Mack-Cali Realty Corporation Announces 29% Increase in Fourth Quarter FFO Per Share

02/23/1999 Category: Earnings

CRANFORD, NJ--February 23, 1999--Mack-Cali Realty Corporation (NYSE:CLI) today announced its results for the fourth quarter and full year 1998. The Company reported that its funds from operations (FFO) per diluted share for the fourth quarter 1998 increased 29.0% over the same period in 1997, with a 21.4% increase for full year 1998 over 1997.

FINANCIAL HIGHLIGHTS
For the quarter ended December 31, 1998, FFO, after adjustment for straight-lining of rents, amounted to $58.7 million, or $0.80 per share, versus $34.0 million, or $0.62 per share, for the quarter ended December 31, 1997, a per share increase of 29.0%. For the year ended December 31, 1998, FFO, after adjustment for straight-lining of rents, amounted to $216.9 million, or $3.06 per share, versus $111.8 million, or $2.52 per share, for 1997, a per share increase of 21.4%.

Cash available for distribution (CAD) for the fourth quarter 1998 equaled $52.9 million, or $0.72 per share, versus $30.1 million, or $0.55 per share, for the same quarter last year, an increase of 30.9% on a per share basis. For the year ended December 31, 1998, CAD $194.7 million, or $2.75 per share, versus $103.5 million, or $2.33 per share, for 1997, a per share increase of 18.0%.

Total revenues for the fourth quarter 1998 increased 81.1% to $134.9 million from $74.5 million for the same quarter last year. For the year ended December 31, 1998, total revenues amounted to $493.7 million, an increase of 97.6% over the $249.8 million in revenues last year.

Income from operations before minority interest for the fourth quarter 1998 totaled $40.4 million, or $0.55 per share, versus $24.8 million, or $0.45 per share, for the same quarter last year, an increase of 22.2%, on a per share basis. Income from operations before minority interest for the year ended December 31, 1998 totaled $151.5 million, or $2.11 per share, versus $82.9 million, or $1.86 per share, for 1997, a per share increase of 13.4%. Income from operations before minority interest excludes extraordinary items and non-recurring charges.

All per share amounts presented are on a diluted basis; basic per share information is included in the financial tables accompanying this press release.

The Company had 57,266,137 shares of common stock, 9,086,585 common operating partnership units and 250,256 $1,000-face-value preferred operating partnership units (6.75% annual rate) outstanding as of year end. The outstanding preferred units are convertible into 7,222,395 common operating partnership units. Assuming conversion of all preferred units into common units, the Company had a total of 73,575,117 shares/common units outstanding at December 31, 1998.

As of December 31, 1998, the Company had total mortgages and loans payable of approximately $1.4 billion, with a weighted average annual interest rate of 6.93%. Mack-Cali's total market capitalization was $3.7 billion at year-end 1998, with a debt-to-market capitalization ratio of 38.48%. The Company had an interest coverage ratio of 3.6 times for both the quarter and year ended December 31, 1998.

Commenting on the results, Thomas A. Rizk, chief executive officer said, "In 1998, we increased our FFO per share by over 20%, invested $793 million in property acquisitions and development, and increased our quarterly dividend for the fourth year in a row. We are extremely proud of Mack-Cali's performance in what was a challenging year for the real estate industry."

ACQUISITIONS AND COMPLETED DEVELOPMENT ACTIVITY
-- Northeast Presence Strengthened with Strategic Acquisitions --
In 1998, the Company increased its Northeast presence with the addition of 38 office and office/flex properties, aggregating 3.5 million square feet, for a total cost of approximately $490.3 million through acquisitions and properties placed in service.

Mitchell E. Hersh, president and chief operating officer, stated, "Mack-Cali strengthened its Northeast presence through several strategic acquisitions in 1998. Most notably, we acquired the Prudential Business Campus, which we renamed Mack-Cali Business Campus, and Morris County Financial Center. Both of these office complexes are located in the exclusive Parsippany, New Jersey submarket, bringing our total presence in this submarket to 1.3 million square feet - representing 27% of the total Class A office space in this submarket."

