On Mar 7, 2014, we issued an updated research report on the
healthcare real estate investment trust (REIT) -
Mack-Cali Realty Corp.
On Mar 3, hurt by higher expenses, Mack-Cali reported
fourth-quarter 2013 funds from operations (FFO) of 52 cents per
share, a penny short of the Zacks Consensus Estimate and 21.2%
below the year-ago quarter figure of 66 cents. The company has
also lowered its 2014 outlook.
The persisting weakness in the company's core office markets
continues to impact its business with rent on the renewals
rolling down in 2013. Furthermore, with rental rates declining
over the last few years in the company's core markets, we
anticipate the company to experience lower rental rates at these
commercial properties on new leases than the current rates with
leases expiring in the quarters ahead.
Although the company is aiming at strengthening its portfolio
base through multifamily apartment buyouts and office assets
divestiture as well as leadership changes, its aggressive
disposition efforts would continue to have a dilutive impact on
its financials in the near-to-medium term.
Analysts turned more bearish on the stock's future performance.
This is evident from the movement witnessed in the Zacks
Consensus Estimate that decreased 7.8% to $1.90 per share for
2014 and 4.9% to $1.96 per share for 2015, over the past 7 days.
Mack-Cali currently carries a Zacks Rank #4 (Sell).
Stocks That Warrant a Look
However, some better-ranked stocks in the REIT industry include
Cousins Properties Incorporated
Liberty Property Trust
). All three stocks have a Zacks Rank #2 (Buy).
Note: FFO, a widely used metric to gauge the performance of
REITs, are obtained after adding depreciation, amortization and
other non-cash expenses to net income.
MACK CALI CORP (CLI): Free Stock Analysis
COUSIN PROP INC (CUZ): Free Stock Analysis
LIBERTY PPTY TR (LPT): Free Stock Analysis
PUBLIC STORAGE (PSA): Free Stock Analysis
To read this article on Zacks.com click here.