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Mack-Cali Divests Assets

Zacks Equity Research

Mack-Cali Realty Corp. (CLI), a real estate investment trust (:REIT), recently sold Moorestown Corporate Center in Moorestown, New Jersey for approximately $19.9 million. The property is 61.4% leased and consists of three buildings totalling 222,258 square feet. The property was acquired by a fund sponsored by the Keystone Property Group, a real estate investment and property development company.

Mack-Cali continues to reposition its portfolio through the disposal of non-strategic assets and acquisition of high-quality properties. Subsequent to the end of third quarter 2012, the company acquired the real estate development and management businesses of Roseland Partners, L.L.C., a leading multi-family residential community developer and operator in the Northeast. The transaction, worth $134.6 million, was funded through a combination of cash on hand and debt under its $600 million unsecured revolving credit facility.

Besides improving the quality of its portfolio, Mack-Cali intends to increase its liquidity by selling non-core assets. At the end of third quarter 2012, the company had cash and cash equivalents of $21.5 million.

Mack-Cali is primarily engaged in owning, leasing, managing, and developing Class A office and industrial/flex properties. The company focuses on high-barrier markets mostly in the suburban areas in the northeast and mid-Atlantic regions in the U.S., and derives most of its annualized base rents from New Jersey.

Presently, Mack-Cali has interests in 278 properties consisting of 272 office and office/flex properties spanning approximately 31.7 million square feet and six multi-family rental properties containing over 1,700 residential units.

Mack-Cali currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We maintain our long-term Neutral recommendation on the stock. One of its competitors, Boston Properties Inc (BXP) holds a Zacks #3 Rank which implies a short term Hold rating.

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