Mack-Cali Signs Lease With 24 Hour Fitness At Hanover Center

Mack-Cali Realty Corporation (NYSE:CLI) has struck a lease deal with 24 Hour Fitness at its shopping center in Hanover, NJ. The fitness firm will occupy approximately 40,000 square feet of space at the shopping center situated at the intersection of Sylvan Way and Ridgedale Avenue in Hanover. The move will offer amenities to the entire community as well as diversify the company’s tenant base.

San Ramon, CA-based 24 Hour Fitness is a reputed firm in the fitness industry and boasts around four million members in over 400 clubs across the U.S. The firm will join anchor tenant, Wegmans, at the Hanover shopping center. Notably, presently under construction, Wegmans is slated to open the 134,000-square-foot supermarket on Jul 23.

Last month, Mack-Cali reported first-quarter 2017 core funds from operations (“FFO”) per share of 56 cents, missing the Zacks Consensus Estimate by a penny. However, the figure came 14% higher than the prior-year quarter tally. The year-over-year increase in core FFO per share was driven by higher base rents in 2017 and interest expense savings from refinancing of high rate debt.

Mack-Cali has been making solid strides in its 20/15 strategic plan. This plan is aimed at transforming the company by focusing on waterfront and transit-based office holdings, and luxury multi-family portfolio growth. It also includes planned exits from non-core markets and capital improvements in core assets. Such efforts are likely to prove conducive to growth and improve cash flow. However, earnings-dilutive effects of disposition in the near term remain headwinds. Also, rate hikes add to the company’s woes.

However, shares of Mack-Cali underperformed the Zacks categorized REIT and Equity Trust – Other industry over the past three months. Mack-Cali’s shares descended 8.1% against the industry’s decline of 0.4%.



Mack-Cali currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Investors can also consider better-ranked stocks in the REIT space like Equity LifeStyle Properties, Inc. (NYSE:ELS) , Sunstone Hotel Investors, Inc. (NYSE:SHO) and PS Business Parks, Inc. (NYSE:PSB) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.

Sunstone Hotel’s estimates for 2017 FFO per share moved north nearly 2.6% to $1.20, over the past 30 days.

Moreover, PS Business Parks’ estimates for 2017 FFO per share climbed 1.3% to $6.01, over the past seven days.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.


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Equity Lifestyle Properties, Inc. (ELS): Free Stock Analysis Report

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Mack-Cali Realty Corporation (CLI): Free Stock Analysis Report

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