Mack-Cali Realty Corp. (CLI), a real estate investment trust (REIT), reported fourth quarter 2010 FFO (fund from operations) of $54.7 million or 59 cents per share, compared with $55.3 million or 60 cents in the year-earlier quarter. Fund from operations, 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.
Excluding non-recurring items, FFO for the reported quarter was 69 cents per share compared with 78 cents per share in the year-ago quarter. The recurring FFO for the quarter was in line with the Zacks Consensus Estimate. For full year 2010, FFO was $251.7 million or $2.71 per share compared with $274.8 million or $3.11 per share in 2009.
Total revenues were $192.2 million during the quarter versus $193.7 million in the year-ago period. For full year 2010, the company reported total revenues of $787.5 million compared with $758.9 million in the previous year.
Despite challenging market conditions, Mack-Cali executed strong leasing activities during the quarter. The company signed 140 leases at its consolidated in-service portfolio spanning over 1.2 million square feet, including 1.0 million square feet of office space and 0.2 million square feet of office/flex space.
About 0.4 million square feet of the total leases executed during the quarter were new leases, while 0.8 million square feet were lease renewals. The consolidated in-service portfolio of the company was 89.1% leased at the end of the quarter, compared with 89.0% in the previous quarter.
For full year 2010, Mack-Cali executed 540 leases at its consolidated in-service portfolio spanning over 4.4 million square feet, including 3.4 million square feet of office space and 0.9 million square feet of office/flex space. About 1.4 million square feet of the total leases executed during the year were new leases, while 3.0 million square feet were lease renewals.
At year-end 2010, the company had a total debt burden of $2.1 billion, with a debt-to-undepreciated assets ratio of 37.0%, an interest coverage ratio of 2.5x, and cash and cash equivalents of $21.9 million. The dividend payout ratio during the quarter was 76.2% compared with 75.2% in the year-earlier quarter.
With the continued strong leasing activities and a healthy occupancy rate of nearly 90% across the portfolio, Mack-Cali anticipates the gradual recovery of the overall capital market and the housing sector in general. For full year 2011, the company expects FFO in the range of $2.75 to $2.95 per share.
We maintain our ‘Neutral’ recommendation on Mack-Cali, which currently has a Zacks #3 Rank translating into a short-term ‘Hold’ rating. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Vornado Realty Trust (VNO), a competitor of Mack-Cali.
MACK CALI CORP (CLI): Free Stock Analysis Report
VORNADO RLTY TR (VNO): Free Stock Analysis Report
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