Tom Catherwood: Thank you, and good morning, everybody.
Mahbod Nia: Hi, Tom.
Tom Catherwood: Maybe for Amanda, you mentioned paying down I think roughly $170 million of principal as you refinanced four mortgages this year and put them on the line and the revolver. For sources of this funds, it looks like you’ll have roughly that much cash once you close on the $28 million of contracted land sales. But outside of that, how much more capital do you need or how much more do you have to sell to execute the rest of your ’24 business plan, including spending on asset upgrades?
Amanda Lombard: So, I’ll answer part of it and I’ll throw it over to Mahbod. So, first off, your math is right there. If you take — we have about $140 million on balance sheet today from the recently completed sales and then you add the $28 million from the recently announced asset under contract and that’s how you get to the debt repayment. Mahbod, I’ll let you take the second part of the question.
Mahbod Nia: So, I agree with the math. And in terms of where additional cash flow could come from to invest in the properties, first thing I’d point to is that we’re now, as we’ve come out the other side of the transformation and built earnings back up, we’re generating a not insignificant amount of free cash flow. And so, the business itself is cash flow positive again and so that’s not in the equation that you just outlined. In addition to that, we have liquidity in the form of the line, which is accessible for investing in our properties and we still have around $200 million of other land, which may or may not be monetized, but is available to us to the extent that we may seek to unlock that equity as well. So, between those sources, I think we’re in a good spot, but I think it’s important to remember the business itself is also generating a not insignificant amount of free cash flow.
Tom Catherwood: Got it. Appreciate that. And then maybe Mahbod sticking with you, you’ve previously discussed your joint ventures as a potential avenue for capital allocation. Is that a nearer-term opportunity or is something like that more than likely further down the line?
Mahbod Nia: Well, difficult to comment on the timing, because I would say it’s certainly an area where we may seek to for want of a better word clean up a little bit more. And what I really mean by that is determine whether for certain joint ventures there may be a higher and better use for our company and whether we can access the equity that’s locked in those joint ventures. But there’s always a path. The question is how long does it take to get through that path, which makes it difficult to really put a timeframe around it, but it is another potential area of optimization on the capital allocation side of our three-pronged approach that could be unlocked over time.
Tom Catherwood: Understood. Thanks for that. And then last one for me, just over on Haus25. How much NOI upside is there as you stabilize the storefront commercial space at the building?
Mahbod Nia: I wouldn’t say it’s material. It’s going to be in the region of — well, it’s not immaterial either. It’s in the region of $2 million from it being fully leased.
Tom Catherwood: Okay. Any then, any thoughts — progress towards some of it or is it again the timing is going to be — are we talking a ’25 event?
Mahbod Nia: I’d say overall, we’re seeing some really positive signs on the retail side. The team is doing a fantastic job of making sure we’re in the flow and definitely seeing a little bit of an uptick in inquiries and tours. And so, we hope to be able to make some progress there.
Tom Catherwood: Got it. Thanks for the answers. That’s it for me.
Mahbod Nia: Thank you. Thanks, Tom.
Operator: Thank you. Our next questions come from the line of Michael Lewis with Truist securities. Please proceed with your questions.
Michael Lewis: Great. Thank you. As far as additional non-core dispositions, how much of that is land versus targeted properties that you have to sell?
Mahbod Nia: We haven’t announced any additional sales at this point other than $28 million that’s under binding contract. But what is available is $190 million of land, and then it’s really the multifamily properties. So, those decisions will be again keep using the word, but capital allocation decisions, is the equity that’s tied in those assets being put to its highest and best use within the company, is there a higher and better use for it, can it be unlocked and over what timeframe? So, we’re constantly evaluating let’s set the past every dollar of equity that’s tied up in the business and making those decisions, working closely with the Board, but no decisions have been made at this point with regard to the remainder of the assets.
Michael Lewis: Okay. I guess I’m thinking not just the yield on this kind of source of capital from sales, but also should we expect that most of this land is eventually going to be sold or do you think you’re a material developer going forward when that makes sense?
Mahbod Nia: Well. There’s clearly a long standing DNA at Veris for developing very high-quality products here in terms of Class A multifamily assets, and that stands. But as I said, no decision has been made yet with regard to the land bank.
Michael Lewis: Okay. Understood. And then, you talked a lot about this, but as far as the debt repayment, the specific pieces here, right, so I see Signature Place and Liberty Towers have maturities this year, one much larger than the other. Should I expect that you’ll use some of these proceeds and then put the balance on the line that you’re not going to refi either of these?
Amanda Lombard: This is Amanda here. Yeah, that’s correct.
Michael Lewis: Okay.
Amanda Lombard: So, the way we’re looking at it is we’ll tackle each maturity/refinancing at the date that it’s required to be done. And the order of operations is first, we’ll repay down with cash on hand. Once we do that, then we’ll draw on the term loan and then after that, we’ll draw on the revolver.
