Veris Residential raises asset sale target to $650M and projects core FFO growth of 12%-13% through accelerated deleveraging

Earnings Call Insights: Veris Residential, Inc. (VRE) Q3 2025

MANAGEMENT VIEW

* CEO Mahbod Nia opened the call highlighting "another quarter of exceptionally strong operational performance, including blended net rental growth of 3.9%, significantly outperforming the national market and core FFO per share of $0.20." Nia emphasized the company's progress in monetizing non-strategic assets, stating Veris has "sold or entered contracts of $542 million of non-strategic assets, including Harborside 8/9, exceeding the upper end of our initial $300 million to $500 million target, which we are now raising to $650 million." He outlined that these actions have "proactively reduced net debt-to-EBITDA by 15% since the beginning of the year to 10x."
* Nia noted that Harborside 8/9 is expected to close early next year, with anticipated proceeds to "generate $0.04 of run rate earnings while further decreasing net debt-to-EBITDA to approximately 9x with the potential to delever to below 8x by the end of 2026."
* Nia further commented, "we are raising guidance for the second consecutive quarter to $0.67 to $0.68, 12.5% above 2024."
* COO Anna Malhari reported, "our portfolio continues to outperform with the same store blended net rental growth rate of 3.9% for the quarter, comprising 3.6% growth in new leases and 4.3% in renewals."
* Malhari stated, "our Jersey City Waterfront portfolio has significantly outperformed with new lease net blended rental growth of 6% during the quarter."
* CFO Amanda Lombard reported, "For the third quarter of 2025, net income available to common shareholders was $0.80 per fully diluted share, reflecting substantial gains from sales during the quarter versus a loss of $0.10 for the prior year. Core FFO per share was $0.20 for the third quarter, up $0.03 from the second quarter due to the recognition of $0.04 of successful tax appeals on sold assets, which was offset by $0.01 from the finalization of Jersey City property taxes in the third quarter."

OUTLOOK

* Lombard announced, "We are raising core FFO guidance for the second consecutive quarter to $0.67 to $0.68 per share annually compared to our previous guidance of $0.63 to $0.64 per share. This enhancement reflects $0.04 from one-time tax appeal benefits associated with previously sold office properties."
* Lombard stated, "Our raised guidance range represents robust year-over-year core FFO growth of 12% to 13%."
* The company reaffirmed its same-store NOI guidance of 2% to 2.8%, citing "solid performance year-to-date and strong visibility into rental revenue through the end of the year."

FINANCIAL RESULTS

* Net income available to common shareholders for Q3 2025 was $0.80 per fully diluted share, while core FFO per share was $0.20, up $0.03 from the prior quarter.
* Year-to-date, core FFO is $0.52 per share versus $0.49 at this time last year.
* Same-store NOI growth was 1.6% year-to-date and declined 2.7% for the quarter compared to last year, attributed to lapping favorable non-controllable expense resolutions from 2024 and a 4.5% increase in Jersey City tax rates.
* Same-store revenue increased by 2.2% both for the quarter and year-to-date.
* Technology investments led to year-to-date controllable expenses growth of just 1.9%.
* Debt was reduced by $394 million during the quarter, with net debt-to-EBITDA now at 10x, a 14.5% reduction since the beginning of the year.
* Liquidity at quarter-end was $274 million, and the weighted average coupon decreased 32 basis points to 4.8%.

