CLI - Earnings call transcript Q1 2019 | Veris Residential, Inc.

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Operator

Good day, everyone, and welcome to the Mack-Cali Realty Corporation First Quarter 2019 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to Michael J. DeMarco, Chief Executive Officer. Please go ahead, sir.

Michael DeMarco

thank call. joining and quarter Mack-Cali's everyone, earnings XXXX morning, you the for first Good to to time. going than I'm try I bit and did louder a the last speak more clearly This DeMarco. is Mike by my operations; EVP multifamily our of I am Smetana, joined partners, Tycher, Roseland, David Hilton, Chairman Nick and Marshall CFO; Leasing. our of our today federal a note, I within information call this in forward-looking legal must statements certain On may meaning the securities the of discussed remind everyone law. constitute that

estimates the reasonable give that be believe impact Although and any on the filed the to in will quarterly we are based you with could annual the SEC reflected assumptions, company. statements results press refer we assurance release, for achieved. reports that our risk cannot We anticipated factors

quarter. at always, many supplemental conference. upcoming contact look We please with suggestions. all, a seeing forward any to have not the filed And if as further We NAREIT you, this of David

to following and multifamily we break will Nick our As we're and our close down office Marshall our opening the going will will leasings into comments I our our will recap forward. make sections. some into insight provide comments. discuss markets meeting. performance David have results, some call regarding our of will view operations. done operating before, going with the I upcoming annual

transaction great not thought of we positive if results very early. deal I quarter that for on delivered we We performed indicated, our as successful quarter. had another brilliantly. little As a operating had we a the teams plan, activity completed

deals we achieve working more. Waterfront. both active if square the moment foot which upcoming particularly at the expected were for equal large the We of results results suburbs, on in of on not leased can amount leases over and achieved. office Our far number new also the total XXXX so and are a We're can rates believe quarters, regarding

go will partner all getting into cylinders, which multifamily Marshall business on really is our detail. Additionally, my

So as that from really a tone of the office multifamily. far, well Waterfront new made up product build love XXXX and a we office our as lobbies packages are and tenants sense creating tenants the the for place. to cafeterias, day, revamped our above is and amenity shaping improvements accepting Every

of that bringing getting multifamily XXXX, XX we were Columbus; the several and XXXX inclusion are and change same transaction in Harborside, now the other will the the which excitement We Starting redone planned looked Whole at. X, which deliver, and operations in totally, is [indiscernible] retail our our product with restaurants, portfolio. Harborside totally to Foods new Plaza Christopher and both its that way

the Our three-year is complete. plan of selling portfolio of bottom

in creating focus are truly by process occasional results. on acquisitions selected we highest We portfolio of that to now can the and achieve dispositions the

example is is past Towers, at sale an business the quarter the Our the Flex Marbella this of that purchase of the as the Soho consolidation Lofts. City ownership MX of and apartment of strategy of Jersey

last very, delivery for fully Regarding go but all our our is leasing being Front XXX good to multifamily, over projects. points, at very stabilized. in partner, will his we a had quarter Street, Marshall, XXXX close my

in XXXX opened this that sense plan actually theaters, us here public help substantial the Residence so doing complete well phase his in expect some should In Marshall in year. projects, we second of will which continue of were numbers space process XXXX, far Inn the really in The time, Waterfront. arts, our will show XX. superb the The ahead is creating December Port Imperial, place strength, by and is on expressed leased last our of the and in same-store as the inclusive be the truly throughout fully we June team, of as

we'd like out, more the valuable. in The fully increasingly are Autograph, year. as Also, be Yards Marriott online, to be our our We the Hudson second not in there. Imperial of is to going assets second open Port point will could which this more phase, strategy for comes quarter excited

of about, sales. from that Lastly, and Flex David the [indiscernible] leverage will asset talk non-income the proceeds some business, came down

the do like fourth further this turn will quarter, balance. debt to to over an be it We sales overview for applied year will I'd third of in and our now which to Nick leasing.

Nick Hilton

committed rolled both our year X.X% finishing with markets, a and another was lease per basis transactions, a waterfront signing a XXXX, basis. cash XX.X% posted kick XX% up of all square $X.XX rents portfolio. our resulting of we GAAP per for XXX,XXX We office and our And of in or Waterfront which Mike. foot term, off leased you, largely Across executed on on renewals. Foods feet to quarter-end. lease our in square XX,XXX Amazon approximately XX% at deals square Of store or feet square and over result in and leases a were were new these XXX,XXX Whole portfolio Thank on leases good QX at space just XX.X% core transactions, quarter feet

quarter, just roll-up In Focusing and a XX.X% of over the by a square roll-up GAAP with feet results on XX.X%. our the completed Waterfront transactions XXX,XXX of cash first market. of

XXX,XXX In addition, we new transactions feet currently were approximately in of square negotiations.

