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Mack-Cali Realty Corporation Reports Fourth Quarter And Full Year 2017 Results
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PR Newswire
JERSEY CITY, N.J., Feb. 21, 2018
JERSEY CITY, N.J., Feb. 21, 2018 /PRNewswire/ -- Mack-Cali Realty Corporation (NYSE: CLI) today reported its results for the fourth quarter and full year 2017.
FOURTH QUARTER 2017 HIGHLIGHTS
- Reported net income (loss) of $(0.01) per diluted share for the quarter;
- Achieved Funds from Operations and Core Funds from Operations per diluted share of $0.50 for the quarter;
- Leased 439,070 square feet of office space; finished at 87.6% leased in its Core portfolio;
- Grew office rental rates by 9.6% on a cash basis and 17.9% on a GAAP basis;
- Roseland stabilized portfolio was 96.6% leased at December 31, 2017, as compared to 97.4% for the third quarter; 2017 lease-up properties containing 1,162 units currently 96.7% leased;
- Completed property sales of $56 million in the fourth quarter; $528 million full year ($416 million of property sales and $112 million of J.V. interests); and
- Declared $0.20 per share quarterly common stock dividend.
Michael J. DeMarco, Chief Executive Officer, commented "We made considerable progress during 2017 in repositioning our office portfolio and converting subordinate interests in our Roseland residential portfolio into majority owned positions. Our office disposition activity has allowed us to further streamline property operations and deepen our focus on core markets. As Roseland's developments are put into service, we anticipate its contribution to operating income will grow meaningfully over the next three years. While leasing in the fourth quarter did not meet our expectations, for 2018 the Company is laser focused on waterfront leasing and executing an additional $400 million of non-core dispositions. Our approach positions Mack-Cali for NAV accretion and stronger earnings growth potential in the years ahead."
FINANCIAL HIGHLIGHTS
* All per share amounts presented below are on a diluted basis.
Net income (loss) available to common shareholders for the quarter ended December 31, 2017 amounted to $2.6 million, or $(0.01) per share, as compared to $15.2 million, or $0.17 per share, for the quarter ended December 31, 2016. For the year ended December 31, 2017, net income available to common shareholders equaled $23.2 million, or $0.06 per share, as compared to $117.2 million, or $1.30 per share, for the same period last year.
Funds from operations (FFO) for the quarter ended December 31, 2017 amounted to $50.0 million, or $0.50 per share, as compared to $32.8 million, or $0.33 per share, for the quarter ended December 31, 2016. For the year ended December 31, 2017, FFO equaled $224.2 million, or $2.23 per share, as compared to $205 million, or $2.04 per share, for the same period last year.
For the fourth quarter 2017, Core FFO was $0.50 per share, as compared to $0.56 for the same period last year. For the full year 2017, Core FFO was $2.23 per share versus $2.15 for the same period last year.
OPERATING HIGHLIGHTS
Mack-Cali's consolidated Core office properties were 87.6 percent leased at December 31, 2017, as compared to 90.1 percent leased at September 30, 2017 and 90.6 percent leased at December 31, 2016.
Fourth quarter 2017 same store GAAP revenues for the office portfolio declined by 2.5 percent while same store GAAP NOI fell by 3.5 percent. For the year ended December 31, 2017, same store GAAP revenues increased by 2.2 percent driven by the ability to mark rents to market to partially offset the loss of office tenants in our waterfront properties. Same store GAAP NOI for the year ended December 31, 2017 improved by 2.6 percent as the Company began to benefit from operating efficiencies resulting from existing non-core office assets. Fourth quarter 2017 same store cash revenues for the office portfolio declined by 3.4 percent while same store cash NOI fell by 5.0 percent. For the year ended December 31, 2017, same store cash revenues increased by 3.6 percent. Same store cash NOI for the year ended December 31, 2017 improved by 5.0 percent.
For the quarter ended December 31, 2017, the Company executed 38 leases at its consolidated in-service commercial portfolio totaling 439,070 square feet. Of these totals, seven leases for 80,087 square feet (18 percent) were for new leases and 31 leases for 358,983 square feet (82 percent) were for lease renewals and other tenant retention transactions. Rental rate roll up for fourth quarter 2017 transactions was 9.6 percent on a cash basis and 17.9 percent on a GAAP basis.
The Company's residential same store portfolio increased net operating income by 6.0 percent for the fourth quarter and 4.2 percent for the year. The same store portfolio is comprised of 3,528 units that were 96.6 percent leased at year-end. The Company's 2017 lease-up properties, which consist of Urby Harborside, Chase II at Overlook Ridge and Quarry Place at Tuckahoe, leased at an accelerated pace. Collectively, the properties, which comprise 1,162 units, are currently 96.7 percent leased.
ACQUISITIONS AND DISPOSITIONS/TRANSACTION ACTIVITY
The Company continued its repositioning efforts in the fourth quarter with the sale of three properties for $56 million. Total disposition activity for the year totaled $528 million. Additional dispositions of approximately $400 million are planned for 2018 and expected to be completed by the end of the second quarter. This will conclude the Company's major disposition program with future sales occurring on a select one-off basis.
