Veris Residential, Inc. · NYSE:VRE
Veris Residential — Mack-Cali Realty — NAREIT REITweek Investor Conference November 2019
34 slides from Veris Residential's conference presentation, Nov 12, 2019
Slide 1: Mack-Cali NAREIT Presentation November 2019
Mack]Cali NAREIT Presentation November 2019
Slide 2: Forward-looking statements
Statements made in this presentation may be forward]looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward]looking statements can be identified by the use of words such as gmay,h gwill,h gplan,h gpotential,h gprojected,h gshould,h gexpect,h g
Slide 3: Our Investment Strategy
Our Investment Strategy 3 Thesis NJ Waterfront transit hubs will experience unparalleled growth as more seek value, connectivity & space Value Proposition Access to New York & professional hubs, discount to NYC, room to grow as millennials start families, tax benefits Strategy Dominate core submarke
Slide 4: Dual Platforms Form One Strategy: The Waterfront
Dual Platforms Form One Strategy: The Waterfront 4 Suburban Avg Base Rents vs. Market Asking Rent 6.08% SF Office Space (Incl. Non]Core) % Leased (Excl. Non]Core)(5) 3Q 2019 Cash/GAAP Rental Rate Roll]Up (Excl. Non]Core) Waterfront Avg Base Rents vs. Market Asking Rent Operating Residential Units/Ke
Slide 5: Comprehensive Transformation
Office buildings (Excluding Non]Core & Flex) Operating/In Construction Units (WO/JV) (1) Operating/In Construction Units (Subordinate) Total Market Cap Weighted Average Interest Rate Interest Coverage Ratio Core FFO (Qtr.) 39 (66% Reduction) 9,854 159% Increase) 130 (96% Reduction) $5.9 billion (51%
Slide 6: NOI Evolution – 40/40/20
NOI Evolution – 40/40/20 Waterfront 23% Class A Suburban 6% Suburban/Corp. 48% Flex 15% Residential 8% Waterfront 27% Class A Suburban 15% Suburban/Corp. 19% Flex… Residential 39% Total Portfolio NOI (3): $345M Preferred Segments: 81% Total Portfolio NOI: $357M Preferred Segments: 37% (1) Annualized
Slide 7: NAV 3Q 2019 (Unaudited)
NAV 3Q 2019 (Unaudited) 7 $ in millions (except per share amounts) See footnotes and gInformation About Gross & Net Asset Value (Unaudited)h on pages 23 and 24. Rentable SF/ 3Q 2019 Cap Gross Asset G r o ss P er Propert y Third Part y Discounting Net Asset High Low Apt Unit s Annualized NOI (1 ) Val
Slide 8: Waterfront Concentration
Waterfront Concentration 8 Port Imperial Hoboken Jersey City Edgewater Fort Lee Mack]Cali Assets Operating Office Operating Residential Operating Hospitality In]Construction Land Retail/Commercial Waterfront Holdings: 7 Operating Office (2) $1,779M 8 Operating Resi $1,904M 3 Operating Hotels $263M 3
Slide 9: Harborside Transformation: Past
9 Harborside Transformation: Past (IN]CONSTRUCTION) A MONACO 523 UNITS
Slide 10: Harborside Transformation: Present
10 Harborside Transformation: Present A MONACO 523 UNITS
Slide 11: Harborside Transformation: Future
11 Harborside Transformation: Future A MONACO 523 UNITS 107 MORGAN 804 UNITS
Slide 12: Port Imperial Transformation: Past
12 Port Imperial Transformation: Past 316 UNITS
Slide 13: Port Imperial Transformation: Present
13 Port Imperial Transformation: Present 316 UNITS
Slide 14: Port Imperial Transformation: Future
14 Port Imperial Transformation: Future 316 UNITS
Slide 15: Two Platforms = One Strategy: The Waterfront
Waterfront Residential, $3,574M Waterfront Office, $1,860M Other Residential, $1,558M Other Office, $1,203M Two Platforms = One Strategy: The Waterfront Waterfront Residential, $1,438M Waterfront Office, $882M Other Residential, $437M Other Office, $673M Office 11.2 $3,063M 45% Residential 9,854 $5,
Slide 16: Waterfront: Residential Market Share
Waterfront: Residential Market Share 16 The Company is the largest institutional owner of operating class A residential and developable land, controlling approximately 14% of the current market and 31% of the potential market Comparable Properties Units Market Share LeFrak Organization 15 4,714 19%
Slide 17: Waterfront: Office Market Share
Waterfront: Office Market Share 17 Comparable Properties SF Market Share Mack]Cali (1) 7 4.9MSF 31% LeFrak 5 3.4MSF 21% SJP Properties 3 1.4MSF 9% Goldman Sachs 1 1.4MSF 9% Bentell Kennedy 1 1.1MSF 7% Spear Street Capital 2 0.9MSF 6% John Hancock 1 0.7MSF 4% Columbia Property Trust 1 0.6MSF 4% Other
Slide 18: Waterfront Value Proposition
Waterfront Value Proposition 18 Midtown South Residential: $80.00 PSF Office (2): $93.00 PSF Financial District Residential: $70.00 PSF Office (2): $69.00 PSF Midtown Residential: $75.00 PSF Office (2): $89.00 PSF Hoboken . 111 River Residential: $55.00 PSF Office: $52.00 PSF Harborside Residential:
Slide 19: Successful 2018 Deliveries
Successful 2018 Deliveries 19 The Company delivered 1,212 units to the marketplace in 2018, which are collectively 98.8% leased as of September 30, 2019 . Highlighting this success is the absorption of RiverHouse 11. The property opened on July 6, 2018, stabilized within 3 months in October, and is
