Real estate investment trust Veris Residential reversed course on its day-old stock offering plan after its share price dropped nearly a dollar early Tuesday.
The offering withdrawal also will force Veris ask to terminate a $158.5 million purchase agreement for a Jersey City apartment complex it also entered into on Monday.
The decision comes despite a strong month for REITs in May with a total return of 5.3%, according to real estate investment trust association Nareit, outperforming the Russell 1000 and Dow Jones U.S. Total Stock Market of 4.7%.
"Following careful consideration of all relevant factors, consistent with our disciplined approach and with the best interests of our shareholders in mind, we have made the decision to withdraw our previously announced public offering of common stock,” Mahbod Nia, CEO of Veris Residential, said in a statement.
Veris planned to raise $159 million through the offering, mirroring the purchase price for 55 Riverwalk Place, a 348-unit property in West New York, New Jersey, as per a U.S. Securities and Exchange Commission filing.
Prudential, the current owner of 55 Riverwalk Place, did not immediately respond to CoStar News' request for comment on Veris' announcement.
The property sits along the New Jersey Hudson River waterfront where Veris already owns four Class A multifamily properties and holds development rights for two more. Veris, along with a partner, constructed 55 Riverwalk Place in 2006 and managed it until exiting third-party management in 2021.
As of June 1, the property boasted a 96.4% occupancy rate with an average monthly rent of $3,160 per unit, a 22% discount compared to Veris' existing Port Imperial portfolio, according to the SEC filing. Veris identified $9 million in potential improvements planned for the first three years of ownership.
If the offering had proceeded and the Riverwalk purchase fell through, Veris intended to use the funds to repay $157 million in outstanding mortgage debt on its 377-unit Soho Lofts property in Jersey City.