Veris Residential, Inc. (NYSE:VRE) Q1 2023 Earnings Conference Call April 27, 2023 9:00 AM ET

Company Participants

Taryn Fielder - General Counsel, Secretary

Mahbod Nia - Chief Executive Officer

Amanda Lombard - Chief Financial Officer

Conference Call Participants

Tom Catherwood - BTIG

Joshua Dennerlein - Bank of America

Eric Wolfe - Citi

Derek Johnston - Deutsche Bank

Operator

Good morning, and welcome to Veris Residential Inc.'s First Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would like to turn the conference over to Taryn Fielder. Please go ahead.

Taryn Fielder

Good morning, everyone, and welcome to the Veris Residential First Quarter 2023 Earnings Conference Call.

I would like to remind everyone that certain information discussed on this call may constitute forward-looking statements within the meaning of the federal securities law. Although we believe the estimates reflected in these statements are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. We refer you to the company's press release and the annual and quarterly reports filed with the SEC for risk factors that impact the company.

With that, I would like to hand the call over to Mahbod Nia, Veris Residential's Chief Executive Officer. Mahbod?

Mahbod Nia

Good morning, and welcome to our first quarter 2023 earnings call. I'm joined today by our CFO, Amanda Lombard.

We had a positive start to 2023, underpinned by continued strength in the performance of our multifamily portfolio and momentum in our strategic transformation.

We closed on the sale of Harborside 1, 2, 3 despite an extremely challenging transaction market, particularly for office. Closing the Harborside 1, 2, 3 transaction represents a significant milestone in the company's continued evolution and concludes over $2 billion of non-strategic asset sales since the beginning of 2021, which, combined with the successful development, and stabilization of four new multifamily buildings and one acquisition during this period have transformed Veris Residential from primarily an office company to a pure-play multifamily company with 99% of our NOI being derived from Class A multifamily properties.

As of March 31, our 7,681-unit multifamily portfolio, which now includes Haus25 and Same Store 6,691-unit multifamily portfolio, were 95.9% and 96% occupied, respectively. Following a seasonally slower start to the year, we've seen demand accelerating ahead of what we anticipate will be another busy leasing season.

The Same Store portfolio achieved a blended net rental growth rate of almost 11% during the first quarter, moderating as expected, but remaining extremely robust. In particular, our Jersey City and Port Imperial assets, which represents approximately 72% of the portfolio, continued to outperform with a 13% blended net rental growth rate achieved in the first quarter. Despite the strong rental growth, Class A rents in these submarkets remain approximately 40% below average comparable Manhattan rents.