The following is a summary of the Company's 1998 acquisitions in the Northeast region:


  • 1/98: McGarvey portfolio in Moorestown, NJ (17 office properties, aggregating 748,660 square feet) for $47.5 million
  • 2/98: 500 West Putnam Ave. in Greenwich, CT (121,250-square foot office property) for $20.1 million
  • 2/98: 10 Mountainview Rd. in Upper Saddle River, NJ (192,000 square foot office property) for $24.8 million
  • 3/98: Mack-Cali Business Campus in Parsippany, NJ (six office properties, aggregating 859,946 square feet) for $148.4 million
  • 3/98: Morris County Financial Center in Parsippany, NJ (two office properties, aggregating 301,940 square feet) for $52.8 million
  • 5/98: 500 College Rd. East in Princeton, NJ (158,235-square foot office property) for $21.3 million
  • 6/98: 1709 NY Ave./1400 L St. NW in Washington, D.C. (two office properties aggregating 325,000 square feet) for $90.4 million
  • 7/98: 4200 Parliament Dr. in Lanham, MD (122,000 square foot office property) for $15.8 million
  • 7/98: 1510 Lancer Rd. in Moorestown, NJ (88,000-square foot office/flex property) for $3.7 million
  • 9/98: 40 Richards Ave. in Norwalk, CT (145,487-square foot office property) for $19.6 million
  • 9/98: 7 Skyline Dr. in Hawthorne, NY (109,000-square foot office property) for $13.4 million


The following is a summary of the 1998 properties placed in service by the Company in the Northeast region:


  • 1/98: 224 Strawbridge Dr. in Moorestown, NJ (74,000-square foot office property) for $7.8 million
  • 6/98: 2 Center Ct. in Company's Commercenter office park in Totowa, NJ (30,600-square foot office/flex property) for $2.2 million
  • 8/98: 228 Strawbridge Dr. in Moorestown, NJ (74,000 square foot office property) for $8.0 million
  • 10/98: 650 West Ave. in Company's Stamford Executive Park in Stamford, CT (40,000-square foot office/flex property) for $5.0 million


-- Increased Presence in Other Regional Markets --
During 1998, the Company also complemented its considerable Northeast presence with the acquisition of 22 office properties, aggregating over 2.3 million square feet, in several other markets for a total cost of $239.3 million. The acquisitions were located in Colorado (18 buildings - 1.4 million square feet), Texas (3 buildings - 568,703 square feet), and California (1 building - 305,618 square feet).

In summary, through acquisitions and placing properties in service during 1998, Mack-Cali increased its real estate portfolio over 26% to a total of 27.8 million square feet at December 31, 1998.

LAND AND REDEVELOPMENT PROPERTY ACQUISITIONS
-- Northeast Land and Redevelopment Property Purchases Increase Development Potential in Company's Core Markets --
Mack-Cali's Northeast presence was also strengthened by several land and redevelopment property acquisitions made by the Company in 1998, most notably the acquisition of the remaining developable land at the Mack-Cali Business Campus (with the acquisition of the office complex) and five acres of developable land adjacent to the Company's Harborside Financial Center in Jersey City, New Jersey.

The following is a summary of the Company's 1998 developable land and redevelopment property acquisitions in the Northeast region:


  • 2/98: 2115 Linwood Ave. (68,000-square foot redevelopment office project) for $5.2 million
  • 3/98: Mack-Cali Business Campus land (95 acres of land in the Company's office complex, with potential for up to 1.3 million square feet of development) for $27.5 million
  • 5/98: Ramland Road (232,000-square foot redevelopment office/flex property and 20 acres of developable land with potential for up to 100,000 square feet of office development) for $7.0 million
  • 5/98: American Financial Exchange (5 acres of land adjacent to Company's Harborside Financial Center, with potential for up to 1.8 million square feet of development) for $10.0 million
  • 9/98: Horizon Center land (128 acres of land adjacent to Company's office/flex complex, with development potential of up to 1.2 million square feet of development) for $1.7 million
  • 11/98: 3 Vaughn Dr. (10 acres of land adjacent to Company's 5 Vaughn Dr. property, with development potential for a 98,500 square foot office property) for $2.1 million
  • 12/98: 12 Skyline Dr. (three acres of land in the Company's South Westchester Executive Park, with development potential for a 47,000-square foot office/flex property) for $1.5 million

With the 1998 acquisitions, Mack-Cali's Northeast land bank can now accommodate up to 10 million square feet of additional development, in addition to the two redevelopment office projects currently being completed.

