Veris Residential, Inc., a REIT that primarily owns, operates, acquires, and develops Class A multifamily properties, has entered into a binding agreement to sell Harborside 1, 2, and 3 for an aggregate price of $420 million and completed its sale of 101 Hudson Street for $346 million.
Mahbod Nia, Veris CEO, said, “These are significant milestones in our transition to a pure-play multifamily company. I would like to thank the Veris Residential team for its perseverance and tenacity, which have allowed us to continue making progress on our strategic goals despite an extremely challenging market environment. Looking ahead, the sizable proceeds anticipated from these transactions provide the company with meaningful liquidity and optionality as we enter the next phase of our transformation.”
Tammy K. Jones, board chair, added, “With our exit of the office sector nearly complete, we intend to continue streamlining operations as we become a pure-play multifamily REIT with a more resilient cashflow profile. In addition, notwithstanding the extraordinary market dislocation, the Strategic Review Committee and Board will be evaluating the best opportunities to unlock the substantial value that has been created for our shareholders.”
Cushman & Wakefield and CBRE co-arranged the Harborside 1/2/3 transaction, while Cushman & Wakefield served as sole arranger of the 101 Hudson Street transaction.
According to Andy Merin, executive vice chairman of Cushman & Wakefield, “The sale of 101 Hudson is a historic transaction, made even more significant due to the challenging investment sales environment, with deals of this size and caliber rarely closing in any markets across the country right now. After months of hard work, we are thrilled to have arranged this momentous transaction on behalf of Veris, with this being one of the largest single-asset office sales in New Jersey history. We are grateful for our continued relationships with both Veris and Birch Group and look forward to continuing to help them execute on their business plans.”
Since the beginning of 2021, Veris Residential has simplified and focused its business, strengthened its balance sheet, and enhanced its operational platform in pursuit of its new strategic direction. The company has closed on over $1.4 billion of non-core assets, repaid over $1.2 billion of debt, and added approximately 1,900 units to its residential portfolio, all while delivering sector-leading multifamily operating performance.
Under the terms of the Harborside 1/2/3 sales agreement, executed on Sept. 22, Veris Residential anticipates closing the transaction in the first quarter of 2023. The agreement is subject to closing conditions and other terms and conditions customary for real estate transactions. The company expects to receive approximately $350 million and approximately $90 million of net proceeds from the sales of Harborside 1/2/3 and 101 Hudson Street, respectively.
Following the close of Harborside 1/2/3 and pro-forma for the stabilization of Haus25 (currently over 78% leased), multifamily will represent approximately 98% of Veris Residential’s Net Operating Income, up from 39% as of the end of the first quarter of 2021.
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