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Greetings, and welcome to the Veris Residential, Inc. Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded.

I would now like to turn the conference over to your host, Ms. Taryn Fielder. Please go ahead.

Good morning, everyone, and welcome to Veris Residential's Third Quarter 2025 Earnings Conference Call.

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 and annual and quarterly reports filed with the SEC for risk factors that impacts the company.

With that, I would like to hand the call over to Mahbod Nia, Veris Residential's Chief Executive Officer, who is joined by Anna Malhari, Chief Operating Officer; and Amanda Lombard, Chief Financial Officer. Mahbod?

Thank you, Taryn, and good morning, everyone. We're delighted to report 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. Despite challenging transaction markets, we made considerable progress on our corporate plan to monetize select non-strategic assets, using sales proceeds to further delever as we seek to continue unlocking the value embedded within the company.

To date, we've 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. These sales and subsequent debt repayments continue to drive outsized earnings growth relative to our peers, while strengthening our balance sheet as we have proactively reduced net debt-to-EBITDA by 15% since the beginning of the year to 10x.

Harborside 8/9 is expected to close early next year, albeit closing is subject to factors outside of our control. and the resulting proceeds are anticipated 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, as we continue divesting non-strategic assets, in accordance with the revised $650 million target. We anticipate that this will significantly enhance optionality for the company and allows to explore a wider range of financing strategies, including alternatives that were previously unavailable to us, with the potential to further reduce our cost of capital over time, positioning Veris for continued outperformance next year relative to peers.

We also realized several one-time tax appeal refunds during the quarter, which Amanda will discuss in more detail. As a result of these adjustments, core FFO per share for the quarter increased to $0.20, which is reflected in our decision to raise guidance for the second consecutive quarter to $0.67 to $0.68, 12.5% above 2024.

Before discussing our recent sales in further detail, I'd like to say a few words regarding the broader multifamily market as well as current dynamics in our key markets. While the national multifamily market remains structurally undersupplied, demand has recently weakened in select markets, driven by an influx of new supply, which is expected to be absorbed over time.

Rents slowed significantly in September, growing by only 30 basis points year-over-year, with asking rents decreasing in the largest 1-month drop since November '22. Looking ahead, softening labor markets, declining consumer sentiment and more stringent immigration policies could present headwinds to the sector overall.

In contrast with the national market, the Northeast continues to perform encouragingly well, supported by favorable supply/demand dynamics and resilient urban migration trends. In September, New York City led the nation in rental growth of 4.8%, reflecting continued strength in demand and extremely limited supply. Between 2020 and 2024, New York City's multifamily supply grew by only 6%, approximately half the national average, driving robust demand to neighboring submarkets with strong transit links, including Jersey City and Port Imperial, where the majority of our properties are located.

Over the past 2 quarters, the neighborhood surrounding Manhattan have largely absorbed more than 8,700 units of new supply, including nearly 5,000 units in the third quarter alone, the highest quarterly total in 5 years, with deliveries expected to taper beginning in 2026. Despite this regional supply influx, Manhattan alternatives continue to outperform with the broader New York metro area averaging rental growth of 2.3%.

Among these submarkets, the Jersey City Waterfront has been particularly resilient, maintaining low vacancy levels and rental growth of almost 3%, reflecting robust, sustained demand and an ongoing lack of new supply. The Waterfront has not seen any meaningful deliveries since mid-2022 with new supply well below its historical annual average of 600 units, which have been consistently absorbed over the past 15 years.

Currently, approximately 4,500 Class A units are under construction on the waterfront with 2,500 units expected to be delivered over the next 24 months across 4 projects. While not directly competing with the Waterfront, nearby submarket Journal Square saw 2,800 units of new supply delivered and absorbed in the last year, further testament to the ability of the broader Jersey City market to absorb new supply across various price points.

We expect the New York City demand/supply imbalance to continue fueling sustained demand for housing in alternative submarkets such as Jersey City that are expected to see population growth well in excess of projected unit deliveries for the foreseeable future.

Turning to the investment market. While transactions remain challenging, particularly for larger sales, with core capital largely remaining on the sidelines, there are early signs of renewed engagement from Core-Plus capital with interest concentrated in gateway cities. As I mentioned in my opening remarks, we've exceeded our target for non-strategic asset sales with $542 million of sales closed or under contract this year.

During the quarter, we closed on the sale of 4 smaller non-strategic multifamily assets for a combined $387 million, reflecting an average cap rate of 5.1%. In addition to Signature Place and 145 Front Street, which closed in early July, as previously announced, we sold The James, a 240-unit property in New Jersey for $117 million; and Quarry Place, a 108-unit property in New York for $63 million.

We also continued rightsizing our land bank during the quarter, disposing of Port Imperial South for $19 million and entering a $75 million contract for the sale of Harborside 8/9. The Harborside transaction is anticipated to reduce net debt to EBITDA to around 9x and contribute $0.04 to core FFO on an annualized basis. Following these sales, our remaining land bank is valued at approximately $35 million with parcels primarily located in Massachusetts.

Before Anna walks through our operational performance, I wanted to share our recent results from the Global Real Estate Sustainability Benchmark, or GRESB. Year-over-year, our GRESB score improved by 1 point to 90, maintaining our 5-star rating and Green Star and earning us the #1 rank in our peer group as well as designations as a regional listed sector leader and top performer for residential companies in the Americas.

Last but not least, I'd like to thank our team whose dedication and execution have been instrumental in establishing Veris as a high-growth, rapidly deleveraging company.

With that, I'll hand it over to Anna to discuss our operational performance for the quarter.

Thank you, Mahbod. Despite a broader market slowdown, 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; in line with our expectations as we entered the slower leasing season.

For the first 9 months of the year, our portfolio's same store blended net rental growth rate was 3.5%, comprising 2.3% in new leases and 4.2% in renewals. Our portfolio's continued rental growth, coupled with our strategic exit from select suburban markets has increased our average revenue per home to $4,255 and over 40% premium compared to peers.

