PAGE(S)
I.  COMPANY BACKGROUND
·      About the Company / Other Corporate Data	5
·      Board of Directors / Executive Officers	6
·      Equity Research Coverage / Company Contact Information	7
II.  FINANCIAL HIGHLIGHTS
·      Quarterly Summary / Recent Transactions	9
·      Leasing	9 - 10
·      Information About FFO	10
·      Key Financial Data	11
·      Same-Store Results and Analysis	12
·      Select Financial Ratios	13
·      Debt Analysis:
(a) Debt Breakdown/Future Repayments	14
(b) Debt Maturities	15
(c) Debt Detail	16
III.  FINANCIAL INFORMATION
·      Consolidated Statements of Operations	18
·      Consolidated Balance Sheets	19
·      Consolidated Statement of Changes in Equity	20
·      Statements of Funds from Operations	21
·      Statements of Funds from Operations Per Diluted Share	22
·      Reconciliation of Basic-to-Diluted Shares/Units	23
·      Unconsolidated Joint Venture Information	24 - 26
IV.  PORTFOLIO SUMMARY
·      Operating Property Acquisitions	28
·      Properties Commencing Initial Operations	29
·      Rental Property Sales/Dispositions	30
·      Breakdown of Company Holdings	31
·      Consolidated Property Listing (by Property Type)	32 - 40
·      Unconsolidated Joint Venture Summary	41 - 43
·      Consolidated Portfolio Analyses:
Breakdown by:
(a) Number of Properties	44
(b) Square Footage	45
(c) Base Rental Revenue	46
(d) Percentage Leased	47
V.  MULTI-FAMILY RENTAL PORTFOLIO
·      Summary of Stabilized Operating Communities/	49
·      Stabilizing Operating Communities Capitalization/ Repositioning	50
·      Summary of Communities in Lease-Up	51
·      Summary of Development Communities	52
·      Summary of Land Holdings/Pre-Development	53
VI.  OFFICE PORTFOLIO
·      Summary of Development Projects	55
·      Summary of Land Holdings	56
·      Leasing Statistics	57 -59
·      Market Diversification (MSAs)	60
·      Industry Diversification (Top 30 Tenant Industries)	61
·      Significant Tenants (Top 50 Tenants)	62 - 63
·      Schedules of Lease Expirations (by Property Type)	64 - 68

·	risks and uncertainties affecting the general economic climate and conditions, which in turn may have a negative effect on the fundamentals of the Company’s business and the financial condition of the Company’s tenants and residents;
·	the value of the Company’s real estate assets, which may limit the Company’s ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by the Company’s properties or on an unsecured basis;
·	the extent of any tenant bankruptcies or of any early lease terminations;
·	the Company’s ability to lease or re-lease space at current or anticipated rents;
·	changes in the supply of and demand for our properties;
·	changes in interest rate levels and volatility in the securities markets;
·	changes in operating costs;
·	the Company’s ability to obtain adequate insurance, including coverage for terrorist acts;
·	the Company's credit worthiness and the availability of financing on attractive terms or at all, which may adversely impact the Company’s ability to pursue acquisition and development opportunities and refinance existing debt and the Company’s future interest expense;
·	changes in governmental regulation, tax rates and similar matters; 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 or residents will not take occupancy or pay rent, or that development or operating costs may be greater than anticipated.

Corporate Headquarters	Edison, New Jersey
Fiscal Year-End	12/31
Total Properties	283
Total Commercial Square Feet / Multi-family Units	30.9 million commercial square feet and 5,861 multi-family apartment homes
Geographic Diversity	Seven states and the District of Columbia
New Jersey Presence	21.1 million square feet of commercial space and 2,916 multi-family apartment homes
Northeast Presence	30.9 million square feet of commercial space and 5,861 multi-family apartment homes
Common Shares and
Units Outstanding	100.2 million
Dividend--Quarter/Annualized	$0.15/$0.60
Dividend Yield	3.1%
Total Market Capitalization	$4.1 billion
Senior Debt Rating	BBB- (S&P and Fitch);
	Baa3 (Moody’s)

