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Mack-Cali Realty CEO Discusses Q2 2011 Results - Earnings Call Transcript

Stocks in this article: CLI

Back together with the unknown impacts of initiatives such as healthcare reform and Dodd Frank, continue to weigh heavily on businesses. At Mack-Cali, we continue to work with our tenants and the brokerage community to maintain healthy occupancy rates in our portfolio. We had significant leasing activity in the quarter with a total of approximately 1.1 million square feet in a 162 lease transactions. We ended the quarter at 88.1% occupancy, down slightly from last quarter’s 88.2% and our earnings were $0.69 per diluted share.

Clearly, the stress in the global economy and the challenges in the office markets, particularly the office markets outside of New York City continues to negatively impact on the economics of lease transactions. Rents rolled down this quarter by 9.1%, compared to last quarter of 6.2%.

For 2011, remaining leased rollovers are approximately 2.9% of base rent or just under $18 million. For 2012, we face rollovers of 10.9% of base rent or approximately $66.5 million. Among our accomplishments in the second quarter, was the successful leasing activity at our 125 Broadstreet in Downtown, Manhattan. That leasing, totaling almost 140,000 square feet included over 81,000 square feet lease to Continental Casualty Company, C&A one of the country’s largest commercial insurers and almost 60,000 square feet to General Reinsurance Corporation, known as Gen Re, a subsidiary of Berkshire Hathaway.

Clearly, we had a lot of activity within our portfolio in transactions ranging from the traditional small requirement to several transactions totaling between 60,000 and 70,000 square feet and so we were very active during the quarter. Also during the quarter, we completed the delivery and development of 55 Corporate Drive a 204,000 square foot built-to-suit facility for Sanofi Aventis, building as we’ve talked about on previous calls was pre-leased for 15 years and provide expansion space at Sanofi’s corporate headquarters in Bridgewater New Jersey.

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