Exhibit 99.1

 

 

 

FOURTH QUARTER 2015

 

Supplemental Operating and Financial Data

 

 

INDEX

 

	PAGE(S)
Company Today	3
Focus List	4 - 6
Economic Incentives and Programs	7
Spotlight on:
Results	8
Leasing	9 - 12
Earnings	13 - 20
Financials	21 - 23
Portfolio	24 - 25
Details on:
Leasing	26 - 40
Earnings	41
Financials	42 - 45
Portfolio	46 - 52
Company Information	53 - 54

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

2

 

Company Today

 

We are a two platform company — office and multi-family with a focus on owning assets in the Hudson River Waterfront area and other transit-based locations.

 

REIT publicly traded on NYSE (“CLI”)

 

Substantial development opportunities for office

 

Apartment platform managed by Roseland Residential Trust (“RRT”)

 

		4Q 2015			3Q 2015
Market capitalization:		$	4.5 billion		$	4.0 billion
Square feet of office space:		24.2 million			24.0 million
% leased for office:		86.2		%	85.8		%
GAAP rental rate roll-up		8.3		%	6.6		%
Operating multi-family units:		5,644			5,644
% leased for stabilized multi-family:		93.1		%	95.5		%
Sr. unsecured debt ratings:
(S&P/Moody’s/Fitch)		BBB-/Baa3/BB+			BBB-/Baa3/BBB-

 

333 Thornall Street, Edison, NJ (Acquired 4Q 2015)		3 Sylvan Way, Parsippany, NJ (Acquired 4Q 2015)
101 Hudson Street,  Jersey City, NJ		RiversEdge at Port Imperial, Weehawken, NJ

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

3

 

Focus List

 

Our changes over the next 24 months

 

Completed/Underway (Generate Increased Cash Flow)

 

1.                          Staffing levels — reduced by 55 positions or $8M, with continued focus

 

2.                          Cost of operations — reduced by $7.5M

 

3.                          G&A expense — reduced by $3M

 

4.                          In 2016 — continued expense reductions as we reduce the size of the office platform

 

Next 12 — 18 Months (Balance Sheet / Capital Expenditures / Long-term Cash Flow)

 

5.                          Increase occupancy — 86.2% at 12/31/15 and project a clear path to 90% leased by year end 2016. Was 82.3% at 6/30/15 and 84.2% at 12/31/14

 

6.                          Extend credit facility and refinance debt for savings — new 5-year term loan for $350M at 3.12% closed in Jan ‘16

 

7.                          Planned dispositions — $750M of assets. $400M expected to close by 6/30/16 and $350M by 10/31/16

 

8.                          Reposition assets to “A” quality — six major capital investment programs currently in place

 

24 Months (Long-term Strategy Execution)

 

9.                          New capital investment — we look for 6% initial yield and 11% IRR on new investments

 

10.                   Focus on our key markets — exiting NYC, DC, etc.

 

11.                   Funding and growth of the Roseland operations — in the market with Eastdil — projecting $350M equity raise by 6/30/16

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

4

 

Focus List - Net Debt to EBITDA Business Plan Effect

 

The Company has a plan with multiple options regarding its Net Debt to EBITDA leverage ratio. The Company expects to take steps to reduce the ratio to a more conservative level.

 

 

(a)         4Q 2015 Annualized EBITDA is calculated by taking 4Q 2015 EBITDA multiplied by 4.  Ratio reflects Net Debt of $2,118,000 as of December 31, 2015.  See calculation of EBITDA and Net Debt on page 13.

(b)         Assumes successful equity raise for multi-family subsidiary, reducing Net Debt by $350 million with estimated proceeds.

(c)          Assumes successful lease up and expense savings, translating into estimated $22 million in increased EBITDA.

(d)         Assumes projects in construction at December 31, 2015 going into service and stabilizing at a 10% return on equity, translating into estimated $25 million in increased EBITDA.

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

5

 

Focus List - 2017 Lease Expirations

 

2017 is shaping up well to have excellent cash and GAAP results.

 

·                  2017 Expirations total 3.6 million square feet, or 18% of leased space.

·                  We proactively engage significant tenants well in advance of expirations.

·                  1.4 million square feet do not expire until the fourth quarter.

·                  Anticipate occupancy of approximately 89% at year-end 2016; at that level will backfill any vacant space quickly.