Turning to occupancy. Excluding Liberty Towers, where we continue to undergo unit renovations, occupancy was 95.8% as of September 30. Including Liberty Towers, which is now over 85% occupied, overall occupancy was 94.7%, with retention improving by over 570 basis points since last year to 61% across the entire portfolio.

Our New Jersey properties continue to benefit from strong fundamentals, including our assets' strategic locations, adjacent to New York City and sustained interest from prospects moving to the broader metro area who are compelled by the relative value proposition of our generally newer, larger units and the wider range of amenities they offer compared to those in Manhattan.

During the third quarter, approximately 55% of new move-ins came from out of state and 25% from the metro area. While some portfolios have been impacted by declining international student enrollment, our exposure has been extremely limited as only 2% of our units are occupied by students.

Our properties continue to primarily attract affluent, young, urban professionals with an average household income of over $480,000, providing a strong foundation for sustained future rent growth. Notably, our Jersey City Waterfront portfolio has significantly outperformed with new lease net blended rental growth of 6% during the quarter.

In September, new lease rental growth across our Waterfront assets was 4.6%, well above the submarket's average of 2.9%, a testament to the quality of our assets, the strength of our markets and platform, and the unwavering commitment and hard work of our teams. We continue to elevate our customer experience and operational efficiency by investing in innovative technologies through PRISM, our strategic approach to technology implementation, which recently earned us recognition as a finalist for the ThinkAdvisor Luminaries Award. These efforts are reflected in year-to-date controllable expenses growth of just 1.9%, well below inflation.

With that, I'm going to hand it over to Amanda, who will discuss our financial performance and provide an update on guidance.

Thank you, Anna. 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. Year-to-date, core FFO is $0.52 per share versus $0.49 at this time last year.

Before we dive into same-store, please note that the same-store pool has been adjusted to remove the 4 multifamily properties sold during the quarter, with this recalibration impacting some of the growth rates. Same-store NOI growth was 1.6% on a year-to-date basis and off 2.7% for the quarter compared to last year. This was largely due to the company lapping the extremely favorable resolution of non-controllable expenses in 2024, combined with an approximately 4.5% increase in Jersey City tax rates this year.

On the revenue front, same-store revenue increased by 2.2%, both for the quarter and year-to-date. Overall, our revenue growth remains robust, aligning with typical seasonal patterns. In fact, when revenue growth is adjusted to remove the impact of Liberty Tower's occupancy and non-recurring income from last year, growth would have been 3.1% for the quarter and 4.6% year-to-date.

As Anna mentioned, technology investments and portfolio optimization have continued to generate cost efficiencies on the expense front. However, a slight rise in R&M and utility expenditures this quarter led to a 5.7% increase in controllable expenses for the period. Combining the impact of technology investments in R&M this quarter with the considerable savings recorded earlier this year, year-to-date controllable expenses have grown by a modest 1.9%.

Diving deeper into non-controllable expenses. While our property insurance renewal delivered savings of nearly 20%, this was largely offset by increases in other insurance premiums and the rebalancing of the same-store pool. Jersey City also announced its final tax rates for 2025 during the quarter, as I previously mentioned, which together with other finalized taxes, resulted in a $1.1 million increase. Despite these various factors, year-to-date overall expenses increased by only 3.4%.

On the overhead front, core G&A after adjustments for severance payments was $8 million, broadly in line with last quarter as expected and reflecting savings in compensation due to further organizational simplification. For the full year, we anticipate realizing G&A savings in excess of $1 million relative to last year, although fourth quarter G&A is expected to increase sequentially.

Last quarter, we took a significant step in strengthening our financial position by modifying our revolving credit facility. This amendment introduced a leverage grid and resulted in a substantially-lower borrowing spread, enhancing our ability to continue reducing financing costs as we delever further.

In addition, sales completed during the quarter reduced debt by $394 million, including the early repayment of our most expensive coupon debt, a $56 million 2026 maturity. Furthermore, the buyer of Quarry Place assumed the $41 million in-place mortgage resolving the 2027 maturity.

As a result of these transactions, as of September 30, our net debt-to-EBITDA on an adjusted basis has further decreased to 10x, as mentioned by Mahbod, representing a reduction of 14.5% since the beginning of the year. We ended the third quarter in a stronger position than the second, with our weighted average coupon decreasing 32 basis points to 4.8% and weighted-average years to maturity of 2.6 years and liquidity of $274 million.

Turning to our outlook. 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. While we are realizing approximately $0.01 in overhead savings this year, this is largely offset by the increase in real estate taxes in the third quarter.

Our raised guidance range represents robust year-over-year core FFO growth of 12% to 13%, underscoring the strength of our markets and portfolio and the effectiveness of our deleveraging strategy. Not only does this approach reinforce the strength of our balance sheet, but it also drives meaningful earnings expansion and increases free cash flow.

We are affirming our same-store NOI guidance of 2% to 2.8%, reflecting our solid performance year-to-date and strong visibility into rental revenue through the end of the year as well as realized savings from our technology and operational initiatives and a resolution of non-controllable expenses within expectations. These results are a testament to our commitment to maximizing value for our shareholders while maintaining disciplined financial management and operational excellence, resulting in sustained earnings growth and accelerated deleveraging.

With that, operator, please open the line for questions.

[Operator Instructions] And our first question comes from Jana Galan with Bank of America.

Maybe just following up on the same-store guidance ranges that were maintained. The 9 months to-date, they're trending a little bit at the low end. And so, can you let us know any timing-relating items that may impact 4Q that can get you back to kind of the middle of the range?

So, look, I think, first off, Q3 same-store NOI growth is an anomaly due to the resetting of non-controllable expenses for this year as well as last year. Last year, we had a very good result, so the expense base is very low. And then this year, we had a slight increase in real estate taxes, which pushes it up.

