2016 Review

As part of Mack-Cali’s continuing strategy,

the Company will focus on the Hudson River Waterfront and other transit-based office markets, while expanding its multi-family operations. The portfolio enables the Company to provide a full complement of real estate opportunities to its diverse base of commercial and residential tenants.

OUR MISSION: Mack-Cali Realty Corporation, a premier owner of Hudson River Waterfront and transit-based office and luxury multi-family properties, strives to provide tenants and residents with the most innovative communities that empower them to re-imagine the way they work and live.

NY Waterway Ferry

Paulus Hook

Over 1 million riders annually
in 2016


101 Hudson Street

1,246,283 sq. ft.
42 stories

PATH Station

Exchange Place

Over 4 million riders annually
in 2016


Harborside 4A

207,670 sq. ft.
10 stories


Hyatt Regency

350 keys
9 stories


Harborside 1

400,000 sq. ft.
8 stories


Harborside 5

977,225 Sq. Ft.
34 stories


Harborside 2

761,200 sq. ft.
12 stories


Jersey City Urby at Harborside

762 units


Harborside 3

725,600 sq. ft.
12 stories



311 units



412 units



523 units


Harborside 4

An existing land bank with
potential to build a 1.2 million square foot office tower


Harborside Station

Over 2 million riders annually
in 2016


Harborside 8/9

An existing land bank with
potential to build 1.2 million square feet of office space

Growing Core
FFO Per Share

17.5% Annual      Growth





Office portfolio

Lease Spreads Expanding






Stabilized Portfolio




Portfolio Quality


asset sales


Accretive Acquisitions





Building a Strong

Multi-family Presence

5,614 units Operating

3,063 units in-construction

10,340 units future starts


Office Portfolio Leased







Total Shareholder Return 2016


To our Stockholders:

This is our second letter to update you on the process of our transformation. Often these letters contain photos of senior management smiling and looking content no matter how the company is doing. That is not us. We are not content with our success. We have had great success early in this turnaround, however we have a great deal more to do. Mack-Cali is embracing change and preparing for the future. We are so very proud of the entire team’s effort and of the culture evolving throughout our organization. Driven by a diverse group of individuals comprised of all ages, our future is bright and our leaders of tomorrow are contributing today with a passion and energy that is producing positive results.

In any turnaround, it is critical to create a corporate culture that produces a strong sense of teamwork, allowing the correct strategy to be executed effectively. The culture we have created is based on three core principles. First, always be smart about everything we do, which includes: leasing, capital market activities, acquisitions, dispositions, and all of the little things that together can make the Company great. We always look to be better than the day before in every aspect of what we do. Second, be aggressive about our opportunities, an area in which Mack-Cali can and does outperform. Third, and most important, maintain a true sense of fairness in all our dealings. This holds true with how we treat and appreciate our employees, how we value our tenants, and how we honor our word and closely guard our reputation. At the end of the day, having credibility as individuals and as an organization is critical to success.

Our culture has produced a long-term strategy creating real net asset value growth with a corresponding increase of 17.5% in core funds from operations for 2016 and a total return through the end of 2016 of 74.5% from the day we started on June 2, 2015. Our strategy remains focused on continuing to grow our Hudson River Waterfront real estate assets, both office and multi-family, ultimately creating a real sense of place. Furthermore, we plan to complement the waterfront efforts with best-in-class office and multi-family properties in other select, high-barrier-to-entry and transit-based locations. 2016 represented a pivotal year in Mack-Cali’s transformation. Our new management team, now in place for almost two years, has been focused on four primary disciplines to accomplish the transformation. Each of these areas is inextricably linked: leasing and operations, sales and acquisitions, development, and capital markets. We made great progress this year in each of these areas and believe that we are well on our way to completing our plan to unlock meaningful value and drive net asset value ahead of our original timetable and with more favorable results than anticipated.