·                  Approximately 30% of 2017 expirations are on the Waterfront (1.1 million square feet).

·                  Quarter-by-quarter, Waterfront rents are increasing and concession packages reducing.

·                  As of September 30, 2015, our 2017 expirations totaled 3.764 million square feet.  During the fourth quarter this number was reduced by 173,392 square feet to 3.591 million square feet, as follows:

 

·		Renewal of Vonage America at 23 Main Street in Holmdel		(350,000	)
·		Expirations added through leasing transactions and early surrender		145,262
·		Expirations added through acquisition of 333 Thornall Street		31,346
				(173,392	)

 

Following is our approach to remaining 2017 expirations:

 

	3.6		million sf expiring
	(0.7	)	million sf in properties we plan to sell
	(0.4	)	million sf renewals we expect to finalize near-term in Core and Waterfront properties
	(0.8	)	million sf remaining on Waterfront, with a growing backlog of tenant demand
	(0.7	)	million sf Flex space, with historically high retention and occupancy rates
	1.0		million sf remaining in Core suburban properties

 

·                  The 1.0 million square feet within a Core suburban portfolio of 9.4 million square feet represents a manageable 10% rollover in 2017.

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

6

 

Economic Incentives and Programs

 

The State of New Jersey currently offers a compelling incentive program to attract and retain businesses in the State through its “Grow New Jersey” program.  Below is a program summary and example of an incentive calculation.

 

Grow NJ

 

·                              Provides job-based tax credits for job creation and retention

 

·                              Tax credits of $5,000 to $9,750 per job/per year, for up to 10 years for new jobs to the state

 

·                              Limited to specific “Qualified Incentive Areas”

 

·                  Urban Transit Hub municipalities (“UTH”)

 

·                  ‘Mega projects’—logistics, manufacturing, energy, defense, or maritime businesses in a port district

 

·                  Distressed municipalities

 

·                  Projects in other priority areas

 

·                              Eligibility:

 

·                  Minimum 35 new jobs and/or 50 retained jobs for most commercial projects

 

Example — New Tenant to Jersey City

 

·                 New jobs at a 5 employees (EEs) per 1,000sf density

 

# of				Starting		Base
New EEs		SF		Rental Rate		Rent/yr
		60,000		$40/sf		$	2,400,000
300						(2,400,000		)
		Effective rent after incentive				0

 

Base award (UTH)		$	5,000
Bonuses
Within 0.5 miles of transit station		$	2,000
251-400 jobs		500
Targeted Industry		500
		$	8,000	per job/per year
		or
		$	2,400,000	per year

 

·                  If occupancy is higher than 5 EEs per 1,000sf, the tenant receives the further benefit, which adds to their NOI

 

·                  Award based on targeted industry

 

·                  Tenant must commit to 1.5 years of term to qualify for 1 year of benefit

 

·                  Urban Transit Hub location

 

·                  Doesn’t include increases in fixed rent or additional rent payable under the lease

 

·                  Retention benefit could be substantially less than as illustrated

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

7

 

Spotlight on Results

 

Operating Highlights

 

Funds from operations (FFO) for the quarter ended December 31, 2015 amounted to $46.9 million, or $0.47 per share, as compared to $34.1 million, or $0.34 per share, for the quarter ended December 31, 2014. For the year ended December 31, 2015, FFO equaled $188.1 million, or $1.88 per share, as compared to $162.7 million, or $1.63 per share, for the same period last year. For the current quarter compared to the fourth quarter last year, the increase in FFO per share resulted primarily from severance costs of $0.13 in 2014.  This results in Core FFO per diluted share for the current quarter of $0.47 versus $0.47 for the prior year period after selling $95 million of assets during 2015.

 

Net income (loss) available to common shareholders for the quarter ended December 31, 2015 amounted to $(31.7) million, or $(0.35) per share, as compared to $(9.2) million, or $(0.10) per share, for the quarter ended December 31, 2014. For the year ended December 31, 2015, net income (loss) available to common shareholders equaled $(125.8) million, or $(1.41) per share, as compared to $28.6 million, or $0.32 per share, for the same period last year.  Included in net loss for the quarter and year ended December 31, 2015 was $33.7 million and $197.9 million, respectively, of impairments charges taken on properties currently held and used which the Company intends to sell as part of its recently-announced strategic initiative.  All per share amounts presented above are on a diluted basis.

