Veris Residential(US:VRE)2020-05-07 18:31Financial Data and Key Metrics Changes - The company reported core FFO per share for Q1 2020 of $0.33, down from $0.40 in the prior year, primarily due to the disposition program [28] - The total portfolio had same-store NOI growth of 11.9% and revenue growth of 4.6% in Q1 2020 [29] - The net debt-to-EBITDA metric was 11.5x at quarter end, an increase from 9.7x in Q4 due to pandemic-related disruptions [43] Business Line Data and Key Metrics Changes - Residential same-store NOI increased by 9.8% in Q1 2020, driven by a 6% increase in revenues [17][30] - Office cash same-store NOI increased by 13.1% in Q1 2020, benefiting from major lease agreements [29] - The hotel segment, which contributed 4% of revenues, was significantly impacted, with an estimated EBITDA loss of $687,000 in Q1 [35] Market Data and Key Metrics Changes - Residential collections exceeded 96% for April 2020, with a retention rate of 63% for tenants seeking extensions [18] - The company has a strong credit portfolio with delinquencies less than 5% in the office segment [12] - The parking operations produced $21.4 million in revenue in 2019, with expectations for a similar amount in 2020 despite disruptions [36] Company Strategy and Development Direction - The company is focusing on longer-term residential leases and reducing corporate tenancy in response to market changes [20] - Development projects are ongoing, with $31 million remaining in capital obligations to complete the current portfolio [44] - The company is actively marketing suburban office portfolios while managing a light rollover in Waterfront properties [45] Management's Comments on Operating Environment and Future Outlook - Management noted that the hotel segment remains a significant concern, with uncertain recovery timelines [54] - The company is adapting to the changing environment by implementing virtual tours and focusing on tenant needs [52] - Management expressed confidence in the resilience of the multifamily asset class and the potential for recovery in parking and retail segments [54] Other Important Information - The company has contributed $2 million to local small business funds and provided support to medical personnel during the pandemic [7] - The company is in various stages of LOI and contract negotiations for 784,000 square feet of assets, with expected closings in late Q3 to Q4 [41] Q&A Session Summary Question: How are conversations with buyers going amid the pandemic? - Management noted that buyers are looking to lock in stable cash flows and advantageous financing, with ongoing discussions about pricing and timelines [60] Question: Will suburban demand increase due to deurbanization trends? - Management indicated that they will proceed with planned sales of suburban assets, while acknowledging potential shifts in demand [62] Question: What trends are being observed in apartment move-ins and renewals? - Management reported an increase in tenant retention rates and a shift towards longer lease extensions as tenants reconsider moving [74] Question: What renewal increases are being offered to tenants? - Management stated that renewal increases vary, with some tenants receiving modest increases while others may see no increase due to current economic conditions [76]