- Veris Residential has executed or completed approximately $450 million of non-strategic asset sales year-to-date, surpassing the initial target of $300-$500 million by 2026.
- Recent sales include Signature Place in New Jersey for $85 million and 145 Front Street in Worcester for $122 million, both at a cap rate of 5.1%.
- Additional binding contracts for $180 million in sales are expected to close soon, supporting the goal to reduce leverage to below 9x by 2026.
- The asset sales are primarily aimed at deleveraging the balance sheet and reducing debt costs, with a focus on smaller assets and land.
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- 85% of executed leases in 2025 came from street and urban portfolio compared to 30% in 2024.
- Balance sheet liquidity of approximately $600 million with net debt to EBITDA at 5.5x.
- Executed approximately $7.5 million of new leases in first half of 2025, nearly 100% increase over $3.8 million in 2024.
- FFO as adjusted for realized gains from Albertsons stock sales was $0.32 per share, in line with expectations.
- New 5-year $250 million term loan executed at 120 basis points over SOFR, all-in cost about 4.6% after swaps.
- Projected year-over-year NAREIT FFO growth of about 10% at the midpoint of 2025 guidance.
- Reported NAREIT FFO of $0.27 per share in Q2 2025, an 8% increase over $0.25 in Q2 2024.
- Same-store NOI growth reaffirmed at 5% to 6% for 2025, trending towards midpoint or slightly ahead.
- Total core occupancy increased by 50 basis points to 92.2%, with expectation to reach 94% to 95% by year-end.
- A $24 million nonowner-occupied office loan in Twin Cities moved to nonaccrual, with receiver appointed and resolution actions underway.
- The loan was originated in June 2022, with 85% occupancy, but faced rollover risk in 2025, potentially dropping to 65%.
- The bank has taken legal control and expects to reflect a charge-off in Q3 after detailed asset evaluation.
- Other large CRE assets include a $12 million downtown Minneapolis property with good cash flow and an $8.2 million substandard asset supported by a sponsor.
- Reduced clinical health care exposure to 2.4% of ABR.
- Exited noncore asset classes at solid valuation levels.
- Focused on industrial, retail, and build-to-suit investments to maximize shareholder value.
- No plans to sell remaining clinical or office assets hastily, aiming for disciplined value maximization.
- Sold 8 hotels for $46 million in Q2, part of a plan to sell 122 hotels totaling nearly $966 million in 2025.
- Completed due diligence and received deposits for 111 of 114 Sonesta hotels, with a sales price of $900 million.
- Remaining 3 hotels under purchase agreement, expected to close before year-end.
- Focus on divesting select hotels to shift towards a predominantly net lease REIT, with a target of over 70% of pro forma EBITDA from net lease assets.
- Dispositions are part of strategic efforts to improve asset quality and EBITDA growth potential.
- Jim Taylor highlighted the fundamental and accelerating transformation of the portfolio, emphasizing leasing, reinvestment, and capital recycling as key drivers of growth.
- The company is executing a robust value-add plan, with a pipeline of $370 million underway and several hundred million identified for future projects.
- Recent projects include The Davis Collection, BarnPlazo, Wynwood Village, and LaCenterra, which are expected to generate high returns and drive traffic and occupancy growth.
- Successfully completed $500 million 5-year unsecured bond offering at a 4.6% coupon, positioning the company strongly for future strategies.
- Achieved an average debt maturity of over 11 years, sector-leading, providing balance sheet flexibility.
- Pro forma liquidity of nearly $1.5 billion post-bond issuance, with no floating or secured debt, supporting growth and acquisition plans.
- The company signed a definitive agreement to sell the 369-room Marriott Seattle Waterfront for $145 million, representing an 8.1% cap rate on trailing 12-month net operating income.
- The sale aligns with the strategic objective to deleverage the portfolio and sharpen focus on the luxury hotel sector.
- Closing is expected in the next few weeks, subject to customary conditions.
- U.S. Bancorp divested approximately $6 billion in mortgage and auto loans in Q2, leveraging favorable rate environment for asset sales.
- The sale of $4.6 billion in mortgage loans was aimed at shifting the asset mix towards supporting fee growth and higher-margin, multiservice clients.
- Proceeds from asset sales were reinvested into investment securities, with a $57 million loss from restructuring, expected to benefit net interest income within 2 years.
- The company plans to continue opportunistic asset sales aligned with market conditions to support strategic growth objectives.
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