CLI - Earnings call transcript Q2 2021 | Veris Residential, Inc.

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Operator

Good day, and welcome to the Mack-Cali's Realty Corporation Second Quarter 2021 Earnings Conference Call. Today's call is being recorded. 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, annual and quarterly reports filed with the SEC for risk factors that impact the company. hand Officer. over will Mack-Cali's Mahbod I Executive Chief that, the to call Nia, With

Mahbod Nia

internal and U.S. realize assets to us supported the our morning, active joined to Good other for beginning welcome government that our quarter appears since today Monetary call. XXXX share Fund be economy more made by I'm shareholders. leasing of each balance during cost earnings which anchor ancillary David of I our business the high levels. simplified and success. key number seek growth savings sheet, in significant a further will had recovery, discuss to XXXX Smetana, streamlining highest we and positioning operations X%, as we to future its CFO. of their strong we pleased a will projections The to The by strengthened benefits later. vaccination We our to unlock the on initiatives, our at value that potential I'm level recently while another these second International our operational for and progress quarter stimulus maximize our at and XXXX. raised detail

the us which combined accounts multifamily However, strong office XX seen play well and activity brings, inflation days. infection last our our office. potential what live, our of the resurgence we to we is for The economic the makes related leasing approximately economy in resurgence rates has Though of risks to of reopens now believe continue our quality portfolio, and to including half portfolio, during future and the as positioned in concerns incredibly capturing levels particularly work multifamily remain, visible control an in return leasing proposition, cannot rebound demand NOI, COVID market the rising and the with new and variants. employees

occupied leased XX, up XX.X% as of operating from of and July was unit XX.X% and portfolio XX.X% X,XXX Our XX.X% March as XX, respectively.

of majority properties number to of rents We increase have at have started our and across removed the the concessions them.

to Turning development.

opened recently XX% Riverhouse X, located only level ahead the residential During a come asset the having in velocity third expectations XXX-unit as leasing building online, of Imperial. rent Port of Despite July and with was quarter, we to apartment internal leased our respect achieved. XX, both community, a

secured We levels of other at recently also strong leasing our two completed properties. successfully

in were XX% Short As Port of the Imperial and Hills Capstone Upton XX% July respectively. XX, at the and leased,

Christopher initial remains Our year. occupancy for next building Columbus XXX-unit on XX track at early apartment

to office. Turning

with first from expansions Hudson. X piece Harborside due the XX.X% XX,XXX quarter, or primarily end were the we Harborside X renewals at a square the We foot the are lease extensions progress XX,XXX to up now leased, make are of encouraged by on in The we signed the and months six Waterfront to the growth square year, new at of of leases In of feet new with XXX XX.X% have Waterfront. square lease started feet signed assets and that and XX,XXX the first leasing.

Harborside also We which of retail vacation, efforts environmentally more Street, driven future.We to a and anchored Harborside hub and reinvigorated foot unveiled amenities have the advance to identify Hudson also a by innovation plentiful become Jersey's board and our continue landlord. socially conscious as sustainability workplace all for way ever repositioned the campus the community both, to campus, traffic solution pedestrianized a smallest and a first recreational New to areas, and

remain suburban Wegmans-anchored In included the total, million, remaining renewable Center the disposal headquarters at the Bank million sources.We square for million.Earlier million business Short now the we simplifying operations. sold Harborside the in for in X retail our to the line $XXX sheet, fully of balance sales our this the completed of of million, farms an sale and and week, direction, assets. or a as by the at Red our loan.Moving valuation illustrated quarter, initial As that pre-pandemic million, with River our during $XXX expectations. focused portfolio step objectives we portfolio is center Hills of in suburban from fully X.X on for assets virtually Hanover feet I'm substantially streamlining in to million retire of strategic Giralda $XX These us $XX for pleased electricity $XXX all highly $XX usage also allowing term to of this share all XXX our

took expect million we of $X per efficient During run-rate a a steps we the on establish more to operational result cash in up to annum that to quarter, savings basis. organizational architecture cost

We expect are along enhancements investments both, and technology changes, with further to to targeted the these operational that some have we top contemplating, drive revenue line potential efficiencies.

services our We Carmel, our a full potential this at of over He with management a third-party members Jay clients. to quarter. also that, number us as help multifamily other a will optimize and specialist update to multifamily achieve experience with operator. we a of and we our performance our owner best-in-class years talent seasoned over quarter. going you team will operations bolstered property leader With during who Officer, to stakeholders Chief will joined Financial and to team hand the closely multifamily our the JPMorgan the innovate apartments, further multifamily Smetana, while financial XX us that managing with needs I'm work on Minchilli, multifamily institutional provide believe new of platform of David that the overseeing our XX,XXX

