Veris Residential, Inc. [VRE] Filings

10-Q 1 vre-20230630.htm 10-Q vre-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-13274 Veris Residential, Inc.

Commission File Number: 333-57103 Veris Residential, L.P.

Veris Residential, Inc.

Veris Residential, L.P.

(Exact name of registrant as specified in its charter)


Maryland (Veris Residential, Inc.)						22-3305147 (Veris Residential, Inc.)
Delaware (Veris Residential, L.P.)						22-3315804 (Veris Residential, L.P.)
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Harborside 3, 210 Hudson St., Ste. 400, Jersey City, New Jersey						07311
(Address of principal executive offices)						(Zip Code)

(732) 590-1010

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Veris Residential, Inc.:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VRE	New York Stock Exchange

Veris Residential, L.P.:

None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety (90) days.


Veris Residential, Inc.			Yes ☒ No ☐
Veris Residential, L.P.			Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Veris Residential, Inc.			Yes ☒ No ☐
Veris Residential, L.P.			Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Veris Residential, Inc.:

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging Growth Company ☐

Veris Residential, L.P.:

Large accelerated filer ☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Veris Residential, Inc. ☐

Veris Residential, L.P. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Veris Residential, Inc.			Yes ☐ No ☒
Veris Residential, L.P.			Yes ☐ No ☒

As of July 24, 2023, there were 92,064,713 shares of Veris Residential, Inc.’s Common Stock, par value $0.01 per share, outstanding.

Veris Residential, L.P. does not have any class of common equity that is registered pursuant to Section 12 of the Exchange Act.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended June 30, 2023 of Veris Residential, Inc. and Veris Residential, L.P. Unless stated otherwise or the context otherwise requires, references to the “Operating Partnership” mean Veris Residential, L.P., a Delaware limited partnership, and references to the “General Partner” mean Veris Residential, Inc., a Maryland corporation and real estate investment trust (“REIT”), and its subsidiaries, including the Operating Partnership. References to the “Company,” “we,” “us” and “our” mean collectively the General Partner, the Operating Partnership and those entities/subsidiaries consolidated by the General Partner.

The Operating Partnership conducts the business of providing management, leasing, acquisition, development and tenant-related services for its General Partner. The Operating Partnership, through its operating divisions and subsidiaries, including the Veris property-owning partnerships and limited liability companies is the entity through which all of the General Partner’s operations are conducted. The General Partner is the sole general partner of the Operating Partnership and has exclusive control of the Operating Partnership’s day-to-day management.

As of June 30, 2023, the General Partner owned an approximate 91.2 percent common unit interest in the Operating Partnership. The remaining approximate 8.8 percent common unit interest is owned by limited partners. The limited partners of the Operating Partnership are (1) persons who contributed their interests in properties to the Operating Partnership in exchange for common units (each, a “Common Unit”) or preferred units of limited partnership interest in the Operating Partnership or (2) recipients of long-term incentive plan units of the Operating Partnership pursuant to the General Partner’s executive compensation plans.

A Common Unit of the Operating Partnership and a share of common stock of the General Partner (the “Common Stock”) have substantially the same economic characteristics in as much as they effectively share equally in the net income or loss of the Company. The General Partner owns a number of common units of the Operating Partnership equal to the number of issued and outstanding shares of the General Partner’s common stock. Common unitholders (other than the General Partner) have the right to redeem their Common Units, subject to certain restrictions under the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended (the “Partnership Agreement”) and agreed upon at the time of issuance of the units that may restrict such right for a period of time, generally one year from issuance. The redemption is required to be satisfied in shares of Common Stock of the General Partner, cash, or a combination thereof, calculated as follows: one share of the General Partner’s Common Stock, or cash equal to the fair market value of a share of the General Partner’s Common Stock at the time of redemption, for each Common Unit. The General Partner, in its sole discretion, determines the form of redemption of Common Units (i.e., whether a common unitholder receives Common Stock of the General Partner, cash, or any combination thereof). If the General Partner elects to satisfy the redemption with shares of Common Stock of the General Partner as opposed to cash, the General Partner is obligated to issue shares of its Common Stock to the redeeming unitholder. Regardless of the rights described above, the common unitholders may not put their units for cash to the Company or the General Partner under any circumstances. With each such redemption, the General Partner’s percentage ownership in the Operating Partnership will increase. In addition, whenever the General Partner issues shares of its Common Stock other than to acquire Common Units, the General Partner must contribute any net proceeds it receives to the Operating Partnership and the Operating Partnership must issue to the General Partner an equivalent number of Common Units. This structure is commonly referred to as an umbrella partnership REIT, or UPREIT.

