Cali Realty Corporation Announces Fourth Quarter and Year End Results for 1996

02/20/1997 Category: Earnings

1996 Funds from Operations (FFO) Increased by 9% from 1995

CRANFORD, NJ--February 20, 1997--Cali Realty Corporation (NYSE:CLI) today announced its results for the fourth quarter and the full year 1996.

The Company's full year 1996 FFO per share increased nine percent over 1995. Commenting on the results, Thomas A. Rizk, President and Chief Executive Officer, said "1996 was another successful year for Cali as we further implemented our focused strategy of becoming a super-regional REIT. Our 1996 improved performance came as a result of an aggressive and successful acquisition program." Cali Realty Corporation is a fully integrated, self-administered, publicly-owned real estate investment trust ("REIT").

FINANCIAL HIGHLIGHTS
For the quarter ended December 31, 1996, FFO before minority interest and after adjustment for straight-lining of rents amounted to $15.2 million or $.52 per share versus $8.1 million or $.51 per share for the quarter ended December 31, 1995. For the year ended December 31, 1996, FFO before minority interest and after adjustment for straight-lining of rents amounted to $45.2 million or $2.14 per share versus $27.4 million or $1.96 per share for the year ended December 31, 1995.

For the quarter ended December 31, 1996, cash available for distribution equaled $14.2 million or $.49 per share versus $7.5 million or $.47 per share for the same period last year. For the year ended December 31, 1996, cash available for distribution equaled $40.9 million or $1.93 per share versus $25.1 million or $1.79 per share for 1995.

For the quarter ended December 31, 1996, revenues totaled $32.4 million versus revenues of $17.5 million for the quarter ended December 31, 1995. For the year ended December 31, 1996, revenues totaled $95.5 million versus revenues of $62.3 million for the year ended December 31, 1995.

For the quarter ended December 31, 1996, net income before minority interest totaled $11.1 million or $.39 per share versus net income before minority interest of $5.0 million or $.31 per share for the quarter ended December 31, 1995. For the year ended December 31, 1996, income before gain on sale of property, minority interest, and extraordinary item totaled $31.5 million or $1.49 per share versus $17.1 million or $1.23 per share for the year ended December 31, 1995.

SUMMARY OF 1996 ACCOMPLISHMENTS
Commenting on the Company's recent activities, Rizk said, "The past year, and particularly the last few months, has been a period of tremendous accomplishments for Cali. The Robert Martin transaction culminated a six month period in which the Company completed $850 million in transactions, raised $545 million in equity capital, and geographically established itself as the northeast's premier super-regional REIT."

ACQUISITIONS AND NEW MARKETS:
In 1996, Cali purchased 15 properties aggregating approximately 3.3 million square feet, plus land to accommodate in excess of 4 million square feet of development, for a total cost of $459 million. Cali's most notable acquisition was the purchase of the Harborside Financial Center, a 1.9 million square foot office complex in Jersey City, NJ, for $292.6 million. Recognized by many as the largest commercial real estate transaction in New Jersey history, this purchase solidified the Company as the dominant landlord in the Jersey City office market. In addition to Cali's 600,000 square foot International Financial Tower office building, Harborside gives Cali control of 40 percent of the Class A office space in one of the highest performing sub-markets in New Jersey. In connection with the acquisition, Cali assumed $150 million in mortgage debt.

In 1996, Cali expanded into the suburban Philadelphia office market, acquiring seven office properties totaling over 760,000 square feet.

EQUITY OFFERINGS:
Cali's 1996 acquisitions were facilitated by two successful common stock offerings completed during the year. Through the offerings, which occurred in August and November, the Company issued a total of 21 million shares raising over $545 million. The November offering of $467 million was the largest post-IPO offering ever by a REIT.

MARKET CAPITALIZATION:
As a result of the acquisitions, stock offerings and financial performance in 1996, Cali's market capitalization increased 208 percent from $400 million at December 31, 1995 to $1.2 billion at year-end 1996. The Company's total capitalization, including $268 million in debt, was $1.5 billion at December 31, 1996, an increase of 179 percent over 1995. Additionally, Cali's debt-to-total capitalization was 18.2 percent at year-end 1996, compared to 25.7 percent at the end of 1995.

