Mack-Cali Realty Corp. (CLI): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:
Hurt by higher expenses, Mack-Cali's fourth-quarter 2013 FFO per share missed the Zacks Consensus Estimate by a cent and the year-ago quarter figure by 21%. 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. As such, we reiterate our Underperform stance on the stock.

Overview:

The real estate investment trust (REIT) Mack-Cali Realty Corporation is engaged in the ownership and operation of primarily Class A office and office/flex properties situated mainly in the Northeast. This Maryland corporation is currently focusing on expanding into the multi-family rental sector in the same markets.

Amid changing work force demographics and continued weakness in the suburban office properties in its markets, Mack-Cali has been divesting a notable part of its office and office/flex assets and deploying its capital to expand its holdings in the multi-family residential sector that has traditionally been more of a stable product type. The company is making this foray into the multi-family residential sector in its core Northeast markets both through acquisitions and development, both wholly owned and through joint ventures.

Mack-Cali owns or has interests in 279 properties as of Dec 31, 2013. These properties include 267 commercial properties, mainly class A office and office/flex properties that span approximately 31.0 million square feet. Apart from the commercial properties, the company's portfolio incorporates 12 multi-family rental properties including over 3,600 residential units, as well as developable land. The commercial properties are leased to around 2,000 commercial tenants.

Mack-Cali Realty Corp. (NYSE: CLI): Read the Full Research Report
 
MACK CALI CORP (NYSE: CLI): Free Stock Analysis Report
 
To read this article on Zacks.com click here.