the remained also active quarter. Our suburban in first portfolio

of XX,XXX Specifically, square we transactions. over executed just feet

square executing square With at end. over the expansion confident square over million speaking, Marshall. we to more where roughly Proudly across dozen we we like momentum with feet, call square X.X XXX,XXX a the aggregating feet feet than I'd in are negotiations Metropark. to FINRA of Of over XXX suburban included year's Street see turn the for transactions. significant that, XX,XXX of by in and portfolio renewal to of active new feel to total, feet over Main tenants about that the continue most strong entire XX,XXX One

Marshall Tycher

the XX.X% Thanks to quarter. XX.X% at last quarter Nick. Roseland finished as leased stabilized portfolio leased operating compared

portfolio, which continued first over units, X.X% we quarter has same-store in momentum Roseland's leasing enter now are X,XXX we a currently increase into leased grown spring strong and XXXX. strong at XX.X% historically NOI April, season. Our our into experienced as

XXXX. excludes grew collectively period, same units X,XXX is the cost most and our XX% on substantial of Over and $XX stabilized same-store produce delivered leased forecasted to million. communities. growth with delivered in yield the experienced was at and lease-up revenues portfolios This portfolio NOI X.X% The a Alterra, in Chase MX X.X%

last and Our by of lease-up, in end Mike finish XXX Front X Street lease-up XX% remaining expect Worcester, currently stabilized Phase as XX%, with to the leased June. is at mentioned, as we

corporate been On above eviction the in communities. City D.C., process focused leased. quarter call, Strategically, our limit XX% increased the in the objective and and geography. more Airbnb led temporary communities. and to Jersey finished transactions abuses with corporate have we Washington, The the our vacancies select last to tenant quarter referenced restabilized ownership All to have lead a

Prudential's $XXX refinancing the assignment XXX-unit at net requirement million XX% MX, our membership after interest on gross high-rise capital First, asset in Marbella. and approximately The [joint's] valuation a a on we closed had based of acquisition of of was million. a $XX.X

and of stabilized Soho acquired These the community This apartments in subsequent million. transactions is average with Second, a $XXX ownership of XX.X%. we reduced Jersey X,XXX recently have City border. Soho near located collective asset Lofts, quarter-end, to portfolio the Jersey stabilized for West emerging Hoboken XXX-unit an neighborhood City's

in the Lastly, in for and the of disposition million Square the Park closed cap first New non-strategic approximately $XX Rahway, Jersey, we rate. on quarter, X%

of Columbus, an and assets to the apartments, These modernize Christopher in is of ADR fixed and component Inn XX% elementary update April has total signature with XXXX The and for City completed rent of representing significant construction occupancy anticipate development in the the X.X%. XXX-unit to which opened square-foot be premiums. generate The Autograph NOI Charlotte. forecasted years These will million common million market Waterfront school, we success will NOI. pipeline on-site with Residence the $XX to Hotel. XX of long process construction by XXX upon neighborhood. a and Jersey first stabilization. at highlighted tax a key now and Upon full area called apartments will average below-market include Marbella projected at the Jersey X,XXX construction dual-flag, keys renovation building's amenities stabilization, $X.XX common and with The in this City. City active project XXX Port amenity and at comprised $XX This service a The XX,XXX is term, continue will an project quarter Monaco a abatement the of Imperial launched specs $XXX. and hotel generate billion. are costs area generate of to unit third were of a Envue, current and XX substantial Roseland's Jersey hotels renovations In at December opening Marriott quarter, portfolio We program should a combined Collection our Additionally,

target we of holdings greater focus we portfolio. quarter, first suburban the land in initiated efforts our of as Philadelphia our disposition geographic Additionally, residential

After the of Mack-Cali the of billion. I located of accounting along X approximately with Finally, in With the Waterfront Rockpoint Imperial. development Moreover, Consistent call for acquisition $X.X to Soho and residential XX% residential a April. approximately turn the we we actually, along over billion. focus supplemental, estimate Lofts and would units of company's the desirable X,XXX is NAV City participation, NAV the Page Waterfront, highlighted Port most Hudson XX% Waterfront in on control that, share the of sites be David. $X.X with NAV Jersey

David Smetana

back few you, turning the A Thank call Marshall. brief Mike. before highlights over to

$XXX quarter receipt The solid million an part $X.XX prior earlier-than-expected from lost portfolio $X.XX disposition we the $X.XX as is the Waterfront well sale. as the core overall, our per to the share tenants We from in on of said, Mike sales asset NOI a operationally credit versus FFO Flex timing the move-outs on tax mainly year-over-year As proceeds shift decrease share due closing as sale of our a our per reported with quarter executed of program. of for saw in of of and of early year.

