Veris Residential, Inc. · NYSE:VRE
Veris Residential — Mack-Cali Realty — Investor Presentation (June 2018)
30 slides from Veris Residential's investor presentation, Jun 5, 2018
Slide 1: Forward-looking statements
This Operating and Financial Data should be read in connection with our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018. 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. For
Slide 2: Mack-Cali Jersey City Portfolio Overview
Mack-Cali Jersey City Portfolio Overview Mack-Cali has a leading residential and office presence in Jersey City’s premier market. Y Mack-Cali has a leading residential and office presence on the Jersey City Hudson Waterfront Investor Presentation 3
Slide 3: 1Q 2018 Key Statistics
$4.5 billion Market Capitalization 1Q 2018 Key Statistics $3.6 billion Net Asset Value (estimate) 15.4 million Square Feet Office Space 85.2% % Leased (Excl. Non-Core) 10.7% GAAP Rental Rate Roll-Up (Excl. Non-Core) 5.1% Cash Rental Rate Roll-Up (Excl. Non-Core) 5,826 Operating Residential Units 97.
Slide 4: The New Mack-Cali: Transformation
Pictured: Jersey City Waterfront Assets The New Mack-Cali: Transformation 1Q18 40 (65% Reduction) Office buildings (excluding flex) 2Q15 115 Office Buildings (excluding flex) 3,800 Operating/In Construction Units (WO/JV) 7,228 (90% Increase) Operating/In Construction Units (WO/JV) 542 (82% Reduction
Slide 5: NOI Evolution
$ in millions NOI Evolution Mack-Cali has transformed its business from a suburban office company to a residential and geographically focused office concentration 2Q 2015 NOI Composition (annualized) Total Portfolio NOI: $357M 37% of NOI from Preferred Business Segments 1Q 2018 NOI Composition (annu
Slide 6: Residential – Market Leading Portfolio
Residential – Market Leading Portfolio • • As of 1Q 2018, Roseland had a portfolio-wide percentage leased of 97.3% 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 wi
Slide 7: Residential - Portfolio Evolution
Residential - Portfolio Evolution Roseland has nearly eliminated its subordinated interests as it has continued to grow the size and ownership of its operating portfolio Y/E 2019 Operating and In-Construction Units Portfolio Avg. Ownership: 85.39% Units 12,000 Y/E 2014 10,000 8,000 3,063 7,410 7,410
Slide 8: Residential – Value Creation
Residential – Value Creation Roseland’s In-Construction portfolio is forecasted to create approximately $259 million of value through 2020 (Roseland share: $219.7M) Estimated Value Creation from In-Construction Projects Current Development Pipeline Projected NOI Market Value of Projected NOI Less: C
Slide 9: Residential - Development Delivery and FFO Creation
Pictured: Monaco Jersey City Residential - Development Delivery and FFO Creation The growth reflected below is solely from Roseland’s current Operating and In-Construction portfolio $70 $60 $50 $40 $30 $20 $10 $0 Notes (1)2020 incremental FFO creation excludes proceeds from the late 2020 delivery of
Slide 10: Residential – Equity Requirements
Residential – Equity Requirements $ in thousands 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 1,944 units Complete Roseland’s funding requireme
Slide 11: Office – Rent Growth by Property Type
Office – Rent Growth by Property Type The Company achieved GAAP roll-ups of 10.7% across its core portfolio and 4.2% 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 previously di
Slide 12: Office - Disposition Strategy & Statistics
Office - Disposition Strategy & Statistics We have made significant progress in our portfolio transformation via dispositions of non-core and JV assets and expect to finish our program in 2018. The average rent profile of our remaining office portfolio is 35.3% higher than the disposition portfolio
Slide 13: Office – Post Disposition Portfolio
Office – Post Disposition Portfolio Waterfront Suburban Avg. Base Rent + Escalations (2 ) Avg. Base Rent + Escalations (2 ) Building Location Total SF Leased SF % Leased Building Location Total SF Leased SF % Leased 101 Huds on Ha rbors ide 1 Ha rbors ide 2 & 3 Ha rbors ide 4a Ha rbors ide 5 111 Riv
Slide 14: Office – Waterfront Leasing Prospects
Office – Waterfront Leasing Prospects Building(1) • • • • Lobby Renovation Elevator Upgrades New Retail Amenities Tenant Lounge/Conference Center • • FIRE Professional Svcs 101 Hudson 2,000 – 200,000 0 4 13 4Q18 • • • • • • • • • TAMI FIRE Professional Svcs TAMI FIRE Professional Svcs TAMI FIRE Prof
Slide 15: Valuation - Reported NAV
