UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
|
[X]
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the fiscal year ended December 31, 2007
|
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Commission
File Number: 1-13274
MACK-CALI
REALTY CORPORATION
(Exact
Name of Registrant as specified in its charter)
|
Maryland
|
22-3305147
|
|
(State
or other jurisdiction of
|
(IRS
Employer
|
|
incorporation
or organization)
|
Identification
No.)
|
|
343
Thornall Street, Edison, New Jersey
|
08837-2206
|
|
(Address
of principal executive offices)
|
(Zip
code)
|
(732)
590-1000
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
|
(Title
of Each Class)
|
(Name
of Each Exchange on Which Registered)
|
|
Common
Stock, $0.01 par value
Preferred
Share Purchase Rights
|
New
York Stock Exchange
|
Securities
registered pursuant to Section 12(g) of the Act:
None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes X No ___
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange Act. Yes ___ No X
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X
No ___
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendments to
this Form 10-K. [ X ]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of “accelerated filer," "large
accelerated filer,” and "smaller reporting company" in Rule 12b-2 of the
Exchange Act. (Check One):
Large
accelerated filer X Accelerated
filer
___ Non-accelerated
filer
___
Smaller reporting company___
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes ___ No X
As of
June 30, 2007, the aggregate market value of the voting stock held by
non-affiliates of the registrant was $2,922,992,821. The aggregate
market value was computed with reference to the closing price on the New York
Stock Exchange on such date. This calculation does not reflect a
determination that persons are affiliates for any other purpose.
As of
February 8, 2008, 65,664,851 shares of common stock, $0.01 par value, of the
Company (“Common Stock”) were outstanding.
LOCATION OF EXHIBIT
INDEX: The index of exhibits is contained herein on page
number 122.
DOCUMENTS INCORPORATED BY
REFERENCE: Portions of the registrant’s definitive proxy
statement for fiscal year ended December 31, 2007 to be issued in conjunction
with the registrant’s annual meeting of shareholders expected to be held on May
21, 2008 are incorporated by reference in Part III of this Form
10-K. The definitive proxy statement will be filed by the registrant
with the SEC not later than 120 days from the end of the registrant’s fiscal
year ended December 31, 2007.
FORM
10-K
Table
of Contents
|
PART
I
|
Page No.
|
|
|
Item
1
|
Business
|
3
|
|
Item
1A
|
Risk
Factors
|
8
|
|
Item
1B
|
Unresolved
Staff Comments
|
16
|
|
Item
2
|
Properties
|
17
|
|
Item
3
|
Legal
Proceedings
|
37
|
|
Item
4
|
Submission
of Matters to a Vote of Security Holders
|
37
|
|
PART
II
|
||
|
Item
5
|
Market
for Registrant’s Common Equity, Related Stockholder
Matters
|
|
|
and
Issuer Purchases of Equity Securities
|
38
|
|
|
Item
6
|
Selected
Financial Data
|
41
|
|
Item
7
|
Management’s
Discussion and Analysis of Financial Condition and
|
|
|
Results
of Operations
|
42
|
|
|
Item
7A
|
Quantitative
and Qualitative Disclosures About Market Risk
|
61
|
|
Item
8
|
Financial
Statements and Supplementary Data
|
62
|
|
Item
9
|
Changes
in and Disagreements with Accountants on Accounting and
|
|
|
Financial
Disclosure
|
62
|
|
|
Item
9A
|
Controls
and Procedures
|
62
|
|
Item
9B
|
Other
Information
|
63
|
|
PART
III
|
||
|
Item
10
|
Directors,
Executive Officers and Corporate Governance
|
63
|
|
Item
11
|
Executive
Compensation
|
63
|
|
Item
12
|
Security
Ownership of Certain Beneficial Owners and Management
|
|
|
and
Related Stockholder Matters
|
63
|
|
|
Item
13
|
Certain
Relationships and Related Transactions, and Director
Independence
|
63
|
|
Item
14
|
Principal
Accounting Fees and Services
|
63
|
|
PART
IV
|
||
|
Item
15
|
Exhibits
and Financial Statement Schedules
|
64
|
|
SIGNATURES
|
120
|
|
|
EXHIBIT
INDEX
|
122
|
2
PART
I
ITEM
1. BUSINESS
GENERAL
Mack-Cali
Realty Corporation, a Maryland corporation (together with its subsidiaries, the
“Company”), is a fully-integrated, self-administered and self-managed real
estate investment trust (“REIT”) that owns and operates a real estate portfolio
comprised predominantly of Class A office and office/flex properties located
primarily in the Northeast. The Company performs substantially all
commercial real estate leasing, management, acquisition, development and
construction services on an in-house basis. Mack-Cali Realty
Corporation was incorporated on May 24, 1994. The Company’s executive
offices are located at 343 Thornall Street, Edison, New Jersey 08837-2206, and
its telephone number is (732) 590-1000. The Company has an internet
website at www.mack-cali.com.
As of
December 31, 2007, the Company owned or had interests in 294 properties,
aggregating approximately 33.7 million square feet, plus developable land
(collectively, the “Properties”), which are leased to approximately 2,200
tenants. The Properties are comprised of: (a) 255 wholly-owned or
Company-controlled properties consisting of 150 office buildings and 95
office/flex buildings aggregating approximately 28.8 million square feet, six
industrial/warehouse buildings totaling approximately 387,400 square feet, two
stand-alone retail properties totaling approximately 17,300 square
feet, and two land leases (collectively, the “Consolidated Properties”); and (b)
38 buildings, which are primarily office properties, aggregating approximately
4.5 million square feet, and a 350-room hotel, which are owned by unconsolidated
joint ventures in which the Company has investment interests. Unless
otherwise indicated, all references to square feet represent net rentable
area. As of December 31, 2007, the office, office/flex,
industrial/warehouse and stand-alone retail properties included in the
Consolidated Properties were 92.7 percent leased. Percentage leased
includes all leases in effect as of the period end date, some of which have
commencement dates in the future (including, at December 31, 2007, a lease with
a commencement date substantially in the future consisting of 8,590 square feet
scheduled to commence in 2009), and leases that expire at the period end
date. Leases that expire as of December 31, 2007 aggregate 146,261
square feet, or 0.5 percent of the net rentable square footage. The
Properties are located in six states, primarily in the Northeast, and the
District of Columbia. See Item 2: Properties.
The
Company’s strategy has been to focus its operations, acquisition and development
of office properties in high-barrier-to-entry markets and sub-markets where it
believes it is, or can become, a significant and preferred owner and
operator. The Company plans to continue this strategy by expanding
through acquisitions and/or development in Northeast markets where it has, or
can achieve, similar status. The Company believes that its Properties
have excellent locations and access and are well-maintained and professionally
managed. As a result, the Company believes that its Properties
attract high quality tenants and achieve among the highest rental, occupancy and
tenant retention rates within their markets. The Company also
believes that its extensive market knowledge provides it with a significant
competitive advantage, which is further enhanced by its strong reputation for,
and emphasis on, delivering highly responsive, professional management
services. See “Business Strategies.”
As of
December 31, 2007, executive officers and directors of the Company and their
affiliates owned approximately 9 percent of the Company’s outstanding shares of
Common Stock (including Units redeemable into shares of Common
Stock). As used herein, the term “Units” refers to limited
partnership interests in Mack-Cali Realty, L.P., a Delaware limited partnership
(the “Operating Partnership”) through which the Company conducts its real estate
activities. The Company’s executive officers have been employed by
the Company and/or its predecessor companies for an average of
approximately 20 years.
BUSINESS
STRATEGIES
Operations
Reputation: The
Company has established a reputation as a highly-regarded landlord with an
emphasis on delivering quality tenant services in buildings it owns and/or
manages. The Company believes that its continued success depends in
part on enhancing its reputation as an operator of choice, which will facilitate
the retention of current tenants and the attraction of new
tenants. The Company believes it provides a superior level of service
to its tenants, which should in turn, allow the Company to outperform the market
with respect to occupancy rates, as well as improve tenant
retention.
3
Communication
with tenants: The Company emphasizes frequent communication with tenants
to ensure first-class service to the Properties. Property management
personnel generally are located on site at the Properties to provide convenient
access to management and to ensure that the Properties are
well-maintained. Property management’s primary responsibility is to
ensure that buildings are operated at peak efficiency in order to meet both the
Company’s and tenants’ needs and expectations. Property management
personnel additionally budget and oversee capital improvements and building
system upgrades to enhance the Properties’ competitive advantages in their
markets and to maintain the quality of the Company’s properties.
Additionally,
the Company’s in-house leasing representatives develop and maintain long-term
relationships with the Company’s diverse tenant base and coordinate leasing,
expansion, relocation and build-to-suit opportunities within the Company’s
portfolio. This approach allows the Company to offer office space in
the appropriate size and location to current or prospective tenants in any of
its sub-markets.
Growth
The
Company plans to continue to own and operate a portfolio of properties in
high-barrier-to-entry markets, with a primary focus in the
Northeast. The Company’s primary objectives are to maximize operating
cash flow and to enhance the value of its portfolio through effective
management, acquisition, development and property sales strategies, as
follows:
Internal
Growth: The Company seeks to maximize the value of its existing portfolio
through implementing operating strategies designed to produce the highest
effective rental and occupancy rates and lowest tenant installation cost within
the markets that it operates. The Company continues to pursue
internal growth through re-leasing space at higher effective rents with
contractual rent increases and developing or redeveloping space for its diverse
base of high credit tenants, including New Cingular Wireless PCS LLC, Morgan
Stanley and The United States of America - GSA. In addition, the
Company seeks economies of scale through volume discounts to take advantage of
its size and dominance in particular sub-markets, and operating efficiencies
through the use of in-house management, leasing, marketing, financing,
accounting, legal, development and construction services.
Acquisitions:
The Company also believes that growth opportunities exist through acquiring
operating properties or properties for redevelopment with attractive returns in
its core Northeast sub-markets where, based on its expertise in leasing,
managing and operating properties, it believes it is, or can become, a
significant and preferred owner and operator. The Company intends
either directly or through joint ventures to acquire, invest in or redevelop
additional properties that: (i) are expected to provide attractive initial
yields with potential for growth in cash flow from operations; (ii) are
well-located, of high quality and competitive in their respective sub-markets;
(iii) are located in its existing sub-markets or in sub-markets in which the
Company can become a significant and preferred owner and operator; and (iv) it
believes have been under-managed or are otherwise capable of improved
performance through intensive management, capital improvements and/or leasing
that should result in increased effective rental and occupancy
rates.
Development: The Company seeks to
selectively develop additional properties either directly or through joint
ventures where it believes such development will result in a favorable
risk-adjusted return on investment in coordination with the above operating
strategies. Such development primarily will occur: (i) when leases
have been executed prior to construction; (ii) in stable core Northeast
sub-markets where the demand for such space exceeds available supply; and (iii)
where the Company is, or can become, a significant and preferred owner and
operator.
Property
Sales:
While management’s principal intention is to own and operate its properties on a
long-term basis, it periodically assesses the attributes of each of its
properties, with a particular focus on the supply and demand fundamentals of the
sub-markets in which they are located. Based on these ongoing
assessments, the Company may, from time to time, decide to sell any of its
properties.
Financial
The
Company currently intends to maintain a ratio of debt-to-undepreciated assets
(total debt of the Company as a percentage of total undepreciated assets) of 50
percent or less. As of December 31, 2007 and 2006, the Company’s
total debt constituted approximately 40.2 and 41.4 percent of total
undepreciated assets of the Company, respectively. The Company has
three investment grade credit ratings. Standard & Poor’s Rating
Services (“S&P”) and Fitch, Inc. (“Fitch”) have each assigned their BBB
rating to existing and prospective senior unsecured debt of the Operating
Partnership. S&P and Fitch have also assigned their BBB- rating
to existing and prospective preferred stock offerings of the
Company. Moody’s Investors Service (“Moody’s”) has assigned its Baa2
rating to existing and prospective senior unsecured debt of the Operating
Partnership and its Baa3 rating to existing and prospective preferred stock
offerings of the Company. Although there is no limit in the Company’s
organizational documents on the amount of indebtedness that the Company may
incur or a requirement for the maintenance of investment grade credit ratings,
the Company has entered into certain financial agreements which contain
covenants that limit the Company’s ability to incur indebtedness under certain
circumstances. The Company intends to conduct its operations so as to
best be able to maintain its investment grade rated status. The
Company intends to utilize the most appropriate sources of capital for future
acquisitions, development, capital improvements and other investments, which may
include funds from operating activities, proceeds from property and land sales,
short-term and long-term borrowings (including draws on the Company’s revolving
credit facility), and the issuance of additional debt or equity
securities.
4
EMPLOYEES
As of
December 31, 2007, the Company had approximately 485 full-time
employees.
COMPETITION
The
leasing of real estate is highly competitive. The Properties compete
for tenants with lessors and developers of similar properties located in their
respective markets primarily on the basis of location, rent charged, services
provided, and the design and condition of the Properties. The Company
also experiences competition when attempting to acquire or dispose of real
estate, including competition from domestic and foreign financial institutions,
other REITs, life insurance companies, pension trusts, trust funds,
partnerships, individual investors and others.
REGULATIONS
Many laws
and governmental regulations are applicable to the Properties and changes in
these laws and regulations, or their interpretation by agencies and the courts,
occur frequently.
Under
various laws and regulations relating to the protection of the environment, an
owner of real estate may be held liable for the costs of removal or remediation
of certain hazardous or toxic substances located on or in the
property. These laws often impose liability without regard to whether
the owner was responsible for, or even knew of, the presence of such
substances. The presence of such substances may adversely affect the
owner’s ability to rent or sell the property or to borrow using such property as
collateral and may expose it to liability resulting from any release of, or
exposure to, such substances. Persons who arrange for the disposal or
treatment of hazardous or toxic substances at another location may also be
liable for the costs of removal or remediation of such substances at the
disposal or treatment facility, whether or not such facility is owned or
operated by such person. Certain environmental laws impose liability
for the release of asbestos-containing materials into the air, and third parties
may also seek recovery from owners or operators of real properties for personal
injury associated with asbestos-containing materials and other hazardous or
toxic substances.
In
connection with the ownership (direct or indirect), operation, management and
development of real properties, the Company may be considered an owner or
operator of such properties or as having arranged for the disposal or treatment
of hazardous or toxic substances and, therefore, potentially liable for removal
or remediation costs, as well as certain other related costs, including
governmental penalties and injuries to persons and property.
There can
be no assurance that (i) future laws, ordinances or regulations will not impose
any material environmental liability, (ii) the current environmental condition
of the Properties will not be affected by tenants, by the condition of land or
operations in the vicinity of the Properties (such as the presence of
underground storage tanks), or by third parties unrelated to the Company, or
(iii) the Company’s assessments reveal all environmental liabilities and that
there are no material environmental liabilities of which the Company is
aware. If compliance with the various laws and regulations, now
existing or hereafter adopted, exceeds the Company’s budgets for such items, the
Company’s ability to make expected distributions to stockholders could be
adversely affected.
There are
no other laws or regulations which have a material effect on the Company’s
operations, other than typical federal, state and local laws affecting the
development and operation of real property, such as zoning laws.
5
INDUSTRY
SEGMENTS
The
Company operates in two industry segments: (i) real estate; and (ii)
construction services. As of December 31, 2007, the Company does not
have any foreign operations and its business is not seasonal. In May
2006, in conjunction with the Company’s acquisition of the Gale Company and
related businesses, the Company acquired a business specializing solely in
construction and related services whose operations comprise the Company’s
construction services segment. Please see our financial statements
attached hereto and incorporated by reference herein for financial information
relating to our industry segments.
RECENT
DEVELOPMENTS
The
Company’s core markets continue to be weak. The percentage leased in
the Company’s consolidated portfolio of stabilized operating properties was 92.7
percent at December 31, 2007 as compared to 92.0 percent at December 31, 2006
and 91.0 percent at December 31, 2005. Percentage leased includes all
leases in effect as of the period end date, some of which have commencement
dates in the future (including, at December 31, 2007, a lease with a
commencement date substantially in the future consisting of 8,590 square feet
scheduled to commence in 2009), and leases that expire at the period end
date. Leases that expired as of December 31, 2007, 2006 and 2005
aggregate 146,261, 103,477 and 311,623 square feet, respectively, or 0.5, 0.4
and 1.1 percentage of the net rentable square footage,
respectively. Rental rates on the Company’s space that was re-leased
(based on first rents payable) during the year ended December 31,
2007 decreased an average of 0.2 percent compared to rates that were in effect
under the prior leases, as compared to a 0.2 percent decrease in 2006 and an 8.2
percent decrease in 2005. The Company believes that vacancy rates may
continue to increase in some of its markets in 2008. As a result, the
Company’s future earnings and cash flow may continue to be negatively impacted
by current market conditions.
Property
Acquisitions
The
Company acquired the following office properties during the year ended December
31, 2007: (dollars in
thousands)
|
Acquisition
|
#
of
|
Rentable
|
Acquisition
|
||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Square
Feet
|
Cost
|
|
05/08/07
|
AAA
Properties (a) (c)
|
Hamilton
Township, New Jersey
|
2
|
69,232
|
$ 9,048
|
|
06/11/07
|
125
Broad Street (b) (c)
|
New
York, New York
|
1
|
524,476
|
274,091
|
|
Total
Property Acquisitions:
|
3
|
593,708
|
$283,139
|
||
|
(a)
Included
in this transaction was the acquisition of two parcels of developable land
aggregating approximately 13 acres.
|
|||||
|
(b)
Acquisition represented two units of office condominium interests, which
collectively comprise floors 2 through 16, or 39.6 percent, of the
40-story, 1.2 million square-foot building.
|
|||||
|
(c) Transaction
was funded primarily through borrowing on the Company’s revolving credit
facility.
|
|||||
Properties
Commencing Initial Operations
The
following office property commenced initial operations during the year ended
December 31, 2007 (dollars in
thousands):
|
#
of
|
Rentable
|
Investment
by
|
||||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Square
Feet
|
Company
(a)
|
|
|
05/08/07
|
700
Horizon Drive
|
Hamilton
Township, New Jersey
|
1
|
120,000
|
$16,751
|
|
|
Total
Properties Commencing Initial Operations:
|
1
|
120,000
|
$16,751
|
|||
|
(a)
Development
costs were funded primarily through borrowing on the Company’s revolving
credit facility. Amounts are as of December 31,
2007.
|
||||||
Land
Acquisition
In
February 2007, the Company exercised its option to acquire approximately 43
acres of land sites within its Capital Office Park complex in Greenbelt,
Maryland, which is able to accommodate the development of up to 600,000 square
feet of office space, for $13 million. On May 25, 2007, the Company
completed the purchase of the land for approximately $13 million, which
consisted of 114,911 common operating partnership units valued at $5.2 million,
and the remainder in cash.
6
Sales
The
Company sold the following office properties during the year ended December 31,
2007: (dollars in
thousands)
|
Rentable
|
Net
|
Net
|
||||||
|
Sale
|
#
of
|
Square
|
Sales
|
Book
|
Realized
|
|||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Feet
|
Proceeds
|
Value
|
Gain
|
|
|
05/10/07
|
1000
Bridgeport Avenue
|
Shelton,
Connecticut
|
1
|
133,000
|
$16,411
|
$13,782
|
$ 2,629
|
|
|
06/11/07
|
500
W. Putnam Avenue
|
Greenwich,
Connecticut
|
1
|
121,250
|
54,344
|
18,113
|
36,231
|
|
|
07/13/07
|
100
& 200 Decadon Drive
|
Egg
Harbor, New Jersey
|
2
|
80,344
|
11,448
|
5,894
|
5,554
|
|
|
Total
Office Property Sales:
|
4
|
334,594
|
$82,203
|
$37,789
|
$44,414
|
|||
FINANCING
ACTIVITY
On
February 7, 2007, the Company completed an underwritten offer and sale of
4,650,000 shares of its common stock and used the net proceeds, which totaled
approximately $252 million (after offering costs), primarily to pay down its
outstanding borrowings under the Company’s revolving credit facility and for
general corporate purposes.
On
September 12, 2007, the Board of Directors authorized an increase to the
Company’s repurchase program under which the Company was permitted to purchase
up to $150 million of the Company’s outstanding common stock (“Repurchase
Program”). During the year ended December 31, 2007 and through
February 8, 2008, the Company purchased and retired 2,893,630 shares of its
outstanding common stock for an aggregate cost of approximately $104
million. The Company has a remaining authorization to repurchase up
to approximately $46 million of its outstanding common stock, which it may
repurchase from time to time in open market transactions at prevailing prices or
through privately negotiated transactions.
AVAILABLE
INFORMATION
The
Company’s internet website is www.mack-cali.com. The Company makes
available free of charge on or through its website its annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended, as soon as reasonably practicable after it
electronically files or furnishes such materials to the Securities and Exchange
Commission. In addition, the Company’s internet website includes
other items related to corporate governance matters, including, among other
things, the Company’s corporate governance guidelines, charters of various
committees of the Board of Directors, and the Company’s code of business conduct
and ethics applicable to all employees, officers and directors. The
Company intends to disclose on its internet website any amendments to or waivers
from its code of business conduct and ethics as well as any amendments to its
corporate governance principles or the charters of various committees of the
Board of Directors. Copies of these documents may be obtained, free
of charge, from our internet website. Any shareholder also may obtain
copies of these documents, free of charge, by sending a request in writing to:
Mack-Cali Investor Relations Department, 343 Thornall Street, Edison,
NJ 08837-2206.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
We
consider portions of this report, including the documents incorporated by
reference, to be forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as
amended. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in
Section 21E of such act. Such forward-looking statements relate
to, without limitation, our future economic performance, plans and objectives
for future operations and projections of revenue and other financial
items. Forward-looking statements can be identified by the use of
words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,”
“estimate,” “continue” or comparable terminology. Forward-looking
statements are inherently subject to risks and uncertainties, many of which we
cannot predict with accuracy and some of which we might not even
anticipate. Although we believe that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions at the
time made, we can give no assurance that such expectations will be
achieved. Future events and actual results, financial and otherwise,
may differ materially from the results discussed in the forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements.
7
Among the
factors about which we have made assumptions are:
|
·
|
changes
in the general economic climate and conditions, including those affecting
industries in which our principal tenants
operate;
|
|
·
|
the
extent of any tenant bankruptcies or of any early lease
terminations;
|
|
·
|
our
ability to lease or re-lease space at current or anticipated
rents;
|
|
·
|
changes
in the supply of and demand for office, office/flex and
industrial/warehouse properties;
|
|
·
|
changes
in interest rate levels;
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changes
in operating costs;
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our
ability to obtain adequate insurance, including coverage for terrorist
acts;
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the
availability of financing;
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changes
in governmental regulation, tax rates and similar matters;
and
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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 operating costs may be greater than
anticipated.
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For
further information on factors which could impact us and the statements
contained herein, see Item 1A: Risk Factors. We assume no obligation to update
and supplement forward-looking statements that become untrue because of
subsequent events, new information or otherwise.
ITEM
1A. RISK
FACTORS
Our
results from operations and ability to make distributions on our equity and debt
service on our indebtedness may be affected by the risk factors set forth
below. All investors should consider the following risk factors
before deciding to purchase securities of the Company. The Company
refers to itself as “we” or “our” in the following risk factors.
Declines
in economic activities in the Northeastern office markets could adversely affect
our operating results.
A
majority of our revenues are derived from our properties located in the
Northeast, particularly in New Jersey, New York and
Pennsylvania. Adverse economic developments in this region could
adversely impact the operations of our properties and, therefore, our
profitability. Because our portfolio consists primarily of office and
office/flex buildings (as compared to a more diversified real estate portfolio),
a decline in the economy and/or a decline in the demand for office space may
adversely affect our ability to make distributions or payments to our
investors.
Our
performance is subject to risks associated with the real estate
industry.
General:
Our business and our ability to make distributions or payments to our investors
depend on the ability of our properties to generate funds in excess of operating
expenses (including scheduled principal payments on debt and capital
expenditures). Events or conditions that are beyond our control may
adversely affect our operations and the value of our properties. Such
events or conditions could include:
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changes
in the general economic climate;
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changes
in local conditions, such as an oversupply of office space, a reduction in
demand for office space, or reductions in office market rental
rates;
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decreased
attractiveness of our properties to
tenants;
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competition
from other office and office/flex
properties;
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our
inability to provide adequate
maintenance;
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increased
operating costs, including insurance premiums, utilities and real estate
taxes, due to inflation and other factors which may not necessarily be
offset by increased rents;
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changes
in laws and regulations (including tax, environmental, zoning and building
codes, and housing laws and regulations) and agency or court
interpretations of such laws and regulations and the related costs of
compliance;
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changes
in interest rate levels and the availability of
financing;
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the
inability of a significant number of tenants to pay
rent;
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our
inability to rent office space on favorable terms;
and
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civil
unrest, earthquakes, acts of terrorism and other natural disasters or acts
of God that may result in uninsured
losses.
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8
We may
suffer adverse consequences if our revenues decline since our operating costs do
not necessarily decline in proportion to our revenue: We earn
a significant portion of our income from renting our properties. Our operating
costs, however, do not necessarily fluctuate in relation to changes in our
rental revenue. This means that our costs will not necessarily decline even if
our revenues do. Our operating costs could also increase while our
revenues do not. If our operating costs increase but our rental revenues do not,
we may be forced to borrow to cover our costs, we may incur losses and we may
not have cash available for distributions to our stockholders.
Financially
distressed tenants may be unable to pay rent: If a tenant defaults, we
may experience delays and incur substantial costs in enforcing our rights as
landlord and protecting our investments. If a tenant files for
bankruptcy, a potential court judgment rejecting and terminating such tenant’s
lease could adversely affect our ability to make distributions or payments to
our investors.
Renewing
leases or re-letting space could be costly: If a tenant does not renew
its lease upon expiration or terminates its lease early, we may not be able to
re-lease the space. If a tenant does renew its lease or we re-lease
the space, the terms of the renewal or new lease, including the cost of required
renovations or concessions to the tenant, may be less favorable than the current
lease terms, which could adversely affect our ability to make distributions or
payments to our investors.
Our
insurance coverage on our properties may be inadequate: We currently carry
comprehensive insurance on all of our properties, including insurance for
liability, fire and flood. We cannot guarantee that the limits of our
current policies will be sufficient in the event of a catastrophe to our
properties. We cannot guarantee that we will be able to renew or
duplicate our current insurance coverage in adequate amounts or at reasonable
prices. In addition, while our current insurance policies insure us
against loss from terrorist acts and toxic mold, in the future, insurance
companies may no longer offer coverage against these types of losses, or, if
offered, these types of insurance may be prohibitively expensive. If any or all
of the foregoing should occur, we may not have insurance coverage against
certain types of losses and/or there may be decreases in the limits of insurance
available. Should an uninsured loss or a loss in excess of our
insured limits occur, we could lose all or a portion of the capital we have
invested in a property or properties, as well as the anticipated future revenue
from the property or properties. Nevertheless, we might remain
obligated for any mortgage debt or other financial obligations related to the
property or properties. We cannot guarantee that material losses in
excess of insurance proceeds will not occur in the future. If any of
our properties were to experience a catastrophic loss, it could seriously
disrupt our operations, delay revenue and result in large expenses to repair or
rebuild the property. Such events could adversely affect our ability
to make distributions or payments to our investors.
Illiquidity
of real estate limits our ability to act quickly: Real estate investments
are relatively illiquid. Such illiquidity may limit our ability to
react quickly in response to changes in economic and other
conditions. If we want to sell an investment, we might not be able to
dispose of that investment in the time period we desire, and the sales price of
that investment might not recoup or exceed the amount of our
investment. The prohibition in the Internal Revenue Code of 1986, as
amended (the “Code”), and related regulations on a real estate investment trust
holding property for sale also may restrict our ability to sell
property. In addition, we acquired a significant number of our
properties from individuals to whom we issued Units as part of the purchase
price. In connection with the acquisition of these properties, in
order to preserve such individual’s income tax deferral, we contractually agreed
not to sell or otherwise transfer the properties for a specified period of time,
except in a manner which does not result in recognition of any built-in-gain
(which may result in an income tax liability) or which reimburses the
appropriate individuals for the income tax consequences of the recognition of
such built-in-gains. As of December 31, 2007, 13 of our properties,
with an aggregate net book value of approximately $220.9 million, were subject
to these restrictions, which expire periodically through 2016. For
those properties where such restrictions have lapsed, we are generally required
to use commercially reasonable efforts to prevent any sale, transfer or other
disposition of the subject properties from resulting in the recognition of
built-in gain to the appropriate individuals. 124 of our properties, with an
aggregate net book value of approximately $1.9 billion, have lapsed restrictions
and are subject to these conditions. The above limitations on our
ability to sell our investments could adversely affect our ability to make
distributions or payments to our investors.
9
Americans
with Disabilities Act compliance could be costly: Under the Americans
with Disabilities Act of 1990 (“ADA”), all public accommodations and commercial
facilities must meet certain federal requirements related to access and use by
disabled persons. Compliance with the ADA requirements could involve
removal of structural barriers from certain disabled persons’
entrances. Other federal, state and local laws may require
modifications to or restrict further renovations of our properties with respect
to such accesses. Although we believe that our properties are
substantially in compliance with present requirements, noncompliance with the
ADA or related laws or regulations could result in the United States government
imposing fines or private litigants being awarded damages against
us. Such costs may adversely affect our ability to make distributions
or payments to our investors.
Environmental
problems are possible and may be costly: Various federal, state and
local laws and regulations subject property owners or operators to liability for
the costs of removal or remediation of certain hazardous or toxic substances
located on or in the property. These laws often impose liability
without regard to whether the owner or operator was responsible for or even knew
of the presence of such substances. The presence of or failure to
properly remediate hazardous or toxic substances (such as toxic mold) may
adversely affect our ability to rent, sell or borrow against contaminated
property and may impose liability upon us for personal injury to persons exposed
to such substances. Various laws and regulations also impose
liability on persons who arrange for the disposal or treatment of hazardous or
toxic substances at another location for the costs of removal or remediation of
such substances at the disposal or treatment facility. These laws
often impose liability whether or not the person arranging for such disposal
ever owned or operated the disposal facility. Certain other
environmental laws and regulations impose liability on owners or operators of
property for injuries relating to the release of asbestos-containing or other
materials into the air, water or otherwise into the environment. As
owners and operators of property and as potential arrangers for hazardous
substance disposal, we may be liable under such laws and regulations for removal
or remediation costs, governmental penalties, property damage, personal injuries
and related expenses. Payment of such costs and expenses could
adversely affect our ability to make distributions or payments to our
investors.
Competition
for acquisitions may result in increased prices for properties: We plan to acquire
additional properties in New Jersey, New York and Pennsylvania and in the
Northeast generally. We may be competing for investment opportunities
with entities that have greater financial resources. Several office
building developers and real estate companies may compete with us in seeking
properties for acquisition, land for development and prospective tenants. Such
competition may adversely affect our ability to make distributions or payments
to our investors by:
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reducing
the number of suitable investment opportunities offered to
us;
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increasing
the bargaining power of property
owners;
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interfering
with our ability to attract and retain
tenants;
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increasing
vacancies which lowers market rental rates and limits our ability to
negotiate rental rates; and/or
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adversely
affecting our ability to minimize expenses of
operation.
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New
acquisitions may fail to perform as expect: We may require new
office properties, assuming we are able to obtain capital on favorable
terms. Such newly acquired properties may not perform as
expected. Inaccurate assumptions regarding future rental or occupancy
rates could result in overly optimistic estimates of future
revenues. In addition, future operating expenses or the costs
necessary to bring an acquired property up to standards established for its
intended market position may be underestimated.
Development
of real estate could be costly: As part of our operating
strategy, we may acquire land for development or construct on owned land, under
certain conditions. Included among the risks of the real estate
development business are the following, which may adversely affect our ability
to make distributions or payments to our investors:
10
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financing
for development projects may not be available on favorable
terms;
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long-term
financing may not be available upon completion of construction;
and
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failure
to complete construction on schedule or within budget may increase debt
service expense and construction
costs.
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Property
ownership through joint ventures could subject us to the contrary business
objectives of our co-venturers: We, from time to
time, invest in joint ventures or partnerships in which we do not hold a
controlling interest in the assets underlying the entities in which we invest,
including joint ventures in which (i) we own a direct interest in an entity
which controls such assets, or (ii) we own a direct interest in an equity which
owns indirect interests, through one or more intermediaries, of such
assets. These investments involve risks that do not exist with
properties in which we own a controlling interest with respect to the underlying
assets, including the possibility that our co-venturers or partners may, at any
time, have business, economic or other objectives that are inconsistent with our
objectives. Because we lack a controlling interest, our co-venturers
or partners may be in a position to take action contrary to our instructions or
requests or contrary to our policies or objectives. While we seek
protective rights against such contrary actions, there can be no assurance that
we will be successful in procuring any such protective rights, or if procured,
that the rights will be sufficient to fully protect us against contrary
actions. Our organizational documents do not limit the amount of
available funds that we may invest in joint ventures or
partnerships. If the objectives of our co-venturers or partners are
inconsistent with ours, it may adversely affect our ability to make
distributions or payments to our investors.
Our
real estate construction management activities are subject to risks particular
to third-party construction projects.
As a
result of the Gale/Green Transactions, we now perform fixed price construction
services for third parties and we are subject to a variety of risks unique to
these activities. If construction costs of a project exceed original
estimates, such costs may have to be absorbed by us, thereby making the project
less profitable than originally estimated, or possibly not profitable at all. In
addition, a construction project may be delayed due to government or regulatory
approvals, supply shortages, or other events and circumstances beyond our
control, or the time required to complete a construction project may be greater
than originally anticipated. If any such excess costs or project delays were to
be material, such events may adversely effect our cash flow and liquidity and
thereby impact our ability to pay dividends or make distributions to our
investors.
Debt
financing could adversely affect our economic performance.
Scheduled
debt payments and refinancing could adversely affect our financial
condition: We
are subject to the risks normally associated with debt
financing. These risks, including the following, may adversely affect
our ability to make distributions or payments to our investors:
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our
cash flow may be insufficient to meet required payments of principal and
interest;
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payments
of principal and interest on borrowings may leave us with insufficient
cash resources to pay operating
expenses;
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we
may not be able to refinance indebtedness on
our properties at maturity; and
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if
refinanced, the terms of refinancing may not be as favorable as the
original terms of the related
indebtedness.
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As of
December 31, 2007, we had total outstanding indebtedness of $2.2 billion
comprised of $1.6 billion of senior unsecured notes, outstanding borrowings of
$250 million under our $775 million revolving credit facility and approximately
$329 million of mortgage loans payable and other obligations
indebtedness. We may have to refinance the principal due on our
current or future indebtedness at maturity, and we may not be able to do
so.
If we are
unable to refinance our indebtedness on acceptable terms, or at all, events or
conditions that may adversely affect our ability to make distributions or
payments to our investors include the following:
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we
may need to dispose of one or more of our properties upon disadvantageous
terms;
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prevailing
interest rates or other factors at the time of refinancing could increase
interest rates and, therefore, our interest
expense;
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if
we mortgage property to secure payment of indebtedness and are unable to
meet mortgage payments, the mortgagee could foreclose upon such property
or appoint a receiver to receive an assignment of our rents and leases;
and
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foreclosures
upon mortgaged property could create taxable income without accompanying
cash proceeds and, therefore, hinder our ability to meet the real estate
investment trust distribution requirements of the Internal Revenue
Code.
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11
We are
obligated to comply with financial covenants in our indebtedness that could
restrict our range of operating activities: The mortgages on our
properties contain customary negative covenants, including limitations on our
ability, without the prior consent of the lender, to further mortgage the
property, to enter into new leases outside of stipulated guidelines or to
materially modify existing leases. In addition, our credit facility
contains customary requirements, including restrictions and other limitations on
our ability to incur debt, debt to assets ratios, secured debt to total assets
ratios, interest coverage ratios and minimum ratios of unencumbered assets to
unsecured debt. The indentures under which our senior unsecured debt
have been issued contain financial and operating covenants including coverage
ratios and limitations on our ability to incur secured and unsecured
debt. These covenants limit our flexibility in conducting our
operations and create a risk of default on our indebtedness if we cannot
continue to satisfy them.
Rising
interest rates may adversely affect our cash flow: As of December 31,
2007, outstanding borrowings of approximately $250 million under our
revolving credit facility bear interest at variable rates. We may
incur additional indebtedness in the future that also bears interest at variable
rates. Variable rate debt creates higher debt service requirements if
market interest rates increase. Higher debt service requirements
could adversely affect our ability to make distributions or payments to our
investors and/or cause us to default under certain debt covenants.
Our
degree of leverage could adversely affect our cash flow: We fund
acquisition opportunities and development partially through short-term
borrowings (including our revolving credit facility), as well as from proceeds
from property sales and undistributed cash. We expect to refinance
projects purchased with short-term debt either with long-term indebtedness or
equity financing depending upon the economic conditions at the time of
refinancing. Our Board of Directors has a general policy of limiting
the ratio of our indebtedness to total undepreciated assets (total debt as a
percentage of total undepreciated assets) to 50 percent or less, although there
is no limit in Mack-Cali Realty, L.P.’s or our organizational documents on the
amount of indebtedness that we may incur. However, we have entered
into certain financial agreements which contain financial and operating
covenants that limit our ability under certain circumstances to incur additional
secured and unsecured indebtedness. The Board of Directors could
alter or eliminate its current policy on borrowing at any time at its
discretion. If this policy were changed, we could become more highly
leveraged, resulting in an increase in debt service that could adversely affect
our cash flow and our ability to make distributions or payments to our investors
and/or could cause an increased risk of default on our obligations.
