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Mack-Cali (CLI) Misses Q1 FFO Estimates, Reaffirms Outlook
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Mack-Cali Realty Corp. reported first-quarter 2017 core funds from operations (“FFO”) per share of 56 cents, missing the Zacks Consensus Estimate by a penny. However, the figure was 14% higher than the prior-year quarter tally.
The year-over-year increase in core FFO per share was driven by higher base rents in 2017 and interest expense savings from refinancing of high rate debt.
Total revenue of $149.9 million exceeded the Zacks Consensus Estimate of $145.2 million, but fell 2% from the prior-year quarter.
Quarter in Detail
During the quarter, Mack-Cali executed 54 lease deals, spanning around 0.36 million square feet, at its consolidated in-service commercial portfolio. This comprised 15% for new leases, and 85% for lease renewals and other tenant-retention deals.
As of Mar 31, 2017, Mack-Cali’s consolidated Core, Waterfront and Flex properties were 90.4% leased, down 20 basis points (bps) sequentially.
Further, rental rate roll up for the first-quarter transactions in the company’s Core, Waterfront and Flex properties was 1.2% on a cash basis and 11.4% on a GAAP basis.
Liquidity
Mack-Cali exited first-quarter 2017 with cash and cash equivalents of $168.3 million, up from $31.6 million recorded at the end of the prior year.
Further, as of Mar 31, 2017, the company had a debt-to-undepreciated assets ratio of 43.8% compared with 41.6% as of Dec 31, 2016.
Guidance
Mack-Cali reaffirmed its 2017 FFO per share guidance at $2.25–$2.40. The Zacks Consensus Estimate for the same is currently pegged at $2.33.
Our Take
Mack-Cali has been making solid strides in its 20/15 strategic plan. This plan is aimed at transforming the company by focusing on waterfront and transit-based office holdings, and on luxury multi-family portfolio growth. It also includes planned exits from non-core markets, capital improvements in core assets. Such efforts are likely to drive growth and improve cash flow. However, earnings-dilutive effects of disposition in the near term remain headwinds. Rate hikes add to its woes.
Mack-Cali currently carries a Zacks Rank #3 (Hold).
Mack-Cali Realty Corporation Price, Consensus and EPS Surprise
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Prologis’ estimates for 2017 funds from operations (“FFO”) per share moved north nearly 3.8% to $2.76, over the past 30 days.
Moreover, PS Business Parks’ estimates for 2017 FFO per share climbed 1.2% to $5.93, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, 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.
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Mack-Cali (CLI) Misses Q1 FFO Estimates, Reaffirms Outlook
Mack-Cali Realty Corp. reported first-quarter 2017 core funds from operations (“FFO”) per share of 56 cents, missing the Zacks Consensus Estimate by a penny. However, the figure was 14% higher than the prior-year quarter tally.
The year-over-year increase in core FFO per share was driven by higher base rents in 2017 and interest expense savings from refinancing of high rate debt.
Total revenue of $149.9 million exceeded the Zacks Consensus Estimate of $145.2 million, but fell 2% from the prior-year quarter.
Quarter in Detail
During the quarter, Mack-Cali executed 54 lease deals, spanning around 0.36 million square feet, at its consolidated in-service commercial portfolio. This comprised 15% for new leases, and 85% for lease renewals and other tenant-retention deals.
As of Mar 31, 2017, Mack-Cali’s consolidated Core, Waterfront and Flex properties were 90.4% leased, down 20 basis points (bps) sequentially.
Further, rental rate roll up for the first-quarter transactions in the company’s Core, Waterfront and Flex properties was 1.2% on a cash basis and 11.4% on a GAAP basis.
Liquidity
Mack-Cali exited first-quarter 2017 with cash and cash equivalents of $168.3 million, up from $31.6 million recorded at the end of the prior year.
Further, as of Mar 31, 2017, the company had a debt-to-undepreciated assets ratio of 43.8% compared with 41.6% as of Dec 31, 2016.
Guidance
Mack-Cali reaffirmed its 2017 FFO per share guidance at $2.25–$2.40. The Zacks Consensus Estimate for the same is currently pegged at $2.33.
Our Take
Mack-Cali has been making solid strides in its 20/15 strategic plan. This plan is aimed at transforming the company by focusing on waterfront and transit-based office holdings, and on luxury multi-family portfolio growth. It also includes planned exits from non-core markets, capital improvements in core assets. Such efforts are likely to drive growth and improve cash flow. However, earnings-dilutive effects of disposition in the near term remain headwinds. Rate hikes add to its woes.
Mack-Cali currently carries a Zacks Rank #3 (Hold).
Mack-Cali Realty Corporation Price, Consensus and EPS Surprise
Mack-Cali Realty Corporation Price, Consensus and EPS Surprise | Mack-Cali Realty Corporation Quote
Stocks to Consider
Investors can also consider better-ranked stocks in the REIT space like Equity LifeStyle Properties, Inc. (ELS - Free Report) , Prologis, Inc. (PLD - Free Report) and PS Business Parks, Inc. . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Prologis’ estimates for 2017 funds from operations (“FFO”) per share moved north nearly 3.8% to $2.76, over the past 30 days.
Moreover, PS Business Parks’ estimates for 2017 FFO per share climbed 1.2% to $5.93, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, 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.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>