The Company believes that combining the quarterly reports on Form 10-Q of the General Partner and the Operating Partnership into this single report provides the following benefits:

•enhance investors’ understanding of the General Partner and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business of the Company;

•eliminate duplicative disclosure and provide a more streamlined and readable presentation because a substantial portion of the disclosure applies to both the General Partner and the Operating Partnership; and

•create time and cost efficiencies through the preparation of one combined report instead of two separate reports.

The Company believes it is important to understand the few differences between the General Partner and the Operating Partnership in the context of how they operate as a consolidated company. The financial results of the Operating Partnership are consolidated into the financial statements of the General Partner. The General Partner does not have any significant assets, liabilities or operations, other than its interests in the Operating Partnership, nor does the Operating Partnership have employees of its own. The Operating Partnership, not the General Partner, generally executes all

significant business relationships other than transactions involving the securities of the General Partner. The Operating Partnership holds substantially all of the assets of the General Partner, including ownership interests in joint ventures. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by the General Partner, which are contributed to the capital of the Operating Partnership in consideration of common or preferred units in the Operating Partnership, as applicable, the Operating Partnership generates all remaining capital required by the Company’s business. These sources include working capital, net cash provided by operating activities, borrowings under the Company’s revolving credit facility, the issuance of secured and unsecured debt and equity securities, and proceeds received from the disposition of properties and joint ventures.

Shareholders’ equity, partners’ capital and noncontrolling interests are the main areas of difference between the consolidated financial statements of the General Partner and the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s financial statements as is the General Partner’s interest in the Operating Partnership. The noncontrolling interests in the Operating Partnership’s financial statements comprise the interests of unaffiliated partners in various consolidated partnerships and development joint venture partners. The noncontrolling interests in the General Partner’s financial statements are the same noncontrolling interests at the Operating Partnership’s level and include limited partners of the Operating Partnership. The differences between shareholders’ equity and partners’ capital result from differences in the equity issued at the General Partner and Operating Partnership levels.

To help investors better understand the key differences between the General Partner and the Operating Partnership, certain information for the General Partner and the Operating Partnership in this report has been separated, as set forth below:

•Item 1. Financial Statements (unaudited), which includes the following specific disclosures for Veris Residential, Inc. and Veris Residential, L.P.:

•Note 2. Significant Accounting Policies, where applicable;

•Note 14. Redeemable Noncontrolling Interests;

•Note 15. Veris Residential, Inc.’s Stockholders’ Equity and Veris Residential, L.P.’s Partners’ Capital;

•Note 16. Noncontrolling Interests in Subsidiaries; and

•Note 17. Segment Reporting, where applicable.

•Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations includes information specific to each entity, where applicable.

This report also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of the General Partner and the Operating Partnership in order to establish that the requisite certifications have been made and that the General Partner and Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 and 18 U.S.C. §1350.

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

FORM 10-Q

INDEX


			Page
Part I	Financial Information
	Item 1.	Financial Statements (unaudited):
		Veris Residential, Inc.
		Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	6
		Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	7
		Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022	8
		Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2023 and 2022	9
		Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	11
		Veris Residential, L.P.
		Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	12
		Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022	13
		Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022	14
		Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2023 and 2022	15
		Consolidated Statements of Cash Flows for the six months ended June 30, 2023 and 2022	17
		Veris Residential, Inc. and Veris Residential, L.P.
		Notes to Consolidated Financial Statements	18
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	66
	Item 4.	Controls and Procedures	67
Part II	Other Information
		Veris Residential, Inc. and Veris Residential, L.P.
	Item 1.	Legal Proceedings	68
	Item 1A.	Risk Factors	68
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
	Item 3.	Defaults Upon Senior Securities	68
	Item 4.	Mine Safety Disclosures	68
	Item 5.	Other Information	68
	Item 6.	Exhibits	71
Exhibit Index			72
Signatures			73

VERIS RESIDENTIAL, INC.

VERIS RESIDENTIAL, L.P.

