | Same Store Market Information The Same Store portfolio achieved 5.6% year-over-year NOI growth to $51.3 million in Q2 2025, with blended lease tradeouts at 4.7% | Year-over-Year 2Q Comparison | Apartments | 2Q 2025 NOI at Share | Change | 2Q 2025 Occupancy | Change | 2Q 2025 Blended Lease Tradeouts | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | New Jersey Waterfront | 5,067 | $37,814 | 4.5% | 93.2% | (1.9)% | 4.7% | | Massachusetts | 1,167 | $7,029 | 5.9% | 95.6% | 0.4% | 3.4% | | Other | 1,257 | $6,466 | 12.0% | 95.3% | 2.3% | 7.2% | | Total | 7,491 | $51,309 | 5.6% | 93.9% | (0.8)% | 4.7% | | Sequential Quarter Comparison | 2Q 2025 NOI at Share | Change | 2Q 2025 Blended Lease Tradeouts | Change | | :--- | :--- | :--- | :--- | :--- | | Total | $51,309 | 1.2% | 4.7% | 2.4% | Same Store Performance Q2 2025 Same Store GAAP NOI increased 5.6% year-over-year, driven by 2.5% revenue growth and 3.4% expense reduction, expanding the NOI margin to 67.5% | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Property Revenues | $75,999 | $74,160 | 2.5% | | Controllable Expenses | $12,799 | $13,286 | (3.7)% | | Non-Controllable Expenses | $11,891 | $12,283 | (3.2)% | | Total Property Expenses | $24,690 | $25,569 | (3.4)% | | Same Store GAAP NOI | $51,309 | $48,591 | 5.6% | | Same Store NOI Margin | 67.5% | 65.5% | 2.0% | Debt This section outlines Veris Residential's debt profile, including total debt, interest rates, maturity schedules, and recent repayments Debt Profile As of June 30, 2025, total debt was $1.83 billion, with $1.51 billion in secured permanent loans and $327 million in revolving credit and term loans | ($ in thousands) | June 30, 2025 Balance | | :--- | :--- | | Secured Permanent Loans Outstanding | $1,510,903 | | RCF & Term Loan Balances | $327,000 | | Total Debt | $1,825,339 | Debt Summary and Maturity Schedule As of July 22, 2025, 100% of debt is hedged or fixed, with a 4.86% weighted average interest rate and 2.6-year maturity - As of June 30, 2025, the total consolidated debt was $1.83 billion with a weighted average interest rate of 5.11% and maturity of 2.44 years. VRE's share of total consolidated debt was $1.75 billion[64] | Pro Forma as of July 22, 2025 | Balance | % of Total | Weighted Average Interest Rate | Weighted Average Maturity in Years | | :--- | :--- | :--- | :--- | :--- | | Fixed Rate & Hedged Secured Debt | $1,693,649 | 100.0% | 4.86% | 2.63 | - The debt maturity schedule shows significant maturities in 2026 and 2027, with the Term Loan fully repaid in July 2025[65] Reconciliations and Additional Details This section provides detailed annexes covering transaction activity, financial reconciliations, joint ventures, debt footnotes, property information, and non-GAAP definitions Annex 1: Transaction Activity This annex details 2025 transaction activity, including $268.1 million in dispositions and the $38.5 million acquisition of the remaining Sable property interest | 2025 Activity | Gross Asset Value | | :--- | :--- | | Land dispositions-to-date | $60,300 | | Multifamily dispositions-to-date | $207,800 | | Total dispositions-to-date | $268,100 | | Multifamily acquisitions-to-date | $38,500 | Annex 2: Reconciliation of Net Income (loss) to NOI This annex reconciles Q2 2025 Net Income of $11.8 million to a total NOI of $50.1 million, adjusting for key non-operating items | ($ in thousands) | 2Q 2025 | 1Q 2025 | | :--- | :--- | :--- | | Net Income (loss) | $11,843 | $(13,730) | | Add: Depreciation and amortization | 22,471 | 21,253 | | Add: Interest expense | 24,604 | 22,960 | | Deduct: (Gain) loss on disposition of developable land | (36,566) | 156 | | Net operating income (NOI) | $50,067 | $44,026 | Annex 3: Consolidated Statements of Operations and Non-GAAP Financial