Ladies and gentlemen, good morning. And welcome to the Veris Residential, Inc. Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Taryn Fielder, General Counsel and Secretary. Please go ahead.

Good morning, everyone. And welcome to Veris Residential’s fourth quarter and full year 2024 earnings conference call. I would like to remind everyone that certain information discussed on this call may constitute forward-looking statements within the meaning of the federal securities law. Although we believe the estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. We refer you to the company’s press release and annual and quarterly reports filed with the SEC for risk factors that impact the company. With that, I would like to hand the call over to Mahbod Nia, Veris Residential’s Chief Executive Officer, who is joined by Amanda Lombard, Chief Financial Officer; and Anna Malhari, Chief Operating Officer. Mahbod?

Thank you, Taryn, and good morning, everyone. To begin, I’d like to take a moment to reflect on Veris Residential’s evolution since the reconstitution of our Board and establishment of the Strategic Review Committee or SRC over four years ago. We successfully pivoted away from our office exposure, proactively executing large-scale asset sales at advantageous pricing and challenging market conditions, preserving significant value for our shareholders while accelerating Veris Residential’s successful transformation into a consistently top-performing pure-play multifamily REIT with core Class A properties concentrated in one of the top performing residential markets in the U.S. Concurrently, management has worked closely with the Board, the SRC and the company’s advisors to stay abreast of the state of the transaction market and related capital flows, as well as capital markets, as we evaluate all available avenues to maximize value for Veris Residential shareholders. We recognize that despite our successful transformation, intrinsic value of our company is not accurately reflected in our share price today. Both management and the Board are keenly focused on closing this gap to intrinsic value through measures including, but not limited to, the crystallization of assets at or close to the intrinsic value where opportunities exist to do so. Consistent with this approach, the company, in close coordination with the Board, has developed Veris Residential’s 2025 corporate plan, central to which is the proposed sale of approximately $300 million to $500 million of select assets, which we believe we can achieve strong pricing at or near to their intrinsic value over the next 12 months to 24 months, given their size, location and buyer interest, despite the broader challenges in the investment market today. These assets comprise the majority of our remaining land bank, whose sale will be the primary catalyst for earnings accretion. The balance is…

Thank you, Mahbod. For the full year 2024, net loss available to common shareholders was $0.25 per fully diluted share versus a net loss of $1.22 for the prior year. Core FFO per share was $0.11 for the fourth quarter, at the high end of our guidance, compared to $0.12 in the fourth quarter of 2023 and $0.17 in the third quarter of 2024. For the full year, we reported core FFO of $0.60 per share, an increase of 13% over 2023. Same-store NOI growth was 7.3% for the quarter and 6.9% for the year. For the quarter, same-store revenues were up 4.1% as compared to last year, primarily driven by market rent growth. Revenues were up 5.4% during the year, driven by revenue growth of 3.8% approximately 60 basis points of other revenue earned in the first half of the year and the remainder primarily attributable to outsized year-over-year growth from House 25 as the asset left its stabilization. On the expense side, we realized expense savings of 1.8% for the quarter, with expenses only increasing 2.5% year-over-year in line with expectations. We have kept expense growth to a minimum through the favorable resolution of insurance and real estate taxes, in addition to realized cost savings from technological enhancements and portfolio efficiencies implemented. Moving on to overhead, core G&A, after adjustments for non-cash stock compensation and severance payments, ended the year up broadly flat at $37 million, reflecting the benefit of cost-cutting initiatives offset by inflationary pressures. Consistent with seasonal expense trends, the quarterly core G&A was elevated relative to the third quarter due to typical seasonal fluctuations in compensation and professional fees. Turning to the balance sheet, 2024 was a very successful year for the Veris team as we repaid approximately $526 million of mortgage debt and entered…

Thank you. [Operator Instructions] The first question comes from the line of Steve Sakwa from Evercore ISI. Please go ahead.

