Mack-Cali Realty Corporation Announces 20% Increase in Annual FFO Per Share

03/05/1998 Category: Earnings

CRANFORD, NJ--March 5, 1998--Mack-Cali Realty Corporation (NYSE:CLI) today announced its results for the fourth quarter and the full year 1997. The Company's full year 1997 funds from operations (FFO) per share increased 20% over 1996.

Financial Highlights
For the quarter ended December 31, 1997, FFO, after adjustment for straight-lining of rents, amounted to $34.0 million or $.63 per share, versus $15.2 million, or $.52 per share, for the quarter ended December 31, 1996. For the year ended December 31, 1997, FFO, after adjustment for straight-lining of rents, amounted to $111.8 million, or $2.56 per share, versus $45.2 million, or $2.14 per share, for the year ended December 31, 1996.

For the quarter ended December 31, 1997, cash available for distribution equaled $30.1 million, or $.56 per share, versus $14.2 million, or $.49 per share, for the same period last year. For the year ended December 31, 1997, cash available for distribution equaled $103.5 million, or $2.37 per share, versus $40.9 million, or $1.93 per share, for 1996.

For the quarter ended December 31, 1997, revenues totaled $74.5 million versus revenues of $32.4 million for the quarter ended December 31, 1996. For the year ended December 31, 1997, revenues totaled $249.8 million versus $95.5 million for the year ended December 31, 1996.

For the quarter ended December 31, 1997, income from operations before minority interest totaled $24.8 million, or $.46 per common share, versus income from operations before minority interest of $11.1 million, or $.39 per common share, for the same quarter in 1996. For the year ended December 31, 1997, income from operations before minority interest totaled $82.9 million, or $1.88 per common share, versus $31.5 million, or $1.49 per common share, for the year ended December 31, 1996. Income from operations excludes gain on sale of rental property, non-recurring charges, and extraordinary items.

Mack, Robert Martin Transactions Highlight Year
Commenting on the results, Thomas A. Rizk, chief executive officer, said "These positive results reflect the strength of our growth strategy, particularly our aggressive, accretive acquisitions program. Highlighting 1997 were the Robert Martin and Mack/Patriot transactions, which positioned us among the elite within the REIT sector. With the $1.3 billion in transactions already announced this quarter, we are well positioned to continue this growth throughout 1998."

The Robert Martin and Mack transactions in 1997 added 119 properties comprised of 13.3 million square feet to the Company's portfolio, representing 90% of Mack-Cali's portfolio growth for the year. The $1.1 billion transaction with the Mack Company and Patriot American Office Group in December 1997 added approximately 9.2 million square feet of primarily Northeast and Southwest office space to the Company's portfolio. The Company's $450 million transaction with Westchester-based Robert Martin Company in January 1997 added 4.1 million square feet to the Company's Northeast portfolio. The balance of the Company's portfolio growth consisted of 13 additional properties, aggregating approximately 1.5 million square feet, which was primarily office space in the Northeast.

In summary, Mack-Cali more than tripled the size of its portfolio in 1997, adding 132 properties totaling approximately 14.8 million square feet, for a total cost of approximately $1.8 billion.

Barry Lefkowitz, executive vice president and chief financial officer, stated, "Not only were we successful in growing Mack-Cali through acquisitions, we also completed several significant financing transactions, which further strengthened our balance sheet and enhanced our financial flexibility." In 1997, the Company completed a public offering of 13 million shares of common stock, which raised $517.6 million in proceeds, and added a $400 million unsecured credit facility, which increased the Company's total facilities to $500 million.

As a result of the Company's acquisition activities, equity offering and stock price growth in 1997, Mack-Cali's total market capitalization increased 133 percent from $1.5 billion at December 31, 1996 to $3.5 billion at year-end 1997.

1998 First Quarter Most Active in Company's History
So far in the first quarter of 1998, Mack-Cali has announced over $1.3 billion in acquisitions and financing transactions, representing the Company's most active quarter to date.

In January 1998, the Company announced $147 million in acquisitions, adding over 1.1 million square feet to its portfolio, primarily in the Northeast. Additionally, the Company completed a $96 million, 2.5 million share common stock offering in February.

Yesterday, the Company announced over $1.1 billion in transactions, including $435 million in acquisitions and $650 million in financing transactions, most significantly agreements to acquire Prudential Business Campus and Morris County Financial Center, aggregating 1.2 million square feet of office space in Parsippany, New Jersey; the 1.4 million square-foot office portfolio and related operations of Denver-based Pacifica Holding Company; an agreement to increase the Company's unsecured credit facility by $400 million to $800 million; and a commitment for a $150 million fixed-rate, secured mortgage loan.

Leasing Information
Mack-Cali Realty's portfolio of office buildings was 95.8% leased at December 31, 1997, unchanged from September 30, 1997.

During the fourth quarter 1997, the Company executed 102 leases totaling 963,254 square feet, consisting of 710,033 square feet of office space, 77,653 square feet of industrial/warehouse space, and 175,568 square feet of office/flex space; 293,192 square feet for new leases and 670,062 square feet for lease renewals.

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

About the Company
Mack-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. With the closing of pending transactions, Mack-Cali will own 240 properties, primarily office and office/flex buildings, totaling approximately 25.8 million square feet, serving over 2,300 tenants in 11 states, primarily in the Northeast, as well as the Southwest and West.

Additional information on Mack-Cali Realty Corporation is available on the Company's website at www.mack-cali.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.