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Mack-Cali (CLI) Q2 FFO, Revenues Miss Estimates, Stock Down

Mack-Cali Realty Corp’s CLI second-quarter 2020 core funds from operations (FFO) per share of 28 cents missed the Zacks Consensus Estimate of 31 cents. Moreover, the figure compares unfavorably with the year-ago quarter’s reported number of 40 cents.

The company’s same-store cash net operating income (NOI) for the office portfolio increased year over year. However, leasing activity decreased in its office portfolio.

Quarterly revenues of $72.7 million missed the Zacks Consensus Estimate of $118.8 million. The revenue figure also comes in 16.1% lower than the prior-year quarter’s $86.6 million.

In the second quarter, the company collected average office rents of 96% and average residential rents of 98%. Moreover, the company has collected about 98% of its total rent from office tenants and about 99% of its total rent from residential tenants for July.

Shares of Mack-Cali depreciated 8.39% to $15.54 during Monday's regular trading session.

The company did not issue the ongoing-year outlook due to the pandemic-related uncertainties.

Quarter in Detail

As of Jun 30, 2020, Mack-Cali’s consolidated core office properties were 80.3% leased, reflecting a decrease from 81.1% as of Mar 31, 2020. Notably, the Class A suburban portfolio was leased 89.5%, while Suburban and Waterfront portfolios were leased 77.4% and 78.6%, respectively, as of the same date.

Same-store cash revenues for the office portfolio climbed 4.3% and the same-store cash NOI was up 13.4%, year over year.

During the reported quarter, Mack-Cali executed eight lease deals, spanning 155,054 square feet, in the company’s consolidated in-service commercial portfolio. This comprised 6.8% for new leases, and 93.2% for lease renewals and other tenant-retention transactions.

In addition, for the core portfolio, rental rate roll up for second-quarter 2020 transactions was 3.4% on a cash basis.

Further, Roseland, its subsidiary engaged in multi-family residential operations, reported that its stabilized operating portfolio was 92.6% leased at the end of the quarter, contracting 310 basis points (bps) from the prior quarter’s end. The multi-family property’s same-store NOI decreased 5% for the June-end quarter.

Portfolio Activity

During the second quarter, Mack- Cali contracted to sell 111 River Street, an office building for $244.5 million and this is subject to due diligence.

Balance Sheet Position

The company exited second-quarter 2020 with $26.3 million in cash, up from $25.6 million as of Dec 31, 2019.

Mack-Cali’s net debt to adjusted EBITDA was 13.0X for the reported quarter compared with the prior-year quarter’s 9.5X.

Dividend Update

Mack-Cali announced a quarterly cash dividend of 20 cents per share in July. This was paid on Jul 24, to shareholders of record as of Jul 13, 2020.

Mack-Cali currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MackCali Realty Corporation Price, Consensus and EPS Surprise

MackCali Realty Corporation Price, Consensus and EPS Surprise

MackCali Realty Corporation price-consensus-eps-surprise-chart | MackCali Realty Corporation Quote

Other REIT Performances

SL Green Realty Corp. SLG reported second-quarter 2020 FFO per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compared unfavorably with the year-ago quarter’s $1.82.

CBRE Group Inc. CBRE delivered second-quarter adjusted earnings per share of 35 cents, beating the Zacks Consensus Estimate of 30 cents. However, the figure plummeted 57.1% year over year.

Duke Realty Corporation’s DRE second-quarter 2020 core FFO per share of 38 cents surpassed the Zacks Consensus Estimate of 37 cents. The figure also increased from the year-ago tally of 36 cents.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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