Part I – Financial Information

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of operations, of comprehensive income (loss), of changes in equity, and of cash flows and related notes thereto, have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. The financial statements reflect all adjustments consisting only of normal, recurring adjustments, which are, in the opinion of management, necessary for a fair statement for the interim periods.

The aforementioned financial statements should be read in conjunction with the notes to the aforementioned financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in Veris Residential, Inc.’s and Veris Residential, L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

The results of operations for the three and six month periods ended June 30, 2023 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited)


ASSETS	June 30, 2023		December 31, 2022
Rental property
Land and leasehold interests	$	483,195	$	492,204
Buildings and improvements	2,845,193		3,332,315
Tenant improvements	40,809		122,509
Furniture, fixtures and equipment	100,803		99,094
	3,470,000		4,046,122
Less – accumulated depreciation and amortization	(438,113)		(631,910)
	3,031,887		3,414,212
Real estate held for sale, net	122,690		193,933
Net investment in rental property	3,154,577		3,608,145
Cash and cash equivalents	396,940		26,782
Restricted cash	27,614		20,867
Investments in unconsolidated joint ventures	122,435		126,158
Unbilled rents receivable, net	7,808		39,734
Deferred charges and other assets, net	58,961		96,162
Accounts receivable	4,498		2,920

Total assets	$	3,772,833	$	3,920,768
LIABILITIES AND EQUITY

Mortgages, loans payable and other obligations, net	$	1,820,981	$	1,903,977
Mandatorily redeemable noncontrolling interests	487,619		—
Dividends and distributions payable	72		110
Accounts payable, accrued expenses and other liabilities	53,239		72,041
Rents received in advance and security deposits	15,710		22,941
Accrued interest payable	6,963		7,131
Total liabilities	2,384,584		2,006,200

Commitments and contingencies

Redeemable noncontrolling interests	40,231		515,231

Equity:
Veris Residential, Inc. stockholders’ equity:
Common stock, $0.01 par value, 190,000,000 shares authorized, 92,041,386 and 91,141,649 shares outstanding	918		911
Additional paid-in capital	2,540,309		2,532,182
Dividends in excess of net earnings	(1,348,792)		(1,301,385)
Accumulated other comprehensive income	4,518		3,977
Total Veris Residential, Inc. stockholders’ equity	1,196,953		1,235,685

Noncontrolling interests in subsidiaries:
Operating Partnership	115,307		126,109
Consolidated joint ventures	35,758		37,543
Total noncontrolling interests in subsidiaries	151,065		163,652

Total equity	1,348,018		1,399,337

Total liabilities and equity	$	3,772,833	$	3,920,768

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
REVENUES	2023		2022		2023		2022
Revenue from leases	$	61,909	$	47,313	$	121,747	$	91,256
Real estate services	643		896		1,554		1,807
Parking income	4,796		4,173		9,129		7,760

Other income	1,381		1,431		3,258		2,491
Total revenues	68,729		53,813		135,688		103,314

EXPENSES
Real estate taxes	7,860		7,911		18,980		16,201
Utilities	2,379		1,895		4,882		4,247
Operating services	14,044		13,100		26,307		25,964
Real estate services expenses	4,389		2,920		6,332		5,283
General and administrative	9,582		11,527		19,865		30,976
Transaction related costs	3,319		1,345		4,347		1,345
Depreciation and amortization	23,684		21,015		47,331		39,456

Land and other impairments, net	—		3,900		3,396		6,832
Total expenses	65,257		63,613		131,440		130,304

OTHER (EXPENSE) INCOME
Interest expense	(21,692)		(14,741)		(43,706)		(26,348)
Interest cost of mandatorily redeemable noncontrolling interests	(13,390)		—		(13,390)		—
Interest and other investment income	3,927		189		4,043		347
Equity in earnings of unconsolidated joint ventures	2,700		2,638		2,633		2,151