 

Mack-Cali’s consolidated commercial in-service portfolio was 86.2 percent leased at December 31, 2015, as compared to 85.8 percent leased at September 30, 2015 and 82.3 percent leased at June 30, 2015.

 

For the quarter ended December 31, 2015, the Company executed 88 leases at its consolidated in-service commercial portfolio totaling 898,507 square feet.  Of these totals, 179,240 square feet were for new leases and 719,267 square feet were for lease renewals and other tenant retention transactions.  Lease transactions included 712,677 square feet in Core properties, 11,064 square feet in Waterfront properties,  122,673 square feet in Flex properties and 52,093 square feet in Non-Core properties.

 

Acquisitions

 

In November 2015, the Company acquired 333 Thornall Street in Edison, New Jersey, a Class A 196,128 square-foot office building located in Metropark, a major transit hub.  The purchase price was approximately $53.1 million. The property is approximately 96 percent leased. Adjacent to the Company’s 343 Thornall Street building, the acquisition will be combined into a two-building complex.

 

In December, the Company acquired 3 Sylvan Way, a vacant 147,241-square-foot, three story, Class A office building located in Parsippany, New Jersey.  This acquisition enhances the company’s holdings at the 600-acre Mack-Cali Business Campus, which includes 15 Class A office properties totaling approximately 2.1 million square feet of space.

 

Rental Property Sales/Dispositions

(dollars in thousands)

 

For the year ended December 31, 2015

 

								Rentable
Sale						# of		Square		Net Sales			Realized			Capitalization
Date		Property/Address		Location		Buildings		Feet		Proceeds			Gain			Rate (a)
1/15/2015		1451 Metropolitan Drive		West Deptford, New Jersey		1		21,600		$	1,072		$	143		(4.7	)%(b)
5/27/2015		10 Independence Boulevard		Warren, New Jersey		1		120,528		18,351		(c)	3,237			n/a	(c)
6/11/2015		4 Sylvan Way		Parsippany, New Jersey		1		105,135		15,961		(c)	6,439			n/a	(c)
6/26/2015		14 Sylvan Way		Parsippany, New Jersey		1		203,506		79,977			24,724			6.14	%
7/21/2015		210 Clay Avenue		Lyndhurst, New Jersey		1		121,203		14,766		(c)	9,564			n/a	(c)
8/24/2015		5 Becker Farm Road		Roseland, New Jersey		1		118,343		18,129		(c)	9,154			n/a	(c)
Total Property Sales and Dispositions:						6		690,315		$	148,256		$	53,261

 

(a)           Capitalization rate is calculated by dividing the projected net operating income for the 12 months forward from the closing date by the gross sales price.

(b)          This property was vacant when sold.

(c)           The Company transferred the deeds for these properties to the lender in satisfaction of its mortgage loan obligations totaling $59.7 million.  

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

8

 

Spotlight on Leasing - Year in Review

 

Consolidated Commercial Leasing Summary

 

Portfolio Summary

(as of December 31, 2015)

 

Number of buildings		217
Total square feet		24,211,880
Square feet leased		20,865,233
Square feet vacant		3,346,647
Number of tenants		1,611

 

Leasing Transactions - 2015 (by type)

 

		Number of		Total		Sq. Ft.		Sq. Ft. Renewed		Average		Median		Weighted Avg.		Weighted Avg.			Leasing Costs
		Transactions		Square Feet		New Leases		and Other Retained		Square Feet		Square Feet		Term (Yrs)		Base Rent			PSF/Year
Core		214		2,084,495		514,680		1,569,815		9,741		3,448		6.2		$	24.84		$	4.51
Waterfront		19		339,098		179,478		159,620		17,847		7,260		7.8		32.16			6.55
Flex		101		917,019		202,606		714,413		9,079		5,580		3.8		15.19			1.72
Sub-Total		334		3,340,612		896,764		2,443,848		10,002		4,345		5.7		23.13			4.28
Non-Core		109		649,484		134,709		514,775		5,959		2,538		3.3		27.09			2.48
TOTALS		443		3,990,096		1,031,473		2,958,623		9,007		3,775		5.3		$	23.77		$	4.10

 

Leasing Transactions - 2015 (by new/renewal)

 

