Mack-Cali Realty Corp. (CLI) stated the leasing details of its office and office/flex commercial real estate assets in Westchester County, New York and Fairfield County, Connecticut in fourth-quarter 2013. In particular, the company leased 153,766 square feet of space in this portfolio during the said quarter.
Notably, Westchester County and Fairfield County are among the seven prime office markets of Mack-Cali. As per a report by Cushman & Wakefield, these two regions experienced a notable increase in leasing in fourth-quarter 2013. Further, the prospect looks promising in 2014 on the back of rising demand and expected acceleration in job growth in the area, as per Cushman & Wakefield.
In particular, during the fourth-quarter, Mack-Cali penned a new lease deal for 28,430 square feet at 4 Executive Plaza in Yonkers with the Montefiore Medical Center. Also, Mack-Cali renewed its lease with Bright Horizons Children’s Center – a subsidiary of Bright Horizons Family Solutions, Inc. (BFAM) – for 14,200 square feet of space at 77 Executive Boulevard in Elmsford and 7 Odell Plaza in Yonkers.
In addition, Mack-Cali inked a new lease deal with Solais Lighting, Inc. – a lighting division of PowerSecure International, Inc. (POWR) – for 21,957 square feet of space at 650 West Avenue in Stamford. The company also renewed lease for 12,060 square feet of space at 3 Westchester Plaza with Fabrication Enterprises, Inc.
As a matter of fact, last week, Mack-Cali disclosed the fourth-quarter 2013 leasing details of its office and office/flex commercial real estate assets in Northern and Central New Jersey. In particular, this real estate investment trust (REIT) leased 484,975 square feet of space in this portfolio during the said quarter. We expect these leasing transactions of Mack-Cali to prove accretive to its earnings going forward.
However, recently Mack-Cali reported lower-than-expected fourth quarter 2013 results. Despite a revenue beat, the company’s fourth-quarter FFO per share fell a penny short of the Zacks Consensus Estimate on higher expenses. Mack-Cali also lowered its 2014 outlook.
Amid persistent weakness in the suburban office properties in its markets, Mack-Cali is expanding into the multi-family residential sector and divesting a part of its office and office/flex assets. However, its aggressive disposition effort is anticipated to continue to have a dilutive impact on its financials in the near-to-medium term.
Consequently, Mack-Cali currently carries a Zacks Rank #5 (Strong Sell). However, Cousins Properties Incorporated (CUZ) is a better-ranked stock in the REIT industry having a Zacks Rank #2 (Buy).
Note: FFO, a widely accepted and reported measure of the performance of REITs is derived by adding depreciation, amortization and other non-cash expenses to net income.
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