Veris Residential, Inc. · NYSE:VRE
Veris Residential — Mack-Cali Realty — Proxy Contest (May 2020)
57 slides from Veris Residential's proxy contest presentation, May 19, 2020
Slide 1: Mack-Cali Realty Corporation May 2020
DRAFT – FOR DISCUSSION PURPOSES ONLY Mack-Cali Realty May 2020 Corporation
Slide 2: Disclaimer
Disclaimer 2 This presentation should be read in connection with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. 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. Forwar
Slide 3: Mack-Cali has Demonstrated Responsiveness to Shareholders
Mack-Cali has Demonstrated Responsiveness to Shareholders We have listened and taken meaningful action in response to shareholder feedback execute on a potential transaction Value Committee to review strategic alternatives Audit Committee to provide the greatest insight of the Company itself, and 2)
Slide 4: Bow Street's Continued Fight for Control
Bow Street’s Continued Fight for Control What is Bow Street’s true objective? To profit at the expense of Mack-Cali shareholders documentation for the claimed expenses nominated a majority slate of six nomination deadline, Bow Street principals who subsequently dropped candidates to the Board unless
Slide 5: A Walk Through Bow Street's "Plan" Shows it is Not Grounded in Reality
A Walk Through Bow Street’s “Plan” Shows it is Not Grounded in Reality Bow Street’s “plan” is a mix of vague and flawed ideas. Although four Bow Street Directors spent a year on the Board, Bow Street is still not offering specifics about how it would maximize value for all shareholders suburban offi
Slide 6: A Walk Through Bow Street's "Plan" Shows it is Not Grounded in Reality
A Walk Through Bow Street’s “Plan” Shows it is Not Grounded in Reality Bow Street’s “plan” is a mix of vague and flawed ideas. Although four Bow Street Directors spent a year on the Board, Bow Street is still not offering specifics about how it would maximize value for all shareholders engaging in d
Slide 7: Mack-Cali is Executing a Clearly Defined Strategic Plan
Mack-Cali is Executing a Clearly Defined Strategic Plan to Build Value and Seek Strategic Alternatives - Leasing up current Waterfront vacancies portfolio from suburban office to multifamily and Class-A simplification until a strategic alternative that delivers value to ALL Mack-Cali shareholders is
Slide 8: Vote For a Slate of Highly Qualified Directors
Vote For a Slate of Highly Qualified Directors Well-Positioned to Deliver Shareholder Value Mack-Cali’s full slate of directors is equipped to oversee strategic transactions CEO Experience and historical CEO, Mack-Cali, Delivering our REIT CFO experienced with Portfolio Manager for Real Estate Direc
Slide 9: Agenda
Agenda Mack-Cali’s Board has Listened and Been Responsive to Shareholders 1 Strategy, Execution & Performance Driving Growth and Portfolio Transformation 2 Bow Street is Seeking Control of Your Company to Pursue its Own Agenda 3 Shareholders Deserve Directors Maximize Value Best Positioned to 4 5 Ap
Slide 10: Conducted Strategic Review, Now Managing a Multi-Prong Sales Process
Conducted Strategic Review, Now Managing a Multi-Prong Sales Process As part of its strategic review process, Mack-Cali, a long-standing suburban office company, made the decision to exit its suburban office assets, accelerating its transition to a multifamily offering to increase the attractiveness
Slide 11: Mack-Cali Continues to Seek Constructive Engagement with Bow Street
Mack-Cali Continues to Seek Constructive Engagement with Bow Street We have repeatedly tried to reach an agreement with Bow Street to avoid another costly fight which distracts management from its mission to create shareholder value MAR. 13 unconstructive behavior as a Board member) on the Company’s
Slide 12: Extensive and Independent Nominee Search Process
Extensive and Independent Nominee Search Process Search process aligned with Mack-Cali’s demonstrated commitment to continued Board refreshment and governance best practices third party search firm, was already candidates to replace retiring Chairman of its search process once the Board Governance C