														Weighted			Leasing
		Number of		Percent of				Average		Median		Term		Avg Base			Costs
		Transactions		Transactions		Square Feet		Square Feet		Square Feet		(Yrs)		Rent (a)			PSF/Year (b)
New		123		28	%	1,031,473		8,386		3,073		8.6		$	23.57		$	5.27
Renew/Other Retained		320		72	%	2,958,623		9,246		3,951		4.2		23.84			3.22
TOTAL		443		100	%	3,990,096		9,007		3,775		5.3		$	23.77		$	4.10

 

Leasing Transactions - 2015 Rental Rate Roll Up/Down (by new/renewal)

 

				Number of		Number of		Number of
		GAAP		Transactions		Transactions		Transactions
		Roll Up/(Down)		Rolled Up		Flat		Rolled Down		Total
New		(0.5	)%	34		1		31		66
Renew/Other Retained		5.0	%	166		35		71		272
TOTAL		4.4	%	200		36		102		338

 

(a)        Equals triple net rent plus common area costs and real estate taxes, as applicable.

(b)        Represents estimated workletter costs of $64,152,511 and commissions of $22,654,826 committed, but not necessarily expended, during the period for second generation space aggregating 3,990,096 square feet.

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

9

 

Spotlight on Leasing - Rollforwards

 

(For the three months ended December 31, 2015

 

Leasing Activity

See detail on pages 26-27

 

Positive absorption through solid leasing velocity of almost 900,000 square feet contributed 30 basis points to the Company’s increase in percent leased to 86.2 percent at year-end.  Another 10 basis-point increase was realized through the acquisition of 333 Thornall Street in Edison, New Jersey.  The 196,000-square-foot building, in transit-oriented Edison, NJ, is 95.6 percent leased.

 

						Sq. Ft.										Net				Sq. Ft.
		Pct. Leased		Inventory		Leased		Inventory		Leased Sq. Ft.		Expiring/		Incoming		Leasing		Inventory		Leased		Pct. Leased
		9/30/2015		09/30/15		9/30/15		Acquired		Acquired		Adj. Sq. Ft.		Sq. Ft.		Activity		12/31/15		12/31/15		12/31/15
Core		87.3	%	9,204,977		8,036,388		196,128		187,495		(602,070	)	712,677		110,607		9,401,105		8,334,490		88.7	%
Waterfront		86.7	%	4,317,978		3,744,230		—		—		(11,064	)	11,064		—		4,317,978		3,744,230		86.7	%
Flex		91.9	%	5,207,813		4,786,991		—		—		(124,443	)	122,673		(1,770	)	5,207,813		4,785,221		91.9	%
Sub-Total		88.5	%	18,730,768		16,567,609		196,128		187,495		(737,577	)	846,414		108,837		18,926,896		16,863,941		89.1	%
Non-Core		76.3	%	5,284,984		4,033,583		—		—		(84,384	)	52,093		(32,291	)	5,284,984		4,001,292		75.7	%
TOTALS		85.8	%	24,015,752		20,601,192		196,128		187,495		(821,961	)	898,507		76,546		24,211,880		20,865,233		86.2	%

 

Percentage Leased

 

		Pct. Leased		Impact of		Impact of		Pct. Leased
		09/30/15		Portfolio Changes		Leasing Activity		12/31/15
Core		87.3	%	0.2	%	1.2	%	88.7	%
Waterfront		86.7	%	0.0	%	0.0	%	86.7	%
Flex		91.9	%	0.0	%	0.0	%	91.9	%
Sub-Total		88.5	%	0.1	%	0.5	%	89.1	%
Non-Core		76.3	%	0.0	%	(0.6	)%	75.7	%
TOTALS		85.8	%	0.1	%	0.3	%	86.2	%

 

“Core”	-	Long-term hold office properties (excluding Waterfront locations)
“Waterfront”	-	Office assets located on NJ Hudson River waterfront
“Flex”	-	Non-office commercial assets, primarily office/flex properties
“Non-Core”	-	Properties designated for eventual sale/disposition or repositioning

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

10

 

Spotlight on Leasing - Quarter Stats

 

(For the three months ended December 31, 2015)

 

Leasing Transaction - 4Q15 (by type)

See detail on page 28

 