I think looking to the fourth quarter; right now, we don't see any major one-time items, which would impact the numbers. And so, I think you need to really look back at Q1 and Q2, where we have very low expense growth. In fact, I think in Q2, we actually had a reduction in our expenses and expect that, that trend will continue into the fourth quarter.

So, I think, those factors combined with the fact that in the fourth quarter, a very small percentage of our revenue is still open is what gives us confidence that we will be within the range of our same-store NOI guidance.

Great. And then on the visibility into the rental revenue into year-end, can you let us know kind of where you're setting out the rental rate increases now? And I guess, kind of the percent of expirations in 4Q, typically, I'm assuming is lower than earlier in other quarters in the year.

Yes, as you mentioned, we do have our expiration metrics following the seasonal trend in a way that we have limited exposure in Q4. We also have strong visibility into renewals already and only about 0.5% of our NOI is outstanding to renew at this point.

In terms of the renewal rates, we continue to send out renewals just touch below kind of mid-single digits around the 4% to 5% range, something maybe slightly below that. But we are in a very good shape from an occupancy perspective since the end of the quarter with 95.8%, excluding Liberty Towers and feel confident about the revenue range that Amanda mentioned earlier.

And we'll go next to Steve Sakwa with Evercore ISI.

This is Sanket on for Steve. We had a question around, like your leverage target of 8x through year-end '26. What does the path forward look like from there on in terms of, will you still focus on selling more non-core assets after that or move to more operational initiatives?

Thank you for the question. I think at this point, I would say the focus is on executing on the extended plan that we've announced, and in parallel, continuing to push the operational side of things, which as you've seen, is continuing to perform very well, and we expect that to continue into next year. And that should set us on this path delever in this accelerated fashion down to that 8x or even potentially below 8x, as we've said, next year.

As for what comes next, there may be from time-to-time, and in the past, you've seen at the beginning of the year, we set out the plan for the year and communicate that to you. So, there may be further amendments or changes to this plan, which we'll announce in due course. But at this time, I think the focus really is to execute on this plan, see where that gets us while in parallel working with the Board and the SRC to evaluate a wide range of options available to the company as we always do in pursuit of the creation of value on behalf of our shareholders.

Makes sense. And the other question was like you guys were very active on the transactional front, like disposing a couple of assets, land. So, I just wanted to know like, how was the buyer pool like? Was there a wide area of people who are out there buying assets? Or it was just some specific types of people who are out there looking at this asset?

Sorry, you're a little faint, but I think I got the question, about the buyer pool out there for assets. Yes, look, I would say consistent with our expectations when we set out on this plan at the beginning of the year, there is a somewhat broader or deeper buyer pool for smaller assets today. I think once you get into sort of what would be regarded as large today, which is not that large, a couple of hundred million dollars, $200 million, $250 million and above, the buyer pool does spin out and the nature of the buyer does tend to become more of a value-add opportunistic type of a buyer.

But look, there's also some encouraging signs in transaction activity that particularly with the low end of the curve coming in, obviously, the 10-year has come in and now it's around 4% or touch below 4%, and that's helpful. But with the front end of the curve, rates having come in and expected to continue coming in; in the near-term, we think that that actually is creating more interest in the transaction market from prospective buyers.

And our next question comes from Eric Wolfe with Citibank.

Can you talk about how you came up with the high end of the disposition guidance at $650 million and what assets you're considering selling for the remaining $100 million?

Thanks for the question, Eric. So, I think the way we came up with that number is, it's really reflective of, again, what we're seeing in the market. You have a Board, a Strategic Review Committee and management team that's highly focused on the creation and crystallization of value for shareholders. And so, when we set out on this plan at the beginning of the year, our best estimate of how much value we could crystallize through asset sales, values that were at or close to intrinsic value, our best estimate was that range. It's been a very challenging transaction market and still is today, which is why it was the range.

Thankfully, we've been able to make progress ahead of expectation. That wasn't guaranteed, far from guaranteed. And as we've done that, and I mentioned earlier, we're constantly reviewing, working with the Board and the SRC, a wide range of ways to be able to continue creating and unlocking value for shareholders. And so, I think 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, given the restrictive parameters that are placed on us through the current state of the transaction markets.

Got it. That's helpful. And I guess on a similar line, the $100 million of stock repurchases, is there sort of a certain price you have in mind? Or is it really about getting the balance sheet to a certain leverage level before you even consider using the repurchases? Just trying to understand the framework from which you'll decide to use repurchases or not?

No, it's a great question. Look, it's a very useful tool to have. To be clear, we believe there is significant value in the company over and above the current share price. And so, as an investment, as a capital allocation decision, we have strong conviction that share buybacks would make a lot of sense. Having said that, we have to balance the limited capital that we have as we're recycling capital through asset sales. And the determination we've made at this time is to prioritize deleveraging.

And to some extent, notwithstanding the whole sector is trading at a discount to NAV at the moment; to some extent, that leverage is, for us, probably causing some of that discount that we're seeing. And so, it's a little bit circular. But when you take into consideration the potential accretive impact of even that full buyback program, $100 million buyback program relative to the impact on leverage from using those proceeds to delever, to us, it makes more sense at this time to prioritize deleveraging.

And moving on to Tom Catherwood with BTIG.

Just wanted to circle back on Eric's disposition question there. For the $542 million of transactions closed or under contract, did prices come in stronger on the original pool of non-core assets that you had identified back in February? Or did you end up selling more assets than were initially planned in that original pool?

Tom, I think it's a great question. I think when we set out in February, the markets were still quite challenging, but we felt like for smaller assets, we'd be able to make some progress. The truth is, it wasn't clear to us how quickly we'd be able to make progress. We felt like conditions could improve during the year, and they did improve during the year, and they're continuing to improve now. But as I said earlier, we could have been in a very different situation here with far fewer asset sales.