-- Joint Venture Alliance Adds Development Activity Outside Northeast --
During 1998, the Company also increased its development activity outside of the Northeast through a joint venture with Highridge Partners. The joint venture was formed to develop office and office/flex properties in California. Three projects, aggregating 552,200 square feet, are expected to be completed and placed in service in 1999.

FINANCING ACTIVITIES STRENGTHEN BALANCE SHEET
In 1998, the Company raised $288.4 million in common equity through the issuance of eight million shares of its common stock. Additionally, during the year, the Company issued operating partnership units, with a total value of approximately $126.2 million, in connection with several of its acquisitions.

On the financing side, Mack-Cali increased its borrowing capacity under its credit facilities from $500 million to $1.1 billion, with the interest rate on its $1 billion unsecured facility reduced by 20 basis points to 90 basis points over LIBOR.

Also in 1998, the Company obtained a $150 million mortgage loan from The Prudential Insurance Company of America at an effective annual interest rate of 7.10%. This mortgage loan, as well as the Company's $185.3 million, 7.18% mortgage loan with Teachers Insurance and Annuity Association (TIAA), can each be converted into unsecured debt at the Company's option.

Mack-Cali increased its quarterly dividend in 1998 by 10% to $0.55 per share, an indicated rate of $2.20 per share on an annualized basis.

Barry Lefkowitz, executive vice president and chief financial officer, stated, "Mack-Cali's financing activities during 1998 clearly strengthened our balance sheet in many ways. The execution of strategic financing arrangements, including the addition of $415 million in equity, the expansion of our unsecured credit line to $1 billion, and the 20 basis point reduction in the credit line's interest rate, demonstrates the financial community's continuing confidence in Mack-Cali. Our strong financial position serves as a sound foundation to support the Company's ongoing efforts to take advantage of growing opportunities in today's competitive environment."

LEASING INFORMATION
After net absorption of 153,889 leased square feet in the fourth quarter, Mack-Cali's in-service portfolio was 96.6% leased at year-end, a record high for the Company.

Commenting on the Company's leasing success in 1998, Mr. Hersh added, "Our 96.6% year-end occupancy level, coupled with rent increases achieved during 1998, demonstrate not only the high quality of our properties and operations, but also the strength of the markets in which we operate. Additionally, we continue to see positive trends in rental rates in our markets."

Mack-Cali Realty Corporation's portfolio of in-service properties was 96.6% leased at December 31, 1998, compared to 96.1% at September 30, 1998.

For the quarter ended December 31, 1998, the Company executed 198 leases totaling 983,613 square feet, consisting of 722,772 square feet of office space, and 251,591 square feet of office/flex space and 9,250 square feet of industrial/warehouse space; 259,187 square feet for new leases and 724,426 square feet for lease renewals and other tenant retention transactions.

For the year ended December 31, 1998, the Company executed 767 leases totaling 4,032,324 square feet, consisting of 3,119,812 square feet of office space, and 826,737 square feet of office/flex space and 85,775 square feet of industrial/warehouse space; 1,281,757 square feet for new leases and 2,750,567 square feet for lease renewals and other tenant retention transactions.

Attached are schedules highlighting the fourth quarter and full year leasing statistics of the Company.

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 or have interests in 255 properties, primarily office and office/flex buildings, totaling approximately 28.1 million square feet, serving over 2,400 tenants in 12 states, and the District of Columbia.

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.


