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Mack-Cali (CLI) Misses on Q1 FFO, Suspends '20 Guidance

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Mack-Cali Realty Corp’s (CLI - Free Report) first-quarter 2020 core funds from operations (FFO) per share of 33 cents missed the Zacks Consensus Estimate of 37 cents. Moreover, the figure compares unfavorably with the year-ago quarter’s reported tally of 40 cents.

The company’s same-store cash net operating income (NOI) for the office portfolio increased year over year. In addition, leasing activity increased in its office portfolio.

Quarterly revenues of $82.1 million missed the Zacks Consensus Estimate of $124.2 million. The revenue figure also came in 38.9% lower than the prior-year quarter’s $134.2 million.

The company has collected more than 94% of its total rent from office tenants and about 96.7% of its total rent from multifamily tenants for the month of April.

Mack-Cali has withdrawn its current-year guidance on uncertainties related to the coronavirus pandemic.

Shares of Mack-Cali rallied 4.93% to $15.54 during Thursday's regular trading session.

Quarter in Detail

As of Mar 31, 2020, Mack-Cali’s consolidated core office properties were 81.1% leased, reflecting an increase from 80.7% as of Dec 31, 2019. Notably, the Class A suburban portfolio was leased 90.1%, while Suburban and Waterfront portfolios were leased 79.6% and 78.5%, respectively, as of the same date.

Same-store cash revenues for the office portfolio climbed 7.1% and the same-store cash NOI was up 13.1%, year over year.

During the reported quarter, Mack-Cali executed 16 lease deals, spanning 173,240 square feet, in the company’s consolidated in-service commercial portfolio. This comprised 23.8% for new leases, and 76.2% for lease renewals and other tenant-retention transactions.

In addition, for the core portfolio, rental rate roll up for first-quarter 2020 transactions was 4.6% on a cash basis.

Further, Roseland's multi-family stabilized operating portfolio was 95.7% leased at the end of the quarter, expanding 70 basis points (bps) from the prior quarter’s end. The multi-family property’s same-store NOI climbed 9.8% for the March-end quarter.

Portfolio Activity

During the first quarter, Mack- Cali concluded the sale of One Bridge Plaza, an office building spanning 200,000 square foot in Fort Lee, NJ, for $36.7 million.

The company also sold two developable lands in Middletown, NJ, and Greenbelt, MD, for $7.6 million and $9.7 million, respectively.

Balance Sheet Position

The company exited first-quarter 2020 with $25.3 million in cash, down from $25.6 million as of Dec 31, 2019.

Mack-Cali’s net debt to adjusted EBITDA was 11.5X for the reported quarter compared with the prior-year quarter’s 9.5X.

Dividend Update

Mack-Cali announced a quarterly cash dividend of 20 cents per share in March. This was paid on Apr 14, to shareholders of record as of Apr 2, 2020.

Outlook

The company has withdrawn its guidance for the current year amid the coronavirus scare.

The company had earlier projected 2020 core FFO per share of $1.24-$1.36. This was backed by office occupancy of 79-81% and dispositions of $1.0-$1.2 billion for the ongoing year.

Mack-Cali currently carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

We now look forward to the earnings releases of other REITs like Simon Property Group, Inc. (SPG - Free Report) , Park Hotels & Resorts Inc. (PK - Free Report) and The Macerich Company (MAC - Free Report) . While Simon Property and Park Hotels & Resorts are slated to report quarterly numbers on May 11, The Macerich Company will release results on May 12.

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

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