NOI in NOI some extend XXXX GAAP in see Waterfront rent leased excluding to year. and declined quarter year-over-year in in XX.X% performance begun at slightly portfolio, note, once We office core pickup XX than later due on in Flex, was declined deals, And turning quarter a NOI X.X% free expected and the our fourth of NOI was points. by now by GAAP have basis this in blend still driven first the same-store first in dates and the leased April. office cash came portfolio this our same-store of which Our move-outs XX.X% portfolio. again by quarter-end, commencement year-end same-store quarter, positive better declines Cash the X.X%, our at with same-store

on end improved had Residential by newly isolation minus in a X% will and X.X% a very the our the quarter, of NOI. have cash also NOI out move expanded impact same-store We first the in at pool. this XXX,XXX GAAP suburbs same-store square-foot year-over-year which tenant in same-store quarter

saw some in some operating from and we expense highlighted, to lower Marshall addition benefits lower due In newer properties comps. the to properties increases of our concessions prior-year favorable

to now of watching the will sale quarter assets about And portfolio while closely guidance. NOI other same-store now our I for lease-up of we've some We close. be highlight We and and the the buildings in $XXX any the that million. remaining season transactions full-year finalized million talked making adjustments five that Flex a closed office for now post multifamily will quarter $XX.X for of before

also asset substantial debt by net weighted this The involved, assets to we remaining million, currently representing noncore recycled million. of planning of will continue million driven million notes of We those for $XXX be dispositions the sales year. of micro is a A $XX asset for and complete, sales a our its With more guidance mid-point swapping We incremental on be market. portfolio to influence not have of have to repayment disposed of we and be the substantially versus look after in contract this of be share a acquisitions. a sold of proceeds rationalize our total do multifamily where quarter, we tax markets have into paydown fourth with quarter the another will $XXX debt sales of where our platform will to noncore couple towards under development. and will $XX a

have the closed in X on on our of the closed Soho of at disclosure NAV $XXX We Flex are quarter in the the closed. disclosed consolidated. proceeds are for of our top and updated section now Marbella quarter share reflect now April under our Lofts fourth Lofts and previously Jersey call, joint ventures, in from sale on on of of MX XX% partners consolidated are acquisition to buying residential our earmarked Both MX the we will the note, XXXX we section New owned NAV. As out to post our the wholly Soho they Balances and million and that's I both January. change, end

a as property Flex adjacent office X, part XXX sale repurchased to Metropark. on in our XXXX in property planning tax our around Lastly, a Wood through square-foot exchange, the XXX,XXX of XX February Wood

briefly of and sale million. the used balance our current net additional Flex may debt-to-EBITDA off Turning credit to our the December pay sheet. another loan We of this remaining Elmsford the sale million portfolio recent $XX $XX from balance quarter. of approximately repay the exchange line on balance to pay pay our million XXXX There's to XXXX used $XXX and line debt. of holdings XX on to term be our $XX $XXX outstanding credit balances to balances down of We in by corporate which reported down from of X.Xx million million our Flex

unencumbered to of are of with retire the going loan term first assets our and group debt proceeds these corporate outstanding. assets a the identified finance have working balance other and lenders with to We

Lastly, guidance. to shifting

release, in in a guidance reaffirming XXXX. plan our also earlier credit quarter core on share. tax receipt at second the As given I we the the of stated noted versus the very quarter are we our our press receiving first we to $X.XX now in $X.XX Day FFO of end that Urby Investor at

X% to X% our guidance our NOI We and in same-store in We for minus cash initial still XX% will the to of better-than-expected call And the until that, minus cash all the With we X% of see NOI ahead. of GAAP basis. to our on season apartment leasing in, ranges quarter segment I coming same-store X% are over minus despite XX% the completion maintaining a turn maintain guidance. to range on minus basis a back Michael. our

Michael DeMarco

point up XXXX Thank to have set good my from view, you, showing have up are a results as believe execution with continue outlined, David. In XXXX. of the we we colleagues closing, to an in

the on XXX% really Waterfront for is future transactions. focus Our

Marshall as New land ventures, Jersey suburban has joint we For either intend and down or Philadelphia land D.C. example, laid debt fund development. exit in out our before, sites in to to out sites pay

earlier. in additional to expect as You have can office suburban fourth outlined third quarter us the and also sales

that we strategy. We us total sense continue excited with creating are our Foods and retail operating confident about excellent in long additions effect will restaurants is place Waterfront we're office, currently the construct of new will our coordinated for how to efforts we at grow portfolio execute and and a own the returns the other the to projects adding, Whole key The of and our produce I'm projects. in short the excellent in term.

to as a from update portion as board want investments sought the related of the and Bow call, estate unsolicited welcome real any and Street We to we well Bow that Street, we nominations and received as that shareholder. we today's to Street. Bow other received would suburban assets Waterfront proposal acquire office I we Q&A brief Before turn we regarding provide from the Mack-Cali

As Prior to personal with that and decision, what We thorough Street's in and alternatives. may We with last we our say open had phone ran portfolio a I've my but work. the Bow said reputation the decision I would reviewing They listen to to before, my my agree November. already Flex stake carefully is sell started shareholders, overture, statement. honestly door and e-mail I not is process. always strategic

for be substantial have the consultation Therefore, February, which us opportunity part it Board evaluated about legal I approach very realize am fairly with NAV. of in advisers. working proposal the we been has and of, every receiving transaction [indiscernible] Mack-Cali our will to and on with Upon our our continue in effectively, on a increase to So nine in months. thoughtful Directors,

