Mack-Cali Realty Corp. (CLI) reported relatively modest third-quarter results, with FFO (fund from operations) of $75 million or 81 cents per share, compared to $82.1 million or $1.02 per share 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.
Total revenues were $193.6 million during the quarter versus $204.4 million in the year-ago period.
Despite challenging market conditions, Mack-Cali executed strong leasing activities during the quarter. The company signed 122 leases at its consolidated in-service portfolio spanning over 0.8 million square feet, including 0.6 million square feet of office space and 0.2 million square feet of office/flex space. About 0.15 million square feet of the total leases executed during the quarter were new leases, while 0.67 million square feet were lease renewals. The consolidated in-service portfolio of the company was 90.0% leased at the end of the quarter, compared to 90.6% in the previous quarter.
During the quarter, Mack-Cali sold $250 million 7.750% senior unsecured notes due Aug 2019, generating net proceeds of $246.2 million, which were utilized for general corporate purposes. At quarter end, the company had a total debt burden of $2.3 billion, with a debt-to-undepreciated assets ratio of 39.8% and an interest coverage ratio of 3.1x.
With the continued strong leasing activities and a healthy occupancy rate of over 90% across the portfolio, Mack-Cali anticipates the gradual recovery of the overall capital market and the housing sector in general. For the full year, Mack-Cali revised its earlier FFO guidance from $3.15 to $3.25 per share to $3.25 to $3.29 per share. For 2010, the company expects FFO in the range of $2.80 to $3 per share.
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