We are
dependent on external sources of capital for future growth: To qualify as
a real estate investment trust, we must distribute to our shareholders each year
at least 90 percent of our net taxable income, excluding any net capital gain.
Because of this distribution requirement, it is not likely that we will be able
to fund all future capital needs, including for acquisitions and developments,
from income from operations. Therefore, we will have to rely on
third-party sources of capital, which may or may not be available on favorable
terms or at all. Our access to third-party sources of capital depends
on a number of things, including the market’s perception of our growth potential
and our current and potential future earnings. Moreover, additional
equity offerings may result in substantial dilution of our shareholders’
interests, and additional debt financing may substantially increase our
leverage.
Competition for skilled personnel
could increase our labor costs.
We
compete with various other companies in attracting and retaining qualified and
skilled personnel. We depend on our ability to attract and retain
skilled management personnel who are responsible for the day-to-day operations
of our company. Competitive pressures may require that we enhance our
pay and benefits package to compete effectively for such
personnel. We may not be able to offset such added costs by
increasing the rates we charge our tenants. If there is an increase
in these costs or if we fail to attract and retain qualified and skilled
personnel, our business and operating results could be harmed.
We
are dependent on our key personnel whose continued service is not
guaranteed.
We are
dependent upon our executive officers for strategic business direction and real
estate experience. While we believe that we could find replacements
for these key personnel, loss of their services could adversely affect our
operations. We have entered into an employment agreement (including
non-competition provisions) which provides for a continuous four-year employment
term with each of Mitchell E. Hersh, Barry Lefkowitz and Roger W. Thomas, a
continuous one-year employment term with Michael A. Grossman, and a three-year
employment term with Mark Yeager which, as of May 9, 2009, shall convert to a
continuous one-year employment term. We do not have key man life
insurance for our executive officers.
12
Certain
provisions of Maryland law and our charter and bylaws as well as our stockholder
rights plan could hinder, delay or prevent changes in control.
Certain
provisions of Maryland law, our charter and our bylaws, as well as our
stockholder rights plan have the effect of discouraging, delaying or preventing
transactions that involve an actual or threatened change in
control. These provisions include the following:
Classified
Board of Directors: Our Board of Directors is
divided into three classes with staggered terms of office of three years
each. The classification and staggered terms of office of our
directors make it more difficult for a third party to gain control of our board
of directors. At least two annual meetings of stockholders, instead
of one, generally would be required to affect a change in a majority of the
board of directors.
Removal
of Directors:
Under our charter, subject to the rights of one or more classes or series of
preferred stock to elect one or more directors, a director may be removed only
for cause and only by the affirmative vote of at least two-thirds of all votes
entitled to be cast by our stockholders generally in the election of
directors. Neither the Maryland General Corporation Law nor our
charter define the term “cause.” As a result, removal for “cause” is
subject to Maryland common law and to judicial interpretation and review in the
context of the facts and circumstances of any particular situation.
Number
of Directors, Board Vacancies, Terms of Office: We have, in our bylaws,
elected to be subject to certain provisions of Maryland law which vest in the
Board of Directors the exclusive right to determine the number of directors and
the exclusive right, by the affirmative vote of a majority of the remaining
directors, even if the remaining directors do not constitute a quorum, to fill
vacancies on the board. These provisions of Maryland law, which are
applicable even if other provisions of Maryland law or the charter or bylaws
provide to the contrary, also provide that any director elected to fill a
vacancy shall hold office for the remainder of the full term of the class of
directors in which the vacancy occurred, rather than the next annual meeting of
stockholders as would otherwise be the case, and until his or her successor is
elected and qualifies.
Stockholder
Requested Special Meetings: Our bylaws provide that our
stockholders have the right to call a special meeting only upon the written
request of the stockholders entitled to cast not less than a majority of all the
votes entitled to be cast by the stockholders at such meeting.
Advance
Notice Provisions for Stockholder Nominations and Proposals: Our bylaws
require advance written notice for stockholders to nominate persons for election
as directors at, or to bring other business before, any meeting of
stockholders. This bylaw provision limits the ability of stockholders
to make nominations of persons for election as directors or to introduce other
proposals unless we are notified in a timely manner prior to the
meeting.
Exclusive
Authority of the Board to Amend the Bylaws: Our bylaws provide that our
board of directors has the exclusive power to adopt, alter or repeal any
provision of the bylaws or to make new bylaws. Thus, our stockholders
may not effect any changes to our bylaws.
Preferred
Stock: Under our charter, our Board of Directors has authority to issue
preferred stock from time to time in one or more series and to establish the
terms, preferences and rights of any such series of preferred stock, all without
approval of our stockholders.
Duties
of Directors with Respect to Unsolicited Takeovers: Maryland law provides
protection for Maryland corporations against unsolicited takeovers by limiting,
among other things, the duties of the directors in unsolicited takeover
situations. The duties of directors of Maryland corporations do not require them
to (a) accept, recommend or respond to any proposal by a person seeking to
acquire control of the corporation, (b) authorize the corporation to redeem any
rights under, or modify or render inapplicable, any stockholders rights plan,
(c) make a determination under the Maryland Business Combination Act or the
Maryland Control Share Acquisition Act, or (d) act or fail to act solely because
of the effect of the act or failure to act may have on an acquisition or
potential acquisition of control of the corporation or the amount or type of
consideration that may be offered or paid to the stockholders in an
acquisition. Moreover, under Maryland law, the act of a director of a
Maryland corporation relating to or affecting an acquisition or potential
acquisition of control is not subject to any higher duty or greater scrutiny
than is applied to any other act of a director. Maryland law also contains a
statutory presumption that an act of a director of a Maryland corporation
satisfies the applicable standards of conduct for directors under Maryland
law.
13
Ownership
Limit: In order to preserve our status as a real estate investment trust
under the Code, our charter generally prohibits any single stockholder, or any
group of affiliated stockholders, from beneficially owning more than 9.8 percent
of our outstanding capital stock unless our Board of Directors waives or
modifies this ownership limit.
Maryland
Business Combination Act: The Maryland Business Combination Act provides
that unless exempted, a Maryland corporation may not engage in business
combinations, including mergers, dispositions of 10 percent or more of its
assets, certain issuances of shares of stock and other specified transactions,
with an “interested stockholder” or an affiliate of an interested stockholder,
for five years after the most recent date on which the interested stockholder
became an interested stockholder, and thereafter unless specified criteria are
met. An interested stockholder is generally a person owning or
controlling, directly or indirectly, 10 percent or more of the voting power of
the outstanding stock of the Maryland corporation. Our board of
directors has exempted from this statute business combinations between the
Company and certain affiliated individuals and entities. However,
unless our board adopts other exemptions, the provisions of the Maryland
Business Combination Act will be applicable to business combinations with other
persons.
Maryland
Control Share Acquisition Act: Maryland law provides that
“control shares” of a corporation acquired in a “control share acquisition”
shall have no voting rights except to the extent approved by a vote of
two-thirds of the votes eligible to cast on the matter under the Maryland
Control Share Acquisition Act. “Control Shares” means shares of stock
that, if aggregated with all other shares of stock previously acquired by the
acquirer, would entitle the acquirer to exercise voting power in electing
directors within one of the following ranges of the voting
power: one-tenth or more but less than one-third, one-third or more
but less than a majority or a majority or more of all voting power. A
“control share acquisition” means the acquisition of control shares, subject to
certain exceptions.
If voting
rights of control shares acquired in a control share acquisition are not
approved at a stockholder’s meeting, then subject to certain conditions and
limitations, the issuer may redeem any or all of the control shares for fair
value. If voting rights of such control shares are approved at a
stockholder’s meeting and the acquirer becomes entitled to vote a majority of
the shares of stock entitled to vote, all other stockholders may exercise
appraisal rights. Our bylaws contain a provision exempting from the
Maryland Control Share Acquisition Act any acquisitions of shares by certain
affiliated individuals and entities, any directors, officers or employees of the
Company and any person approved by the board of directors prior to the
acquisition by such person of control shares. Any control shares
acquired in a control share acquisition which are not exempt under the foregoing
provisions of our bylaws will be subject to the Maryland Control Share
Acquisition Act.
Stockholder
Rights Plan: We have adopted a stockholder rights plan that may
discourage any potential acquirer from acquiring more than 15 percent of our
outstanding common stock since, upon this type of acquisition without approval
of our board of directors, all other common stockholders will have the right to
purchase a specified amount of common stock at a substantial discount from
market price.
Consequences of failure to qualify as
a real estate investment trust could adversely affect our financial
condition. Failure
to maintain ownership limits could cause us to lose our qualification as a real
estate investment trust: In order for us to maintain our qualification as
a real estate investment trust, not more than 50 percent in value of our
outstanding stock may be actually and/or constructively owned by five or fewer
individuals (as defined in the Code to include certain entities). We
have limited the ownership of our outstanding shares of our common stock by any
single stockholder to 9.8 percent of the outstanding shares of our common
stock. Our Board of Directors could waive this restriction if they
were satisfied, based upon the advice of tax counsel or otherwise, that such
action would be in our best interests and would not affect our qualification as
a real estate investment trust. Common stock acquired or transferred
in breach of the limitation may be redeemed by us for the lesser of the price
paid and the average closing price for the 10 trading days immediately preceding
redemption or sold at the direction of us. We may elect to redeem
such shares of common stock for Units, which are nontransferable except in very
limited circumstances. Any transfer of shares of common stock which,
as a result of such transfer, causes us to be in violation of any ownership
limit, will be deemed void. Although we currently intend to continue
to operate in a manner which will enable us to continue to qualify as a real
estate investment trust, it is possible that future economic, market, legal, tax
or other considerations may cause our Board of Directors to revoke the election
for us to qualify as a real estate investment trust. Under our
organizational documents, our Board of Directors can make such revocation
without the consent of our stockholders.
14
In
addition, the consent of the holders of at least 85 percent of Mack-Cali Realty,
L.P.’s partnership units is required: (i) to merge (or permit the merger of) us
with another unrelated person, pursuant to a transaction in which Mack-Cali
Realty, L.P. is not the surviving entity; (ii) to dissolve, liquidate or wind up
Mack-Cali Realty, L.P.; or (iii) to convey or otherwise transfer all or
substantially all of Mack-Cali Realty, L.P.’s assets. As of February
8, 2008, as general partner, we own approximately 81.4 percent of Mack-Cali
Realty, L.P.’s outstanding common partnership units.
Tax
liabilities as a consequence of failure to qualify as a real estate investment
trust: We have elected to be treated and have operated so as to qualify
as a real estate investment trust for federal income tax purposes since our
taxable year ended December 31, 1994. Although we believe we will
continue to operate in such manner, we cannot guarantee that we will do
so. Qualification as a real estate investment trust involves the
satisfaction of various requirements (some on an annual and some on a quarterly
basis) established under highly technical and complex tax provisions of the
Internal Revenue Code. Because few judicial or administrative
interpretations of such provisions exist and qualification determinations are
fact sensitive, we cannot assure you that we will qualify as a real estate
investment trust for any taxable year.
If we
fail to qualify as a real estate investment trust in any taxable year, we will
be subject to the following:
|
·
|
we
will not be allowed a deduction for dividends paid to
shareholders;
|
|
·
|
we
will be subject to federal income tax at regular corporate rates,
including any alternative minimum tax, if applicable;
and
|
|
·
|
unless
we are entitled to relief under certain statutory provisions, we will not
be permitted to qualify as a real estate investment trust for the four
taxable years following the year during which we were
disqualified.
|
A loss of
our status as a real estate investment trust could have an adverse effect on
us. Failure to qualify as a real estate investment trust also would
eliminate the requirement that we pay dividends to our
stockholders.
Other
tax liabilities: Even if we qualify as a real estate investment trust, we
are subject to certain federal, state and local taxes on our income and property
and, in some circumstances, certain other state and local taxes. In
addition, our taxable REIT subsidiaries will be subject to federal, state and
local income tax for income received in connection with certain non-customary
services performed for tenants and/or third parties.
Risk of
changes in the tax law applicable to real estate investment trusts: Since the Internal Revenue
Service, the United States Treasury Department and Congress frequently review
federal income tax legislation, we cannot predict whether, when or to what
extent new federal tax laws, regulations, interpretations or rulings will be
adopted. Any of such legislative action may prospectively or
retroactively modify our and Mack-Cali Realty, L.P.’s tax treatment and,
therefore, may adversely affect taxation of us, Mack-Cali Realty, L.P., and/or
our investors.
Changes in market conditions could
adversely affect the market price of our common stock.
As with
other publicly traded equity securities, the value of our common stock depends
on various market conditions, which may change from time to time. Among the
market conditions that may affect the value of our common stock are the
following:
|
·
|
the
extent of your interest in us;
|
|
·
|
the general
reputation of REITs and the attractiveness of our equity securities in
comparison to other equity securities, including securities issued by
other real estate-based
companies;
|
|
·
|
our financial
performance; and
|
|
·
|
general stock and
bond market conditions.
|
15
The
market value of our common stock is based primarily upon the market’s perception
of our growth potential and our current and potential future earnings and cash
dividends. Consequently, our common stock may trade at prices that are higher or
lower than our net asset value per share of common stock.
ITEM
1B. UNRESOLVED STAFF
COMMENTS
None.
16
ITEM
2. PROPERTIES
PROPERTY
LIST
As of
December 31, 2007, the Company’s Consolidated Properties consisted of 251
in-service office, office/flex and industrial/warehouse properties, as well as
two stand-alone retail properties and two land leases. The
Consolidated Properties are located primarily in the Northeast. The
Consolidated Properties are easily accessible from major thoroughfares and are
in close proximity to numerous amenities. The Consolidated Properties
contain a total of approximately 29.2 million square feet, with the individual
properties ranging from 6,216 to 1,246,283 square feet. The
Consolidated Properties, managed by on-site employees, generally have
attractively landscaped sites and atriums in addition to quality design and
construction. The Company’s tenants include many service sector
employers, including a large number of professional firms and national and
international businesses. The Company believes that all of its
properties are well-maintained and do not require significant capital
improvements.
17
|
Office
Properties
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
NEW
JERSEY
|
||||||||
|
Bergen
County
|
||||||||
|
Fair
Lawn
|
||||||||
|
17-17
Route 208 North
|
1987
|
143,000
|
68.6
|
3,144
|
0.55
|
32.05
|
27.79
|
|
|
Fort
Lee
|
||||||||
|
One
Bridge Plaza
|
1981
|
200,000
|
72.7
|
2,784
|
0.48
|
19.15
|
17.75
|
|
|
2115
Linwood Avenue
|
1981
|
68,000
|
40.2
|
865
|
0.15
|
31.64
|
30.40
|
|
|
Little
Ferry
|
||||||||
|
200
Riser Road
|
1974
|
286,628
|
100.0
|
2,071
|
0.36
|
7.23
|
6.67
|
|
|
Montvale
|
||||||||
|
95
Chestnut Ridge Road
|
1975
|
47,700
|
100.0
|
796
|
0.14
|
16.69
|
15.28
|
|
|
135
Chestnut Ridge Road
|
1981
|
66,150
|
100.0
|
1,520
|
0.26
|
22.98
|
19.09
|
|
|
Paramus
|
||||||||
|
15
East Midland Avenue
|
1988
|
259,823
|
80.5
|
5,235
|
0.91
|
25.03
|
24.27
|
|
|
140
East Ridgewood Avenue
|
1981
|
239,680
|
98.4
|
4,846
|
0.84
|
20.55
|
18.73
|
|
|
461
From Road
|
1988
|
253,554
|
98.6
|
6,125
|
1.06
|
24.50
|
24.42
|
|
|
650
From Road
|
1978
|
348,510
|
92.2
|
7,786
|
1.36
|
24.23
|
21.42
|
|
|
61
South Paramus Avenue
|
1985
|
269,191
|
100.0
|
7,208
|
1.25
|
26.78
|
23.99
|
|
|
Ridgefield
Park
|
||||||||
|
105
Challenger Road
|
1992
|
150,050
|
87.5
|
4,250
|
0.74
|
32.37
|
29.72
|
|
|
Rochelle
Park
|
||||||||
|
120
Passaic Street
|
1972
|
52,000
|
99.6
|
1,402
|
0.24
|
27.07
|
25.53
|
|
|
365
West Passaic Street
|
1976
|
212,578
|
100.0
|
4,473
|
0.78
|
21.04
|
18.78
|
|
|
395
West Passaic Street
|
1979
|
100,589
|
96.9
|
2,217
|
0.39
|
22.75
|
19.64
|
|
|
Upper
Saddle River
|
||||||||
|
1
Lake Street
|
1973/94
|
474,801
|
100.0
|
7,465
|
1.30
|
15.72
|
15.72
|
|
|
10
Mountainview Road
|
1986
|
192,000
|
98.2
|
4,328
|
0.75
|
22.95
|
20.84
|
|
|
Woodcliff
Lake
|
||||||||
|
400
Chestnut Ridge Road
|
1982
|
89,200
|
100.0
|
1,950
|
0.34
|
21.86
|
16.32
|
|
|
470
Chestnut Ridge Road
|
1987
|
52,500
|
100.0
|
1,107
|
0.19
|
21.09
|
19.83
|
|
|
530
Chestnut Ridge Road
|
1986
|
57,204
|
100.0
|
1,199
|
0.21
|
20.96
|
20.40
|
|
|
50
Tice Boulevard
|
1984
|
235,000
|
98.7
|
6,140
|
1.07
|
26.47
|
23.93
|
|
|
300
Tice Boulevard
|
1991
|
230,000
|
99.8
|
5,880
|
1.02
|
25.62
|
23.18
|
|
|
Burlington
County
|
||||||||
|
Moorestown
|
||||||||
|
224
Strawbridge Drive
|
1984
|
74,000
|
98.4
|
1,521
|
0.26
|
20.89
|
18.35
|
|
|
228
Strawbridge Drive
|
1984
|
74,000
|
100.0
|
1,043
|
0.18
|
14.09
|
12.11
|
|
|
232
Strawbridge Drive
|
1986
|
74,258
|
98.8
|
1,461
|
0.25
|
19.91
|
16.22
|
|
|
Essex
County
|
||||||||
|
Millburn
|
||||||||
|
150
J.F. Kennedy Parkway
|
1980
|
247,476
|
100.0
|
7,539
|
1.31
|
30.46
|
26.58
|
|
18
|
Office
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
Roseland
|
||||||||
|
101
Eisenhower Parkway
|
1980
|
237,000
|
95.8
|
5,642
|
0.98
|
24.85
|
22.33
|
|
|
103
Eisenhower Parkway
|
1985
|
151,545
|
78.6
|
2,934
|
0.51
|
24.63
|
21.53
|
|
|
105
Eisenhower Parkway
|
2001
|
220,000
|
91.9
|
4,636
|
0.81
|
22.93
|
17.23
|
|
|
Hudson
County
|
||||||||
|
Jersey
City
|
||||||||
|
Harborside
Financial Center Plaza 1
|
1983
|
400,000
|
100.0
|
10,016
|
1.74
|
25.04
|
22.48
|
|
|
Harborside
Financial Center Plaza 2
|
1990
|
761,200
|
100.0
|
18,987
|
3.30
|
24.94
|
22.12
|
|
|
Harborside
Financial Center Plaza 3
|
1990
|
725,600
|
99.1
|
17,983
|
3.12
|
25.01
|
22.16
|
|
|
Harborside
Financial Center Plaza 4-A
|
2000
|
207,670
|
97.7
|
6,206
|
1.08
|
30.59
|
26.31
|
|
|
Harborside
Financial Center Plaza 5
|
2002
|
977,225
|
99.9
|
34,428
|
5.99
|
35.27
|
29.08
|
|
|
101
Hudson Street
|
1992
|
1,246,283
|
99.2
|
26,528
|
4.61
|
21.46
|
18.80
|
|
|
Mercer
County
|
||||||||
|
Hamilton
Township
|
||||||||
|
3
AAA Drive (f)
|
1981
|
35,270
|
62.6
|
124
|
0.02
|
8.61
|
8.06
|
|
|
2
South Gold Drive (f)
|
1974
|
33,962
|
64.5
|
258
|
0.04
|
18.06
|
17.22
|
|
|
600
Horizon Drive
|
2002
|
95,000
|
100.0
|
1,373
|
0.24
|
14.45
|
14.45
|
|
|
700
Horizon Drive (f)
|
2007
|
120,000
|
100.0
|
1,593
|
0.28
|
20.36
|
19.22
|
|
|
Princeton
|
||||||||
|
103
Carnegie Center
|
1984
|
96,000
|
72.5
|
1,837
|
0.32
|
26.39
|
21.98
|
|
|
3
Independence Way
|
1983
|
111,300
|
50.7
|
1,102
|
0.19
|
19.53
|
15.40
|
|
|
100
Overlook Center
|
1988
|
149,600
|
100.0
|
4,859
|
0.84
|
32.48
|
28.36
|
|
|
5
Vaughn Drive
|
1987
|
98,500
|
100.0
|
2,391
|
0.42
|
24.27
|
21.43
|
|
|
Middlesex
County
|
||||||||
|
East
Brunswick
|
||||||||
|
377
Summerhill Road
|
1977
|
40,000
|
100.0
|
353
|
0.06
|
8.83
|
8.65
|
|
|
Edison
|
||||||||
|
343
Thornall Street (c)
|
1991
|
195,709
|
100.0
|
4,008
|
0.70
|
20.48
|
17.58
|
|
|
Piscataway
|
||||||||
|
30
Knightsbridge Road, Bldg 3
|
1977
|
160,000
|
100.0
|
2,465
|
0.43
|
15.41
|
15.41
|
|
|
30
Knightsbridge Road, Bldg 4
|
1977
|
115,000
|
100.0
|
1,771
|
0.31
|
15.40
|
15.40
|
|
|
30
Knightsbridge Road, Bldg 5
|
1977
|
332,607
|
62.9
|
2,437
|
0.42
|
11.65
|
8.30
|
|
|
30
Knightsbridge Road, Bldg 6
|
1977
|
72,743
|
63.8
|
172
|
0.03
|
3.71
|
1.90
|
|
|
Plainsboro
|
||||||||
|
500
College Road East
|
1984
|
158,235
|
95.7
|
4,261
|
0.74
|
28.14
|
25.91
|
|
|
Woodbridge
|
||||||||
|
581
Main Street
|
1991
|
200,000
|
100.0
|
5,268
|
0.92
|
26.34
|
23.15
|
|
|
Monmouth
County
|
||||||||
|
Freehold
|
||||||||
|
2
Paragon Way
|
1989
|
44,524
|
38.1
|
374
|
0.06
|
22.05
|
13.85
|
|
|
3
Paragon Way
|
1991
|
66,898
|
100.0
|
785
|
0.14
|
11.73
|
9.55
|
|
|
4
Paragon Way
|
2002
|
63,989
|
100.0
|
1,097
|
0.19
|
17.14
|
12.96
|
|
|
100
Willbowbrook
|
1988
|
60,557
|
74.8
|
880
|
0.15
|
19.43
|
16.62
|
|
|
Holmdel
|
||||||||
|
23
Main Street
|
1977
|
350,000
|
100.0
|
4,012
|
0.70
|
11.46
|
8.64
|
|
19
|
Office
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
Middletown
|
||||||||
|
One
River Center Bldg 1
|
1983
|
122,594
|
100.0
|
3,097
|
0.54
|
25.26
|
21.22
|
|
|
One
River Center Bldg 2
|
1983
|
120,360
|
100.0
|
2,874
|
0.50
|
23.88
|
22.75
|
|
|
One
River Center Bldg 3
|
1984
|
214,518
|
93.6
|
4,593
|
0.80
|
22.87
|
22.57
|
|
|
Neptune
|
||||||||
|
3600
Route 66
|
1989
|
180,000
|
100.0
|
2,400
|
0.42
|
13.33
|
12.06
|
|
|
Wall
Township
|
||||||||
|
1305
Campus Parkway
|
1988
|
23,350
|
77.3
|
443
|
0.08
|
24.54
|
23.66
|
|
|
1350
Campus Parkway
|
1990
|
79,747
|
91.9
|
1,571
|
0.27
|
21.44
|
18.83
|
|
|
Morris
County
|
||||||||
|
Florham
Park
|
||||||||
|
325
Columbia Turnpike
|
1987
|
168,144
|
96.1
|
4,005
|
0.70
|
24.79
|
21.96
|
|
|
Morris
Plains
|
||||||||
|
250
Johnson Road
|
1977
|
75,000
|
100.0
|
1,579
|
0.27
|
21.05
|
18.47
|
|
|
201
Littleton Road
|
1979
|
88,369
|
88.6
|
1,750
|
0.30
|
22.35
|
19.92
|
|
|
Morris
Township
|
||||||||
|
412
Mt. Kemble Avenue
|
1986
|
475,100
|
36.7
|
2,664
|
0.46
|
15.28
|
12.78
|
|
|
Parsippany
|
||||||||
|
4
Campus Drive
|
1983
|
147,475
|
94.3
|
3,298
|
0.57
|
23.71
|
21.01
|
|
|
6
Campus Drive
|
1983
|
148,291
|
75.1
|
2,422
|
0.42
|
21.75
|
17.94
|
|
|
7
Campus Drive
|
1982
|
154,395
|
67.8
|
979
|
0.17
|
9.35
|
8.75
|
|
|
8
Campus Drive
|
1987
|
215,265
|
100.0
|
6,249
|
1.09
|
29.03
|
25.66
|
|
|
9
Campus Drive
|
1983
|
156,495
|
93.6
|
3,483
|
0.61
|
23.78
|
19.93
|
|
|
4
Century Drive
|
1981
|
100,036
|
78.9
|
1,641
|
0.29
|
20.79
|
18.70
|
|
|
5
Century Drive
|
1981
|
79,739
|
97.3
|
1,293
|
0.22
|
16.67
|
16.54
|
|
|
6
Century Drive
|
1981
|
100,036
|
72.4
|
1,351
|
0.23
|
18.65
|
11.87
|
|
|
2
Dryden Way
|
1990
|
6,216
|
100.0
|
96
|
0.02
|
15.44
|
15.44
|
|
|
4
Gatehall Drive
|
1988
|
248,480
|
89.6
|
5,655
|
0.98
|
25.40
|
22.66
|
|
|
2
Hilton Court
|
1991
|
181,592
|
100.0
|
4,224
|
0.73
|
23.26
|
20.58
|
|
|
1633
Littleton Road
|
1978
|
57,722
|
100.0
|
1,131
|
0.20
|
19.59
|
19.59
|
|
|
600
Parsippany Road
|
1978
|
96,000
|
92.4
|
1,596
|
0.28
|
17.99
|
13.96
|
|
|
1
Sylvan Way
|
1989
|
150,557
|
100.0
|
3,621
|
0.63
|
24.05
|
21.41
|
|
|
5
Sylvan Way
|
1989
|
151,383
|
100.0
|
4,157
|
0.72
|
27.46
|
24.69
|
|
|
7
Sylvan Way
|
1987
|
145,983
|
100.0
|
3,219
|
0.56
|
22.05
|
19.29
|
|
|
35
Waterview Boulevard
|
1990
|
172,498
|
96.2
|
4,460
|
0.78
|
26.88
|
24.03
|
|
|
5
Wood Hollow Road
|
1979
|
317,040
|
96.7
|
6,118
|
1.07
|
19.96
|
17.10
|
|
|
Passaic
County
|
||||||||
|
Clifton
|
||||||||
|
777
Passaic Avenue
|
1983
|
75,000
|
100.0
|
1,627
|
0.28
|
21.69
|
19.53
|
|
|
Totowa
|
||||||||
|
999
Riverview Drive
|
1988
|
56,066
|
100.0
|
1,084
|
0.19
|
19.33
|
17.21
|
|
|
Somerset
County
|
||||||||
|
Basking
Ridge
|
||||||||
|
222
Mt. Airy Road
|
1986
|
49,000
|
60.7
|
615
|
0.11
|
20.68
|
15.53
|
|
|
233
Mt. Airy Road
|
1987
|
66,000
|
100.0
|
1,315
|
0.23
|
19.92
|
16.71
|
|
20
|
Office
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
Bernards
|
||||||||
|
106
Allen Road
|
2000
|
132,010
|
96.2
|
3,149
|
0.55
|
24.80
|
18.74
|
|
|
Bridgewater
|
||||||||
|
721
Route 202/206
|
1989
|
192,741
|
81.2
|
3,817
|
0.66
|
24.39
|
22.93
|
|
|
Union
County
|
||||||||
|
Clark
|
||||||||
|
100
Walnut Avenue
|
1985
|
182,555
|
98.5
|
4,624
|
0.80
|
25.72
|
22.67
|
|
|
Cranford
|
||||||||
|
6
Commerce Drive
|
1973
|
56,000
|
84.1
|
1,029
|
0.18
|
21.85
|
19.05
|
|
|
11
Commerce Drive
|
1981
|
90,000
|
71.3
|
1,389
|
0.24
|
21.65
|
18.73
|
|
|
12
Commerce Drive
|
1967
|
72,260
|
95.1
|
967
|
0.17
|
14.07
|
11.54
|
|
|
14
Commerce Drive
|
1971
|
67,189
|
64.3
|
1,031
|
0.18
|
23.86
|
23.12
|
|
|
20
Commerce Drive
|
1990
|
176,600
|
99.8
|
4,531
|
0.79
|
25.71
|
22.60
|
|
|
25
Commerce Drive
|
1971
|
67,749
|
90.1
|
1,333
|
0.23
|
21.84
|
20.30
|
|
|
65
Jackson Drive
|
1984
|
82,778
|
97.5
|
1,857
|
0.32
|
23.01
|
19.99
|
|
|
New
Providence
|
||||||||
|
890
Mountain Avenue
|
1977
|
80,000
|
95.1
|
1,797
|
0.31
|
23.62
|
22.31
|
|
|
Total
New Jersey Office
|
17,646,642
|
92.4
|
373,269
|
64.88
|
22.94
|
20.22
|
||
|
NEW
YORK
|
||||||||
|
New
York County
|
||||||||
|
New
York
|
||||||||
|
125
Broad Street (f)
|
1970
|
524,476
|
100.0
|
11,579
|
2.02
|
39.50
|
35.69
|
|
|
Rockland
County
|
||||||||
|
Suffern
|
||||||||
|
400
Rella Boulevard
|
1988
|
180,000
|
91.4
|
3,752
|
0.65
|
22.81
|
19.18
|
|
|
Westchester
County
|
||||||||
|
Elmsford
|
||||||||
|
100
Clearbrook Road (c)
|
1975
|
60,000
|
94.4
|
1,083
|
0.19
|
19.12
|
17.39
|
|
|
101
Executive Boulevard
|
1971
|
50,000
|
43.0
|
513
|
0.09
|
23.86
|
21.77
|
|
|
555
Taxter Road
|
1986
|
170,554
|
100.0
|
4,263
|
0.74
|
25.00
|
20.87
|
|
|
565
Taxter Road
|
1988
|
170,554
|
98.8
|
4,138