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Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)


Quarter Ended December 31,
1998 1997
-----------------------------------------------------------------------------------------
Base rents $115,775 $60,887
Escalations & recoveries 15,084 8,666
Parking and other 3,210 1,665
Interest income 236 3,277
Equity in earnings of
unconsolidated joint ventures 636 -


Total revenues 134,941 74,495

Real estate taxes 12,882 7,478
Utilities 9,723 5,245
Operating services 18,839 9,857
General and administrative 6,864 5,260
Depreciation and amortization 22,379 11,194
Interest expense 23,896 10,680

Total expenses 94,583 49,714

Income from operations before
minority interest 40,358 24,781
Minority interest (1) (9,050) (2,971)
Income from operations 31,308 21,810
Minority interest - beneficial
conversion charge -- (26,801)
Non-recurring merger-related
charges (2) -- (42,463)


Net income(loss) $31,308 $(47,454)

PER SHARE DATA:
Income from operations - basic $0.55 $0.46
Net income(loss)- basic $0.55 $(1.00)


Income from operations - diluted $0.55 $0.45
Net income(loss)- diluted $0.55 $(1.00)



Dividends declared $0.55 $0.50



Basic weighted average common
shares outstanding 57,173 47,566
Diluted weighted average common
shares outstanding 66,265 53,073


(1) Excludes effect of beneficial conversion charge in 1997 which is deducted
below and minority interest's share of non-recurring merger related
charges.


(2) Net of minority interest's share in 1997 of $4,056.


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


Quarter Ended
December 31,
1998 1997
-----------------------------------------------------------------------------------------
Income from operations before
minority interest and
extraordinary item $40,358 $24,781
Add: Real estate depreciation
and amortization(1) 22,319 11,007
Deduct: Adj. to rental income for
straight-lining of rents(1) (3,984) (1,820)
Funds from operations(2) after adj.
for straight-lining of rents $58,693 $33,968
Deduct:
Non-incremental revenue generating
capital expenditures:
Capital improvements (1,371) (422)
Tenant improvements and leasing
commissions (4,403) (3,408)

Cash available for distribution $52,919 $30,138

Basic weighted average shares/units
outstanding (3) 65,987 52,111
Diluted weighted average shares/units
outstanding(4) 73,487 54,438

Per Share/Unit - Basic(5):
Funds from operations $0.83 $0.63
Cash available for distribution $0.74 $0.56


Per Share/Unit - Diluted:
Funds from operations $0.80 $0.62
Cash available for distribution $0.72 $0.55

Dividend per common share $0.55 $0.50

Dividend payout ratios:
Funds from operations-diluted 68.86% 80.13%
Cash available for distribution-diluted 76.38% 90.31%


(1) Includes FFO adjustments in 1998 related to Company's investments
in unconsolidated joint ventures.


(2) 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.


(3) Calculated based on weighted average common shares outstanding, assuming
redemption of operating partnership common units into common shares.


(4) Calculated based on shares and units included in basic per share/unit
computation, plus dilutive Common Stock Equivalents (i.e. convertible
preferred units, options and warrants).


(5) 1998 amount calculated after deduction for distributions to preferred unit
holders of $4,223.



Mack-Cali Realty Corporation
Consolidated Statements of Operations
(in thousands, except per share amounts)


Year Ended December 31,
1998 1997
-----------------------------------------------------------------------------------------
Base rents $427,528 $206,215
Escalations & recoveries 51,981 31,130
Parking and other 10,712 6,910
Interest income 2,423 5,546
Equity in earnings of
unconsolidated joint ventures 1,055 --

Total revenues 493,699 249,801

Real estate taxes 48,297 25,992
Utilities 38,440 18,246
Operating services 62,967 30,912
General and administrative 25,572 15,862
Depreciation and amortization 78,916 36,825
Interest expense 88,043 39,078

Total expenses 342,235 166,915

Income from operations before
minority interest 151,464 82,886
Minority interest (1) (32,513) (8,965)
Income from operations 118,951 73,921
Minority interest - beneficial
conversion charge -- (26,801)
Non-recurring merger-related
charges (2) -- (42,132)
Extraordinary item-loss on early
retirement of debt(3) (2,373) (3,583)


Net income $116,578 $1,405

PER SHARE DATA:
Income from operations - basic $2.13 $1.88
Net income - basic $2.09 $0.04


Income from operations - diluted $2.11 $1.86
Net income - diluted $2.07 $0.04


Dividends declared $2.10 $1.90

Basic weighted average common
shares outstanding 55,840 39,266
Diluted weighted average common
shares outstanding 63,893 44,156



(1) Excludes effect of beneficial conversion charge in 1997 which is deducted
below and minority interest's share of non-recurring merger- related
charges, gain on sale of rental property and extraordinary items.