Slide 13: First-Class Nominees Will Help Board Oversee Company Strategy
First-Class Nominees Will Help Board Oversee Company Strategy Highly relevant skill sets, deep experience in public REIT space, seasoned public company directors across various industries, and perspectives of new nominees aligned with the needs of Mack-Cali and all shareholders ▪ Experience overseei
Slide 14: First-Class Nominees Will Help Board Oversee Company Strategy
First-Class Nominees Will Help Board Oversee Company Strategy Mack-Cali’s incumbent directors bring a balance of deep institutional knowledge and fresh perspectives as chair of key A = Audit Committee. NCG = Nominating and Corporate Governance Committee. ECO = Executive Compensation and Option Commi
Slide 15: Embracing a New Corporate Governance Context
Embracing a New Corporate Governance Context Over the past four years, and especially following shareholder feedback last year, the Board has made meaningful enhancements to CLI’s corporate governance practices to re-classify itself without a shareholder vote annual meeting met with shareholders rep
Slide 16: Agenda
Agenda Mack-Cali’s Board has Listened and Been Responsive to Shareholders 1 Strategy, Execution and Performance Driving Growth and Portfolio Transformation 2 Bow Street is Seeking Control of Your Company to Pursue its Own Agenda 3 Shareholders Deserve Maximize Value Directors Best Positioned to 4 5
Slide 17: Executing a Clearly Defined Strategy to Exit the Suburban Office Business
Executing a Clearly Defined Strategy to Exit the Suburban Office Business Completing multi-year transformation to divest non-core assets and build, own and operate market-leading multifamily and office platforms that create live, work, and play environments on the high growth New Jersey waterfront P
Slide 18: Key Facets to Achieve the Goals of Mack-Cali's Strategy
Key Facets to Achieve the Goals of Mack-Cali’s Strategy When hired in 2015, Michael DeMarco devised a simplification strategy with the goal of fewer and larger multifamily and Class A office assets Creating Platform Value Selling the remaining suburban office portfolio Repaying corporate debt to inc
Slide 19: Mack-Cali has the Right Management Team in Place
Mack-Cali has the Right Management Team in Place to Achieve its Goals The Board, including Bow Street’s nominees, unanimously endorsed Management’s current execution strategy Chief Executive Officer implementing a local market strategy with the scale of a public REIT ▪ ▪ CEO of Mack-Cali since April
Slide 20: The Street Supports Management and its Strategy
The Street Supports Management and its Strategy Analysts recognize DeMarco’s strategic transformation creates long term value “We continue to like the shares of CLI, and view any pullback after earnings waterfront and JC residential mix. This should leave CLI more focused and incentives bill as an o
Slide 21: Dominant Jersey City Waterfront Market Share
Dominant Jersey City Waterfront Market Share Mack-Cali has developed the Jersey City waterfront to create an attractive and vibrant live / work / play community M2 311 Units Urby 1 Soho Lofts 377 Units Liberty Towers The Charlotte 107 Morgan Monaco Plaza Plaza 4a Plaza 1, 2, 3 412 Units Residential
Slide 22: Well-Located Port Imperial Residential Ecosystem
Well-Located Port Imperial Residential Ecosystem Highly amenitized residential developments offer compelling value and convenient access to Hudson Yards 55 Riverwalk Place Riverbend 1 RiverHouse 11 +9MSF Net Office Leasing ~45k New Jobs (1) 2006 2000 2018 The Capstone Residence Inn Riverbend 2 And 3
Slide 23: Mack-Cali's Prescient Pivot to Multifamily Has Rewarded Shareholders
Mack-Cali’s Prescient Pivot to Multifamily Has Rewarded Shareholders Mack-Cali’s growing multifamily exposure has led to significant outperformance versus NYC office-focused peers primary responsibility for the capital strategy and operations suburban office assets with lower recurring capex, Peers
Slide 24: Transformation Has Materially Improved Strength and Quality of Cash Flow