Yeah. Thanks. Good morning, Mahbod. I appreciate kind of all the comments you provided about the SRC and kind of the strategic plan. I guess what I’m really trying to get a better handle on is under what environment does the Board think pursuing something larger would be more favorable? Is it more about the economic outlook? Is it more about the rate environment? Do you have a certain sort of targeted interest rate environment that you think would make a larger sale more appealable to a larger buyer? I’m just trying to understand under what conditions does something larger make sense?

Good morning, Steve. Thank you for the question. No. It’s the right question. I think it’s important to remember that we’ve got a relatively newly reconstituted Board and Strategic Review Committee that was put in place four years ago that also includes our two largest non-passive shareholders. And so, yeah, we have a broad set of expertise and perspectives. We’re well advised through our advisors, and as I said in my script of remarks, have and continue to really stay abreast of all the evolving trends in the market that work together and it’s a combination of the things you mentioned and other things such as capital flows and the nature of buyers that are ready, willing and able to execute. And all of that gets factored into what is the best path to maximize value on behalf of shareholders? Because the job of the Board is consistent with their fiduciary obligations, the maximization of long-term value for shareholders. And so, at the moment, what we’re seeing in transaction markets and it’s reflective of the set of a number of the factors you described, is some dislocation, particularly for anything on the larger side that really can have implications or has implications for the viability of transactions and for pricing. So, it would have to be -- it’s not one thing. I think it’s just a continual evaluation of options available to the Board and SRC, and then ultimately deciding the best path forward in pursuit of maximization of value for all shareholders.

Okay. And maybe just as a second question, could you just provide a little more color on the $300 million to $500 million? I guess I’m just curious how you’re thinking about the land sales, and maybe more importantly, what are the buyers, which are presumably all developers, how are they thinking about the land value and the, I guess, the targeted yields that they might want to achieve on those new developments? And I guess, can you just give us any sense for kind of land values per unit that you might be able to achieve on that $300 million to $500 million?

Sure. So, within that $300 million to $500 million you have at the moment, so our land bank today is about $180 million is where we have it marked and I think that’s fair for today. Within the $300 million to $500 million you’ve got, call it, $100 million to $130 million of land of which $45 million is under binding contract now. The values per unit of those -- assumed values will vary depending on the specific sites and the nuances and not to mention how advanced they are in the process of becoming shovel ready. So that’s a bit of a range. And in terms of the buyer groups it’s a bit of a mixed bag actually, but that is one of the areas where we believe we’ve identified some capital that could allow us to be able to exit those at fair value, close to the intrinsic value as we’ve said and they’re highly accretive to earnings to the extent we monetize them and really are the catalyst behind the deleveraging alongside the multifamily sales.

Okay. Great. That’s it for me. Thank you.

Thank you, Steve.

Thank you. The next question comes from the line of Tom Catherwood from BTIG. Please go ahead.

Thanks, and good morning, everybody. Maybe following up on Steve’s question, how much of the land bank is in the market right now and are there properties where you’re updating entitlements to maximize value similar to what you did with Harborside 8 and 9 last year?

Good morning, Tom. Thank you for the question. So about $100 million to $130 million of the $300 million to $500 million is land. I wouldn’t comment specifically on which sites are currently being marketed or in the market, but you should assume that we would look to work through and get things done as expeditiously as is reasonable, while also seeking to preserve and maximize value. Then in terms of enhancing the value of our land where we can, that’s been a continuous process really for the four and a half years, four years that I’ve been here, that’s something that we always do. So regardless of whether we’ve made a decision on what to do with that land, if by progressing steps to enhance the value, by investing and spending the time to enhance the value, we can extract more value in a sale or just hold that asset at a high value, that’s something that we’ve pursued proactively and continue to do.

Understood. And then I know timing is obviously a very hard thing to predict, but in general as you think to that $300 million to $500 million of potential sales, can you bucket that in terms of kind of on an aggregate basis what you think internally as far as what are near-term opportunities, more medium-term and then what still have some more work before you think you can truly monetize those assets?

