EDISON, NJ—Mack-Cali Realty Corporation began clearing its financial decks for its strategic repositioning in the third quarter, booking a net loss of $1.42 per diluted share in the third quarter by taking $164.2 million of impairment charges on properties the company says it intends to sell.
Funds from operations in the third quarter were $0.51 per share, up 6.25 percent from $0.48 per share in 2014. For the nine months, FFO increased 9.3 percent, to $1.41 per share from $1.29 per share in the prior year period.
Mack-Cali says its leased occupancy rose 3.5 percent vs. the second quarter, to 85.8 percent at the end of the third quarter.
“We continue to make progress on our ongoing repositioning efforts as we work to transform Mack-Cali,” says Michael J. DeMarco, president. “In our third quarter we put in place our plans to divest between $700 to $800 million of non-core assets, while selectively adding complementary assets that we expect will contribute to earnings as we move ahead. The Company is reenergized by the numerous opportunities to enhance our office portfolio and to profitably expand our multi-family platform. While this will take time we are excited that process is underway and that our team's efforts should result in the creation of sustained cash-flow and earnings in the coming years as we look to build additional value for our shareholders.”
In the third quarter, the company topped off one of its signature projects in Jersey City, URL Harborside Tower 1, a 763-unit apartment building, with expected lease up by year end 2016.
For the quarter ended September 30, 2015, Mack-Cali executed 94 leases at its consolidated in-service commercial portfolio totaling 955,570 square feet. Of these totals, 361,000 square feet were for new leases and 594,570 square feet were for lease renewals and other tenant retention transactions. Lease transactions included 345,905 square feet in what the company calls “core properties,” 222,824 square feet in “waterfront properties,” 177,820 square feet in “flex properties” and 209,021 square feet in “non-core properties.”
“Operationally, we had an excellent quarter and have launched a number of value-creating initiatives,” says Mitchell E. Rudin, chief executive officer. “This quarter marks the beginning a long-term effort to deliver enhanced and sustained returns for our shareholders.”
As previously reported by GlobeSt.com, in September the company announced a comprehensive three-year strategic initiative to transform the Company into dual-platform owner of waterfront and transit-oriented office properties and a regional owner of luxury multi-family properties. As part of its increased focus on “Gold Coast” waterfront properties in Jersey City Weehawken, Hoboken, and West New York, the Company identified approximately $700 million to $800 million of non-core assets that it intends to sell to help fund its capital plan and transformation.
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Steve Lubetkin
Steve Lubetkin is the New Jersey and Philadelphia editor for GlobeSt.com. He is currently filling in covering Chicago and Midwest markets until a new permanent editor is named. He previously filled in covering Atlanta. Steve’s journalism background includes print and broadcast reporting for NJ news organizations. His audio and video work for GlobeSt.com has been honored by the Garden State Journalists Association, and he has also been recognized for video by the New Jersey Chapter of the Society of Professional Journalists. He has produced audio podcasts on CRE topics for the NAR Commercial Division and the CCIM Institute. Steve has also served (from August 2017 to March 2018) as national broadcast news correspondent for CEOReport.com, a news website focused on practical advice for senior executives in small- and medium-sized companies. Steve also reports on-camera and covers conferences for NJSpotlight.com, a public policy news coverage website focused on New Jersey government and industry; and for clients of StateBroadcastNews.com, a division of The Lubetkin Media Companies LLC. Steve has been the computer columnist for the Jewish Community Voice of Southern New Jersey, since 1996. Steve is co-author, with Toronto-based podcasting pioneer Donna Papacosta, of the book, The Business of Podcasting: How to Take Your Podcasting Passion from the Personal to the Professional. You can email Steve at [email protected].