Transformation To Date Has Materially Improved Mack-Cali’s Strength and Quality of Cash Flow Mack-Cali has delivered on its strategy to date and the portfolio now offers investors substantial exposure to multifamily cash flow Office Suburban 6.50% 4.25% Source: Company information, Green Street Advi
Slide 25: Comprehensive Transformation from Suburban Office to Waterfront Class A Office & Residential
Comprehensive Transformation from Suburban Office to Waterfront Class A Office & Residential Mack-Cali has traded cash flow from depreciating assets in weaker markets for appreciating assets in growth marketsThe Company has completed $2.6bn of acquisitions, $2.5bn of dispositions and $1.1bn of devel
Slide 26: Successful and Ongoing Disposition Program of Non-Core Assets
Successful and Ongoing Disposition Program of Non-Core Assets Asset dispositions of $2.5bn (to date) since 2015 have strengthened and simplified the Company (1) ▪ Disposed of 3.5MSF of suburban flex space with net proceeds of ▪ Flex portfolio disposition executed at an 1.6% premium to under contract
Slide 27: Waterfront Residential Deliveries Catalyze Cash and Value Creation
Waterfront Residential Deliveries Catalyze Cash and Value Creation Mack-Cali achieved record leasing velocity on recent waterfront deliveries Flow Growth Total Recent Mack-Cali has the expertise stabilized value Location: Jersey City Jersey City Port Imperial Lease-up Period 6.3% Current Percentage
Slide 28: Waterfront-Focused $1.0bn Development Pipeline Enhances Growth Prospects
Waterfront-Focused $1.0bn Development Pipeline Enhances Growth Prospects Residential development pipeline scheduled to deliver $61.5mm of additional projected stabilized NOI Development Yield Note: Dollars in millions. 28 Residential Development Snapshot $1.0bn$61.6mm6.2%$31.0mm Total CostTotal Proj
Slide 29: Waterfront Centric Portfolio is More Easily Understood and Valued
Waterfront Centric Portfolio is More Easily Understood and Valued Mack-Cali owns a highly valuable and attractive Class A portfolio of residential and office assets on the NJ waterfront Market Share Remaining After suburban office dispositions, the portfolio will consist of two relatively straightfo
Slide 30: Roseland: Mack-Cali's Residential Platform
Roseland: Mack-Cali’s Residential Platform Company’s strategic acquisition of Roseland has accelerated its transition to multifamily In 2012, Mack-Cali acquired Roseland Partners, a residential development and management business, comprising minority and subordinated ownership interests in assets (
Slide 31: Balance Sheet Management
Balance Sheet Management Transformation to a non-recourse balance sheet aligned with its business strategy quality allows Mack-Cali to support its stabilized leverage level Revolving Line of Credit Availability Revolving Line of Credit Balance Outstanding as of 3/31/2020 Current W.A. Cap Rate 6.2% S
Slide 32: Mack-Cali is Poised to Complete its Strategic Transformation
Mack-Cali is Poised to Complete its Strategic Transformation Remaining execution will address outstanding areas of investor concern Cali’s financing needs Cash Flow office capex and leasing costs at 24.8% of NOI (1) remaining Suburban Office assets (1) Figures represent recurring residential and rec
Slide 33: Agenda
Agenda Mack-Cali’s Board has Listened and Been Responsive to Shareholders 1 Strategy, Execution & Performance Driving Growth and Portfolio Transformation 2 Bow Street is Seeking Control of Your Company to Pursue its Own Agenda 3 Shareholders Deserve Directors Maximize Value Best Positioned to 4 5 Ap
Slide 34: History of Bow Street's Lack of Transparency and Fight for Control
History of Bow Street’s Lack of Transparency and Fight for Control Shareholders should seriously question the timeline of Bow Street’s deceitful behavior. The abuse of our director nomination process is revealing of the character and intentions of Bow Street and its nominees JAN. 28 Bow Street, hold
Slide 35: Bow Street Has No Substantive Plan and Might Take Ill-Conceived Actions