In the fourth quarter, the Company completed the acquisition of 25 Christopher Columbus, a residential development site on the Jersey City waterfront, for $53 million using the proceeds from the dispositions as part of a 1031 exchange. Development of 25 Christopher Columbus is expected to begin in 2018; the property when completed, will comprise 718 units.
2017 office property acquisitions totaled $395 million. In 2017, the Company also acquired residential development sites, including a mortgage note, totaling $212 million. The Company also acquired a multifamily property valued at $315 million using Rockpoint Capital and assuming a mortgage of $165 million. All of the acquisitions were funded in a tax efficient manner and with proceeds from the Company's disposition program and Rockpoint's capital.
DEVELOPMENT ACTIVITY
During the quarter, Roseland broke ground on Riverwalk C, a 40/60 waterfront joint venture project with Prudential. When completed, Riverwalk will contain 360 units. The $187 million project is being funded with a $112 construction loan and $75 million of equity from the JV. Mack-Cali's equity contribution totals $30 million.
BALANCE SHEET/CAPITAL MARKETS
As of December 31, 2017, the Company had a debt-to-undepreciated assets ratio of 46.5 percent compared to 46.2 percent at September 30, 2017 and 41.6 percent at December 31, 2016. At year end, the Company's weighted average cost of debt was 3.9 percent and the weighted average maturity on its debt was 4.0 years. Net debt to adjusted EBITDA for the quarter ended December 31, 2017 was 9.3x compared to 8.0x for the quarter ended September 30, 2017. The Company had an interest coverage ratio of 3.3x for the quarter ended December 31, 2017 compared to 3.4x for the quarter ended September 30, 2017 and 3.5x for the quarter ended December 31, 2016.
DIVIDENDS
In December 2017, the Company's Board of Directors declared a quarterly cash dividend of $0.20 per common share (indicating an annual rate of $0.80 per common share) for the fourth quarter 2017, which was paid on January 12, 2018 to shareholders of record as of January 3, 2018. The Company's Core FFO dividend payout ratio for the quarter was 40.0 percent.
SUBSEQUENT EVENTS
On January 29, 2018, the Company announced the appointment of David J. Smetana as chief financial officer and Nicholas Hilton as executive vice president of leasing of the General Partner. Mr. Smetana will begin to perform his duties as chief financial officer and Anthony Krug shall cease to serve as chief financial officer immediately following the filing of the Annual Report on Form 10-K for the year ended December 31, 2017. Mr. Krug will remain an employee of the General Partner and will provide transition services through March 31, 2018. Mr. Hilton's employment commenced on February 12, 2018 following the departure of Christopher DeLorenzo.
WATERFRONT MOVE-OUTS
Mack-Cali is expecting approximately 889,000 square feet of tenant move-outs in its Waterfront portfolio throughout 2018. The key tenants driving the move-outs and resulting vacancy on the Waterfront are as follows: Allergan lease expired for 215,000 square feet on December 31,2017, Wiley has 120,000 square feet expiring throughout 2018, AIG has 271,000 square feet expiring in the second quarter of 2018, SunAmerica has 70,000 square feet expiring in the second quarter of 2018, ICap has 90,000 square feet expiring in the third quarter of 2018 and the Hay Group has 24,000 square feet expiring in the third quarter of 2018. Deutsche Bank previously vacated 285,000 square feet which occurred in the fourth quarter of 2017.
GUIDANCE/OUTLOOK
The Company is providing projected initial net income and FFO per diluted share guidance for the full year 2018, as follows:
| | | Full Year | | |||
| | | 2018 Range | | |||
| Net income available to common shareholders | $ | 0.02 | - | $ | 0.12 | |
| Add: | | | ||||
| Real estate-related depreciation and amortization on continuing operations | 1.78 | | ||||
| Funds from operations | $ | 1.80 | - | $ | 1.90 | |
| Full Year 2018 Guidance Assumes: | $ in millions | ||
| | Low | | High |
| Office Occupancy (year-end % leased) | 84% | | 86% |
| Office Same Store GAAP NOI Growth Post Sale Portfolio | (18)% | | (16)% |
| Office Same Store Cash NOI Growth Post Sale Portfolio | (17)% | | (15)% |
| Multifamily Same Store NOI Growth Post Sale Portfolio | 3% | | 5% |
| Straight-Line Rent Adjustment | $10 | | $14 |
| FAS 141 Mark-to-Market Rent Adjustment | $5 | | $6 |
| Dispositions | $375 | | $425 |
| Base Building CapEx | $13 | | $15 |
| Leasing CapEx | $50 | | $70 |
| G&A | $45 | | $45 |
| Interest Expense | $83 | | $85 |
| 2017 to 2018 FFO per share Guidance roll-forward: | |||
| | |||
| | Low | | High |
| 2017 Core FFO Per Diluted Share | $2.23 | | $2.23 |
| | | | |
| Same-Store Operating NOI: | | | |
| Waterfront | (0.39) | | (0.37) |
| Other Office / Flex | (0.01) Werbung Mehr Nachrichten zur Veris Residential Aktie kostenlos abonnieren
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