inadequate on careful substantial the whether Further, had cost, this best to Street answer us unanimously the like that. outlined with shareholders. that as far proposal. deal. plan question price and personally. without Street interest superior Bow any proposal strategic the to is Board with open and as to in unworkable rejected is Bow review we on not myself associated shareholders are Following They several the yes. with usually met times, terms The uncertainties I'd We by the as value Mack-Cali concluded and the the Board as previously the risk the answer now of

like We answer wonder long One interest all be to receptive hold are, to The and bid that as the I have is reason. other certainly directors interest about shareholders offers. A best talented and that the my simply acceptable time their comment the could no reservation, because to is today. ago, execution would shareholders. one in continue that I'd intentions. firmly Board decisions the they is to be, without Board. they that what of I believe, to for as best the their repeat any real, are and has defended

directors, posted Bow outlined are Following to the proposal, for the annual which Street Board for the meeting. before nominated to two actually at to essentially reject decision six stand principles of the the Mack-Cali election the public they've

rejected believe I I is objective. felt their reasonable and good we're fair that given any directors, we two ones have getting a two very efforts negotiation. the the Bow was could and done which new other we of resolve a believe are directors headed Mack-Cali's job two Board so true the of than telling and it, -- to advance interest, add intended means avoid Bow at inadequate It's We of costly these will distracting met Bow simply an and Street's end, to to noting an to firmly proposing price. proxy worth the the in nominations to office Street management fight assets fact personally by principles. Street amicably that acquire with we our two will a self-interest to today.

a given two Robertson has year years balance XX which over, Bow turning to X qualified that the be be it's of candidates. is was myself detriment a and annual we'll We different before. adding vote all before directors a shareholders. of who added new a our of believe Street shareholder's majority. recommended added a will and clear a had Last to that focus proxy which X of obviously forcing upcoming for for XX, the So we our meeting filed statement single-minded directors sale Rebecca week,

That we average call and new our about best will XXXX We'd includes as additionally. questions proxy commitment to white today's the refreshing is the earnings And I all results. the if your fond can. like who its also qualified we Importantly, Board focused as coming I'd following age engage of card. quarter said, the the on as could and I you appreciate in In very new increasing the always, hired call. But following meeting, the keep I in questions answer add from elected, two nominees, revoke Board to me that, slate If arrange to diversity. with point operator, am and as with know, please and six will demonstrating annual to anyone take With the I'd of. if shareholders, and team this independent let now, all will meeting like would like the them to or reducing composition, join near the stated to are members at board Board questions. and continue will five meet tender the I'll weeks, first personally. out the members management encourage weeks any Board's time

Operator

Manny of Instructions]. ahead. Korchman Thank from you. take go question first Please We'll Citi. our [Operator

Manny Korchman

the you talk ago? of giving the sort for year. updated us about or the now has on of three momentum leasing time Can propensity versus you an Nick, how us lease last months changed thanks of terms see whether about you for what tours the of update in

Nick Hilton

than strong. at looking be in be And of diversification looking all the mean, we Basically, from have Mike? more mix new got the as we've size exciting activity mentioned I before, And to just coming thing and see. I kicking Yes, amount And a good absolutely. tenant just a there, continues see of which product. from and the ranges. the tires, to continues people the base, is actually significant fairly like -- actually -- to I it's

Michael DeMarco

Mike. Manny, is this

steady. suburbs the Waterfront being other than we said is thing the The same. tour's Waterfront's stronger the been are about The today.

to out, have A the six maybe the quite a like two a from in three like scale pointed is a up to mix Nick but lot good, XX. three As to more actually time in debate suburbs some appealing gone activity, a or in. we're levels to people product. a get have any lot having We in tough we're more that price. our that buildings people having wouldn't fitting want And actually

the suburbs. to hoping have we're in So a good year

whatever For markets. in choice the the just reason, several we're

Manny Korchman

you market? what seen position as is local And down from well and or reacting street, people the the Or way upgrade you you've earning done the outside they're have with a another to that building the buildings? it

Michael DeMarco

starting we've a to of to XXXX. our out, But It's but then bit we know little got and XXXX, tailed now. completed point substantially combination That a as they're in both. XXXX invested of basically let before, people assets, done in

So Day. for Memorial Manny, may us. north, be like Day us, we as those south get is could vacancy substantial we Labor lucky. well are Monmouth from coming we would north by active a as which Wood from by fill going to south migrating tenants that which addition active think Those market people the XX for extremely early was few to Metropark that or for of as had other XXX% from -- received has late living. complexes be been are that as really Then and --

of We are choice experience. It tenant commitment. comes the landlord really our of the because to down

walk into our will project. Mack-Cali renovated We

activity to in makes a problems Hills bodes commitment say their going have the that us solid. has to Short asset, we of handle the Morris the going We that top I sense jewel been think for County. would which to have well which how list. we're You some forward

should for couple that very out a us. expansions well of have work We

So will of from and XX% of view. well it us for the if out not markets more, in own and most but been annual of potentially overall, bodes we an when, it's point --

Manny Korchman

-- ask won't. But ask Bow us proposal, asked you will I Street about to And I not the realizing about

