Veris Residential(US:VRE)2025-02-25 15:32Financial Data and Key Metrics Changes - For the full year 2024, the company reported a net loss available to common shareholders of $0.25 per fully diluted share, compared to a net loss of $1.22 in the prior year [29] - Core FFO per share was $0.11 for Q4 2024, at the high end of guidance, compared to $0.12 in Q4 2023 and $0.17 in Q3 2024 [29] - Same-store NOI growth was 7.3% for the quarter and 6.9% for the year, with revenues up 4.1% for the quarter and 5.4% for the year [30] Business Line Data and Key Metrics Changes - The Class A portfolio recorded NOI growth of 6.9% compared to an average of 1.6% for the peer group, with blended net rental growth of 4% [18] - The average rent per home across the portfolio is now above $4,000, reflecting a 4.6% year-over-year increase [20] - The affordability ratio across the portfolio stands at 12.9%, supported by move-ins with an average income of $180,000 per person [21] Market Data and Key Metrics Changes - New York City and New Jersey led national rental growth in 2024, with 5% and 3.8% year-over-year growth, respectively [16] - Multifamily investment volumes in 2024 were 35% below the historical average, although higher than 2023, which was 44% below the historical average [14] - Jersey City has a projected housing shortage of between 27,000 and 36,000 units, with 10,000 units currently under construction [16] Company Strategy and Development Direction - The company plans to sell approximately $300 million to $500 million of select assets over the next 12 to 24 months to maximize shareholder value [8] - The focus remains on operational outperformance, capital allocation initiatives, and strengthening the balance sheet [10] - The company aims to maintain flexibility to respond to evolving market conditions while pursuing value creation through targeted investments [28] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty and inflationary pressures, with expectations of a higher-for-longer rate environment impacting the multifamily investment market [14] - The company anticipates continued rental growth supported by favorable household formation trends and limited near-term supply in select markets [15] - Management expressed confidence in the company's ability to achieve strong pricing for asset sales despite broader market challenges [8] Other Important Information - The company refinanced over $526 million of mortgages in 2024, reducing indebtedness by over $180 million [11] - The operating margin improved to 66.8%, reflecting operational excellence and cost containment efforts [23] - The company introduced strategic technology initiatives aimed at enhancing operational efficiency and reducing controllable expenses [26] Q&A Session Summary Question: What environment would make pursuing a larger sale more favorable? - Management indicated that it is a combination of factors including economic outlook, rate environment, and capital flows that influence the decision [44][46] Question: Can you provide more details on the $300 million to $500 million asset sales? - Management clarified that the land bank is marked at about $180 million, with $100 million to $130 million of land included in the sales target [49][50] Question: How much of the land bank is currently on the market? - Management stated that they are working to enhance the value of their land continuously and would look to market assets expeditiously while maximizing value [55][56] Question: What are the assumptions for same-store revenue growth? - Management projected revenue growth of approximately 3.3%, with a slight reduction due to one-time items recognized in the previous year [72] Question: How does the company handle unit pricing strategy? - Management explained that the pricing strategy is a combination of proprietary systems and market considerations, aiming to maximize NOI rather than just occupancy [62]