|
0.72
|
24.56
|
20.37
|
|
|
570
Taxter Road
|
1972
|
75,000
|
77.8
|
1,648
|
0.29
|
28.24
|
26.24
|
|
|
Hawthorne
|
||||||||
|
1
Skyline Drive
|
1980
|
20,400
|
99.0
|
340
|
0.06
|
16.84
|
15.70
|
|
|
2
Skyline Drive
|
1987
|
30,000
|
98.9
|
490
|
0.09
|
16.51
|
14.19
|
|
|
7
Skyline Drive
|
1987
|
109,000
|
98.7
|
2,570
|
0.45
|
23.89
|
21.90
|
|
|
17
Skyline Drive
|
1989
|
85,000
|
100.0
|
871
|
0.15
|
10.25
|
10.15
|
|
|
19
Skyline Drive
|
1982
|
248,400
|
100.0
|
4,471
|
0.78
|
18.00
|
16.80
|
|
21
|
Office
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
Tarrytown
|
||||||||
|
200
White Plains Road
|
1982
|
89,000
|
99.3
|
1,905
|
0.33
|
21.56
|
19.38
|
|
|
220
White Plains Road
|
1984
|
89,000
|
95.9
|
2,052
|
0.36
|
24.04
|
21.91
|
|
|
White
Plains
|
||||||||
|
1
Barker Avenue
|
1975
|
68,000
|
97.3
|
1,749
|
0.30
|
26.43
|
24.67
|
|
|
3
Barker Avenue
|
1983
|
65,300
|
100.0
|
1,659
|
0.29
|
25.41
|
23.29
|
|
|
50
Main Street
|
1985
|
309,000
|
99.1
|
9,438
|
1.65
|
30.82
|
28.01
|
|
|
11
Martine Avenue
|
1987
|
180,000
|
85.6
|
4,599
|
0.80
|
29.85
|
26.90
|
|
|
1
Water Street
|
1979
|
45,700
|
100.0
|
1,177
|
0.20
|
25.75
|
22.30
|
|
|
Yonkers
|
||||||||
|
1
Executive Boulevard
|
1982
|
112,000
|
100.0
|
2,848
|
0.49
|
25.43
|
22.19
|
|
|
3
Executive Boulevard
|
1987
|
58,000
|
100.0
|
1,507
|
0.26
|
25.98
|
22.66
|
|
|
Total
New York Office
|
2,739,384
|
96.2
|
62,652
|
10.91
|
27.23
|
24.37
|
||
|
PENNSYLVANIA
|
||||||||
|
Chester
County
|
||||||||
|
Berwyn
|
||||||||
|
1000
Westlakes Drive
|
1989
|
60,696
|
95.7
|
1,589
|
0.28
|
27.36
|
26.20
|
|
|
1055
Westlakes Drive
|
1990
|
118,487
|
96.8
|
2,622
|
0.46
|
22.86
|
18.69
|
|
|
1205
Westlakes Drive
|
1988
|
130,265
|
84.7
|
2,464
|
0.43
|
22.33
|
19.25
|
|
|
1235
Westlakes Drive
|
1986
|
134,902
|
97.7
|
2,951
|
0.51
|
22.39
|
18.41
|
|
|
Delaware
County
|
||||||||
|
Lester
|
||||||||
|
100
Stevens Drive
|
1986
|
95,000
|
100.0
|
2,551
|
0.44
|
26.85
|
24.82
|
|
|
200
Stevens Drive
|
1987
|
208,000
|
100.0
|
5,656
|
0.98
|
27.19
|
25.52
|
|
|
300
Stevens Drive
|
1992
|
68,000
|
89.6
|
1,519
|
0.26
|
24.93
|
20.09
|
|
|
Media
|
||||||||
|
1400
Providence Road - Center I
|
1986
|
100,000
|
95.4
|
2,072
|
0.36
|
21.72
|
19.73
|
|
|
1400
Providence Road - Center II
|
1990
|
160,000
|
94.0
|
3,394
|
0.59
|
22.57
|
19.24
|
|
|
Montgomery
County
|
||||||||
|
Bala
Cynwyd
|
||||||||
|
150
Monument Road
|
1981
|
125,783
|
99.9
|
2,946
|
0.51
|
23.44
|
21.30
|
|
|
Blue
Bell
|
||||||||
|
4
Sentry Parkway
|
1982
|
63,930
|
94.1
|
1,337
|
0.23
|
22.22
|
22.08
|
|
|
5
Sentry Parkway East
|
1984
|
91,600
|
50.3
|
632
|
0.11
|
13.72
|
12.61
|
|
|
5
Sentry Parkway West
|
1984
|
38,400
|
31.5
|
158
|
0.03
|
13.06
|
12.40
|
|
|
16
Sentry Parkway
|
1988
|
93,093
|
100.0
|
2,281
|
0.40
|
24.50
|
22.49
|
|
|
18
Sentry Parkway
|
1988
|
95,010
|
88.5
|
2,198
|
0.38
|
26.14
|
23.90
|
|
|
King
of Prussia
|
||||||||
|
2200
Renaissance Boulevard
|
1985
|
174,124
|
79.4
|
2,433
|
0.42
|
17.60
|
15.28
|
|
|
Lower
Providence
|
||||||||
|
1000
Madison Avenue
|
1990
|
100,700
|
81.3
|
1,404
|
0.24
|
17.15
|
13.28
|
|
|
Plymouth
Meeting
|
||||||||
|
1150
Plymouth Meeting Mall
|
1970
|
167,748
|
92.6
|
3,131
|
0.54
|
20.16
|
15.92
|
|
|
Total
Pennsylvania Office
|
2,025,738
|
89.9
|
41,338
|
7.17
|
22.70
|
19.98
|
||
22
|
Office
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
CONNECTICUT
|
||||||||
|
Fairfield
County
|
||||||||
|
Norwalk
|
||||||||
|
40
Richards Avenue
|
1985
|
145,487
|
76.6
|
2,446
|
0.43
|
21.95
|
19.35
|
|
|
Stamford
|
||||||||
|
1266
East Main Street
|
1984
|
179,260
|
73.3
|
3,615
|
0.63
|
27.51
|
24.64
|
|
|
Total
Connecticut Office
|
324,747
|
74.8
|
6,061
|
1.06
|
24.96
|
22.21
|
||
|
DISTRICT
OF COLUMBIA
|
||||||||
|
Washington
|
||||||||
|
1201
Connecticut Avenue, NW
|
1940
|
169,549
|
100.0
|
6,742
|
1.18
|
39.76
|
36.86
|
|
|
1400
L Street, NW
|
1987
|
159,000
|
100.0
|
5,539
|
0.96
|
34.84
|
29.81
|
|
|
Total
District of Columbia Office
|
328,549
|
100.0
|
12,281
|
2.14
|
37.38
|
33.45
|
||
|
MARYLAND
|
||||||||
|
Prince
George’s County
|
||||||||
|
Greenbelt
|
||||||||
|
9200
Edmonston Road
|
1973
|
38,690
|
100.0
|
911
|
0.16
|
23.55
|
21.19
|
|
|
6301
Ivy Lane
|
1979
|
112,003
|
87.2
|
2,104
|
0.37
|
21.54
|
18.54
|
|
|
6303
Ivy Lane
|
1980
|
112,047
|
62.2
|
2,182
|
0.38
|
31.31
|
27.74
|
|
|
6305
Ivy Lane
|
1982
|
112,022
|
70.2
|
1,610
|
0.28
|
20.47
|
16.63
|
|
|
6404
Ivy Lane
|
1987
|
165,234
|
77.9
|
2,637
|
0.46
|
20.49
|
15.98
|
|
|
6406
Ivy Lane
|
1991
|
163,857
|
100.0
|
2,905
|
0.50
|
17.73
|
16.58
|
|
|
6411
Ivy Lane
|
1984
|
138,405
|
88.5
|
2,854
|
0.50
|
23.30
|
20.17
|
|
|
Lanham
|
||||||||
|
4200
Parliament Place
|
1989
|
122,000
|
85.8
|
2,719
|
0.47
|
25.98
|
24.08
|
|
|
Total
Maryland Office
|
964,258
|
83.4
|
17,922
|
3.12
|
22.28
|
19.44
|
||
|
TOTAL
OFFICE PROPERTIES
|
24,029,318
|
92.2
|
513,523
|
89.28
|
23.65
|
20.89
|
||
23
|
Office/Flex
Properties
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
NEW
JERSEY
|
||||||||
|
Burlington
County
|
||||||||
|
Burlington
|
||||||||
|
3
Terri Lane
|
1991
|
64,500
|
100.0
|
507
|
0.09
|
7.86
|
4.40
|
|
|
5
Terri Lane
|
1992
|
74,555
|
100.0
|
627
|
0.11
|
8.41
|
7.01
|
|
|
Moorestown
|
||||||||
|
2
Commerce Drive
|
1986
|
49,000
|
21.3
|
145
|
0.03
|
13.89
|
9.29
|
|
|
101
Commerce Drive
|
1988
|
64,700
|
100.0
|
275
|
0.05
|
4.25
|
3.85
|
|
|
102
Commerce Drive
|
1987
|
38,400
|
100.0
|
209
|
0.04
|
5.44
|
4.27
|
|
|
201
Commerce Drive
|
1986
|
38,400
|
75.0
|
173
|
0.03
|
6.01
|
4.24
|
|
|
202
Commerce Drive
|
1988
|
51,200
|
100.0
|
252
|
0.04
|
4.92
|
3.54
|
|
|
1
Executive Drive
|
1989
|
20,570
|
81.1
|
157
|
0.03
|
9.41
|
6.41
|
|
|
2
Executive Drive
|
1988
|
60,800
|
100.0
|
430
|
0.07
|
7.07
|
5.00
|
|
|
101
Executive Drive
|
1990
|
29,355
|
90.2
|
296
|
0.05
|
11.18
|
9.18
|
|
|
102
Executive Drive
|
1990
|
64,000
|
100.0
|
383
|
0.07
|
5.98
|
5.38
|
|
|
225
Executive Drive
|
1990
|
50,600
|
67.6
|
232
|
0.04
|
6.78
|
5.06
|
|
|
97
Foster Road
|
1982
|
43,200
|
50.0
|
113
|
0.02
|
5.23
|
4.54
|
|
|
1507
Lancer Drive
|
1995
|
32,700
|
100.0
|
134
|
0.02
|
4.10
|
3.79
|
|
|
1245
North Church Street
|
1998
|
52,810
|
90.5
|
313
|
0.05
|
6.55
|
6.19
|
|
|
1247
North Church Street
|
1998
|
52,790
|
58.1
|
281
|
0.05
|
9.16
|
8.12
|
|
|
1256
North Church Street
|
1984
|
63,495
|
100.0
|
452
|
0.08
|
7.12
|
5.83
|
|
|
840
North Lenola Road
|
1995
|
38,300
|
100.0
|
367
|
0.06
|
9.58
|
7.96
|
|
|
844
North Lenola Road
|
1995
|
28,670
|
100.0
|
180
|
0.03
|
6.28
|
5.06
|
|
|
915
North Lenola Road
|
1998
|
52,488
|
100.0
|
290
|
0.05
|
5.53
|
4.46
|
|
|
2
Twosome Drive
|
2000
|
48,600
|
100.0
|
429
|
0.07
|
8.83
|
8.29
|
|
|
30
Twosome Drive
|
1997
|
39,675
|
89.9
|
226
|
0.04
|
6.34
|
5.13
|
|
|
31
Twosome Drive
|
1998
|
84,200
|
100.0
|
468
|
0.08
|
5.56
|
5.51
|
|
|
40
Twosome Drive
|
1996
|
40,265
|
100.0
|
291
|
0.05
|
7.23
|
5.84
|
|
|
41
Twosome Drive
|
1998
|
43,050
|
100.0
|
231
|
0.04
|
5.37
|
5.16
|
|
|
50
Twosome Drive
|
1997
|
34,075
|
100.0
|
249
|
0.04
|
7.31
|
6.96
|
|
|
Gloucester
County
|
||||||||
|
West
Deptford
|
||||||||
|
1451
Metropolitan Drive
|
1996
|
21,600
|
100.0
|
148
|
0.03
|
6.85
|
6.85
|
|
|
Mercer
County
|
||||||||
|
Hamilton
Township
|
||||||||
|
100
Horizon Center Boulevard
|
1989
|
13,275
|
100.0
|
193
|
0.03
|
14.54
|
12.58
|
|
|
200
Horizon Drive
|
1991
|
45,770
|
100.0
|
591
|
0.10
|
12.91
|
11.73
|
|
|
300
Horizon Drive
|
1989
|
69,780
|
100.0
|
1,155
|
0.20
|
16.55
|
13.43
|
|
|
500
Horizon Drive
|
1990
|
41,205
|
100.0
|
620
|
0.11
|
15.05
|
14.51
|
|
24
|
Office/Flex
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
Monmouth
County
|
||||||||
|
Wall
Township
|
||||||||
|
1325
Campus Parkway
|
1988
|
35,000
|
100.0
|
655
|
0.11
|
18.71
|
14.06
|
|
|
1340
Campus Parkway
|
1992
|
72,502
|
100.0
|
948
|
0.16
|
13.08
|
9.75
|
|
|
1345
Campus Parkway
|
1995
|
76,300
|
100.0
|
947
|
0.16
|
12.41
|
9.12
|
|
|
1433
Highway 34
|
1985
|
69,020
|
76.4
|
525
|
0.09
|
9.96
|
8.08
|
|
|
1320
Wyckoff Avenue
|
1986
|
20,336
|
100.0
|
178
|
0.03
|
8.75
|
8.31
|
|
|
1324
Wyckoff Avenue
|
1987
|
21,168
|
100.0
|
229
|
0.04
|
10.82
|
10.16
|
|
|
Passaic
County
|
||||||||
|
Totowa
|
||||||||
|
1
Center Court
|
1999
|
38,961
|
100.0
|
534
|
0.09
|
13.71
|
11.06
|
|
|
2
Center Court
|
1998
|
30,600
|
99.3
|
373
|
0.06
|
12.28
|
10.89
|
|
|
11
Commerce Way
|
1989
|
47,025
|
100.0
|
576
|
0.10
|
12.25
|
11.50
|
|
|
20
Commerce Way
|
1992
|
42,540
|
100.0
|
330
|
0.06
|
7.76
|
6.44
|
|
|
29
Commerce Way
|
1990
|
48,930
|
100.0
|
711
|
0.12
|
14.53
|
11.44
|
|
|
40
Commerce Way
|
1987
|
50,576
|
72.1
|
564
|
0.10
|
15.47
|
14.53
|
|
|
45
Commerce Way
|
1992
|
51,207
|
96.4
|
428
|
0.07
|
8.67
|
6.89
|
|
|
60
Commerce Way
|
1988
|
50,333
|
73.6
|
519
|
0.09
|
14.01
|
12.61
|
|
|
80
Commerce Way
|
1996
|
22,500
|
100.0
|
311
|
0.05
|
13.82
|
12.80
|
|
|
100
Commerce Way
|
1996
|
24,600
|
66.9
|
340
|
0.06
|
20.66
|
19.20
|
|
|
120
Commerce Way
|
1994
|
9,024
|
100.0
|
125
|
0.02
|
13.85
|
12.74
|
|
|
140
Commerce Way
|
1994
|
26,881
|
99.5
|
374
|
0.06
|
13.98
|
12.86
|
|
|
Total
New Jersey Office/Flex
|
2,189,531
|
91.9
|
19,084
|
3.27
|
9.49
|
7.95
|
||
|
NEW
YORK
|
||||||||
|
Westchester
County
|
||||||||
|
Elmsford
|
||||||||
|
11
Clearbrook Road
|
1974
|
31,800
|
100.0
|
427
|
0.07
|
13.43
|
12.26
|
|
|
75
Clearbrook Road
|
1990
|
32,720
|
100.0
|
702
|
0.12
|
21.45
|
20.35
|
|
|
125
Clearbrook Road
|
2002
|
33,000
|
100.0
|
712
|
0.12
|
21.58
|
17.94
|
|
|
150
Clearbrook Road
|
1975
|
74,900
|
100.0
|
1,181
|
0.21
|
15.77
|
14.46
|
|
|
175
Clearbrook Road
|
1973
|
98,900
|
100.0
|
1,592
|
0.28
|
16.10
|
14.93
|
|
|
200
Clearbrook Road
|
1974
|
94,000
|
99.8
|
1,288
|
0.22
|
13.73
|
12.47
|
|
|
250
Clearbrook Road
|
1973
|
155,000
|
97.3
|
1,416
|
0.25
|
9.39
|
8.47
|
|
|
50
Executive Boulevard
|
1969
|
45,200
|
98.2
|
490
|
0.09
|
11.04
|
10.63
|
|
|
77
Executive Boulevard
|
1977
|
13,000
|
100.0
|
183
|
0.03
|
14.08
|
13.31
|
|
|
85
Executive Boulevard
|
1968
|
31,000
|
93.8
|
546
|
0.09
|
18.78
|
16.20
|
|
|
300
Executive Boulevard
|
1970
|
60,000
|
100.0
|
415
|
0.07
|
6.92
|
6.45
|
|
|
350
Executive Boulevard
|
1970
|
15,400
|
98.8
|
296
|
0.05
|
19.45
|
17.88
|
|
|
399
Executive Boulevard
|
1962
|
80,000
|
100.0
|
922
|
0.16
|
11.53
|
11.09
|
|
|
400
Executive Boulevard
|
1970
|
42,200
|
100.0
|
774
|
0.13
|
18.34
|
16.21
|
|
|
500
Executive Boulevard
|
1970
|
41,600
|
78.3
|
585
|
0.10
|
17.96
|
16.15
|
|
25
|
Office/Flex
Properties
|
||||||||
|
(Continued)
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
525
Executive Boulevard
|
1972
|
61,700
|
83.6
|
814
|
0.14
|
15.78
|
13.76
|
|
|
1
Westchester Plaza
|
1967
|
25,000
|
100.0
|
335
|
0.06
|
13.40
|
12.72
|
|
|
2
Westchester Plaza
|
1968
|
25,000
|
100.0
|
514
|
0.09
|
20.56
|
19.32
|
|
|
3
Westchester Plaza
|
1969
|
93,500
|
100.0
|
636
|
0.11
|
6.80
|
5.90
|
|
|
4
Westchester Plaza
|
1969
|
44,700
|
93.1
|
467
|
0.08
|
11.22
|
9.80
|
|
|
5
Westchester Plaza
|
1969
|
20,000
|
88.9
|
292
|
0.05
|
16.42
|
14.45
|
|
|
6
Westchester Plaza
|
1968
|
20,000
|
100.0
|
322
|
0.06
|
16.10
|
15.00
|
|
|
7
Westchester Plaza
|
1972
|
46,200
|
100.0
|
765
|
0.13
|
16.56
|
16.26
|
|
|
8
Westchester Plaza
|
1971
|
67,200
|
100.0
|
921
|
0.16
|
13.71
|
12.31
|
|
|
Hawthorne
|
||||||||
|
200
Saw Mill River Road
|
1965
|
51,100
|
100.0
|
684
|
0.12
|
13.39
|
12.23
|
|
|
4
Skyline Drive
|
1987
|
80,600
|
92.2
|
1,319
|
0.23
|
17.75
|
14.98
|
|
|
5
Skyline Drive
|
1980
|
124,022
|
99.3
|
1,642
|
0.29
|
13.33
|
11.90
|
|
|
6
Skyline Drive
|
1980
|
44,155
|
100.0
|
571
|
0.10
|
12.93
|
12.86
|
|
|
8
Skyline Drive
|
1985
|
50,000
|
85.3
|
768
|
0.13
|
18.01
|
10.39
|
|
|
10
Skyline Drive
|
1985
|
20,000
|
100.0
|
368
|
0.06
|
18.40
|
13.00
|
|
|
11
Skyline Drive
|
1989
|
45,000
|
100.0
|
803
|
0.14
|
17.84
|
16.91
|
|
|
12
Skyline Drive
|
1999
|
46,850
|
100.0
|
676
|
0.12
|
14.43
|
10.82
|
|
|
15
Skyline Drive
|
1989
|
55,000
|
88.2
|
920
|
0.16
|
18.97
|
18.04
|
|
|
Yonkers
|
||||||||
|
100
Corporate Boulevard
|
1987
|
78,000
|
98.3
|
1,391
|
0.24
|
18.14
|
17.10
|
|
|
200
Corporate Boulevard South
|
1990
|
84,000
|
99.8
|
1,569
|
0.27
|
18.72
|
17.82
|
|
|
4
Executive Plaza
|
1986
|
80,000
|
100.0
|
1,374
|
0.24
|
17.18
|
14.15
|
|
|
6
Executive Plaza
|
1987
|
80,000
|
95.7
|
1,391
|
0.24
|
18.17
|
16.90
|
|
|
1
Odell Plaza
|
1980
|
106,000
|
99.9
|
1,495
|
0.26
|
14.12
|
13.35
|
|
|
3
Odell Plaza
|
1984
|
71,065
|
100.0
|
1,597
|
0.28
|
22.47
|
20.84
|
|
|
5
Odell Plaza
|
1983
|
38,400
|
74.4
|
445
|
0.08
|
15.58
|
14.67
|
|
|
7
Odell Plaza
|
1984
|
42,600
|
99.6
|
740
|
0.13
|
17.44
|
16.80
|
|
|
Total
New York Office/Flex
|
2,348,812
|
97.1
|
34,348
|
5.96
|
15.06
|
13.59
|
||
|
CONNECTICUT
|
||||||||
|
Fairfield
County
|
||||||||
|
Stamford
|
||||||||
|
419
West Avenue
|
1986
|
88,000
|
100.0
|
1,360
|
0.24
|
15.45
|
13.81
|
|
|
500
West Avenue
|
1988
|
25,000
|
82.3
|
375
|
0.07
|
18.23
|
15.89
|
|
|
550
West Avenue
|
1990
|
54,000
|
100.0
|
858
|
0.15
|
15.89
|
15.80
|
|
|
600
West Avenue
|
1999
|
66,000
|
100.0
|
804
|
0.14
|
12.18
|
11.62
|
|
|
650
West Avenue
|
1998
|
40,000
|
100.0
|
609
|
0.11
|
15.23
|
14.55
|
|
|
Total
Connecticut Office/Flex
|
273,000
|
98.4
|
4,006
|
0.71
|
14.92
|
13.94
|
||
|
TOTAL
OFFICE/FLEX PROPERTIES
|
4,811,343
|
94.8
|
57,438
|
9.94
|
12.59
|
11.12
|
||
26
|
Industrial/Warehouse,
Retail and Land Lease Properties
|
||||||||
|
2007
|
||||||||
|
Percentage
|
2007
|
2007
|
Average
|
|||||
|
Net
|
Leased
|
Base
|
Average
|
Effective
|
||||
|
Rentable
|
as
of
|
Rent
|
Percentage
|
Base
Rent
|
Rent
|
|||
|
Year
|
Area
|
12/31/07
|
($000’s)
|
of
Total 2007
|
Per
Sq. Ft.
|
Per
Sq. Ft.
|
||
|
Property
Location
|
Built
|
(Sq.
Ft.)
|
(%)
(a)
|
(b)
(c)
|
Base
Rent (%)
|
($)
(c) (d)
|
($)
(c) (e)
|
|
|
NEW
YORK
|
||||||||
|
Westchester
County
|
||||||||
|
Elmsford
|
||||||||
|
1
Warehouse Lane
|
1957
|
6,600
|
100.0
|
86
|
0.01
|
13.03
|
12.73
|
|
|
2
Warehouse Lane
|
1957
|
10,900
|
100.0
|
161
|
0.03
|
14.77
|
13.03
|
|
|
3
Warehouse Lane
|
1957
|
77,200
|
100.0
|
324
|
0.06
|
4.20
|
3.80
|
|
|
4
Warehouse Lane
|
1957
|
195,500
|
97.4
|
1,738
|
0.30
|
9.13
|
8.11
|
|
|
5
Warehouse Lane
|
1957
|
75,100
|
97.1
|
963
|
0.17
|
13.21
|
11.78
|
|
|
6
Warehouse Lane
|
1982
|
22,100
|
100.0
|
513
|
0.09
|
23.21
|
22.62
|
|
|
Total
Industrial/Warehouse Properties
|
387,400
|
98.1
|
3,785
|
0.66
|
9.96
|
9.00
|
||
|
Westchester
County
|
||||||||
|
Tarrytown
|
||||||||
|
230
White Plains Road
|
1984
|
9,300
|
100.0
|
195
|
0.03
|
20.97
|
19.68
|
|
|
Yonkers
|
||||||||
|
2
Executive Boulevard
|
1986
|
8,000
|
100.0
|
223
|
0.04
|
27.88
|
27.88
|
|
|
Total
Retail Properties
|
17,300
|
100.0
|
418
|
0.07
|
24.16
|
23.47
|
||
|
Westchester
County
|
||||||||
|
Elmsford
|
||||||||
|
700
Executive Boulevard
|
--
|
--
|
--
|
114
|
0.02
|
--
|
--
|
|
|
Yonkers
|
||||||||
|
1
Enterprise Boulevard
|
--
|
--
|
--
|
185
|
0.03
|
--
|
--
|
|
|
Total
Land Leases
|
--
|
--
|
299
|
0.05
|
--
|
--
|
||
|
TOTAL
PROPERTIES
|
29,245,361
|
92.7
|
575,463
|
100.00
|
21.61
|
19.09
|
||
|
(a)
|
Percentage
leased includes all leases in effect as of the period end date, some of
which have commencement dates in the future (including, at December 31,
2007, a lease with a commencement date substantially in the future
consisting of 8,590 square feet scheduled to commence in 2009), and leases
expiring December 31, 2007 aggregating 146,261 square feet (representing
0.5 percent of the Company’s total net rentable square footage) for which
no new leases were signed.
|
|
(b)
|
Total
base rent for 2007, determined in accordance with generally accepted
accounting principles (“GAAP”). Substantially all of the leases
provide for annual base rents plus recoveries and escalation charges based
upon the tenant’s proportionate share of and/or increases in real estate
taxes and certain operating costs, as defined, and the pass through of
charges for electrical usage.
|
|
(c)
|
Excludes
space leased by the Company.
|
|
(d)
|
Base
rent for 2007 divided by net rentable square feet leased at December 31,
2007. For those properties acquired during 2007, amounts are
annualized, as per Note f.
|
|
(e)
|
Total
base rent for 2007 minus total 2007 amortization of tenant improvements,
leasing commissions and other concessions and costs, determined in
accordance with GAAP, divided by net rentable square feet leased at
December 31, 2007. For those properties acquired during 2007,
amounts are annualized, as described in Note
f.
|
|
(f)
|
As
this property was acquired by the Company during 2007, the amounts
represented in 2007 base rent and 2007 effective rent reflect only that
portion of the year during which the Company owned the
property. Accordingly, these amounts may not be indicative of
the property’s full year results. For comparison purposes, the
amounts represented in 2007 average base rent per sq. ft. and 2007 average
effective rent per sq. ft. for this property have been calculated by
taking 2007 base rent and 2007 effective rent for such property and
annualizing these partial-year results, dividing such annualized amounts
by the net rentable square feet leased at December 31,
2007. These annualized per square foot amounts may not be
indicative of the property’s results had the Company owned the property
for the entirety of 2007.
|
27
PERCENTAGE
LEASED
The
following table sets forth the year-end percentages of square feet leased in the
Company’s stabilized operating Consolidated Properties for the last five
years:
|
Percentage
of
|
|
|
December
31,
|
Square
Feet Leased (%) (a)
|
|
2007
|
92.7
|
|
2006
|
92.0
|
|
2005
|
91.0
|
|
2004
|
91.2
|
|
2003
|
91.5
|
|
(a)
|
Percentage
of square-feet leased includes all 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.
|
28
SIGNIFICANT
TENANTS
The
following table sets forth a schedule of the Company’s 50 largest tenants for
the Consolidated Properties as of December 31, 2007 based upon annualized base
rental revenue:
|
Percentage
of
|
|||||||
|
Annualized
|
Company
|
Square
|
Percentage
|
Year
of
|
|||
|
Number
of
|
Base
Rental
|
Annualized
Base
|
Feet
|
Total
Company
|
Lease
|
||
|
Properties
|
Revenue
($) (a)
|
Rental
Revenue (%)
|
Leased
|
Leased
Sq. Ft. (%)
|
Expiration
|
||
|
6
|
14,276,232
|
2.4
|
466,489
|
1.8
|
2018
|
(b)
|
|
|
DB
Services New Jersey, Inc.
|
2
|
10,861,093
|
1.8
|
402,068
|
1.5
|
2017
|
|
|
National
Union Fire Insurance
|
1
|
10,490,646
|
1.8
|
394,849
|
1.5
|
2012
|
|
|
Morgan
Stanley & Co., Inc.
|
5
|
9,493,227
|
1.6
|
381,576
|
1.4
|
2013
|
(c)
|
|
New
Cingular Wireless PCS, LLC
|
4
|
9,144,930
|
1.5
|
410,313
|
1.6
|
2014
|
(d)
|
|
United
States Of America-GSA
|
11
|
8,993,139
|
1.5
|
283,685
|
1.1
|
2017
|
(e)
|
|
Keystone
Mercy Health Plan
|
2
|
8,003,134
|
1.3
|
303,149
|
1.1
|
2015
|
|
|
Prentice-Hall,
Inc.
|
1
|
7,694,097
|
1.3
|
474,801
|
1.9
|
2014
|
|
|
Forest
Laboratories, Inc.
|
2
|
7,463,777
|
1.3
|
202,857
|
0.8
|
2017
|
(f)
|
|
American
Institute of Certified Public
|
|||||||
|
Accountants
|
1
|
6,653,005
|
1.1
|
249,768
|
0.9
|
2012
|
|
|
ICAP
Securities USA, LLC
|
1
|
6,236,408
|
1.0
|
159,834
|
0.6
|
2017
|
|
|
Toys
'R' Us – NJ, Inc.
|
1
|
6,072,651
|
1.0
|
242,518
|
0.9
|
2012
|
|
|
Lehman
Brothers Holdings, Inc.
|
1
|
5,839,982
|
1.0
|
270,063
|
1.0
|
2018
|
(g)
|
|
Allstate
Insurance Company
|
10
|
5,713,563
|
1.0
|
237,559
|
0.9
|
2017
|
(h)
|
|
TD
Ameritrade Online Holdings
|
1
|
5,701,671
|
1.0
|
184,222
|
0.7
|
2015
|
|
|
Merrill
Lynch Pierce Fenner
|
3
|
5,294,084
|
0.9
|
306,125
|
1.1
|
2017
|
(i)
|
|
Credit
Suisse First Boston
|
1
|
5,212,307
|
0.9
|
153,464
|
0.6
|
2012
|
(j)
|
|
KPMG,
LLP
|
3
|
5,024,296
|
0.8
|
181,025
|
0.7
|
2012
|
(k)
|
|
National
Financial Services
|
1
|
4,798,621
|
0.8
|
112,964
|
0.4
|
2012
|
|
|
IBM
Corporation
|
3
|
4,788,402
|
0.8
|
310,263
|
1.2
|
2012
|
(l)
|
|
Daiichi
Sankyo, Inc.
|
3
|
4,009,822
|
0.7
|
136,366
|
0.5
|
2022
|
(m)
|
|
Bank
Of Tokyo-Mitsubishi, Ltd.
|
1
|
3,872,785
|
0.6
|
137,076
|
0.5
|
2019
|
|
|
Vonage
America, Inc.
|
1
|
3,857,000
|
0.6
|
350,000
|
1.3
|
2017
|
|
|
AT&T
Corp.
|
1
|
3,805,000
|
0.6
|
275,000
|
1.0
|
2014
|
|
|
Wyndham
Worldwide Corporation
|
1
|
3,773,775
|
0.6
|
150,951
|
0.6
|
2009
|
|
|
Samsung
Electronics America
|
1
|
3,678,028
|
0.6
|
131,300
|
0.5
|
2010
|
|
|
Montefiore
Medical Center
|
5
|
3,533,233
|
0.6
|
170,064
|
0.6
|
2019
|
(n)
|
|
Hewlett-Packard
Company
|
2
|
3,520,179
|
0.6
|
166,977
|
0.6
|
2010
|
(o)
|
|
SSB
Realty, LLC
|
1
|
3,492,830
|
0.6
|
114,519
|
0.4
|
2009
|
|
|
Wyndham
Worldwide Operations
|
1
|
3,211,626
|
0.5
|
145,983
|
0.5
|
2011
|
|
|
E*Trade
Financial Corporation
|
1
|
3,124,160
|
0.5
|
106,573
|
0.4
|
2022
|
|
|
Dow
Jones & Company, Inc.
|
1
|
3,057,773
|
0.5
|
92,312
|
0.3
|
2012
|
|
|
High
Point Safety & Insurance
|
2
|
2,727,009
|
0.5
|
116,889
|
0.4
|
2020
|
|
|
American
Home Assurance Co.
|
2
|
2,686,732
|
0.5
|
131,174
|
0.5
|
2019
|
(p)
|
|
SunAmerica
Asset Management
|
1
|
2,680,409
|
0.4
|
69,621
|
0.3
|
2018
|
|
|
Moody’s
Investors Service
|
1
|
2,671,149
|
0.4
|
91,344
|
0.3
|
2011
|
(q)
|
|
Oppenheimer
& Co., Inc.
|
1
|
2,636,192
|
0.4
|
104,008
|
0.4
|
2013
|
|
|
Barr
Laboratories, Inc.
|
2
|
2,579,597
|
0.4
|
109,510
|
0.4
|
2015
|
(r)
|
|
United
States Life Insurance Co.
|
1
|
2,520,000
|
0.4
|
180,000
|
0.7
|
2013
|
|
|
AAA
Mid-Atlantic, Inc.
|
2
|
2,517,680
|
0.4
|
129,784
|
0.5
|
2022
|
(s)
|
|
New
Jersey Turnpike Authority
|
1
|
2,455,463
|
0.4
|
100,223
|
0.4
|
2017
|
|
|
Natixis
North America, Inc.
|
1
|
2,408,679
|
0.4
|
83,629
|
0.3
|
2021
|
|
|
Regus
Business Centre Corp.
|
2
|
2,321,656
|
0.4
|
79,805
|
0.3
|
2011
|
|
|
Movado
Group, Inc
|
1
|
2,283,547
|
0.4
|
90,050
|
0.3
|
2013
|
|
|
Deloitte
& Touche USA, LLP
|
1
|
2,171,275
|
0.4
|
86,851
|
0.3
|
2008
|
|
|
UBS
Financial Services, Inc.
|
3
|
2,127,185
|
0.4
|
79,530
|
0.3
|
2016
|
(t)
|
|
Thomson
Tradeweb, LLC
|
1
|
2,116,075
|
0.4
|
56,547
|
0.2
|
2017
|
|
|
Ark
Asset Management Co., Inc.
|
1
|
2,094,608
|
0.4
|
67,568
|
0.3
|
2017
|
|
|
Nextel
of New York, Inc.
|
2
|
2,093,440
|
0.4
|
97,436
|
0.4
|
2014
|
(u)
|
|
GAB
Robins North America Inc.
|
2
|
2,087,199
|
0.4
|
84,649
|
0.3
|
2009
|
(v)
|
|
Totals
|
233,869,371
|
39.2
|
9,463,331
|
35.5
|
|||
See
footnotes on subsequent page.
29
|
Significant Tenants
Footnotes
|
|
(a)
|
Annualized
base rental revenue is based on actual December, 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
|
|
(b)
|
4,412
square feet expire in 2008; 38,196 square feet expire in 2009; 330,900
square feet expire in 2010; 26,834 square feet expire in 2014; 26,262
square feet expire in 2016; 39,885 square feet expire in
2018.
|
|
(c)
|
19,500
square feet expire in 2008; 7,000 square feet expire in 2009; 48,906
square feet expire in 2010; 306,170 square feet expire in
2013.
|
|
(d)
|
4,783
square feet expire in 2008; 333,145 square feet expire in 2013; 72,385
square feet expire in 2014.
|
|
(e)
|
7,008
square feet expire in 2008; 4,950 square feet expire in 2010; 9,901 square
feet expire in 2011; 11,216 square feet expire in 2012; 58,392 square feet
expire in 2013; 4,879 square feet expire in 2014; 180,729 square feet
expire in 2015; 6,610 square feet expire in
2017.
|
|
(f)
|
22,785
square feet expire in 2010; 180,072 square feet expire in
2017.
|
|
(g)
|
198,559
square feet expire in 2010; 71,504 square feet expire in
2018.
|
|
(h)
|
2,138
square feet expire in 2008; 22,185 square feet expire in 2009; 46,555
square feet expire in 2010; 83,693 square feet expire in 2011; 29,005
square feet expire in 2013; 53,983 square feet expire in
2017.
|
|
(i)
|
7,485
square feet expire in 2008; 4,451 square feet expire in 2009; 294,189
square feet expire in 2017.
|
|
(j)
|
71,511
square feet expire in 2011; 81,953 square feet expire in
2012.
|
|
(k)
|
46,440
square feet expire in 2009; 57,204 square feet expire in 2010; 77,381
square feet expire in 2012.
|
|
(l)
|
61,864
square feet expire in 2010; 248,399 square feet expire in
2012.
|
|
(m)
|
46,000
square feet expire in 2009; 5,315 square feet expire in 2011; 85,051
square feet expire in 2022.
|
|
(n)
|
6,800
square feet expire in 2009; 5,850 square feet expire in 2014; 7,200 square
feet expire in 2016; 30,872 square feet expire in 2017; 6,535 square feet
expire in 2018; 112,807 square feet expire in
2019.
|
|
(o)
|
163,857
square feet expire in 2008; 3,120 square feet expire in
2010.
|
|
(p)
|
14,056
square feet expire in 2008; 117,118 square feet expire in
2019.
|
|
(q)
|
43,344
square feet expire in 2009; 36,193 square feet expire in 2010; 11,807
square feet expire in 2011.
|
|
(r)
|
20,000
square feet expire in 2008; 89,510 square feet expire in
2015.
|
|
(s)
|
9,784
square feet expire in 2017; 120,000 square feet expire in
2022.
|
|
(t)
|
21,554
square feet expire in 2010; 20,811 square feet expire in 2013; 37,165
square feet expire in 2016.
|
|
(u)
|
62,436
square feet expire in 2010; 35,000 square feet expire in
2014.
|
|
(v)
|
75,049
square feet expire in 2008; 9,600 square feet expire in
2009.
|
30
SCHEDULE
OF LEASE EXPIRATIONS: ALL CONSOLIDATED PROPERTIES
The
following table sets forth a schedule of lease expirations for the total of the
Company’s office, office/flex, industrial/warehouse and stand-alone retail
properties included in the Consolidated Properties beginning January 1, 2008,
assuming that none of the tenants exercise renewal or termination
options:
|
Average
|
|||||||
|
Annual
|
|||||||
|
Percentage
Of
|
Rent
Per Net
|
||||||
|
Net
Rentable
|
Total
Leased
|
Annualized
|
Rentable
|
Percentage
Of
|
|||
|
Area
Subject
|
Square
Feet
|
Base
Rental
|
Square
Foot
|
Annual
Base
|
|||
|
Number
Of
|
To
Expiring
|
Represented
|
Revenue
Under
|
Represented
|
Rent
Under
|
||
|
Year
Of
|
Leases
|
Leases
|
By
Expiring
|
Expiring
|
By
Expiring
|
Expiring
|
|
|
Expiration
|
Expiring
(a)
|
(Sq.
Ft.)
|
Leases
(%)
|
Leases
($) (b)
|
Leases
($)
|
Leases
(%)
|
|
|
2008
(c)
|
293
|
1,930,173
|
7.2
|
40,605,709
|
21.04
|
6.8
|
|
|
2009
|
361
|
2,397,663
|
9.0
|
53,293,256
|
22.23
|
8.9
|
|
|
2010
|
376
|
3,208,062
|
12.0
|
73,768,677
|
22.99
|
12.4
|
|
|
2011
|
358
|
3,386,416
|
12.7
|
76,565,941
|
22.61
|
12.9
|
|
|
2012
|
261
|
2,855,408
|
10.7
|
67,133,300
|
23.51
|
11.3
|
|
|
2013
|
225
|
3,095,963
|
11.6
|
66,615,433
|
21.52
|
11.2
|
|
|
2014
|
114
|
1,719,904
|
6.4
|
37,835,190
|
22.00
|
6.3
|
|
|
2015
|
72
|
2,281,276
|
8.6
|
50,220,025
|
22.01
|
8.4
|
|
|
2016
|
64
|
904,243
|
3.4
|
17,907,753
|
19.80
|
3.0
|
|
|
2017
|
75
|
2,278,116
|
8.6
|
54,153,943
|
23.77
|
9.1
|
|
|
2018
|
47
|
811,852
|
3.1
|
20,054,181
|
24.70
|
3.4
|
|
|
2019
and thereafter
|
55
|
1,784,202
|
6.7
|
37,833,109
|
21.20
|
6.3
|
|
|
Totals/Weighted
|
|||||||
|
Average
|
2,301
|
26,653,278
(d)
|
100.0
|
595,986,517
|
22.36
|
100.0
|
|
|
(a)
|
Includes
office, office/flex, industrial/warehouse and stand-alone retail property
tenants only. Excludes leases for amenity, retail, parking and
month-to-month tenants. Some tenants have multiple
leases.
|
|
(b)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
|
|
(c)
|
Includes
leases expiring December 31, 2007 aggregating 146,261 square feet and
representing annualized rent of $2,237,232 for which no new leases were
signed.
|
|
(d)
|
Reconciliation
to Company’s total net rentable square footage is as
follows:
|
|
Square
Feet
|
|
|
Square
footage leased to commercial tenants
|
26,653,278
|
|
Square
footage used for corporate offices, management offices,
|
|
|
building use, retail tenants, food
services, other ancillary
|
|
|
service tenants and occupancy
adjustments
|
452,348
|
|
Square
footage unleased
|
2,139,735
|
|
Total
net rentable square footage (does not include land
leases)
|
29,245,361
|
31
SCHEDULE
OF LEASE EXPIRATIONS: OFFICE PROPERTIES
The
following table sets forth a schedule of lease expirations for the office
properties beginning January 1, 2008, assuming that none of the tenants exercise
renewal or termination options:
|
Average
|
|||||||
|
Annual
|
|||||||
|
Percentage
Of
|
Rent
Per Net
|
||||||
|
Net
Rentable
|
Total
Leased
|
Annualized
|
Rentable
|
Percentage
Of
|
|||
|
Area
Subject
|
Square
Feet
|
Base
Rental
|
Square
Foot
|
Annual
Base
|
|||
|
Number
Of
|
To
Expiring
|
Represented
By
|
Revenue
Under
|
Represented
|
Rent
Under
|
||
|
Year
Of
|
Leases
|
Leases
|
Expiring
|
Expiring
|
By
Expiring
|
Expiring
|
|
|
Expiration
|
Expiring
(a)
|
(Sq.
