Commercial REIT Mack-Cali
Despite posting a drop in funds from operations to $0.86 per share from $1.05 a year ago, the company claims earnings per share have actually risen $0.02 when a one-time stock gain last year is backed out. Net income fell 43% as construction-related costs climbed. The company didn't record any such expense in the prior-year period. Meanwhile, revenue rose 27% to $193.7 million in the same period.
The company offered an upbeat assessment of the quarter and outlook for the year. While issuing a full-year FFO projection between $3.38 and $3.54 per share, in line with expectations, management said they believe the real estate market has reached an inflection point and is on the road to recovery.
That's good, especially since Mack-Cali is poised to enter the downtown Manhattan real estate market. Last quarter, the company signed an agreement with Manhattan real estate specialist SL Green
At quarter-end, Mack-Cali owned more than 34 million square feet of office properties in the Northeast and Mid-Atlantic. Its occupancy rate for in-service properties rose to 92.2% from 92% the prior quarter. That rate gives the company room to benefit from a rising leasing market. The company also boasted of its agreement to develop a 250,000-square-foot office building for Wyndham Worldwide
Mack-Cali's mix of locales makes it appealing, as a drop-off in one area may be offset from a rise in another, as opposed to having its holdings concentrated like SLGreen in Manhattan or Maguire Properties
For more REIT ideas, visit Motley Fool Income Investor, where senior analyst James Early brings you two dividend-paying stocks each month. A free trial is only a click away.
Fool contributor S.J. Caplan does not own shares of the companies discussed in this article.