Gain (loss) on disposition of developable land	—		55,125		(22)		57,748
Loss from extinguishment of debt, net	(2,657)		(129)		(2,657)		(129)
Other income, net	853		—		2,851		—
Total other (expense) income, net	(30,259)		43,082		(50,248)		33,769
(Loss) income from continuing operations	(26,787)		33,282		(46,000)		6,779
Discontinued operations:
(Loss) income from discontinued operations	140		5,808		2,344		25,948
Realized gains (losses) and unrealized gains (losses) on disposition of rental property and impairments, net	(3,488)		(4,440)		(2,709)		(2,604)
Total discontinued operations, net	(3,348)		1,368		(365)		23,344
Net (loss) income	(30,135)		34,650		(46,365)		30,123
Noncontrolling interests in consolidated joint ventures	636		784		1,223		1,758
Noncontrolling interests in Operating Partnership of income from continuing operations	2,384		(2,568)		4,696		305
Noncontrolling interests in Operating Partnership in discontinued operations	298		(127)		22		(2,102)
Redeemable noncontrolling interests	(617)		(6,366)		(6,983)		(12,803)
Net (loss) income available to common shareholders	$	(27,434)	$	26,373	$	(47,407)	$	17,281

Basic earnings per common share:
(Loss) income from continuing operations	$	(0.27)	$	0.24	$	(0.56)	$	(0.11)
Discontinued operations	(0.03)		0.01		0.00		0.23
Net (loss) income available to common shareholders	$	(0.30)	$	0.25	$	(0.56)	$	0.12

Diluted earnings per common share:
(Loss) income from continuing operations	$	(0.27)	$	0.24	$	(0.56)	$	(0.11)
Discontinued operations	(0.03)		0.01		0.00		0.23
Net (loss) income available to common shareholders	$	(0.30)	$	0.25	$	(0.56)	$	0.12

Basic weighted average shares outstanding	91,873		91,027		91,551		90,989

Diluted weighted average shares outstanding	100,854		100,352		100,691		100,171

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022

Net (loss) income	$	(30,135)	$	34,650	$	(46,365)	$	30,123
Other comprehensive income (loss):
Net unrealized gain (loss) on derivative instruments for interest rate swaps	1,536		(60)		591		2,122
Comprehensive (loss) income	$	(28,599)	$	34,590	$	(45,774)	$	32,245
Comprehensive loss attributable to noncontrolling interests in consolidated joint ventures	636		784		1,223		1,758
Comprehensive income attributable to redeemable noncontrolling interests	(617)		(6,366)		(6,983)		(12,803)
Comprehensive loss (income) attributable to noncontrolling interests in Operating Partnership	2,545		(2,689)		4,668		(1,987)
Comprehensive (loss) income attributable to common shareholders	$	(26,035)	$	26,319	$	(46,866)	$	19,213

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Three Months Ended June 30, 2023	Shares	Par Value
Balance at April 1, 2023	91,620	915	$	2,533,854	$	(1,321,358)	$	3,119	$	157,439	$	1,373,969
Net loss	—	—	—		(27,434)		—		(2,701)		(30,135)


Redeemable noncontrolling interests	—	—	—		—		—		(617)		(617)

Redemption of common units for common stock	271	3	4,189		—		—		(4,192)		—
Redemption of common units	—	—	—		—		—		(78)		(78)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	1		—		—		—		1
Directors' deferred compensation plan	21	—	86		—		—		—		86
Stock compensation	144	—	3,381		—		—		94		3,475
Cancellation of restricted shares	(15)	—	(219)		—		—		—		(219)
Other comprehensive income	—	—	—		—		1,399		137		1,536
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(983)		—		—		983		—
Balance at June 30, 2023	92,041	918	$	2,540,309	$	(1,348,792)	$	4,518	$	151,065	$	1,348,018


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Three Months Ended June 30, 2022	Shares	Par Value
Balance at April 1, 2022	90,956	909	$	2,531,188	$	(1,258,411)	$	1,995	$	165,120	$	1,440,801
Net income	—	—	—		26,373		—		8,277		34,650


Redeemable noncontrolling interests	—	—	(3,524)		—		—		(6,726)		(10,250)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		7		7
Redemption of common units for common stock	11	—	161		—		—		(161)		—
Redemption of common units	—	—	—		—		—		(359)		(359)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	1	—	16		—		—		—		16
Directors' deferred compensation plan	—	—	110		—		—		—		110
Stock compensation	136	2	2,507		—		—		445		2,954
Cancellation of common stock	(41)	—	(696)		—		—		—		(696)
Other comprehensive loss	—	—	—		—		(54)		(6)		(60)
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(4,296)		—		—		4,296		—
Balance at June 30, 2022	91,063	911	$	2,525,466	$	(1,232,038)	$	1,941	$	170,893	$	1,467,173