Ft.)
|
Leases
(%)
|
Leases
($) (b)
|
Leases
($)
|
Leases
(%)
|
|
|
2008
(c)
|
226
|
1,442,795
|
6.6
|
34,349,088
|
23.81
|
6.4
|
|
|
2009
|
275
|
1,763,173
|
8.1
|
44,595,505
|
25.29
|
8.4
|
|
|
2010
|
288
|
2,382,681
|
11.0
|
62,482,351
|
26.22
|
11.8
|
|
|
2011
|
295
|
2,853,419
|
13.2
|
70,304,107
|
24.64
|
13.2
|
|
|
2012
|
192
|
2,246,355
|
10.4
|
59,201,643
|
26.35
|
11.1
|
|
|
2013
|
171
|
2,414,424
|
11.1
|
58,168,960
|
24.09
|
11.0
|
|
|
2014
|
96
|
1,533,173
|
7.1
|
35,278,848
|
23.01
|
6.6
|
|
|
2015
|
62
|
2,131,479
|
9.8
|
48,736,523
|
22.87
|
9.2
|
|
|
2016
|
50
|
587,594
|
2.7
|
13,725,094
|
23.36
|
2.6
|
|
|
2017
|
62
|
2,116,810
|
9.8
|
51,506,338
|
24.33
|
9.7
|
|
|
2018
|
32
|
612,032
|
2.8
|
17,424,818
|
28.47
|
3.3
|
|
|
2019
and thereafter
|
47
|
1,615,268
|
7.4
|
35,478,909
|
21.96
|
6.7
|
|
|
Totals/Weighted
|
|||||||
|
Average
|
1,796
|
21,699,203
(c)
|
100.0
|
531,252,184
|
24.48
|
100.0
|
|
|
(a)
|
Includes
office tenants only. Excludes leases for amenity, retail,
parking and month-to-month tenants. Some tenants have multiple
leases.
|
|
(b)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
|
|
(c)
|
Includes
leases expiring December 31, 2007 aggregating 14,273 square feet and
representing annualized rent of $316,943 for which no new leases were
signed..
|
32
SCHEDULE
OF LEASE EXPIRATIONS: OFFICE/FLEX PROPERTIES
The
following table sets forth a schedule of lease expirations for the office/flex
properties beginning January 1, 2008, assuming that none of the tenants exercise
renewal or termination options:
|
Average
|
|||||||
|
Annual
|
|||||||
|
Percentage
Of
|
Rent
Per Net
|
||||||
|
Net
Rentable
|
Total
Leased
|
Annualized
|
Rentable
|
Percentage
Of
|
|||
|
Area
Subject
|
Square
Feet
|
Base
Rental
|
Square
Foot
|
Annual
Base
|
|||
|
Number
Of
|
To
Expiring
|
Represented
By
|
Revenue
Under
|
Represented
|
Rent
Under
|
||
|
Year
Of
|
Leases
|
Leases
|
Expiring
|
Expiring
|
By
Expiring
|
Expiring
|
|
|
Expiration
|
Expiring
(a)
|
(Sq.
Ft.)
|
Leases
(%)
|
Leases
($) (b)
|
Leases
($)
|
Leases
(%)
|
|
|
2008
(c)
|
65
|
480,138
|
10.6
|
6,173,940
|
12.86
|
10.2
|
|
|
2009
|
81
|
582,845
|
12.8
|
7,772,201
|
13.33
|
12.9
|
|
|
2010
|
86
|
792,431
|
17.4
|
10,889,226
|
13.74
|
18.1
|
|
|
2011
|
62
|
525,397
|
11.5
|
6,166,834
|
11.74
|
10.2
|
|
|
2012
|
68
|
602,415
|
13.2
|
7,867,932
|
13.06
|
13.1
|
|
|
2013
|
44
|
533,124
|
11.7
|
7,198,386
|
13.50
|
11.9
|
|
|
2014
|
18
|
186,731
|
4.1
|
2,556,342
|
13.69
|
4.2
|
|
|
2015
|
10
|
149,797
|
3.3
|
1,483,502
|
9.90
|
2.5
|
|
|
2016
|
12
|
181,567
|
4.0
|
2,764,298
|
15.22
|
4.6
|
|
|
2017
|
13
|
161,306
|
3.5
|
2,647,605
|
16.41
|
4.4
|
|
|
2018
|
14
|
191,820
|
4.2
|
2,404,363
|
12.53
|
4.0
|
|
|
2019
and thereafter
|
8
|
168,934
|
3.7
|
2,354,200
|
13.94
|
3.9
|
|
|
Totals/Weighted
|
|||||||
|
Average
|
481
|
4,556,505
(c)
|
100.0
|
60,278,829
|
13.23
|
100.0
|
|
|
(a)
|
Includes
office/flex tenants only. Excludes leases for amenity, retail,
parking and month-to-month tenants. Some tenants have multiple
leases.
|
|
(b)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above. Includes office/flex tenants only. Excludes leases
for amenity, retail, parking and month-to-month tenants. Some
tenants have multiple leases.
|
|
(c)
|
Includes
leases expiring December 31, 2007 aggregating 131,988 square feet and
representing annualized rent of $1,920,290 for which no new leases were
signed.
|
33
SCHEDULE
OF LEASE EXPIRATIONS: INDUSTRIAL/WAREHOUSE PROPERTIES
The
following table sets forth a schedule of lease expirations for the
industrial/warehouse properties beginning January 1, 2008, assuming that none of
the tenants exercise renewal or termination options:
|
Average
|
||||||
|
Annual
|
||||||
|
Percentage
Of
|
Rent
Per Net
|
|||||
|
Net
Rentable
|
Total
Leased
|
Annualized
|
Rentable
|
Percentage
Of
|
||
|
Area
Subject
|
Square
Feet
|
Base
Rental
|
Square
Foot
|
Annual
Base
|
||
|
Number
Of
|
To
Expiring
|
Represented
By
|
Revenue
Under
|
Represented
|
Rent
Under
|
|
|
Year
Of
|
Leases
|
Leases
|
Expiring
|
Expiring
|
By
Expiring
|
Expiring
|
|
Expiration
|
Expiring
(a)
|
(Sq.
Ft.)
|
Leases
(%)
|
Leases
($) (b)
|
Leases
($)
|
Leases
(%)
|
|
2008
|
2
|
7,240
|
1.9
|
82,681
|
11.42
|
2.0
|
|
2009
|
4
|
42,345
|
11.1
|
730,550
|
17.25
|
18.1
|
|
2010
|
2
|
32,950
|
8.7
|
397,100
|
12.05
|
9.8
|
|
2011
|
1
|
7,600
|
2.0
|
95,000
|
12.50
|
2.4
|
|
2012
|
1
|
6,638
|
1.8
|
63,725
|
9.60
|
1.6
|
|
2013
|
10
|
148,415
|
39.0
|
1,248,087
|
8.41
|
30.9
|
|
2016
|
2
|
135,082
|
35.5
|
1,418,361
|
10.50
|
35.2
|
|
Totals/Weighted
|
||||||
|
Average
|
22
|
380,270
|
100.0
|
4,035,504
|
10.61
|
100.0
|
|
(a)
|
Includes
industrial/warehouse tenants only. Excludes leases for amenity,
retail, parking and month-to-month industrial/warehouse
tenants. Some tenants have multiple
leases.
|
|
(b)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, the historical results may differ from those set
forth above.
|
SCHEDULE
OF LEASE EXPIRATIONS: STAND-ALONE RETAIL PROPERTIES
The
following table sets forth a schedule of lease expirations for the stand-alone
retail properties beginning January 1, 2008, assuming that none of the tenants
exercise renewal or termination options:
|
Average
|
||||||
|
Annual
|
||||||
|
Percentage
Of
|
Rent
Per Net
|
|||||
|
Net
Rentable
|
Total
Leased
|
Annualized
|
Rentable
|
Percentage
Of
|
||
|
Area
Subject
|
Square
Feet
|
Base
Rental
|
Square
Foot
|
Annual
Base
|
||
|
Number
Of
|
To
Expiring
|
Represented
By
|
Revenue
Under
|
Represented
|
Rent
Under
|
|
|
Year
Of
|
Leases
|
Leases
|
Expiring
|
Expiring
|
By
Expiring
|
Expiring
|
|
Expiration
|
Expiring
(a)
|
(Sq.
Ft.)
|
Leases
(%)
|
Leases
($) (b)
|
Leases
($)
|
Leases
(%)
|
|
2009
|
1
|
9,300
|
53.8
|
195,000
|
20.97
|
46.4
|
|
2018
|
1
|
8,000
|
46.2
|
225,000
|
28.13
|
53.6
|
|
Totals/Weighted
|
||||||
|
Average
|
2
|
17,300
|
100.0
|
420,000
|
24.28
|
100.0
|
|
(a)
|
Includes
stand-alone retail property tenants
only.
|
|
(b)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
|
34
INDUSTRY
DIVERSIFICATION
The
following table lists the Company’s 30 largest industry classifications based on
annualized contractual base rent of the Consolidated Properties:
|
Annualized
|
Percentage
of
|
Percentage
of
|
||
|
Base
Rental
|
Company
|
Square
|
Total
Company
|
|
|
Revenue
|
Annualized
Base
|
Feet
|
Leased
|
|
|
Industry
Classification (a)
|
($)
(b) (c) (d)
|
Rental
Revenue (%)
|
Leased
(d)
|
Sq.
Ft. (%)
|
|
Securities,
Commodity Contracts
|
||||
|
&
Other Financial
|
116,331,972
|
19.5
|
4,183,589
|
15.6
|
|
Insurance
Carriers & Related Activities
|
48,755,385
|
8.2
|
2,118,350
|
7.9
|
|
Manufacturing
|
47,051,663
|
7.9
|
2,216,972
|
8.3
|
|
Computer
System Design Services
|
28,484,708
|
4.8
|
1,364,041
|
5.1
|
|
Credit
Intermediation & Related Activities
|
27,705,517
|
4.6
|
1,119,532
|
4.2
|
|
Telecommunications
|
27,147,675
|
4.6
|
1,315,096
|
4.9
|
|
Legal
Services
|
24,070,028
|
4.0
|
955,919
|
3.6
|
|
Health
Care & Social Assistance
|
24,012,704
|
4.0
|
1,198,337
|
4.5
|
|
Wholesale
Trade
|
21,961,034
|
3.7
|
1,422,646
|
5.3
|
|
Scientific
Research/Development
|
21,549,733
|
3.6
|
937,094
|
3.5
|
|
Other
Professional
|
20,466,810
|
3.4
|
885,610
|
3.3
|
|
Accounting/Tax
Prep.
|
18,109,960
|
3.0
|
727,704
|
2.7
|
|
Public
Administration
|
16,234,770
|
2.7
|
617,621
|
2.3
|
|
Retail
Trade
|
15,563,071
|
2.6
|
933,701
|
3.5
|
|
Advertising/Related
Services
|
15,206,639
|
2.6
|
619,917
|
2.3
|
|
Other
Services (except Public Administration)
|
14,935,857
|
2.5
|
789,184
|
3.0
|
|
Information
Services
|
10,146,488
|
1.7
|
436,007
|
1.6
|
|
Arts,
Entertainment & Recreation
|
9,361,518
|
1.6
|
566,414
|
2.1
|
|
Architectural/Engineering
|
9,193,910
|
1.5
|
409,436
|
1.5
|
|
Real
Estate & Rental & Leasing
|
8,844,972
|
1.5
|
413,448
|
1.6
|
|
Construction
|
8,584,162
|
1.4
|
395,943
|
1.5
|
|
Broadcasting
|
7,603,641
|
1.3
|
475,740
|
1.8
|
|
Utilities
|
7,206,837
|
1.2
|
339,377
|
1.3
|
|
Admin
& Support, Waste Mgt.
|
||||
|
&
Remediation Services
|
6,951,228
|
1.2
|
400,488
|
1.5
|
|
Data
Processing Services
|
5,845,322
|
1.0
|
240,585
|
0.9
|
|
Transportation
|
5,830,219
|
1.0
|
308,274
|
1.2
|
|
Educational
Services
|
5,508,496
|
0.9
|
282,336
|
1.1
|
|
Specialized
Design Services
|
4,175,140
|
0.7
|
183,273
|
0.7
|
|
Management
of Companies & Finance
|
3,664,372
|
0.6
|
147,079
|
0.6
|
|
Publishing
Industries
|
3,557,304
|
0.6
|
185,610
|
0.7
|
|
Other
|
11,925,382
|
2.1
|
463,955
|
1.9
|
|
Totals
|
595,986,517
|
100.0
|
26,653,278
|
100.0
|
|
(a)
|
The
Company’s tenants are classified according to the U.S. Government’s North
American Industrial Classification System (NAICS) which has replaced the
Standard Industrial Code (SIC)
system.
|
|
(b)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
|
|
(c)
|
Includes
office, office/flex, industrial/warehouse and stand-alone retail tenants
only. Excludes leases for amenity, retail, parking and
month-to-month tenants. Some tenants have multiple
leases.
|
|
(d)
|
Includes
leases in effect as of the period end date, some of which have
commencement dates in the future (including, at December 31, 2007, a lease
with a commencement date substantially in the future consisting of 8,590
square feet scheduled to commence in 2009), and leases expiring December
31, 2007 aggregating 146,261 square feet and representing annualized rent
of $2,237,232 for which no new leases were
signed.
|
35
MARKET
DIVERSIFICATION
The
following table lists the Company’s markets (MSAs), based on annualized
contractual base rent of the Consolidated Properties:
|
Percentage
Of
|
||||
|
Company
|
||||
|
Annualized
Base
|
Annualized
|
Total
Property
|
||
|
Rental
Revenue
|
Base
Rental
|
Size
Rentable
|
Percentage
Of
|
|
|
Market
(MSA)
|
($)
(a) (b) (c)
|
Revenue
(%)
|
Area
(b) (c)
|
Rentable
Area (%)
|
|
Jersey
City, NJ
|
117,129,345
|
19.6
|
4,317,978
|
14.8
|
|
Newark,
NJ
|
||||
|
(Essex-Morris-Union
Counties)
|
116,048,183
|
19.5
|
5,847,318
|
20.0
|
|
Westchester-Rockland,
NY
|
92,728,821
|
15.6
|
4,968,420
|
17.0
|
|
Bergen-Passaic,
NJ
|
91,792,074
|
15.4
|
4,602,401
|
15.7
|
|
Philadelphia,
PA-NJ
|
55,501,093
|
9.3
|
3,529,994
|
12.1
|
|
Washington,
DC-MD-VA-WV
|
31,191,296
|
5.2
|
1,292,807
|
4.4
|
|
Monmouth-Ocean,
NJ
|
26,235,892
|
4.4
|
1,620,863
|
5.5
|
|
Trenton,
NJ
|
20,568,550
|
3.5
|
956,597
|
3.3
|
|
Middlesex-Somerset-Hunterdon,
NJ
|
19,567,698
|
3.3
|
986,760
|
3.4
|
|
New
York, NY
|
||||
|
(Manhattan)
|
15,442,033
|
2.6
|
524,476
|
1.8
|
|
Stamford-Norwalk,
CT
|
7,305,712
|
1.2
|
452,260
|
1.5
|
|
Bridgeport,
CT
|
2,475,820
|
0.4
|
145,487
|
0.5
|
|
Totals
|
595,986,517
|
100.0
|
29,245,361
|
100.0
|
|
(a)
|
Annualized
base rental revenue is based on actual December 2007 billings times
12. For leases whose rent commences after January 1, 2008,
annualized base rental revenue is based on the first full month’s billing
times 12. As annualized base rental revenue is not derived from
historical GAAP results, historical results may differ from those set
forth above.
|
|
(b)
|
Includes
leases in effect as of the period end date, some of which have
commencement dates in the future (including, at December 31, 2007, a lease
with a commencement date substantially in the future consisting of 8,590
square feet scheduled to commence in 2009), and leases expiring December
31, 2007 aggregating 146,261 feet and representing annualized rent of
$2,237,232 for which no new leases were
signed.
|
|
(c)
|
Includes
office, office/flex, industrial/warehouse and stand-alone retail tenants
only. Excludes leases for amenity, retail, parking and
month-to-month tenants. Some tenants have multiple
leases.
|
36
ITEM
3. LEGAL PROCEEDINGS
There are
no material pending legal proceedings, other than ordinary routine litigation
incidental to its business, to which the Company is a party or to which any of
the Properties is subject.
ITEM
4. SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
Not
Applicable.
37
PART
II
ITEM
5. MARKET
FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
MARKET
INFORMATION
The
shares of the Company’s Common Stock are traded on the New York Stock Exchange
(“NYSE”) under the symbol “CLI.”
The
following table sets forth the quarterly high, low, and closing price per share
of Common Stock reported on the NYSE for the years ended December 31, 2007 and
2006, respectively:
|
For
the Year Ended December 31, 2007:
|
|||
|
High
|
Low
|
Close
|
|
|
First
Quarter
|
$56.52
|
$46.89
|
$47.63
|
|
Second
Quarter
|
$50.83
|
$42.33
|
$43.49
|
|
Third
Quarter
|
$44.98
|
$36.80
|
$41.10
|
|
Fourth
Quarter
|
$46.51
|
$30.41
|
$34.00
|
|
For
the Year Ended December 31, 2006:
|
|||
|
High
|
Low
|
Close
|
|
|
First
Quarter
|
$48.37
|
$42.34
|
$48.00
|
|
Second
Quarter
|
$47.47
|
$42.17
|
$45.92
|
|
Third
Quarter
|
$53.66
|
$45.47
|
$51.80
|
|
Fourth
Quarter
|
$55.37
|
$48.24
|
$51.00
|
On
February 8, 2008, the closing Common Stock price reported on the NYSE was $33.67
per share.
On June
20, 2007, the Company filed with the NYSE its annual CEO Certification and
Annual Written Affirmation pursuant to Section 303A.12 of the NYSE Listed
Company Manual, each certifying that the Company was in compliance with all of
the listing standards of the NYSE.
HOLDERS
On
February 8, 2008, the Company had 585 common shareholders of
record.
RECENT
SALES OF UNREGISTERED SECURITIES; USES OF PROCEEDS FROM REGISTERED
SECURITIES
During
the three months ended December 31, 2007, the Company issued 261,090 shares of
common stock to holders of common units in the Operating Partnership upon the
redemption of such common units in private offerings pursuant to Section 4(2) of
the Securities Act. The holders of the common units were limited
partners of the Operating Partnership and accredited investors under Rule 501 of
the Securities Act. The common units were converted into an equal
number of shares of common stock. The Company has registered the
resale of such shares under the Securities Act.
DIVIDENDS
AND DISTRIBUTIONS
During
the year ended December 31, 2007, the Company declared four quarterly common
stock dividends and common unit distributions in the amounts of $0.64, $0.64,
$0.64 and $0.64 per share and per unit from the first to the fourth quarter,
respectively. Additionally, in 2007, the Company declared quarterly
preferred stock dividends of $50.00 per preferred share from the first to the
fourth quarter.
38
During
the year ended December 31, 2006, the Company declared four quarterly common
stock dividends and common unit distributions in the amounts of $0.63, $0.63,
$0.64 and $0.64 per share and per unit from the first to the fourth quarter,
respectively. Additionally, in 2006, the Company declared quarterly
preferred stock dividends of $50.00 per preferred share from the first to the
fourth quarter.
The
declaration and payment of dividends and distributions will continue to be
determined by the Board of Directors in light of conditions then existing,
including the Company’s earnings, financial condition, capital requirements,
applicable REIT and legal restrictions and other factors.
PERFORMANCE
GRAPH
The
following graph compares total stockholder returns from the last five fiscal
years to the Standard & Poor’s 500 Index (“S&P 500”) and to the
National Association of Real Estate Investment Trusts, Inc.’s Equity REIT
Total Return Index (“NAREIT”). The graph assumes that the value of
the investment in the Company’s Common Stock and in the S&P 500 and NAREIT
indices was $100 at December 31, 2002 and that all dividends were
reinvested. The price of the Company’s Common Stock on
December 31, 2002 (on which the graph is based) was $30.30. The
stockholder return shown on the following graph is not necessarily indicative of
future performance.
Comparison
of Five-Year Cumulative Total Return
39
SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
Information
regarding securities authorized for issuance under our equity compensation plans
is disclosed in Item 12: Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.
PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
Total
Number of
|
Maximum
Dollar Value
|
|||
|
Total
Number of
|
Shares
Purchased as
|
of
Shares That May Yet
|
||
|
Shares
|
Average
Price
|
Part
of Publicly
|
be
Purchase under the
|
|
|
Period
|
Purchased
|
Paid
Per Share
|
Announced
Plan (1)
|
Announced
Plan (1)
|
|
October
1, 2007 to
October
31, 2007
|
--
|
N/A
|
--
|
$138,829,930.70
|
|
November
1, 2007
November
30, 2007
|
1,633,700
|
$36.28
|
1,633,700
|
$ 79,512,789.61
|
|
December
1, 2007 to
December
31, 2007
|
976,230
|
$34.32
|
976,230
|
$ 45,983,692.60
|
|
Total:
|
2,609,930
|
$35.54
|
2,609,930
|
$ 45,983,692.60
|
|
(1)
|
The
Board of Directors of the Company adopted a $100 million share repurchase
program on August 6, 1998 and re-authorized and
increased the share repurchase program to $150 million on September 13,
2000. From September 2000 through August 2007, approximately $105.5
million of shares of the Company's common stock were repurchased. On
September 12, 2007, the Board of Directors of the Company further
re-authorized and increased the share repurchase program to $150
million. The share repurchase program authorizes repurchases
from time to time in open market transactions at prevailing prices or
through privately negotiated transactions and is not subject to an
expiration date.
|
40
ITEM
6. SELECTED FINANCIAL
DATA
The
following table sets forth selected financial data on a consolidated basis for
the Company. The consolidated selected operating, balance sheet and
other data of the Company as of December 31, 2007, 2006, 2005, 2004 and 2003,
and for the years then ended have been derived from the Company’s financial
statements for the respective periods.
|
Operating
Data (a)
|
Year
Ended December 31,
|
||||
|
In
thousands, except per share data
|
2007
|
2006
|
2005
|
2004
|
2003
|
|
Total
revenues
|
$ 808,350
|
$ 732,012
|
$ 591,991
|
$ 529,225
|
$ 509,099
|
|
Property
expenses (b)
|
$ 270,913
|
$ 253,667
|
$ 207,558
|
$ 168,021
|
$ 156,073
|
|
Direct
construction costs
|
$ 85,180
|
$ 53,602
|
--
|
--
|
--
|
|
General
and administrative
|
$ 52,162
|
$ 49,074
|
$ 32,432
|
$ 31,305
|
$ 30,827
|
|
Interest
expense
|
$ 126,672
|
$ 134,964
|
$ 119,070
|
$ 109,211
|
$ 114,919
|
|
Income
from continuing operations
|
$ 73,129
|
$ 84,679
|
$ 73,987
|
$ 77,977
|
$ 110,731
|
|
Net
income available to common shareholders
|
$ 108,466
|
$ 142,666
|
$ 93,488
|
$ 100,453
|
$ 141,381
|
|
Income
from continuing operations
|
|||||
|
per
share – basic
|
$ 1.06
|
$ 1.33
|
$ 1.17
|
$ 1.26
|
$ 1.89
|
|
Income
from continuing operations
|
|||||
|
per
share – diluted
|
$ 1.06
|
$ 1.32
|
$ 1.16
|
$ 1.25
|
$ 1.88
|
|
Net
income per share – basic
|
$ 1.62
|
$ 2.29
|
$ 1.52
|
$ 1.66
|
$ 2.45
|
|
Net
income per share – diluted
|
$ 1.61
|
$ 2.28
|
$ 1.51
|
$ 1.65
|
$ 2.43
|
|
Dividends
declared per common share
|
$ 2.56
|
$ 2.54
|
$ 2.52
|
$ 2.52
|
$ 2.52
|
|
Basic
weighted average shares outstanding
|
67,026
|
62,237
|
61,477
|
60,351
|
57,724
|
|
Diluted
weighted average shares outstanding
|
82,500
|
77,901
|
74,189
|
68,743
|
65,980
|
|
Balance
Sheet Data
|
December
31,
|
||||
|
In
thousands
|
2007
|
2006
|
2005
|
2004
|
2003
|
|
Rental
property, before accumulated
|
|||||
|
depreciation
and amortization
|
$4,885,429
|
$4,573,587
|
$4,491,752
|
$4,160,959
|
$3,954,632
|
|
Rental
property held for sale, net
|
--
|
--
|
--
|
$ 19,132
|
--
|
|
Total
assets
|
$4,593,202
|
$4,422,889
|
$4,247,502
|
$3,850,165
|
$3,749,570
|
|
Total
debt (c)
|
$2,211,735
|
$2,159,959
|
$2,126,181
|
$1,702,300
|
$1,628,584
|
|
Total
liabilities
|
$2,492,797
|
$2,412,762
|
$2,335,396
|
$1,877,096
|
$1,779,983
|
|
Minority
interests
|
$ 457,850
|
$ 482,220
|
$ 400,819
|
$ 427,958
|
$ 428,099
|
|
Stockholders’
equity
|
$1,642,555
|
$1,527,907
|
$1,511,287
|
$1,545,111
|
$1,541,488
|
________________________
|
(a)
|
Certain
reclassifications have been made to prior period amounts in order to
conform with current period
presentation.
|
|
(b)
|
Property
expenses is calculated by taking the sum of real estate taxes, utilities
and operating services for each of the periods
presented.
|
|
(c)
|
Total
debt is calculated by taking the sum of senior unsecured notes, revolving
credit facilities, and mortgages, loans payable and other
obligations.
|
41
The
following discussion should be read in conjunction with the Consolidated
Financial Statements of Mack-Cali Realty Corporation and the notes thereto
(collectively, the “Financial Statements”). Certain defined terms
used herein have the meaning ascribed to them in the Financial
Statements.
Executive
Overview
Mack-Cali
Realty Corporation (the “Company”) is one of the largest real estate investment
trusts (REITs) in the United States, with a total market capitalization of
approximately $5.0 billion at December 31, 2007. The Company has been
involved in all aspects of commercial real estate development, management and
ownership for over 50 years and has been a publicly-traded REIT since
1994. The Company owns or has interests in 294 properties
(collectively, the “Properties”), primarily class A office and office/flex
buildings, totaling approximately 33.7 million square feet, leased to
approximately 2,200 tenants. The properties are located primarily in
suburban markets of the Northeast, some with adjacent, Company-controlled
developable land sites able to accommodate up to 11.3 million square feet of
additional commercial space.
The
Company’s strategy is to be a significant real estate owner and operator in its
core, high-barriers-to-entry markets, primarily in the Northeast.
As an
owner of real estate, almost all of the Company’s earnings and cash flow is
derived from rental revenue received pursuant to leased space at the
Properties. Key factors that affect the Company’s business and
financial results include the following:
|
·
|
the general economic climate;
|
|
·
|
the occupancy rates of the Properties;
|
|
·
|
rental rates on new or renewed leases;
|
|
·
|
tenant improvement and leasing costs incurred to obtain and retain
tenants;
|
|
·
|
the extent of early lease terminations;
|
|
·
|
operating expenses;
|
|
·
|
cost of capital; and
|
|
·
|
the extent of acquisitions, development and sales of real
estate.
|
Any
negative effects of the above key factors could potentially cause a
deterioration in the Company’s revenue and/or earnings. Such negative
effects could include: (1) failure to renew or execute new leases as current
leases expire; (2) failure to renew or execute new leases with rental terms at
or above the terms of in-place leases; and (3) tenant defaults.
A failure
to renew or execute new leases as current leases expire or to execute new leases
with rental terms at or above the terms of in-place leases may be affected by
several factors such as: (1) the local economic climate, which may be adversely
impacted by business layoffs or downsizing, industry slowdowns, changing
demographics and other factors; and (2) local real estate conditions, such as
oversupply of office and office/flex space or competition within the
market.
The
Company’s core markets continue to be weak. The percentage leased in
the Company’s consolidated portfolio of stabilized operating properties was 92.7
percent at December 31, 2007 as compared to 92.0 percent at December 31, 2006
and 91.0 percent at December 31, 2005. Percentage leased includes all
leases in effect as of the period end date, some of which have commencement
dates in the future (including, at December 31, 2007, a lease with a
commencement date substantially in the future consisting of 8,590 square feet
scheduled to commence in 2009), and leases that expire at the period end
date. Leases that expired as of December 31, 2007, 2006 and 2005
aggregate 146,261, 103,477 and 311,623 square feet, respectively, or 0.5, 0.4
and 1.1 percentage of the net rentable square footage,
respectively. Rental rates on the Company’s space that was re-leased
(based on first rents payable) during the year ended December 31,
2007 decreased an average of 0.2 percent compared to rates that were in effect
under the prior leases, as compared to a 0.2 percent decrease in 2006 and an 8.2
percent decrease in 2005. The Company believes that vacancy rates may
continue to increase in some of its markets in 2008. As a result, the
Company’s future earnings and cash flow may continue to be negatively impacted
by current market conditions.
42
The
remaining portion of this Management’s Discussion and Analysis of Financial
Condition and Results of Operations should help the reader
understand:
|
·
|
property transactions during the period;
|
|
·
|
critical accounting policies and estimates;
|
|
·
|
results of operations for the year ended December 31, 2007 as compared to
the year ended December 31, 2006;
|
|
·
|
results of operations for the year ended December 31, 2006 as compared to
the year ended December 31, 2005; and
|
|
·
|
liquidity and capital resources.
|
Summary
of 2007 Transactions
Property
Acquisitions
The
Company acquired the following office properties during the year ended December
31, 2007 (dollars in
thousands):
|
Acquisition
|
#
of
|
Rentable
|
Acquisition
|
||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Square
Feet
|
Cost
|
|
05/08/07
|
AAA
Properties (a) (c)
|
Hamilton
Township, New Jersey
|
2
|
69,232
|
$ 9,048
|
|
06/11/07
|
125
Broad Street (b) (c)
|
New
York, New York
|
1
|
524,476
|
274,091
|
|
Total
Property Acquisitions:
|
3
|
593,708
|
$283,139
|
||
|
(a)
Included
in this transaction was the acquisition of two parcels of developable land
aggregating approximately 13 acres.
|
|||||
|
(b)
Acquisition represented two units of office condominium interests, which
collectively comprise floors 2 through 16, or 39.6 percent, of the
40-story, 1.2 million square-foot building.
|
|||||
|
(c) Transaction
was funded primarily through borrowing on the Company’s revolving credit
facility.
|
|||||
Properties
Commencing Initial Operations
The
following office property commenced initial operations during the year ended
December 31, 2007 (dollars in
thousands):
|
#
of
|
Rentable
|
Investment
by
|
||||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Square
Feet
|
Company
(a)
|
|
|
05/08/07
|
700
Horizon Drive
|
Hamilton
Township, New Jersey
|
1
|
120,000
|
$16,751
|
|
|
Total
Properties Commencing Initial Operations:
|
1
|
120,000
|
$16,751
|
|||
|
(a)
Development
costs were funded primarily through borrowing on the Company’s revolving
credit facility. Amounts are as of December 31,
2007.
|
||||||
Land
Acquisition
In
February 2007, the Company exercised its option to acquire approximately 43
acres of land sites within its Capital Office Park complex in Greenbelt,
Maryland, which is able to accommodate the development of up to 600,000 square
feet of office space, for $13 million. On May 25, 2007, the Company
completed the purchase of the land for approximately $13 million, which
consisted of 114,911 common operating partnership units valued at $5.2 million,
and the remainder in cash.
43
Property
Sales
The Company sold the following office
properties during the year ended December 31, 2007 (dollars in
thousands):
|
Rentable
|
Net
|
Net
|
||||||
|
Sale
|
#
of
|
Square
|
Sales
|
Book
|
Realized
|
|||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Feet
|
Proceeds
|
Value
|
Gain
|
|
|
05/10/07
|
1000
Bridgeport Avenue
|
Shelton,
Connecticut
|
1
|
133,000
|
$16,411
|
$13,782
|
$ 2,629
|
|
|
06/11/07
|
500
W. Putnam Avenue
|
Greenwich,
Connecticut
|
1
|
121,250
|
54,344
|
18,113
|
36,231
|
|
|
07/13/07
|
100&
200 Decadon Drive
|
Egg
Harbor, New Jersey
|
2
|
80,344
|
11,448
|
5,894
|
5,554
|
|
|
Total
Office Property Sales:
|
4
|
334,594
|
$82,203
|
$37,789
|
$44,414
|
|||
Critical
Accounting Policies and Estimates
The
Financial Statements have been prepared in conformity with generally accepted
accounting principles. The preparation of the Financial Statements
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the Financial Statements, and the reported amounts of
revenues and expenses during the reported period. These estimates and
assumptions are based on management’s historical experience that are believed to
be reasonable at the time. However, because future events and their
effects cannot be determined with certainty, the determination of estimates
requires the exercise of judgment. The Company’s critical accounting
policies are those which require assumptions to be made about matters that are
highly uncertain. Different estimates could have a material effect on
the Company’s financial results. Judgments and uncertainties
affecting the application of these policies and estimates may result in
materially different amounts being reported under different conditions and
circumstances.
Rental
Property:
Rental
properties are stated at cost less accumulated depreciation and
amortization. Costs directly related to the acquisition, development
and construction of rental properties are capitalized. Capitalized
development and construction costs include pre-construction costs essential to
the development of the property, development and construction costs, interest,
property taxes, insurance, salaries and other project costs incurred during the
period of development. Interest capitalized by the Company for the
years ended December 31, 2007, 2006 and 2005 was $5.1 million, $6.1, million and
$5.5 million, respectively. Ordinary repairs and maintenance are
expensed as incurred; major replacements and betterments, which improve or
extend the life of the asset, are capitalized and depreciated over their
estimated useful lives. Fully-depreciated assets are removed from the
accounts.
The
Company considers a construction project as substantially completed and held
available for occupancy upon the completion of tenant improvements, but no later
than one year from cessation of major construction activity (as distinguished
from activities such as routine maintenance and cleanup). If portions
of a rental project are substantially completed and occupied by tenants, or held
available for occupancy, and other portions have not yet reached that stage, the
substantially completed portions are accounted for as a separate
project. The Company allocates costs incurred between the portions
under construction and the portions substantially completed and held available
for occupancy and capitalizes only those costs associated with the portion under
construction.
Properties
are depreciated using the straight-line method over the estimated useful lives
of the assets. The estimated useful lives are as
follows:
|
Leasehold
interests
|
Remaining
lease term
|
|
Buildings
and improvements
|
5
to 40 years
|
|
Tenant
improvements
|
The
shorter of the term of the
|
|
related
lease or useful life
|
|
|
Furniture,
fixtures and equipment
|
5
to 10 years
|
44
Upon
acquisition of rental property, the Company estimates the fair value of acquired
tangible assets, consisting of land, building and improvements, and identified
intangible assets and liabilities generally consisting of the fair value of (i)
above and below market leases, (ii) in-place leases and (iii) tenant
relationships. The Company allocates the purchase price to the assets
acquired and liabilities assumed based on their relative fair
values. In estimating the fair value of the tangible and intangible
assets acquired, the Company considers information obtained about each property
as a result of its due diligence and marketing and leasing activities, and
utilizes various valuation methods, such as estimated cash flow projections
utilizing appropriate discount and capitalization rates, estimates of
replacement costs net of depreciation, and available market
information. The fair value of the tangible assets of an acquired
property considers the value of the property as if it were vacant.
Above-market
and below-market lease values for acquired properties are recorded based on the
present value (using a discount rate which reflects the risks associated with
the leases acquired) of the difference between (i) the contractual amounts to be
paid pursuant to each in-place lease and (ii) management’s estimate of fair
market lease rates for each corresponding in-place lease, measured over a period
equal to the remaining term of the lease for above-market leases and the
remaining initial term plus the term of any below-market fixed rate renewal
options for below-market leases. The capitalized above-market lease
values are amortized as a reduction of base rental revenue over the remaining
term of the respective leases, and the capitalized below-market lease values are
amortized as an increase to base rental revenue over the remaining initial terms
plus the terms of any below-market fixed rate renewal options of the respective
leases.
Other
intangible assets acquired include amounts for in-place lease values and tenant
relationship values which are based on management’s evaluation of the specific
characteristics of each tenant’s lease and the Company’s overall relationship
with the respective tenant. Factors to be considered by management in
its analysis of in-place lease values include an estimate of carrying costs
during hypothetical expected lease-up periods considering current market
conditions, and costs to execute similar leases. In estimating
carrying costs, management includes real estate taxes, insurance and other
operating expenses and estimates of lost rentals at market rates during the
expected lease-up periods, depending on local market conditions. In
estimating costs to execute similar leases, management considers leasing
commissions, legal and other related expenses. Characteristics
considered by management in valuing tenant relationships include the nature and
extent of the Company’s existing business relationships with the tenant, growth
prospects for developing new business with the tenant, the tenant’s credit
quality and expectations of lease renewals. The value of in-place
leases are amortized to expense over the remaining initial terms of the
respective leases. The value of tenant relationship intangibles will
be amortized to expense over the anticipated life of the
relationships.
