Good day, everyone, and welcome to the Veris Residential Fourth Quarter 2021 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 will now hand the call over to Mahbod Nia, Veris Residential Chief Executive Officer. Please go ahead.

Good morning and welcome to our fourth quarter 2021 earnings call. I'm pleased to be joined by Amanda Lombard, our Chief Accounting Officer, whom I'd like to welcome to the team. Amanda will be assuming the role of Chief Financial Officer on April 1st, taking over from David Smetana, whom I would like to thank for his unwavering commitment and contributions to the company during the past four years. 2021 was a transformative year for our company, as we made significant progress in simplifying and refocusing the portfolio, strengthening our balance sheet and further enhancing our multifamily operational platform. We continue to execute on initiatives aligned with our strategic objective of being an environmentally and socially conscious, transparent and forward-thinking, pure-play multifamily REIT, as evidenced by our renewed ethos and corporate values as Veris Residential, which began with the reconstitution of our board in the summer of 2020. We enter 2022 from a position of strength with a number of nonstrategic asset sales that we anticipate will generate significant additional liquidity and provide even more optionality for the company throughout the course of the year. The operating fundamentals across our 6,691-unit multifamily portfolio once again showed strong momentum during the quarter. The portfolio was 96.6% occupied as of year-end, at pre-pandemic levels. During the past year, we tapered concessions and realized rental growth rates for new leases of 13.9% and renewal leases of 11.6% on a net basis during the fourth quarter. The same-store 5,499-unit operating portfolio was 96.4% occupied as of year-end, up from 86.9% in December 2020 and 2.8% above pre-pandemic levels, driving sequential same-store revenue and net operating income growth of 3.4% and 7% respectively. During 2021, we launched three lease-up properties comprised of 866 units, all of which stabilized during the year well ahead of our internal expectations in terms of leasing velocity and rent levels achieved. In fact, by year-end occupancy at the Capstone in Port Imperial, which received LEED Silver certification in early 2022, and the Upton in Short Hills both exceeded 99%. As a further step to continue strengthening our operational platform, we made a decision to terminate our third-party management activities, effective December 31, 2021. This will free up valuable resources that we will allocate to managing our own assets, including Haus 25. We believe our Class A multifamily portfolio, which offers unique living environments that align with our residents' lifestyles and values, is poised to continue to benefit from a favorable macroeconomic backdrop, including continued job and wage growth, declining home purchase affordability, and the anticipation of a wider return to office. Turning to our dispositions, since commencing our suburban office disposition program at the end of 2019, we've completed over $1 billion of sales across 36 assets, including approximately $741 million sold during 2021. Proceeds generated from these sales were used to repay corporate bonds, reduce overall indebtedness and further strengthen our balance sheet. In January 2022, we completed the disposal of 111 River Street in Hoboken for $210 million and have another office property in Jersey City currently under contract for $380 million. As a result, our multifamily portfolio represented 56% of our net operating income at the end of 2021, up from 38% in the prior year. We expect this level to be around 71% when adjusted for the aforementioned office sales and a four-quarter contribution from recently stabilized lease-up properties, all else held constant. Additionally, to further simplify the business and recycle capital, we progressed in monetizing select land parcels. We currently have six land parcels with a total value of $155 million on binding contracts. As we look to our office portfolio, the waterfront assets were 72% leased at year-end. During the course of 2021, we signed 181,500 square feet of leases comprised of 85,500 square feet of new leases and 96,000 square feet of lease renewals and expansions. In January 2022, we executed a new 15-year, 130,400 square foot lease with Collectors Universe at Harborside 3. Collectors Universe and MUFG, who were not occupying their full space, we negotiated the surrender of 100,300 square feet of their lease with a corresponding early termination fee to facilitate this new lease. A new lease with Collectors Universe is value enhancing as it captures an increase in term to 16.5 years, up from 8 years, with the rent per square foot of just under $42, while improving the occupancy and overall weighted average lease term at the property. While the pace of returns to office remained subdued during the fourth quarter due to Omicron, we anticipate a more widespread return to office during 2022. We continue to believe that Harborside's live-work-play proposition, coupled with the incentives offered through Jersey City's Emerge Program, will appeal to a wide cross section of office tenants, as validated by the recently executed Collectors Universe lease. As noted earlier, Veris Residential was much more than a name change; it is a culmination of our efforts over the past 18 months to weave environmental and social considerations into the fabric of the company. These considerations will inform our future decision making as we seek to continue to maximize long-term shareholder value as a responsible and transparent company. To that end, we've already made significant progress on reducing the environmental impact of our portfolio and operations and strengthening our commitment to diversity around endorsement of global initiatives, including the CEO Action for Diversity and Inclusion pledge, the UN Women's Empowerment Principles and the Climate Group's EV100 initiative. In fact, we're pleased to report that we were the first real estate company in the U.S. to become a member of EV100, joining a diverse group of blue-chip institutions committed to rolling out electric vehicle charging points across our properties by 2030. Furthermore, as of year-end, 25% of our wholly owned multifamily properties were LEED certified, and 100% of them received the WELL Health and Safety certification in the fourth quarter, demonstrating our commitment to the environment as well as the health and well-being of our employees and residents. Overall, 2021 marked a year of tremendous progress for our company with strong operating results and a number of strategic milestones achieved. We're excited for what lies ahead and remain well positioned to continue executing on our transformation plan during 2022. With that, I'm going to hand it over to Amanda, who will update you on our financial performance during the quarter.

