Kushner Companies lobbed a series of bombs at Veris Residential’s managment as it aims to take over the New Jersey landlord.
Kushner accused leaders of Veris — formerly Mack-Cali Realty — of repeatedly making poor decisions and misleading shareholders.
The family firm released a Powerpoint presentation Wednesday that accused Veris of executing poor deals and cherry-picking financial information to make its position seem rosier.
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According to Kushner, Veris management “incorrectly claimed to shareholders” that it “paid down” $1.2 billion in debt, but only reduced debt by $575 million and refinanced the balance, and was overleveraged.
Veris’ wording in its claim to shareholders was that it “repaid” $1.2 billion, which could be open to interpretation.
Kushner also claimed that Veris “selectively represented” data to show income and rent growth by comparing financial results from the second quarter of this year to the same time in 2021, a quarter that Kushner said had “particular under-performance.”
Even though it’s standard for companies to make year-over-year comparisons, Kushner said Veris should have compared financials to the same period two years ago, which would have shown a 40 percent drop in income.
Kushner also accused Veris leadership of bad real estate deals. The REIT poorly timed its sale of the Harborside complex in Jersey City and “got pulled off a cliff” as the market for office properties declined, Kushner alleged.
And Kushner said Veris made a lousy decision in reinvesting the proceeds from a Jersey City land sale in a suburban apartment complex at a high cap rate, instead of paying down debt.
Kushner publicized the presentation after its unsolicited offer last week to buy Veris at a valuation of $4.3 billion was rebuffed.
The company said it made the offer after Veris’ board failed to respond to Kushner’s offer to manage its properties.
“Our attempts at fruitful engagement with the board and management over the last several months have effectively been ignored,” chairman Charles Kushner wrote in the letter, stating that the offer was made public so shareholders could be made “aware that there are more viable alternatives to the current and continuing path Veris is on.”
A representative for Veris declined to comment on Kushner’s claims. But the REIT said last week in response to Kushner’s takeover offer that it “will respond to these proposals in due course, just as it has carefully evaluated and responded to all other proposals Kushner Companies has put forth to date.”
Veris, which rebranded from Mack-Cali last December, has also been targeted by activist investor Bow Street over its lagging performance. The REIT has nearly completed a transformation to a pure-play residential landlord by selling its office properties.