On a
periodic basis, management assesses whether there are any indicators that the
value of the Company’s rental properties may be impaired. A
property’s value is impaired only if management’s estimate of the aggregate
future cash flows (undiscounted and without interest charges) to be generated by
the property is less than the carrying value of the property. To the
extent impairment has occurred, the loss shall be measured as the excess of the
carrying amount of the property over the fair value of the
property. The Company’s estimates of aggregate future cash flows
expected to be generated by each property are based on a number of assumptions
that are subject to economic and market uncertainties including, among others,
demand for space, competition for tenants, changes in market rental rates, and
costs to operate each property. As these factors are difficult to
predict and are subject to future events that may alter management’s
assumptions, the future cash flows estimated by management in its impairment
analyses may not be achieved. Management does not believe that the
value of any of the Company’s rental properties is impaired.
Rental Property Held for
Sale and Discontinued Operations:
When
assets are identified by management as held for sale, the Company discontinues
depreciating the assets and estimates the sales price, net of selling costs, of
such assets. If, in management’s opinion, the net sales price of the
assets which have been identified as held for sale is less than the net book
value of the assets, a valuation allowance is established. Properties
identified as held for sale and/or sold are presented in discontinued operations
for all periods presented.
If
circumstances arise that previously were considered unlikely and, as a result,
the Company decides not to sell a property previously classified as held for
sale, the property is reclassified as held and used. A property that
is reclassified is measured and recorded individually at the lower of (a) its
carrying amount before the property was classified as held for sale, adjusted
for any depreciation (amortization) expense that would have been recognized had
the property been continuously classified as held and used, or (b) the fair
value at the date of the subsequent decision not to sell.
45
Revenue
Recognition:
Base
rental revenue is recognized on a straight-line basis over the terms of the
respective leases.
Unbilled rents receivable represents the amount by which straight-line rental
revenue exceeds rents currently billed in accordance with the lease
agreements. Above-market and below-market lease values for acquired
properties are recorded based on the present value (using a discount rate which
reflects the risks associated with the leases acquired) of the difference
between (i) the contractual amounts to be paid pursuant to each in-place lease
and (ii) management’s estimate of fair market lease rates for each corresponding
in-place lease, measured over a period equal to the remaining term of the lease
for above-market leases and the initial term plus the term of any below-market
fixed-rate renewal options for below-market leases. The capitalized
above-market lease values for acquired properties are amortized as a reduction
of base rental revenue over the remaining term of the respective leases, and the
capitalized below-market lease values are amortized as an increase to base
rental revenue over the remaining initial terms plus the terms of any
below-market fixed-rate renewal options of the respective
leases. Escalations and recoveries from tenants are received from
tenants for certain costs as provided in the lease agreements. These
costs generally include real estate taxes, utilities, insurance, common area
maintenance and other recoverable costs.
Construction
services revenue includes fees earned and reimbursements received by the Company
for providing construction management and general contractor services to
clients. Construction services revenue is recognized on the
percentage of completion method. Using this method, profits are
recorded on the basis of our estimates of the overall profit and percentage of
completion of individual contracts. A portion of the estimated
profits is accrued based upon estimates of the percentage of completion of the
construction contract. This revenue recognition method involves
inherent risks relating to profit and cost estimates. Real estate
services revenue includes property management, facilities management, leasing
commission fees and other services, and payroll and related costs reimbursed
from clients. Other income includes income from parking spaces leased
to tenants, income from tenants for additional services arranged for the Company
and income from tenants for early lease terminations.
Allowance for Doubtful
Accounts:
Management
periodically performs a detailed review of amounts due from tenants to determine
if accounts receivable balances are impaired based on factors affecting the
collectibility of those balances. Management’s estimate of the
allowance for doubtful accounts requires management to exercise significant
judgment about the timing, frequency and severity of collection losses, which
affects the allowance and net income.
46
Results
From Operations
The
following comparisons for the year ended December 31, 2007 (“2007”), as compared
to the year ended December 31, 2006 (“2006”), and for 2006, as compared to the
year ended December 31, 2005 (“2005”), make reference to the
following: (i) the effect of the “Same-Store Properties,” which
represents all in-service properties owned by the Company at December 31, 2005,
(for the 2007 versus 2006 comparison) and which represents all in-service
properties owned by the Company at December 31, 2004, (for the 2006 versus 2005
comparison), excluding properties sold or held for sale through December 31,
2007, and (ii) the effect of the “Acquired Properties,” which represents all
properties acquired by the Company or commencing initial operations from January
1, 2006 through December 31, 2007 (for the 2007 versus 2006 comparison) and
which represent all properties acquired by the Company or commencing initial
operation from January 1, 2005 through December 31, 2006 (for the 2006 versus
2005 comparison).
47
Year
Ended December 31, 2007 Compared to Year Ended December 31, 2006
|
Year
Ended
|
||||
|
December
31,
|
Dollar
|
Percent
|
||
|
(dollars
in thousands)
|
2007
|
2006
|
Change
|
Change
|
|
Revenue
from rental operations:
|
||||
|
Base
rents
|
$575,463
|
$532,879
|
$
42,584
|
8.0%
|
|
Escalations
and recoveries from tenants
|
104,781
|
90,214
|
14,567
|
16.1
|
|
Other
income
|
22,070
|
21,649
|
421
|
1.9
|
|
Total revenues from rental
operations
|
702,314
|
644,742
|
57,572
|
8.9
|
|
Property
expenses:
|
||||
|
Real
estate taxes
|
90,895
|
85,999
|
4,896
|
5.7
|
|
Utilities
|
73,072
|
59,788
|
13,284
|
22.2
|
|
Operating
services
|
106,946
|
107,880
|
(934)
|
(0.9)
|
|
Total property
expenses
|
270,913
|
253,667
|
17,246
|
6.8
|
|
Non-property
revenues:
|
||||
|
Construction
services
|
88,066
|
56,225
|
31,841
|
56.6
|
|
Real
estate services
|
17,970
|
31,045
|
(13,075)
|
(42.1)
|
|
Total non-property
revenues
|
106,036
|
87,270
|
18,766
|
21.5
|
|
Non-property
expenses:
|
||||
|
Direct
constructions costs
|
85,179
|
53,602
|
31,577
|
58.9
|
|
General
and administrative
|
52,162
|
49,074
|
3,088
|
6.3
|
|
Depreciation
and amortization
|
183,564
|
159,096
|
24,468
|
15.4
|
|
Total non-property
expenses
|
320,905
|
261,772
|
59,133
|
22.6
|
|
Operating
Income
|
216,532
|
216,573
|
(41)
|
--
|
|
Other
(expense) income:
|
||||
|
Interest
expense
|
(126,672)
|
(134,964)
|
8,292
|
6.1
|
|
Interest
and other investment income
|
4,670
|
3,054
|
1,616
|
52.9
|
|
Equity
in earnings (loss) of unconsolidated
|
||||
|
joint ventures
|
(5,918)
|
(5,556)
|
(362)
|
(6.5)
|
|
Minority
interest in consolidated joint ventures
|
643
|
218
|
425
|
195.0
|
|
Gain
on sale of investment in marketable securities
|
--
|
15,060
|
(15,060)
|
(100.0)
|
|
Gain
on sale of investment in joint ventures
|
--
|
10,831
|
(10,831)
|
(100.0)
|
|
Gain/(loss)
on sale of land and other assets
|
--
|
(416)
|
416
|
100.0
|
|
Total other (expense)
income
|
(127,277)
|
(111,773)
|
(15,504)
|
(13.9)
|
|
Income
from continuing operations before minority
|
||||
|
interest in Operating
Partnership
|
89,255
|
104,800
|
(15,545)
|
(14.8)
|
|
Minority
interest in Operating Partnership
|
(16,126)
|
(20,121)
|
3,995
|
19.9
|
|
Income
from continuing operations
|
73,129
|
84,679
|
(11,550)
|
(13.6)
|
|
Discontinued
operations (net of minority interest):
|
||||
|
Income (loss) from discontinued
operations
|
1,057
|
12,272
|
(11,215)
|
(91.4)
|
|
Realized gains (losses) and
unrealized losses
|
||||
|
on disposition of rental
property, net
|
36,280
|
47,715
|
(11,435)
|
(24.0)
|
|
Total
discontinued operations, net
|
37,337
|
59,987
|
(22,650)
|
(37.8)
|
|
Net
income
|
110,466
|
144,666
|
(34,200)
|
(23.6)
|
|
Preferred
stock dividends
|
(2,000)
|
(2,000)
|
--
|
--
|
|
Net
income available to common shareholders
|
$108,466
|
$142,666
|
$(34,200)
|
(24.0)%
|
48
The
following is a summary of the changes in revenue from rental operations and
property expenses in 2007 as compared to 2006 divided into Same-Store Properties
and Acquired Properties (dollars in
thousands):
|
Total Company
|
Same-Store Properties
|
Acquired Properties
|
||||
|
Dollar
|
Percent
|
Dollar
|
Percent
|
Dollar
|
Percent
|
|
|
Change
|
Change
|
Change
|
Change
|
Change
|
Change
|
|
|
Revenue
from rental operations:
|
||||||
|
Base
rents
|
$42,584
|
8.0%
|
$19,823
|
3.7%
|
$ 22,761
|
4.3%
|
|
Escalations
and recoveries
|
|
|||||
|
from
tenants
|
14,567
|
16.1
|
9,086
|
10.1
|
5,481
|
6.0
|
|
Other
income
|
421
|
1.9
|
2,037
|
9.4
|
(1,616)
|
(7.5)
|
|
Total
|
$57,572
|
8.9%
|
$30,946
|
4.8%
|
$ 26,626
|
4.1%
|
|
Property
expenses:
|
||||||
|
Real
estate taxes
|
$ 4,896
|
5.7%
|
$1,660
|
1.9%
|
$3,236
|
3.8%
|
|
Utilities
|
13,284
|
22.2
|
10,878
|
18.2
|
2,406
|
4.0
|
|
Operating
services
|
(934)
|
(0.9)
|
8,884
|
8.2
|
(9,818)
|
(9.1)
|
|
Total
|
$17,246
|
6.8%
|
$21,422
|
8.4%
|
$
(4,176)
|
(1.6)%
|
|
OTHER
DATA:
|
||||||
|
Number
of Consolidated Properties
|
255
|
240
|
15
|
|||
|
Square
feet (in thousands)
|
29,245
|
27,070
|
2,175
|
|||
Base
rents for the Same-Store Properties increased $19.8 million, or 3.7 percent, for
2007 as compared to 2006, due primarily to an increase in the percentage of
space leased at the properties in 2007 from 2006. Escalations and
recoveries from tenants for the Same-Store Properties increased $9.1 million, or
10.1 percent, for 2007 over 2006, due primarily to an increased amount of total
property expenses in 2007. Other income for the Same-Store Properties
increased $2.0 million, or 9.4 percent, due primarily to an increase in lease
termination fees in 2007.
Real
estate taxes on the Same-Store Properties increased $1.7 million, or 1.9
percent, for 2007 as compared to 2006, due primarily to property tax rate
increases in certain municipalities in 2007, partially offset by reduced
assessments on certain properties in 2007. Utilities for the
Same-Store Properties increased $10.9 million, or 18.2 percent, for 2007 as
compared to 2006, due primarily to increased electric rates in 2007 as compared
to 2006. Operating services for the Same-Store Properties increased
$8.9 million, or 8.2 percent, due primarily to increases in maintenance costs of
$3.9 million, snow removal costs of $2.0 million, salaries and related expenses
of $1.0 million, and property insurance expense of $0.7 million in 2007 as
compared to 2006.
Construction
services revenue increased $31.8 million in 2007 as compared to 2006, due to the
effect of the Gale/Green transactions completed in May 2006 (“Gale/Green
Transactions”). Real estate services revenues decreased by $13.1
million, or 42.1 percent, for 2007 as compared to 2006, due primarily to the
contribution of the Gale facilities management business to an unconsolidated
joint venture in late 2006.
Direct
construction costs increased $31.6 million in 2007 as compared to 2006, due
primarily to the effect of the Gale/Green Transactions.
General
and administrative increased by $3.1 million, or 6.3 percent, for 2007 as
compared to 2006 due primarily to the effect of the Gale/Green
Transactions.
Depreciation
and amortization increased by $24.5 million, or 15.4 percent, for 2007 over
2006. Of this increase, $8.8 million, or 5.5 percent, was
attributable to the Same-Store Properties and $15.7 million, or 9.9 percent, was
due to the Acquired Properties.
49
Interest
expense decreased $8.3 million, or 6.1 percent, for 2007 as compared to
2006. This decrease was primarily as a result of lower average debt
balances in 2007 as compared to 2006, partially due to the use of proceeds from
the common stock offering in February 2007 to repay outstanding
borrowings.
Interest
and other investment income increased $1.6 million, or 52.9 percent, for 2007 as
compared to 2006. This increase was due primarily to higher cash
balances invested in 2007.
Equity in
earnings of unconsolidated joint ventures decreased $0.4 million, or 6.5
percent, for 2007 as compared to 2006. The decrease was due primarily to an
increased loss of $2.1 million in the Route 93 joint venture and an increased
loss of $1.7 million in the Mack-Green joint venture. These losses
were partially offset by 2006 losses of $1.9 million in the Meadowlands Xanadu
venture and $0.9 million in the G&G Martco venture, with no activity for
these ventures in 2007, and an increased net income of $0.4 million in 2007 in
the 12 Vreeland venture.
The
Company recognized a gain on sale of investment in marketable securities of
$15.1 million in 2006.
Gain on
sale of investment in unconsolidated joint ventures amounted to $10.8 million in
2006 from the sale of the Company’s interest in the G&G Martco joint
venture.
Gain
(loss) on sale of land and other assets amounted to a loss of $0.4 million in
2006 due to a loss on the sale of Gale Global Facilities and related companies
in 2006 of $1.5 million, partially offset by a gain of $1.1 million from the
sale of a parcel of land in Hamilton, New Jersey.
Income
from continuing operations before minority interest in Operating Partnership
decreased to approximately $89.2 million in 2007 from $104.8 million in
2006. The decrease of approximately $15.6 million was due to the
factors discussed above.
Net
income available to common shareholders decreased by $34.2 million, or 24.0
percent, from $142.7 million in 2006 to $108.5 million in 2007. This
decrease was primarily the result of realized gains on disposition of rental
property of $47.7 million in 2006, decrease in income from continuing operations
before minority interest in Operating Partnership of approximately $15.6 million
and a decrease in income from discontinued operations of $11.2 million for 2007
as compared to 2006. These were partially offset by realized gains on
disposition of rental property of $36.3 million in 2007, and a decrease in
minority interest in Operating Partnership in 2007 of $4.0 million as compared
to 2006.
50
Year
Ended December 31, 2006 Compared to Year Ended December 31, 2005
|
Year
Ended
|
||||
|
December
31,
|
Dollar
|
Percent
|
||
|
(dollars
in thousands)
|
2006
|
2005
|
Change
|
Change
|
|
Revenue
from rental operations:
|
||||
|
Base
rents
|
$532,879
|
$497,358
|
$35,521
|
7.1%
|
|
Escalations
and recoveries from tenants
|
90,214
|
77,109
|
13,105
|
17.0
|
|
Other
income
|
21,649
|
14,607
|
7,042
|
48.2
|
|
Total revenues from rental
operations
|
644,742
|
589,074
|
55,668
|
9.5
|
|
Property
expenses:
|
||||
|
Real
estate taxes
|
85,999
|
76,653
|
9,346
|
12.2
|
|
Utilities
|
59,788
|
51,720
|
8,068
|
15.6
|
|
Operating
services
|
107,880
|
79,185
|
28,695
|
36.2
|
|
Total property
expenses
|
253,667
|
207,558
|
46,109
|
22.2
|
|
Non-property
revenues:
|
||||
|
Construction
services
|
56,225
|
--
|
56,225
|
--
|
|
Real
estate services
|
31,045
|
2,917
|
28,128
|
964.3
|
|
Total non-property
revenues
|
87,270
|
2,917
|
84,353
|
2,891.8
|
|
Non-property
expenses:
|
||||
|
Direct
constructions costs
|
53,602
|
--
|
53,602
|
--
|
|
General
and administrative
|
49,074
|
32,432
|
16,642
|
51.3
|
|
Depreciation
and amortization
|
159,096
|
141,771
|
17,325
|
12.2
|
|
Total non-property
expenses
|
261,772
|
174,203
|
87,569
|
50.3
|
|
Operating
Income
|
216,573
|
210,230
|
6,343
|
3.0
|
|
Other
(expense) income:
|
||||
|
Interest
expense
|
(134,964)
|
(119,070)
|
(15,894)
|
(13.3)
|
|
Interest
and other investment income
|
3,054
|
856
|
2,198
|
256.8
|
|
Equity
in earnings (loss) of unconsolidated
|
||||
|
joint ventures
|
(5,556)
|
248
|
(5,804)
|
(2,340.3)
|
|
Minority
interest in consolidated joint ventures
|
218
|
(74)
|
292
|
394.6
|
|
Gain
on sale of investment in marketable
|
15,060
|
--
|
15,060
|
--
|
|
securities
|
10,831
|
35
|
10,796
|
30,845.7
|
|
Gain
on sale of investment in joint ventures
|
(416)
|
--
|
(416)
|
--
|
|
Total other (expense)
income
|
(111,773)
|
(118,005)
|
6,232
|
5.3
|
|
Income
from continuing operations before minority
|
||||
|
interest in Operating
Partnership
|
104,800
|
92,225
|
12,575
|
13.6
|
|
Minority
interest in Operating Partnership
|
(20,121)
|
(18,238)
|
(1,883)
|
(10.3)
|
|
Income
from continuing operations
|
84,679
|
73,987
|
10,692
|
14.5
|
|
Discontinued
operations (net of minority interest):
|
||||
|
Income (loss) from discontinued
operations
|
12,272
|
17,075
|
(4,803)
|
(28.1)
|
|
Realized gains (losses) and
unrealized losses
|
|
|||
|
on disposition of rental
property, net
|
47,715
|
4,426
|
43,289
|
978.1
|
|
Total
discontinued operations, net
|
59,987
|
21,501
|
38,486
|
179.0
|
|
Net
income
|
144,666
|
95,488
|
49,178
|
51.5
|
|
Preferred
stock dividends
|
(2,000)
|
(2,000)
|
--
|
--
|
|
|
||||
|
Net
income available to common shareholders
|
$142,666
|
$
93,488
|
$49,178
|
52.6%
|
51
The
following is a summary of the changes in revenue from rental operations and
property expenses in 2006 as compared to 2005 divided into Same-Store Properties
and Acquired Properties (dollars in
thousands):
|
Total Company
|
Same-Store Properties
|
Acquired Properties
|
||||
|
Dollar
|
Percent
|
Dollar
|
Percent
|
Dollar
|
Percent
|
|
|
Change
|
Change
|
Change
|
Change
|
Change
|
Change
|
|
|
Revenue
from rental operations:
|
||||||
|
Base
rents
|
$35,521
|
7.1%
|
$ 6,155
|
1.2%
|
$29,366
|
5.9%
|
|
Escalations
and recoveries
|
||||||
|
from
tenants
|
13,105
|
17.0
|
6,557
|
8.5
|
6,548
|
8.5
|
|
Other
income
|
7,042
|
48.2
|
6,181
|
42.3
|
861
|
5.9
|
|
Total
|
$55,668
|
9.5%
|
$18,893
|
3.2%
|
$36,775
|
6.3%
|
|
Property
expenses:
|
||||||
|
Real
estate taxes
|
$ 9,346
|
12.2%
|
$ 5,215
|
6.8%
|
$ 4,131
|
5.4%
|
|
Utilities
|
8,068
|
15.6
|
3,803
|
7.4
|
4,265
|
8.2
|
|
Operating
services
|
28,695
|
36.2
|
1,778
|
2.2
|
26,917
|
34.0
|
|
Total
|
$46,109
|
22.2%
|
$10,796
|
5.2%
|
$35,313
|
17.0%
|
|
OTHER
DATA:
|
||||||
|
Number
of Consolidated Properties
|
251
|
234
|
17
|
|||
|
Square
feet (in thousands)
|
28,531
|
25,238
|
3,293
|
|||
Base
rents for the Same-Store Properties increased $6.2 million, or 1.2 percent, for
2006 as compared to 2005, due primarily to an increase in the percentage of
space leased at the properties in 2006 from 2005. Escalations and
recoveries from tenants for the Same-Store Properties increased $6.6 million, or
8.5 percent, for 2006 over 2005, due primarily to an increased amount of total
property expenses in 2006. Other income for the Same-Store Properties
increased $6.2 million, or 42.3 percent, due primarily to an increase in lease
breakage fees.
Real
estate taxes on the Same-Store Properties increased $5.2 million, or 6.8
percent, for 2006 as compared to 2005, due primarily to property tax rate
increases in certain municipalities in 2006. Utilities for the
Same-Store Properties increased $3.8 million, or 7.4 percent, for 2006 as
compared to 2005, due primarily to increased electric rates in 2006 as compared
to 2005. Operating services for the Same-Store Properties increased
$1.8 million, or 2.2 percent, due primarily to increased maintenance and related
labor costs of $5.1 million for 2006 as compared to 2005, partially offset by a
decrease in snow removal costs in 2006 of $3.1 million.
Construction
services amounted to $56.2 million in 2006, due to the effect of the Gale/Green
Transactions. Real estate services increased by $28.1 million, or
964.3 percent, for 2006 as compared to 2005, also due primarily to the effect of
the Gale/Green Transactions.
Direct
construction costs totaled $53.6 million in 2006, due primarily to the effect of
the Gale/Green Transactions. General and administrative increased by
$16.6 million, or 51.3 percent, for 2006 as compared to 2005 due primarily to
the effect of the Gale/Green Transactions.
Depreciation
and amortization increased by $17.3 million, or 12.2 percent, for 2006 over
2005. Of this increase, $2.9 million, or 2.1 percent, was
attributable to the Same-Store Properties and $14.4 million, or 10.1 percent,
was due to the Acquired Properties.
Interest
expense increased $15.9 million, or 13.3 percent, for 2006 as compared to
2005. This increase was primarily as a result of higher average debt
balances in 2006, as compared to 2005.
Interest
and other investment income increased $2.2 million, or 256.8 percent, for 2006
as compared to 2005. This increase was due primarily
to the receipt of approximately $0.9 million in dividends on the
Company’s investment in marketable securities, as well as higher cash balances
invested in 2006 due primarily to property sales proceeds as compared to
2005.
52
Equity in
earnings of unconsolidated joint ventures decreased $5.8 million, or 2,340.3
percent, for 2006 as compared to 2005. The decrease was due primarily
to a loss of $4.9 million in 2006 in the Mack-Green joint venture and a loss of
$1.9 million in 2006 in the Meadowlands Xanadu joint venture, partially offset
by an increase of $1.1 million in the Harborside South Pier joint
venture.
The
Company recognized a gain on sale of investment in marketable securities of
$15.1 million in 2006.
Gain on
sale of investment in unconsolidated joint ventures amounted to $10.8 million in
2006 from the sale of the Company’s interest in the G&G Martco joint
venture. Gain on sale of investment in unconsolidated joint ventures
amounted to $35,000 in 2005 from the sale of the Company’s interest in the
Ashford Loop joint venture.
Gain
(loss) on sale of land and other assets amounted to a loss of $0.4 million in
2006 due to a loss on the sale of Gale Global Facilities and related companies
in 2006 of $1.5 million, partially offset by a gain of $1.1 million from the
sale of a parcel of land in Hamilton, New Jersey.
Income
from continuing operations before minority interest in Operating Partnership
increased to $104.8 million in 2006 from $92.2 million in 2005. The
increase of approximately $12.6 million was due to the factors discussed
above.
Net
income available to common shareholders increased by $49.2 million, or 52.6
percent, from $93.5 million in 2005 to $142.7 million in 2006. This
increase was primarily the result of realized gains on disposition of rental
property of $47.7 million in 2006 and an increase in income from continuing
operations before minority interest in Operating Partnership of $12.6
million. These were partially offset by a decrease in income from
discontinued operations of $4.8 million in 2006 as compared to 2005, realized
gains on disposition of rental property of $4.4 million in 2005, and an increase
in minority interest in Operating Partnership in 2006 of $1.9 million as
compared to 2005.
LIQUIDITY
AND CAPITAL RESOURCES
Liquidity
Overview:
Historically,
rental revenue has been the principal source of funds to pay operating expenses,
debt service, capital expenditures and dividends, excluding non-recurring
capital expenditures. To the extent that the Company’s cash flow from
operating activities is insufficient to finance its non-recurring capital
expenditures such as property acquisitions, development and construction costs
and other capital expenditures, the Company has and expects to continue to
finance such activities through borrowings under its revolving credit facility
and other debt and equity financings.
The
Company believes that with the general downturn in the Company’s markets in
recent years, it is reasonably likely that vacancy rates may continue to
increase, effective rental rates on new and renewed leases may continue to
decrease and tenant installation costs, including concessions, may continue to
increase in most or all of its markets in 2008. As a result of the
potential negative effects on the Company’s revenue from the overall reduced
demand for office space, the Company’s cash flow could be insufficient to cover
increased tenant installation costs over the short-term. If this
situation were to occur, the Company expects that it would finance any
shortfalls through borrowings under its revolving credit facility and other debt
and equity financings.
The
Company expects to meet its short-term liquidity requirements generally through
its working capital, net cash provided by operating activities and from its
revolving credit facility. The Company frequently examines potential
property acquisitions and development projects and, at any given time, one or
more of such acquisitions or development projects may be under
consideration. Accordingly, the ability to fund property acquisitions
and development projects is a major part of the Company’s financing
requirements. The Company expects to meet its financing requirements
through funds generated from operating activities, proceeds from property sales,
long-term and short-term borrowings (including draws on the Company’s revolving
credit facility) and the issuance of additional debt and/or equity
securities.
53
Construction
Projects:
The
Company owns a 15 percent indirect interest in a joint venture which plans to
develop approximately 1.2 million square foot mixed-use project in downtown
Boston consisting of office and retail space, condominium apartments, a hotel
and garage. The development project, which is subject to government
approval, is currently projected to cost approximately $710 million, of which
the Company is currently projected to invest a total of approximately $26
million (of which the Company has invested $18.8 million through February 8,
2008).
On
February 22, 2007, the Company announced that it agreed to develop a 250,000
square-foot class A office building for Wyndham Worldwide Corporation for its
corporate headquarters. In July 2007, the Company commenced
construction on the building, which Wyndham Worldwide pre-leased for 15 years,
on a land site located in the Company’s Mack-Cali Business Campus in Parsippany,
New Jersey. The building is expected to be completed in the fourth quarter
2008 at a total estimated cost of approximately $64.8 million.
On June
9, 2006, the
Company entered into a joint venture with a Gale Affiliate to form 55 Corporate
Partners L.L.C. (“55 Corporate”). 55 Corporate was formed for the
sole purpose of acquiring from a Gale Affiliate a 50 percent interest in SLG 55
Corporate Drive II LLC (“SLG 55”), an entity presently holding a 100 percent
indirect condominium interest in a vacant land parcel located in Bridgewater,
New Jersey, which can accommodate development of an approximately 200,000 square
foot office building (the “55 Corporate Property”). The remaining 50
percent in SLG 55 is owned by SLG Gale 55 Corporate LLC, an affiliate of SL Green Realty Corp (“SLG Gale
55”).
In
November 2007, Sanofi-Aventis U.S. Inc. (“Sanofi”), which occupies neighboring
buildings, exercised its option to cause the venture to construct a building on
the Property and has signed a lease thereof. The lease has a term of
fifteen years, subject to three five-year extension options. The
construction of the building, estimated to cost approximately $58 million, is
not required to commence until July 1, 2009 for a July 2011 delivery; however,
if Sanofi gives a Construction Start Date Acceleration Notice in accordance with
the provisions of its lease, then construction shall promptly commence after the
necessary permits are obtained, even if such construction start date shall occur
prior to July 1, 2009.
Gale Earn-Out and
Agreement:
The
agreement to acquire the Gale Company (“Gale Agreement”), which was completed as
part of the Gale/Green transactions on May 9, 2006, contained earn-out
provisions (“Earn-Out”) providing for the payment of contingent purchase
consideration of up to $18 million in cash based upon the achievement of Gross
Income and NOI (as such terms were defined in the Gale Agreement) targets and
other events for the three years following the closing date.
On May
23, 2007, the Company entered into an amendment (the “Amendment”) to the Gale
Agreement. The Amendment eliminated the Earn-Out and substituted an
aggregate of $14 million in payments by the Company consisting of the
following: (1) $8 million, which was paid on May 31, 2007; (2) $3
million on May 9, 2008; and (3) $3 million on May 9, 2009.
In
October 2007, the Company reached an agreement with Stanley C. Gale, the seller
of the Gale Company, Mark Yeager, an executive officer of the Company, and
certain affiliates of Messrs. Gale and Yeager, which are parties to certain
non-portfolio interest joint ventures with the Company, to provide primarily for
the following:
|
|
(1)
|
The
Company agreed to satisfy the requirements for the $3 million payment due
on May 9, 2008 and the $3 million payment due on May 9, 2009 as of October
31, 2007 by:
|
|
|
(a)
|
paying
$4 million in cash; and
|
|
|
(b)
|
transferring
to an entity whose beneficial owners includes Messrs. Gale and Yeager a
49.8 percent interest in an entity that owns one of the non-portfolio
interests in a development project located in Belmar, New Jersey, which
the Company acquired in June 2006 pursuant to the Gale Agreement for $1.6
million. In 2007, the Company wrote off $2.1 million of costs
related to this project, as it believes the project is no longer viable,
which is included in general and administrative expense for the year ended
December 31, 2007.
|
|
(2)
|
Under
the Gale Agreement, the Company is obligated to acquire from an entity
whose beneficial owners include Messrs. Gale and Yeager (the “Florham
Entity”), a 50 percent interest in a venture which owns a developable land
parcel in Florham Park, New Jersey (the “Florham Park Land”) for a maximum
purchase price of up to $10.5 million, subject to reduction based on
developable square feet approved and other conditions, with the completion
of such acquisition subject to the Florham Entity obtaining final
development permits and approvals and related conditions necessary to
allow for office development expected to be 600,000 square
feet. The Company has agreed to waive its contractual rights
for reimbursement from the Florham Entity for certain costs incurred by
the Company securing approvals for the development of the Florham Park
Land and to defer collection of other costs. Such deferred
other costs, including a carrying charge of six percent per
annum, will be credited against the purchase price of the
Florham Park Land at closing. In the event the acquisition of
the Florham Park Land does not close by May 9, 2009, subject to certain
conditions, the Florham Entity will be obligated to pay the deferred other
costs and an additional $1 million to the Company at that
time.
|
54
|
|
(3)
|
The
Company has agreed to settle a dispute and treat the right to receive
certain commission payments in the approximate amount of $2.3 million as
an excluded asset under the Gale Agreement, which commissions may become
payable in connection with Sanofi-Aventis’ exercise of its option to cause
the 55 Corporate venture (see Note 4: Investment in Unconsolidated Joint
Ventures) to construct a building for Sanofi-Aventis will lease on a
long-term basis, as well as the completion of certain related events. The
Company has agreed to pay directly to an entity whose beneficial owners
include Messrs. Gale and Yeager up to $769,000 of these commissions when
due.
|
REIT
Restrictions:
To
maintain its qualification as a REIT, the Company must make annual distributions
to its stockholders of at least 90 percent of its REIT taxable income,
determined without regard to the dividends paid deduction and by excluding net
capital gains. Moreover, the Company intends to continue to make
regular quarterly distributions to its common stockholders which, based upon
current policy, in the aggregate would equal approximately $173.9 million on an
annualized basis. However, any such distribution, whether for federal
income tax purposes or otherwise, would only be paid out of available cash,
including borrowings and other sources, after meeting operating requirements,
preferred stock dividends and distributions, and scheduled debt service on the
Company’s debt.
Property
Lock-Ups:
The
Company may not dispose of or distribute certain of its properties, currently
comprising 11 properties with an aggregate net book value of approximately
$208.1 million, which were originally contributed by the sellers of certain
properties to the Company, without the express written consent of a
representative of the contributors of such properties, except in a manner which
does not result in recognition of any built-in-gain (which may result in an
income tax liability) or which reimburses the appropriate members for the tax
consequences of the recognition of such built-in-gains. These transfer
restrictions are scheduled to expire periodically through 2016.
Additionally, the Company may not dispose of or distribute two properties with
an aggregate net book value of approximately $12.8 million, which were
originally contributed by members of the Cali Group (which includes John R.
Cali, director, and John J. Cali, a former director) under similar terms and
conditions, for which such restrictions are scheduled to expire in June 2008.
The aforementioned restrictions do not apply in the event that the Company sells
all of its properties or in connection with a sale transaction which the
Company’s Board of Directors determines is reasonably necessary to satisfy a
material monetary default on any unsecured debt, judgment or liability of the
Company or to cure any material monetary default on any mortgage secured by a
property. Upon expiration, the Company generally is required to use
commercially reasonable efforts to prevent any sale, transfer or other
disposition of the subject properties from resulting in the recognition of
built-in gain to the contributors of the properties. 124 of the Company’s
properties which were originally contributed by members of either the Mack Group
(which includes William L. Mack, Chairman of the Company’s Board of Directors;
David S. Mack, director; Earle I. Mack, a former director; and Mitchell E.
Hersh, president, chief executive officer and director), the Robert Martin Group
(which includes Martin S. Berger, director; Robert F. Weinberg, a former
director; and Timothy M. Jones, former president), the Cali Group (which
includes John R. Cali, director, and John J. Cali, a former director) or certain
other common unitholders, with an aggregate net book value of approximately $1.9
billion, have lapsed restrictions and are subject to these
conditions.
Unencumbered
Properties:
As of
December 31, 2007, the Company had 238 unencumbered properties, totaling 25.7
million square feet, representing 87.7 percent of the Company’s total portfolio
on a square footage basis.
55
Credit
Ratings:
The
Company has three investment grade credit ratings. Standard &
Poor’s Rating Services (“S&P”) and Fitch, Inc. (“Fitch”) have each assigned
their BBB rating to existing and prospective senior unsecured debt of the
Operating Partnership. S&P and Fitch have also assigned their
BBB- rating to existing and prospective preferred stock offerings of the
Company. Moody’s Investors Service (“Moody’s”) has assigned its Baa2
rating to existing and prospective senior unsecured debt of the Operating
Partnership and its Baa3 rating to its existing and prospective preferred stock
offerings of the Company.
Cash
Flows
Cash and
cash equivalents decreased by $76.5 million to $24.7 million at December 31,
2007, compared to $101.2 million at December 31, 2006. This decrease
is comprised of the following net cash flow items:
|
(1)
|
$260
million provided by operating
activities.
|
|
(2)
|
$355.9
million used in investing activities, consisting primarily of the
following:
|
|
(a)
|
$382.7
million used for additions to rental property;
minus
|
|
(b)
|
$29
million used for investments in unconsolidated joint ventures;
minus
|
|
(c)
|
$4.9
million used for the purchase of marketable securities;
plus
|
|
(d)
|
$57.2
million received from proceeds from sale of rental properties;
plus
|
|
(e)
|
$0.6
million received from proceeds from the sale of investment in
unconsolidated joint ventures; plus
|
|
(f)
|
$1
million received from distributions from investments in unconsolidated
joint ventures.
|
|
|
(3)
|
$19.3
million provided by financing activities, consisting primarily of the
following:
|
|
(a)
|
$539
million from borrowings under the revolving credit facility;
minus
|
|
(b)
|
$251.7
million from proceeds received from stock options and warrants exercised;
plus
|
|
(c)
|
$434
million used for repayments of borrowings under the Company’s unsecured
credit facility; plus
|
|
(d)
|
$211.5
million used for payments of dividends and distributions;
plus
|
|
(e)
|
$29
million used for repayments of mortgages, loans payable and other
obligations; plus
|
|
(f)
|
$98.8
million used for the repurchase of common
stock.
|
Debt
Financing
Summary of
Debt:
The
following is a breakdown of the Company’s debt between fixed and variable-rate
financing as of December 31, 2007:
|
Balance
|
Weighted
Average
|
Weighted
Average Maturity
|
||
|
($000’s)
|
%
of Total
|
Interest
Rate (a)
|
in
Years
|
|
|
Fixed
Rate Unsecured Debt
|
$1,660,204
|
75.07%
|
6.29%
|
4.31
|
|
Fixed
Rate Secured Debt and
|
||||
|
Other
Obligations
|
301,531
|
13.63%
|
5.36%
|
4.02
|
|
Variable
Rate Unsecured Debt
|
250,000
|
11.30%
|
5.55%
|
3.48
|
|
Totals/Weighted
Average:
|
$2,211,735
|
100.00%
|
6.08%
|
4.18
|
Debt
Maturities:
Scheduled
principal payments and related weighted average annual interest rates for the
Company’s debt as of December 31, 2007 are as follows:
56
|
Scheduled
|
Principal
|
Weighted
Avg.
|
||
|
Amortization
|
Maturities
|
Total
|
Interest
Rate of
|
|
|
Period
|
($000’s)
|
($000’s)
|
($000’s)
|
Future
Repayments (a)
|
|
2008
|
$21,191
|
$ 12,563
|
$ 33,754
|
5.21%
|
|
2009
|
11,471
|
300,000
|
311,471
|
7.40%
|
|
2010
|
2,583
|
334,500
|
337,083
|
5.26%
|
|
2011
|
2,745
|
550,000
|
552,745
|
6.84%
|
|
2012
|
2,864
|
210,148
|
213,012
|
6.13%
|
|
Thereafter
|
5,702
|
760,618
|
766,320
|
5.41%
|
|
Sub-total
|
46,556
|
2,167,829
|
2,214,385
|
6.08%
|
|
Adjustment
for unamortized debt
|
||||
|
discount/premium,
net, as of
|
||||
|
December
31, 2007
|
(2,650)
|
0
|
(2,650)
|
|
|
Totals/Weighted
Average
|
$43,906
|
$2,167,829
|
$2,211,735
|
6.08%
|
|
(a)
Actual weighted average LIBOR contract rates relating to the Company’s
outstanding debt as of December 31, 2007 of 5.01 percent was used in
calculating revolving credit
facility.
|
||||
Senior Unsecured
Notes:
The terms
of the Company’s senior unsecured notes (which totaled approximately $1.6
billion as of December 31, 2007) include certain restrictions and covenants
which require compliance with financial ratios relating to the maximum amount of
debt leverage, the maximum amount of secured indebtedness, the minimum amount of
debt service coverage and the maximum amount of unsecured debt as a percent of
unsecured assets.