Michael DeMarco

I Actually, just no. that. focus results. no, on I Manny, say No, said, didn't

you, you in standing the always. for whatever really that But do a -- Bowman's Fest? for You by true the at mind? you do Is this want, have can Do Jazz standing Nick Bowman's question I it way. think ask weekend as you

Manny Korchman

taken have presentations, you a valuation-implied the like of investor We'll segment the to in it's sounds stock clearly sort sort and has so we're essence, and slide that multiple. into But sort And the of Street standalone of leave proposal how what versus work. entity it. you've and added parts. the to a their that of disagree But this framework rebuttals Bow the the Mike, doesn't your office in there, put is NAV of layers same of piece with couple the past, under sum to that in called proposals the see. had and in price, and left office in of splits in company multifamily. of a other multifamily It you back what your it's the you with

guys the some react you be to parts, slide should had together." figure company where look I telling this "Don't the have the the that to how because me, of past some held So in you're of parts help out me the at as needs to now

Michael DeMarco

right, same exactly the Not vein. but

we way, had flow low said, by someone $XX, values, way. it we from "Oh, slide "Could else," have basically do $X right? $XXX Because said, have sell conversation. right, wasn't looked we "Oh, and you multi us proposal have the which quality And trade you the And that should basically But to them might $XX, even we is institutional, smaller, range, their and which at nothing, assets great, think which looked to sense if discounting we little a little the cash we said of, you to, and and that the then multi's loss, you we purpose, going to Waterfront right, trade It out, the vacancy at virtually price, as is certain end the assets, do though pointed have office "We're cleaner, if at, to the institutional always think keep on don't But because then what issues. been for significantly have And to So case, better getting easier is for took going debt. office getting the of and right? and if then a NAV?" right? million operational trade came little took a getting the makes no trade." and sense you're and out business billion bit we then back effectively, it's XXx multifamily in around felt sensitive let's That's on really and an to done pieces, the one to a they say, multifamily have is NAV. your better that more spin took So value, two and business, Now levered if price." at that suburban, proposal then what the said, was minus their give a listen, this done was sell that just basically which "Here's they pointing it we and crystallizing a we

One, have have. we over piece then every time can you of get $X.X I and a having net debt about this Every prepayment nothing. sold $X. much we was has the we Okay, transferred Jersey, of debt have New cost I the imagine growing, and penalties. what Manny, particularly X.X% debts almost business. in doing company billion state well were which Here's Basically, on assets is." how It's of sold

it's tell come $XX to billion $X.XX. $X.X me million that out take and So and

reduction have to with factored have that change drastic of costs control to Third, get in. going assets, issues I'm a other that of and and severance

listen, So I'd coming never to I've just It the -- to XX XX XX, XX. X X is to set X. never get want get to never service. to is years -- I I X realized XX,

high maybe like take I'm probably a You the to down Xs, deductions, X.

But get about finish ecstatic tends really when on. by But up. change. we ago just to really And rejected think it Well, all it something way, go by going a back analysis reject last out. care It in and it down the multi's was it they price, number. away about or XXX I months reconfirmed they we That's for add was called what having discount, our profit buy another was the have I cash, If HFF read XX And paid work small was I shareholders; a would XXX. view to piece." deal. the buy take could We'll a and your to with we differential. to the rejected. our right? numbers. bid. a XXX% first trade real at a valuation $XX we think then my an We for then points, be I knows to work came how look. the the still, was I'm why it They buy we'll want time slight time something to maybe and called, I'm yours. real job. of that know What was on bid, $XX on last me, at, said, I based I the make talked for "Well, and you the "We'll aligned and greenmail, everything." my and "Underwritten You estate they XXX said, we or how don't that better provide everyone not -- starting Plus, to point like discount go when piece and them three on refresh, to They I wanted it's had even

Operator

go now We Deutsche take Johnston our question Derek ahead. next will Please Bank. of from

Derek Johnston

What's going are mean, order what rents ramp there? to I've on to back you seen you pushing too are are your And Are demand you and the at just I TIs? holding balance to occupancy in opinion, and I'm levers supply pulling They lovely. the take, spaces. it in wondering, get aggressively? I'm wondering, guys Waterfront?

Michael DeMarco

I think it's a couple of things.

Foods, excellent Whole we having we think first I the that -- was question, and stake. And the reached Derek, deal, price. rolled

we X-for You which not I the of concessions. them deal, will you'll front We marketing give the company as time the which store full think to first the add did us will certain in with and have think the building, a our -- luster. house X be get a

in of grown square of our people different mentioned will size that that have other two tenants. would certain to and a sense a do that buildings deal number bring to will co-working a less that actually have we be occupancy, then it's certain We not we've And activity. buildings, than feet that absorb in panache we XX,XXX

to when the it we're very set price, terms We good building commission. and bit pay it's a in relatively flexible, getting and it about we little comes down So we're full up. a think

opened, and So the you continue that saw make We've we nicer as done years something tour, pretty improvements. to at the which looks looking foothold on canvassing. wasn't even we two actually that now were is last as ago,

get successful We We we renewal in We a the -- future. be We year. think rates. good lining have agents. be this great we'll think hold up to year it's

