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Mark-Cali's Subsidiary Commences Leasing at Signature Place

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Mack-Cali Realty Corporation’s CLI subsidiary, Roseland Residential Trust, has initiated the leasing for its new luxury rental community, Signature Place. It boasts 197 newly-constructed apartments and is situated in Morris Plains, NJ. Earlier, Signature Place was an unoccupied office asset, owned by Mark-Cali.

Andrew Marshall, president and executive vice president of development at Roseland Residential Trust stated that "What was formerly an underperforming office asset has become the newest apartment community in an incredibly attractive market for high-end residential development and its success will serve as a model for future property conversions."  

The community is very conveniently located at 250 Johnson Road with easy access to recreational, dining and shopping centers. It has a stylish club room with multiple facilities like billiards, conference rooms, swimming pool and a movie theater to name a few.

The plush homes are also done up using the best quality products, well-furnished with all the modern amenities. A few apartments are also built with personal balconies and terraces.

Mack-Cali has made concerted efforts in recent years to transform from a sub-urban office REIT to a residential and geographically-focused office REIT. The company announced a three-year strategic initiative in September 2015, aimed at transforming itself into a more concentrated owner of New Jersey Hudson River waterfront and transit-oriented office properties as well as a regional owner of luxury multi-family residential properties. The company’s portfolio-repositioning strategy is focused on capturing the attention of people who prefer to live, work and play in the same area — a trend that drove development in several other cities in the United States. This group also gives much importance to transit options, and hence focusing on such areas remains a strategic choice for the company. Moreover, Several Fortune 500 companies have their headquarters in New Jersey, while others have a significant presence in the region. Armed with a skilled workforce and a well-established transit network, the region remains a top choice for the company to expand its business.

However, as part of portfolio-streamlining efforts, Mack-Cali has been aggressively disposing its assets. In fact, it completed $56 million of property sales in fourth-quarter 2017, bringing the tally for full-year 2017 property sales to $528 million. Further, the company has additional dispositions of around $400 million planned for 2018 and expects those to be completed by the end of the second quarter. This will mark completion of its major disposition program. While the measures are a strategic fit for the long run, the dilutive impact on earnings from such huge asset sales cannot be bypassed in the near term.

Shares of Mark-Cali have underperformed its industry in the past 12 months. The stock has lost 37.6% compared with industry’s decrease of 6.7%


Mark-Cali carries a Zacks Rank #5 (Strong Sell).

Stocks Worth a Look

A few better-ranked stocks from the same industry are Arbor Realty Trust ABR, Extra Space Storage Inc. EXR and Sotherly Hotels Inc. SOHO, all three carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arbor Realty Trust’s Zacks Consensus Estimate for 2018 FFO per share has been revised 2.3% upward to 90 cents over the past two months. Share price of the company has risen 5% in 12 months’ time.

Extra Space Storage’s FFO per share estimates for the current year have moved 2.5% north to $4.59 in two months’ time. Its shares have rallied 18% over a year.

Sotherly Hotels’ FFO per share estimates for 2018 have been revised approximately 1.9% upward to $1.05 over the past two months. The stock has gained 6.8% during the past 12 months.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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