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Mack-Cali Realty Corp’s third-quarter 2018 revenues of $132.1 million declined 17.4% year over year. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $127.2 million.
Mack-Cali’s core funds from operations (FFO) per share of 43 cents came in lower than the year-ago figure of 57 cents. Moreover, it lagged the Zacks Consensus Estimate of 44 cents per share.
Q3 Highlights
As of Sep 30, 2018, Mack-Cali’s consolidated core office properties were 84.2% leased, which increased 100 basis points (bps) from the prior-quarter end. Same-store cash revenues for the office portfolio descended 4.8% while same-store cash net operating income (NOI) fell 6.5%.
During the reported quarter, Mack-Cali executed 52 lease deals, spanning around 833,840 square feet of space, at the company’s consolidated in-service commercial portfolio. This comprised 29% for new leases, and 71% for lease renewals and other tenant-retention deals.
Further, for the core portfolio, rental rate roll up for third-quarter 2018 deals was 9.9% on a cash basis. For new transactions, rental rate roll up was 6.5% on a cash basis, while for renewals and other tenant retention deals, it was 10.6% on a cash basis.
The company’s residential same-store portfolio remained 74.4% leased at the quarter’s end. Moreover, same-store NOI increased 1.2% in the quarter under review.
Guidance
Mack-Cali revised its projected core FFO per share to $1.81-$1.85. The estimate provided earlier was $1.80-$1.86. The Zacks Consensus Estimate for the same is currently pegged at $1.83.
The company projects office occupancy (year-end % leased) of 84-86% and dispositions of $300-$375 million for full-year 2018. This will mark completion of Mack-Cali’s major disposition program. Sales will occur on a select one-off basis in the future.
Our Take
Mack-Cali has been making solid progress, with respect to the 2015 strategic plan, aimed at focusing on waterfront and transit-based office holdings, and luxury multi-family portfolio growth. Nevertheless, such plans involve significant upfront costs, which might drag down the company’s profit margins.
In addition to these, the company has been disposing of assets. While such measures are a strategic fit for the long term, the dilutive impact on earnings from huge asset sales cannot be bypassed in the near term. Rate hike also remains another concern.
Mack-Cali Realty Corporation Price, Consensus and EPS Surprise
Performance & Earnings Release Dates of Other Companies
Boston Properties Inc.’s (BXP - Free Report) third-quarter 2018 funds from operations (FFO) per share of $1.64 surpassed the Zacks Consensus Estimate of $1.63. The figure also came in higher than the company’s prior-year quarter’s tally of $1.57.
Outfront Media Inc. (OUT - Free Report) and MedEquities Realty Trust, Inc. (MRT - Free Report) are expected to release their quarterly figures on Nov 5 and Nov 9, respectively.
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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Mack-Cali (CLI) Q3 FFO Lags Estimates, Revenues Decline
Mack-Cali Realty Corp’s third-quarter 2018 revenues of $132.1 million declined 17.4% year over year. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $127.2 million.
Mack-Cali’s core funds from operations (FFO) per share of 43 cents came in lower than the year-ago figure of 57 cents. Moreover, it lagged the Zacks Consensus Estimate of 44 cents per share.
Q3 Highlights
As of Sep 30, 2018, Mack-Cali’s consolidated core office properties were 84.2% leased, which increased 100 basis points (bps) from the prior-quarter end. Same-store cash revenues for the office portfolio descended 4.8% while same-store cash net operating income (NOI) fell 6.5%.
During the reported quarter, Mack-Cali executed 52 lease deals, spanning around 833,840 square feet of space, at the company’s consolidated in-service commercial portfolio. This comprised 29% for new leases, and 71% for lease renewals and other tenant-retention deals.
Further, for the core portfolio, rental rate roll up for third-quarter 2018 deals was 9.9% on a cash basis. For new transactions, rental rate roll up was 6.5% on a cash basis, while for renewals and other tenant retention deals, it was 10.6% on a cash basis.
The company’s residential same-store portfolio remained 74.4% leased at the quarter’s end. Moreover, same-store NOI increased 1.2% in the quarter under review.
Guidance
Mack-Cali revised its projected core FFO per share to $1.81-$1.85. The estimate provided earlier was $1.80-$1.86. The Zacks Consensus Estimate for the same is currently pegged at $1.83.
The company projects office occupancy (year-end % leased) of 84-86% and dispositions of $300-$375 million for full-year 2018. This will mark completion of Mack-Cali’s major disposition program. Sales will occur on a select one-off basis in the future.
Our Take
Mack-Cali has been making solid progress, with respect to the 2015 strategic plan, aimed at focusing on waterfront and transit-based office holdings, and luxury multi-family portfolio growth. Nevertheless, such plans involve significant upfront costs, which might drag down the company’s profit margins.
In addition to these, the company has been disposing of assets. While such measures are a strategic fit for the long term, the dilutive impact on earnings from huge asset sales cannot be bypassed in the near term. Rate hike also remains another concern.
Mack-Cali Realty Corporation Price, Consensus and EPS Surprise
Mack-Cali Realty Corporation Price, Consensus and EPS Surprise | Mack-Cali Realty Corporation Quote
Mack-Cali currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Release Dates of Other Companies
Boston Properties Inc.’s (BXP - Free Report) third-quarter 2018 funds from operations (FFO) per share of $1.64 surpassed the Zacks Consensus Estimate of $1.63. The figure also came in higher than the company’s prior-year quarter’s tally of $1.57.
Outfront Media Inc. (OUT - Free Report) and MedEquities Realty Trust, Inc. (MRT - Free Report) are expected to release their quarterly figures on Nov 5 and Nov 9, respectively.
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.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>