As for price and the two obviously are related, we ended up pretty much exactly where we expected. As I said, we were looking to crystallize pockets of NAV or sell assets where we could release pockets of value at levels that are in line or very close to NAV, and that really pointed mostly to smaller assets.

And the overall cap rate and actually even the individual cap rates, which are pretty much all in line with the blended cap rate at which we sold those assets was right on top of what we expected and hoped for when we announced that plan. So, we sold at a low 5s, around a 5.1% cap rate across that pool and that's stripping out the land. And that's exactly where we thought we'd be or hope it would be.

Got it. Got it. Okay. So, the follow-up on that then is, if you ended up where you thought you'd be on pricing or hoped you'd be on pricing, that would suggest the $150 million increase to sales guidance would be the addition of other assets than were initially planned. If that's the case, are those assets that the market has recovered to the point where now you think you can sell them? Or is that just as you went through the sales faster than you expected, you reevaluated and transferred more into that non-core strategic sales bucket?

It's a little bit of both. As I said, we still -- for larger assets, I think there is still illiquidity discount at this moment in time, given capital flows. It feels like things are improving and that discount may over time, reduce or potentially even fully be eliminated. But I think it's a little bit of both. I think it's a little bit of market conditions improving over the past several months and continuing to improve today and us constantly evaluating alternatives that could make sense for shareholders and determining that it could make sense to slightly increase that target to $650 million.

Got it. Got it. And then last one for me, and this kind of follows up on your comment about transaction markets improving. But Mahbod, in your prepared remarks, you noted early signs of renewed interest from Core-Plus capital. I assume that's both commercial real estate and specifically multifamily. Can you provide some more thoughts around that and kind of what was driving those comments?

Yes, it's no secret that for the past few years, particularly with rates having climbed at the pace that they have, the more core, Core-Plus capital that was active previously in the market has reverted more to credit strategies, given the relative risk return profile that credit strategies have offered over the last few years.

But with rates coming in a little bit recently plus the realization that with credit investments, you don't necessarily get the multiple that you get with equity investments, we understand that potentially the gates are opening somewhat, particularly on the Core-Plus side at this point.

In terms of the core, if you look at what's happening there, the Odyssey funds are still seeing net redemptions, that redemption queues come down a little bit, which could be an encouraging early sign, too soon to say.

But on the Core-Plus side, there are certainly a few groups out there that are becoming more active, both in terms of capital raising and fund structures and single-managed accounts and starting to look at more Core-Plus type opportunities. Why is that relevant? Because while those 2 groups of capital really have been otherwise focused on credit opportunities, the active capital, the dominant active capital in the market for the last few years has really been value-add and opportunistic capital, which obviously has a much higher cost, a much higher return expectation associated with it. And so that commands a certain risk profile to the assets that those investors are acquiring or it just requires a certain return regardless of the risk profile, which has implications for core asset valuations to the extent that those buyers are involved.

And so, it's an encouraging early sign that things may be finally turning. We know that by their very existence, opportunity funds came to be to provide liquidity at times when more traditional sources of capital were unavailable. And so that's been the case for the last few years, but these are temporary capital flow dynamics that ultimately revert back to some normality over time.

This now concludes our question-and-answer session. I would like to turn the floor back over to Mahbod Nia for closing comments.

Well, thank you, everyone, for joining us today. I'd like to thank the team for the hard efforts that have allowed us to post another quarter of extremely strong operational results and meaningful strategic process. We look forward to updating you again next quarter.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.

Greetings, and welcome to the Veris Residential, Inc. Second Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Taryn Fielder, General Counsel. Thank you. You may begin.

Good morning, everyone, and welcome to Veris Residential's Second Quarter 2025 Earnings Conference Call. 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 and annual and quarterly reports filed with the SEC for risk factors that impact the company. With that, I would like to hand the call over to Mahbod Nia, Veris Residential's Chief Executive Officer, who is joined by Anna Malhari, Chief Operating Officer, and Amanda Lombard, Chief Financial Officer. Mahbod?

Thank you, Taryn, and good morning, everyone. I'll begin today's call by providing details on our quarterly results, year-to-date performance and key dynamics of our markets before turning to Anna to update you on our operating performance and Amanda to provide details on our financial performance and outlook.

The second quarter marked another period of solid operational and financial results for Veris, including $0.17 of Core FFO and 5.6% Same Store NOI growth. We also made significant progress with the corporate plan that we announced earlier this year, alongside continued enhancements to our operational platform, further optimization of our balance sheet, allowing us to meaningfully reduce our cost of debt. Year-to-date, we've either completed or executed binding contracts for approximately $450 million of nonstrategic asset sales, largely fulfilling our stated target of selling $300 million to $500 million of nonstrategic assets by the end of 2026, well ahead of schedule.

We intend to utilize proceeds from these sales primarily to reduce leverage to around 10x by year-end 2025 and are on track to further reduce this to below 9x by year-end 2026. The rapid progress we've made in deleveraging our balance sheet is translating into tangible value creation for our shareholders. As we realized an immediate 55 basis point improvement in our borrowing costs through our amended credit facility with potential for a further improvement in our borrowing costs as we continue to delever.

Our robust operational performance, combined with the significant progress we have made executing nonstrategic asset sales, resulting in a reduction of debt has enabled us to raise guidance on key metrics. We've now closed $268 million of the aforementioned $450 million of nonstrategic asset sales, including the recent sales of Signature Place, a 197-unit property located in suburban New Jersey for $85 million and 145 Front Street, a 365-unit property located in Worcester, Massachusetts for $122 million. These assets, generally smaller in size, were sold at an average cap rate of 5.1%, in line with what we believe to be their intrinsic value.