William L. Mack, Chairman of the Board
Alan S. Bernikow	David S. Mack
Kenneth M. Duberstein	Alan G. Philibosian
Nathan Gantcher	Irvin D. Reid
Mitchell E. Hersh	Vincent Tese
Jonathan Litt	Roy J. Zuckerberg

 

	Mitchell E. Hersh, President and Chief Executive Officer
	Anthony Krug, Chief Financial Officer
	Gary Wagner, Chief Legal Officer and Secretary

 

 

 

 

 

 

Bank of America Merrill Lynch James C. Feldman (646) 855-5808	Green Street Advisors Michael Knott (949) 640-8780
Barclays Capital Ross Smotrich (212) 526-2306	J.P. Morgan Anthony Paolone (212) 622-6682
Citigroup Michael Bilerman (212) 816-1383	Stifel, Nicolaus & Company, Inc. John W. Guinee, III (443) 224-1307
Cowen and Company James Sullivan (646) 562-1380	SunTrust Robinson Humphrey, Inc. Michael R. Lewis (212) 319-5659
Deutsche Bank North America Vin Chao (212) 250-6799	UBS Investment Research Ross T. Nussbaum (212) 713-2484
Evercore ISI Steve Sakwa (212) 446-9462

Mack-Cali Realty Corporation
Investor Relations Department
343 Thornall Street
Edison, New Jersey 08837-2206
Phone:      (732) 590-1000	Web:     www.mack-cali.com
Fax:           (732) 205-8237	E-mail:  investorrelations@mack-cali.com

Funds from operations (FFO) for the quarter ended March 31, 2015 amounted to $43.1 million, or $0.43 per share.

Net loss available to common shareholders for the first quarter 2015 equaled $2.5 million, or $0.03 per share.

All per share amounts presented above are on a diluted basis.

Total revenues for the first quarter 2015 were $153.7 million.

The Company had 89,127,942 shares of common stock, and 11,036,898 common operating partnership units outstanding as of March 31, 2015. The Company had a total of 100,164,840 common shares/common units outstanding at March 31, 2015.

As of March 31, 2015, the Company had total indebtedness of approximately $2.1 billion, with a weighted average annual interest rate of 5.65 percent.

The Company had a debt-to-undepreciated assets ratio of 37.5 percent at March 31, 2015. The Company had an interest coverage ratio of 2.6 times for the quarter ended March 31, 2015.

In April, the Company acquired vacant land to accommodate the development of up to 370 multi-family residential units located in Worcester, Massachusetts (the “CitySquare Project”) for a purchase price of $3.1 million with an additional $1.25 million to be paid, subject to certain conditions, in accordance with the terms of the purchase and sale agreement.

In January, the Company sold its 21,600 square-foot office/flex property located at 1451 Metropolitan Drive in West Deptford, New Jersey for net sales proceeds of approximately $1.1 million, with a gain of approximately $0.1 million from the sale.

Mack-Cali’s consolidated commercial in-service portfolio was 84.3 percent leased at March 31, 2015 as compared to 84.2 percent leased at December 31, 2014.
For the quarter ended March 31, 2015, the Company executed 123 leases at its consolidated in-service portfolio totaling 758,919 square feet, consisting of 539,721 square feet of office space, 209,898 square feet of office/flex space and 9,300 square feet of stand-alone retail space. Of these totals, 276,656 square feet were for new leases and 482,263 square feet were for lease renewals and other tenant retention transactions.
Highlights of the quarter’s leasing transactions include:
NORTHERN NEW JERSEY:
-	Securitas Security Services USA, Inc., a knowledge leader in security, signed a new lease for 81,282 square feet at 9 Campus Drive in Parsippany. The 156,495 square-foot office building, located in Mack-Cali Business Campus, is 89.2 percent leased.
-	The MI Group Ltd., a global relocation outsource company, signed a new lease for 26,148 square feet at 5 Wood Hollow Road in Parsippany. The 317,040 square-foot office building is 68.8 percent leased.
-	Willis of New Jersey, Inc., a unit of Willis Group Holdings, the global risk adviser, insurance and reinsurance broker, signed a new lease for 25,113 square feet at 150 JFK Parkway in Short Hills. The 247,476 square-foot office building is 78.1 percent leased.