Unsecured Revolving Credit
Facility:
The
Company has an unsecured revolving credit facility with a borrowing capacity of
$775 million (expandable to $800 million). The interest rate on
outstanding borrowings (not electing the Company’s competitive bid feature)
under the unsecured facility is currently LIBOR plus 55 basis
points. The facility has a competitive bid feature, which allows the
Company to solicit bids from lenders under the facility to borrow up to $300
million at interest rates less than the current LIBOR plus 55 basis point
spread. As of December 31, 2007, the Company’s outstanding borrowings
carried a weighted average interest rate of LIBOR plus 55 basis
points. The Company may also elect an interest rate representing the
higher of the lender’s prime rate or the Federal Funds rate plus 50 basis
points. The unsecured facility, which also requires a 15 basis point
facility fee on the current borrowing capacity payable quarterly in arrears, is
scheduled to mature in June 2011 and has an extension option of one year, which
would require a payment of 15 basis points of the then borrowing capacity of the
facility upon exercise. As of February 8, 2008, the Company had $291
million of outstanding borrowings under its unsecured revolving credit
facility.
The
interest rate and the facility fee are subject to adjustment, on a sliding
scale, based upon the operating partnership’s unsecured debt
ratings. In the event of a change in the Operating Partnership’s
unsecured debt rating, the interest and facility fee rates will be adjusted in
accordance with the following table:
|
Operating
Partnership’s
|
Interest
Rate –
|
|
|
Unsecured
Debt Ratings:
|
Applicable
Basis Points
|
Facility
Fee
|
|
S&P
Moody’s/Fitch (a)
|
Above
LIBOR
|
Basis
Points
|
|
No
ratings or less than BBB-/Baa3/BBB-
|
100.0
|
25.0
|
|
BBB-/Baa3/BBB-
|
75.0
|
20.0
|
|
BBB/Baa2/BBB
(current)
|
55.0
|
15.0
|
|
BBB+/Baa1/BBB+
|
42.5
|
15.0
|
|
A-/A3/A-
or higher
|
37.5
|
12.5
|
|
(a)
If the Operating Partnership has debt ratings from two rating agencies,
one of which is Standard & Poor’s Rating Services (“S&P”) or
Moody’s Investors Service (“Moody’s”), the rates per the above table shall
be based on the lower of such ratings. If the Operating
Partnership has debt ratings from three rating agencies, one of which is
S&P or Moody’s, the rates per the above table shall be based on the
lower of the two highest ratings. If the Operating Partnership
has debt ratings from only one agency, it will be considered to have no
rating or less than BBB-/Baa3/BBB- per the above
table.
|
||
57
The terms
of the unsecured facility include certain restrictions and covenants which
limit, among other things, the payment of dividends (as discussed below), the
incurrence of additional indebtedness, the incurrence of liens and the
disposition of real estate properties (to the extent that: (i) such property
dispositions cause the Company to default on any of the financial ratios of the
facility described below, or (ii) the property dispositions are completed while
the Company is under an event of default under the facility, unless, under
certain circumstances, such disposition is being carried out to cure such
default), and which require compliance with financial ratios relating to the
maximum leverage ratio, the maximum amount of secured indebtedness, the minimum
amount of tangible net worth, the minimum amount of fixed charge coverage, the
maximum amount of unsecured indebtedness, the minimum amount of unencumbered
property interest coverage and certain investment limitations. The
dividend restriction referred to above provides that, if an event of default has
occurred and is continuing, the Company will not make any excess distributions
with respect to common stock or other common equity interests except to enable
the Company to continue to qualify as a REIT under the Code.
The
lending group for the credit facility consists of: JPMorgan Chase Bank, N.A., as
administrative agent (the “Agent”); Bank of America, N.A., as syndication agent;
Scotiabanc, Inc., Wachovia Bank, National Association, and Wells Fargo Bank,
National Association, as documentation agents; SunTrust Bank, as senior managing
agent; US Bank National Association, Citicorp North America, Inc. and PNC Bank,
National Association, as managing agents; and Bank of China, New York Branch,
The Bank of New York; Chevy Chase Bank, F.S.B., The Royal Bank of Scotland PLC,
Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. (Successor
by merger to UFJ Bank Limited), North Fork Bank, Bank Hapoalim B.M., Comerica
Bank, Chang Hwa Commercial Bank, Ltd., New York Branch, First Commercial Bank,
New York Agency, Mega International Commercial Bank Co. Ltd., New York Branch,
Deutsche Bank Trust Company Americas and Hua Nan Commercial Bank, New York
Agency, as participants.
Mortgages, Loans Payable and
Other Obligations:
The
Company has mortgages, loans payable and other obligations which consist of
various loans collateralized by certain of the Company’s rental
properties. Payments on mortgages, loans payable and other
obligations are generally due in monthly installments of principal and interest,
or interest only.
Debt
Strategy:
The
Company does not intend to reserve funds to retire the Company’s senior
unsecured notes or its mortgages, loans payable and other obligations upon
maturity. Instead, the Company will seek to refinance such debt at
maturity or retire such debt through the issuance of additional equity or debt
securities on or before the applicable maturity dates. If it cannot
raise sufficient proceeds to retire the maturing debt, the Company may draw on
its revolving credit facility to retire the maturing indebtedness, which would
reduce the future availability of funds under such facility. As of
February 8, 2008, the Company had $291 million in outstanding borrowings under
its $775 million unsecured revolving credit facility. The Company is
reviewing various refinancing options, including the purchase of its senior
unsecured notes in privately-negotiated transactions, the issuance of
additional, or exchange of current, unsecured debt, preferred stock, and/or
obtaining additional mortgage debt, some or all of which may be completed during
2008. The Company anticipates that its available cash and cash
equivalents and cash flows from operating activities, together with cash
available from borrowings and other sources, will be adequate to meet the
Company’s capital and liquidity needs both in the short and
long-term. However, if these sources of funds are insufficient or
unavailable, the Company’s ability to make the expected distributions discussed
below may be adversely affected.
58
Equity
Financing and Registration Statements
Equity
Activity:
The
following table presents the changes in the Company’s issued and outstanding
shares of Common Stock and the Operating Partnership’s common units since
December 31, 2006:
|
Common
|
Common
|
||
|
Stock
|
Units
|
Total
|
|
|
Outstanding
at December 31, 2006
|
62,925,191
|
15,342,283
|
78,267,474
|
|
Common
Stock offering
|
4,650,000
|
--
|
4,650,000
|
|
Stock
options exercised
|
132,770
|
--
|
132,770
|
|
Common
units redeemed for Common Stock
|
471,656
|
(471,656)
|
--
|
|
Common
units issued
|
--
|
114,911
|
114,911
|
|
Shares
issued under Dividend Reinvestment
|
|||
|
and
Stock Purchase Plan
|
7,738
|
--
|
7,738
|
|
Restricted
shares issued
|
113,118
|
--
|
113,118
|
|
Repurchase
of Common Stock
|
(2,742,400)
|
--
|
(2,742,400)
|
|
Outstanding
at December 31, 2007
|
65,558,073
|
14,985,538
|
80,543,611
|
Share Repurchase
Program:
The
Company has a share repurchase program to purchase up to $150 million of the
Company’s outstanding common stock (“Repurchase Program”), which it may
repurchase from time to time in open market transactions at prevailing prices or
through privately negotiated transactions. From January 1, 2007
through February 8, 2008, the Company purchased and retired 2,893,630 shares of its outstanding
common stock for a cost of approximately $104 million, with a remaining
authorization under the Repurchase Program of approximately $46
million.
Shelf Registration
Statements:
The
Company has an effective shelf registration statement on Form S-3 filed with the
Securities and Exchange Commission (“SEC”) for an aggregate amount of $2.0
billion in common stock, preferred stock, depositary shares, and/or warrants of
the Company, under which $260.1 million of securities have been sold through
December 31, 2007 and $1.7 billion remains available for future
issuances.
The
Company and the Operating Partnership also have an effective shelf registration
statement on Form S-3 filed with the SEC for an aggregate amount of $2.5 billion
in common stock, preferred stock, depositary shares and guarantees of the
Company and debt securities of the Operating Partnership, under which $600
million of securities have been sold through February 8, 2008 and $1.9 billion
remains available for future issuances.
Off-Balance
Sheet Arrangements
Unconsolidated Joint Venture
Debt:
The debt
of the Company’s unconsolidated joint ventures aggregating $535 million at
December 31, 2007, is non-recourse to the Company except for customary
exceptions pertaining to such matters as intentional misuse of funds,
environmental conditions and material misrepresentations. The Company
has also posted a $7.0 million letter of credit in support of the Harborside
South Pier joint venture, $3.5 million of which is indemnified by
Hyatt.
The
Company’s off-balance sheet arrangements are further discussed in Note 4:
Investments in Unconsolidated Joint Ventures to the Financial
Statements.
59
Contractual
Obligations
The
following table outlines the timing of payment requirements related to the
Company’s debt (principal and interest), PILOT agreements, ground lease and
other agreements as of December 31, 2007:
|
Payments
Due by Period
|
||||||
|
Less
than 1
|
1
– 3
|
4
– 5
|
6
– 10
|
After
10
|
||
|
(dollars
in thousands)
|
Total
|
Year
|
Years
|
Years
|
Years
|
Years
|
|
Senior
unsecured notes
|
$2,097,254
|
$100,494
|
$629,576
|
$597,402
|
$769,782
|
--
|
|
Revolving
credit facility
|
299,168
|
13,884
|
27,769
|
256,942
|
573
|
--
|
|
Mortgages,
loans payable
|
||||||
|
and
other obligations
|
394,021
|
50,386
|
206,324
|
33,950
|
75,140
|
$28,221
|
|
Payments
in lieu of taxes
|
||||||
|
(PILOT)
|
65,909
|
4,194
|
12,780
|
8,697
|
23,835
|
16,403
|
|
Operating
lease payments
|
81
|
62
|
19
|
--
|
--
|
--
|
|
Ground
lease payments
|
37,442
|
486
|
1,503
|
1,002
|
2,418
|
32,033
|
|
Total
|
$2,893,875
|
$169,506
|
$877,971
|
$897,993
|
$871,748
|
$76,657
|
Inflation
The
Company’s leases with the majority of its tenants provide for recoveries and
escalation charges based upon the tenant’s proportionate share of, and/or
increases in, real estate taxes and certain operating costs, which reduce the
Company’s exposure to increases in operating costs resulting from
inflation.
DISCLOSURE
REGARDING FORWARD-LOOKING STATEMENTS
We
consider portions of this information, including the documents incorporated by
reference, to be forward-looking statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as
amended. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained in
Section 21E of such act. Such forward-looking statements relate
to, without limitation, our future economic performance, plans and objectives
for future operations and projections of revenue and other financial
items. Forward-looking statements can be identified by the use of
words such as “may,” “will,” “plan,” “should,” “expect,” “anticipate,”
“estimate,” “continue” or comparable terminology. Forward-looking
statements are inherently subject to risks and uncertainties, many of which we
cannot predict with accuracy and some of which we might not even
anticipate. Although we believe that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions at the
time made, we can give no assurance that such expectations will be
achieved. Future events and actual results, financial and otherwise,
may differ materially from the results discussed in the forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements.
Among the
factors about which we have made assumptions are:
|
·
|
changes
in the general economic climate and conditions, including those affecting
industries in which our principal tenants compete;
|
|
·
|
the
extent of any tenant bankruptcies or of any early lease
terminations;
|
|
·
|
our
ability to lease or re-lease space at current or anticipated
rents;
|
|
·
|
changes
in the supply of and demand for office, office/flex and
industrial/warehouse properties;
|
|
·
|
changes
in interest rate levels;
|
|
·
|
changes
in operating costs;
|
|
·
|
our
ability to obtain adequate insurance, including coverage for terrorist
acts;
|
|
·
|
the
availability of financing;
|
|
·
|
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 will not take occupancy or pay rent, or that development
or operating costs may be greater than
anticipated.
|
60
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
Market
risk is the exposure to loss resulting from changes in interest rates, foreign
currency exchange rates, commodity prices and equity prices. In
pursuing its business plan, the primary market risk to which the Company is
exposed is interest rate risk. Changes in the general level of
interest rates prevailing in the financial markets may affect the spread between
the Company’s yield on invested assets and cost of funds and, in turn, its
ability to make distributions or payments to its investors.
Approximately
$2.0 billion of the Company’s long-term debt bears interest at fixed rates and
therefore the fair value of these instruments is affected by changes in market
interest rates. The following table presents principal cash flows (in
thousands) based upon maturity dates of the debt obligations and the related
weighted-average interest rates by expected maturity dates for the fixed rate
debt. The average interest rate on the variable rate debt as of
December 31, 2007 was LIBOR plus 55 basis points.
|
December
31, 2007
|
||||||||
|
Debt,
|
||||||||
|
including current
portion
($’s in
thousands)
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
Fair
Value
|
|
Fixed
Rate
|
$32,782
|
$310,568
|
$336,407
|
$302,329
|
$212,806
|
$766,843
|
$1,961,735
|
$1,906,615
|
|
Average
Interest Rate
|
5.21%
|
7.40%
|
5.26%
|
7.91%
|
6.13%
|
5.41%
|
6.15%
|
|
|
Variable
Rate
|
$250,000
|
$ 250,000
|
$ 250,000
|
While the
Company has not experienced any significant credit losses, in the event of a
significant rising interest rate environment and/or economic downturn, defaults
could increase and result in losses to the Company which could adversely affect
its operating results and liquidity.
61
ITEM
8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
The
information required by Item 8 is contained in the Consolidated Financial
Statements and Report of PricewaterhouseCoopers LLP, together with the notes to
the Consolidated Financial Statements and the report of independent registered
public accounting firm, filed with this annual report on Form 10-K, see Item 15:
Exhibits and Financial Statements.
ITEM
9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM
9A. CONTROLS AND
PROCEDURES
Disclosure Controls and Procedures.
The Company’s management, with the participation of the Company’s chief
executive officer and chief financial officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) as of the end of the period covered by this
report. Based on such evaluation, the Company's chief executive officer and
chief financial officer have concluded that, as of the end of such period, the
Company's disclosure controls and procedures were effective in recording,
processing, summarizing and reporting, on a timely basis, information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.
Management’s Report
on Internal Control Over Financial Reporting. Internal control over financial
reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act, is a process designed by, or under the supervision of, the
Company’s chief executive officer and chief financial officer, or persons
performing similar functions, and effected by the Company’s board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles. The Company’s management, with the participation of the
Company’s chief executive officer and chief financial officer, has established
and maintained policies and procedures designed to maintain the adequacy of the
Company’s internal control over financial reporting, and includes those policies
and procedures that:
|
|
(1)
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
Company;
|
|
|
(2)
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company
are being made only in accordance with authorizations of management and
directors of the Company; and
|
|
|
(3)
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that
could have a material effect on the financial
statements.
|
The
Company’s management has evaluated the effectiveness of the Company’s internal
control over financial reporting as of December 31, 2007 based on the criteria
established in a report entitled Internal Control—Integrated
Framework, issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on our assessment and those
criteria, the Company’s management has concluded that the Company’s internal
control over financial reporting was effective as of December 31,
2007.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree or compliance
with the policies or procedures may deteriorate.
62
The
effectiveness of the Company’s internal control over financial reporting as of
December 31, 2007 has been audited by PricewaterhouseCoopers LLP, an independent
registered public accounting firm, as stated in their report which appears
herein.
Changes In Internal Control Over
Financial Reporting. There have not been any changes in the
Company’s internal control over financial reporting (as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth fiscal
quarter to which this report relates that have materially affected, or are
reasonably likely to materially affect, the Company's internal control over
financial reporting.
ITEM
9B. OTHER
INFORMATION
Not
Applicable.
PART
III
ITEM
10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE
The
information required by Item 10 will be set forth in the Company’s definitive
proxy statement for its annual meeting of shareholders expected to be held on
May 21, 2008, and is incorporated herein by reference.
ITEM
11. EXECUTIVE
COMPENSATION
The
information required by Item 11 will be set forth in the Company’s definitive
proxy statement for its annual meeting of shareholders expected to be held on
May 21, 2008, and is incorporated herein by reference.
ITEM
12. SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The
information required by Item 12 will be set forth in the Company’s definitive
proxy statement for its annual meeting of shareholders expected to be held on
May 21, 2008, and is incorporated herein by reference.
ITEM
13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by Item 13 will be set forth in the Company’s definitive proxy statement for its annual meeting of shareholders expected to be held on May 21, 2008, and is incorporated herein by reference.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND
SERVICES
The
information required by Item 14 will be set forth in the Company’s definitive
proxy statement for its annual meeting of shareholders expected to be held on
May 21, 2008, and is incorporated herein by reference.
63
PART
IV
ITEM
15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES
|
(a)
1.
|
All
Financial Statements
|
Report of
Independent Registered Public Accounting Firm
Consolidated
Balance Sheets as of December 31, 2007 and 2006
Consolidated
Statements of Operations for the Years Ended December 31, 2007, 2006 and
2005
Consolidated
Statements of Changes in Stockholders’ Equity for the Years Ended December 31,
2007, 2006 and 2005
Consolidated
Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and
2005
Notes to
Consolidated Financial Statements
|
(a)
2.
|
Financial
Statement Schedules
|
Schedule
III - Real Estate Investments and Accumulated Depreciation as of December 31,
2007
All other
schedules are omitted because they are not required or the required information
is shown in the financial statements or notes thereto.
|
(a)
3.
|
Exhibits
|
The exhibits required by this item are
set forth on the Exhibit Index attached hereto.
64
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To Board
of Directors and Shareholders
of
Mack-Cali Realty Corporation:
In our
opinion, the consolidated financial statements listed in the index appearing
under Item 15(a)(1) present fairly, in all material respects, the financial
position of Mack-Cali Realty Corporation and its subsidiaries (collectively, the
"Company") at December 31, 2007 and 2006, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2007 in conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the financial
statement schedule listed in the index appearing under Item 15(a)(2) presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. Also
in our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2007, based on
criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). The Company's management is responsible
for these financial statements and financial statement schedule, for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting, included in
Management’s Report on Internal Controls Over Financial Reporting appearing
under Item 9A. Our responsibility is to express opinions on these
financial statements, on the financial statement schedule, and on the Company's
internal control over financial reporting based on our integrated
audits. We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audits to obtain reasonable
assurance about whether the financial statements are free of material
misstatement and whether effective internal control over financial reporting was
maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. Our audit of internal control over
financial reporting included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our
opinions.
A
company’s internal control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of
the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/
PricewaterhouseCoopers LLP
New York,
New York
February
13, 2008
65
MACK-CALI
REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except per
share amounts)
|
December
31,
|
||
|
ASSETS
|
2007
|
2006
|
|
Rental
property
|
||
|
Land
and leasehold interests
|
$ 726,253
|
$ 659,169
|
|
Buildings
and improvements
|
3,753,088
|
3,549,699
|
|
Tenant
improvements
|
397,132
|
356,495
|
|
Furniture,
fixtures and equipment
|
8,956
|
8,224
|
|
4,885,429
|
4,573,587
|
|
|
Less
– accumulated depreciation and amortization
|
(907,013)
|
(796,793)
|
|
Net investment in rental
property
|
3,978,416
|
3,776,794
|
|
Cash
and cash equivalents
|
24,716
|
101,223
|
|
Marketable
securities available for sale at fair value
|
4,839
|
--
|
|
Investments
in unconsolidated joint ventures
|
181,066
|
160,301
|
|
Unbilled
rents receivable, net
|
107,761
|
100,847
|
|
Deferred
charges and other assets, net
|
246,386
|
240,637
|
|
Restricted
cash
|
13,613
|
15,448
|
|
Accounts
receivable, net of allowance for doubtful accounts
|
||
|
of
$1,576 and $1,260
|
36,405
|
27,639
|
|
Total
assets
|
$4,593,202
|
$4,422,889
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||
|
Senior
unsecured notes
|
$1,632,547
|
$1,631,482
|
|
Revolving
credit facilities
|
250,000
|
145,000
|
|
Mortgages,
loans payable and other obligations
|
329,188
|
383,477
|
|
Dividends
and distributions payable
|
52,099
|
50,591
|
|
Accounts
payable, accrued expenses and other liabilities
|
142,778
|
122,134
|
|
Rents
received in advance and security deposits
|
51,992
|
45,972
|
|
Accrued
interest payable
|
34,193
|
34,106
|
|
Total
liabilities
|
2,492,797
|
2,412,762
|
|
Minority
interests:
|
||
|
Operating
Partnership
|
456,436
|
480,103
|
|
Consolidated joint
ventures
|
1,414
|
2,117
|
|
Total
minority interests
|
457,850
|
482,220
|
|
Commitments
and contingencies
|
||
|
Stockholders’
equity:
|
||
|
Preferred
stock, $0.01 par value, 5,000,000 shares authorized,
10,000
|
||
|
and
10,000 shares outstanding, at liquidation preference
|
25,000
|
25,000
|
|
Common
stock, $0.01 par value, 190,000,000 shares authorized,
|
||
|
65,558,073
and 62,925,191 shares outstanding
|
656
|
629
|
|
Additional
paid-in capital
|
1,886,467
|
1,708,053
|
|
Dividends
in excess of net earnings
|
(269,521)
|
(205,775)
|
|
Accumulated
other comprehensive loss
|
(47)
|
--
|
|
Total
stockholders’ equity
|
1,642,555
|
1,527,907
|
|
Total
liabilities and stockholders’ equity
|
$4,593,202
|
$4,422,889
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
||
66
MACK-CALI
REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS (in
thousands, except per share amounts)
|
Year
Ended December 31,
|
|||
|
REVENUES
|
2007
|
2006
|
2005
|
|
Base
rents
|
$575,463
|
$532,879
|
$497,358
|
|
Escalations
and recoveries from tenants
|
104,781
|
90,214
|
77,109
|
|
Construction
services
|
88,066
|
56,225
|
--
|
|
Real
estate services
|
17,970
|
31,045
|
2,917
|
|
Other
income
|
22,070
|
21,649
|
14,607
|
|
Total
revenues
|
808,350
|
732,012
|
591,991
|
|
EXPENSES
|
|||
|
Real
estate taxes
|
90,895
|
85,999
|
76,653
|
|
Utilities
|
73,072
|
59,788
|
51,720
|
|
Operating
services
|
106,946
|
107,880
|
79,185
|
|
Direct
construction costs
|
85,179
|
53,602
|
--
|
|
General
and administrative
|
52,162
|
49,074
|
32,432
|
|
Depreciation
and amortization
|
183,564
|
159,096
|
141,771
|
|
Total
expenses
|
591,818
|
515,439
|
381,761
|
|
Operating
Income
|
216,532
|
216,573
|
210,230
|
|
OTHER
(EXPENSE) INCOME
|
|||
|
Interest
expense
|
(126,672)
|
(134,964)
|
(119,070)
|
|
Interest
and other investment income
|
4,670
|
3,054
|
856
|
|
Equity
in earnings (loss) of unconsolidated joint ventures
|
(5,918)
|
(5,556)
|
248
|
|
Minority
interest in consolidated joint ventures
|
643
|
218
|
(74)
|
|
Gain
on sale of investment in marketable securities
|
--
|
15,060
|
--
|
|
Gain
on sale of investment in unconsolidated joint ventures
|
--
|
10,831
|
35
|
|
Gain/(loss)
on sale of land and other assets
|
--
|
(416)
|
--
|
|
Total
other (expense) income
|
(127,277)
|
(111,773)
|
(118,005)
|
|
Income
from continuing operations before minority interest
|
|
||
|
in
Operating Partnership
|
89,255
|
104,800
|
92,225
|
|
Minority
interest in Operating Partnership
|
(16,126)
|
(20,121)
|
(18,238)
|
|
Income
from continuing operations
|
73,129
|
84,679
|
73,987
|
|
Discontinued
operations (net of minority interest):
|
|
||
|
Income
from discontinued operations
|
1,057
|
12,272
|
17,075
|
|
Realized
gains (losses) and unrealized losses
|
|||
|
on
disposition of rental property, net
|
36,280
|
47,715
|
4,426
|
|
Total
discontinued operations, net
|
37,337
|
59,987
|
21,501
|
|
Net
income
|
110,466
|
144,666
|
95,488
|
|
Preferred
stock dividends
|
(2,000)
|
(2,000)
|
(2,000)
|
|
Net
income available to common shareholders
|
$108,466
|
$142,666
|
$
93,488
|
|
Basic
earnings per common share:
|
|||
|
Income
from continuing operations
|
$ 1.06
|
$ 1.33
|
$ 1.17
|
|
Discontinued
operations
|
0.56
|
0.96
|
0.35
|
|
Net
income available to common shareholders
|
$ 1.62
|
$ 2.29
|
$ 1.52
|
|
Diluted
earnings per common share:
|
|||
|
Income
from continuing operations
|
$ 1.06
|
$ 1.32
|
$ 1.16
|
|
Discontinued
operations
|
0.55
|
0.96
|
0.35
|
|
Net
income available to common shareholders
|
$ 1.61
|
$ 2.28
|
$ 1.51
|
|
Dividends
declared per common share
|
$ 2.56
|
$ 2.54
|
$ 2.52
|
|
|
|||
|
Basic
weighted average shares outstanding
|
67,026
|
62,237
|
61,477
|
|
Diluted
weighted average shares outstanding
|
82,500
|
77,901
|
74,189
|
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
|||
67
MACK-CALI
REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN
STOCKHOLDERS’ EQUITY (in
thousands)
|
Accumulated
|
|||||||||||||||||||||||||||||||||||||||||
|
Additional
|
Unamortized
|
Dividends
in
|
Other
|
Total
|
|||||||||||||||||||||||||||||||||||||
|
Preferred
Stock
|
Common
Stock
|
Paid-In
|
Stock
|
Excess
of
|
Comprehensive
|
Stockholders’
|
Comprehensive
|
||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Par
Value
|
Capital
|
Compensation
|
Net
Earnings
|
Income
(Loss)
|
Equity
|
Income
|
||||||||||||||||||||||||||||||||
|
Balance
at January 1, 2005
|
10 | $ | 25,000 | 61,039 | $ | 610 | $ | 1,650,834 | $ | (3,968 | ) | $ | (127,365 | ) | -- | $ | 1,545,111 | -- | |||||||||||||||||||||||
|
Net income
|
-- | -- | -- | -- | -- | -- | 95,488 | -- | 95,488 | $ | 95,488 | ||||||||||||||||||||||||||||||
|
Preferred stock
dividends
|
-- | -- | -- | -- | -- | -- | (2,000 | ) | -- | (2,000 | ) | -- | |||||||||||||||||||||||||||||
|
Common stock
dividends
|
-- | -- | -- | -- | -- | -- | (155,702 | ) | -- | (155,702 | ) | -- | |||||||||||||||||||||||||||||
|
Redemption of common
units
|
|||||||||||||||||||||||||||||||||||||||||
|
for common
stock
|
-- | -- | 235 | 2 | 6,788 | -- | -- | -- | 6,790 | -- | |||||||||||||||||||||||||||||||
|
Shares issued under
Dividend
|
|||||||||||||||||||||||||||||||||||||||||
|
Reinvestment and
Stock
|
|||||||||||||||||||||||||||||||||||||||||
|
Purchase
Plan
|
-- | -- | 9 | -- | 390 | -- | -- | -- | 390 | -- | |||||||||||||||||||||||||||||||
|
Stock options
exercised
|
-- | -- | 574 | 6 | 16,597 | -- | -- | -- | 16,603 | -- | |||||||||||||||||||||||||||||||
|
Stock options
expense
|
-- | -- | -- | -- | 448 | -- | -- | -- | 448 | -- | |||||||||||||||||||||||||||||||
|
Comprehensive
Loss:
|
|||||||||||||||||||||||||||||||||||||||||
|
Unrealized holding
loss
|
|||||||||||||||||||||||||||||||||||||||||
|
on marketable
securities
|
|||||||||||||||||||||||||||||||||||||||||
|
available for
sale
|
-- | -- | -- | -- | -- | -- | -- | (790 | ) | (790 | ) | (790 | ) | ||||||||||||||||||||||||||||
|
Directors Deferred
comp. plan
|
-- | -- | 5 | -- | 288 | -- | -- | -- | 288 | -- | |||||||||||||||||||||||||||||||
|
Issuance of restricted
stock
|
-- | -- | 166 | 2 | 7,189 | (7,191 | ) | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
|
Amortization of stock
comp.
|
-- | -- | -- | -- | -- | 4,661 | -- | -- | 4,661 | -- | |||||||||||||||||||||||||||||||
|
Adj. to fair value
of
|
|||||||||||||||||||||||||||||||||||||||||
|
restricted
stock
|
-- | -- | -- | -- | (37 | ) | 37 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
|
Cancellation of restricted
stock
|
-- | -- | (8 | ) | -- | (356 | ) | 356 | -- | -- | -- | -- | |||||||||||||||||||||||||||||
|
Balance
at December 31, 2005
|
10 | $ | 25,000 | 62,020 | $ | 620 | $ | 1,682,141 | $ | (6,105 | ) | $ | (189,579 | ) | $ | (790 | ) | $ | 1,511,287 | $ | 94,698 | ||||||||||||||||||||
|
Reclassification upon
the
|
|||||||||||||||||||||||||||||||||||||||||
|
adoption of FASB No.
123(R)
|
-- | -- | -- | -- | (6,105 | ) | 6,105 | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
|
Net income
|
-- | -- | -- | -- | -- | -- | 144,666 | -- | 144,666 | 144,666 | |||||||||||||||||||||||||||||||
|
Preferred stock
dividends
|
-- | -- | -- | -- | -- | -- | (2,000 | ) | -- | (2,000 | ) | -- | |||||||||||||||||||||||||||||
|
Common stock
dividends
|
-- | -- | -- | -- | -- | -- | (158,862 | ) | -- | (158,862 | ) | -- | |||||||||||||||||||||||||||||
|
Redemption of common
units
|
|||||||||||||||||||||||||||||||||||||||||
|
for common
stock
|
-- | -- | 475 | 5 | 14,669 | -- | -- | -- | 14,674 | -- | |||||||||||||||||||||||||||||||
|
Shares issued under
Dividend
|
|||||||||||||||||||||||||||||||||||||||||
|
Reinvestment and
Stock
|
|||||||||||||||||||||||||||||||||||||||||
|
Purchase
Plan
|
-- | -- | 5 | -- | 244 | -- | -- | -- | 244 | -- | |||||||||||||||||||||||||||||||
|
Stock options
exercised
|
-- | -- | 353 | 3 | 10,442 | -- | -- | -- | 10,445 | -- | |||||||||||||||||||||||||||||||
|
Stock options
expense
|
-- | -- | -- | -- | 465 | -- | -- | -- | 465 | -- | |||||||||||||||||||||||||||||||
|
Comprehensive
Gain:
|
|||||||||||||||||||||||||||||||||||||||||
|
Unrealized holding
gain
|
|||||||||||||||||||||||||||||||||||||||||
|
on marketable
securities
|
|||||||||||||||||||||||||||||||||||||||||
|
available for
sale
|
-- | -- | -- | -- | -- | -- | -- | 15,850 | 15,850 | 15,850 | |||||||||||||||||||||||||||||||
|
Directors Deferred comp.
plan
|
-- | -- | -- | -- | 302 | -- | -- | -- | 302 | -- | |||||||||||||||||||||||||||||||
|
Issuance of restricted
stock
|
-- | -- | 81 | 1 | -- | -- | -- | -- | 1 | -- | |||||||||||||||||||||||||||||||
|
Amortization of stock
comp.
|
-- | -- | -- | -- | 5,895 | -- | -- | -- | 5,895 | -- | |||||||||||||||||||||||||||||||
|
Cancellation of restricted
stock
|
-- | -- | (9 | ) | -- | -- | -- | -- | -- | -- | -- | ||||||||||||||||||||||||||||||
|
Reclassification
adjustment
|
|||||||||||||||||||||||||||||||||||||||||
|
for realized gain
included
|
|||||||||||||||||||||||||||||||||||||||||
|
in net
income
|
-- | -- | -- | -- | -- | -- | -- | (15,060 | ) | (15,060 | ) | (15,060 | ) | ||||||||||||||||||||||||||||
|
Balance
at December 31, 2006
|
10 | $ | 25,000 | 62,925 | $ | 629 | $ | 1,708,053 | -- | $ | (205,775 | ) | -- | $ | 1,527,907 | $ | 145,456 | ||||||||||||||||||||||||
|
Net income
|
-- | -- | -- | -- | -- | -- | 110,466 | -- | 110,466 | 110,466 | |||||||||||||||||||||||||||||||
|
Preferred stock
dividends
|
-- | -- | -- | -- | -- | -- | (2,000 | ) | -- | (2,000 | ) | -- | |||||||||||||||||||||||||||||
|
Common stock
dividends
|
-- | -- | -- | -- | -- | -- | (172,212 | ) | -- | (172,212 | ) | -- | |||||||||||||||||||||||||||||
|
Common stock
offering
|
-- | -- | 4,650 | 47 | 251,685 | -- | -- | -- | 251,732 | -- | |||||||||||||||||||||||||||||||
|
Redemption of common
units
|
|||||||||||||||||||||||||||||||||||||||||
|
for common
stock
|
-- | -- | 472 | 5 | 14,618 | -- | -- | -- | 14,623 | -- | |||||||||||||||||||||||||||||||
|
Shares issued under
Dividend
|
|||||||||||||||||||||||||||||||||||||||||
|
Reinvestment and
Stock
|
-- | -- | |||||||||||||||||||||||||||||||||||||||
|
Purchase
Plan
|
7 | -- | 311 | -- | -- | -- | 311 | -- | |||||||||||||||||||||||||||||||||
|
Stock options
exercised
|
-- | -- | 133 | 1 | 3,801 | -- | -- | -- | 3,802 | -- | |||||||||||||||||||||||||||||||
|
Stock options
expense
|
-- | -- | -- | -- | 132 | -- | -- | -- | 132 | -- | |||||||||||||||||||||||||||||||
|
Comprehensive
Gain:
|
|||||||||||||||||||||||||||||||||||||||||
|
Unrealized holding
gain
|
|||||||||||||||||||||||||||||||||||||||||
|
on marketable
securities
|
|||||||||||||||||||||||||||||||||||||||||
|
available for
sale
|
-- | -- | -- | -- | -- | -- | -- | $ | (47 | ) | (47 | ) | (47 | ) | |||||||||||||||||||||||||||
|
Directors Deferred comp.
plan
|
-- | -- | -- | -- | 323 | -- | -- | -- | 323 | -- | |||||||||||||||||||||||||||||||
|
Issuance of restricted
stock
|
-- | -- | 113 | 1 | 2,851 | -- | -- | -- | 2,852 | -- | |||||||||||||||||||||||||||||||
|
Amortization of stock
comp.
|
-- | -- | -- | -- | 3,487 | -- | -- | -- | 3,487 | -- | |||||||||||||||||||||||||||||||
|
Cancellation of restricted
stock
|
-- | -- | -- | -- | |||||||||||||||||||||||||||||||||||||
|
Repurchase of common
stock
|
-- | -- | (2,742 | ) | (27 | ) | (98,794 | ) | -- | -- | -- | (98,821 | ) | -- | |||||||||||||||||||||||||||
|
Balance
at December 31, 2007
|
10 | $ | 25,000 | 65,558 | $ | 656 | $ | 1,886,467 | -- | $ | (269,521 | ) | $ | (47 | ) | $ | 1,642,555 |
|
$ | 110,419 | |||||||||||||||||||||
The
accompanying notes are an integral part of these consolidated financial
statements.