We've also entered binding contracts with The James in suburban New Jersey and Quarry Place, our only asset in New York, posting an additional $180 million of sales, which are anticipated to close in the coming months.

As previously announced, during the second quarter, we consolidated our partners' 15% stake in Sables, formerly the Jersey City Urby, and have already begun to realize meaningful operational synergies through the integration of this asset into the Veris platform.

Before I hand over to Anna to walk through our operational performance, I'd like to say a few words regarding the current dynamics in our markets. The Northeast multifamily landscape continues to perform encouragingly well, driven by favorable supply-demand dynamics and resilient urban migration trends. New York City, to which Jersey City is highly correlated, remains one of the strongest markets nationwide, underpinned by historically low vacancy of below 3% metro-wide despite the delivery of approximately 15,000 new units over the past year.

Demand has also remained strong in Boston, where vacancy has edged lower year-over-year and rent growth has remained above national levels. New construction in Jersey City remains concentrated in Journal Square, a less established submarket, which does not compete directly with the Jersey City Waterfront, where our assets are located.

The Waterfront submarket maintains clear advantages, lower vacancy, approximately 25% higher asking rents and almost 3x the rental growth of Journal Square this year. The Jersey City Waterfront has successfully absorbed 3,900 units with minimal impact to our occupancy rates over the past 5 years. In the next 4 years, around 3,000 units across 4 projects are currently under construction, only 385 units delivered over the past 3 years, well below historical levels. We expect the market to readily absorb the new supply in line with the historical absorption rate of approximately 630 units annually.

These robust supply-demand dynamics leave our Waterfront portfolio well positioned to sustain strong rental growth going forward. With that, I'll hand it over to Anna to discuss our operational performance for the quarter.

Thank you, Mahbod. Our portfolio continued to deliver strong operating results in the second quarter. Excluding Liberty Towers, where we continue to undergo unit renovations, occupancy was 95.5% as of June 30, up from 94.7% a year ago. Including Liberty Towers, occupancy was 93.9%, while retention improved to approximately 60%.

To date, we have renovated and leased 121 units at Liberty Towers, nearly 20% of the property, at a gross rental uplift of around 20%. Occupancy has picked up over the last few weeks with the asset currently 88% leased and over 80% occupied. Rental growth has gradually increased as peak leasing season progresses. Our portfolio achieved a blended net rental growth rate of 4.7% for the quarter, up from 2.3% in the first quarter and well above the national average of 1%. This is driven by renewals of 5.2% and new leases accelerating to 4%.

The blended net rental growth rate was 3.5% for the first half of 2025, comprising 2.5% in new leases and 4.3% in renewals. Simultaneously, rent-to-income ratios across our portfolio have remained stable, highlighting the creditworthiness of our high-income resident base. This rental performance, coupled with our ongoing focus on expense management is reflected in our Same Store NOI growing by 5.6% in the quarter and our operating margin improving by approximately 200 basis points year-over-year to 67.5%.

Our broader New Jersey portfolio continued to deliver strong results, supported by our strategic locations adjacent to New York City with approximately 25% of new move-ins coming from the area and over 50% from out of state. These residents are attracted to our compelling value proposition of generally newer, more spacious units and a more comprehensive suite of amenities.

Our portfolio's continued outperformance is a testament to the quality of our assets, the strength of our markets and platform and the unwavering commitment and hard work of our teams. We continue to focus on further optimization of our operational platform, investing in and implementing innovative technologies balanced by human interaction to create an elevated customer experience.

In June, we hosted an investor event showcasing Prism, our approach to technology adoption that further empowers our teams and provides comprehensive support to every resident. During the presentation, which you can find on our website, our technology partners spoke to our outperformance, including our AI assistants achieving a lease conversion rate more than double that of our partners' other clients, and our website generating more than 3x the virtual tours than other multifamily companies using the same tool.

During the quarter, we leveraged our existing virtual tours to launch our VR showroom in an incredibly cost-effective manner, allowing residents to tour select units at all of our properties in 3D wearing their own VR glasses, with the plans to expand this immersive experience across all units this year.

In addition to our virtual leasing assistant, our website now features an embedded AI chatbot, which is designed to guide every prospect, resident, investor, and job seeker who visits our website. We've also developed our own proprietary revenue management tool, which is performing extremely well across the assets were deployed, eliminating over $250,000 of annualized costs associated with utilizing third-party revenue management tools and potentially more over time.

Overall, our strong operational performance reflects the effectiveness of our platform investments, the quality of our assets and the strength of our markets, positioning us well to continue momentum as we move forward.

With that, I'm going to hand it over to Amanda, who will discuss our financial performance and provide an update on guidance.

Thank you, Anna. For the second quarter of 2025, net income available to common shareholders was $0.12 per fully diluted share versus $0.03 for the prior year and a net loss of $0.12 in the first quarter. Core FFO per share was $0.17 for the second quarter, up $0.01 from the first quarter due to several factors, including the transactions closed in the period, the timing of the annual stable tax credit and continued strong performance from our portfolio.

Core FFO per share for the second quarter also includes approximately $0.01 of nonrecurring other income and property management expense savings. Year-to-date, core FFO was $0.33 per share versus $0.32 last year.

As mentioned earlier, Same Store NOI growth for the quarter was 5.6%. On a year-to-date basis, Same Store NOI growth is 4.4%. Same Store rental revenue was up 2.5% for the quarter, driven by an increase in occupancy across the majority of our portfolio and continued rental revenue growth. Excluding Liberty Towers and other income recognized last year, rental revenue growth would have been 3.8%. Year-to-date, rental revenue growth was 2.4%, driven by growth in market rates, occupancy, higher amenity fees and retail lease-up, offset by the same components as the quarter-to-date, the reduction in Liberty Towers occupancy due to renovations and the benefit of other income recognized last year.

