Mack-Cali Realty Corp.
) came up with its guidance for full-year 2014. The company
expects funds from operations (FFO) in the range of $1.90 to
$2.10 per share, well below the Zacks Consensus Estimate of $2.27
per share. Shares fell 0.78% to $21.69 during the regular trading
session on the New York Stock Exchange.
In the midst of continued weakness in the company's core
office markets, Mack-Cali has been focusing on expanding its
holdings in the multi-family residential sector that has
traditionally been more of a stable product type. The growth in
the echo boomers population is particularly expected to drive
demand for these properties.
Mack-Cali has been engaged aggressively in strategic
divestitures that are helping it to reap funds that can be
efficiently deployed in its venture into the Multi-family sector.
As part of this diversification, the company acquired Roseland
Properties - the premier luxury multi-family developer, owner,
and manager - in Oct 2012.
The company made a series of divestitures and acquisition of
multi-family properties, the most recent one being the Riverwatch
Commons and Richmond Court property in New Brunswick, N.J. for
Notably, this real estate investment trust (REIT) reported
third-quarter 2013 FFO of 57 cents per share, in line with the
Zacks Consensus Estimate. However, this came below the year-ago
quarterly figure by 8 cents. The quarterly results reflected the
impact of a tough operating environment and declining occupancy
rate. Though total revenue increased 3.6% year over year to
$162.5 million, it fell short of the Zacks Consensus Estimate of
At that time, Mack-Cali narrowed its FFO per share guidance
for full-year 2013, and projected it in the range of $2.35-$2.39
per share (previous one being $2.32-$2.42). Currently, the Zacks
Consensus Estimate for 2013 FFO per share stands at $2.39.
Although the portfolio repositioning efforts through
multifamily apartment buyouts and office assets divestiture are
encouraging, we believe that the aggressive disposition efforts
are continuing to have a dilutive impact on its financials in the
near-to-medium term. But we believe that these strategic
initiatives will benefit Mack-Cali in the long run.
Mack-Cali currently carries a Zacks Rank #3 (Hold). However,
investors interested in the REIT industry may consider stocks
Getty Realty Corp.
Winthrop Realty Trust
Sabra Health Care REIT, Inc.
). While Getty Realty and Winthrop Realty have a Zacks Rank #1
(Strong Buy), Sabra Health Care carries a Zacks Rank #2
FFO, a widely used metric to gauge the performance of REITs,
is obtained after adding depreciation and amortization and other
non-cash expenses to net income.
MACK CALI CORP (CLI): Free Stock Analysis
WINTHROP REALTY (FUR): Free Stock Analysis
GETTY REALTY CP (GTY): Free Stock Analysis
SABRA HEALTHCR (SBRA): Free Stock Analysis
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