(2) Net of minority interest's share in 1997 of $4,387.


(3) Net of minority interest's share of extraordinary item of $297 in 1998 and
$402 in 1997.



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


Year Ended
December 31,
1998 1997
-----------------------------------------------------------------------------------------
Income from operations before
minority interest & extraordinary item $151,464 $82,886
Add: Real estate depreciation
and amortization(1) 79,169 36,599
Deduct: Adj. to rental income for
straight-lining of rents(1) (13,684) (7,733)
Funds from operations(2) after adj.
for straight-lining of rents $216,949 $111,752
Deduct:
Non-incremental revenue generating
capital expenditures:
Capital improvements (3,075) (1,544)
Tenant improvements and leasing
commissions (19,192) (6,746)

Cash available for distribution $194,682 $103,462

Basic weighted average shares/units
outstanding (3) 63,438 43,356
Diluted weighted average shares/units
outstanding(4) 70,867 44,351

Per Share/Unit - Basic(5):
Funds from operations $3.16 $2.56
Cash available for distribution $2.81 $2.37

Per Share/Unit - Diluted:
Funds from operations $3.06 $2.52
Cash available for distribution $2.75 $2.33

Dividend per common share $2.10 $1.90

Dividend payout ratios:
Funds from operations-diluted 68.60% 75.41%
Cash available for distribution-diluted 76.44% 81.45%



(1) Includes FFO adjustments in 1998 related to Company's investments in
unconsolidated joint ventures.


(2) 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.


(3) Calculated based on weighted average common shares outstanding, assuming
redemption of operating partnership common units into common shares.


(4) Calculated based on shares and units included in basic per share/unit
computation, plus dilutive Common Stock Equivalents (i.e. convertible
preferred units, options and warrants).


(5) 1998 amount calculated after deduction of distributions to preferred unit
holders of $16,313.



Mack-Cali Realty Corporation
Consolidated Balance Sheets
(in thousands, except share amounts)

December 31,
ASSETS: 1998 1997
-----------------------------------------------------------------------------------------
Rental property
Land and leasehold interests $510,534 $374,242
Buildings and improvements 2,887,115 2,206,462
Tenant improvements 64,464 44,596
Furniture, fixtures and equipment 5,686 4,316
3,467,799 2,629,616
Less-accumulated depreciation
and amortization (177,934) (103,133)
Total rental property 3,289,865 2,526,483


Cash and cash equivalents 5,809 2,704
Investments in unconsolidated
joint ventures 66,508 --
Unbilled rents receivable 41,038 27,438
Deferred charges and other assets, net 39,020 18,989
Restricted cash 6,026 6,844
Accounts receivables 3,928 3,736
Mortgage note receivable -- 7,250


Total assets $3,452,194 $2,593,444


LIABILITIES AND STOCKHOLDER'S EQUITY:
Mortgages and loans payable $1,420,931 $972,650
Dividends and distributions payable 40,564 28,089
Accounts payable and accrued expenses 33,253 31,136
Rents received in advance and
security deposits 29,980 21,395
Accrued interest payable 2,246 3,489


Total liabilities 1,526,974 1,056,759
Minority interest of unitholders
in Operating Partnership 501,313 379,245
Commitments and contingencies
stockholder's equity:
Preferred stock, 5,000,000 shares
authorized, none issued -- --
Common stock, $0.01 par value, 190,000,000
shares authorized, 57,266,137 and
49,856,289 shares outstanding 573 499
Additional paid-in capital 1,514,648 1,244,883
Dividends in excess of net earnings (91,314) (87,942)


Total stockholder's equity 1,423,907 1,157,440


Total liabilities and
stockholder's equity $3,452,194 $2,593,444



Mack-Cali Realty Corporation
Leasing Statistics
For The Quarter Ended December 31, 1998


WHOLLY-OWNED PORTFOLIO


SUMMARY OF SPACE LEASED DURING PERIOD

IN-SERVICE PROPERTIES:
Square feet leased at September 30, 1998 25,693,568
Net leasing activity in 4th quarter 1998 115,058
Leased s.f. from 4th quarter 1998 acquisitions 40,000
Occupancy adjustment(1) (1,169)