On the expense side, our technology investments and enhancements and portfolio optimization initiatives continue to drive savings. Both controllable and non-controllable expenses were down from prior year. Controllable expenses decreased by 3.7% year-over-year and are essentially flat year-to-date. This benefit is driven primarily by lower marketing and administrative costs due to increased demand for our Waterfront assets and a reduction in repairs and maintenance expenses at Liberty Towers, given little to no make-ready costs are incurred while units undergo renovation.

Year-to-date, these savings in marketing, administration and repairs and maintenance were partially offset by higher utility costs due to cold weather in the first quarter. Additionally, payroll costs are virtually flat as technology and centralization initiatives are rolled out across the portfolio.

Non-controllable expenses, which will reset in the third quarter, are down 3.2% year-over-year, 2.6% year-to-date due to lower insurance costs and real estate tax expenses.

On the overhead front, core G&A after adjustments for Severance payments was $8.2 million, a significant improvement from last quarter as expected due to seasonal increases in noncash stock compensation in the first quarter. We also recognized savings of approximately $500,000 this quarter in property management expenses related to our employee benefits.

Turning to our balance sheet, a key focus area of our 2025 strategic initiatives. Given our progress in monetizing low-yielding land and select non-strategic multifamily assets with the aim of improving our leverage and cost of debt capital, in early July, we modified our revolving credit facility and term loan. With this amendment, we reduced our borrowing spread and introduced a leverage grid to allow for continual improvement in our borrowing costs as we further reduce leverage. The initial spread is 150 basis points over SOFR, down from 205 basis points with the ability to step down to 120 basis points should we reduce corporate leverage below 40%.

This amendment represents another important step in the company's balance sheet evolution, tangibly improving our cost of capital, flexibility and optionality and demonstrating continued support from our lenders. Net debt-to-EBITDA on a trailing 12-month basis was 11.3x, which does not reflect the impact of assets closed and under contract after June 30.

With these sales, we remain on track to reduce net debt-to-EBITDA to around 10x by year-end 2025. After factoring in the impact of the recent transactions closed in July, we had $126 million outstanding on the revolver. Our $200 million term loan has been fully repaid and liquidity has increased to $181 million, which includes the available balance of the revolver.

As a result, all of our debt was fixed or hedged with a weighted average maturity of 2.6 years and a weighted average effective interest rate of 4.86%, a reduction of over 20 basis points prior to the amendment. Importantly, with the recently closed and announced sales and the new facility, the company will have sufficient liquidity to refinance all of its wholly owned 2026 maturities with proceeds from completed sales and/or availability on its revolving credit facility.

Turning to guidance. We are raising our Core FFO guidance range to $0.63 to $0.64 from $0.61 to $0.63 per share. This change reflects the robust performance of our portfolio to date, including strong blended leasing spreads of 3.5% year-to-date, recent sales and resulting debt repayments, the acquisition of the controlling interest in Sable and the amended facility.

Our revised range represents Core FFO growth of 5% to 6.7% compared to 2024, not only leading our multifamily peers, but also outperforming most REITs across sectors and asset classes. We are also raising our Same Store NOI guidance to between 2% and 2.8%, reflecting our solid performance year-to-date, visibility into continued market rent growth through the end of the peak leasing season and realized savings from our technology and operational initiatives.

As a reminder, in the third quarter, we will lap significantly positive insurance and tax resolutions from last year, which will impact our Same Store growth rate. We still anticipate G&A will be flat relative to last year, with the third quarter mostly in line with the second quarter and an uptick in the fourth quarter for activities that occur at that time.

Our interest expense guidance assumes the sales under binding contracts are completed by the end of the third quarter and utilized to repay debt. This concludes a strong second quarter for Veris Residential. Highlighting our sustained momentum in achieving our strategic milestones, including accelerated earnings growth and an earlier-than-projected reduction in corporate leverage.

With that, operator, please open the line for questions.

[Operator Instructions] The first question is from Steve Sakwa from Evercore ISI.

Mahbod, maybe if you could first talk about kind of the Board change and the departure of the CIO. Maybe just kind of help us think through maybe the CIO and kind of what that means for dispositions moving forward? And then just any comments on sort of the Board change.

Sure. Steve, thank you for the question. With regards to our CIO, the decision that we made to make that change, we'd like to thank Jeff for his contribution that he's made over the last 2, 3 years. We have a team, an investment team headed by Brian Primost who's been with the company for 19, almost 20 years and has actually been very much leading many of the executions on the office, land and even multifamily side, certainly during my tenure.

And so we're in good hands with Brian and the investment team and well positioned to continue executing on our plan. And as you've seen even during this past quarter, it really made some significant strides in moving that forward. As for Ron, I'd also like to thank Ron for his valuable contribution over the past 2 years. He's been a tremendous Board member and supporter of the company, been a shareholder for a long time. I think his decision was based on his recognition of his fiduciary obligations to various shareholders and balancing those with his position at Madison and their need for greater flexibility to trade various shares in accordance with their fiduciary obligations to their investors.

But Ron continues to be highly supportive of us and the company's strategy, and we look forward to maintaining a regular dialogue with him and Madison as one of our larger shareholders going forward.

Okay. And then, Amanda, I know you sort of commented about some of the tough comps that you've got coming up in the back half, I think taxes and insurance were both down last year. But is there anything that you can share with us on kind of what's embedded in guidance for the back half of the year? And when do you sort of get more visibility on, I guess, both of those figures for the back half of the year?

Yes, sure. Steve, so for -- as you noted, we do have our non-controllables renewing in the second quarter. For insurance, we did assume that we would have a mid- to high single-digits renewal. And I know that there is more capacity in the market this year. But we also have our real estate taxes resetting in the third quarter and in particular, Jersey City, which is a large portion of our portfolio. And so the real estate taxes in Jersey City have been volatile in the prior years. And to put that into context, a 10% change in insurance premiums would be offset by just a 4% increase in Jersey City taxes. So overall, in -- that's how we're thinking about it, and that's how it's been factored into our guidance.