-	First Data Corporation, a global leader in payment technology and services solutions, signed an expansion lease for 24,221 square feet at 101 Hudson in Jersey City.
-	Also at 101 Hudson Street, QH Acquisition Sub, LLC, a digital patient identification and engagement platform for health-focused companies and organizations, signed transactions totaling 16,478 square feet, consisting of a 12,437 square-foot renewal and a 4,041 square-foot expansion. The 1,246,283 square-foot office building is 89.6 percent leased.
-	Black & Veatch Corporation, an employee-owned, global leader in building Critical Human Infrastructure TM in energy, water, telecommunications, and government services, signed a renewal of 19,678 square feet at 650 From Road in Paramus. Mack-Cali Centre II is a 348,510 square-foot office building that is 86.6 percent leased.
-	Eagle Pharmaceuticals Inc., a specialty pharmaceutical company, signed transactions totaling 15,173 square feet at 50 Tice Boulevard in Woodcliff Lake, consisting of a 9,906 square-foot renewal and a 5,267 square-foot expansion. The 235,000 square-foot office building is 91.3 percent leased.
CENTRAL NEW JERSEY:
-	Kleinfelder, Inc., an engineering, architecture, and science consulting firm, signed a renewal for 15,896 square feet at 3 AAA Drive in Hamilton.  The 35,270 square-foot office building, located in Horizon Center North, is 76.7 percent leased.
WESTCHESTER COUNTY, NEW YORK:
-	Fitness by Lifestyle, LLC, a fitness center, signed a new lease for 17,863 square feet at 150 Clearbrook Road in Elmsford. The 74,900 square-foot office/flex building, located in Cross Westchester Executive Park, is 99.3 percent leased.
SOUTHERN NEW JERSEY:
-	McKesson Patient Care Solutions Inc., a healthcare services and information technology company, signed a renewal for the entire 48,600 square-foot 2 Twosome Drive, located in Moorestown West Corporate Center.
MARYLAND:
-	Global technology company Pitney Bowes Software Inc. signed a renewal for 16,282 square feet at 4200 Parliament Place in Lanham. The 122,000 square-foot office building is 97.4 percent leased.