68
MACK-CALI
REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH
FLOWS (in
thousands)
|
Year
Ended December 31,
|
||||||||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
2007
|
2006
|
2005
|
|||||||||
|
Net
income
|
$ | 110,466 | $ | 144,666 | $ | 95,488 | ||||||
|
Adjustments
to reconcile net income to net cash provided by
|
||||||||||||
|
Operating
activities:
|
||||||||||||
|
Depreciation
and amortization, including related intangible assets
|
179,705 | 156,987 | 138,047 | |||||||||
|
Depreciation
and amortization on discontinued operations
|
424 | 8,853 | 14,327 | |||||||||
|
Stock
options expense
|
132 | 465 | 448 | |||||||||
|
Amortization
of stock compensation
|
3,487 | 5,895 | 4,661 | |||||||||
|
Amortization
of deferred financing costs and debt discount
|
2,808 | 3,157 | 3,271 | |||||||||
|
Equity
in earnings of unconsolidated joint venture, net
|
5,918 | 5,556 | (248 | ) | ||||||||
|
Gain
on sale of investment in unconsolidated joint ventures
|
-- | (10,831 | ) | (35 | ) | |||||||
|
Gain
on sale of marketable securities available for sale
|
-- | (15,060 | ) | -- | ||||||||
|
Loss
on sale of land and other assets
|
-- | 416 | -- | |||||||||
|
(Realized
gains) unrealized losses on disposition of rental property
|
||||||||||||
|
(net
of minority interest)
|
(36,280 | ) | (47,715 | ) | (4,426 | ) | ||||||
|
Distributions
of cumulative earnings from unconsolidated joint ventures
|
1,875 | 2,302 | -- | |||||||||
|
Minority
interest in Operating Partnership
|
16,126 | 20,533 | 18,758 | |||||||||
|
Minority
interest in consolidated joint ventures
|
(643 | ) | (218 | ) | 74 | |||||||
|
Minority
interest in income from discontinued operations
|
240 | 2,603 | 2,777 | |||||||||
|
Changes
in operating assets and liabilities:
|
||||||||||||
|
Increase
in unbilled rents receivable, net
|
(7,490 | ) | (15,989 | ) | (13,283 | ) | ||||||
|
Increase
in deferred charges and other assets, net
|
(20,665 | ) | (37,975 | ) | (36,841 | ) | ||||||
|
(Increase)
decrease in accounts receivable, net
|
(8,766 | ) | 3,162 | (1,237 | ) | |||||||
|
Increase
in accounts payable, accrued expenses and
|
||||||||||||
|
other
liabilities
|
6,532 | 4,598 | 15,674 | |||||||||
|
Increase
(decrease) in rents received in advance and security
deposits
|
6,020 | (1,713 | ) | (253 | ) | |||||||
|
Increase
in accrued interest payable
|
87 | 6,235 | 5,727 | |||||||||
|
Net
cash provided by operating activities
|
$ | 259,976 | $ | 235,927 | $ | 242,929 | ||||||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
||||||||||||
|
Additions
to rental property, related intangibles and service
companies
|
$ | (382,742 | ) | $ | (217,804 | ) | $ | (451,335 | ) | |||
|
Repayment
of mortgage note receivable
|
159 | 150 | 81 | |||||||||
|
Investment
in unconsolidated joint ventures
|
(29,017 | ) | (163,428 | ) | (17,788 | ) | ||||||
|
Distributions
from unconsolidated joint ventures
|
992 | 39,982 | -- | |||||||||
|
Proceeds
from sale of investment in unconsolidated joint venture
|
575 | 16,324 | 2,676 | |||||||||
|
Acquisition
of minority interest in consolidated joint venture
|
-- | -- | (7,713 | ) | ||||||||
|
Proceeds
from sales of rental property and service company
|
57,204 | 338,546 | 102,980 | |||||||||
|
Purchase
of marketable securities available for sale
|
(4,884 | ) | (11,912 | ) | (51,637 | ) | ||||||
|
Proceeds
from sale of marketable securities available for sale
|
-- | 78,609 | -- | |||||||||
|
Decrease
(increase) in restricted cash
|
1,835 | (6,227 | ) | 1,256 | ||||||||
|
Net
cash (used in) provided by investing activities
|
$ | (355,878 | ) | $ | 74,240 | $ | (421,480 | ) | ||||
|
CASH
FLOW FROM FINANCING ACTIVITIES
|
||||||||||||
|
Borrowings
from revolving credit facility
|
$ | 539,000 | $ | 983,250 | $ | 1,041,560 | ||||||
|
Proceeds
from senior unsecured notes
|
-- | 199,914 | 398,480 | |||||||||
|
Proceeds
from mortgages
|
-- | -- | 58,500 | |||||||||
|
Repurchase
of common stock
|
(98,821 | ) | -- | -- | ||||||||
|
Repayment
of revolving credit facility
|
(434,000 | ) | (1,104,643 | ) | (921,560 | ) | ||||||
|
Repayment
of mortgages, loans payable and other obligations
|
(29,038 | ) | (160,626 | ) | (169,935 | ) | ||||||
|
Payment
of financing costs
|
(1,797 | ) | (646 | ) | (5,071 | ) | ||||||
|
Proceeds
from stock options exercised
|
3,802 | 10,445 | 16,603 | |||||||||
|
Proceeds
from issuance of common stock
|
251,732 | -- | -- | |||||||||
|
Payment
of dividends and distributions
|
(211,483 | ) | (197,035 | ) | (191,899 | ) | ||||||
|
Net
cash provided by (used in) financing activities
|
$ | 19,395 | $ | (269,341 | ) | $ | 226,678 | |||||
|
Net
(decrease) increase in cash and cash equivalents
|
$ | (76,507 | ) | $ | 40,826 | $ | 48,127 | |||||
|
Cash
and cash equivalents, beginning of period
|
101,223 | 60,397 | 12,270 | |||||||||
|
Cash
and cash equivalents, end of period
|
$ | 24,716 | $ | 101,223 | $ | 60,397 | ||||||
|
The
accompanying notes are an integral part of these consolidated financial
statements.
|
||||||||||||
69
MACK-CALI
REALTY CORPORATION AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
1.
|
ORGANIZATION AND BASIS
OF PRESENTATION
|
ORGANIZATION
Mack-Cali
Realty Corporation, a Maryland corporation, together with its subsidiaries
(collectively, the “Company”), 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 properties. As of December 31, 2007, the Company owned or had
interests in 294 properties plus developable land (collectively, the
“Properties”). The Properties aggregate approximately 33.7 million
square feet, which are comprised of 283 buildings, primarily office and
office/flex buildings totaling approximately 33.3 million square feet (which
include 38 buildings, primarily office buildings aggregating approximately 4.5
million square feet owned by unconsolidated joint ventures in which the Company
has investment interests), six industrial/warehouse buildings totaling
approximately 387,400 square feet, two retail properties totaling approximately
17,300 square feet, one hotel (which is owned by an unconsolidated joint venture
in which the Company has an investment interest) and two parcels of land leased
to others. The Properties are located in six states, primarily in the
Northeast, plus the District of Columbia.
BASIS
OF PRESENTATION
The
accompanying consolidated financial statements include all accounts of the
Company, its majority-owned and/or controlled subsidiaries, which consist
principally of Mack-Cali Realty, L.P. (the “Operating Partnership”) and variable
interest entities for which the Company has determined itself to be the primary
beneficiary, if any. See Note 2: Significant Accounting Policies –
Investments in Unconsolidated Joint Ventures, Net for the Company’s treatment of
unconsolidated joint venture interests. Intercompany accounts and
transactions have been eliminated.
The
preparation of financial statements in conformity with generally accepted
accounting principles (“GAAP”) requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Certain
reclassifications have been made to prior period amounts in order to conform
with current period presentation.
|
2.
|
SIGNIFICANT ACCOUNTING
POLICIES
|
|
Rental
Property
|
Rental
properties are stated at cost less accumulated depreciation and
amortization. Costs directly related to the acquisition,
development and construction of rental properties are
capitalized. Capitalized development and construction costs
include pre-construction costs essential to the development of the
property, development and construction costs, interest, property taxes,
insurance, salaries and other project costs incurred during the period of
development. Included in total rental property is construction
and development in-progress of $126,470,000 and $116,151,000 (including
land of $68,328,000 and $63,136,000) as of December 31, 2007 and 2006,
respectively. Ordinary repairs and maintenance are expensed as
incurred; major replacements and betterments, which improve or extend the
life of the asset, are capitalized and depreciated over their estimated
useful lives. Fully-depreciated assets are removed from the
accounts.
|
The
Company considers a construction project as substantially completed and held
available for occupancy upon the completion of tenant improvements, but no later
than one year from cessation of major construction activity (as distinguished
from activities such as routine maintenance and cleanup). If portions
of a rental project are substantially completed and occupied by tenants, or held
available for occupancy, and other portions have not yet reached that stage, the
substantially completed portions are accounted for as a separate
project. The Company allocates costs incurred between the portions
under construction and the portions substantially completed and held available
for occupancy, and capitalizes only those costs associated with the portion
under construction.
70
Properties
are depreciated using the straight-line method over the estimated useful lives
of the assets. The estimated useful lives are as
follows:
|
Leasehold
interests
|
Remaining
lease term
|
|
Buildings
and improvements
|
5
to 40 years
|
|
Tenant
improvements
|
The
shorter of the term of the
|
|
related
lease or useful life
|
|
|
Furniture,
fixtures and equipment
|
5
to 10 years
|
Upon
acquisition of rental property, the Company estimates the fair value of acquired
tangible assets, consisting of land, building and improvements, and identified
intangible assets and liabilities, generally consisting of the fair value of (i)
above and below market leases, (ii) in-place leases and (iii) tenant
relationships. The Company allocates the purchase price to the assets
acquired and liabilities assumed based on their relative fair
values. In estimating the fair value of the tangible and intangible
assets acquired, the Company considers information obtained about each property
as a result of its due diligence and marketing and leasing activities, and
utilizes various valuation methods, such as estimated cash flow projections
utilizing appropriate discount and capitalization rates, estimates of
replacement costs net of depreciation, and available market
information. The fair value of the tangible assets of an acquired
property considers the value of the property as if it were vacant.
Above-market
and below-market lease values for acquired properties are recorded based on the
present value, (using a discount rate which reflects the risks associated with
the leases acquired) of the difference between (i) the contractual amounts to be
paid pursuant to each in-place lease and (ii) management’s estimate of fair
market lease rates for each corresponding in-place lease, measured over a period
equal to the remaining term of the lease for above-market leases and the initial
term plus the term of any below-market fixed rate renewal options for
below-market leases. The capitalized above-market lease values are amortized as
a reduction of base rental revenue over the remaining term of the respective
leases, and the capitalized below-market lease values are amortized as an
increase to base rental revenue over the remaining initial terms plus the terms
of any below-market fixed rate renewal options of the respective
leases.
Other
intangible assets acquired include amounts for in-place lease values and tenant
relationship values, which are based on management’s evaluation of the specific
characteristics of each tenant’s lease and the Company’s overall relationship
with the respective tenant. Factors to be considered by management in
its analysis of in-place lease values include an estimate of carrying costs
during hypothetical expected lease-up periods considering current market
conditions, and costs to execute similar leases. In estimating
carrying costs, management includes real estate taxes, insurance and other
operating expenses and estimates of lost rentals at market rates during the
expected lease-up periods, depending on local market conditions. In
estimating costs to execute similar leases, management considers leasing
commissions, legal and other related expenses. Characteristics
considered by management in valuing tenant relationships include the nature and
extent of the Company’s existing business relationships with the tenant, growth
prospects for developing new business with the tenant, the tenant’s credit
quality and expectations of lease renewals. The value of in-place
leases are amortized to expense over the remaining initial terms of the
respective leases. The value of tenant relationship intangibles are
amortized to expense over the anticipated life of the
relationships.
On a
periodic basis, management assesses whether there are any indicators that the
value of the Company’s real estate properties held for use may be
impaired. A property’s value is impaired only if management’s
estimate of the aggregate future cash flows (undiscounted and without interest
charges) to be generated by the property is less than the carrying value of the
property. To the extent impairment has occurred, the loss shall be
measured as the excess of the carrying amount of the property over the fair
value of the property. The Company’s estimates of aggregate future
cash flows expected to be generated by each property are based on a number of
assumptions that are subject to economic and market uncertainties including,
among others, demand for space, competition for tenants, changes in market
rental rates, and costs to operate each property. As these factors
are difficult to predict and are subject to future events that may alter
management’s assumptions, the future cash flows estimated by management in its
impairment analyses may not be achieved. Management does not believe
that the value of any of the Company’s rental properties is
impaired.
71
|
Rental
Property
|
|
|
Held
for Sale and
|
|
|
Discontinued
|
|
|
Operations
|
When
assets are identified by management as held for sale, the Company
discontinues depreciating the assets and estimates the sales price, net of
selling costs, of such assets. If, in management’s opinion, the
net sales price of the assets which have been identified as held for sale
is less than the net book value of the assets, a valuation allowance is
established. Properties identified as held for sale and/or sold
are presented in discontinued operations for all periods
presented. See Note 7: Discontinued
Operations.
|
If
circumstances arise that previously were considered unlikely and, as a result,
the Company decides not to sell a property previously classified as held for
sale, the property is reclassified as held and used. A property that
is reclassified is measured and recorded individually at the lower of (a) its
carrying amount before the property was classified as held for sale, adjusted
for any depreciation (amortization) expense that would have been recognized had
the property been continuously classified as held and used, or (b) the fair
value at the date of the subsequent decision not to sell.
Investments
in
Unconsolidated
|
Joint
Ventures, Net
|
The
Company accounts for its investments in unconsolidated joint ventures for
which Financial Accounting Standards Board (“FASB”) Interpretation No. 46
(revised December 2003), Consolidation of Variable Interest Entities (“FIN
46”) does not apply under the equity method of accounting as the Company
exercises significant influence, but does not control these entities.
These investments are recorded initially at cost, as Investments in
Unconsolidated Joint Ventures, and subsequently adjusted for equity in
earnings and cash contributions and
distributions.
|
|
|
FIN
46 provides guidance on the identification of entities for which control
is achieved through means other than voting rights (“variable interest
entities” or “VIEs”) and the determination of which business enterprise,
if any, should consolidate the VIE (the “primary
beneficiary”). Generally, FIN 46 applies when either (1) the
equity investors (if any) lack one or more of the essential
characteristics of a controlling financial interest, (2) the equity
investment at risk is insufficient to finance that entity’s activities
without additional subordinated financial support or (3) the equity
investors have voting rights that are not proportionate to their economic
interests and the activities of the entity involve or are conducted on
behalf of an investor with a disproportionately small voting
interest.
|
On a
periodic basis, management assesses whether there are any indicators that the
value of the Company’s investments in unconsolidated joint ventures may be
impaired. An investment is impaired only if management’s estimate of
the value of the investment is less than the carrying value of the investment,
and such decline in value is deemed to be other than temporary. To
the extent impairment has occurred, the loss shall be measured as the excess of
the carrying amount of the investment over the value of the
investment. Management does not believe that the value of any of the
Company’s investments in unconsolidated joint ventures is
impaired. See Note 4: Investments in Unconsolidated Joint
Ventures.
72
|
|
|
|
Cash
and Cash Equivalents |
All
highly liquid investments with a maturity of three months or less when
purchased are considered to be cash
equivalents.
|
|
Marketable
|
|
|
Securities
|
The
Company classifies its marketable securities among three categories:
Held-to-maturity, trading and available-for-sale. Unrealized
holding gains and losses relating to available-for-sale securities are
excluded from earnings and reported as other comprehensive income (loss)
in stockholders’ equity until realized. A decline in the market
value of any marketable security below cost that is deemed to be other
than temporary results in a reduction in the carrying amount to fair
value. Any impairment would be charged to earnings and a new
cost basis for the security
established.
|
The
Company’s marketable securities at December 31, 2007 carried a value of $4.8
million and consisted of common equity securities. The Company’s
marketable securities at December 31, 2007 were classified as available-for-sale
and were carried at fair value based on quoted market prices. The
Company recorded an unrealized holding loss of $46,000 as other comprehensive
loss in 2007.
The
Company received dividend income of approximately $130,000 from its holdings in
marketable securities during the year ended December 31, 2007, which is included
in interest and other investment income.
Deferred
|
Financing
Costs
|
Costs
incurred in obtaining financing are capitalized and amortized on a
straight-line basis, which approximates the effective interest method,
over the term of the related indebtedness. Amortization of such costs is
included in interest expense and was $2,808,000, $3,157,000, and
$3,271,000 for the years ended December 31, 2007, 2006 and 2005,
respectively.
|
Deferred
|
Leasing
Costs
|
Costs
incurred in connection with leases are capitalized and amortized on a
straight-line basis over the terms of the related leases and included in
depreciation and amortization. Unamortized deferred leasing
costs are charged to amortization expense upon early termination of the
lease. Certain employees of the Company are compensated for providing
leasing services to the Properties. The portion of such
compensation, which is capitalized and amortized, approximated $4,132,000,
$3,749,000 and $3,855,000 for the years ended December 31, 2007, 2006 and
2005, respectively.
|
Derivative
|
Instruments
|
The
Company measures derivative instruments, including certain derivative
instruments embedded in other contracts, at fair value and records them as
an asset or liability, depending on the Company’s rights or obligations
under the applicable derivative contract. For derivatives
designated and qualifying as fair value hedges, the changes in the fair
value of both the derivative instrument and the hedged item are recorded
in earnings. For derivatives designated as cash flow hedges,
the effective portions of the derivative are reported in other
comprehensive income (“OCI”) and are subsequently reclassified into
earnings when the hedged item affects earnings. Changes in fair value of
derivative instruments not designated as hedging and ineffective portions
of hedges are recognized in earnings in the affected
period.
|
Revenue
|
Recognition
|
Base
rental revenue is recognized on a straight-line basis over the terms of
the respective leases.
Unbilled rents receivable represents the amount by which straight-line
rental revenue exceeds rents currently billed in accordance with the lease
agreements. Above-market and below-market lease values for
acquired properties are recorded based on the present value (using a
discount rate which reflects the risks associated with the leases
acquired) of the difference between (i) the contractual amounts to be paid
pursuant to each in-place lease and (ii) management’s estimate of fair
market lease rates for each corresponding in-place lease, measured over a
period equal to the remaining term of the lease for above-market leases
and the initial term plus the term of any below-market fixed-rate renewal
options for below-market leases. The capitalized above-market
lease values for acquired properties are amortized as a reduction of base
rental revenue over the remaining term of the respective leases, and the
capitalized below-market lease values are amortized as an increase to base
rental revenue over the remaining initial terms plus the terms of any
below-market fixed-rate renewal options of the respective
leases. Escalations and recoveries from tenants are received
from tenants for certain costs as provided in the lease
agreements. These costs generally include real estate taxes,
utilities, insurance, common area maintenance and other recoverable
costs. See Note 15: Tenant Leases. Construction
services revenue includes fees earned and reimbursements received by the
Company for providing construction management and general contractor
services to clients. Construction services revenue is
recognized on the percentage of completion method. Using this
method, profits are recorded on the basis of estimates of the overall
profit and percentage of completion of individual contracts. A
portion of the estimated profits is accrued based upon estimates of the
percentage of completion of the construction contract. This
revenue recognition method involves inherent risks relating to profit and
cost estimates. Real estate services revenue includes property
management, facilities management, leasing commission fees and other
services, and payroll and related costs reimbursed from
clients. Other income includes income from parking spaces
leased to tenants, income from tenants for additional services arranged
for by the Company and income from tenants for early lease
terminations.
|
73
Allowance
for
|
Doubtful
Accounts
|
Management
periodically performs a detailed review of amounts due from tenants to
determine if accounts receivable balances are impaired based on factors
affecting the collectibility of those balances. Management’s
estimate of the allowance for doubtful accounts requires management to
exercise significant judgment about the timing, frequency and severity of
collection losses, which affects the allowance and net
income.
|
Income
and
|
Other
Taxes
|
The
Company has elected to be taxed as a REIT under Sections 856 through 860
of the Internal Revenue Code of 1986, as amended (the
“Code”). As a REIT, the Company generally will not be subject
to corporate federal income tax (including alternative minimum tax) on net
income that it currently distributes to its shareholders, provided that
the Company satisfies certain organizational and operational requirements
including the requirement to distribute at least 90 percent of its REIT
taxable income to its shareholders. The Company has elected to
treat certain of its corporate subsidiaries as taxable REIT subsidiaries
(each a “TRS”). In general, a TRS of the Company may perform
additional services for tenants of the Company and generally may engage in
any real estate or non-real estate related business (except for the
operation or management of health care facilities or lodging facilities or
the providing to any person, under a franchise, license or otherwise,
rights to any brand name under which any lodging facility or health care
facility is operated). A TRS is subject to corporate federal
income tax. If the Company fails to qualify as a REIT in any
taxable year, the Company will be subject to federal income tax (including
any applicable alternative minimum tax) on its taxable income at regular
corporate tax rates. The Company is subject to certain state
and local taxes.
|
|
|
The
Company adopted the provisions of FASB Interpretation No. 48 (“FIN 48”),
Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109 (“FAS No. 109”) on January 1, 2007. As a
result of the implementation of FIN 48, the Company recognized no material
adjustments regarding its tax accounting treatment. The Company
expects to recognize interest and penalties related to uncertain tax
positions, if any, as income tax expense, which is included in general and
administrative expense.
|
74
|
Earnings
|
|
|
Per
Share
|
The
Company presents both basic and diluted earnings per share
(“EPS”). Basic EPS excludes dilution and is computed by
dividing net income available to common shareholders by the weighted
average number of shares outstanding for the period. Diluted
EPS reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into
common stock, where such exercise or conversion would result in a lower
EPS amount.
|
|
Dividends
and Distributions |
|
|
Payable
|
The
dividends and distributions payable at December 31, 2007 represents
dividends payable to preferred shareholders (10,000 shares) and common
shareholders (65,637,709 shares), and distributions payable to minority
interest common unitholders of the Operating Partnership (14,985,538
common units) for all such holders of record as of January 4, 2008 with
respect to the fourth quarter 2007. The fourth quarter 2007
preferred stock dividends of $50.00 per share, common stock dividends and
common unit distributions of $0.64 per common share and unit were approved
by the Board of Directors on December 4, 2007. The common stock
dividends and common unit distributions payable were paid on January 14,
2008. The preferred stock dividends payable were paid on
January 15, 2008.
|
The
dividends and distributions payable at December 31, 2006 represents dividends
payable to preferred shareholders (10,000 shares) and common shareholders
(62,925,271 shares), and distributions payable to minority interest common
unitholders of the Operating Partnership (15,342,283 common units) for all such
holders of record as of January 4, 2007 with respect to the fourth quarter
2006. The fourth quarter 2006 preferred stock dividends of $50.00 per
share, common stock dividends and common unit distributions of $0.64 per common
share and unit were approved by the Board of Directors on December 5,
2006. The common stock dividends and common unit distributions
payable were paid on January 12, 2007. The preferred stock dividends
payable were paid on January 16, 2007.
The
Company has determined that the $2.56 dividend per common share paid during the
year ended December 31, 2007 represented approximately 80 percent ordinary
income and approximately 20 percent capital gain to its stockholders; the
$2.53 dividend per common share paid during the year ended December 31, 2006
represented 81 percent ordinary income and approximately 19 percent capital gain
to its stockholders; and the $2.52 dividend per common share paid during the
year ended December 31, 2005 represented approximately 100 percent ordinary
income to its stockholders.
|
Costs
Incurred
|
|
|
For
Stock
|
|
|
Issuances
|
Costs
incurred in connection with the Company’s stock issuances are reflected as
a reduction of additional paid-in
capital.
|
|
Stock
|
|
|
Compensation
|
The
Company accounts for stock options and restricted stock awards granted
prior to 2002 using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, “Accounting for Stock Issued
to Employees,” and related Interpretations (“APB No.
25”). Under APB No. 25, compensation cost for stock options is
measured as the excess, if any, of the quoted market price of the
Company’s stock at the date of grant over the exercise price of the option
granted. Compensation cost for stock options is recognized
ratably over the vesting period. The Company’s policy is to
grant options with an exercise price equal to the quoted closing market
price of the Company’s stock on the business day preceding the grant
date. Accordingly, no compensation cost has been recognized
under the Company’s stock option plans for the granting of stock options
made prior to 2002. Restricted stock awards granted prior to
2002 are valued at the vesting dates of such awards with compensation cost
for such awards recognized ratably over the vesting
period.
|
75
In 2002,
the Company adopted the provisions of FASB No. 123, and in 2006, the Company
adopted the provisions of FASB No. 123(R), which did not have a material effect
on the Company’s financial position and results of operations. These
provisions require that the estimated fair value of restricted stock
(“Restricted Stock Awards”) and stock options at the grant date be amortized
ratably into expense over the appropriate vesting period. For the
years ended December 31, 2007, 2006 and 2005, the Company recorded restricted
stock and stock options expense of $6,470,000, $6,360,000 and $5,109,000,
respectively. FASB No. 148, Accounting for Stock-Based Compensation –
Transition and Disclosure, was issued in December 2002 and amends FASB No. 123,
Accounting for Stock Based Compensation. FASB No. 148 provides
alternative methods of transition for a voluntary change to the fair value based
method of accounting for stock based compensation. In addition, this
Statement amends the disclosure requirements of FASB No. 123 to require
prominent disclosures in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of the
method used on reported results. FASB No. 148 disclosure requirements
are presented below:
The
following table illustrates the effect on net income and earnings per share if
the fair value based method had been applied to all outstanding and unvested
stock awards for the year ended December 31, 2005: (dollars in
thousands)
|
Net
income, as reported
|
$95,488
|
||
|
Add:
Stock-based compensation expense included in reported
|
|||
|
net income (net of minority interest)
|
4,260
|
||
|
Deduct: Total
stock-based compensation expense determined
|
|||
|
under fair value
based method for all awards
|
(5,391)
|
||
|
Add: Minority
interest on stock-based compensation expense
|
|||
|
under fair value
based method
|
896
|
||
|
Pro
forma net income
|
95,253
|
||
|
Deduct: Preferred
stock dividends
|
(2,000)
|
||
|
Pro
forma net income available to common shareholders – basic
|
$93,253
|
||
|
Earnings
Per Share:
|
|||
|
Basic – as
reported
|
$ 1.52
|
||
|
Basic – pro forma
|
$ 1.52
|
||
|
Diluted – as
reported
|
$ 1.51
|
||
|
Diluted – pro
forma
|
$ 1.51
|
|
Other
|
|
|
Comprehensive
|
|
|
Income
|
Other
comprehensive income (loss) includes items that are recorded in equity,
such as unrealized holding gains or losses on marketable securities
available for sale.
|
76
|
3.
|
REAL ESTATE
TRANSACTIONS
|
Property
Acquisitions
The
Company acquired the following office properties during the year ended December
31, 2007 (dollars in
thousands):
|
Acquisition
|
#
of
|
Rentable
|
Acquisition
|
||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Square
Feet
|
Cost
|
|
05/08/07
|
AAA
Properties (a) (c)
|
Hamilton
Township, New Jersey
|
2
|
69,232
|
$ 9,048
|
|
06/11/07
|
125
Broad Street (b) (c)
|
New
York, New York
|
1
|
524,476
|
274,091
|
|
Total
Property Acquisitions:
|
3
|
593,708
|
$283,139
|
||
|
(a) Included
in this transaction was the acquisition of two parcels of developable land
aggregating approximately 13 acres.
|
|||||
|
(b)
Acquisition represented two units of office condominium interests, which
collectively comprise floors 2 through 16, or 39.6 percent, of the
40-story, 1.2 million square-foot building.
|
|||||
|
(c) Transaction
was funded primarily through borrowing on the Company’s revolving credit
facility.
|
|||||
Properties
Commencing Initial Operations
The
following office property commenced initial operations during the year ended
December 31, 2007 (dollars in
thousands):
|
#
of
|
Rentable
|
Investment
by
|
||||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Square
Feet
|
Company
(a)
|
|
|
05/08/07
|
700
Horizon Drive
|
Hamilton
Township, New Jersey
|
1
|
120,000
|
$16,751
|
|
|
Total
Properties Commencing Initial Operations:
|
1
|
120,000
|
$16,751
|
|||
|
(a) Development
costs were funded primarily through borrowing on the Company’s revolving
credit facility. Amounts are as of December 31,
2007.
|
||||||
Land
Acquisition
In
February 2007, the Company exercised its option to acquire approximately 43
acres of land sites within its Capital Office Park complex in Greenbelt,
Maryland, which is able to accommodate the development of up to 600,000 square
feet of office space, for $13 million. On May 25, 2007, the Company
completed the purchase of the land for approximately $13 million, which
consisted of 114,911 common operating partnership units valued at $5.2 million,
and the remainder in cash.
Property
Sales
The Company sold the following office
properties during the year ended December 31, 2007 (dollars in
thousands):
|
Rentable
|
Net
|
Net
|
||||||
|
Sale
|
#
of
|
Square
|
Sales
|
Book
|
Realized
|
|||
|
Date
|
Property/Address
|
Location
|
Bldgs.
|
Feet
|
Proceeds
|
Value
|
Gain
|
|
|
05/10/07
|
1000
Bridgeport Avenue
|
Shelton,
Connecticut
|
1
|
133,000
|
$16,411
|
$13,782
|
$ 2,629
|
|
|
06/11/07
|
500
W. Putnam Avenue
|
Greenwich,
Connecticut
|
1
|
121,250
|
54,344
|
18,113
|
36,231
|
|
|
07/13/07
|
100&
200 Decadon Drive
|
Egg
Harbor, New Jersey
|
2
|
80,344
|
11,448
|
5,894
|
5,554
|
|
|
Total
Office Property Sales:
|
4
|
334,594
|
$82,203
|
$37,789
|
$44,414
|
|||
Gale Earn-Out and
Agreement:
The
agreement to acquire the Gale Company (“Gale Agreement”), which was completed as
part of the Gale/Green transactions on May 9, 2006, contained earn-out
provisions (“Earn-Out”) providing for the payment of contingent purchase
consideration of up to $18 million in cash based upon the achievement of Gross
Income and NOI (as such terms were defined in the Gale Agreement) targets and
other events for the three years following the closing date.
On May
23, 2007, the Company entered into an amendment (the “Amendment”) to the Gale
Agreement. The Amendment eliminated the Earn-Out and substituted an
aggregate of $14 million in payments by the Company consisting of the
following: (1) $8 million, which was paid on May 31, 2007; (2) $3
million on May 9, 2008; and (3) $3 million on May 9, 2009.
77
In
October 2007, the Company reached an agreement with Stanley C. Gale, the seller
of the Gale Company, Mark Yeager, an executive officer of the Company, and
certain affiliates of Messrs. Gale and Yeager, which are parties to certain
non-portfolio interest joint ventures with the Company, to provide primarily for
the following:
|
|
(1)
|
The
Company agreed to satisfy the requirements for the $3 million payment due
on May 9, 2008 and the $3 million payment due on May 9, 2009 as of October
31, 2007 by:
|
|
|
(a)
|
paying
$4 million in cash; and
|
|
|
(b)
|
transferring
to an entity whose beneficial owners includes Messrs. Gale and Yeager a
49.8 percent interest in an entity that owns one of the non-portfolio
interests in a development project located in Belmar, New Jersey, which
the Company acquired in June 2006 pursuant to the Gale Agreement for $1.6
million. In 2007, the Company wrote off $2.1 million of costs
related to this project, as it believes the project is no longer viable,
which is included in general and administrative expense for the year ended
December 31, 2007.
|
|
(2)
|
Under
the Gale Agreement, the Company is obligated to acquire from an entity
whose beneficial owners include Messrs. Gale and Yeager (the “Florham
Entity”), a 50 percent interest in a venture which owns a developable land
parcel in Florham Park, New Jersey (the “Florham Park Land”) for a maximum
purchase price of up to $10.5 million, subject to reduction based on
developable square feet approved and other conditions, with the completion
of such acquisition subject to the Florham Entity obtaining final
development permits and approvals and related conditions necessary to
allow for office development expected to be 600,000 square
feet. The Company has agreed to waive its contractual rights
for reimbursement from the Florham Entity for certain costs incurred by
the Company securing approvals for the development of the Florham Park
Land and to defer collection of other costs. Such deferred
other costs, including a carrying charge of six percent per
annum, will be credited against the purchase price of the
Florham Park Land at closing. In the event the acquisition of
the Florham Park Land does not close by May 9, 2009, subject to certain
conditions, the Florham Entity will be obligated to pay the deferred other
costs and an additional $1 million to the Company at that
time.\
|
|
(3)
|
The
Company has agreed to settle a dispute and treat the right to receive
certain commission payments in the approximate amount of $2.3 million as
an excluded asset under the Gale Agreement, which commissions may become
payable in connection with Sanofi-Aventis’ exercise of its option to cause
the 55 Corporate venture (see Note 4: Investment in Unconsolidated Joint
Ventures) to construct a building for Sanofi-Aventis will lease on a
long-term basis, as well as the completion of certain related events. The
Company has agreed to pay directly to an entity whose beneficial owners
include Messrs. Gale and Yeager up to $769,000 of these commissions when
due.
|
|
4.
|
INVESTMENTS IN
UNCONSOLIDATED JOINT
VENTURES
|
The debt
of the Company’s unconsolidated joint ventures aggregating $535 million as of
December 31, 2007 is non-recourse to the Company, except for customary
exceptions pertaining to such matters as intentional misuse of funds,
environmental conditions and material misrepresentations, and except as
otherwise indicated below.
PLAZA
VIII AND IX ASSOCIATES, L.L.C.
Plaza
VIII and IX Associates, L.L.C. is a joint venture between the Company and
Columbia Development Company, L.L.C. (“Columbia”). The venture was
formed to acquire land for future development, located on the Hudson River
waterfront in Jersey City, New Jersey, adjacent to the Company’s Harborside
Financial Center office complex. The Company and Columbia each hold a
50 percent interest in the venture. Among other things, the
partnership agreement provides for a preferred return on the Company’s invested
capital in the venture, in addition to the Company’s proportionate share of the
venture’s profit, as defined in the agreement. The venture owns
undeveloped land currently used as a parking facility.
78
RAMLAND
REALTY ASSOCIATES L.L.C. (One Ramland Road)
On August
20, 1998, the Company entered into a joint venture with S.B. New York Realty
Corp. to form Ramland Realty Associates L.L.C. The venture was formed
to own, manage and operate One Ramland Road, a 232,000 square foot office/flex
building and adjacent developable land, located in Orangeburg, New
York. In August 1999, the joint venture completed redevelopment of
the property and placed the office/flex building in service. The
Company holds a 50 percent interest in the joint venture. The venture
has a mortgage loan with a $14.8 million balance at December 31, 2007
collateralized by its office/flex property. The mortgage bears
interest at a rate of LIBOR plus 175 basis points and is scheduled to mature in
January 2009.
The
Company performs management, leasing and other services for the property owned
by the joint venture and recognized $63,000, $100,000 and $93,000 in fees for
such services in the years ended December 31, 2007, 2006 and 2005,
respectively.
SOUTH
PIER AT HARBORSIDE – HOTEL DEVELOPMENT
On
November 17, 1999, the Company entered into a joint venture with Hyatt
Corporation (“Hyatt”) to develop a 350-room hotel on the South Pier at
Harborside Financial Center, Jersey City, New Jersey, which was completed and
commenced initial operations in July 2002. The Company owns a 50
percent interest in the venture.
The
venture has a $70.0 million mortgage loan (with a balance as of December 31,
2007 of $69.1 million) collateralized by the hotel property. The loan
carries an interest rate of 6.15 percent and matures in November
2016. The venture has a loan with a balance as of December 31, 2007
of $7.0 million with the City of Jersey City, provided by the U.S. Department of
Housing and Urban Development. The loan currently bears interest at
fixed rates ranging from 6.09 percent to 6.62 percent and matures in August
2020. The Company has posted a $7.0 million letter of credit in
support of this loan, $3.5 million of which is indemnified by
Hyatt.
RED
BANK CORPORATE PLAZA L.L.C./RED BANK CORPORATE PLAZA II, L.L.C.
On March
23, 2006, the Company entered into a joint venture with The PRC Group (“PRC”) to
form Red Bank Corporate Plaza L.L.C. The venture was formed to
develop Red Bank Corporate Plaza, a 92,878 square foot office building located
in Red Bank, New Jersey, which has been fully pre-leased to Hovnanian
Enterprises, Inc. for a 10-year term. The Company holds a 50 percent
interest in the venture. PRC contributed the vacant land for the
development of the office building as its initial capital in the
venture. The Company funded the costs of development up to the value
of the land contributed by PRC of $3.5 million as its initial
capital.
On
October 20, 2006, the venture entered into a $22.0 million construction loan
with a commercial bank collateralized by the land and development
project. The loan (with a balance as of December 31, 2007 of $18.1
million), carries an interest rate of LIBOR plus 130 basis points and matures in
April 2009. The interest rate will be reduced to LIBOR plus 125 basis
points in April 2008. The loan currently has two one-year extension
options subject to certain conditions, each of which requires payment of a
fee.
In
September 2007, the joint venture completed development of the property and
placed the office building in service. The Company performs
management, leasing and other services for the property owned by the joint
venture and recognized $678,000 in fees for such services during the year ended
December 31, 2007.