Bow Street Has No Substantive Plan and Might Take Ill-Conceived Actions Bow Street wants to fire the Company’s CEO and sell the Company, but has no substantive plan or ability to run the business until a sale process can be undertaken and to “restructure” a critical joint venture relationship after
Slide 36: Bow Street's Nominees Are Not Right for Mack-Cali's Board
Bow Street’s Nominees Are Not Right for Mack-Cali’s Board Nominees are not independent of Bow Street and are not suited to responsibly oversee the Company’s strategic transformation nominee premium for its shares (1) 2020 to serve as nominee search firm as a after she signed onto did not disclose wi
Slide 37: Bow Street Directors' Repeated Failure to Act in Good Faith
Bow Street Directors’ Repeated Failure to Act in Good Faith Each of the Bow Street Directors chose multiple times to act in secrecy, rather than conducting themselves in a transparent and responsible manner was appropriate, they could have disclosed their views and its slate without informing the fu
Slide 38: Bow Street is Mischaracterizing a Proposed "Offer" from Rizk Ventures
Bow Street is Mischaracterizing a Proposed “Offer” from Rizk Ventures We are open to a sale and we look forward to the earliest transaction that can maximize value for shareholders but continued to insist on another in-person meeting with Mr. DeMarco potential transaction, as well as information to
Slide 39: Bow Street's Plan to "Streamline" Roseland
Bow Street’s Plan to “Streamline” Roseland Bow Street has demonstrated a clear and concerning lack of understanding of both Roseland and Rockpoint’s investment As part of its so-called three-step plan, Bow Street stated an intent to “streamline Mack-Cali’s residential assets by restructuring the Com
Slide 40: Bow Street is Mistaken: Mack-Cali's Cash Flow Profile has Strengthened
Bow Street is Mistaken: Mack-Cali’s Cash Flow Profile has Strengthened Contrary to Bow Street’s claims, the portfolio transformation from high yield to high value has established durable cash flows. The suburban assets have higher top line yield, but disproportionately high capital needs yield lower
Slide 41: Bow Street's Deceptive Claims are Unfounded and Disregard Facts
Bow Street’s Deceptive Claims are Unfounded and Disregard Facts Bow Street’s criticisms misrepresent the actions Mack-Cali’s Board and management have taken to enhance and protect shareholder value – Mack-Cali shareholders deserve directors they can trust The Truth Misleading Claims transition to re
Slide 42: Bow Street's Deceptive Claims are Unfounded and Disregard Facts
Bow Street’s Deceptive Claims are Unfounded and Disregard Facts Bow Street’s criticisms misrepresent the actions Mack-Cali’s Board and management have taken to enhance and protect shareholder value – Mack-Cali shareholders deserve directors they can trustBow Street’s Misleading Claims The TruthBUSIN
Slide 43: Bow Street's Deceptive Claims are Unfounded and Disregard Facts
Bow Street’s Deceptive Claims are Unfounded and Disregard Facts Bow Street’s criticisms misrepresent the actions Mack-Cali’s Board and management have taken to enhance and protect shareholder value – Mack-Cali shareholders deserve directors they can trust The Truth Misleading Claims gone to “extraor
Slide 44: Bow Street's Deceptive Claims are Unfounded and Disregard Facts
Bow Street’s Deceptive Claims are Unfounded and Disregard Facts Bow Street’s criticisms misrepresent the actions Mack-Cali’s Board and management have taken to enhance and protect shareholder value – Mack-Cali shareholders deserve directors they can trust The Truth Misleading Claims The Board dismis
Slide 45: Bow Street's Deceptive Claims are Unfounded and Disregard Facts
Bow Street’s Deceptive Claims are Unfounded and Disregard Facts Bow Street’s criticisms misrepresent the actions Mack-Cali’s Board and management have taken to enhance and protect shareholder value – Mack-Cali shareholders deserve directors they can trust Misleading Claims The Bow Street Directors v
Slide 46: Bow Street's Deceptive Claims are Unfounded and Disregard Facts