Yes. So it’s -- that’s an estimate. So that’s a product of an extensive review working with the Board and the Strategic Review Committee and our advisors and it’s an estimate today of what we believe could be monetized given a range of factors including the size of those assets, the operational efficiency, future return profile and very importantly the nature of the buyers for those types of assets and that ties in with current capital flows that could allow us to realize values that as I’ve said are at or close to the intrinsic value of those assets implying significantly below the current trading cap rate of the company. So that’s the best estimate today. The timing of 12 months to 24 months, I mean, hopefully, if you’ve followed and I know you have, Tom, everything we’ve done over the last four years we don’t tend to sit on our hands. I think we’re pretty thoughtful but also pragmatic when it comes to crystallization of value including with the office portfolio where we really proactively had to seek out small pockets of capital to be able to execute the levels that we did but ultimately moved forward. So we don’t tend to sit on our hands but we’re also thoughtful and very mindful of preserving and maximizing value for shareholders.

I appreciate those thoughts. And then last one for me Mahbod, you mentioned the uptick in blended net rental growth thus far in 2024 and really accelerating in February. Can you remind us how Veris handles its unit pricing strategy, and is that your own system or a third-party service?

Well, it’s a combination, so -- and there’s an element of it that’s proprietary, but we do obviously take into consideration what is happening in competing assets around the market and ultimately set pricing strategy in a way that seeks to not necessarily prioritize occupancy, as some may do or as you may do in certain market conditions, but really to maximize NOI.

Appreciate that. That’s it for me. Thanks, everybody.

Thanks, Tom.

Thank you. The next question comes from the line of Eric Wolfe from Citi. Please go ahead.

Hi. Good morning. It’s actually Nick Kerr on for Eric this morning. I guess the main question for me is, given you guys tried to raise equity somewhat recently in June, I think, what’s causing the sort of shift in rationale to or purchase 100 million shares and pay off debt with these asset sale proceeds?

Well, I think you’re talking -- good morning by the way, Nick. You’re talking about two different points in time and two very different rationales behind those two things. The asset that we’d identified back in June was highly strategic and highly accretive. Our NAV -- our consensus NAV at that time was 20% to 25% lower than it is today. So it was a very different time and an opportunity to acquire an asset that was not only accretive to the business, but also highly strategic. We didn’t move forward with that for reasons that you’re well aware of. Today, we’re at a different point where we’re seeing a significant dislocation between the trading price, the trading value of the company and the intrinsic value of the company. And we’re also seeing a shift in the dynamics and the transaction markets whereby there does seem to be some small pockets of liquidity that we believe may be available for smaller transactions. And so consistent with what we always said we would do in our pursuits of maximizing value, we’re seeking to exploit that arbitrage opportunity that we believe exists and crystallize values at or close to NAV for those assets and put that capital to a higher and better use, buying back our own stock at these discounts to intrinsic value and delevering the company in a more accelerated fashion.

Thanks. And then I guess the second one for me is if you could just kind of walk through high level some of the assumptions for the same-store revenue build, like revenue growth and occupancy?

Sure. Good morning, Nick. This is Amanda here. So for our same-store revenue, we are projecting revenue growth of approximately 3.3%. However, we’ve got it to a little bit lower number because last year, we had some one-time items, some termination income from a retail tenant and other items that’s driving a 60-basis-point reduction as we lap the recognition of that revenue. And then so that’s really driving where our revenue assumptions come from. On the expense side. Mahbod said earlier, on the controllable expenses, we’re predicting there that for them to be relatively flat. I think it’s like a 20-basis-point increase we’re seeing. There is a small amount of savings that we’re recognizing this year due to the Liberty Towers value-add where we’re not incurring make ready costs anymore, but that’s only about 70 basis points. So it’s still very low overall. And then on the non-controllable side, we are projecting that that is the bulk of our expense growth was coming from. And last year, we have the favorable resolutions on both the taxes and insurance side, which are helping to which are a factor in how we projected those growths.