Thank you, Mahbod. Before I begin, I'd just like to say that I'm very pleased to be joining the Veris Residential team at such a pivotal point in this transition and look forward to being a part of the next chapter. For the fourth quarter, we reported a net loss available to common shareholders of $0.32 per share and core FFO per share of $0.17. For the year, our 2021 core FFO was $0.68, as compared to $1.07 for 2020. The year-over-year reduction in core FFO was primarily due to the impact of our ongoing suburban office disposition program and was partially offset by increases in our multifamily NOI and a reduction in interest expense. Quarter-over-quarter, core FFO per share was flat as disposition activity was muted during the period. As Mahbod mentioned, our multifamily operations continue to be strong. Our occupancy exceeded pre-pandemic levels, which, together with lower concessions, was the main driver behind 3.4% revenue growth on a sequential same-store basis. Sequential same-store NOI was up slightly more at 7%, primarily due to a one-time reduction in real estate taxes in the fourth quarter. Same-store NOI was up 21% for the fourth quarter of 2021 as compared to the same period in 2020. This increase was also driven primarily by higher occupancy as a result of the general recovery from the pandemic and, to a lesser extent, from completing unit renovations at two of our stabilized properties. Excluding the impact of $800,000 of real estate tax catch-up payments in the fourth quarter of 2020, the fourth quarter 2021 same-store NOI increased by 16.2% year-over-year. Across the portfolio, net effective rents were still behind last year's rents due to higher concessions in our New Jersey waterfront assets, which we expect to burn off by the third quarter of 2022. As we move forward, we should continue to benefit from renewing our leases at market rents, which can already be observed in our positive net effective rent growth rates mentioned by Mahbod earlier. Total NOI contributed by our multifamily operations increased due to the stabilization of three development projects in the fourth quarter of 2021, well ahead of our expectations. These properties, located in Weehawken, West New York and Short Hills, along with the Emery in Massachusetts, which was stabilized in Q1, contributed NOI of $4 million for the fourth quarter. Given these three development projects stabilized during the quarter, we expect to see increased NOI contribution from these properties in upcoming quarters. Turning to our office portfolio, office leasing was modest in the quarter, with only two leases signed for 5,300 square feet. However, as Mahbod mentioned, after quarter end, we signed a lease with Collectors Universe and received a $25 million lease termination payment from MUFG on a space surrender. I'd also like to point out that going forward, we will no longer report on same-store NOI for the office portfolio. Turning to the balance sheet, during the quarter we refinanced the two construction loans on the recently stabilized Capstone in Port Imperial, which is part of our consolidated JV, and the Upton in Short Hills with permanent financing. We took out an additional $22 million in proceeds and reduced the margin by 155 basis points and 75 basis points respectively. We also purchased a cap on the Upton loan. Additionally, in January we used the net proceeds from the sale of 111 River to reduce leverage, repaying the $150 million mortgage and using the remaining proceeds to reduce the credit line. Lastly, our only multifamily development under construction right now is Haus 25, which was budgeted at total costs of approximately $470 million. We have fully funded all the equity in that project and are still expecting to meet our budget. This concludes our prepared remarks. Operator, can we open the call for Q&A?