Leasing and Operations

Our office percentage leased reached the highest level since before the Great Recession. Our team worked to close the year with leasing spread increases in our core portfolio of 20% on a GAAP basis and 10.9% on a cash basis, driving occupancy to 90.6% in our core portfolio, leasing roughly 2.8 million square feet. Supporting our success was healthy demand in our select markets. We have started 2017 by building on the recent success and are working to further drive our percentage leased as we move through the year. Our operationally focused efforts resulted in same-store net operating income growth of 10.1%, the highest growth in more than 15 years.

Some of these operational achievements were linked to disposing of non-strategic assets. We set and achieved our goal of $750 million of asset sales in 2016 and expect to complete an additional $600 million in 2017. We successfully exited non-core markets that include: Manhattan, Washington, DC, and other suburban markets. Through strategic acquisitions, we solidified our presence in several key markets including: the Hudson River Waterfront, Metropark, and Short Hills, all in New Jersey, and all complementing our existing holdings.

Our active portfolio management helps us achieve our stated goal of owning a fewer number of buildings each larger in size, concentrated in higher growth markets. With corresponding larger average tenant size, we have the opportunity to achieve greater operational efficiencies. These streamlining efforts have enabled us to spread in-house leasing and engineering teams among fewer assets, while maintaining high standards of service for tenants.

Our multi-family subsidiary, Roseland Residential Trust

A key Company accomplishment in 2016 came via the meaningful achievements completed by our best-in-class multi-family subsidiary. Specifically, Roseland executed a series of acquisitions and dispositions that solidified the ownership structure of its properties and increased cash flow. The closing of the Monaco Towers acquisition in Jersey City in the second quarter of 2017 culminated a string of 10 transactions whereby Roseland will reduce its subordinate interests to two assets from 10 at year-end 2015. From a development perspective, Roseland delivered 711 units in 2016 and is scheduled to deliver more than 1,300 units in 2017. The lease-up portfolio is highlighted by the March delivery of the iconic, 762-unit Urby in Jersey City. Since opening just two months ago, more than 150 apartments have been leased, a record pace for rental units in Jersey City.

Roseland continues to oversee a construction portfolio of 2,300 units, with planned starts from our land portfolio in 2017. Roseland’s acquisition, lease-up, and construction activities will lead to cash flow growth from $18 million in 2016 to a projected $59 million in 2018, with strong growth projected thereafter.

Roseland has proven to be a great engine of value creation, with an estimated internal net asset value at year-end 2016 of $1.35 billion, concentrated in operating and construction assets, with a geographic focus on the Hudson River Waterfront. Importantly, in early 2017 we closed on a $300 million strategic equity raise with the Rockpoint Group. The transaction will facilitate Roseland’s ongoing development and acquisition activities.

Capital Markets

With respect to our capital markets activities, we had an extremely active and productive year. During 2016, we retired or refinanced in excess of $500 million of high-cost debt, reducing our weighted average interest rate by 143 basis points to 3.79% while extending our weighted average debt maturities to 3.8 years. Through a combination of improved operations and asset dispositions, we have increased two key debt ratios, interest coverage from 2.78x to 3.28x and fixed charge coverage from 2.33x to 2.61x on a year-over-year basis. Strong progress continues on improving the positioning of our balance sheet. We added important financial flexibility by re-casting our $600 million revolving line of credit that now matures in 2021. The line is appropriately sized to support the Company’s growth initiatives.

The $300 million equity raise culminated a period since the beginning of 2016 where Roseland’s capital markets activity totaled $800 million.

We have made meaningful improvements to our capital structure. We are confident that our financial position will continue to improve throughout 2017, which will serve to enhance our funding options.

It has been an honor to serve our stakeholders these past 22 months. The team has made meaningful progress toward transforming and strengthening the Mack-Cali platform. As we stated earlier, we are not content with our results. We embrace the challenge before us with confidence and look forward to keeping you apprised of our progress.

We’d like to thank every single one of our 507 team members for their dedication and contribution to all of our successes in 2016, and our stockholders for your continued support.

April 7, 2017


2016 Annual Report

2016 Form 10-K