								Sq. Ft.								Wtd.			Wtd. Avg.
								Renewed								Avg.			Costs Per
		Number of		Total		Sq. Ft.		and Other		Average		Median		Wtd. Avg.		Base			Sq. Ft.
		Transactions		Sq. Ft.		New Leases		Retained		Square Feet		Square Feet		Term (Yrs.)		Rent			Per Year
Core		52		712,677		114,278		598,399		13,705		3,903		6.0		$	21.14		$	4.24
Waterfront		1		11,064		11,064		—		11,064		11,064		8.3		36.24			4.19
Flex		21		122,673		42,041		80,632		5,842		3,110		3.5		13.69			1.83
Sub-Total		74		846,414		167,383		679,031		11,438		3,903		5.7		20.26			4.03
Non-Core		14		52,093		11,857		40,236		3,721		2,426		5.0		27.33			4.43
TOTALS		88		898,507		179,240		719,267		10,210		3,775		5.7		$	20.67		$	4.05

 

Summary of Lease Expirations

 

(as of December 31, 2015)

 

See detail on pages 33-40

 

				Net Rentable		Pct of Leased		Annualized			Avg.			Pct of
		Number of		Area of		Sq. Ft.		Base Rental			Annualized			Annualized
Year of		Leases		Leases		Leases		Revenue			Base Rent			Base Rent
Expiration		Expiring		Expiring		Expiring		Expiring			Per Sq. Ft.			Expiring
2016		267		1,572,681		7.7		$	36,045,597		$	22.92		7.3
2017		329		3,591,173		17.6		90,429,372			25.18			18.3
2018		297		2,893,301		14.2		66,931,429			23.13			13.5
2019		252		2,459,708		12.1		53,078,243			21.58			10.7
2020		218		1,748,600		8.6		38,862,232			22.22			7.9
2021 & beyond		505		8,106,904		39.8		209,079,163			25.79			42.3
TOTALS		1,868		20,372,367		100.0		$	494,426,036		$	24.27		100.0

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

11

 

Spotlight on Leasing - Rental Rate Effects

 

(for the year ended December 31, 2015)

 

The following schedule sets forth the percentage change in GAAP rent for transactions signed within the period.  Transactions signed for space which has been vacant for longer than twelve months are excluded.

 

		Transaction Type		1st Qtr ‘15		2nd Qtr ‘15		3rd Qtr ‘15		4th Qtr ‘15		Wtd. Average - 2015
Core
		New		(11.2	)%	(5.9	)%	(4.4	)%	0.2	%	(5.1	)%
		Renew/Other Retained		(2.5	)%	6.0	%	0.8	%	8.9	%	5.2	%
		Weighted Average		(5.1	)%	5.8	%	(0.7	)%	7.9	%	3.8	%
Waterfront
		New		(8.4	)%	n/a		n/a		4.5	%	2.4	%
		Renew/Other Retained		(8.9	)%	14.9	%	21.7	%	n/a		11.6	%
		Weighted Average		(8.8	)%	14.9	%	21.7	%	4.5	%	10.6	%
Flex		New		(10.1	)%	(0.7	)%	36.3	%	20.6	%	14.7	%
		Renew/Other Retained		1.1	%	5.4	%	2.5	%	9.3	%	4.5	%
		Weighted Average		(0.5	)%	5.1	%	9.9	%	11.2	%	5.6	%
Sub-Total		New		(10.9	)%	(3.1	)%	2.5	%	3.1	%	(1.1	)%
		Renew/Other Retained		(2.5	)%	6.4	%	5.0	%	8.9	%	5.6	%
		Weighted Average		(4.4	)%	6.2	%	4.4	%	8.1	%	4.7	%
Non-Core		New		(1.0	)%	4.1	%	5.8	%	10.9	%	2.3	%
		Renew/Other Retained		(6.3	)%	(2.0	)%	11.4	%	11.0	%	3.1	%
		Weighted Average		(5.3	)%	(1.4	)%	11.2	%	11.0	%	3.0	%
TOTAL		New		(8.2	)%	0.9	%	2.8	%	3.2	%	(0.5	)%
		Renew/Other Retained		(3.7	)%	4.8	%	7.3	%	9.0	%	5.0	%
		Weighted Average		(4.7	)%	4.6	%	6.6	%	8.3	%	4.4	%

 

Mack-Cali Realty Corporation Supplemental Operating and Financial Data for the Quarter Ended December 31, 2015

 

12