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands) (unaudited)


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Six Months Ended June 30, 2023	Shares	Par Value
Balance at January 1, 2023	91,142	911	$	2,532,182	$	(1,301,385)	$	3,977	$	163,652	$	1,399,337
Net (loss) income	—	—	—		(47,407)		—		1,042		(46,365)


Redeemable noncontrolling interests	—	—	(4,516)		—		—		(7,444)		(11,960)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		(562)		(562)
Redemption of common units for common stock	650	7	9,044		—		—		(9,051)		—
Redemption of common units	—	—	—		—		—		(94)		(94)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	—	—	2		—		—		—		2
Directors' deferred compensation plan	21	—	196		—		—		—		196
Stock compensation	259	—	6,852		—		—		487		7,339
Cancellation of restricted shares	(31)	—	(466)		—		—		—		(466)
Other comprehensive income	—	—	—		—		541		50		591
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(2,985)		—		—		2,985		—
Balance at June 30, 2023	92,041	918	$	2,540,309	$	(1,348,792)	$	4,518	$	151,065	$	1,348,018


	Common Stock		Additional Paid-In Capital		Dividends in Excess of Net Earnings		Accumulated Other Comprehensive Income (Loss)		Noncontrolling Interests in Subsidiaries		Total Equity
For the Six Months Ended June 30, 2022	Shares	Par Value
Balance at January 1, 2022	90,948	909	$	2,530,383	$	(1,249,319)	$	9	$	167,436	$	1,449,418
Net income	—	—	—		17,281		—		12,842		30,123

Common unit distributions	—	—	—		—		—		218		218
Redeemable noncontrolling interests	—	—	(6,466)		—		—		(13,454)		(19,920)
Change in noncontrolling interests in consolidated joint ventures	—	—	—		—		—		18		18
Redemption of common units for common stock	11	—	161		—		—		(161)		—
Redemption of common units	—	—	—		—		—		(1,801)		(1,801)
Shares issued under Dividend Reinvestment and Stock Purchase Plan	2	—	27		—		—		—		27
Directors' deferred compensation plan	—	—	220		—		—		—		220
Stock compensation	143	2	4,464		—		—		2,978		7,444
Cancellation of restricted shares	(41)	—	(696)		—		—		—		(696)
Other comprehensive income	—	—	—		—		1,932		190		2,122
Rebalancing of ownership percentage between parent and subsidiaries	—	—	(2,627)		—		—		2,627		—
Balance at June 30, 2022	91,063	911	$	2,525,466	$	(1,232,038)	$	1,941	$	170,893	$	1,467,173

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)


	Six Months Ended June 30,
CASH FLOWS FROM OPERATING ACTIVITIES	2023		2022
Net (loss) income	$	(46,365)	$	30,123
Net loss (income) from discontinued operations	365		(23,344)
Net (loss) income from continuing operations	(46,000)		6,779
Adjustments to reconcile net income (loss) to net cash provided by
Operating activities:
Depreciation and amortization, including related intangible assets	47,269		39,480
Amortization of deferred compensation stock units	196		220
Amortization of stock compensation	7,339		7,444
Amortization of deferred financing costs	1,808		2,358

Equity in earnings of unconsolidated joint ventures	(2,633)		(2,151)
Distributions of cumulative earnings from unconsolidated joint ventures	—		13


Loss (gain) on disposition of developable land	22		(57,748)


Land and other impairments, net	3,396		6,832
Loss from extinguishment of debt	2,657		129
Gain on insurance proceeds	(2,851)		—

Interest cost of mandatorily redeemable noncontrolling interests	13,390		—
Changes in operating assets and liabilities:
Decrease in unbilled rents receivable, net	1,695		3,560
Increase in deferred charges and other assets	(1,610)		(3,894)
(Increase) decrease in accounts receivable, net	(248)		225
Decrease in accounts payable, accrued expenses and other liabilities	(7,188)		(2,915)
Increase in rents received in advance and security deposits	502		2,171
Increase (decrease) in accrued interest payable	158		(39)
Net cash flows provided by operating activities - continuing operations	17,902		2,464
Net cash flows provided by operating activities - discontinued operations	6,462		43,246

