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Paul Bubny is editor of Real Estate New York .

NEW YORK CITY-Maintaining liquidity rather than chasing opportunities is a priority at the moment for Mack-Cali Realty Corp. That was the upshot of the presentation by Mitchell E. Hersh, president and CEO of the Edison, NJ-based REIT, at the Citi 2008 Global Property CEO Conference, held at the Breakers in West Palm Beach, FL yesterday.

“Right now you need to be very cautious about expending capital,” said Hersh. However, he emphasized that Mack-Cali is strongly capitalized and could be more open to acquisitions as the capital markets start to stabilize. “When it’s the right time to do something, we will be in a position to do it.”

In the Q&A period following his opening remarks, Hersh made no bones about his bearish stance, saying that he was “very concerned about the economy. There’s a real lack of clarity” as to the depth and breadth of market woes or their causes. He noted that in general the leasing environment has been “somewhat tepid” in the past few months and that tenants have been slow to make decisions, or have been erratic in the decisions they do make.

For example, Hersh said that in the past several months his company would have committed to developing a few new office towers in Jersey City, a Mack-Cali stronghold, but the would-be main tenants couldn’t make up their minds. Conversely, Mack-Cali stepped away from some opportunities to expand its Manhattan portfolio in part because the deals would have been too expensive or the underwriting too aggressive in the present climate, “and I don’t feel badly about doing that.” Mack-Cali’s sole Manhattan property is the 550,000-sf 125 Broad St., which it acquired last May for $273 million.

However, Hersh also emphasized the company’s position of strength, citing its $5-billion market cap and 294 properties totaling 34 million sf. Within that portfolio, the lease rollovers for this year and next–6% and 8%, respectively–are “very manageable.”

Hersh said he feels “pretty good” about 125 Broad and is hopeful that the Manhattan office market remains as “invincible” as others say it is. He opined that Manhattan is “practically a foreign country” in terms of its immunity to the downturns that other markets have experienced. In the Westchester and North Jersey markets, there has been “no indication” of a sharp increase in sublet space due to corporate downsizing. Looking beyond the tri-state region, Hersh said Mack-Cali’s acquisition of Gale Property Group had given the company a strong entry to the Boston market, which has picked up steam again after some softening.

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