Operator provided instructions to participants. And we'll go ahead and take our first question from Manny Korchman with Citi.

Amanda or Mahbod, I think in Amanda's remarks you said you're not going to offer same-store NOI-wide stats for the office portfolio any longer. What's driving that decision? I mean, office is still a significant part of your portfolio — is that just a matter of interfering with plans to sell? Is that something else that you would cut back on information?

It's Mahbod here. The decision was really based on the fact that now with the expectation of the sale of 111 River and the expectation of the sale of our other office asset that's under contract, what remains is actually relatively small. The portion of the overall portfolio is about 30%. And I've been pretty clear that that's not really strategic to the business long term going forward. That was really the rationale behind that decision.

And maybe following on that, what is the timing to then exit that nonstrategic position? Is it something we should think about in '22 or '23? And realizing that the timing of the transaction market varies, if you had your dream come true, when would you be out of that office?

Yes, it's a great question. I've been in the seat for a year now, and I've been pretty clear from the beginning that we're going to be pragmatic about this transition. We're also going to be measured and balanced in the decisions that we make. So no plans to buy or sell anything just because that's the easy thing to do. We'll do it in a measured and balanced way at the right time. I do expect this year to be a year of transition for us, but I wouldn't want to put a strict timeframe on any further asset sales.

And then Amanda, realizing that you just got into the seat, but just as you think about the funding plans going forward, where does the capital come from? I guess some of that will come, hopefully, if these assets do sell. But with the stock price still challenging, how do you fund multifamily growth going forward?

Manny, if you don't mind, I'm going to take that one. I think what you're really talking about is the recycling of capital. At this point in time, we do not expect to be raising fresh equity. It's really about recycling, and as and when capital frees up — as we approach closing on the current transactions and potentially future transactions and have that capital in sight — we'll be working with the board to determine the highest and best use for that capital. But certainly, at this point, the plan is very much to organically recycle capital to a higher and better use within the company.

Operator provided instructions to participants. And we'll go ahead and move on to our next question from Brian Spahn with Evercore ISI.

Obviously, the office leasing has been muted the past couple of quarters. So what do you attribute that slowdown to? And I guess how focused are you on leasing up the waterfront at this point, given the office leasing has been sluggish yet transaction pricing seems okay? I'm trying to get a sense of priorities and the timeline of pivoting toward pure-play multifamily.

I think all good questions. In terms of muted pipelines, certainly the fourth quarter was somewhat muted; we attributed that to Omicron. But there are also some positive signs on both sides of the river. Here on the waterfront, we had 197,000 square feet of leasing done, which was above the five-year average for the fourth quarter across the river and Manhattan as well. There were four consecutive months running into December of 2.5 million square feet plus of leasing in Manhattan. There are some interesting anecdotes: the number of tenants in the market looking for 50,000-plus square feet in Manhattan is around 70% of the level pre-COVID, so there are more tenants looking and they're looking for high-quality space generally. Most of that leasing I mentioned across the river — about 75% of it — has been in higher-quality buildings: new buildings, redeveloped buildings, more true Class A, which should bode well for us given that's what we own here at Harborside. So there are really positive signs. Going back to the waterfront in the first quarter, with the Collectors Universe lease and a couple of other leases that we're aware of or expect to be signed imminently on the waterfront, we could be matching that full-year 2021 number of about 400,000 square feet signed on the waterfront in the first quarter. So I think there are positive signs. In terms of our commitment to continuing to lease the waterfront, absolutely — the Collectors Universe lease demonstrates that we are highly committed to continuing to lease on the waterfront. We own these assets until we don't, and we will continue to manage, operate and lease them with the due care and attention that we always have.

Okay, because it seems like if you were to sell those assets as-is it would be terribly dilutive to then redeploy that capital into stabilized apartments, assuming somewhat similar pricing to what you've seen. So if and when you do sell the assets, how are you balancing growth — do you think you'd favor stabilized acquisitions or would you rather try to get a better yield through development?

I think it's a balance. We don't expect the use of capital to be a single use. It can be a combination of stabilized acquisitions, development, or other opportunities. Ultimately, it will be a case of evaluating what is available for recycling and what the highest and best use of that capital is. That discussion will be had with the board. So multiple uses are likely, and that's probably the most likely way we'll look at it. But again, that's to be discussed and decided with the board. To answer the first part of your question, we continue to own these assets and will continue to focus on leasing them. I'm optimistic that the return to office and some of the green shoots we're seeing in tenant activity will allow us to capture more leasing. That doesn't conflict with our strategic objective to conclude this transformation; we're pragmatic and measured in evaluating options for Harborside.