Slide 20: Waterfront Residential Development Outperformance
Waterfront Residential Development Outperformance 20 The Company had record velocity on recent Waterfront deliveries (1,368 units): 2016 2017 2018 M2 . Urby . RiverHouse 11 . Units: 311 . 762 . 295 . 1,368 . Location: Jersey City . Jersey City . Port Imperial . ] . Initial Occupancy: June 2016 . Mar
Slide 21: Development Pipeline
Development Pipeline 21 The Companyfs next round of construction deliveries and near]term starts are heavily weighted towards Waterfront (80% of aggregate total project cost) Units 750 313 360 326 195 Location Jersey City, NJ Weehawken, NJ West New York, NJ Malden, MA Short Hills, NJ Development Sta
Slide 22: Waterfront Portfolio Overview
Waterfront Portfolio Overview . Mack]Cali will continue to invest in its best assets . current plan $156.0M . As AFFO increases, we have and will allocate $30M per annum . The Company has 1 MSF to lease to 92% stabilization . In]place rents on the Waterfront are currently 20% below asking 22 Buildin
Slide 23: Harborside Transformation
Harborside Transformation 23 Before . 2015 Today . 2019 District Kitchen Food Hall . Opened March 2019 Capital Spent: $64.3 M Proj. Future Investment: 91.7 M Total Project Cost: $156.0 M Master Planned Amenities: Harborside is the center of live/work/play on the New Jersey Waterfront. Future investm
Slide 24: Suburban Portfolio Repositioning – Core
Suburban Portfolio Repositioning ] Core As of September 2015 As of September 2019 Only 18 suburban assets . 2.8 MSF . remain from September 2015 portfolio. Rents in current portfolio are 21% higher than 2015 rents in those markets Morris Monmouth Metropark Short Hills Total Market Inventory 3.1MSF 1
Slide 25: Drivers of Future Earnings Growth
Drivers of Future Earnings Growth 25 0% 5% 10% 15% 20% 25% 30% 35% 40% X Y Z Waterfront Occupancy Gains (1) (92% occupancy) Development Deliveries Development Deliveries (3) $40 million or $0.40 per share (+18.0% increase) 2019(2) Deliveries: $6.6M (+3.0% increase) 2020 Deliveries: $14.6M (+6.6% inc
Slide 26: Appendix
26 Appendix
Slide 27: Definitions
Average Revenue Per Home: Calculated as total apartment revenue for the quarter ended September 30, divided by the average percent occupied for the quarter ended September 30, 2018, divided by the number of apartments and divided by three. Operating Communities: Communities that have achieved Projec
Slide 28: Notes: Gross & Net Asset Value (Unaudited)
Notes: Gross & Net Asset Value (Unaudited) 28 28 The year one cap rate, applied to the 3Q 2019 Annualized Cash NOI, is derived from the present value of periodic cash flows over five years and a terminal value based on stabilized income and a market cap rate, all discounted at an unlevered internal
Slide 29: Net Asset Value notes (continued)
6) Includes the Company's ownership interests in the Hyatt Regency Jersey City and two office joint venture properties. 7) The value of land is based on a combination of recent or pending transactions for land parcels within our relevant markets and unrelated third parties, and sometimes may utilize
Slide 30: Development Activity & Future Cash Flow Growth
(1) Projected stabilized yield without the Marriott Hotels at Port Imperial is 6.08 percent. $ in millions (unaudited) Development Activity & Future Cash Flow Growth 30 Projected Projected RRT Nominal % Leased As of : Actual /Projected Projected Stabi l i zed Share of Stabi l i zed Ownership As of 9
Slide 31: Residential Calculator: Harborside
Residential Calculator . Harborside 31 1 Bedroom Household Annual Household Income ] ] ] ] ] ] Less: Income Tax (1) Federal 20.2% ($30,290) 20.2% ($30,290) ] ] 22.8% ($45,690) 22.8% ($45,690) ] ] 25.3% ($63,190) 25.3% ($63,190) ] ] FICA 6.7% (10,111) 6.7% (10,111) ] ] 5.4% (10,836) 5.4% (10,836) ] ]
Slide 32: Residential Calculator: Hoboken
Residential Calculator . Hoboken 32 (1) Reflects 2018 tax rates for single filers. Federal Income Tax values reflect rates from US Tax Center at IRS.com, a private sector financial services company. FICA rates reflect those listed for Social Security & Medicare Withholdings on IRS.gov. New Jersey St
Slide 33: Residential Calculator: Port Imperial
Residential Calculator . Port Imperial 33 (1) Reflects 2018 tax rates for single filers. Federal Income Tax values reflect rates from US Tax Center at IRS.com, a private sector financial services company. FICA rates reflect those listed for Social Security & Medicare Withholdings on IRS.gov. New Jer
Slide 34: Information About Net Operating Income (NOI)
Information About Net Operating Income (NOI) NOI represen3Qts 2t0o18tal revenues less total operating expenses, as reconciled to net income above. The Company considers NOI to be a meaningful non]GAAP financial measure for making decisions and assessing unlevered performance of its property types an
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