Veris Residential, Inc. · NYSE:VRE
Veris Residential — Mack-Cali Realty — Investor Presentation (September 2018)
30 slides from Veris Residential's investor presentation, Sep 25, 2018
Slide 1: Forward-looking statements
2 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 “may,” “will,” “plan,” “potential,” “projected,” “should,” “expect,”
Slide 2: Jersey City Portfolio Overview
3 Jersey City Portfolio Overview Mack-Cali has a leading residential and office presence in Jersey City’s premier market 4 Residential Units Office SF Future Developments Transportation 2 3 1 5 6 7 8 14 15 16 17 9 10 11 13 12 Urby (762 Units) Marbella (412 Units) M2 (311 Units) Monaco (523 Units) 10
Slide 3: 2Q 2018 Key Statistics
2Q 2018 Key Statistics (1) Square Feet Office Space % Leased (Excl. Non-Core) GAAP Rental Rate Roll-Up (Excl. Non-Core) Cash Rental Rate Roll-Up (Excl. Non-Core) Operating Residential Units % Leased Residential Units In-Construction Residential Units/Keys 6,082 97.5% 2,001 Market Capitalization Net
Slide 4: Comprehensive Transformation 2Q15 vs 2Q18
5 Office buildings (Excluding Flex) Operating/In Construction Units (WO/JV) Operating/In Construction Units (Subordinate) Total Market Cap Weighted Average Interest Rate Interest Coverage Ratio Core FFO (Qtr.) 42 (63% Reduction) 7,953 (109% Increase) 130 (96% Reduction) $5.0 billion (28% Increase) 3
Slide 5: NOI Evolution
NOI Evolution 6 Total Portfolio NOI: $335M 69% of NOI from Preferred Business Segments Total Portfolio NOI: $357M 37% of NOI from Preferred Business Segments Market NOI % Waterfront Office $82 23% Residential 28 8% Class A Suburban Office 23 6% Subtotal $133 37% Suburban Office 170 48% Flex 54 15% T
Slide 6: Residential – 2018 Lease Up Success
Residential – 2018 Lease Up Success 7 The Company has delivered 1,212 units to the marketplace in 2018, which are collectively 63.9% leased as of September 17, 2018 Highlighting this success is the absorption of RiverHouse 11. The property opened on July 6, 2018 and is currently 84.1% leased (248 un
Slide 7: Residential – Market Leading Portfolio
Residential – Market Leading Portfolio 8 As of 2Q 2018, Roseland had a portfolio-wide percentage leased of 97.5% Roseland’s low volatility portfolio has leased within a 200 bps range over last three years, which management believes is supportive of higher loan-to-value debt Roseland’s portfolio has
Slide 8: Residential – Value Creation
Residential – Value Creation Estimated Value Creation from In-Construction Projects Projected NOI $61.2M Market Value of Projected NOI 1,194.7M Less: Cost of Development - 875.0M Value Creation $319.7M Roseland Share $269.8M 9 Roseland’s In-Construction and lease-up portfolio is forecasted to create
Slide 9: Residential – Development Delivery and FFO Creation
Residential - Development Delivery and FFO Creation 10 2019E: $28.7 M 2020E 1: $38.2 M 2018E: $13.7 M Pictured: Monaco Jersey City The growth reflected below is solely from Roseland’s current Operating and In-Construction portfolio Economic Stabilizations Quarry Place at Tuckahoe – 108 Units ($1.1M)
Slide 10: Residential – Equity Requirements
Residential – Equity Requirements 11 As summarized in the table below, Mack-Cali is planning on and expects to have excess capital sources available to achieve the following key objectives: Complete Roseland’s in-construction portfolio of 2,001 units Complete Roseland’s funding requirement for 2018/
Slide 11: Office – Rent Growth by Property Type
Office – Rent Growth by Property Type 12 The Company achieved GAAP roll-ups of 16.5% across its core portfolio and 12.2% at waterfront assets Waterfront rents continue to climb as the Company focuses on its trophy assets As waterfront rents continue to climb, management believes re-leasing previousl
Slide 12: Office – Disposition Strategy & Statistics
($ in millions) Percent of Goal Buildings Building SF Avg. Base Rent Dispositions (2015 – YTD 2018) $1,435.2 90.6% 143 16,002,167 $25.17 Under Contract/Negotiations 131.1 8.3% 6 766,563 24.44 Active Dialogue/Future Dispositions 17.1 1.1% 2 194,714 24.49 Total Dispositions $1,583.4 100% 151 16,963,44
Slide 13: Office – Post Disposition Portfolio
Office – Post Disposition Portfolio 14 Excludes non-core holdings targeted for sale at 842,086 SF; excludes consolidated repositionings taken offline totaling 513,101 SF. Total consolidated office portfolio of 15,920,449 SF. Includes annualized base rental revenue plus escalations for square footage
Slide 14: Office – Waterfront Leasing Prospects
Office – Waterfront Leasing Prospects 15 4Q 2017 SF (Thousand) Looking ahead to 2019 and beyond, Mack-Cali will be in an excellent position to capitalize on the momentum provided by our building improvements, new leases signed, and the continued enhancement of the Jersey City Waterfront’s reputation
Slide 15: Valuation – NAV 2Q 2018
16 Valuation – NAV 2Q 2018 $ in millions (except per share amounts) Notes: See appendix for additional information The company’s NAV estimate of $3.6B is further supposed using alternative valuation methodologies on page 17
