Quarterly report [Sections 13 or 15(d)]

VERIS RESIDENTIAL, INC. STOCKHOLDERS??? EQUITY AND VERIS RESIDENTIAL, L.P.???S PARTNERS??? CAPITAL

v3.26.1
VERIS RESIDENTIAL, INC. STOCKHOLDERS’ EQUITY AND VERIS RESIDENTIAL, L.P.’S PARTNERS’ CAPITAL
 3 Months Ended
Mar. 31, 2026
Stockholders' Equity Note [Abstract]  
VERIS RESIDENTIAL, INC. STOCKHOLDERS’ EQUITY AND VERIS RESIDENTIAL, L.P.’S PARTNERS’ CAPITAL VERIS RESIDENTIAL, INC. STOCKHOLDERS’ EQUITY AND VERIS RESIDENTIAL, L.P.’S PARTNERS’ CAPITAL
Partners’ Capital in the accompanying consolidated financial statements relates to (a) General Partners’ capital consisting of common units in the Operating Partnership held by the General Partner, and (b) Limited Partners’ capital consisting of common units and Long Term Incentive Performance Units ("LTIP Units") held by the limited partners. See Note 15: Noncontrolling Interests in Subsidiaries.
The following table reflects the activity of the General Partner capital for the three months ended March 31, 2026 and 2025, respectively (dollars in thousands):
Three Months Ended
March 31,
2026 2025
Opening Balance $ 1,151,621 $ 1,099,391
Net income (loss) available to common shareholders (14,008) (10,699)
Common stock distributions (7,668) (7,550)
Redemption of common units for common stock 308  509 
Shares issued under Dividend Reinvestment and Stock Purchase Plan — 2
Directors' deferred compensation plan — 98
Stock Compensation 3,682 3,322
Cancellation of common stock (5,068) (3,923)
Other comprehensive income (loss) 430 (1,011)
Rebalancing of ownership percent between parent and subsidiaries 196 347
Balance at March 31 $ 1,129,493 $ 1,080,486
Any transactions resulting in the issuance of additional common and preferred stock of the General Partner result in a corresponding issuance by the Operating Partnership of an equivalent amount of common and preferred units to the General Partner.
ATM PROGRAM
On November 15, 2023, the Company reestablished a continuous “at-the-market” offering program (“ATM Program”) with a syndicate of banks, pursuant to which shares of our common stock having an aggregate gross sales price of up to $100 million may be sold (i) directly through or to the banks acting as sales agents or as principal for their own accounts or (ii) through or to participating banks or their affiliates acting as forward sellers on behalf of any forward purchasers pursuant to a forward sale agreement. As of March 31, 2026, the Company sold 133,759 shares pursuant to the ATM Program, generating net proceeds of $1.8 million. No shares were sold pursuant to the ATM Program during the three months ended March 31, 2026. On February 23, 2026, the $2.0 billion shelf registration statement on Form S-3/ASR covering the ATM Program expired pursuant to Rule 415(a)(5) of the Securities Act and the Company terminated the ATM program effective as of February 23, 2026, and as a result, no further shares may be issued.
SHARE REPURCHASE PROGRAM
On February 19, 2025, the Board of Directors approved a $100 million share repurchase program, with share repurchases under the new program authorized to begin on March 26, 2025. The repurchase program is set to expire in February 2027. During the three months ended March 31, 2026, the Company did not repurchase any shares. Under the terms of the
Merger Agreement, the Company is not permitted to acquire any shares under the repurchase program without the prior consent of Parent.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The General Partner has a Dividend Reinvestment and Stock Purchase Plan (the “DRIP”) which commenced in March 1999 under which approximately 5.4 million shares of the General Partner’s common stock have been reserved for future issuance. The DRIP provides for automatic reinvestment of all or a portion of a participant’s dividends from the General Partner’s shares of common stock. The DRIP also permits participants to make optional cash investments up to $5,000 a month without restriction and, if the General Partner waives this limit, for additional amounts subject to certain restrictions and other conditions set forth in the DRIP prospectus filed as part of the General Partner’s effective registration statement on Form S-3/ASR filed with the SEC for the approximately 5.4 million shares of the General Partner’s common stock reserved for issuance under the DRIP. On February 23, 2026, the registration statement on Form S-3/ASR for the DRIP
expired pursuant to Rule 415(a)(5) of the Securities Act and the Company terminated the DRIP effective as of February 23, 2026, and as a result, no further shares may be issued under the DRIP.
INCENTIVE STOCK PLAN
In May 2013, the General Partner established the 2013 Incentive Stock Plan under which a total of 4,600,000 shares has been reserved for issuance. In June 2021, stockholders of the Company approved the Amended and Restated 2013 Incentive Stock Plan (as so amended and restated, the "2013 Plan") to increase the total shares reserved for issuance under the plan from 4,600,000 to 6,565,000 shares.