Square feet leased at December 31, 1998 25,847,457

Percent leased at December 31, 1998 96.6%



Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31, 1998 107,000


OFFICE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
-----------------------------------------------------------------------------------------
New Leases:
First generation space 3 28,341 $21.00 5.0
Second generation space 48 164,588 $23.77 6.9
Total new leasing 51 192,929 $23.36

Renewals & extensions 86 403,429 $20.21 4.1
Other retained tenants 33 126,414 $23.63 5.3
Total leasing 170 722,772

Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total

Expend. committed-4th qtr $4,501,474 $2,973,185 $7,474,659
Rentable s.f. leased-4th qtr 694,431
Cap. ex. committed
per r.s.f. per year $1.04 $0.73 $1.77


(1) Represents the net change in the amount of space leased/expired since the
prior reporting period in excess of 100 percent of the gross rentable area
of certain properties in the portfolio.


(2) Represents amounts committed, but not necessarily expended during period.


(3) Equals estimated workletter costs, net of estimated profit and overhead.



OFFICE/FLEX SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
-----------------------------------------------------------------------------------------
New Leases - Second
generation space 7 65,808 $12.81 10.3


Renewals & extensions 15 172,543 $14.33 4.2
Other retained tenants 3 13,240 $17.63 5.6
Total leasing 25 251,591


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total


Expend. committed-4th qtr $481,569 $494,786 $976,355
Rentable s.f. leased-4th qtr 251,591
Cap. ex. committed
per r.s.f. per year $0.23 $0.37 $0.60


INDUSTRIAL/WAREHOUSE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
-----------------------------------------------------------------------------------------
New Leases-Second
generation space 1 450 $16.00 1.0


Other retained tenants 2 8,800 $ 9.74 5.2
Total leasing 3 9,250


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total
-----------------------------------------------------------------------------------------
Expend. committed-4th qtr $17,411 $8,536 $25,947
Rentable s.f. leased-4th qtr 9,250
Cap. ex. committed
per r.s.f. per year $0.35 $0.19 $0.53


(1) Equals Atriple net@ rent plus common area costs and real estate taxes.


(2) Represents amounts committed, but not necessarily expended during period.


(3) Equals estimated workletter costs, net of estimated profit and overhead.



LEASE RENEWALS


Number of
Leases Rentable S.F.
-----------------------------------------------------------------------------------------
Leases expiring 190 868,555

Leases renewed & extended 101 575,972
Other retained tenants 38 148,454
Total leases retained 139 724,426
Percent retained 73.2% 83.4%

Future expirations renewed or
relet (included in totals above) 50 453,619


-------------------------------

JOINT VENTURE PORTFOLIO



SUMMARY OF SPACE LEASED DURING PERIOD



IN-SERVICE PROPERTIES:


Square feet leased at September 30, 1998 524,025
Net leasing activity in 4th quarter 1998 26,728
Leased s.f.- 4th quarter 1998 acquisitions 74,960

Square feet leased at December 31, 1998 625,713

Percent leased at December 31, 1998 82.3%

Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31,1998 601,300




Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
-----------------------------------------------------------------------------------------
Leasing Activity:
Other retained tenants 1 26,728 $34.00 4.4


Capital Expenditures - Second Generation Space(1):

Tenant Leasing
Improvements(2) Commissions Total
-----------------------------------------------------------------------------------------
Expend. committed-4th qtr $534,560 $203,935 $738,495
Rentable s.f. leased-4th qtr 26,728
Cap. ex. committed
per r.s.f. per year $4.54 $1.73 $6.27


(1) Represents amounts committed, but not necessarily expended during period.


(2) Equals estimated workletter costs, net of estimated profit and overhead.