Slide 16: Office Portfolio Value Price-to-FFO Multiple Sensitivity
Office Portfolio Value Price-to-FFO Multiple Sensitivity 2018 Office Portfolio FFO(3): $1.51/share Valuation - Implied Stock Price Office FFO Multiple Office Company Value Per Share Roseland Value Per Share Implied Stock Value 11.00x $16.61 $15.46 $32.07 12.00x 18.12 15.46 33.58 13.00x 19.63 15.46 3
Slide 17: Geographic Breakdown of NAV along Hudson River Waterfront
Mack-Cali’s residential and core office assets are concentrated in targeted urban markets and transit based locations, with approximately 74% of NAV along the Hudson River Waterfront. Geographic Breakdown Hudson River Waterfront NAV ($) NAV (%) Office (Jersey City, Hoboken) $1,570M 43% Residential (
Slide 18: Regional Spotlight - Jersey City
Regional Spotlight - Jersey City 19 Mack-Cali and Roseland have a market leading residential & office portfolio along the Jersey City Waterfront. Residential Units % Leased (6/30/18) Rent PSF (6/30/18) Marbella 412 97.3% $40.66 Monaco 523 97.1% 45.03 M2 311 97.1% 46.36 Urby 762 99.3% 58.84 Total 2,0
Slide 19: Jersey City: The New Scene
Jersey City: The New Scene 20 1st Most Livable City in the US Smartasset (2016) 1st Fastest- Growing Metro Area in NJ Forbes & CareerBliss 2nd Happiest City to Work in the US Forbes & CareerBliss 5th Best Public Transportation in the US Business Insider Top 5 US Cities for Millennials Niche & Forbes
Slide 20: Regional Spotlight - Port Imperial
Regional Spotlight - Port Imperial 21 The Port Imperial submarket provides unrivaled access to Midtown West and Hudson Yards ($17Bn investment) via the NY Waterway Ferry. Port Imperial will further become a prime residential destination as companies migrate to Hudson Yards Operating In-Construction
Slide 21: Port Imperial Fundamentals
Port Imperial Fundamentals 22 Port Imperial is a community sought after by young professionals looking for access to New York City and unrivaled value. The neighborhood offers numerous parks, walking paths, retail options and dining experiences, all within walking distance. The unparalleled absorpti
Slide 22: Regional Spotlight - Overlook Ridge
Regional Spotlight - Overlook Ridge 23 Operating Properties Units % Leased (6/30/18) Rent PSF (6/30/18) Alterra at Overlook Ridge 722 97.5% $24.12 The Chase at Overlook Ridge 664 97.6% 26.77 Total 1,386 97.5% $25.39 2018 Target Start (Chase III) 326 Remaining Land 490 Roseland has developed the 92 a
Slide 23: Repositioning - Harborside Cultural District
Repositioning - Harborside Cultural District The Company continues to invest in our Jersey City assets as part of a complete transformation project to create a cultural district at Harborside. 24 Lutze Biergarten Harborside Tower (Proposed JV with SJP Properties) New Retail, Dining and Event Space R
Slide 24: NJ Grows: business incentive program
NJ Grows: Mack-Cali is well positioned to benefit from business incentive program 25 Tenants locating in the Company’s core markets may be eligible to participate in the Grow NJ Assistance Program, a powerful job creation program designed to strengthen New Jersey’s competitive edge. Companies that c
Slide 25: NJ Grows: business incentive program
NJ Grows: Mack-Cali is well positioned to benefit from business incentive program Tenants locating in the Company's core markets may be eligible to participate in the Grow NJ Assistance Program, a powerful job creation program designed to strengthen New Jersey's competitive edge. Companies that crea
Slide 26: Definitions
27 Average Revenue Per Home: Calculated as total apartment revenue for the quarter ended December 31, divided by the average percent occupied for the quarter ended December 31, 2017, divided by the number of apartments and divided by three. Operating Communities: Communities that have achieved Proje
Slide 27: Development Activity and Cash Flow Growth
Development Activity and Cash Flow Growth 4Q 2017 Note: Roseland delivered Phase I (237 units) in 1Q 2018 and envision completion of Phase II (128 units) in 3Q 2018. Projected stabilized yield without the Marriott Hotels at Port Imperial is 6.30 percent. $ in millions (unaudited) 28
Slide 28: Notes: Net Asset Value (Unaudited)
Notes: Net Asset Value (Unaudited) 29 The year one cap rate, applied to the projected 2018 cash net operating income, 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 interna
Slide 29: Notes: Net Asset Value (Unaudited)
30 Notes: Net Asset Value (Unaudited) Valuations for properties planned for or undergoing a repositioning or repurposing utilize a projected stabilized net operating income for the asset upon completion of the repositioning/repurposing activities. After applying an estimated capitalization rate to a
Slide 30: Notes: Net Asset Value (Unaudited)
Notes: Net Asset Value (Unaudited) (9) Votations for properties planned fr or undergoing 2 repostioning or repuposngutlze 9 projected stabiaed net operating income forthe aset upon completion of the ‘epostioning/tepurpsing acts. Aer appyingan estimated coptaizaton at oa projected stabizes net operat
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