JERSEY CITY, N.J. — Veris Residential Inc. (NYSE: VRE), a publicly traded REIT with offices in New Jersey and Massachusetts, has agreed to sell Harborside 1, 2 and 3, a trio of adjacent office buildings in Jersey City. The unnamed buyer will purchase the properties for an aggregate price of $420 million, subject to closing adjustments.
The three office buildings anchor Harborside, a 25-acre development that fronts the Hudson River and also houses five apartment communities, a Whole Foods Market, shops, eateries, the Harborside 5 and Harborside 6 office buildings, onsite daycare, urgent care and primary care medical space, and two parking garages. Veris recently signed Collectors Holdings, parent company of Professional Sports Authenticator, to a 130,000-square-foot lease at Harborside 3.
Veris recently also closed on its $346 million sale of 101 Hudson Street, a 42-story office tower in Jersey City spanning nearly 1.3 million square feet of space. With sale of this and the Harborside portfolio, Veris is taking a big step toward the corporate goal of being a “pure-play multifamily REIT.” With these office sales and the stabilization of Haus25, a 750-unit apartment community underway in Jersey City, multifamily will represent 98 percent of Veris’ net operating income, up from 39 percent at the end of first-quarter 2021.
“With our exit of the office sector nearly complete, we intend to continue streamlining operations as we become a pure-play multifamily REIT with a more resilient cashflow profile,” says Tammy Jones, board chair at Veris.
Veris expects the Harborside transaction to close in first-quarter 2023 and provide the REIT with $350 million in proceeds. The REIT also expects the 101 Hudson Street deal to net about $90 million in proceeds.
“Looking ahead, the sizable proceeds anticipated from these transactions provide the company with meaningful liquidity and optionality as we enter the next phase of our transformation,” adds Mahbod Nia, CEO of Veris.
Cushman & Wakefield’s Andy Merin, Adam Spies, David Bernhaut, Gary Gabriel, Kevin Donner, Frank DiTommaso, Ed Duenas and Ben Lushing of Cushman & Wakefield served as sole arranger of the 101 Hudson Street transaction.
“The sale of 101 Hudson is a historic transaction, made even more significant due to the challenging investment sales environment, with deals of this size and caliber rarely closing in any markets across the country right now,” says Merin.
Merin, Spies, Bernhaut, Gabriel, DiTommaso and Max Helfman, along with CBRE, co-arranged the Harborside 1, 2 and 3 transaction.
Since the beginning of 2021, Veris has sold over $1.4 billion of non-core assets, repaid over $1.2 billion of debt and added approximately 1,900 multifamily units to its residential portfolio.
The company’s stock price closed on Friday, Oct. 7 at $10.37 per share, down from $17.80 a year ago.
— John Nelson