Thursday, real estate investment trust Mack-Cali Realty Corp. (CLI) posted a decline in Funds From Operations for the third quarter, compared to the year-ago period on lower revenue from its construction, real estate services and tenants.
Mack-Cali's FFO for the third quarter declined to $75.0 million from $82.10 million in the year-ago period. On a per share basis, FFO decreased to $0.81 from $1.02 in the prior year quarter. On an average, 12 analysts polled by Thomson Reuters expected FFO of $0.76 for the quarter. Analysts' estimates typically exclude one-time items.
Net income for the quarter declined to $19.1 million or $0.24 per share from $22.56 million or $0.34 per share in the prior-year period.
Mack-Cali's third quarter revenue decreased to $193.61 million from $204.36 million in the year-earlier quarter. Analysts' expected revenue of 175.26 million for the quarter.
Overall revenue dropped with a fall in revenue from the company's real estate, construction services and tenants, partially offset by an increase in base rent to $155.53 million from $147.80 million. Escalations and recoveries from tenants decreased to $24.99 million from $29.75 million, construction services revenue plunged to $7.76 million from $12.26 million last year. Real estate services revenue decreased to $1.80 million from $3.34 million in the previous year quarter, while other income revenue declined to $3.52 million from $11.18 million.
Mack-Cali's consolidated in-service portfolio was 90.0% leased at September 30, 2009, as compared to 90.6% at June 30, 2009.
For the quarter ended September 30, 2009, the company executed 122 leases at its consolidated in-service portfolio totaling 819,572 square feet, consisting of 576,171 square feet of office space and 243,401 square feet of office/flex space. Of these totals, 153,549 square feet were for new leases and 666,023 square feet were for lease renewals and other tenant retention transactions.
For the nine-month period, FFO was $219.6 million or $2.52 per share, compared to $228.21 million or $2.83 per share in the prior-year period. Net income decreased to $51.6 million or $0.71 per share from $55.86 million or $0.85 per share in the year-ago period as revenues decreased to $569.6 million from $591.86 million last year.
Mack-Cali increased its full year FFO guidance to $3.25 - $3.29 per share from the previously announced guidance of $3.15 to $3.25 per share. In 2010, it expects to report FFO in the range of $2.80 - $3.00 per share. Analysts currently expect the company to report FFO of $3.21 per share in 2009 and FFO of $2.92 per share in 2010.
The company expects net income of $0.85 - $0.89 per share with real estate-related depreciation and amortization charges of $2.40 per share for the full year. In 2010, the company expects to report net-income in the range of $0.50 - $0.70 per share with real estate-related depreciation and amortization charges of $2.30 per share.
CLI stock is currently trading at $31.29, up $1.72 or 5.68%, on a volume of 0.78 million shares on the NYSE.
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