Okay. And then just last question, Mahbod. You've been pretty successful executing on the dispositions, I think, faster than most people maybe expected. I guess where is your head just as you kind of hit the -- towards the upper end of the range with a couple that are pending, how are you sort of thinking about future sales over the balance of this year and into '26?

I think it's a good question. I think I'd firstly say that the team has done a phenomenal job to bring us this far at this pace at these valuations, but it's an extremely challenging transaction market and difficult to predict. So we've -- it looks like it's all very smooth on the surface, but behind the scenes, there are challenges to every transaction. And often, there's a chain. And so if buyers have issues with their transactions, with their sales of assets, that has the potential to impact us. And so it's very difficult to make calls on the extent and pace of progress that one can make. Having said that, this shows a clear desire by the Board and management to recognize to realize NAV where we can. That tends to be on smaller assets and crystallize those values on behalf of our shareholders.

Having achieved what we've achieved so far, there's still $134 million of land that we referenced that we may want to, to the extent we can, rationalize further from here and potentially less than a handful, but 1 or 2 more other small assets as well that to the extent that we can realize fair value at or close to intrinsic value for those assets, we may make some further progress.

And to the extent that we can do that, then that allows us to go further in terms of our ability to continue reducing leverage and further strengthening the balance sheet, accreting earnings, especially from land to the extent we can recycle and reallocate that equity and continue to focus on things that are within our control, at least to try to close the discount to NAV.

The next question is from Eric Wolfe from Citi.

Just wanted to follow-up on your answer there a moment ago. If you look at the properties that you sold, it looks like they're around about $100 million in value on average. Should we take that as an early indication that the market for larger buildings is falling a bit? Or is there a certain size or type of asset where it becomes more difficult to sell them?

Yes, look, there's definitely a discount for size today. That's a given. I wouldn't say that's developed in the last quarter. That's been the case for a while now, but there's definitely a discount for size. And so I wouldn't say there's a firm cutoff, but certainly smaller transactions you do have a greater chance of being able to access a different buyer pool with a different cost of capital or investment horizon or both, that typically would translate into a value that's more consistent with what we think of as intrinsic value.

I wouldn't say there's a firm cutoff, but look, anything over large today is not really that large. Anything over a couple of hundred million dollars, the buyer pool starts to really tail off pretty quickly and you can find yourself often with more value-add opportunistic type capital and with that cost of capital, that translates into a different price.

Makes sense. I guess I was trying to understand the sort of the number of properties, the value of properties that sort of fall into that hard to sell category. Because I guess just looking at yourself, it seems like it's maybe Haus25 or the Liberty Towers that sort of fall into that category of a couple of hundred million. But I don't know if there's anything else that would be falling to that.

Yes. Potentially Boulevard would be another one. So no, you are -- I think I said it a minute ago, but we don't have too many more assets that I would say would be regarded as bite size in today's market. But having said that, we've got $134 million of land, and we do have a few more assets. And that's certainly between those, there's enough there to continue with this momentum that we've built deleveraging and accreting earnings.

Right. And then just last question for me. You said that the there -- I guess, there were some struggles in the background. I guess you probably can't talk about the ones that haven't closed yet, but I was just curious for the ones that did, the 2 properties, sort of what those sort of struggles were, what needed to be overcome before those could transact?

And then second, if you just had a view on sort of where you sold those properties relative to replacement cost, if buyers are demanding a discount to replacement cost today just given higher debt costs and return hurdles or if there's an opportunity to actually sort of sell around replacement cost?

Yes, it's a good question. So relative to replacement cost, I would say those represented something of a discount, not a huge discount, but something of a discount to replacement cost. Relative to what we deem to be a sort of near-term strong valuation for those properties in this market, I think we've got very strong prices. And I think you can see that in the cap rate, which is a low 5s cap rate that we achieved for those assets.

The next question is from Anthony Paolone from JPMorgan.

First question is on next year's debt maturities. Just wondering what your early thoughts are in terms of how you address those with either disposition proceeds or refinancing and also just balancing the desire to reduce leverage versus maybe the buyback.

So next year, we do have about $0.5 billion of debt maturing. And I break it up into 2 buckets. So about half of that is related to mortgages, which are on wholly owned assets. And for those mortgages between the sales that we've announced already as well as the capacity on the revolver, we believe we'll have the capacity to repay off all of those through those needs.

The -- I'd also just call out within that bucket, we do have one mortgage on Portside 1, which is our most expensive mortgage. And so you could actually potentially see us pay that off sooner than its maturity next year.

The other half of the mortgages, those are all on assets that are held in joint ventures, some of them consolidated, some of them unconsolidated. And so each one of those is going to require its own asset level financing solution. But I'm sure, as you know, as we talked about previously, there is a lot of demand for -- to provide capital and mortgages for our quality of assets. And so we do feel that we'll have a number of options there, and we'll work with our joint venture partners to figure out the solutions there. But overall, we feel comfortable with the refinancing options there.

Yes. I think just to add to that, if you just take the asset class, but then specifically the asset quality that we have, the markets that we're in and then the progress that we've made operationally and in terms of addressing our balance sheet, I think that's put us in really good stead to be able to manage through those refinancings as we move forward as we have done this year and in prior years. And so I think we're in a good spot.

And I think we've created many options for ourselves going forward as a result of the great work the team has done to be able to strengthen the balance sheet. And you can also see that in the terms of the latest amended credit facility, which I think are very different to what they were a few years ago and really reflective of the company today.

Got it. And just the success you've had in just hitting your disposition goals already. And then you mentioned the land and maybe some smaller assets, like is it still the priority though to reduce debt further? Or would you consider the buyback here?