David Smetana

$X.XX reported effects $X.XX hotel, per impact We the FFO in to FFO year. versus the for share operations. primarily core in sales was prior office core pandemic of of asset per program parking due year-over-year and The suburban share reduction quarter and the per of share our on Mahbod. you, multifamily the Thank

to received beginning reported revenue a share Net million, our growth.On concessions, a Same-Store effective in increasing have was sequential FFO. quarter. to portfolio, Historically, X.X% due NOI proceeds incurred rents quarter, This revenue XX,XXX by the leased write-downs. Same-Store lower to straight-line basis, largely this leased the X.X% their occupancy. rent to credit square year's by now to Waterfront cash GAAP Same-Store quarter, portfolio third a which core continued year-over-year improvements feet $X.X tenant outs. sequential prior leasing our included was of sale primarily parking the sequential we in move X.X%. increased in tax income the of of The Waterfront received drove attributable office increase underpinned the of increase of in reduction XX,XXX multifamily URBY show are a we Also and announced feet decreased and credit compared to we NOI square NOI last team significant previously The stabilized team reinvigorate from X.X%, quarter. efforts resulting Same-Store operations, in and due

feet the move-out Harborside XXXX, end approximately XXX,XXX square additional remaining and of Waterfront our move-outs at expire, fourth relate TD to relate we at Harborside a of Ameritrade feet which balance leases the X feet XXX,XXX have in the to July. the X Natixis at For square of quarter over XX,XXX which office to of square

feet and land comprised of of: our manageable lease our an is role suburban XX% a like square discontinued take which one our two NOI; class in office now moment construction; remaining our no hotels portfolio. operating a currently which assets; set square XX sites. a produced A to has project with than approximately current It six to expiring XXXX overview in multifamily rata XX,XXX assets, XX one ahead, single feet expire.I'd in assets XXX,XXX development to lease of greater Looking only operations; bank of pro Waterfront multifamily two office is provide comprising

begin development contribute to growth expect we stabilizes, have As our embedded multifamily earnings. NOI pipeline to to gradually

derive continue in burn operating concessions to also incremental portfolio. off rises as will occupancy income our multifamily We and

issue, the the Turning to a loan. In were term retirement the XX million and with bonds sheet. $XXX we April booked second of office the with million, credit million bonds, unsecured and suburban quarter, entered $XXX retired from revolving the May facility the sale of new portfolios. Simultaneous bond $XXX balance our proceeds into XX

earlier Giralda loan now sheet. week, X balance of our the closing the fully been in de-risking With our farms repaid, further has term

$X.X maturity maturity XXXX needed. loan successful totaling in year in maturity extension, with $XX single construction We apartment are a million, which mortgage if A left a with our class the and one schedule only favorable to one related XXXX debt million has

our We with credit balance new we on pleased for our line provides Operator, made the concludes continue call Q&A? we remarks. executing are progress can we prepared flexibility the the strategic have This sheet objectives. our as on our open us, and

Operator

take can It [Operator first of now Korchman our Instructions] Citi. Manny from comes question. We

Manny Korchman

down? now, the and witnessing concessions Your office Is your normal to come those as back you leasing. that new do expect when for elevated sort of remain

Mahbod Nia

package are look the there, on the minimal think was a relative if granted. But there certainly, I rent-free really Yes, very concessions pre-COVID lease, that we obviously to -- that the elevated you was offered levels. that MGM at

So package. really concessions really went into of TI the the the majority

to and So started from perspective, we're continue. that massive that see hope to to an really see that to perspective encouraged at leasing from to accretive on value We're levels some the a earnings and are incentives. business front pleased traction have

Manny Korchman

you're during New on core, that What outside platform you at Mahbod, sort saying expanding Jersey meeting New maybe the of base. at spoke our pursuing Jersey plus actively And Is the moment? you multifamily and the NAREIT, then something of in are about that?

Mahbod Nia

more to was concentration comment or should in you our markets. and centered general look the extent And market Boston, to front others REIT, risk some that as a Northeast a gravitate interesting we and earnings current whether of then growth that around presence more that the a multifamily corridor. front are more really, say on on would I becoming towards again, and, in concentrated we and that in Yes. whether, couple markets we know. new do There economic have in dynamics be job

evaluating point for really future, the at we're decisions been where we're conclusive have us at made but point. the So in no options this potential

Operator

our to along move It comes next now Spahn can of We Brian from Evercore. question.

