Simplifying structure: Veris Residential redeems Rockpoint’s equity interest for $520M

Jersey City-based Veris Residential and Rockpoint, a Boston-based real estate investment management firm, recently announced that the companies have closed a deal in which Veris Residential purchased and redeemed the preferred units and certain other ownership interests from Rockpoint and its affiliates in Veris Residential Trust for $520 million.

“The negotiated early redemption of Rockpoint’s interest substantially simplifies the company’s overall structure while maximizing our strategic and operational flexibility moving forward,” Mahbod Nia, CEO of Veris Residential, said. “We are grateful to Rockpoint for their unwavering support and commitment to the joint venture, through which we have developed a unique, best-in-class multifamily portfolio.”

“Rockpoint has been pleased to partner with Veris Residential since 2017, and through multiple stages of its growth and transformation,” Tom Gilbane, a managing member of Rockpoint, said. “Rockpoint’s disciplined, market-based investment approach led us to work with Veris Residential to build a high-quality portfolio, and we believe they are well-positioned going forward given the age, location and quality of their multifamily portfolio. We look forward to watching their continued success.”

The transaction substantially simplifies Veris Residential’s overall structure and is projected to save approximately $24 million of annual interest while paving the way for additional expense savings starting in 2024.

The transaction was funded with approximately $360 million of cash on hand released from the sale of Harborside 1, 2 and 3 in April 2023, as well as a new $115 million transitional term loan and $60 million credit facility that are expected to be repaid with approximately $200 million of proceeds anticipated from non-strategic assets under binding contract.

J.P. Morgan and Goldman Sachs & Co. LLC provided the term loan and revolving credit facility and acted as financial advisers to Veris Residential on its strategic transformation. Eastdil Secured acted as an adviser to the joint venture.