EDISON, NJ-Mack-Cali Realty Corp. announced third-quarter earnings on its office building portfolio Thursday that were down by a third compared to last year. CEO Mitchell E. Hersh emphasized in a statement that the REIT’s recent move into the multifamily sector is expected to reverse the trend in profits.
“As we enter the fourth quarter, we are poised to capitalize on the many opportunities for growth resulting from our recent acquisition of Roseland Partners,” Hersh said, calling the move a “fundamental step in a strategic diversification.”
Earlier this month, Mack-Cali closed on the acquisition of Roseland and its six apartment developments with 1,769 units and 13 development projects, which will produce another 2,200 units. Last year, Mack-Cali established a joint venture with Ironstate Development to build two apartment towers at its Harborside Plaza development in Jersey City.
Third quarter profits were reported as $14.3 million for the Edison-based REIT, down from $21.2 million the year before. That amounts to profits of 16 cents a share this year, compared to 24 cents a share in 2011.
Meanwhile, Q3 revenue was down 1.3% to $173.2 million, and expenses were up by 7%, to $129.2 million. Its office portfolio was 87.5% leased as of Sept. 30, which Hersh called “healthy.”
Occupancy was down just 0.1% from the second quarter. Last year, occupancy was 88.2%
“While overall market activity continues to be sluggish,” Hersh said in his quarterly statement, “we are pleased that we’ve successfully completed lease transactions for 932,990 square feet.”
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