EDISON, NJ—Even as it continues to sign major leases in its suburban New Jersey wheelhouse, expect Mack-Cali Realty Corp. to increase its portfolio in urban cores both in its home state and beyond, executives said at the company’s first-quarter conference call.
In addition to a rebounding leasing market in New Jersey, the company is pursuing a partnership with a private operator in New York City and helping to recapitalize a private developer in the Washington, DC, suburbs. “Our mission is to have the best, highest quality suburban product, and for diversity to layer onto that expansion into urban cores,” said Mitchell E. Hersh, president and chief executive officer at Mack-Cali.
New Jersey, too, will see both urban and suburban activity, Hersh said. “You will continue to see some of our building concentration in these urban areas,” he said. “The young talent pool wants to be in Jersey City because of its urban cachet and housing stock.”
But don’t count out the suburbs, he added. Reports of the death of suburban office buildings are greatly exaggerated. “I don’t think you’ll take a stock of 500 million square feet of office space and get these people to the city when there are 10 trains a day,” Hersh said. “It’s a strong overreaction to say the end is here.”
For the quarter that ended March 31 this year, funds from operations (FFO) available to common shareholders were $67.3 million, up from $66.5 million in Q1 2010. Net income available to common shareholders for the quarter was $15.7 million, versus $14.5 million for the year-ago period. Total revenues for Q1 2011 were $186.3 million, down from $194.6 million last year.
At the end of the quarter, Mack-Cali’s portfolio was 88.2% leased, compared with 89.1% at the end of 2010. The company executed 148 leases at its consolidated in-service portfolio, totaling 1.1 million square feet. Of this, 247,784 square feet were for new leases and 880,811 square feet were for lease renewals and other tenant retention transactions.
Deals included in Northern New Jersey included: The Bank of Tokyo-Mitsubishi UFJ, Ltd., renewing 137,076 square feet at Harborside Financial Center Plaza 3 in Jersey City; Jefferies & Co. taking 62,763 square feet at 101 Hudson Street in Jersey City and extending 55,560 square feet at Harborside Financial Center Plaza 3; Movado Group renewing for five years 90,050 square feet at Mack-Cali Centre II in Paramus, NJ; and Fiserv Solutions renewing the entire 75,000-square foot building at 250 Johnson Road in Morris Plains, NJ.
In Central New Jersey, Lomurro, Davison, Eastman & Munoz, P.A., a Monmouth County-based law firm, renewed 26,827 square feet at 100 Willowbrook Road in Freehold, NJ; and The Travelers Indemnity Co., renewed 24,450 square feet at 343 Thornall Street in Edison, NJ. In suburban Philadelphia, Merchant Services signed for 24,000 square feet at 102 Commerce Drive in Moorestown, NJ, including a renewal for 19,200 square feet and an expansion of 4,800 square feet.
Even so, Hersh said he expects a further 1% decline in occupancy as the market continues to shake out. “Despite a challenging environment, our portfolio continues to outperform most of the markets where we operate,” Hersh said. “We did see tenants make long-term commitments to space, all good signs.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
