Mack-Cali Realty Corp. (CLI), a fully integrated real estate investment trust (REIT), has recently completed its secondary offering of 7.2 million common shares at $33.00 each, including 0.9 million shares sold to the underwriters to cover the over-allotment options.
BofA Merrill Lynch, the investment banking and wealth management division of Bank of America Corporation (BAC); J.P. Morgan Securities LLC, the investment banking division of JPMorgan Chase & Co. (JPM); and Deutsche Bank Securities Inc. – the U.S. investment banking and securities arm of Deutsche Bank AG (DB) acted as joint book-running managers for the offering.
Mack-Cali raised net proceeds of $227.4 million from the offer. The company intends to utilize the proceeds to repay debt under its unsecured revolving credit facility and for general corporate purposes.
Mack-Cali is primarily engaged in owning, leasing, managing and developing Class A office and industrial/flex properties. The company focuses on high-barrier markets mostly in the suburban areas in the northeast and mid-Atlantic regions in the U.S., and derives most of its annualized base rents from New Jersey.
With debt-free ownership of the bulk of its portfolio, Mack-Cali offers a faster and more streamlined leasing process. In addition, the company is structured as a vertically integrated company, providing a full range of leasing, property management, construction, legal, space planning and architectural services under a single platform.
We maintain our Neutral rating on Mack-Cali, which presently has a Zacks #3 Rank, translating into a short-term Hold recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1–3 months.
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