So tenants rational, we and in terms been and have to had on then both your excellent, concession in we're cash question. totally GAAP answer

Derek Johnston

Mack-Cali. in a Okay. release will guys And past XXXX you even just for repositioned secondly, stated and as have fully baseline in that the the serve a

move So solid past the repositioned be to from to will back growth would fully it portfolio. point certain be what we to can XXXX me, seems, what having at right? lackluster able the results, snap somewhat I'm So

I the the metrics Mike, So guess question, a strategy? look are the be you what will validation of is that toward

Michael DeMarco

Two things.

good a again, the we very to question. -- has wanted The to the start think multifamily gel to way business do. I

even adding have it product build a to been well though drive to you X.X, renewal That as we've you thereafter. but So rents product. still product

our numbers So numbers. in that that this were we've started power same-store to type time actually the our have quarter first of

X,XXX we pointed units demand a Jersey City become and do. of have way. driving Marshall X,XXX we about more in we As can price which At in and out, think factor we the A units, on Class

business. from believe the we of out cut can We expenses also

to synergies what drive We doing we're have basically those numbers. of some

part. for both So it right? of So the and look first look multi rate guide then and drive Occupancy maybe up XX% in today, the will more we to to our push want really rates. would little and occupancy. bit a we that's where the That's P&L

the think which good have a But to of take. third It's therefore we're are and year. relatively XX% or suburban. part understand, to part, easy our going we second number, The give is

Class in portfolio. have sit really April should relatively we we results I May if the we good office same-store have for start can So X, do, do our year here we that the A then suburban numbers think as in should Derek, well.

going trimming on asset Our a should sales. get pulled some little We're to do bottoms up.

Whole should sale start. think to next the enter So little when receptive it. have number you're it Co-working's a start. a lead Waterfront, I in that the to constituted could we bit into were -- The assets if market XXXX, Foods which a more work, of those is problematic. if the

deal Now we need two. or another

because but a now, New legislative need XX, finalized in, Right are X, love, And around a We the think little tenants, of XX, play very for come Jersey, the of it's tires. the game love program New personally, poking sniffing take that to of Jersey, who's communicated the the they out and growing space, waiting proximity, the they've have good for will well, tenant we I going that getting smaller Manhattan XXX. renew branch it. haven't been who bit

wait the in with and give and leasing So after To as Waterfront and a I jobs don't pieces, were which a think have for steady XXXX. good large baseline to to expenses noted anyone's a down They'll year. until we'll today will budgetary multi-suburban have drive three session's that But good for a July still going those deal. for things. year, has has us term over. other

Operator

ahead. question BTIG. will from go Catherwood from We our take now next Tom Please

Tom Catherwood

Harborside. Following up on Derek's on question

lobby's X, investment down that's X of it atrium But at and work then the X food and and does much the left? and complete. And in the left So completed there. break the of rescanning is hall XXX how Hudson? The is X, how Harborside you've between modernization

Michael DeMarco

essentially to controls, is in elevator Building put moneymaking years. add but probably better We're relatively going done. We're with. The floor. each a excellent X's work us to artwork. beautiful getting a over one deal, to in building it. to charge going lobby a It's cost that the and we going -- lobby. So refresh added also some We begin but it's restaurant's It's $X.X cost. back has we an about did we it's one will superb some which Hudson's restaurant. It's a million. a shape, component, XXX through amenity is condition. in the expense the

kind but the they the And year have laid think $XX a shaped we it the It term, be deck out to That are floor. reskinning it's what opened It's for harbor little will up. for We building million use $X XX or over in rest actually relatively the after. the the restaurant a it's out it $X.X $X as on of We and of great. getting for people Food be the A on overlooks might the pointed what numbers. X, before cosmetic The that work. or is going $XX is space. to numbers million those changed. we a use really two call, maybe haven't about needs done. convening lay convening hall's moneymaker, then lobby that million, space, XXth out million. next build Also, looks you the to and but We're about in so. lobby's million. total another between X of to bit like of both out probably But fit the the those small $X and the million, it's

budgets, over or bid reskin and think getting $XX get X Both because an it we're million in should cheap million, to done then like will and I we so to I take. $XX better the work signed X thought period. come XX-month than give

Tom Catherwood

it. Got

completely that it's to needs get everything and it? once that be gets else to So they X done reskinned

Michael DeMarco

Yes.