Operator provided instructions to participants. We'll go ahead and move on to a question from Jamie (James) Feldman with Bank of America.

I just want to get your thoughts on the land sales during the quarter. How are you thinking about maintaining a land bank for future residential development? And how do those land sales line up with that strategy?

We talked about recycling capital, rebalancing the allocation of equity throughout the company, and one thing that was clear is that we had a disproportionately large land bank for a company of our size. In theory, you could develop a very large number of units, but in reality that's a very long slog — not all that land is entitled and ready to go. Much of it isn't and would take several years to get to that stage. For the time being, it was an inefficient use of capital; it's a drag on earnings. If we were to develop it, in many cases it would add concentration risk to existing assets and potentially risk cannibalizing our own assets. So the decision to recycle some of that land is to rebalance and free capital. That said, redeploying capital could be towards multiple different options, and I wouldn't rule out future development. We haven't announced any new development today, but development is certainly an option we'll explore in the future. There's a long history of successful development and a DNA that runs through the company that is valuable to us.

Okay, but can you talk more about the buyers? Could these buyers potentially be building competitive supply?

The use of the land will be to build multifamily. It's a wide range of buyers. I won't get into detailed levels of disclosure here, but yes, uses will be multifamily. Will it be a comparable product to what we build? I don't believe so. I believe we have the highest-quality assets with the best amenity offering that attract the highest rent points in the market. The question for us is whether we should continue to develop and, if so, where to develop that product. But as I said, it's not a priority at this point.

And then can you talk about the termination fee and how that's going to flow through earnings?

On a GAAP basis, we expect to recognize roughly $22 million for the termination fee, and we'll be deducting that from our core FFO.

Operator provided instructions to participants. And we'll move on to our next question from Tom Catherwood with BTIG.

Kind of following up on the capital allocation questions — I understand your comments about working with the board on deciding multiple options. When we think of timelines, you've already paid off the secured line of credit. So near-term sales should provide growth capital. Have you already started the capital allocation discussions with the board? And is your expectation that you'll have a strategic direction a quarter from now? Or could it be more of a second half item?

I think to start with, we do still have an outstanding balance on the line; we used proceeds from 111 River to pay down the line. The proceeds, which were just under $50 million from that particular transaction, were used to repay debt. As for the future, the closing schedules attached to a number of these sales vary. It's a case of looking at that schedule in the context of discussions with the board to determine the highest and best use of that capital. We'll update you in due course, but I'm not going to give more guidance on that today.

Understood. It's just the kind of thing where I don't want to have to bring it up every time we talk if the thought is that it's most likely a later-'22 event or if it's imminent. Any sense of three months, six months, nine months? Any kind of thought on when you might have a bit more definitive direction?

A slightly different way to answer that: my expectation would be the majority of what we've announced could close in the first half of the year. That's probably as much as I can say. Timing is a consideration and will affect outcomes, and numbers are likely to be in flux this year. That's not uncommon for a company undergoing a significant transformation like ours. This year is more about achieving milestones in our transformation plan, but you should expect noise and distortion in the numbers given the number of variables involved.

Got it, appreciate it. Then on the land bank, it looks like you pulled out some of the units on potential developments — it looks like Portside, 14 East Boston, and maybe the option land at Liberty Landing. Were those decided not to pursue? What was the rationale for ending up with fewer developable units this quarter?

Yes, that's a great question. It was simply the determination that it wasn't feasible to proceed with those investments and that the carrying cost of maintaining the option to develop was not justified. So we made the decision to hand those options back in.

Got it, appreciate that. And last one for me: on the termination of third-party management — two parts. First, is there any fee drag in '22, or what's the scope of the fee drag you're expecting this year? Second, on expense growth, especially on the residential side, any expectations for how that might flow through this year?

Both great questions. On termination of the third-party management business, we explained the rationale — we want to create a best-in-class platform to manage our assets and focus resources on our own properties. The gross revenue loss from that is about $0.02 a year, but there are costs associated with winding it down. Third-party management, unless done at significant scale, is not a very profitable business. Regarding overall cost pressures across the labor market, we've done a good job managing expenses. Last year we announced a series of measures to streamline operations and run more efficiently, which is ongoing. We remain on track, despite these pressures, to deliver on our $5 million of run-rate cash expense savings this year.

