Mack-Cali Quarterly Net Jumps 37 Percent

Mitchell E. Rudin, chief executive officer, left, and Michael J. DeMarco, president, Mack-Cali Realty Corporation

EDISON, NJ—Mack-Cali Realty Corp. says its quarterly net income rose 36.7 percent, to $48.4 million, or $0.54 per share, vs. $35.4 million, or $0.40 per share, for the quarter ended June 30, 2015. For the first half of the year, Mack-Cali says net income to common shareholders equaled $110.6 million, or $1.23 per share, compared with $32.9 million, or $0.37 per share, for the same period last year. The company says the half-year results benefited from $45.1 million of net gains from property and debt-related transactions (net of non-controlling interests in operating partnership of $5.3 million). ” Mack-Cali has made great strides in its realignment plans over the last 12 months and our progress is starting to flow through to our quarterly results,” says Michael J. DeMarco , president. “We have made substantial progress on our disposition program and have selectively acquired other properties that have strengthened our positioning in the Waterfront and Metropark submarkets. We are encouraged with our progress and excited by the opportunities in both our office and multi-family portfolios to extract additional value for our shareholders.” Funds from operations (FFO) for the quarter ended June 30, 2016 amounted to $64.1 million, or $0.64 per share, as compared to $46.5 million, or $0.46 per share, for the quarter ended June 30, 2015. For the six months ended June 30, 2016, FFO equaled $112.3 million, or $1.12 per share, as compared to $89.6 million, or $0.89 per share, for the same period last year.

OPERATING HIGHLIGHTS

Mack-Cali’s consolidated commercial in-service portfolio was 86.7 percent leased at June 30, 2016, as compared to 87.2 percent leased at March 31, 2016 and an increase of 4.4 percent as compared to June 30, 2015. The firm signed 74 leases in the second quarter totaling 660,373 square feet. Of these, 154,069 square feet were for new leases and 506,304 square feet were for lease renewals and other tenant retention transactions. “Our leasing pace is encouraging. During the quarter, we addressed over 275,000 square feet of our 2017 expirations and anticipate additional progress,” says Mitchell E. Rudin , chief executive officer. “As we embark on repositioning Harborside , we continue to attract technology, media and financial services users to this premier waterfront, mixed-use complex, as evidenced by our recent announcement of new leases with Omnicom and Zurich Insurance . These recent leases, along with our previously announced acquisition of 111 River Street in Hoboken, bring our current waterfront presence of 4.9 million square feet to 94.7 percent leased – strongly outperforming the Hudson Waterfront submarket.”

RECENT TRANSACTIONS

In July, Mack-Cali announced a series of transactions in the redeployment of disposition proceeds as part of its announced strategic plan. The company has sold approximately $400 million of assets year to date. Currently, Mack-Cali has contracts out for an additional $250 million of dispositions, $200 million of which it expects to close in the third quarter or early fourth quarter, with the remainder in early 2017. In addition, the company is currently marketing for sale $200 million in assets for total potential sale proceeds of $850 million. The proceeds from these dispositions is expected to be used to pay down debt, fund development, and purchase suitable acquisitions. The company has purchased two class A office assets for approximately $317 million in Hoboken, and Metropark, NJ, totaling approximately 830,000 square feet. Earlier this year, Mack-Cali also acquired three smaller assets for  approximately $34 million. The company’s acquisitions and dispositions are part of Mack-Cali’s broad-based portfolio realignment announced as part of their strategic plan last September on balance sheet management while focusing on increasing holdings in waterfront and transit-based locations. To achieve this realignment, the company has set a goal of $750 million in dispositions to help raise capital for reduction in debt, development funding, and key acquisitions. As previously reported by GlobeSt.com, the company announced that Roseland Residential Trust completed the acquisition of various partners’ interests in Port Imperial on the Hudson River Waterfront and in East Boston, as well as disposition of its subordinated ownership in two Port Imperial communities. In addition, Roseland entered into an agreement to sell Andover Place in Andover, Massachusetts.