$ in millions (except per share amounts) Valuation - Reported NAV The company’s NAV estimate of $3.6B is further supposed using alternative valuation methodologies on page 8 High Low Rentable SF/ Projected Cap Rate Gross Asset Gross Per SF / Property Third Party Discounting Net Asset 117 117 Les s :
Slide 16: Valuation - Implied Stock Price
Valuation - Implied Stock Price As reflected in the sum of parts NAV calculation, a stock price of $35.82 is further validated by a cash flow multiple approach: • Office Portfolio Value Mack-Cali Stock Price(1) 1Q 2018 CLI Share of Roseland Net Asset Value Per Share $19.77 15.40 • Price-to-FFO Multi
Slide 17: Geographic Breakdown
Geographic Breakdown Mack-Cali’s residential and core office assets are concentrated in targeted urban markets and transit based locations, with approximately 72% of NAV along the Hudson Waterfront. Hudson Waterfront Office (Jersey City) NAV ($) $1,570M NAV (%) 44% Residential (Jersey City / Port Im
Slide 18: Regional Spotlight - Jersey City
Regional Spotlight - Jersey City Mack-Cali and Roseland have a market leading residential & office portfolio along the Jersey City waterfront. Residential Marbella Monaco M2 Urby Total Remaining Land 412 523 311 762 2,008 4,807 96.8% 96.7% 96.1% 97.8% 97.0% $40.32 44.75 45.84 55.81 $48.21 Operating
Slide 19: Jersey City: The New Scene
Jersey City: The New Scene 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 10t
Slide 20: Regional Spotlight - Port Imperial
Regional Spotlight - Port Imperial 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-Development 2018
Slide 21: Regional Spotlight - Overlook Ridge
Regional Spotlight - Overlook Ridge Roseland has developed the 92 acre Overlook Ridge community, located 5 miles from the center of Boston and directly off of Route 1. Operating Properties Alterra at Overlook Ridge The Chase at Overlook Ridge Total 2018 Target Start (Cantera) Remaining Land 722 664
Slide 22: 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. New Retail, Dining and Event Space Harborside Tower (JV with SJP Properties) Lutze Biergarten Re-Skin of Ha
Slide 23: NJ Grows: business incentive program
NJ Grows: Mack-Cali is well positioned to benefit from this business incentive program These are credits per employee offered by the State of NJ (NJS) to be applied against NJS Corporate Taxes Urban Transit Hub Municipality $5,000 Transit-oriented development $2,000 Large numbers of new full-time jo
Slide 24: NJ Grows: business incentive program
NJ Grows: Mack-Cali is well positioned to benefit from this business incentive program These are credits per employee offered by the State of NJ (NJS) to be applied against NJS Corporate Taxes Gross Annual Benefit/Employee Gross Annual Benefit/SF Large numbers of new full-time jobs are elegible $500
Slide 25: Global Definitions
Global Definitions Average Revenue Per Home: Calculated as total apartment revenue for the quarter ended Operating Communities: Communities that have achieved Project Stabilization. December 31, divided by the average percent occupied for the quarter ended December 31, 2017, divided by the number of
Slide 26: Income Statement – Annual
$ in thousands Income Statement – Annual REVENUES Ba s e rents Es ca la tion a nd recoveries from tena nts Rea l es ta te s ervices Pa rking income Other income Total revenues EXPENSES Rea l es ta te ta xes Utilities Opera ting s ervices Rea l es ta te s ervice expens es Operating Expenses NOI Gener
Slide 27: Development Activity and Cash Flow Growth
Development Activity and Cash Flow Growth $ in millions (unaudited) 2017 Lease-Ups Urby Ha rbors ide Cha s e II a t Overlook Ridge Qua rry Pla ce a t Tucka hoe Total 2017 Lease-Ups 85.00% 100.00% 100.00% 90.16% 97.8% 96.4% 99.1% 97.6% Q1 2017 Q4 2016 Q4 2016 762 292 108 1,162 6.72% 6.52% 6.61% 6.66%
Slide 28: Notes: Net Asset Value (Unaudited)
Notes: Net Asset Value (Unaudited) (1) (2) Based on projected 2018 cash net operating income with management fees added back for office portfolio. NAV is generally arrived at by calculating the estimated gross asset values for each of the Company’s real estate properties, investments and other signi
Slide 29: Notes: Net Asset Value (Unaudited)
Notes: Net Asset Value (Unaudited) (9) 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
Slide 30: Notes: Net Asset Value (Unaudited)
Notes: Net Asset Value (Unaudited) (9) Valuatons for properties plnned for or undergoing « repotoning or repurposing wie a projected sablzed nat operating income for the asset upon completion of the ‘epostioninerepurposing actitis. After apphing an estimated captalcation rate toa projected stabized