Veris Residential is getting bought for $3.4 billion in cash by an investor group led by Affinius Capital, capping the company's transition from New Jersey's biggest office landlord — with properties overlooking New York City — to a pure-play multifamily real estate investment trust.
Jersey City, New Jersey-based Veris said it entered into a definitive merger agreement with Affinius in partnership with Vista Hill Partners, co-led by Jonathan Kushner of Kushner Real Estate Group. The deal that takes Veris private is expected to close in the second quarter.
The shift in properties reflects the changes in commercial property demand over the past half dozen years as the pandemic reduced the desire of employers to own offices because of the popularity during the health crisis of remote work. While the company was beginning its shift before the pandemic struck, the timing proved beneficial.
Veris is the rebranded Mack-Cali Realty, a business name once ubiquitous and found on office buildings across the Garden State. But the company changed direction after the ouster of its then-CEO Michael DeMarco in 2020, divesting its office properties in the suburbs and Jersey City.
New management changed the company's name to Veris Residential and pivoted to focus on become a pure-play multifamily REIT. Veris' largest properties include Haus25 and Soho Lofts in Jersey City — luxury apartments that sit within commuting distance across the Hudson River from Manhattan.
In recent years, Veris fended off several attempted takeovers, including unsolicited offers from Kushner Cos. in 2022. Kusher Cos. and Kushner Real Estate Group are two separate companies owned by different members of the Kushner family.
'Strategic transformation'
Veris said the sale to Affinius represents the culmination of its "strategic transformation and a comprehensive review of strategic alternatives" it conducted with assistance from financial advisers J.P. Morgan and Morgan Stanley & Co.
"Following inbound interest, the company and its advisers engaged with a broad group of potential counterparties, including financial sponsors, sovereign wealth funds, pension funds and multifamily investment platforms," Veris said in a statement.
The REIT's board unanimously approved the sale. The accord calls for the investor group to pay $19 a share for Veris, an amount that's about 23% higher than the stock’s closing price on Feb. 4 and about 28% above its average trading price over the previous 30 days.
"Since the reconstitution of the board in 2020, Veris has undergone a remarkable transformation into a sector-leading, pure-play multifamily REIT ... executing on initiatives that drive operational improvements while divesting non-strategic assets," Tammy Jones, the board's chair, said in a statement.
Veris CEO Mahbod Nia described the company's pivot away from the office sector over the past five years: "Today's announcement marks the culmination of our strategic transformation into a top-performing pure-play multifamily REIT with core, Class A properties concentrated in premier U.S. residential markets and our stated objective of realizing intrinsic value on behalf of our shareholders," he said in a statement.
The transaction's financing will be a combination of equity investments and debt, including a $2.08 billion committed senior secured bridge loan facility. Veris expects to distribute its regular quarterly cash dividend on its common stock for the first quarter of 2026 but has agreed to suspend any dividends thereafter.
Veris didn't disclose whether it plans to retain its REIT status as a private company. CoStar News reached out to Veris for comment but didn't immediately hear back.
Bow Street, which manages funds that own roughly 5.6% of Veris's outstanding shares, has agreed to vote its shares in favor of the transaction, according to the REIT.
Affinius is an integrated institutional real estate investment firm. Vista Hill Partners is a real estate investment and development firm focused on acquiring and enhancing portfolios within clustered real estate markets. It was founded by Bradford Klatt, co-founder and managing partner of Roseland Property Co. and Canoe Brook Partners. Klatt co-leads Vista with Jonathan Kushner.
For the record
JPMorgan Chase and Morgan Stanley are serving as financial advisers to Veris, while Weil, Gotshal & Manges and Seyfarth Shaw are serving as legal advisers.
UBS is acting as lead buyside financial adviser. Goldman Sachs is also serving as financial adviser. Skadden, Arps, Slate, Meagher & Flom, Greenberg Traurig and Simpson Thacher & Bartlett are serving as legal advisers to members of the buy side. Eastdil Secured is acting as real estate adviser to the buy side.
Goldman Sachs is the lead arranger and underwriter on the bridge loan. UBS is also acting as co-arranger and underwriter on the bridge loan. Gibson, Dunn & Crutcher is acting as legal counsel to Goldman Sachs.