	03/31/15		12/31/14		09/30/14		06/30/14		03/31/14
Shares and Units:
Common Shares Outstanding	89,127,942		89,076,578		89,055,220		88,982,062		88,630,146
Common Units Outstanding	11,036,898		11,083,876		11,092,044		11,164,018		11,518,069
Combined Shares and Units	100,164,840		100,160,454		100,147,264		100,146,080		100,148,215
Weighted Average- Basic (a)	100,265,509		100,130,039		99,995,081		99,993,083		99,875,659
Weighted Average- Diluted (b)	100,265,509		100,130,039		100,052,290		100,022,734		99,875,659
Common Share Price ($’s):
At the end of the period	19.28		19.06		19.11		21.48		20.79
High during period	20.11		20.11		22.05		22.44		23.23
Low during period	18.01		17.92		18.95		19.98		19.75
Market Capitalization:
($’s in thousands, except ratios)
Market Value of Equity (c)	1,985,839		1,964,115		1,977,334		2,205,844		2,137,042
Total Debt	2,107,572		2,088,654		2,238,641		2,208,268		2,232,287
Total Market Capitalization	4,093,411		4,052,769		4,215,975		4,414,112		4,369,329
Total Debt/ Total Market
Capitalization	51.49	%	51.54	%	53.10	%	50.03	%	51.09	%
Financials:
($’s in thousands, except ratios and
per share amounts)
Total Assets	4,198,854		4,192,247		4,357,197		4,354,772		4,354,343
Gross Book Value of Real Estate Assets	4,955,293		4,958,179		4,909,727		4,966,633		5,172,017
Total Liabilities	2,334,631		2,310,236		2,452,915		2,438,892		2,483,223
Total Equity	1,864,223		1,882,011		1,904,283		1,915,880		1,871,120
Total Revenues	153,715		151,414		155,489		160,300		169,596
Capitalized Interest	3,607		4,820		4,158		3,351		3,141
Scheduled Principal Amortization	1,017		1,022		690		595		904
Interest Coverage Ratio	2.58		2.24		2.76		2.79		2.01
Fixed Charge Coverage Ratio	2.20		1.85		2.34		2.44		1.77
Net Loss	(3,325)		(10,413)		2,897		57,347		(17,628)
Net Loss Available to Common Shareholders	(2,521)		(9,240)		2,704		51,123		(15,298)
Earnings per Share—diluted	(0.03)		(0.10)		0.03		0.58		(0.17)
FFO per Share—diluted (d)	0.43		0.34		0.48		0.50		0.30
Dividends Declared per Share	0.15		0.15		0.15		0.15		0.30
FFO Payout Ratio—diluted (d)	34.93	%	44.00	%	31.24	%	29.80	%	99.40	%
Portfolio Size:
Properties	283		283		282		279		279
Total Commercial Square Footage	30,945,345		30,966,945		31,459,489		31,459,489		31,002,668
Commercial Sq. Ft. Leased at End of Period (e)	84.3	%	84.2	%	83.7	%	83.7	%	83.6	%
Apartment Homes	5,861		5,484		4,940		3,898		3,678

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

(b)	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).

(c)	Includes any outstanding preferred units presented on a converted basis into common units and noncontrolling interests in consolidated joint ventures.

(d)	Funds from Operations (“FFO”) is calculated in accordance with the definition of the National Association of Real Estate Investment Trusts (NAREIT). See “Information About FFO” on page 10.

(e)

Percentage leased includes leases in effect as of the period end date, some of which have commencement dates in the future and leases that expire at the period end date.  Reflects square feet leased at the Company’s consolidated in-service portfolio, excluding in-service properties in lease up (if any).

		For the three months ended
		March 31,					%
		2015		2014		Change	Change
Total Property Revenues	$	144,684	$	147,099	$	(2,415)	(1.6)
Real Estate Taxes		22,166		22,001		165	0.7
Utilities		17,450		24,371		(6,921)	(28.4)
Operating Services		27,639		26,599		1,040	3.9
Total Property Expenses:		67,255		72,971		(5,716)	(7.8)
GAAP Net Operating Income		77,429		74,128		3,301	4.5
Less: straight-lining of rents adj.		(317)		3,036		(3,353)	(110.4)
Net Operating Income	$	77,746	$	71,092	$	6,654	9.4
Percentage Leased at
Period End		84.3	%	83.6	%
Total Properties:		229
Total Square Footage:		25,266,990
Apartment Homes:		1,081

Ratios Computed For Industry	March 31,
Comparisons:	2015		2014
Financial Position Ratios:
Total Debt/ Total Book	50.19	%	51.27	%
Capitalization
(Book value) (%)
Total Debt/ Total Market	51.49	%	51.09	%
Capitalization
(Market value) (%)
Total Debt/ Total Undepreciated	37.53	%	38.81	%
Assets (%)
Secured Debt/ Total Undepreciated	14.20	%	12.96	%
Assets (%)
	Three Months Ended
	March 31,
	2015		2014
Operational Ratios:
Interest Coverage	2.58		2.01
(Funds from Operations+Interest
Expense)/Interest Expense (x)
Debt Service Coverage	2.49		1.95
(Funds from Operations +
Interest Expense)/(Interest Expense
+ Principal Amort.) (x)
Fixed Charge Coverage	2.20		1.77
(Funds from Operations +
Interest Expense + Ground Lease Payments)/
(Interest Expense + Capitalized Interest+Pref. Div.
+Prin. Amort.+Ground Lease
Payments)(x)
FFO Payout	34.93	%	99.40	%
(Dividends Declared/Funds from
Operations) (%)