Q&A

* Jana Galan, BofA Securities: Asked about the timing of same-store guidance and factors for Q4 performance. Lombard responded, "Q3 same-store NOI growth is an anomaly due to the resetting of non-controllable expenses for this year as well as last year...we don't see any major one-time items, which would impact the numbers."
* Galan followed by asking about visibility into rental revenue and renewal rates. Malhari answered, "only about 0.5% of our NOI is outstanding to renew at this point...we continue to send out renewals just touch below kind of mid-single digits around the 4% to 5% range."
* Sanketkumar Agrawal, Evercore ISI: Asked about leverage targets and future asset sales. Nia replied, the focus is on the "extended plan that we've announced, and in parallel, continuing to push the operational side of things," and noted the company will "evaluate a wide range of options available...in pursuit of the creation of value on behalf of our shareholders."
* Agrawal asked about the buyer pool for asset sales. Nia stated, "there is a somewhat broader or deeper buyer pool for smaller assets today...there's also some encouraging signs in transaction activity."
* Eric Wolfe, Citigroup: Inquired on the rationale for the $650 million disposition guidance and potential assets for sale. Nia explained, "this extension is really reflective of that dialogue, staying close to the market and what we believe really represents the best interest of our shareholders today."
* Wolfe also asked about the $100 million stock repurchase. Nia responded, "we have strong conviction that share buybacks would make a lot of sense...the determination we've made at this time is to prioritize deleveraging."
* William Catherwood, BTIG: Asked about realized prices and whether more assets were sold than originally planned. Nia answered, "we ended up pretty much exactly where we expected."
* Catherwood followed up on Core-Plus capital interest. Nia noted, "on the Core-Plus side, there are certainly a few groups out there that are becoming more active...it's an encouraging early sign that things may be finally turning."

SENTIMENT ANALYSIS

* Analyst questions were focused and neutral-to-slightly positive, with most inquiries probing for additional clarity on guidance, asset sales, and capital allocation without pressing skepticism.
* Management maintained a confident and constructive tone during both prepared remarks and Q&A, frequently emphasizing progress, visibility, and strategic optionality. Nia and Lombard conveyed optimism, exemplified by raising guidance and outlining continued deleveraging.
* Compared to the previous quarter, analyst tone remained neutral, while management’s confidence appeared elevated, highlighted by multiple upward guidance revisions and strong asset sale outcomes. The tone was more assertive about the company's ability to outperform and unlock value.

QUARTER-OVER-QUARTER COMPARISON

* The company raised its core FFO per share guidance again, now projecting $0.67 to $0.68, up from the previous quarter’s $0.63 to $0.64 range, with year-over-year growth expectations increasing from 5%-6.7% to 12%-13%.
* The asset sales target was raised to $650 million from $500 million, reflecting greater-than-expected progress and an expanding pool of non-strategic assets available for disposition.
* Leverage reduction accelerated, with net debt-to-EBITDA now at 10x versus 11.3x previously, and a further decrease to below 8x targeted by end of 2026.
* Management’s tone was more upbeat on strategic flexibility and the transaction environment, while analysts continued to focus on execution and future capital allocation.
* The company continued to report robust occupancy and rental growth in key submarkets, though same-store NOI growth moderated due to expense resets versus last year’s favorable comps.

RISKS AND CONCERNS

* Nia acknowledged, "softening labor markets, declining consumer sentiment and more stringent immigration policies could present headwinds to the sector overall."
* The company noted that closing of the Harborside 8/9 sale is "subject to factors outside of our control."
* Lombard highlighted that increases in Jersey City tax rates and one-time expense resets impacted quarterly NOI, though these are expected to moderate in Q4.
* Analysts questioned the sustainability of asset sales, the depth of the buyer pool for larger assets, and the rationale for prioritizing deleveraging over share repurchases.

FINAL TAKEAWAY

Veris Residential’s third quarter showcased strong operational execution and significant progress in asset monetization and deleveraging, prompting a raised core FFO guidance to $0.67 to $0.68 per share and an increased asset sale target of $650 million. Management emphasized that continued portfolio optimization, robust performance in key submarkets, and proactive debt reduction are positioning the company for sustainable earnings growth and greater strategic flexibility heading into 2026, while maintaining a disciplined approach to capital allocation and risk management.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/vre/earnings/transcripts]

MORE ON VERIS RESIDENTIAL

* Veris Residential, Inc. (VRE) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4832614-veris-residential-inc-vre-q3-2025-earnings-call-transcript]
* Seeking Alpha’s Quant Rating on Veris Residential [https://seekingalpha.com/symbol/VRE/ratings/quant-ratings]
* Historical earnings data for Veris Residential [https://seekingalpha.com/symbol/VRE/earnings]
* Dividend scorecard for Veris Residential [https://seekingalpha.com/symbol/VRE/dividends/scorecard]
* Financial information for Veris Residential [https://seekingalpha.com/symbol/VRE/income-statement]