Mack-Cali Realty Remains a Sell

Wed. November 26, 2008; Posted: 07:10 AM

Nov 26, 2008 (Zacks Investment Research via COMTEX) -- CLI | Quote | Chart | News | PowerRating -- Mack-Cali Realty Corporation (CLI) is a fully integrated, self-administered, and self-managed office real estate investment trust (REIT). The company owns, operates leases, manages, and develops Class A office and industrial/flex properties, primarily in suburban markets in the northeastern US.CLI reported 3Q08 FFO [funds from operations] of $1.02 per share compared to $0.93 in 3Q07. The increase was due to lower expenses and share counts. Operations held up relatively well in the 3rd quarter, although we have cut our 2009 FFO estimates by 6% due to macroeconomic conditions. Office occupancies in the company's core markets have increased at a rapid pace from last year. As such, Mack-Cali Realty will have a difficult time holding occupancy and increasing rents. We think suburban office landlords will have a tough time over the next 12 months.National job growth numbers are negative and corporations are not expanding. CLI has significant exposure to financial services, a sector that will continue to shed jobs in 2009. The yield is attractive, although we expect dividend coverage to turn negative next year; we think CLI will need to lower rents and increase concessions to retain current and attract new tenants.Read the full analyst report on CLI

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For full details on Mack Cali Realty Corp (CLI) click here. Mack Cali Realty Corp (CLI) has Short Term PowerRatings of 4. Details on Mack Cali Realty Corp (CLI) Short Term PowerRatings is available at This Link.

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