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Mack-Cali (CLI) Q1 FFO Tops Estimates, Revenues & NOI Dip Y/Y

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Mack-Cali Realty Corp’s (CLI - Free Report) first-quarter 2021 core funds from operations (FFO) per share of 18 cents surpassed the Zacks Consensus Estimate of 14 cents. However, the figure compares unfavorably with the year-ago quarter’s 33 cents.

Results reflect a year-over-year decline in same-store net operating income (NOI) for the office portfolio. Nonetheless, leasing activity at its multi-family portfolio remained decent as indicated by a sequential increase in leased rate.

In fact, per management, “We continued to streamline our portfolio through the disposal of $547 million of suburban office sales, executed a number of leases in our Harborside campus, and grew our multifamily platform with the launch of two new communities. We remain focused on simplifying our business, leasing and strengthening our balance sheet while managing our overhead."

Quarterly revenues of $76.09 million missed the Zacks Consensus Estimate of $90.74 million. The revenue figure was also 8.9% lower than the prior-year quarter’s number.

Quarter in Detail

As of Mar 31, 2021, Mack-Cali’s consolidated core office properties were 74.2% leased, reflecting a decline from 78.7% as of Dec 30, 2020. Notably, the Waterfront portfolio was 74.2% leased, down from 77.3% as of the fourth-quarter end.

Same-store revenues for the office portfolio declined 8.9% and the same-store cash NOI was down 12.1% year over year, indicating the adverse impacts of the pandemic and high vacancy across the portfolio.

In the reported quarter, Mack-Cali executed new or renewal/extension lease deals, spanning 78,901 square feet, in the company’s office portfolio.

Further, Roseland, the company’s subsidiary engaged in multi-family residential operations, reported that its overall operating portfolio was 92.8% leased at the end of the reported quarter, increasing from the prior-quarter end’s 90.2%. The multi-family portfolio, which comprised 5,825 units, witnessed a same-store NOI decline of 23.4% from the prior-year quarter.

Portfolio Activity

In the first quarter, the company sold 1.1 million square feet of suburban office assets for $292 million.

Balance Sheet Position

Mack-Cali exited first-quarter 2021 with $261.7 million in cash, up from $38.1million as of Dec 31, 2020.

The company’s net debt to adjusted EBITDA was 14.9X for the reported quarter compared with the prior-year quarter’s 11.5X.

Dividend Update

On Mar 19, 2021, the company announced that it will continue to suspend its common stock dividend for 2021. Notably, the dividend suspension reflects its projected 2021 taxable income and will enhance Mack-Cali’s financial flexibility amid the pandemic.

The company currently carries a Zacks Rank #4 (Sell).

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

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other REITs

PS Business Parks, Inc. (PSB - Free Report) reported first-quarter 2021 core FFO per share of $1.67, in line with the Zacks Consensus Estimate. However, the reported figure decreased 2.9% year over year.

Boston Properties Inc.’s (BXP - Free Report) first-quarter 2021 FFO per share of $1.56 beat the Zacks Consensus Estimate of $1.55. The quarterly figure also surpassed the mid-point of the company’s guidance by a cent, highlighting better-than-projected portfolio performance and higher fee income.

Highwoods Properties, Inc.’s (HIW - Free Report) first-quarter 2021 FFO per share of 91 cents surpassed the Zacks Consensus Estimate of 87 cents. However, FFO per share declined 2.2% from 91 cents recorded in the year-ago period.

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

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