Tom Catherwood

And it's $XX that all to $XX the million reskin, million. in

Michael DeMarco

And is $XX for do a bathrooms, million-or-so we just X. will and another X million $XX It be because to we elevators. do brand X new building. then do

Tom Catherwood

this? spend, how it this the Got how -- capital it. Is Got expenditures? Is it. this building leasing does some Got it. base get of And classified? you How CapEx? classify do do you

Michael DeMarco

of It's combination a three. all

So deal, expense. when leasing it's restaurant do you a a

truly got TI in, pay over law we for amortize are transaction reskinning expense. The you our company up upon building. doing offline, based is could a call different the And a wants firm. basically The be want depending deal. give guy, So you us you like. it $XX, comes if breakdown, it restaurant a the you building. not, or or than out building improvements lease to build of amenity based a if we'll lobby a to either No to The basically just the space, rented them, willing course you're for -- we a

Tom Catherwood

for one One it me. I'll later. do last

But million trying so you XXXX. figure to to out this the $XXX you've about Dave, Just guided dispositions. talked bit. little for a

there. look the or there You still completed at $XXX and is we sources sales Roseland if potential $XXX But million. uses, million

do how together? two So tied of those think how we sites

Michael DeMarco

great the few call in left -- bit There's a been answer the that. of our it's to with managing And David a I'm -- sides little projects. not numbers. two side a There's do does office the and because job counting

at because into tax redeployed pay will last we it. got On Park the about usually their We the Square put get redeploying that fundamental into it don't Roseland disposition to business office side, basically down things. capital, -- same of sales and which debt basis. things which going goes we're year, out, because we XXXX office have money we exiting go we business Like, strategy-wise really laid owner's sold way an residential into the while talking we've is

which some might for will JVs, dispositions assets. have into the We redeployed DC other in get

answer. really really separate run that's the and So two sources It's uses.

Tom Catherwood

it. Got

million So Roseland? you've when separate happening -- to, what's going at we than that guided think to that that's $XXX of that be

Michael DeMarco

Fundamentally, yes.

Operator

Please We question final John take of Guinee will our now ahead. from Stifel. go

John Guinee

XXXX? David, you on net the of a question? on goal by what's Investor delever that? Final year-end plan And Day on had and equity thinking a your the Wow. event debt-to-EBITDA maybe What's sorts. XXXX mentioned to year-end an current

David Smetana

last, for didn't we John, so to thanks. be mean you certainly

X.Xx. at never So we came in with Never, us.

equity Certainly, suburban go venture listen, Day of leases, would at a be our further to taking raise thought top that, to the on could here. we take we then out would to years. had really we that would look get over at could leasing. not commence a the have of the sales. lease And we three But asset Xx if laid be side. And So could just growth wouldn't of then price Investor we said next that, we XX%, from with Roseland what if if around on did was the be we I reasonable. a two up, our And we couple We're joint at partners assets. to markets a look That from beyond those equity sources, earnings those But go. got Rockpoint, it XX% was something happened, specifically. ways to

eight NAV. get to You to and outside from you at raise below, have leasing sources from equity

Michael DeMarco

go we're will David's plan much as the that probably planning, comment. embellish to $XXX million quarter which XXXX, could $XXX fourth will just currently to at today. third which million looking John, as tax and into sales be The be the

John Guinee

your get does your or not? -- to get ability year-end the you to still X.Xx do by XXXX give -- numbers So

David Smetana

would John. be Waterfront No, for No. would to event. We the it sometime basis. early to EBITDA up. least. commence, That would to in commenced need probably be XXXX XXXX We leased have be at And have truly on a a would

Operator

ahead. go We have another question from of Paolone JPMorgan. Please Anthony

Anthony Paolone

on it the something maybe to the side I as me can just hoping you proposal. was relates help understand tax

tax Mack-Cali's open understand you at the and the there's deal think market to today just some would $XXX in an I of I'm trying investor a that million stock would what's tax whether of implication? it's of $XX or highlight $XX be, $XX, one the liability buys whatever sort create. if your but in rebuttals number

Michael DeMarco

So Bow liquidation. what partial proposal either is into took or total effect the Street

XXXX assets your transactions up used Tony, we we already sold did -- the significant of business. a we shield, in when So Flex amount for the

a any So bought keep used which $X.X are here's What have under say, kept They down asset because we the and debt. which XXXX come rules have, don't is REIT money, fairly the regulations and our or whether we it's cash. One rest," it, XXXX. large Safe not sell shield "Let's the We will questions transaction, still left we transaction. is efficient. in million. an Harbor paid numerous, dividend That's

into an it's go but to XXXX, XXXX. have enormous deal We in

right? where you're company So has bought that we out have or if million house. That aside, a from basically But is cap million, Lincoln $XXX you're worth which right? the you $XXX or shareholder putting basically you're Properties million So a $XXX have a XXX of the going million to grew taken -- money taxes, gets back normal if Hudson, right, for day, recaptured to you $XXX unitholder. out, gains, you or pay in starting wrote

got your sovereign if the individual, you pool, normal on not anywhere gets rules, whether XX% say, dividend out. have return, have other -- of However, REIT worried an pay a wealth shareholder you one is don't. you if office, your a will about -- if that you're people plan, and you pension XX% plan, we you the laid be or a "Oh $X." liabilities and taxes there when from you'll which it So so some But family other taxes. so forth. baskets, of to paying would are And actually corporate any violate the We

ever which company in this is bought all you day if one's these no go the corporate responsibility a XX-some-odd and them, not for your just which is for buys sell years has right, been have if structured the and taking way," this around "Oh, basic most which since the to $X. point, of for is it space in $XX, as not deals, we've everything like this let's and because why God, the stock That's deals, are of tax their for ramifications. somebody of $XX right, been So saying, by done business it's -- essentially

there's if And deal it taxes, it. Did benefit. I they a make clear? get You with

Anthony Paolone

no. and yes Well, Right.