In June 2024, stockholders of the Company approved the termination of the 2013 Plan and the establishment of the 2024 Incentive Stock Plan (the "2024 Plan"), under which a total of 2,885,207 shares has been reserved for issuance. No new awards will be granted under the 2013 Plan.
Stock Options
As of March 31, 2026, the Company had 1,530,000 options granted and outstanding, all of which are vested.
No stock options were exercised under any stock option plans for the three months ended March 31, 2026 and 2025. The Company has a policy of issuing new shares to satisfy stock option exercises.
As of March 31, 2026 and December 31, 2025, the stock options outstanding had a weighted average remaining contractual life of approximately 2.5 years and 2.7 years, respectively.
The Company recognized stock compensation expense related to stock options of zero and $0.1 million for the three months ended March 31, 2026 and 2025, respectively.
Restricted Stock Awards
The Company has issued Restricted Stock Awards ("RSAs") in the form of restricted stock units to non-employee members of the Board of Directors, which allow the holders to each receive shares of the Company’s common stock following a one-year vesting period. Vesting of the RSAs issued is based on time and service. On June 11, 2025 and July 23, 2025, the Company issued RSAs to non-employee members of the Board of Directors, of which 67,729 unvested RSAs were outstanding at March 31, 2026.
The Company recognized stock compensation expense related to RSAs of $0.3 million for both the three months ended March 31, 2026 and 2025.
As of March 31, 2026, the Company had $0.2 million unrecognized compensation cost related to unvested RSAs granted under the Company’s stock compensation plans. That cost is expected to be recognized over a weighted average period of 0.2 years.
All currently outstanding and unvested RSAs provided to the non-employee members of the Board of Directors were issued under the 2024 Plan.
Long-Term Incentive Plan Awards
The Company has granted long-term incentive plans awards (“LTIP Awards”) to executive officers, senior management, and certain other employees of the Company. LTIP Awards generally are granted in the form of restricted stock units (each, an “RSU” and collectively, the “RSU LTIP Awards”) and constitute awards under the 2013 Plan and 2024 Plan.
A portion of the RSUs are subject to time-based vesting conditions and will vest over a three-year period ("TRSUs"). As of March 31, 2026, there are 806,659 TRSUs outstanding and unvested.
Another portion of the annual LTIP Awards have market-based vesting conditions ("PRSUs"), and recipients will only earn the full amount of the PRSUs if, over the three-year performance period, the General Partner achieves an absolute Total Shareholder Return ("TSR") target and if the General Partner’s relative TSR as compared to a group of peer REITs ("Peer Group") exceeds certain thresholds. Depending on the results achieved during the three-year performance periods, the actual number of shares that a grant recipient receives at the end of the period may range from 0% to 160% of the shares granted. The market-based award targets are determined annually by the compensation committee of the Board of Directors. As of March 31, 2026, there are 781,225 PRSUs at their target vesting amounts, outstanding and unvested.
In addition, the Company has granted RSUs with a three-year cliff vest subject to the achievement of adjusted funds from operations targets ("OPRSUs"). As of March 31, 2026, there are 765,555 OPRSUs outstanding and unvested.
The fair value of the RSU LTIP Awards is based on the fair value of the underlying shares on the date of grant. The fair value of the PRSUs that relate to a TSR performance objective was determined using a Monte Carlo simulation analysis, which, for awards granted during the three months ended March 31, 2026, incorporates assumptions regarding the probability and potential impact of a change in control, including the Company’s recently announced Merger Agreement. The expected volatility of the common stock is estimated based on the historical volatility rate for the preceding three-year performance period. The dividend yield assumption was based on anticipated dividend payouts.
The Company recognized stock compensation expense related to LTIP awards of $3.4 million and $2.9 million for the three months ended March 31, 2026 and 2025, respectively.
As of March 31, 2026, the Company had $21.6 million of total unrecognized compensation cost related to unvested LTIP Awards granted under the Company’s stock compensation plans. That cost is expected to be recognized over a remaining weighted average period of 2.5 years.
All currently outstanding and unvested RSU LTIP Awards provided to the executive officers, senior management, and certain other employees were issued under the 2013 Plan or 2024 Plan.
Deferred Stock Compensation Plan For Directors
The Amended and Restated Deferred Compensation Plan for Directors, which commenced January 1, 1999, allows non-employee directors of the Company to elect to defer up to 100 percent of their annual retainer fee into deferred stock units. The deferred stock units are convertible into an equal number of shares of common stock upon the directors’ termination of service from the Board of Directors or a change in control of the Company, as defined in the plan. Deferred stock units are credited to each director quarterly using the closing price of the Company’s common stock on the applicable dividend record date for the respective quarters. Each participating director’s account is also credited for an equivalent amount of deferred stock units based on the dividend rate for each quarter.