ROBERT MARTIN TRANSACTION
In January 1997, Cali Realty announced and completed a transaction with Westchester-based Robert Martin Company LLC. The $450 million deal, which is believed to be one of the largest private real estate transactions in REIT history, was financed by Cali with $220 million in cash, an assumption of $185 million in debt, and the issuance of $46 million in operating partnership units, convertible to common stock of Cali Realty Corporation. The Company funded the cash portion of the transaction primarily from cash reserves. The combined company continues to operate as Cali Realty Corporation.

With the transaction, Cali acquired 65 properties in Westchester County, NY and Fairfield County, CT, primarily office and office/flex space, aggregating approximately 4.1 million square feet, and the related operations of the Robert Martin Company, headquartered in Elmsford, Westchester County, NY. The transaction increased Cali Realty's portfolio square footage by 58 percent to approximately 11.4 million square feet.

LEASING INFORMATION
Cali Realty's portfolio of office buildings was 96.4 percent leased at December 31, 1996 compared to 96.9 percent at September 30, 1996.

During the fourth quarter 1996, the Company executed 31 leases totaling 201,875 square feet, consisting of 190,267 square feet of office space and 11,608 square feet of office/flex space; 88,752 square feet for new leases and 113,123 square feet for lease renewals.

A schedule is attached highlighting the fourth quarter's leasing statistics.

ABOUT THE COMPANY
Cali Realty Corporation is a fully integrated, self-administered, self-managed real estate investment trust (REIT) providing leasing, management, acquisition, development, construction and tenant-related services for its portfolio. The Company owns 123 properties, primarily office and office/flex buildings, totaling approximately 11.4 million square feet. All of the properties are located in New Jersey, New York, Pennsylvania and Connecticut.

Additional information on Cali Realty Corporation is available on the Company’s website at http://www.calirealty.com.

Certain information discussed in this press release may constitute forward-looking statements within the meaning of the Federal Securities law. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to different materially from those projected. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office, office/flex and industrial/warehouse properties; interest rate levels; the availability of financing; and other risks associated with the development and acquisition of properties, including risks that the development may not be completed on schedule, that the tenants will not take occupancy or pay rent, or that development or information on factors which could impact the Company and the statements contained herein, reference should be made to the Company's filings with the Securities and Exchange Commission including quarterly reports on Form 10-Q on Form 8-K, and annual reports on Form 10-L.


Cali Realty Corporation
Condensed Statements of Operations
(in thousands, except per share amounts)


Quarter Ended December 31,
1996 1995


Revenues $32,379 $17,536


Operating and other expenses (9,406) (5,913)
General and administrative (2,373) (922)
Depreciation and amortization (5,156) (3,175)
Interest expense (4,388) (2,500)


Total expenses (21,323) (12,510)


Income before minority interest 11,056 5,026


Minority interest (894) (888)


Net income $10,162 $ 4,138


Weighted average shares
outstanding 26,377 13,193


Net income per common share $ 0.39 $ 0.31


Dividends declared per
common share $ 0.45 $ 0.425








Cali Realty Corporation
Statements of Funds from Operations and
Cash Available for Distribution
(in thousands, except per share amounts)


Quarter Ended December 31,
1996 1995


Income before minority interest, gain on
sale of property and extraordinary item $11,056 $ 5,026
Add:
Real estate depreciation and amortization 4,865 2,954
Deduct:
Adjustment to rental income for
straight line rents (745) 153
Funds from Operations(1) after adjustment
for straight-lining of rents $ 15,176 $ 8,133

Deduct:
Non-incremental revenue generating
capital expenditures:
Capital improvements (188) (159)
Tenant improvements and lease
commissions (781) (429)


Cash available for distribution $ 14,207 $ 7,545


Weighted average shares/units
outstanding (2) 29,071 16,024


Per share/unit:
Funds from Operations $ 0.52 $ 0.51


Cash available for distribution $ 0.49 $ 0.47


Dividend $ 0.45 $ 0.425


Dividend payout ratios:
Funds from Operations (1) 86.20% 83.73%
Cash available for distribution 92.08% 90.26%


(1) Funds from Operations for both periods are calculated in
accordance with the National Association of Real Estate
Investment Trusts (NAREIT) definition, as published in March
1995.


(2) Assumes conversion of 2,694 (1996) and 2,830 (1995) weighted
average limited partnership units in Cali Realty, L.P. to
shares of Cali Realty Corporation.