Yes, it's a good question. We have the buyback. We have an authorized program. It's a tool that's available to us. If you run the math, I'd say that limited potential for accretion from that, but it's still accretion. So it's valuable to have. I think what we've been clear about from the outset is that leverage reduction is the priority.

So while the buyback would allow you to take advantage of the discount to NAV that we're trading at and create some accretion, that discount in itself, we believe, is somewhat driven by the leverage profile, which is significantly better than it has been historically. And on a trend now to really get within an expected range for a public company like us.

And in addressing that leverage and continuing to delever the balance sheet, our hope and expectation is that we can close that gap and that would be in the best interest of our shareholders. And so it's absolutely a priority to delever over anything else at this time.

Okay. Got it. And then my other question just relates to your rent to income. This is always something that stands out to us. It's now below 11%, and it's almost half of where the multifamily peer group sits. Can you maybe -- I know there's a market, but can you maybe talk about just where you think that should be over time or maybe the nature of your resident base that just allows it to be so low. It just seems like it would afford you all pretty substantial pricing power relative to, say, across the water in New York City.

Yes. You've got to bear in mind, 25% or so of our move-ins are from Manhattan. Many of our residents also work in Manhattan and have Manhattan salaries, around just under 10% of our residents have 7-figure incomes and the average household income is over $400,000. And so I think that figure is really reflective of the tenant profile and creditworthiness, if you like, of our residents and the income that underpins our properties.

I read into that as it's got -- it's very resilient cash flow and allows us to be able to continue increasing rents in a supply-constrained market. I don't think it's a license to go out and push rent increases, renewals that are egregious for want of a better word.

And so at the end of the -- we're in a market that is still competitive. We have our own internal pricing model that takes into consideration, a wide number of factors in determining pricing. And you can see that, that's still translating into very healthy rent growth relative to the country as an average. But I see those -- the affordability ratio more is just an indication of the resilience of the underlying cash flows.

The next question is from Yana Galan from Bank of America.

Congrats on a strong second quarter. I was wondering if you could share any thoughts on the mayoral election in New York City and how potentially less development in New York City can increase rents and values in Jersey City?

Thank you for the question. It's an interesting one. I think it's a little bit too soon to draw any definitive conclusions. But certainly, based on some of the policies that have been mentioned, it is very possible, as you say, that Jersey City and particularly the Waterfront, given its proximity to Manhattan could be a real beneficiary of some of those policies, both in terms of what you just described, but also the mention of potentially higher taxation on corporations and high earners who are now a meaningful portion of our resident base and could become an even more meaningful portion of our resident base to the extent that they face greater taxes across the river.

There are already benefits to living here and working across the river and one of them is that you don't pay New York City tax. And so if you think about the high earners in our portfolio and what that translates into 4% of 7 figures and actually, the average is a couple of million dollars is meaningful -- as a meaningful contribution towards the rent over here, which is then 30% cheaper than prime rents across the river.

And so to the extent those policies come in, it could very well be that we're a beneficiary. But I think it's a little bit too soon to draw any conclusions, as I said.

And I'm sorry if I missed it, but can you share the blended rent spreads for July so far?

For July, we're mid-single digit.

So you mean post quarter, Jana, just to clarify?

Yes.

Apologies.

Yes. So look, as you've seen, we've seen an acceleration in the second quarter as we've entered the busy leasing season, and the portfolio continues to do really well. But it's really only been 3 weeks. So we don't want to draw any conclusions about where new leases are. But in terms of renewal, we still continue to send out renewals around the mid-single digits, as Mahbod just mentioned.

Apologies. I think your question was where we're sending out renewals.

The next question is from John Pawlowski from Green Street.

I want to follow-up on the disposition commentary on land. Do you still expect to sell the bulk of the remaining $130 million or so on the land in the near term? Or would you -- at this point, given the challenging construction market and land market, would you expect to hold on to it for the foreseeable future?

It's a good question. I go back to my comments about it being a difficult transaction market. It's certainly a difficult transaction market for land as well, as you correctly pointed out. So I think our approach historically has been to be pragmatic about these things, but also measured in our approach. And what I mean by that is we recognize the importance of recycling capital, and you've seen us do this with office, recycling capital and the potential to create entity value through that process. And so we're looking at a wide range of options. We're not going to be fire selling anything, but we would like to make some more progress.

I wouldn't say all of that land is it's sellable near term. But if you look at the composition, there's a significant chunk of concentration, and that is very desirable and in any normal market would be very liquid.

Okay. That helps. Last question for me is just on the trajectory of occupancy for Liberty Towers. It's been volatile and it's stepped down and declined a little bit more than we expected this quarter, but it sounds like it's off up into the right, at least the next few months. Can you just help frame is -- should we expect it to bounce around, hover around the high 70%, low 80% for the next several quarters as you take units offline? Is this -- was this the bottom and it's, again, more of a clear upward path from occupancy from here?

Thank you for the question. I think they can bounce around a bit as we're introducing new units to the asset, but we have seen strong momentum in the summer season, both on the new leases, but have also secured a corporate lease for 18 units that helped drive up the lease percentage, as you've seen in my remarks for July. So there may be some volatility, but we would hope to be in the low 80s going forward.

Okay. Can you remind me when exactly you expect the project to be fully complete?

It's going to be over 3 years. We've done 120 units year-to-date that are renovated and are leased. That's around 20% of the building. We're actually pre-leasing some units that we know are scheduled to be delivered in the upcoming weeks to the extent the prospects want to move in, in a few weeks or so. But just given the size of the building, it will take around 3 years to complete the full project.

3 years from today, so mid-2028 stabilized?

Yes, and thereabouts, could be end of '27, but may as well slip into '28. It's too early to say we're still on a 20% through the building.

There are no further questions at this time. I would like to turn the floor back over to Mahbod Nia for closing comments.

Well, thank you, everyone, for joining us today. We're pleased to report another strong quarter, both strategically and operationally, and look forward to updating you again next quarter.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.