Mack-Cali Late To The Follow On Party
But better late than never, especially when you have the REIT dilution powerhouse behind you. CLI just announced it will issue a total of 7,475,000 shares with Merrill as lead underwriter. Use of proceeds: "To repay borrowings under its unsecured revolving credit facility" which has as syndication agent...pause... Bank Of America. Unfortunately the $180 million of max proceeds will not really help BofA with their total bank exposure... Curiously CLI is not even covered by the dynamic ML REIT duo of SS (Schmidt-Sakwa). Which does not mean the two have not been busy - here are their latest actions over just the past 3 days - finding the mildly optimistic report is harder than Where's Waldo:
Duke Realty: We are raising our '09 and '10 estimates while our PO increases from $9 to $10. Maintain Neutral rating.
Kimco: Maintaining Buy rating due to the KIMs improved balance sheet strength as a result of its add-on offering. While retail fundamentals should remain weak for 09, KIMs should be one of the survivors.
Boston Properties: BXP's 1Q results solid; increasing FFO. BXP reported normalized 1Q09 FFOPS of $1.30/share when you exclude the $0.19 one-time, non-cash impairment charge related to the suspension of construction at 250 West 55th Street.
ProLogis Trust: Significant progress toward deleveraging. PLD has taken meaningful steps to improve its balance sheet although it comes with a near-term cost of earnings dilution. We are trimming our '09 and '10 estimates while our PO falls to $9.50.
Avalon Bay: Despite stronger than expected Q1 results we are lowering our rating from Buy to Neutral due to the recent stock price gains coupled with weakening fundamentals. Our new PO is $55 (up from $49).
Equity Residential: EQR reported 1Q09 FFO of $0.57 which was a few pennies above our forecast. We are raising our '09 and '10 FFO estimates by a nickel while our PO increases from $18.00 to $18.50.
Corporate Office Properties Trust: OFC reported $0.67, $0.08 ahead of our estimate. We maintain our 09 estimate of $2.41 while our NAV stays flat at $21 and our PO remains at $22, in line with our forward NAV estimate
Weingarten Realty: Maintaining 09 Est., despite 1Q surprise: We are maintaining our price objective of $13 for WRI. This assumes a 5% discount to its forward NAV. Maintain Underperform based on PO and WRI recent outperformance of REIT sector.
AMB Property Corp: Well positioned to weather the storm: AMB reported better than expected Q1 results due to higher than expected gains on development sales. We are maintaining our Neutral rating but raising our PO from $16 to $19 per share.
SL Green: SLG's results beat on one-time items. SLG reported 1Q09 FFO of $1.48. We are increasing our 09 FFOPS estimate by $0.17 to $5.67, while our PO increased $2 to $16.50, in line with our forward NAV estimate.
Now that all REITs are solidly recapitalized and chasing the 3 still non-bankrupt retail tenants with 100%-off rent offers, maybe it is time for the custodians to allow investors to short again. One of these days SPY and IWR may finally not be Hard To Borrow - who knows?
Mack-Cali Realty Corporation Announces Commencement of Public Offering of Common Stock
EDISON, N.J. -- April 30, 2009
Mack-Cali Realty Corporation (the “Company”) (NYSE: CLI) today announced that it has commenced a public offering of 6,500,000 shares of common stock. In addition, the Company expects to grant to the underwriters for the public offering an option for 30 days to purchase up to 975,000 additional shares of common stock to cover overallotments, if any. Merrill Lynch & Co. and Deutsche Bank Securities will serve as the joint book-running managers.
The Company plans to use the net proceeds from the offering to repay borrowings under its unsecured revolving credit facility and for general corporate purposes.
This offering will be made pursuant to a prospectus supplement to the Company’s prospectus, dated November 26, 2008, filed as part of the Company’s effective $2 billion shelf registration statement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
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