Net cash provided by operating activities	$	24,364	$	45,710

CASH FLOWS FROM INVESTING ACTIVITIES
Rental property acquisitions and related intangibles	$	—	$	(5,192)
Rental property additions, improvements and other costs	(5,747)		(8,147)
Development of rental property and other related costs	(5,647)		(40,673)
Proceeds from the sales of rental property	6,528		28,596

Repayment of notes receivable	1,257		1,433

Investment in unconsolidated joint ventures	(98)		(147)
Distributions in excess of cumulative earnings from unconsolidated joint ventures	6,454		7,450
Proceeds from insurance settlements	3,239		—
Net cash provided by (used in) investing activities - continuing operations	5,986		(16,680)
Net cash provided by investing activities - discontinued operations	445,648		171,754

Net cash provided by investing activities	$	451,634	$	155,074

CASH FLOW FROM FINANCING ACTIVITIES
Borrowings from revolving credit facility	$	16,000	$	43,000
Repayment of revolving credit facility	(16,000)		(115,000)



Proceeds from mortgages and loans payable	—		149,068
Repayment of mortgages, loans payable and other obligations	(84,258)		(240,270)
Redemption of redeemable noncontrolling interests, net	—		(12,000)
Payment of early debt extinguishment costs	(251)		(5,140)
Common unit redemptions	(94)		(2,497)
Payment of financing costs	(1,721)		(3,025)
Contribution from noncontrolling interests	—		18
Distributions to redeemable noncontrolling interests	(12,731)		(12,908)
Payment of common dividends and distributions	(38)		(56)

Net cash used in financing activities	$	(99,093)	$	(198,810)

Net increase in cash and cash equivalents	$	376,905	$	1,974
Cash, cash equivalents and restricted cash, beginning of period (1)	47,649		51,455

Cash, cash equivalents and restricted cash, end of period (2)	$	424,554	$	53,429

(1)Includes Restricted Cash of $20,867 and $19,701 as of December 31, 2022 and 2021, respectively.

(2)Includes Restricted Cash of $27,614 and $24,356 as of June 30, 2023 and 2022, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (in thousands, except per unit amounts) (unaudited)


ASSETS	June 30, 2023		December 31, 2022
Rental property
Land and leasehold interests	$	483,195	$	492,204
Buildings and improvements	2,845,193		3,332,315
Tenant improvements	40,809		122,509
Furniture, fixtures and equipment	100,803		99,094
	3,470,000		4,046,122
Less – accumulated depreciation and amortization	(438,113)		(631,910)
	3,031,887		3,414,212
Real estate held for sale, net	122,690		193,933
Net investment in rental property	3,154,577		3,608,145
Cash and cash equivalents	396,940		26,782
Restricted cash	27,614		20,867
Investments in unconsolidated joint ventures	122,435		126,158
Unbilled rents receivable, net	7,808		39,734
Deferred charges and other assets, net	58,961		96,162
Accounts receivable	4,498		2,920

Total assets	$	3,772,833	$	3,920,768
LIABILITIES AND EQUITY

Mortgages, loans payable and other obligations, net	$	1,820,981	$	1,903,977
Mandatorily redeemable noncontrolling interests	487,619		—
Distributions payable	72		110
Accounts payable, accrued expenses and other liabilities	53,239		72,041
Rents received in advance and security deposits	15,710		22,941
Accrued interest payable	6,963		7,131
Total liabilities	2,384,584		2,006,200

Commitments and contingencies

Redeemable noncontrolling interests	40,231		515,231

Partners’ Capital:
General Partner, 92,041,386 and 91,141,649 common units outstanding	1,127,647		1,163,935
Limited partners, 8,666,675 and 9,301,521 common units/LTIPs outstanding	180,095		193,882
Accumulated other comprehensive income	4,518		3,977
Total Veris Residential, L.P. partners’ capital	1,312,260		1,361,794

Noncontrolling interests in consolidated joint ventures	35,758		37,543

Total equity	1,348,018		1,399,337

Total liabilities and equity	$	3,772,833	$	3,920,768

The accompanying notes are an integral part of these consolidated financial statements.

VERIS RESIDENTIAL, L.P. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
REVENUES	2023		2022		2023		2022
Revenue from leases	$	61,909	$	47,313	$	121,747