Veris Residential Soon to Be Pure-Play Multifamily REIT

4 min read

The company formerly known as Mack-Cali is leasing its first community since rebranding.

Veris Residential Inc. has agreed to sell three Class A office properties in Jersey City, N.J.–Harborside 1, 2 and 3 for $420 million–and completed the sale of 101 Hudson St., a 42-story, 1.35 million-square-foot office building also in Jersey City, for $346 million as it gets closer to its goal of becoming a pure-play Class A multifamily owner, operator, investor and developer.

The Jersey City, N.J., REIT did not identify the buyer of the Harborside properties, which are located along the Hudson River in the 25-acre, mixed-use Harborside complex. In February, Veris Residential, formerly known as Mack-Cali Realty Corp., signed a long-term lease for 130,000 square feet of office space at Harborside 3 with Collectors Holdings, according to our sister publication Commercial Property Executive. The 10-story Harborside 3 has about 750,000 square feet of rentable square feet of office space. Harborside 2 is a 12-story building with 761,200 square feet and Harborside 1 is a nine-story building with 422,590 square feet of office space. Veris Residential expects to close the sale in early 2023 and receive approximately $350 million in net proceeds.

The Birch Group, which bought a three-building suburban office portfolio in Morristown, N.J., from Mack-Cali in April 2021 for $77 million, is the buyer of 101 Hudson Street, also located within the Harborside campus. Veris Residential expects to receive about $90 million in net proceeds from the sale.

Cushman & Wakefield and CBRE co-arranged the Harborside 1/2/3 transaction while Cushman & Wakefield was the sole arranger for the 101 Hudson St. deal. Executive Vice Chairman Andy Merin of Cushman & Wakefield along with Adam Spies, David Bernhaut, Gary Gabriel, Kevin Donner, Frank DiTommaso, Ed Duenas and Ben Lushing arranged the 101 Hudson Street sale. Merin, Spies, Bernhaut, Gabriel, DiTommaso and Max Helfman worked with CBRE on the Harborside agreement.

Mahbod Nia, Veris Residential CEO, called the transactions significant milestones in the REIT’s transition to a pure-play multifamily company. He said in prepared remarks the sizable proceeds anticipated from the transactions would provide the company with meaningful liquidity and optionality as it enters the next phase of its transformation.

Transitioning to multifamily platform

With its exit from the office sector nearly complete, Board Chair Tammy Jones said in a prepared statement the REIT will have a more resilient cashflow profile as it continues streamlining operations and gets closer to completing its transition to multifamily.

Since the beginning of 2021, Veris Residential has simplified and focused its business, strengthened its balance sheet and enhanced its operational platform as it moved in a new strategic direction. The company sold more than $1.4 billion of non-core assets, repaid more than $1.2 billion of debt and added approximately 1,900 units to its residential portfolio.

Following the close of the Harborside transaction and pro-forma for the stabilization of Haus25, a 56-story, 750-unit luxury multifamily property at 25 Christopher Columbus Drive in Jersey City, multifamily will represent approximately 98 percent of Veris Residential’s net operating income, up from 38 percent in the first quarter of 2021. Leasing began for Haus25 in April, and as of this week the building is more than 78 percent leased.

It is the first multifamily property to deliver since Veris Residential rebranded in late 2021. Nia said in prepared remarks the building is a sustainability-focused and state-of-the-art property that represents the company’s visions and ambitions for the future. The building was designed by Elkus Manfredi Architects with interior designs from Fogarty Finger and outdoor landscape architecture by Melillo Bauer Carman.

Haus25 details

Haus25 offers studios, one-, two- and three-bedroom layouts, which all include kitchens with quartz countertops, full-height backsplashes and Energy Star stainless steel appliances. Bathrooms feature Moen, Kohler and Sterling fixtures and the units also have custom modular closets, in-unit Bosch washers and dryers, and smart technology.

Community amenities include a pool and spa, outdoor fitness area, firepits, grilling stations, cabanas, foosball, billiards, and an outdoor amphitheater. The building has a co-working area with conference rooms, a fitness center, spin and yoga studios, a chef’s kitchen, a bowling alley, a karaoke lounge, a game room, a golf simulator, a children’s playroom, a pet spa and a dog run.

Water-efficiency systems and fixtures have been installed and the property is using SOURCE hydro panels utilizing solar power to extract net-zero water from the air and distribute it to drinking fountains on the outdoor roof deck. Energy-efficient features include elevators that use regenerative braking to reduce electrical demand and improve efficiency. The company also installed 24 electric vehicle charging stations in the garage and 375 bike parking spaces.

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