Mack-Cali Realty Corp.
(
CLI
), a real estate investment trust (REIT), reported FFO (funds from
operations) of $62.1 million or 62 cents per share in the second
quarter of 2012, compared with $69.1 million or 69 cents in the
year-earlier quarter.
Reported FFO per share in the quarter beat the Zacks Consensus
Estimate by a penny. Total revenue was $178.5 million during the
reported quarter versus $179.2 million in the year-ago period.
Mack-Cali executed strong leasing activities during the quarter.
The company executed 139 leases at its consolidated in-service
portfolio spanning 0.9 million square feet, including 0.7 million
square feet of office space and 0.2 million square feet of
office/flex space.
Of the total leased space, 0.3 million square feet were for new
leases and 0.6 million were for lease renewals and other tenant
retention transactions. The consolidated in-service portfolio of
the company was 87.6% leased at quarter end compared with 87.9% in
the previous quarter.
Subsequent to the end of the quarter, Mack-Cali signed a ground
lease with Wegmans Food Markets for a site in Hanover Township, New
Jersey.
During the quarter, Mack-Cali completed the sale of $300 million
worth of 4.50% senior unsecured notes scheduled to mature in April
18, 2022. The company utilized the net proceeds of $296.8 million
to repay outstanding debt under its revolving credit facility.
Additionally, Mack-Cali redeemed $94.9 million of its 6.15%
senior unsecured notes scheduled to mature in December 15, 2012 and
$26.1 million of 5.82 % senior unsecured notes due March 15,
2013. The company funded the redemption price of
approximately $127.9 million from borrowing on its unsecured
revolving credit facility as well as cash on hand.
During the reported quarter, Mack-Cali declared a quarterly cash
dividend of 45 cents per share, which equates to an annualized
distribution of $1.80 At quarter-end, the company had total
debt of $1.9 billion, with a debt-to-undepreciated assets ratio of
33.9%, an interest coverage ratio of 3.0x, and cash and cash
equivalents of $19.3 million. For fiscal 2012, the company expects
FFO in the range of $2.52 -$2.62 per share.
Mack-Cali currently retains a Zacks #3 Rank, which translates
into a short term Hold rating. We maintain our long-term
Neutral recommendation on the stock. One of its competitors,
Boston Properties Inc
(
BXP
) also holds a Zacks #3 Rank.
Note: 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.
BOSTON PPTYS (BXP): Free Stock Analysis Report
MACK CALI CORP (CLI): Free Stock Analysis
Report
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