 

 

 

(dollars in thousands)

			%		Weighted Average		Weighted Average
		Balance	of Total		Interest Rate (a)		Maturity in Years
Fixed Rate Unsecured Debt and
Other Obligations	$	1,268,018	60.17%		4.88%		4.91
Fixed Rate Secured Debt		659,759	31.30%		7.77%		2.98
Variable Rate Secured Debt		137,795	6.54%		3.89%		1.69
Variable Rate Unsecured Debt (b)		42,000	1.99%		1.48%		2.33
Totals/Weighted Average:	$	2,107,572	100.00%		5.65%		4.04

(a)	The actual weighted average LIBOR rate for the Company’s outstanding variable rate debt was 0.18 percent as of March 31, 2015, plus the applicable spread.

(b)	Excludes amortized deferred financing costs pertaining to the Company’s unsecured revolving credit facility which amounted to $0.8 million for the three months ended March 31, 2015.

 

 

(dollars in thousands)

							Weighted Average
		Scheduled		Principal			Interest Rate of
Period		Amortization		Maturities		Total	Future Repayments (a)
April 1 - December 31, 2015	$	6,797	$	144,755	$	151,552	7.61%
2016		8,311		333,272		341,583	7.43%
2017 (b)		7,275		435,114		442,389	3.86%
2018		7,311		231,536		238,847	6.67%
2019		723		331,567		332,290	7.44%
Thereafter		6,328		605,206		611,534	4.13%
Sub-total		36,745		2,081,450		2,118,195
Adjustment for unamortized debt discount/premium and mark-to-market, net, as of March 31, 2015		(10,623)		-		(10,623)
Totals/Weighted Average:	$	26,122	$	2,081,450	$	2,107,572	5.65%	(c)

(a)	The actual weighted average LIBOR rate for the Company’s outstanding variable rate debt was 0.18 percent as of March 31, 2015, plus the applicable spread.

(b)	Includes outstanding borrowings on the Company's unsecured revolving credit facility of $42 million which matures in 2017 with two six-month extension options with the payment of a fee.

(c)	Excludes amortized deferred financing costs pertaining to the Company’s unsecured revolving credit facility which amounted to $0.8 million for the three months ended March 31, 2015.

 

 

 

(dollars in thousands)

		April 1 -
		December 31,															2023 and
		2015		2016		2017		2018		2019	2020		2021		2022		Beyond		Totals
Secured Debt:
6 Becker, 85 Livingston,75 Livingston, & 20 Waterview	$	65,035																$	65,035
4 Sylvan Way		14,575																	14,575
10 Independence		16,924																	16,924
Port Imperial South		44,333																	44,333
9200 Edmonston Road		3,889																	3,889
Curtis Center			$	64,000															64,000
4 Becker				40,431															40,431
5 Becker				14,574															14,574
210 Clay				14,267															14,267
Prudential Portfolio					$	141,151													141,151
150 Main Street						1,963													1,963
23 Main Street							$	26,566											26,566
Harborside Plaza 5								204,970											204,970
100 Walnut Avenue									$	17,281									17,281
One River Center										39,586									39,586
Park Square										24,700									24,700
Port Imperial South 4/5 Retail												$	3,800						3,800
Port Imperial South 4/5 Garage																$	26,405		26,405
Total Secured Debt:	$	144,756	$	133,272	$	143,114	$	231,536	$	81,567	-	$	3,800		-	$	26,405	$	764,450
Unsecured Debt:
Unsecured credit facility					$	42,000												$	42,000
5.80% unsecured notes
due 1/16			$	200,000															200,000
2.50% unsecured notes
due 12/17						250,000													250,000
7.75% unsecured notes
due 8/19									$	250,000									250,000
4.50% unsecured notes
due 4/22														$	300,000				300,000
3.15% unsecured notes
due 5/23																	275,000		275,000
Total Unsecured Debt:		-	$	200,000	$	292,000		-	$	250,000	-		-	$	300,000		275,000	$	1,317,000
Total Debt:	$	144,756	$	333,272	$	435,114	$	231,536	$	331,567	-	$	3,800	$	300,000		301,405	$	2,081,450

