Veris Residential, Inc. (NYSE:VRE) Q1 2022 Earnings Conference Call May 5, 2022 8:30 AM ET

Company Participants

Mahbod Nia - CEO

Amanda Lombard - CFO

Conference Call Participants

Tom Catherwood - BTIG

Brian Spahn - Evercore ISI

Michael Bilerman - Citi

John Pawlowski - Green Street Advisors

Operator

Good day, everyone, and welcome to Veris Residential’s First Quarter 2022 Earnings Conference Call. Today's call is being recorded. 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, annual, and quarterly reports, filed with the SEC for risk factors that impact the company.

With that, I would like to hand you over to Mahbod Nia, Veris Residential Chief Executive Officer. Please go ahead, sir.

Mahbod Nia

Good morning, and welcome to our first quarter 2022 earnings call. Before we begin, I want to congratulate our CFO, Amanda Lombard, on the new addition to her family. The first quarter of 2022 was another positive period for us, as we continued to advance our transition to a pure-play multi-family REIT. We achieved strong operational performance across our multi-family portfolio, commenced leasing of Haus25, our newest multi-family development in Jersey City, entered into an off-market transaction to expand our multi-family portfolio through the acquisition of The James, a recently built Class A 240-unit property in Park Ridge, New Jersey, and closed on the sales of four land parcels. The operating fundamentals across our 6,691-unit multi-family portfolio, continued to improve during the quarter, with occupancy at 97.5%, and a blended net rental growth rate of 16% as of March 31, up from 13% in the previous quarter.

We’ve seen demand begin to accelerate ahead of the peak leasing season. However, consistent with the wider industry, we anticipate occupancy may be at or close to peak levels, and as such, will focus on finding the optimal balance between occupancy and rental growth to drive NOI going forward. Our 5,825-unit same-store operating portfolio, which for the first quarter included The Emery in Massachusetts, was 97.2% occupied as of March 31, up from 89.8% in March 2021, and 3.6% above pre-pandemic levels, driving year-over-year same-store revenue and NOI growth of 14% and 20%, respectively. Our Class A multi-family portfolio offers a distinctive living environment that aligns with our resident sustainable lifestyle preferences, and increased focus on health and well-being. The success of the strategy is evidenced by the strong initial demand we've experienced at Haus25, which commenced lease-up on April 6, and is already over 28% leased. As we continue to enhance our multi-family platform, I'm pleased to share that our new website will be launching at the end of next week. The new website offers prospective residents, employees, and investors, a wide range of market-leading features, including the ability to search for availability across our properties, conduct virtual viewings, and communicate with the onsite teams, all on one user-friendly platform.