Operator provided instructions to participants. And we'll move on to our next question from Michael Lewis with Truist Securities.

Just followed up on a previous question about the board and strategy. I don't remember a formal end to the formal strategic review. Is it fair to say now the strategy is set, or is there still kind of a review going on? Is that process incurring any costs still? Where are we on that?

No, the strategic review committee is still very much intact and focused on creating and maximizing value for shareholders. That committee is wholly independent from what we're doing as a management team. What we're doing as management is creating entity value through the steps we've taken over the last year: a clearer strategic direction, a more focused business, a cleaner balance sheet, and a more efficient operating platform. The strategic review committee will continue to evaluate any and all options available to maximize shareholder value.

Okay, that sounds ongoing. My second question: I know you're not going to report same-store for office anymore, so could you point us to the direction of occupancy and revenue in that business before asset sales? I ask because I know you have big leases expiring in 2023 and I think Amtrust is expiring in the near term. Is there risk of occupancy going down while you're looking for a buyer of those assets?

We don't have much rolling this year — around 85,000 square feet that's rolling this year. We just signed the new lease with Collectors Universe, which is net about 30,000 square feet more space but importantly a significantly longer term — 16 years versus around eight previously — which is value enhancing. I go back to comments about potential tenant demand; the biggest potential value driver this year will be whether we can do more leasing and grow the top line. In terms of rollover, there's very little this year.

I meant next year — you mentioned Bondex and Amtrust and any others? I think next year is a bigger rollover year, maybe 14% or 15% of the portfolio?

Yes, next year we obviously have a bit more than we do this year. From memory it's around 12% or so of the space that rolls next year. We proactively engage in dialogue with tenants to retain them; we've invested a lot in Harborside. Two-thirds of leasing last year in the portfolio was renewals, and we'll continue to adopt that approach with leases approaching expiry and continue to focus on attracting new tenants like Collectors Universe to the Harborside proposition.

Okay, and then lastly, you mentioned not really raising new capital but recycling capital. You did establish an ATM program in December. Is that just to have an arrow in your quiver in case the stock price gets to where you think it's appropriate? Any intention of utilizing that anytime soon? Is it in your capital plan?

We felt it's prudent for a company to have an ATM program in place, which is why we put it in place, but there is no current intention to use it.

Operator provided instructions to participants. And we'll go ahead and take a follow-up from Manny Korchman with Citi.

Mahbod, what's the actual use of the Collectors Universe space? Is that going to be fully office space? It sounds like part of that is going to be what they call a grading operation. Just wondering how much of that looks like traditional office versus something different.

It's substantially traditional office. I couldn't give you the exact breakout, but it will be predominantly traditional office. There will be an element of fitting it out for that specific use over the course of the next year or so, but it is predominantly traditional office.

And then if we think about other significantly underused space in the Harborside portfolio — how much of that type of dark or phantom space is there that you could see another tenant occupying? Could you approach tenants to flip that space?

In terms of dark space, there really isn't much. You can see where the vacancy is: a floor or two at buildings 1, 6 and 5 have vacancy, but beyond that there isn't much. The Collectors Universe solution was creative — it allowed a tenant who wanted to be in that building specifically to occupy it, taking some space back and getting a reverse premium payment, creating a win-win. If there is more creative dark space like that, it's de minimis; it's not material in Harborside.

One last one on the Collectors Universe space: what did the upfront lease economics look like in terms of tenant improvements and free rent and build-out costs? And maybe weigh that against the MUFG surrender payment — how much of that check is basically getting put right back out to Collectors Universe?

That's a great question. The headline rent is just under $42 per square foot. TIs were at market — on the low end of market — around about $5 per square foot, and there's a landlord contribution of $3 million that we'll put forward. So there is still a meaningful portion of the reverse premium that we received that remains after those contributions.

With that, that does conclude our question-and-answer session for today. I would now like to hand the call back over to Mahbod Nia for any additional or closing remarks. Please go ahead.

Thank you, everyone, for joining us today. It's been an eventful and transformative year and we look forward to updating you on our future progress in the coming quarters.

And with that, that does conclude today's call. Thank you for your participation. You may now disconnect.