The disparate results are linked, in part, to acquisition and disposition activity during Q1. The REIT completed its acquisition of 101 Hudson St. in Jersey City, paying $329 million for the 1.2-million-sf building, and also acquired a 350,000-sf office building in Holmdel for $24 million, and bought out its partner in One River Centre in Middletown, paying $10.5 million. Mack-Cali also sold off three office properties in Texas and Nebraska.

"In the first quarter, we continued to execute our strategic plan of increasing our Northeast holdings and disposing of assets in non-core markets," says Mitchell E. Hersh, Mack-Cali's president/CEO. In a conference call, Hersh did express some concerns about just how well that recovery is going, however. Reflecting on the fact that his company's portfolio-wide vacancy rate of just over 91% was virtually unchanged from Q4 2004, he told analysts that, "businesses remain reluctant to make decisions affecting their growth. We don't expect there to be a general recovery of the office market until there is clearer evidence of economic recovery."

As a result of that thinking, Hersh also told analysts that Mack-Cali was lowering its forecast for the full year just a bit. The consensus of analysts had been that the REIT would earn $3.60 per share this year, but Hersh predicted the full-year number will be in the $3.45 range. Mack-Cali currently owns or has interests in 270 office and office/flex properties totaling 30.4 million sf in the Northeast.