of But -- effectively REIT of depreciated tax against this likely any $X, Sorry again, have, $XXX that's would this. to again if liquidated but million I'm call the just to -- a that a make they get basis. to in like understanding the sure conversation some

So is something this the that more Or Mack-Cali to to is? unitholders? that what is unique deal? specific the $XXX or million with Or

Michael DeMarco

have for substantial a number corporate not It's unitholder would number. It's a us. We gains. capital

down you the done it good right, say, why stock, of which if investor, They're We done, drives should me these the because Anthony, if value which really deals pressure liquidation, let wealth, if you're was that values do I is a immediately," at offers of I right? The down guy don't a that on right? was to have usually think structured if own family as gave if "Oh, do, share, what and and corporate That's up." the you stock, REIT, puts Anthony are transaction. well, one not sovereign look sell deals, should York you dissolution. So then worked trade "and that. -- to go pick the that the your that the a whole typical only fund, then all Which as and asset I advice, you I you next then a Which in partial have Right? is out want recapture, and if suffer own own the liquidation basically road. New why, mutual

Anthony Paolone

the for deal a the deals cash there's share? done have this when outright most just been were takeout, So nonevent to the the that proposed historically extent an REIT been common a $XXX million way is

Michael DeMarco

value factor have Nonevent. Nonevent, a absolutely. as didn't of Because Roseland, which And was gain. secondary liquidation by cost the our numbers at it embedded we similar way, been we sale is. have a built is building been grow of buildings market into we've that secondary gain, the a what structure we those bigger more all also which have even because

said, and simply when "Well, transaction, you it this there the words Tony, I have future. to proposed learned? you really spend somebody. you and Tuscany we'd gains, spell. learned, well what like way I've way But set one equity." is a really of they $XX the have to mean, So right? another up warm know because that, I I've to you, or I of in say comes can $X the will it do all cookies, But look always of at this a want as which at is was trade get a things price, is Right? and next the end We'd the "Here's really the Look, portion really at none "Our thought get is of It one done," guy and the of $XX," time the we're here's was, The some milk story, skills, right? bid says works I here's bedtime I way my buying at substantial a assets of deposit" the to "Oh, put the my we're in of "Finance, It's to we can terms, discount." I should that.

about very would So have if I bid, this been a it. was real excited

Operator

question our Please go next We'll ahead. Lewis now from take of SunTrust. Michael

Michael Lewis

question there you so So structure And $XX out is deal can't just way. asked way estimate. that? same any there's much different NAV think maybe But that crystallize your this this or of a Tony got isn't you've any Why there? the kind isn't that -- Is the between stock or there deal it is you to in room price. find and

Michael DeMarco

say Well, Michael. I this, would

we the I thought we company ago, we've think over took -- we we a June worth and to that X trading And at $XX and of When didn't I Marshall NAV, $XX if assets X, when formed years over. when sold took $XX.XX. -- didn't it that right? polished were right? want exist X/X the have we we basically in $XX.XX People

So higher one-third, that to numbers. we've re-leased either

So crystallizing business different look and would But bet. we substantially is think quarters, higher And value. been think, in development is those benefits suburban as substantial the chance get me a lastly, it capital a continue obviously point up the of fact then we like, single value, reason a a has point, much at that today, you upcoming sometime today assets Smetana think tells create more quarter, better Well, over having didn't quarter. more can if less lease portfolio would and that valuable. quarter more to are X, we're quarters, guys when company, deployment we'll to well a shot XXX, produce the real normal And obviously, continues though joke don't out we will right? we is always so place. have suburban this as Truth Total multifamily like create the our We in amount deals. our then market David The is think can conversations that rents. we ultimate the future, don't four We redo We multifamily the not building I we change. rented some I at I we're it's at like I of portfolio And The Waterfront, something obviously, which the becomes total, XXX off. think probably why as point over Waterfront, each the and one Why have deals of get certain crystallized less and And than us The number on have as based even two took announced is, have quarter?" you actually of XX. reaping we more that? XX which down when office numbers. it's every gets years started a we're the now. is buildings did every one we ago, you out normal with the think increasingly that to we years series the to crystallize. valuable, "I would I we more of

have e-mail, my to is in the my visitor. going future, Sometime door phone, a my good

Operator

back for to further I this phone any or host There questions closing to like would are remarks. additional at no time. the your turn over the call

Michael DeMarco

seeing be bringing schedule extend. members single up meeting. one. every We'll going us. our to look a to We to out if a be Two, board I'm full forward we'll investors, set with We'll we all need have everyone at to NAREIT. reaching

to a desire or and interesting David any you. questions concerns, so and wish for everyone myself. we're would with Deidre has there directly, day. can great are We hear know Crockett them this from us. speak to And call you you I If please times, or to Anyone that, expect

Operator

Ladies and your participation. for you today's this Thank concludes gentlemen, call.

now You may disconnect.

Veris Residential (VRE) 3 May 192019 Q1 Earnings call transcript