Why the Upgrade?
Mack-Cali, a real estate investment trust ("REIT") based in The Edison, NJ, is structured as a vertically integrated company. It offers a wide range of leasing, property management, acquisition, development, construction, legal, space-planning and architectural services under a single platform.
During second-quarter 2015, Mack-Cali executed 138 lease deals, spanning 1,377,100 square feet, at its consolidated in-service commercial portfolio. Of the total leased space, 214,577 square feet pertained to new lease deals, while 1,162,523 square feet consisted of lease renewals and other tenant retention deals.
Further, Mack-Cali revealed leasing of 918,992 square feet at its office and office/flex commercial real estate properties in Northern and Central New Jersey during the second quarter. The company also disclosed that it has leased 362,778 square feet at its office and office/flex commercial real estate properties in Westchester County, NY and Fairfield County, CT during the same period. Also, the company disclosed a new 11-year lease deal, for 114,798 square feet at Harborside Plaza 5 in Jersey City, with Brown Brothers Harriman.
Mack-Cali announced better-than-expected results for second-quarter 2015. The company's FFO per share of 46 cents exceeded the Zacks Consensus Estimate of 42 cents. Total revenue came in at $148.6 million, exceeding the Zacks Consensus Estimate of $144 million. The company also raised its full-year 2015 guidance.
However, exposure to suburban office assets, high expenses tied to multi-family residential investments, earnings-dilutive effects of disposition and an anticipated rise in interest rates are potential headwinds.
Investors interested in the REIT industry may consider stocks like CoreSite Realty Corporation COR , Ashford Hospitality Trust, Inc. AHT and Ashford Hospitality Prime, Inc. AHP . All three stocks sport a Zacks Rank #1 (Strong Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.