Mack-Cali Reports $22M Second Quarter Loss
In its second quarter financial announcement, the company revealed that on Monday (Aug. 5) it secured a $150-million mortgage on its 111 River St. office building in Hoboken, NJ.
JERSEY CITY, NJ—Despite posting a loss of $22.1 million in the second quarter, Mack-Cali Realty Corp. CEO Michael J. DeMarco termed the second quarter as “excellent” and said the REIT will make significant progress on its waterfront strategy later this year.
Mack-Cali Realty reports net income available to common shareholders for the second quarter ended June 30, 2019 amounted to a loss of $22.1 million, or $ 0.43 per share, as compared to a loss of $1.3 million, or $0.05 per share, for the quarter ended June 30, 2018.
For the six months ended June 30, 2019, net income available to common shareholders equaled $222.4 million, or $2.24 per share, as compared to $41.8 million, or $0.39 per share, for the same period last year.
The company explains that a change in net income per share for the current quarter was driven by a non-cash redemption value adjustment as a result of the follow-on Rockpoint investment, as well as the loss of earnings associated with the company’s $791 million in asset sales over the last 12 months. The company also states incremental costs associated with its proxy fight totaled approximately $0.04 per diluted share. The net loss was offset by incremental leasing in both the office and residential portfolios.
“It was an excellent quarter for us in transactions involving financings, sales, acquisitions, equity raise, the Autograph Hotel opening (at Port Imperial), and in the multifamily business overall,” DeMarco says. “The suburban portfolio is active with pockets of real strength. The waterfront has slowed in activity, which we largely attribute to New Jersey incentive program not being renewed. We expect the program will be reinstated shortly. We have started our next round of dispositions for early 2020, and our substantial construction portfolio is on time and on budget. Lastly, we are committed to our waterfront strategy, and our investors in the upcoming quarters can expect us to make substantial progress in executing that strategy fully.”
In its second quarter financial announcement, the company revealed that on Monday (Aug. 5) it secured a $150-million mortgage on its 111 River St. office building in Hoboken, NJ, and used the proceeds of the refinancing of the 566,215-square-foot 13-story office building primarily to pay down unsecured corporate debt.
Mack-Cali leased a total of 226,646 square feet of commercial space, including 18,781 square feet on the waterfront, 195,383 square feet of Class A suburban and suburban, and 12,482 square feet of non-core space in the second quarter. The firm’s core portfolio office rental rates grew by 8.7% on a cash basis and 17.7% on a GAAP basis.
At the end of the second quarter, the core office portfolio was 79.8% leased, with the Class A suburban portfolio at 92.5%, suburban 79.4% and waterfront 74.7%.
Roseland’s 7,262-unit multifamily stabilized portfolio was 97.7% leased at June 30, 2019, with an average rent of $2,737 per unit. Roseland’s 2018 deliveries totaling 1,212 units were 99.4% leased as of June 30, 2019, including the second quarter stabilization of Front Street in Worcester, MA.
Roseland’s same-store portfolio, which has now grown to 5,673 units, experienced a 5.1% increase in NOI over second quarter 2018. Over the same period, revenues grew 4.4%, and expenses increased by 3.2%.