It has been about a month since the last earnings report for Mack-Cali Realty . Shares have added about 26.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mack-Cali due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Mack-Cali Q3 FFO Surpasses, Revenues Miss Estimates
Mack-Cali’s third-quarter 2020 core FFO per share of 30 cents outpaced the Zacks Consensus Estimate of 29 cents. However, the figure compares unfavorably with the year-ago quarter’s 38 cents.
Results reflect increase in same-store cash net operating income (NOI) for the office portfolio. However, leasing activity shrunk in the company’s office and multi-family portfolios. Moreover, same-store NOI decreased year over year in the multi-family portfolio.
Quarterly revenues of $77.7 million missed the Zacks Consensus Estimate of $118.3 million. The revenue figure also comes in 11.1% lower than the prior-year quarter’s $87.4 million.
During the third quarter, the company collected office rents of 96.9% and residential rents of 99.5%.
Quarter in Detail
As of Sep 30, 2020, Mack-Cali’s consolidated core office properties were 78.2% leased, reflecting a decrease from 80.3% as of Jun 30, 2020. Notably, the Class A suburban portfolio was leased 89%, while Suburban and Waterfront portfolios were leased 70% and 76.9%, respectively, as of the same date.
Same-store cash revenues for the office portfolio climbed 8.4% and the same-store cash NOI was up 15.4%, year over year.
During the reported quarter, Mack-Cali executed 10 lease deals, spanning 153,827 square feet, in the company’s core office portfolio. All these leases were lease renewals and other tenant-retention transactions.
In addition, for the core portfolio, the rental rate roll up for third-quarter 2020 transactions was 12.3% on a cash basis.
Further, Roseland, the company’s subsidiary engaged in multi-family residential operations, reported that its overall operating portfolio was 89.5% leased at the end of the quarter, contracting 310 basis points (bps) from the prior quarter’s end. The same-store multi-family portfolio, which comprised 4,838 units, witnessed a same-store NOI decline of 17.4% from the prior-year quarter.
Portfolio Activity
During the third quarter, the company concluded the Phase 1 sale of its Parsippany and Giralda Farms portfolio for a total price of $167.6 million. The portfolio comprises 11 office buildings and spans an area of 1.6 million square feet. Also, the company completed the sale of 9 Campus Drive, the first asset of its Phase 2 sales tranche in the same portfolio for $21 million. The office property spans an area of 156,495 square feet.
Additionally, the company completed the sale of 325 Columbia Turnpike for $25.8 million. The office property is located in Florham Park, NJ, and spans an area of 168,144 square foot.
Balance Sheet Position
The company exited third-quarter 2020 with $22.9 million in cash, down from $25.6 million as of Dec 31, 2019.
Mack-Cali’s net debt to adjusted EBITDA was 12.1X for the reported quarter compared with the prior-year quarter’s 11.4X.
Dividend Update
On Sep 30, the company announced the suspension of its dividend payments for the third and fourth quarters of 2020. The move has been taken to support its financial flexibility amid the uncertainties due to the pandemic.
Notably, the dividend suspension will enhance Mack-Cali’s financial flexibility during the pandemic. It will also help preserve the incremental capital required to support leasing initiatives at the company’s Harborside commercial office properties on the Jersey City waterfront.
Since Mack-Cali has satisfied the dividend obligation on taxable income expected for 2020, the move does not affect the company’s REIT status.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a flat path over the past two months.
VGM Scores
Currently, Mack-Cali has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Mack-Cali has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Image: Bigstock
Why Is Mack-Cali (CLI) Up 26.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Mack-Cali Realty . Shares have added about 26.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Mack-Cali due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Mack-Cali Q3 FFO Surpasses, Revenues Miss Estimates
Mack-Cali’s third-quarter 2020 core FFO per share of 30 cents outpaced the Zacks Consensus Estimate of 29 cents. However, the figure compares unfavorably with the year-ago quarter’s 38 cents.
Results reflect increase in same-store cash net operating income (NOI) for the office portfolio. However, leasing activity shrunk in the company’s office and multi-family portfolios. Moreover, same-store NOI decreased year over year in the multi-family portfolio.
Quarterly revenues of $77.7 million missed the Zacks Consensus Estimate of $118.3 million. The revenue figure also comes in 11.1% lower than the prior-year quarter’s $87.4 million.
During the third quarter, the company collected office rents of 96.9% and residential rents of 99.5%.
Quarter in Detail
As of Sep 30, 2020, Mack-Cali’s consolidated core office properties were 78.2% leased, reflecting a decrease from 80.3% as of Jun 30, 2020. Notably, the Class A suburban portfolio was leased 89%, while Suburban and Waterfront portfolios were leased 70% and 76.9%, respectively, as of the same date.
Same-store cash revenues for the office portfolio climbed 8.4% and the same-store cash NOI was up 15.4%, year over year.
During the reported quarter, Mack-Cali executed 10 lease deals, spanning 153,827 square feet, in the company’s core office portfolio. All these leases were lease renewals and other tenant-retention transactions.
In addition, for the core portfolio, the rental rate roll up for third-quarter 2020 transactions was 12.3% on a cash basis.
Further, Roseland, the company’s subsidiary engaged in multi-family residential operations, reported that its overall operating portfolio was 89.5% leased at the end of the quarter, contracting 310 basis points (bps) from the prior quarter’s end. The same-store multi-family portfolio, which comprised 4,838 units, witnessed a same-store NOI decline of 17.4% from the prior-year quarter.
Portfolio Activity
During the third quarter, the company concluded the Phase 1 sale of its Parsippany and Giralda Farms portfolio for a total price of $167.6 million. The portfolio comprises 11 office buildings and spans an area of 1.6 million square feet. Also, the company completed the sale of 9 Campus Drive, the first asset of its Phase 2 sales tranche in the same portfolio for $21 million. The office property spans an area of 156,495 square feet.
Additionally, the company completed the sale of 325 Columbia Turnpike for $25.8 million. The office property is located in Florham Park, NJ, and spans an area of 168,144 square foot.
Balance Sheet Position
The company exited third-quarter 2020 with $22.9 million in cash, down from $25.6 million as of Dec 31, 2019.
Mack-Cali’s net debt to adjusted EBITDA was 12.1X for the reported quarter compared with the prior-year quarter’s 11.4X.
Dividend Update
On Sep 30, the company announced the suspension of its dividend payments for the third and fourth quarters of 2020. The move has been taken to support its financial flexibility amid the uncertainties due to the pandemic.
Notably, the dividend suspension will enhance Mack-Cali’s financial flexibility during the pandemic. It will also help preserve the incremental capital required to support leasing initiatives at the company’s Harborside commercial office properties on the Jersey City waterfront.
Since Mack-Cali has satisfied the dividend obligation on taxable income expected for 2020, the move does not affect the company’s REIT status.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a flat path over the past two months.
VGM Scores
Currently, Mack-Cali has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Mack-Cali has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.