Veris Residential(VRE)2025-04-24 13:30Financial Data and Key Metrics Changes - For Q1 2025, the net loss available to common shareholders was $0.12 per fully diluted share compared to a net loss of $0.04 in the prior year [14] - Core FFO per share was $0.16 for Q1 2025, which is $0.03 higher than expected due to early recognition of the IRBY tax credit, compared to $0.11 in Q4 2024 and $0.14 in Q1 2024 [14][15] - Same store NOI growth was 3.2%, with blended net rental growth of 2.4% [10][15] Business Line Data and Key Metrics Changes - The company closed $45 million in non-strategic asset sales and entered contracts for an additional $34 million in land sales [4] - The Jersey City assets outperformed, benefiting from proximity to New York City, with a 4.2% new lease rental growth rate in March [6][7] - Occupancy rates improved to 95.3% excluding Liberty Towers, which was undergoing renovations [10] Market Data and Key Metrics Changes - Jersey City is projected to see population growth of 8% to 15% over the next seven years, leading to a potential housing shortage of 27,000 to 36,000 units [7] - The Northeast market continues to show strong fundamentals, with robust demand and constrained supply [5][6] Company Strategy and Development Direction - The company aims to sell $300 million to $500 million of non-strategic assets over the next 12 to 24 months to improve leverage and reduce debt [4][17] - The strategic focus includes recycling capital from asset sales into debt repayment and share repurchases [33] Management Comments on Operating Environment and Future Outlook - Management noted that while the economic outlook is uncertain due to tariffs and inflation, most multifamily markets have started positively in 2025 [5][18] - The company is maintaining guidance due to market volatility, despite strong operational performance [19] Other Important Information - The company has implemented a new resident mobile app that has been adopted by over 65% of units, enhancing resident engagement and operational efficiency [12] - The balance sheet remains a focus, with a goal to reduce net debt to EBITDA below nine times by the end of 2026 [17] Q&A Session Summary Question: Can you provide progression on blended spreads for January, February, and March? - Management confirmed that blended spreads were around 2.5% in February, exceeding 4% in March, and 4.8% through April 21 [21][22] Question: What is the demand trend from Manhattan? - Approximately 20% to 25% of move-ins come from Manhattan, driven by rent differentials and the quality of offerings [25][26] Question: How challenging is it to achieve the $300 to $500 million asset sales target? - Management expressed confidence in navigating challenging market conditions and remains on track to meet stated objectives [28][29] Question: What is the strategic focus for the company's next chapter? - The focus is on selling non-strategic assets and recycling capital for debt repayment and share repurchases [33] Question: Are there any concerns regarding layoffs or bad debt in the portfolio? - Management indicated no current operational impacts but acknowledged economic uncertainty [34][35] Question: Can you discuss the process behind the Urby acquisition? - The decision to acquire was based on the valuation and the benefits of simplifying operations and enhancing flexibility [40][41] Question: What is the expected occupancy trend for Liberty Towers? - Management expects occupancy to improve from current levels as renovations are completed [59][61] Question: What percentage of the portfolio is excluded from blended lease statistics? - The excluded properties are immaterial to the overall portfolio, primarily two assets not managed by the company [62]