VRE - Veris Residential stock jumps on early redemption of Rockpoint interest Q2 FFO beat

2023-07-27 10:02:47 ET

Veris Residential ( NYSE: VRE ) shares spiked 10% in Thursday morning trading a day after the REIT said it completed the purchase and redemption of preferred units from Rockpoint and its affiliates in Veris Residential Trust for $520M.

"The negotiated early redemption of Rockpoint's interest substantially simplifies the Company's overall structure while maximizing our strategic and operational flexibility moving forward," said Veris CEO Mahbod Nia.

The transaction is projected to save Veris ( VRE ) ~$24M of annual interest while paving the way for further expense savings starting in 2024.

It was funded with ~$360M of cash on hand released from the sale of Harborside 1, 2 and 3 in April 2023, as well as a new $115M transitional term loan and $60M credit facility that are expected to be repaid with ~$200M of proceeds from non-strategic assets under binding contract.

Rockpoint, a Boston-based real estate investment management firm, has been a partner of Veris ( VRE ) since 2017.

The move marks "a pivotal moment for the Company that cements our transformation to a multifamily REIT," Nia said in a separate statement. "With our transformation achieved, we will focus on building upon the outperformance of our Class A portfolio, which realized a 12% blended net rental growth rate during the [second] quarter."

It seems investors were also praising the company's Q2 results, with same-store net operating income increasing by 21.8% vs. a year ago. And, for 2023, it sees same-store NOI growth of 10%-12%, up from the initial projection range of 4%-6%.

In addition, Q2 funds from operations per share of $0.16, topping the $0.09 average analyst estimate, inched up from $0.15 in Q2 of last year. Total property revenue of $60.3M missed the $67.7M consensus and rose 13.3% from Q2 2022.

More on Veris Residential:

• Veris Residential Q2 FFO of $0.16 beats by $0.07, revenue of $60.34M misses by $7.32M
• SA's Quant system rates VRE a Hold
• Veris Residential: likely To Decline Further

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