 

 

		Effective
		Interest			March 31,		December 31,		Date of
Property Name	Lender	Rate			2015		2014		Maturity
Senior Unsecured Notes: (a)
5.800%, Senior Unsecured Notes	public debt	5.806%		$	200,066	$	200,086		01/15/16
2.500%, Senior Unsecured Notes	public debt	2.803%			249,224		249,150		12/15/17
7.750%, Senior Unsecured Notes	public debt	8.017%			249,066		249,013		08/15/19
4.500%, Senior Unsecured Notes	public debt	4.612%			299,580		299,565		04/18/22
3.150%, Senior Unsecured Notes	public debt	3.517%			270,082		269,930		05/15/23
Total Senior Unsecured Notes:				$	1,268,018	$	1,267,744

Revolving Credit Facilities:
Unsecured Facility (b)	17 Lenders	LIBOR +1.300%		$	42,000		-		07/31/17
Total Revolving Credit Facilities:				$	42,000		-

Property Mortgages: (c)
Overlook-Sites III D, III C, III A (d)	Wells Fargo Bank N.A.	LIBOR+3.50%			-	$	17,260		-
Overlook-Site II B (Quarrystone I) (d)	Wells Fargo Bank N.A.	LIBOR+2.50%			-		5,787		-
6 Becker, 85 Livingston, 75 Livingston & 20 Waterview (e)	Wells Fargo CMBS	10.260%		$	65,035		65,035		08/11/14	(f)
4 Sylvan	Wells Fargo CMBS	10.260%			14,575		14,575		08/11/14	(f)
10 Independence	Wells Fargo CMBS	10.260%			16,924		16,924		08/11/14	(f)
9200 Edmonston Road (g)	Principal Commercial Funding, L.L.C.	5.534%			3,903		3,951		05/01/15
Port Imperial South	Wells Fargo Bank N.A.	LIBOR+1.75%			44,333		44,119		09/19/15
4 Becker	Wells Fargo CMBS	9.550%			39,568		39,421		05/11/16
5 Becker (h)	Wells Fargo CMBS	19.450%			14,073		13,867		05/11/16
210 Clay (i)	Wells Fargo CMBS	18.100%			13,549		13,330		05/11/16
Curtis Center (j)	CCRE & PREFG	LIBOR+5.912%	(m)		64,000		64,000		10/09/16
Various (k)	Prudential Insurance	6.332%			145,058		145,557		01/15/17
150 Main Street	Webster Bank	LIBOR+2.35%			1,963		1,193	(o)	03/30/17
23 Main Street	JPMorgan CMBS	5.587%			29,041		29,210		09/01/18
Harborside Plaza 5	The Northwestern Mutual Life Insurance Co. & New York Life Insurance Co.	6.842%			220,630		221,563		11/01/18
100 Walnut Avenue	Guardian Life Ins. Co.	7.311%			18,476		18,542		02/01/19
One River Center (l)	Guardian Life Ins. Co.	7.311%			42,326		42,476		02/01/19
Park Square	Wells Fargo Bank N.A.	LIBOR+1.872%	(n)		27,500		27,500		04/10/19
Port Imperial South 4/5 Retail	American General Life & A/G PC	4.559%			4,000		4,000		12/01/21
Port Imperial South 4/5 Garage	American General Life & A/G PC	4.853%			32,600		32,600		12/01/29
Total Mortgages, Loans Payable and Other Obligations:				$	797,554	$	820,910
Total Debt:				$	2,107,572	$	2,088,654