Cali Realty Corporation
Condensed Statements of Operations
(in thousands, except per share amounts)


Year Ended December 31,
1996 1995


Revenues $95,472 $62,335
Gain on sale of property 5,658 --


Operating and other expenses (29,662) (20,705)
General and administrative (5,800) (3,712)
Depreciation and amortization (15,812) (12,111)
Interest expense (12,677) (8,661)


Total expenses (63,951) (45,189)


Income before minority interest 37,179 17,146


Minority interest (4,760) (3,508)


Extraordinary item-loss on early
retirement of debt (1) (475) --


Net income $ 31,944 $ 13,638


Weighted average shares
outstanding 18,461 11,122


Net income per common share:
Before extraordinary item $ 1.76 $ 1.23
Extraordinary item (.03) --
Net income $ 1.73 $ 1.23


Dividends declared per
common share $ 1.75 $ 1.66




(1) Net of minority interest's share of $86.






Cali Realty Corporation
Statements of Funds from Operations and
Cash Available for Distribution
(in thousands, except per share amounts)


Year Ended December 31,
1996 1995


Income before minority interest, gain on
sale of property and extraordinary item $ 31,521 $ 17,146
Add:
Real Estate depreciation and amortization 14,677 10,606
Deduct:
Adjustment to rental income for
straight line rents (978) (312)
Funds from Operations(1) after adjustment
for straight-lining of rents $ 45,220 $ 27,440

Deduct:
Non-incremental revenue generating
capital expenditures:
Capital improvements (1,037) (636)
Tenant improvements and lease
commissions (3,240) (1,716)


Cash available for distribution $ 40,943 $ 25,088


Weighted average shares/units
outstanding(2) 21,171 13,986


Per share/unit:
Funds from Operations $ 2.14 $ 1.96


Cash available for distribution $ 1.93 $ 1.79


Dividend $ 1.75 $ 1.66


Dividend payout ratios:
Funds from Operations (1) 81.93% 84.49%
Cash available for distribution 90.49% 92.41%


(1) Funds from Operations for both periods are calculated in
accordance with the new National Association of Real Estate
Investment Trusts (NAREIT) definition, as published in March
1995.


(2) Assumes conversion of 2,711 (1996) and 2,864 (1995) weighted
average limited partnership units in Cali Realty, L.P. to
shares of Cali Realty Corporation.


Cali Realty Corporation
Leasing Statistics
For Quarter Ended December 31, 1996


Leased Area Percentage
Rentable S.F. % Leased


September 30, 1996 4,137,641 96.9%
4th quarter leasing, net 11,741
4th quarter acquisitions 2,727,099
December 31, 1996 6,876,481 96.4%

Fourth Quarter Leasing Activity:


OFFICE SPACE

Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)


New Leases:
First generation space 1 6,507 $24.02 12.4
Second generation space 19 70,637 $21.54 6.5

Total new leasing 20 77,144


Renewals & extensions 11 113,123 $23.54 4.9

Total leasing 31 190,267



Capital Expenditures- Tenant Leasing
Second Generation Space: Improvements Commissions Total


Expend. committed-4th qtr.(1) $1,591,642(2) $1,131,097 $2,722,739
Rentable s.f. leased-4th qtr. 183,760 183,760 183,760
Cap ex. committed per r.s.f. $8.66 $6.16 $14.82


(1) Represents amounts committed but not necessarily expended during period.
(2) Equals estimated workletter costs, net of estimated profit and overhead.




Cali Realty Corporation
Leasing Statistics
For Quarter Ended December 31, 1996
(continued)


OFFICE/FLEX SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Net Rent (Years)


New leases:
First generation space 2 11,608 $12.07 8.9


Total Leasing: 2 11,608

Capital Expenditures- Tenant Leasing
Second Generation Space: Improvements Commissions Total


Expend. committed-4th qtr.(1) $0 0 0
Rentable s.f. leased-4th qtr. 0 0 0


(1) Represents amounts committed, but not necessarily expended during period.
(2) Equals estimated workletter costs, net of estimated profit and overhead.


Lease Renewals


Number of
Leases Rentable S.F.


Leases expiring-4th quarter 28 190,134
Leases renewed-4th quarter 11 113,123


Renewal percentage per r.s.f. 39% 60%



Expiring in future periods and
renewed in 4th quarter
(included in totals above) 6 92,892