Mack-Cali Realty Corporation
Leasing Statistics
For The Year Ended December 31, 1998


WHOLLY-OWNED PORTFOLIO


SUMMARY OF SPACE LEASED DURING PERIOD

IN-SERVICE PROPERTIES:
Square feet leased at December 31, 1997 21,045,625
Net leasing activity in 1998 252,337
Leased s.f. - 1998 acquisitions 4,566,659
Occupancy adjustment(1) (17,164)

Square feet leased at December 31, 1998 25,847,457

Percent leased at December 31, 1998 96.6%

Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31, 1998 107,000


OFFICE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
-----------------------------------------------------------------------------------------
New Leases:
First generation space 11 142,040 $20.29 5.0
Second generation space 224 881,488 $24.25 5.8
Total new leasing 235 1,023,528 $23.70

Renewals & extensions 275 1,498,610 $18.64 5.3
Other retained tenants 137 597,674 $22.18 6.0
Total leasing 647 3,119,812

Capital Expenditures - Second Generation Space(1):


Tenant Leasing
Improvements(2) Commissions Total
-----------------------------------------------------------------------------------------
Expend. committed $18,375,792 $11,620,969 $29,996,761
Rentable s.f. leased 2,977,772
Cap. ex. committed
per r.s.f. per year $0.98 $0.65 $1.63


(1) Represents amounts committed, but not necessarily expended during period.


(2) Equals estimated workletter costs, net of estimated profit and overhead.



OFFICE/FLEX SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
-----------------------------------------------------------------------------------------
New Leases:
First generation space 1 10,100 $13.08 5.0
Second generation space 29 211,403 $11.20 6.1
Total new leasing 30 221,503 $11.28


Renewals & extensions 64 562,940 $13.28 4.8
Other retained tenants 15 42,294 $15.65 4.7
Total leasing 109 826,737


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total
-----------------------------------------------------------------------------------------
Expend. committed $1,475,911 $1,353,555 $2,829,466
Rentable s.f. leased 816,637
Cap. ex. committed
per r.s.f. per year $0.33 $0.35 $0.68


INDUSTRIAL/WAREHOUSE SPACE


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent(1) (Years)
-----------------------------------------------------------------------------------------
New Leases- Second
generation space 3 36,726 $ 9.51 5.7


Renewals & extensions 3 13,190 $10.18 3.9
Other retained tenants 5 35,859 $ 8.80 2.1
Total leasing 11 85,775


Capital Expenditures - Second Generation Space(2):


Tenant Leasing
Improvements(3) Commissions Total
-----------------------------------------------------------------------------------------
Expend. committed $75,597 $132,576 $208,173
Rentable s.f. leased 85,775
Cap. ex. committed
per r.s.f. per year $0.17 $0.33 $0.50


(1) Equals Atriple net@ rent plus common area costs and real estate taxes.


(2) Represents amounts committed, but not necessarily expended during period.


(3) Equals estimated workletter costs, net of estimated profit and overhead.



LEASE RENEWALS


Number of
Leases Rentable S.F.
-----------------------------------------------------------------------------------------
Leases expiring 788 3,853,754

Leases renewed & extended 342 2,074,740
Other retained tenants 158 675,827
Total leases retained 500 2,750,567
Percent retained 63.4% 71.4%

-------------------------------

JOINT VENTURE PORTFOLIO


SUMMARY OF SPACE LEASED DURING PERIOD



IN-SERVICE PROPERTIES:
Square feet leased at December 31, 1997 --
Leased s.f. - 1998 acquisitions 492,073
Net leasing activity in 1998 133,640

Square feet leased at December 31, 1998 625,713

Percent leased at December 31, 1998 82.3%

Square feet of Development/Redevelopment
Properties Not-in-Service as of December 31, 1998 601,300


Number Weighted Average
of Rentable Average Term
Leases S.F. Base Rent (Years)
-----------------------------------------------------------------------------------------
New Leases:
First generation space 1 15,350 $37.00 5.0
Second generation space 5 74,673 $29.39 5.2
Total new leasing 6 90,023 $30.69


Other retained tenants 2 53,456 $33.50 4.7
Total leasing 8 143,479



Capital Expenditures - Second Generation Space(1):

Tenant Leasing
Improvements(2) Commissions Total
-----------------------------------------------------------------------------------------
Expend. committed $1,888,130 $568,650 $2,456,780
Rentable s.f. leased 128,129
Cap. ex. committed
per r.s.f. per year $2.94 $0.88 $3.82


(1) Represents amounts committed, but not necessarily expended during period.


(2) Equals estimated workletter costs, net of estimated profit and overhead.