#United States #Jersey City #Veris Residential #VRE #multifamily REIT

Veris Residential's Strong Performance in 2024

Overview

Veris Residential, Inc. (NYSE: VRE), a leading multifamily real estate investment trust (REIT) focused on the Northeastern United States, has published its financial results for the fourth quarter and the entire year of 2024. The report shows a substantial progression in several areas, despite the backdrop of an unpredictable economic environment.

During the fourth quarter of 2024, Veris posted a net loss per diluted share of $(0.13), which is notably an increase from the $(0.06) loss recorded in the same quarter of 2023. However, the firm showcased a significant improvement in its operational metrics, particularly with a growth in Core Funds from Operations (FFO) and Core Adjusted Funds from Operations (AFFO).

Financial Highlights

For the fourth quarter:

• - Core FFO per diluted share was recorded at $0.11, compared to $0.12 in 2023, showcasing a resilient performance despite external pressures.
• - Core AFFO per diluted share reached $0.13, slightly down from $0.14 a year earlier, reflecting the ongoing adjustments in the market.
• - The company raised its quarterly dividend substantially by approximately 60%, bringing it to $0.08 per share from the previous $0.0525.

Over the entirety of 2024, Veris Residential reported:

• - A net loss per share of $(0.25), an improvement compared to a substantial $(1.22) loss in 2023.
• - Notably, the normalized Same Store Net Operating Income (NOI) grew by 7.9% year-over-year, underscoring the company's stability in managing its properties.
• - A considerable refinancing of $526 million in mortgages that eliminated upcoming debt maturities until 2026.

Operational Efficiency

The company's operational execution remained strong. The normalized Same Store NOI margin enhanced significantly, ending 2024 at 66.8%, a 160 basis point increase from the prior year. Such efficiency was largely propelled by strategic asset management and expense control.

With the real estate market continually evolving, Veris has adeptly identified a robust pipeline of $300 to $500 million in assets targeted for sale, set to optimize its portfolio performance further. This move aims to leverage capital for its share repurchase program and overall debt reduction, aligning with their strategic goals to enhance shareholder value.

Comments from Leadership

Mahbod Nia, the CEO, remarked on the strategic advancements the company has made since establishing their Strategic Review Committee. He emphasized the necessity for the market to recognize the intrinsic value of Veris Residential, which he feels is not yet reflected in their current share price. Nia stated, "We are keen on closing this valuation gap through prudent asset sales and enhancing shareholder value."

The company plans to maintain momentum by focusing on operational outperformance and agility in navigating market challenges. Through these measures, Veris aims to engage effectively in potential capital markets opportunities, ensuring they remain a foremost choice in the multifamily REIT sector.

Future Outlook

Looking ahead, Veris Residential has set optimistic revenue guidance for 2025, anticipating a continued increase in rental growth. Analysts predict that these initial sales along with their strong dividend policy will strategically position the company to outperform in the upcoming fiscal year.

To remain competitive, Veris Residential is looking to adhere to a target Net Debt-to-EBITDA ratio of below 9.0x as they complete their sales and enhance their overall market standing. A conference call discussing these financial results and strategic outlooks is scheduled for February 25, 2025, promising further insights into the company's operational strategies going forward.

In conclusion, despite the challenges presented by the evolving economic landscape, Veris Residential, Inc. has illustrated its commitment to growth and value creation through strategic enhancements and operational efficiencies.