Bow Street’s Deceptive Claims are Unfounded and Disregard Facts Bow Street’s criticisms misrepresent the actions Mack-Cali’s Board and management have taken to enhance and protect shareholder value – Mack-Cali shareholders deserve directors they can trust The Truth Misleading Claims Mr. DeMarco’s pa
Slide 47: Bow Street's Self-Interested Campaign for Control and Profit
Bow Street’s Self-Interested Campaign for Control and Profit Wants Control No Transparency 47 Self-Interested,No Operational Plan andNo Case for ChangeWrong Candidates In 2019, Bow Street attempted toBow Street proposes to remove theMack-Cali fully embracedBow Street’s current directors buy Mack-Cal
Slide 48: Agenda
Agenda Mack-Cali’s Board has Listened and Been Responsive to Shareholders 1 Strategy, Execution & Performance Driving Growth and Portfolio Transformation 2 Bow Street is Seeking Control of Your Company to Pursue its Own Agenda 3 Shareholders Deserve Directors Maximize Value Best Positioned to 4 5 Ap
Slide 49: This is Not Last Year's Vote or Last Year's Slate
This is Not Last Year’s Vote or Last Year’s Slate Last year shareholders told us their vote reflected the need to update our governance practices. We heard you. Bow Street is now seeking control of the Board. The outcome could allow one investor to control the future of Mack-Cali. 49 Mack-Cali has e
Slide 50: Shareholders Face a Critical Choice
Shareholders Face a Critical Choice Mack-Cali shareholders deserve directors with the skills and independence to maximize value 50 At this critical juncture, we urge our shareholders to ask themselves two important questions: 1 )Which directors are best positioned to continue executing Mack-Cali’s o
Slide 51: Vote the WHITE CARD
Vote the WHITE CARD 51 It is incredibly important that you VOTE THE WHITE CARD to prevent Bow Street from gaining effective control of Mack-Cali Voting on the dissident card, EVEN IF ONLY FOR ONE OF BOW STREET’S NOMINEES, can have the unintended consequence of helping Bow Street gain a majority posi
Slide 52: Agenda
Agenda Mack-Cali’s Board has Listened and Been Responsive to Shareholders 1 Strategy, Execution & Performance Driving Growth and Portfolio Transformation 2 Bow Street is Seeking Control of Your Company to Pursue its Own Agenda 3 Shareholders Deserve Directors Maximize Value Best Positioned to 4 5 Ap
Slide 53: Focused on Response to COVID-19
Focused on Response to COVID-19 Successfully adapting operations in response to COVID-19 while also supporting our community we can provide essential services in a safe and timely manner, and Emergency Response Fund We have also donated $100,000 to the Jersey City Small Business Relief ▪ (1) Mack-Ca
Slide 54: CEO Compensation Overview
CEO Compensation Overview Well-structured program drives strong alignment of pay and performance Salary ▪ 40% based on Core FFO Based LTIPs Incentive LTIPs 54 2019 CEO Target Compensation Base 12% Performance-Annual Cash 46%26% Time-Based the 3-year performance period ▪ Represents 25% of long-term e
Slide 55: Responsible Stewardship for our Properties, People and Community
Responsible Stewardship for our Properties, People and Community Mack-Cali is committed to operating sustainably and responsibly to support our local and extended communities extended communities in need, channeling our contributions to Corporate Energy Group in 1999, an internal advisory function,
Slide 56: Mack-Cali's Strategy Caters To Changing Consumer Demographics and Preferences
Mack-Cali’s Strategy Caters To Changing Consumer Demographics and Preferences Secular trends support investment in well-connected, urban residential markets …a prevailing preference for urban which today is the largest generation …with lower home ownership rates… Millennial generation home location
Slide 57: Mack-Cali's Credit Facility Default Risk
Mack-Cali’s Credit Facility Default Risk The publicly disclosed Credit Facility has been structured this way for nearly 20 years The Company’s unsecured revolving credit facility (the “Credit Facility”) has change of control provisions dating back to June 2000 - For purposes of the Credit Facility,