EXCLUSIVE-Apartment owner Veris Residential being pushed to sell itself, sources say

By Svea Herbst-Bayliss

NEW YORK, Feb 5 (Reuters) - A large real estate investor wants high-end rental properties owner Veris Residential VRE.N to put itself up for sale, arguing a transaction could reward shareholders with a 70% premium to the real estate investment trust's current share price.

Erez Asset Management, which owns nearly 5% of Veris Residential, urged the Jersey City, New Jersey-headquartered company to begin a formal review of strategic alternatives and to publicly announce and fully market the process, according to two sources and a document seen by Reuters.

The current call for a sale comes several years after President Donald Trump's son-in-law Jared Kushner's family business tried to buy Veris.

Erez, run by former Goldman Sachs banker Bruce Schanzer and a top 10 investor in Veris, pressed management and the board to act quickly and boldly now that its three main competitors have announced similar reviews, said the sources who could not speak about the private plans publicly.

A Veris representative did not immediately respond to a request for comment.

"We urge you to promptly initiate a comprehensive review of strategic alternatives, accompanied by a public announcement and broad dissemination of the opportunity to all qualified parties," Schanzer wrote in a letter sent to the Veris board chair and chief executive officer on December 1 and seen by Reuters.

Schanzer ran a shopping center real-estate investment trust called Cedar Realty Trust for more than a decade and helped sell it in 2022.

"We estimate that shareholders could realize approximately $22-$25 per share in a sale, after transaction expenses, representing roughly a 40-70% premium to Veris’ current share price," the letter said. Veris, which has an enterprise value of roughly $3 billion, traded at roughly $16 on Thursday.

Veris, formerly called Mack-Cali Realty Corp, has taken a lot of positive steps including asset sales, debt reduction, capital investments and operational initiatives, but it continues to trade at a sizable discount to its net asset value.

Three years ago, Veris said in a statement that it planned to launch a strategic review process in due course in order to understand "potential opportunities to unlock the substantial value that has been created for our shareholders."

Erez is pressing the company to get going on its pledge now.

Also this week's market sell0ff might help real estate assets, analysts said, noting that investors' demand for real assets is climbing and that sales in the space may be accelerated by the recent reduction in interest rates.

In late 2022, the company rejected unsolicited bids from Kushner Cos, the family business associated with President Donald Trump's son-in-law Jared Kushner.