And Nick, it’s Anna here again, chiming in on the occupancy. As Mahbod mentioned, we always look to find the right balance between rental growth and occupancy, really targeting somewhere around the 95%, which is what you have seen over the last few years and that’s where we’re as of now, as you’ve seen in the disclosures, excluding Liberty Towers, where we will continue to have reduced occupancy as we work through the value-add project.

Yeah. Great. Thank you for that.

Thank you.

Thank you. The next question comes from the line of Jana Galan from Bank of America. Please go ahead.

Hi. Thank you. Good morning. Maybe just following up a little bit deeper on Nick’s question, with the type of occupancy and blended rent spreads embedded in the guidance and kind of the seasonal cadence, I think, some of your peers are expecting a stronger second half 2025 versus first half. But just kind of given your portfolio focus, maybe if you could maybe talk to that.

Good morning, Jana. So two-thirds approximately of our leases roll between the second quarter and third quarter, which is where we expect the strongest lease growth. We typically see slowdown in the first quarter, as you have seen in 2024. And at the moment, we’re kind of recovering from that period, going into the stronger leasing season. So I would say the summer will be the peak on our side.

Thank you. And then maybe just when thinking about the revenue-enhancing redev opportunities, is the pace kind of measured just given the disruption to the portfolio? Is it any way to pull forward some of that or is the capital constraint? If you could just maybe talk to the decisions when looking at these opportunities?

So you mean in terms of Liberty Towers and Portside and any other value-add opportunities?

Yes.

Yeah. It’s a function of a few things. So, obviously, the units have to be available and so we’re constrained to some extent by the availability of units and waiting for them to turn. And then we do try to, as much as possible, minimize disruption within the building for existing residents as well. So I’d say your aim is to pace things along in a way that is expeditious, but also minimizes, to the extent possible, disturbance to existing tenants and candidly to our numbers as well. I mean, we wouldn’t make half the building vacant, for example, in one go [ph], even if we had the opportunity. So it’s a bit of a balancing act of just working through it steadily. But capital is not the constraint. We’ve got plenty of liquidity available.

Thank you.

Thank you.

Thank you. The next question comes from the line of David Segall from Green Street. Please go ahead.

Hi. Thank you. I think in your opening remarks, you mentioned that cap rates in the market are around 5%, but also the assets you’re planning to sell are smaller and less efficient. So I was curious how you’re thinking about pricing for those assets relative to the market.

Good morning. Great question actually. So the 5% was really a reference to general sort of cap rates in and around the Massachusetts market, not across our full asset base today. Having said that, the assumption should be that the operating assets in that $300 million to $500 million, our expectation is to sell them in the low 5s cap rates.

Great. Thank you. And maybe just to build on that, most of the smaller assets you own are outside of the New Jersey Waterfront bucket. So does that mean you would be looking to potentially exit some of the Massachusetts assets or market?

Could be. I think that we haven’t announced which assets yet, but it’s a bit of a combination. We also have some smaller assets, you will notice, that are in markets like Westchester and D.C. And then also joint ventures, which we’ve mentioned in the past that we would like to try to find a path to clean up to the extent that we can. And so I think the assumption should be that it captures, it goes back to what I said earlier, this is the product of an extensive review of our asset base working with the Board and the SRC and our advisors and taking into consideration a range of factors. But certainly from a market liquidity and pricing standpoint, size is one of the critical ones today.

Great. Thank you.

Thank you.

Thank you. As there are no further questions, I now hand the conference over to Mahbod Nia for his closing comments.

Thank you for joining us today. We’re very pleased to have reported another year of solid operating results and are excited about the future prospects of the company and look forward to updating you again next quarter.

Thank you. Ladies and gentlemen, the conference of Veris Residential has now concluded. Thank you for your participation. You may now disconnect your lines.