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Mack-Cali Realty Corp.  (CLI - Analyst Report) reported first quarter 2011 FFO (fund from operations) of $67.3 million or 70 cents per share, compared to $66.5 million or 72 cents per share in the year-earlier quarter. Fund from operations, 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.  FFO for the quarter was in line with the Zacks Consensus Estimate.

Total revenues were $186.3 million during the quarter versus $194.5 million in the year-ago period. The reported revenues for the quarter were ahead of the Zacks Consensus Estimate of $174.0 million.

Despite challenging market conditions, Mack-Cali executed strong leasing activities during the quarter. The company signed 148 leases at its consolidated in-service portfolio spanning over 1,128,595 square feet, including 882,130 square feet of office space and 246,465 square feet of office/flex space.

About 247,784 square feet of the total leases executed during the quarter were new leases, while 880,811 million square feet were renewals. The consolidated in-service portfolio of the company was 88.2% leased at the end of the quarter, compared to 89.1% in the previous quarter.

During the quarter, Mack-Cali completed the sale of 7.2 million shares of common stock generating proceeds of $227.4 million to repay borrowings under its revolving credit facility.

At the end of first quarter of 2011, the company had a total debt burden of $1.9 billion, with a debt-to-undepreciated assets ratio of 33.4%, an interest coverage ratio of 3.2x, and cash and cash equivalents of $10.7 million.

With the continued strong leasing activities, Mack-Cali anticipates the gradual recovery of the overall capital market and the housing sector in general. For full year 2011, the company expects FFO in the range of $2.61 to $2.81 per share.

Mack- Cali currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Boston Properties Inc. (BXP - Analyst Report) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

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