During the three months ended March 31, 2026 and 2025, deferred stock units earned were 572 and 6,320, respectively. As of March 31, 2026 and December 31, 2025, there were 135,347 and 134,775 deferred stock units outstanding, respectively. Under the terms of the Merger Agreement, except for the issuance of deferred stock units for the quarterly dividend on March 31, 2026 on previously outstanding deferred stock units, the Company is not permitted to issue any deferred stock units without the consent of Parent, and the Company suspended the Deferred Compensation Plan for Directors effective March 31, 2026 pending completion of the Merger.
EARNINGS PER SHARE/UNIT
Basic EPS or EPU excludes dilution and is computed by dividing net income available to common shareholders or unitholders by the weighted average number of shares or units outstanding for the period. Diluted EPS or EPU reflects the
potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. In the calculation of basic and diluted EPS and EPU, a redemption value adjustment of redeemable noncontrolling interests attributable to common shareholders or unitholders is included in the calculation to arrive at the numerator of net income (loss) available to common shareholders or unitholders.
The following information presents the Company’s results for the three months ended March 31, 2026 and 2025 in accordance with ASC 260, Earnings Per Share (dollars in thousands, except per share amounts):
Veris Residential, Inc.:
Three Months Ended
March 31,
Computation of Basic EPS 2026 2025
Income (loss) from continuing operations after income tax expense $ (15,600) $ (13,866)
Add (deduct): Noncontrolling interests in consolidated joint ventures 400  2,125 
Add (deduct): Noncontrolling interests in Operating Partnership 1,273  998 
Add (deduct): Redeemable noncontrolling interests (81) (81)
Income (loss) from continuing operations available to common shareholders $ (14,008) $ (10,824)
Income (loss) from discontinued operations available to common shareholders —  125 
Net income (loss) available to common shareholders for basic earnings per share $ (14,008) $ (10,699)
Weighted average common shares 93,595  93,059 
Basic EPS:
Income (loss) from continuing operations available to common shareholders $ (0.15) $ (0.12)
Income (loss) from discontinued operations available to common shareholders —  — 
Net income (loss) available to common shareholders $ (0.15) $ (0.12)
Three Months Ended
March 31,
Computation of Diluted EPS 2026 2025
Net income (loss) from continuing operations available to common shareholders $ (14,008) $ (10,824)
Add (deduct): Noncontrolling interests in Operating Partnership (1,273) (998)
Income (loss) from continuing operations for diluted earnings per share $ (15,281) $ (11,822)
Income (loss) from discontinued operations for diluted earnings per share —  136 
Net income (loss) available for diluted earnings per share $ (15,281) $ (11,686)
Weighted average common shares 102,136  101,690 
Diluted EPS:
Income (loss) from continuing operations available to common shareholders $ (0.15) $ (0.12)
Income (loss) from discontinued operations available to common shareholders —  — 
Net income (loss) available to common shareholders $ (0.15) $ (0.12)
The following schedule reconciles the weighted average shares used in the basic EPS calculation to the shares used in the diluted EPS calculation (in thousands):
Three Months Ended
March 31,
2026 2025
Basic EPS shares 93,595  93,059 
Add: Operating Partnership – common and vested LTIP units 8,541  8,631 
Diluted EPS Shares 102,136  101,690 
Veris Residential, L.P.:
Three Months Ended
March 31,
Computation of Basic EPU 2026 2025
Income (loss) from continuing operations after income tax expense $ (15,600) $ (13,866)
Add (deduct): Noncontrolling interests in consolidated joint ventures 400  2,125 
Add (deduct): Redeemable noncontrolling interests (81) (81)
Income (loss) from continuing operations available to unitholders $ (15,281) $ (11,822)
Income (loss) from discontinued operations available to unitholders —  136 
Net income (loss) available to common unitholders for basic earnings per unit $ (15,281) $ (11,686)
Weighted average common units 102,136  101,690 
Basic EPU:
Income (loss) from continuing operations available to unitholders $ (0.15) $ (0.12)
Income (loss) from discontinued operations available to unitholders —  — 
Net income (loss) available to common unitholders for basic earnings per unit $ (0.15) $ (0.12)
Three Months Ended
March 31,
Computation of Diluted EPU 2026 2025
Income (loss) from continuing operations available to common unitholders $ (15,281) $ (11,822)
Income (loss) from discontinued operations for diluted earnings per unit —  136 
Net income (loss) available to common unitholders for diluted earnings per unit $ (15,281) $ (11,686)
Weighted average common unit 102,136  101,690 
Diluted EPU:
Income (loss) from continuing operations available to common unitholders $ (0.15) $ (0.12)
Income (loss) from discontinued operations available to common unitholders —  — 
Net income (loss) available to common unitholders $ (0.15) $ (0.12)
The following schedule reconciles the weighted average units used in the basic EPU calculation to the units used in the diluted EPU calculation (in thousands):
Three Months Ended
March 31,
2026 2025
Basic EPU units 102,136  101,690 
Diluted EPU Units 102,136  101,690