Brian Spahn

about does the Could of just the leasing look the What pipeline like? of Waterfront? activity you There's acceleration bit in at interest talk quarter. maybe a

you of kind on of the add some industry? tenant can terms in size, color of just -- pipeline in types what's So

Mahbod Nia

Sure.

work, coupled certainly, with that initiatives the sense think, -- implemented, that into really live, with campus I complex, made a is now. the the we've And place-making Harborside the of the Waterfront offering we've that investment space it pretty play that that the diverse a an of fact interest. a tenants of varied pretty tenants for that that have in the group and available terms showing we diverse of have are we it's means type onto

is so And it's requirements like services, entertainment. getting services, insurance, are and specific, It's as broad, technology, really financial know well. advertising, the pre-diverse, pretty it diverse you professional pretty

Brian Spahn

over just multifamily. to guess switching I then And

to be leased you as to How talked out With do market the the tapering can days you given concessions you push XX% plan starting rents. apartments able think ago, front you on over get there? where a few and do occupancy settling about and back aggressive current on conditions, of

Mahbod Nia

good question. the on Yes. point occupancies story XX.X% Well, having having It are really rental now at reached it's substantially natural next assets growth. inflection should over we would -- concessions of a phase the all at of just the that XX%, and that the say I of leasing and tapered be where we evolution

our an So haven't really would we ground leasing we'll closely the last the to certainly, be And the still return over in rebound team it's feasible. and that the occupancy on in seen constituents assess case-specific encouraging very reside all a what's and yet. the basis, with working quarter. apartments But on sign,

a being with of the momentum return borders September side an So wider borders growth. with of more us the a labor rental we generally type office more opening, to and speaking, of the help still returns sort the the overseas demand and would still being realize office, day there's post shut that returning could hope on students event,

Brian Spahn

suburban there terms the is front Or office in anything lastly, sales? completed? of Dave, is And left that on

David Smetana

question. Good

remaining So I assets want all assets make accounted where understands to are everybody the sure -- for.

suburban that be really a technically for held probably with which remaining operations, Main which in will Street for than ultimately our under which contract may So Gatehall, Gatehall land there and a us big office may turn is discontinued longer not. office two into two one But and suburban campus, assets. we're a left but assets play, is down asset, little office around bit are XX the

really and So the bullets the you see and our on and focus there. on leasing Waterfront cars can in the -- momentum the

Operator

It question. America. We Bank can Feldman now Jamie move next our of to comes from of

Jamie Feldman

just a follow-up. I guess

marketing So on for market is now, Gatehall, you're yet? that the or that not just

David Smetana

is. under It It's currently contract.

Okay.

Jamie Feldman

do I or know leased. rate I lower? the -- at you this And looking XX, asset, mean, it's Giralda the expect something I XX-ish Farms' for percent know cap similar

David Smetana

located of a Giralda of couple Both Parsippany space and have these of pharma mergers to lot submarkets big which a companies. sublease some due assets are in the

price the going give rate square sale. decent is we're foot, So per same way remaining should to a not about per but think price the to foot cap guidance, square that be in last

Jamie Feldman

mentioned more about had cost and investment. and about in what have the the some of help Mahbod talking guys might little bit a the platform you mind, talk Can how technology improvements, And maybe savings just business? that you

Mahbod Nia

Sure. Well, we number so, manage established you as an our well. manage own platform. know have of institutions operations as blue-chip multifamily assets, a assets we for We

curve ensure optimize which that the to best-in-class we So of being taken one we the terms the we've operational internally, achieving equally in really objective ahead that then to just remain enhance hand, further operate are in of and sector. our steps on within efficiency operator a of owner, really, that and the importantly,

with a so changes. are there that, of initial number And

organizational and will tremendous I talked I hiring at in be Minchilli As about for the architecture us. who, that Jay effort believe leading

mentioned side the more and business, some side controlling more effectively And and managing, monitoring the will cost I the the on changes side of them technology the some revenue be at be of the on of focused targeted will revenue and side. that

the validated have them. us well. utilizing we We But by market we're our way operate remain and they're make edge already It's what that's and the That's to assets. assets incremental. sure to at really comes who we best-in-class want a allowing really that leading it works were in that targeted at. It technology to really we the of platform. So manage for others when

Jamie Feldman

the you of good probably are two you back XX, the in in apartment suburban do -- the think when core move-out Because you less. pickup. it David year, about bottoms? then, excluding sounds And portfolio, feeling and half it those like pretty still Natixis like when assets, think then TD you NOI the have And the sounds about

David Smetana

Sorry, without you me Jamie, have feedback apologize. do I now? the

Jamie Feldman

you're good. No, Yes.