Footnotes This annex clarifies financial statement calculations and non-GAAP reconciliations, detailing adjustments for depreciation, land impairments, and severance costs - The FFO calculation includes adjustments for the company's share of depreciation from unconsolidated joint ventures, which amounted to $0.9 million for Q2 2025[73] - Core FFO adjustments include the removal of a $12.5 million land and other impairment charge (controlling interest portion) and $1.4 million in severance/compensation related costs from G&A for Q2 2025[73] Annex 4: Unconsolidated Joint Ventures The company's four unconsolidated joint ventures comprise 1,195 multifamily units (94.1% occupied), generating $8.1 million in total NOI | | Units | Percentage Occupied | Total 2Q 2025 NOI | Total Debt | VRE Share of 2Q NOI | VRE Share of Debt | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total UJV | 1,195 | 94.1% | $8,053 | $333,459 | $3,085 | $129,170 | Annex 5: Debt Profile Footnotes This annex details debt footnotes, clarifying Term Loan repayment and the $126 million Revolver being fully hedged, with an amended facility reducing the spread to 1.55% over SOFR - Subsequent to quarter-end, the Term Loan was fully repaid, and the $126 million drawn on the Revolver is fully hedged by interest rate caps that expire in July 2026[77] | As of July 22, 2025 | Balance | Initial Spread | Updated Spread | All In Rate | | :--- | :--- | :--- | :--- | :--- | | Secured Revolving Credit Facility | $126,000,000 | 1.55% | 2.38% | 5.88% | Annex 6: Multifamily Property Information This annex lists all multifamily properties in the operating portfolio, totaling 7,491 units with an average size of 869 square feet | | Apartments | Rentable SF | Average Size | | :--- | :--- | :--- | :--- | | NJ Waterfront Subtotal | 5,067 | 4,391,122 | 867 | | Massachusetts Subtotal | 1,167 | 963,549 | 826 | | Other Subtotal | 1,257 | 1,156,702 | 920 | | Operating Portfolio | 7,491 | 6,511,373 | 869 | Annex 7: Noncontrolling Interests in Consolidated JVs This annex details noncontrolling interests in consolidated JVs, showing Q2 2025 net losses of $149,000 and FFO of $590,000 | ($ in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net losses in noncontrolling interests | $(149) | $(543) | | Depreciation in noncontrolling interests | 739 | 737 | | Funds from operations - noncontrolling interest | $590 | $194 | Non-GAAP Financial Definitions This section defines key non-GAAP financial measures like FFO, Core FFO, AFFO, NOI, and Adjusted EBITDA, clarifying their calculation and utility - FFO (Funds From Operations): Defined per Nareit as net income excluding gains/losses from property sales and real estate depreciation[91] - Core FFO: FFO adjusted for certain non-recurring items to facilitate performance comparison over time[90] - NOI (Net Operating Income): Total property revenues less total operating expenses, used to assess the unlevered performance of properties[95] - Adjusted EBITDA: Core FFO plus interest, taxes, and other adjustments, used as an indicator of the company's ability to service debt[87] Company Information This section provides essential company details, including headquarters, stock exchange listing, ticker symbol, executive officers, and investor relations Company Information This section provides essential company details, including headquarters in Jersey City, NYSE listing (VRE), key executive officers, and investor relations - Company: Veris Residential, Inc. Headquarters: Jersey City, New Jersey Stock Exchange: New York Stock Exchange Ticker Symbol: VRE[98] - Executive Officers: - Mahbod Nia, Chief Executive Officer - Amanda Lombard, Chief Financial Officer - Anna Malhari, Chief Operating Officer - Taryn Fielder, General Counsel and Secretary[99]