David Smetana

So, a good question.

couple countervailing and of highlighted of from XX,XXX So forces. the square at -- a well-known we this TD are end have Natixis month which I Ameritrade. then feet and of another the move-outs

positive, sequential a online, residential the and do So we are we see albeit in we our parking our pipeline coming to coupled in -- slight with development to recovery hotels. our And income, now growth have starting portfolio. multifamily

all the big asset quarters to of dilution this for couple as the this seeing that starting about end bottom peak up grow suburban office in of couple a notify to putting we're finishing and towards we've together, think we're sales I row into the So I a year. and now. going year think which EBITDA next of these But move-outs trying everybody the of of is been kind

Jamie Feldman

moving on And then really saying the you're just you Waterfront confirm, nothing to meaningful have XX, out?

David Smetana

square Yes. feet largest a And square XXX,XXX remarks, XX,XXX feet. in I there's total this rolling lease our highlighted prepared in

had this move-outs large the tenant year we in nothing like So XXXX.

Operator

along next from BTIG. question. It We can our Tom Catherwood to comes of now move

Tom Catherwood

I swing on appreciate to two office remaining the back. the suburban sales comments wanted the there. and just assets Dave,

Wegmans the else come that of remaining line alleviate to land of non-core just credit, help As else like of think, or sales track though, is to of about Roseland, the that's we like operating going Center? for the kind maybe anything office the debt? the non-core, that that's kind land, of the besides secured things was kind office else of in besides balance anything there there kind office anything remaining any of bucket, non-core within the Is repaying out

David Smetana

well. Tom, question, know the you right. Yes, company, That's great and

assets. remaining two the suburban have We office

the of excess to And land long-term think our on messaged the have on portfolio. some yourself. probably I are Mack-Cali's land side. part hotels operating kind And of we've many side, that some, We Roseland perhaps over not of core

be should the of total balance. in take those to remaining care So able line

Tom Catherwood

long obviously what -- them ago. we front? in, leasing, not its start on expect And could uptick New do program of Emerge in flowing positive to too quarter you Jersey was on a have office kind Jersey office at the and beyond then when when a look those obviously, leasing sense positive incentive put Any benefits New

Mahbod Nia

difference, definitely Jersey in a of made appeal helping it's would the a City. I say, of terms So enhance further

So appealing and be it pretty there. subsidy degrees, but for more it, to tenants, it financial from for can a a obviously, qualify relocate perspective can varying meaningful even to will make pure tenants

do So we're -- year. this already at very difference. We the making pleased think has a that its of been beginning introduced it's

the need today, sure widespread come return we'll to that of appears the continue see just office we it think be through. I'm I plan the mobile to and to benefits as

Tom Catherwood

question tough plus buildings. if now. thoughts about earnings what of as space as ultimately for things last space, we that stabilizes? of it's up, to that of filling feet know of kind ask And a segment, XXX,XXX generate reopen. And especially starting reopening then, amongst then there's office are and It's square me. variety utilizing And for look retail not What your at of could in retail, generating just it business right continues? as I kind far any NOI to the that as as are your you terms But

David Smetana

Yes, Tom, it's David.

a things. retail, couple on So of

building get see tenants. come to in have quarter You're back we ones to office are starting current starting us, our rents. on that do The to base the

the induce we income larger sure pickup I least from leasing contribution. City, make of in space tenants. Harborside, we and going So get tenants. kind the had guys hold impact occupancy the start start modeling get see we in We'll on now will up, you to retail picks want our that write-ups the to on in some to really to slowly retail help amenity to of as go you're really at office retail we that when retail a not from as we're be see well view Jersey modeling to our increased have the big as and But in. leasing, but there. And footprint base would the office it want off to we coming But any but right retail, more that

Operator

session. now concludes hand the back additional our I can Q&A concluding That or the call any remarks. to for speakers

Mahbod Nia

this course. quarter for and again a look It's for due to you been updating Thank in us, everyone, forward productive joining you, us we quarter.

Operator

That will ladies your participation, conclude gentlemen. conference you Thank for today's call. and

You disconnect. may now

Veris Residential (VRE) 31 Jul 212021 Q2 Earnings call transcript