On July
20, 2006, the Company entered into a second joint venture agreement with PRC to
form Red Bank Corporate Plaza II L.L.C. The venture was formed to
hold land on which it plans to develop Red Bank Corporate Plaza II, an 18,561
square foot office building located in Red Bank, New Jersey. The
Company holds a 50 percent interest in the venture. The terms of the
venture are similar to Red Bank Corporate Plaza L.L.C. PRC
contributed the vacant land as its initial capital in the venture.
MACK-GREEN-GALE
LLC
On May 9,
2006, as part of the Gale/Green transactions completed in May 2006, the Company
entered into a joint venture, Mack-Green-Gale LLC (“Mack-Green”), with SL Green,
pursuant to which Mack-Green holds a 96 percent interest in and acts as general
partner of Gale SLG NJ Operating Partnership, L.P. (the “OP LP”). The
Company’s acquisition cost for its interest in Mack-Green was approximately $125
million, which was funded primarily through borrowing under the Company’s
revolving credit facility. The OP LP owns 100 percent of entities
which own 25 office properties (the “OP LP Properties”) which aggregate 3.5
million square feet (consisting of 17 office properties aggregating 2.3 million
square feet located in New Jersey and eight properties aggregating 1.2 million
square feet located in Troy, Michigan), as well as a minor, non-controlling
interest in four office properties aggregating 419,000 square feet located in
Naperville, Illinois, which was subsequently sold. In December 2007,
the OP LP sold its eight properties located in Troy, Michigan for $83.5
million. The venture recognized a loss of approximately $22.3 million
from the sale. Included in the Company’s equity in earnings in 2007 was $223,000
in loss related to the sale.
79
As
defined in the Mack-Green operating agreement, the Company shares
decision-making equally with SL Green regarding: (i) all major
decisions involving the operations of Mack-Green; and (ii) overall general
partner responsibilities in operating the OP LP.
The
Mack-Green operating agreement generally provides for profits and losses to be
allocated as follows:
|
(i)
|
99
percent of Mack-Green’s share of the profits and losses from 10 specific
OP LP Properties allocable to the Company and one percent allocable to SL
Green;
|
|
(ii)
|
one
percent of Mack-Green’s share of the profits and losses from eight
specific OP LP Properties and its minor interest in four office properties
allocable to the Company and 99 percent allocable to SL Green;
and
|
|
(iii)
|
50
percent of all other profits and losses allocable to the Company and 50
percent allocable to SL Green.
|
Substantially
all of the OP LP Properties are encumbered by mortgage loans with an aggregate
outstanding principal balance of $282 million at December 31,
2007. $188.2 million of the mortgage loans bear interest at a
weighted average fixed interest rate of 6.26 percent per annum and mature at
various times through May 2016. $93.6 million of the mortgage loans
bear interest at a floating rate ranging from LIBOR plus 275 basis points to
LIBOR plus 400 basis points per annum and mature at various times through
January 2009. Included in the floating rate mortgage loans are $90.3
million provided by an affiliate of SL Green.
The
Company performs management, leasing, and construction services for the
properties owned by the joint venture and recognized $3.9 million and $2.3
million in income (net of $974,000 and $2.2 million in direct costs) for such
services in the years ended December 31, 2007, and 2006,
respectively.
GE/GALE
FUNDING LLC (PFV)
The Gale
agreement signed as part of the Gale/Green transactions in May 2006 provides for
the Company to acquire certain ownership interests in real estate projects (the
“Non-Portfolio Properties”), subject to obtaining certain third party consents
and the satisfaction of various project-related and/or other
conditions. Each of the Company’s acquired interests in the
Non-Portfolio Properties provide for the initial distributions of net cash flow
solely to the Company, and thereafter an affiliate of Mr. Gale (“Gale
Affiliate”) has participation rights (“Gale Participation Rights”) in 50 percent
of the excess net cash flow remaining after the distribution to the Company of
the aggregate amount equal to the sum of: (a) the Company’s capital
contributions, plus (b) an internal rate of return (“IRR”) of 10 percent per
annum, accruing on the date or dates of the Company’s investments.
On May 9,
2006, as part of the Gale/Green transactions, the Company acquired from a Gale
Affiliate for $1.8 million a 50 percent controlling interest in GMW Village
Associates, LLC (“GMW Village”). GMW Village holds a 20 percent
interest in GE/Gale Funding LLC (“GE Gale”). GE Gale owns a 100
percent interest in the entity owning Princeton Forrestal Village, a mixed-use,
office/retail complex aggregating 527,015 square feet and located in Plainsboro,
New Jersey (“Princeton Forrestal Village” or “PFV”).
In
addition to the cash consideration paid to acquire the interest, the Company
provided a Gale affiliate with the Gale Participation Rights.
The
operating agreement of GE Gale, which is owned 80 percent by GEBAM, Inc.,
provides for, among other things, distributions of net cash flow, initially, in
proportion to each member’s interest and subject to adjustment upon achievement
of certain financial goals, as defined in the operating agreement.
80
GE Gale
has a mortgage loan with a balance of $52.8 million at December 31,
2007. The loan bears interest at a rate of LIBOR plus 275 basis
points and matures on January 9, 2009, with an extension option through January
9, 2011.
The
Company performs management, leasing, and construction services for PFV and
recognized $1.1 million and $956,000 in income (net of $1.6 million and $7.0
million in direct costs) for such services in the years ended December 31, 2007
and 2006, respectively.
ROUTE
93 MASTER LLC (“Route 93 Participant”)/ROUTE 93 BEDFORD MASTER LLC (with the
Route 93 Participant, collectively, the “Route 93 Venture”)
On June
1, 2006, the Route 93 Venture was formed between the Route 93 Participant, a
majority-owned subsidiary of the Company, having a 30 percent interest and the
Commingled Pension Trust Fund (Special Situation Property) of JPMorgan Chase
Bank having a 70 percent interest, for the purpose of acquiring seven office
buildings, aggregating 666,697 square feet, located in the towns of Andover,
Bedford and Billerica, Massachusetts. Profits and losses are shared
by the partners in proportion to their respective interests until the investment
yields an 11 percent IRR, then sharing will shift to 40/60, and when the IRR
reaches 15 percent, then sharing will shift to 50/50.
The Route
93 Participant is a joint venture between the Company and a Gale
affiliate. Profits and losses are shared by the partners under this
venture in proportion to their respective interests (83.3/16.7) until the
investment yields an 11 percent IRR, then sharing will shift to
50/50.
The Route
93 Ventures has a mortgage loan with an amount not to exceed $58.6 million, with
a $42.5 million balance at December 31, 2007 collateralized by its office
properties. The loan provides the venture the ability to draw
additional monies for qualified leasing and capital improvement
costs. The loan bears interest at a rate of LIBOR plus 220 basis
points and matures on July 11, 2008, with three one-year extension
options.
GALE
KIMBALL, L.L.C.
On June
15, 2006, the
Company entered into a joint venture with a Gale Affiliate to form M-C Kimball,
LLC (“M-C Kimball”). M-C Kimball was formed for the sole purpose of
acquiring a Gale Affiliate’s 33.33 percent membership interest in Gale Kimball,
L.L.C. (“Gale Kimball”), an entity holding a 25 percent interest in 100 Kimball
Drive LLC (“100 Kimball”), which developed and placed in service a 175,000
square foot office property that has been substantially pre-leased to a single
tenant, located at 100 Kimball Drive, Parsippany, New Jersey (the “Kimball
Property”).
The
operating agreement of M-C Kimball provides, among other things, for the Gale
Participation Rights (of which Mark Yeager, an Executive Vice President of the
Company, has a direct 26 percent interest).
Gale
Kimball is owned 33.33 percent by M-C Kimball and 66.67 percent by the Hampshire
Generational Fund, L.L.C. (“Hampshire”). The operating agreement of
Gale Kimball provides, among other things, for the distribution of net cash
flow, initially, in accordance with its members’ respective membership interests
and, upon achievement of certain financial conditions, 50 percent to each of the
Company and Hampshire.
100
Kimball is owned 25 percent by Gale Kimball and 75 percent by 100 Kimball Drive
Realty Member LLC, an affiliate of JPMorgan (“JPM”). The operating agreement
of 100 Kimball provides, among other things, for the distributions to be made in
the following order:
|
(i)
|
first,
to JPM, such that JPM is provided with an annual 12 percent compound
preferred return on Preferred Equity Capital Contributions (as such term
is defined in the operating agreement of 100 Kimball and largely comprised
of development and construction
costs);
|
|
(ii)
|
second,
to JPM, as return of Preferred Equity Capital Contributions until complete
repayment of such Preferred Equity Capital
Contributions;
|
|
(iii)
|
third,
to each of JPM and Gale Kimball in proportion to their respective
membership interests until each member is provided, as a result of such
distributions, with an annual twelve percent compound return on the
Member’s Capital Contributions (as defined in the operating agreement of
100 Kimball, and excluding Preferred Equity Capital Contributions, if
any); and
|
|
(iv)
|
fourth,
50 percent to each of JPM and Gale
Kimball.
|
81
On
September 21, 2007, the venture obtained a mortgage loan which allows a maximum
principal amount of $47 million (with a balance of $40.4 million at December 31,
2007). The loan provides the ability to draw funds for
qualified leasing and capital improvement costs. The loan bears
interest at a rate of 5.95 percent and matures in September 2012.
The
Company performs management, leasing, construction and development services for
the property owned by 100 Kimball for which it recognized $1.7 million and
$271,000 in income (net of $9.4 million and $6.6 million in direct costs) in the
years ended December 31, 2007, and 2006, respectively.
55
CORPORATE PARTNERS, LLC
On June
9, 2006, the
Company entered into a joint venture with a Gale Affiliate to form 55 Corporate
Partners L.L.C. (“55 Corporate”). 55 Corporate was formed for the
sole purpose of acquiring from a Gale Affiliate a 50 percent interest in SLG 55
Corporate Drive II LLC (“SLG 55”), an entity presently holding a 100 percent
indirect condominium interest in a vacant land parcel located in Bridgewater,
New Jersey, which can accommodate development of an approximately 200,000 square
foot office building (the “55 Corporate Property”). The remaining 50
percent in SLG 55 is owned by SLG Gale 55 Corporate LLC, an affiliate of SL Green Realty Corp. (“SLG Gale
55”).
In
November 2007, Sanofi-Aventis U.S. Inc. (“Sanofi”), which occupies neighboring
buildings, exercised its option to cause the venture to construct a building on
the Property and has signed a lease thereof. The lease has a term of
fifteen years, subject to three five-year extension options. The
construction of the building, estimated to cost approximately $58 million, is
not required to commence until July 1, 2009 for a July 2011 delivery; however,
if Sanofi gives a Construction Start Date Acceleration Notice in accordance with
the provisions of its lease, then construction shall promptly commence after the
necessary permits are obtained, even if such construction start date shall occur
prior to July 1, 2009.
The
operating agreement of 55 Corporate provides, among other things, for the Gale
Participation Rights (of which Mr. Yeager has a direct 26 percent
interest). If Mr. Gale receives any commission payments with respect
to a Sanofi lease on the development property, Mr. Gale has agreed to pay to Mr.
Yeager 26 percent of such payments.
The
operating agreement of SLG 55 provides, among other things, for the distribution
of the available net cash flow to each of 55 Corporate and SLG Gale 55 in
proportion to their respective membership interests in SLG 55 (50 percent
each).
12
VREELAND ASSOCIATES, L.L.C.
On
September 8, 2006,
the Company entered into a joint venture with a Gale Affiliate to form M-C
Vreeland, LLC (“M-C Vreeland”). M-C Vreeland was formed for the sole
purpose of acquiring a Gale Affiliate’s 50 percent membership interest in 12
Vreeland Associates, L.L.C., an entity owning an office property located at 12
Vreeland Road, Florham Park, New Jersey.
The
operating agreement of M-C Vreeland provides, among other things, for the Gale
Participation Rights (of which Mr. Yeager has a direct 15 percent
interest).
The
office property at 12 Vreeland is a 139,750 square foot office building that is
fully leased to a single tenant through June 15, 2012. The property
is subject to a mortgage loan, which matures on July 1, 2012, and bears interest
at 6.9 percent per annum. As of December 31, 2007 the outstanding
balance on the mortgage note was $8.8 million.
Under the
operating agreement of 12 Vreeland Associates, L.L.C., M-C Vreeland has a 50
percent interest, with S/K Florham Park Associates, L.L.C. (the managing member)
and its affiliate holding the other 50 percent.
BOSTON-FILENES
On
October 20, 2006, the Company formed a joint venture (the “MC/Gale JV LLC”) with
Gale International/426 Washington St. LLC (“Gale/426”), which, in turn, entered
into a joint venture (the “Vornado JV LLC”) with VNO 426 Washington Street JV
LLC (“Vornado”), an affiliate of Vornado Realty LP, which was formed to acquire
and redevelop the Filenes property located in the Downtown Crossing district of
Boston, Massachusetts (the “Filenes Property”).
82
On
January 25, 2007, (i) each of M-C/Gale JV LLC, Gale and Washington Street Realty
Member LLC (“JPM”) formed a joint venture (“JPM JV LLC”), (ii) M-C/Gale JV LLC
assigned its entire 50 percent ownership interest in the Vornado JV LLC to JPM
JV LLC, (iii) the Limited Liability Company Agreement of Vornado JV LLC was
amended to reflect, among other things, the change in the ownership structure
described in subsection (ii) above, and (iv) the Limited Liability Company
Agreement of MC/Gale JV LLC was amended and restated to reflect, among other
things, the change in the ownership structure described in subsection (ii)
above. The Vornado JV LLC acquired the Filenes Property on January
29, 2007, for approximately $100 million.
As a
result of the foregoing transactions, as of January 29, 2007, (i) the Filenes
Property is owned by Vornado JV LLC, (ii) Vornado JV LLC is owned 50 percent by
each of Vornado and JPM JV LLC, (iii) JPM JV LLC is owned 30 percent by M-C/Gale
JV LLC, 70 percent by JPM and managed by Gale/426, which has no ownership
interest in JPM JV LLC, and (iv) M-C/Gale JV LLC is owned 99.99 percent by the
Company and 0.01 percent by Gale/426. Thus, the Company holds
approximately a 15 percent indirect ownership interest in the Vornado JV LLC and
the Filenes Property.
Distributions
are made (i) by Vornado JV LLC in proportion to its members’ respective
ownership interests, (ii) by JPM JV LLC (a) initially, in proportion to its
members’ respective ownership interests until JPM’s investment yields an 11
percent IRR, (b) thereafter, 60/40 to JPM and MC/Gale JV LLC, respectively,
until JPM’s investment yields a 15 percent IRR and (c) thereafter, 50/50 to JPM
and MC/Gale JV LLC, respectively, and (iii) by MC/Gale JV LLC (w) initially, in
proportion to its members’ respective ownership interests until each member has
received a 10 percent IRR on its investment, (x) thereafter, 65/35 to the
Company and Gale/426, respectively, until the Company’s investment yields a 15
percent IRR, (y) if by the time the Company receives a 15 percent IRR on its
investment, Gale/426 has not done so, 100 percent to Gale/426 until Gale/426’s
investment yields a 15 percent IRR, and (z) thereafter, 50/50 to each
of the Company and Gale/426.
The joint
venture’s current plans for the development of the Filenes Property include
approximately 1.2 million square feet consisting of office, retail, condominium
apartments, hotel and a garage. The project is subject to
governmental approvals.
NKFGMS
OWNERS, LLC
On
December 28, 2006, the Company contributed its facilities management business,
which was acquired on May 9, 2006 as part of the Gale/Green transactions, to a
newly-formed joint venture called NKFGMS Owners, LLC. With the
contribution, the Company received $600,000 in cash and a 40 percent interest in
the joint venture. In connection with the Contribution, the Company
recognized a loss of approximately $1.5 million. The joint venture
operating agreement provided for, among other things, profits and losses
generally to be allocated in proportion to each member’s interest.
On
September 21, 2007, the Company sold its 40 percent interest in NKFGMS to its
joint venture partner for net proceeds of $575,000, and recorded a gain of
$19,000 on the sale.
GALE
JEFFERSON, L.L.C.
On August
22, 2007, the Company entered into a joint venture with a Gale Affiliate to form
M-C Jefferson, L.L.C. (“M-C Jefferson”). M-C Jefferson was formed for
the sole purpose of acquiring a Gale Affiliate’s 33.33 percent membership
interest in Gale Jefferson, L.L.C. (“Gale Jefferson”), an entity holding a 25
percent interest in One Jefferson Road LLC (“One Jefferson”), which is
developing a 100,000 square foot office property located at 1 Jefferson Road,
Parsippany, New Jersey (the “Jefferson Property”).
The
operating agreement of M-C Jefferson provides, among other things, for the Gale
Participation Rights (of which Mark Yeager, an Executive Vice President of the
Company, has a direct 26 percent interest). Gale Jefferson is owned
33.33 percent by M-C Jefferson and 66.67 percent by the Hampshire Generational
Fund, L.L.C. (“Hampshire”). The operating agreements of Gale
Jefferson provides, among other things, for the distribution of net cash flow,
first, in accordance with its member’s respective interests until each member is
provided, as a result of such distributions, with an annual 12 percent compound
return on the Member’s Capital Contributions, as defined in the operating
agreement and secondly, 50 percent to each of the Company and
Hampshire.
One
Jefferson is owned 25 percent by Gale Jefferson and 75 percent by One Jefferson
Road Realty Member LLC, an affiliate of JPMorgan (“JPM”). The
operating agreement of One Jefferson provides, among other things, for the
distribution of net cash flow, first, in accordance with its members’ respective
interests until each member is provided, as a result of such distributions, with
an annual 12 percent compound return on the Member’s Capital Contributions, as
defined in the operating agreement and secondly, 50 percent to JPM and Gale
Jefferson. One Jefferson has a construction loan in an amount not to
exceed $21 million (with no balance drawn as of December 31, 2007), bearing
interest at a rate of LIBOR plus 160 basis points and maturing on October 24,
2010 with a one-year extension option.
83
The
Company performs management, leasing and construction services for Gale
Jefferson and recognized $102,000 in income (net of $4.0 million in direct
costs) for such services in the year ended December 31, 2007.
MEADOWLANDS
XANADU
On
November 25, 2003, the Company and affiliates of The Mills Corporation (“Mills”)
entered into a joint venture agreement (“Meadowlands Xanadu Venture Agreement”)
to form Meadowlands Mills/Mack-Cali Limited Partnership (“Meadowlands Venture”)
for the purpose of developing a $1.3 billion family entertainment, recreation
and retail complex with an office and hotel component to be built at the
Meadowlands sports complex in East Rutherford, New Jersey (“Meadowlands
Xanadu”). Meadowlands Xanadu’s approximately 4.76 million-square-foot
complex is expected to feature a family entertainment, recreation and retail
destination comprising five themed zones: sports; entertainment; children’s
education; fashion; and food and home, in addition to four office buildings,
aggregating approximately 1.8 million square feet, and a 520-room
hotel.
The
Company and Mills owned a 20 percent and 80 percent interest, respectively, in
the Meadowlands Venture. The Meadowlands Xanadu Venture Agreement
required the Company to make an equity contribution up to a maximum of $32.5
million, which it fulfilled in April 2005.
On August
21, 2006, Mills announced that it had signed a non-binding letter of intent with
Colony Capital Acquisitions, LLC (“Colony”) and Kan Am USA Management XXII
Limited Partnership (“Kan Am”) under which Colony would arrange for construction
financing for Meadowlands Xanadu and make a significant equity infusion into the
Meadowlands Venture, and Mills would not have any financial obligations post
closing (“Colony Transaction”). Kan Am had been a partner with Mills
in the Meadowlands Venture since the formation of the venture.
On
November 22, 2006, the Company entered into and consummated a Redemption
Agreement (the “Redemption Agreement”) with the Meadowlands Venture, Meadowlands
Developer Holding Corp., a limited partner in the Meadowlands Venture, and the
Meadowlands Limited Partnership (f/k/a Meadowlands/Mills Limited Partnership,
and hereafter “MLP”), a general partner and a limited partner in the Meadowlands
Venture. Immediately prior to entering into the Redemption Agreement,
the investors in MLP undertook a restructuring of MLP whereby Colony became an
indirect owner of MLP.
In
connection with the Colony Transaction and pursuant to the Redemption Agreement,
the Meadowlands Venture redeemed (the “Redemption”) the Company’s entire
interest in the Meadowlands Venture and its right to participate in the
development of the ERC component in exchange for (i) $22.5 million in cash and
(ii) a non-economic partner interest in each of the office and hotel components
of Meadowlands Xanadu. In connection with the Redemption, the
Operating Partnership also received a non-interest bearing promissory note for
an additional $2.5 million, which note is payable in full by MLP only at such
time as the Operating Partnership exercises one of its options to develop the
first of the office and hotel components of Meadowlands Xanadu. The
Company’s remaining investment of approximately $11.9 million is included in
deferred charges and other assets, net, as of December 31, 2007 and
2006.
Concurrent
with the execution of the Redemption Agreement, the Company also entered into
the Mack-Cali Rights, Obligations and Option Agreement (the “Rights Agreement”)
by and among the Meadowlands Venture, MLP, Meadowlands Mack-Cali GP, L.L.C.,
Mack-Cali, Baseball Meadowlands Limited Partnership, A-B Office Meadowlands
Mack-Cali Limited Partnership, C-D Office Meadowlands Limited Partnership, Hotel
Meadowlands Mack-Cali Limited Partnership and ERC Meadowlands Mills/Mack-Cali
Limited Partnership. Pursuant to the Rights Agreement, the Operating
Partnership retained certain rights and obligations it held under the
Meadowlands Xanadu Venture Agreement with respect to the development of the
office and hotel components of Meadowlands Xanadu, including an option to
develop any of the office or hotel components of Meadowlands Xanadu (each, a
“Take Down Option”). Upon the exercise of an initial Take Down
Option, the Operating Partnership will receive economic interests in each of the
office or hotel component partnerships as both a general partner and a limited
partner in the applicable office or hotel component, and following receipt of
$2.5 million in full payment of the note from MLP, the Operating Partnership’s
ownership interest in each of the office or hotel component partnerships will be
reduced from 80 percent (as provided in the Meadowlands Xanadu Venture
Agreement) to 75 percent.
84
G&G
MARTCO (Convention Plaza)
The
Company held a 50 percent interest in G&G Martco, which owns Convention
Plaza, a 305,618 square foot office building, located in San Francisco,
California. On November 6, 2006, the Company sold substantially all
of its interest in the venture to an affiliate of its joint venture partner for
approximately $16.3 million, realizing a gain on the sale of approximately $10.8
million. The Company performed management and leasing services for
the property owned by the joint venture through the date of sale and recognized
$132,000 and $161,000 in fees for such services in the years ended December 31,
2006 and 2005, respectively.
85
SUMMARIES
OF UNCONSOLIDATED JOINT VENTURES
The following is a summary of the
financial position of the unconsolidated joint ventures in which the Company had
investment interests as of December 31, 2007 and 2006: (dollars in
thousands)
|
December
31, 2007
|
|||||||||||||||
|
Plaza
|
Red
Bank
|
Mack-
|
Princeton
|
NKFGMS
|
|||||||||||
|
VIII
& IX
|
Ramland
|
Harborside
|
Corporate
|
Gale-
|
Forrestal
|
Route
93
|
Gale
|
55
|
12
|
Boston-
|
Owners
|
Gale
|
Combined
|
||
|
Associates
|
Realty
|
South
Pier
|
Plaza
I & II
|
Green
|
Village
|
Portfolio
|
Kimball
|
Corporate
|
Vreeland
|
Filenes
|
LLC
|
Jefferson
|
Total
|
||
|
Assets:
|
|||||||||||||||
|
Rental
property, net
|
$
10,787
|
$
11,522
|
$
64,882
|
$
23,594
|
$
368,028
|
$
42,713
|
$
56,226
|
$ 7,785
|
$
17,000
|
$
7,954
|
--
|
--
|
$
1,838
|
$
612,329
|
|
|
Other
assets
|
2,250
|
762
|
15,039
|
2,843
|
52,741
|
25,471
|
2,307
|
1,809
|
--
|
851
|
$
65,134
|
--
|
80
|
169,287
|
|
|
Total
assets
|
$
13,037
|
$
12,284
|
$
79,921
|
$
26,437
|
$
420,769
|
$
68,184
|
$
58,533
|
$ 9,594
|
$
17,000
|
$
8,805
|
$
65,134
|
--
|
$
1,918
|
$
781,616
|
|
|
Liabilities
and
|
|||||||||||||||
|
partners’/members’
|
|||||||||||||||
|
capital
(deficit):
|
|||||||||||||||
|
Mortgages,
loans
|
|||||||||||||||
|
payable
and other
|
|||||||||||||||
|
obligations
|
--
|
$
14,771
|
$
76,072
|
$
18,116
|
$
281,746
|
$
52,800
|
$
42,495
|
$
10,103
|
--
|
$
8,761
|
--
|
--
|
--
|
$
504,864
|
|
|
Other
liabilities
|
$ 532
|
365
|
2,711
|
133
|
23,809
|
6,923
|
857
|
30
|
--
|
--
|
$ 4,171
|
--
|
$ 80
|
39,611
|
|
|
Partners’/members’
|
|||||||||||||||
|
capital
(deficit)
|
12,505
|
(2,852)
|
1,138
|
8,188
|
115,214
|
8,461
|
15,181
|
(539)
|
$
17,000
|
44
|
60,963
|
--
|
1,838
|
237,141
|
|
|
Total
liabilities and
|
|||||||||||||||
|
partners’/members’
|
|||||||||||||||
|
capital
(deficit)
|
$
13,037
|
$
12,284
|
$
79,921
|
$
26,437
|
$
420,769
|
$
68,184
|
$
58,533
|
$ 9,594
|
$
17,000
|
$
8,805
|
$
65,134
|
--
|
$
1,918
|
$
781,616
|
|
|
Company’s
|
|||||||||||||||
|
investment
|
|||||||||||||||
|
in
unconsolidated
|
|||||||||||||||
|
joint
ventures, net
|
$ 6,175
|
--
|
$ 513
|
$ 3,703
|
$
128,107
|
$ 2,029
|
$ 4,729
|
--
|
$ 8,518
|
$
7,752
|
$
18,828
|
--
|
$ 712
|
$
181,066
|
|
|
December
31, 2006
|
|||||||||||||||
|
Plaza
|
Red
Bank
|
Mack-
|
Princeton
|
NKFGMS
|
|||||||||||
|
VIII
& IX
|
Ramland
|
Harborside
|
Corporate
|
Gale-
|
Forrestal
|
Route
93
|
Gale
|
55
|
12
|
Boston-
|
Owners
|
Gale
|
Combined
|
||
|
Associates
|
Realty
|
South
Pier
|
Plaza
I & II
|
Green
|
Village
|
Portfolio
|
Kimball
|
Corporate
|
Vreeland
|
Filenes
|
LLC
|
Jefferson
|
Total
|
||
|
Assets:
|
|||||||||||||||
|
Rental
property, net
|
$
11,404
|
$
12,141
|
$
69,303
|
$
13,205
|
$
479,245
|
$
39,538
|
$
54,866
|
$ 6,650
|
$
17,000
|
$ 8,221
|
--
|
$ 239
|
--
|
$
711,812
|
|
|
Other
assets
|
1,408
|
851
|
11,170
|
3,320
|
76,704
|
24,830
|
6,857
|
164
|
--
|
909
|
$
10,500
|
2,638
|
--
|
139,351
|
|
|
Total
assets
|
$
12,812
|
$
12,992
|
$
80,473
|
$
16,525
|
$
555,949
|
$
64,368
|
$
61,723
|
$ 6,814
|
$
17,000
|
$ 9,130
|
$
10,500
|
$
2,877
|
--
|
$
851,163
|
|
|
Liabilities
and
|
|||||||||||||||
|
partners’/members’
|
|||||||||||||||
|
capital
(deficit):
|
|||||||||||||||
|
Mortgages,
loans
|
|||||||||||||||
|
payable
and other
|
|||||||||||||||
|
obligations
|
--
|
$
14,936
|
$
77,217
|
$ 8,673
|
$
358,063
|
$
47,761
|
$
39,435
|
$ 3,838
|
--
|
$
10,253
|
--
|
--
|
--
|
$
560,176
|
|
|
Other
liabilities
|
$ 532
|
259
|
4,944
|
13
|
40,106
|
5,972
|
846
|
--
|
--
|
--
|
--
|
$
1,329
|
--
|
54,001
|
|
|
Partners’/members’
|
|||||||||||||||
|
capital
(deficit)
|
12,280
|
(2,203)
|
(1,688)
|
7,839
|
157,780
|
10,635
|
21,442
|
2,976
|
$ 17,000
|
(1,123)
|
$
10,500
|
1,548
|
--
|
236,986
|
|
|
Total
liabilities and
|
|||||||||||||||
|
partners’/members’
|
|||||||||||||||
|
capital
(deficit)
|
$
12,812
|
$
12,992
|
$
80,473
|
$
16,525
|
$
555,949
|
$
64,368
|
$
61,723
|
$ 6,814
|
$
17,000
|
$ 9,130
|
$
10,500
|
$
2,877
|
--
|
$
851,163
|
|
|
Company’s
|
|||||||||||||||
|
investment
|
|||||||||||||||
|
in
unconsolidated
|
|||||||||||||||
|
joint
ventures, net
|
$ 6,060
|
--
|
--
|
$ 3,647
|
$
119,061
|
$ 2,560
|
$ 6,669
|
$ 1,024
|
$ 8,500
|
$ 7,130
|
$ 5,250
|
$ 400
|
--
|
$
160,301
|
|
86
SUMMARIES
OF UNCONSOLIDATED JOINT VENTURES
The
following is a summary of the results of operations of the unconsolidated joint
ventures for the period in which the Company had investment interests during the
years ended December 31, 2007, 2006 and 2005: (dollars in
thousands)
|
Year
Ended December 31, 2007
|
|||||||||||||||||
|
Plaza
|
Red
Bank
|
Mack-
|
Princeton
|
NKFGMS
|
|||||||||||||
|
VIII
& IX
|
Ramland
|
Ashford
|
Harborside
|
Corporate
|
Green-
|
Forrestal
|
Route
93
|
Gale
|
55
|
12
|
Boston-
|
Owners
|
Gale
|
Meadowlands
|
G&G
|
Combined
|
|
|
Associates
|
Realty
|
Loop
|
South
Pier
|
Plaza
I & II
|
Gale
|
Village
|
Portfolio
|
Kimball
|
Corporate
|
Vreeland
|
Filenes
|
LLC
|
Jefferson
|
Xanadu
|
Martco
|
Total
|
|
|
Total
revenues
|
$
1,015
|
$ 1,903
|
--
|
$
43,952
|
$
1,098
|
$ 67,113
|
$ 12,637
|
$ 2,541
|
$ 12
|
--
|
$
2,280
|
$
664
|
--
|
--
|
--
|
--
|
$
133,215
|
|
Operating
and
|
|||||||||||||||||
|
other
expenses
|
(174)
|
(1,528)
|
--
|
(26,661)
|
(237)
|
(53,123)
|
(6,471)
|
(3,674)
|
(83)
|
--
|
(65)
|
(698)
|
--
|
--
|
--
|
--
|
(92,714)
|
|
Depreciation
and
|
|||||||||||||||||
|
amortization
|
(616)
|
(727)
|
--
|
(5,929)
|
(208)
|
(24,751)
|
(3,589)
|
(2,794)
|
(146)
|
--
|
(352)
|
--
|
--
|
--
|
--
|
--
|
(39,112)
|
|
Interest
expense
|
--
|
(1,047)
|
--
|
(4,785)
|
(367)
|
(26,706)
|
(4,751)
|
(3,429)
|
(324)
|
--
|
(663)
|
--
|
--
|
--
|
--
|
--
|
(42,072)
|
|
Net
income
|
$ 225
|
$
(1,399)
|
--
|
$ 6,577
|
$ 286
|
$
(37,467)
|
$ (2,174)
|
$
(7,356)
|
$
(541)
|
--
|
$
1,200
|
$ (34)
|
--
|
--
|
--
|
--
|
$ (40,683)
|
|
Company’s
equity
|
|||||||||||||||||
|
in
earnings (loss)
|
|||||||||||||||||
|
of
unconsolidated
|
|||||||||||||||||
|
joint
ventures
|
$ 113
|
$ (375)
|
--
|
$ 3,182
|
$ 143
|
$ (6,677)
|
$ (531)
|
$
(2,236)
|
$
(180)
|
--
|
$ 600
|
$ (10)
|
$53
|
--
|
--
|
--
|
$ (5,918)
|
|
Year
Ended December 31, 2006
|
|||||||||||||||||
|
Plaza
|
Red
Bank
|
Mack-
|
Princeton
|
NKFGMS
|
|||||||||||||
|
VIII
& IX
|
Ramland
|
Ashford
|
Harborside
|
Corporate
|
Green-
|
Forrestal
|
Route
93
|
Gale
|
55
|
12
|
Boston-
|
Owners
|
Gale
|
Meadowlands
|
G&G
|
Combined
|
|
|
Associates
|
Realty
|
Loop
|
South
Pier
|
Plaza
I & II
|
Gale
|
Village
|
Portfolio
|
Kimball
|
Corporate
|
Vreeland
|
Filenes
|
LLC
|
Jefferson
|
Xanadu
|
Martco
|
Total
|
|
|
Total
revenues
|
$
755
|
$ 2,058
|
--
|
$
39,229
|
$
15
|
$ 44,262
|
$ 9,495
|
$ 3,486
|
$
1
|
--
|
$
2,102
|
--
|
--
|
--
|
--
|
$
5,990
|
$
107,393
|
|
Operating
and
|
|||||||||||||||||
|
other
expenses
|
(186)
|
(1,496)
|
--
|
(23,591)
|
(6)
|
(19,136)
|
(5,925)
|
(1,585)
|
--
|
--
|
(76)
|
--
|
--
|
--
|
--
|
(2,702)
|
(54,703)
|
|
Depreciation
and
|
|||||||||||||||||
|
amortization
|
(616)
|
(736)
|
--
|
(5,853)
|
--
|
(21,129)
|
(2,908)
|
(622)
|
--
|
--
|
(352)
|
--
|
--
|
--
|
--
|
(1,216)
|
(33,432)
|
|
Interest
expense
|
--
|
(1,022)
|
--
|
(4,078)
|
--
|
(17,117)
|
(3,063)
|
(1,969)
|
--
|
--
|
(755)
|
--
|
--
|
--
|
--
|
(2,499)
|
(30,503)
|
|
Net
income
|
$ (47)
|
$
(1,196)
|
--
|
$ 5,707
|
$ 9
|
$
(13,120)
|
$
(2,401)
|
$ (690)
|
$
1
|
--
|
$ 919
|
--
|
--
|
--
|
--
|
$ (427)
|
$
(11,245)
|
|
Company’s
equity
|
|||||||||||||||||
|
in
earnings (loss)
|
|||||||||||||||||
|
of
unconsolidated
|
|||||||||||||||||
|
joint
ventures
|
$ (24)
|
$ (225)
|
--
|
$ 2,820
|
--
|
$ (4,945)
|
$ (436)
|
$ (148)
|
--
|
--
|
$ 208
|
--
|
--
|
--
|
$
(1,876)
|
$ (930)
|
$ (5,556)
|
|
Year
Ended December 31, 2005
|
|||||||||||||||||
|
Plaza
|
Red
Bank
|
Mack-
|
Princeton
|
NKFGMS
|
|||||||||||||
|
VIII
& IX
|
Ramland
|
Ashford
|
Harborside
|
Corporate
|
Green-
|
Forrestal
|
Route
93
|
Gale
|
55
|
12
|
Boston-
|
Owners
|
Gale
|
Meadowlands
|
G&G
|
Combined
|
|
|
Associates
|
Realty
|
Loop
|
South
Pier
|
Plaza
I & II
|
Gale
|
Village
|
Portfolio
|
Kimball
|
Corporate
|
Vreeland
|
Filenes
|
LLC
|
Jefferson
|
Xanadu
|
Martco
|
Total
|
|
|
Total
revenues
|
$ 396
|
$
2,028
|
--
|
$ 35,198
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
$ 6,767
|
$
44,389
|
|
Operating
and
|
|||||||||||||||||
|
other
expenses
|
(169)
|
(1,407)
|
--
|
(22,251)
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
(3,662)
|
(27,489)
|
|
Depreciation
and
|
|||||||||||||||||
|
amortization
|
(616)
|
(638)
|
--
|
(5,778)
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
(1,205)
|
(8,237)
|
|
Interest
expense
|
--
|
(759)
|
--
|
(4,176)
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
(2,270)
|
(7,205)
|
|
Net
income
|
$
(389)
|
$ (776)
|
--
|
$ 2,993
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
$ (370)
|
$ 1,458
|
|
Company’s
equity
|
|||||||||||||||||
|
in
earnings (loss)
|
|||||||||||||||||
|
of
unconsolidated
|
|||||||||||||||||
|
joint
ventures
|
$
(196)
|
--
|
$ (30)
|
$ 1,693
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
--
|
$
(1,219)
|
$ 248
|
87
|
5.
|
DEFERRED CHARGES AND
OTHER ASSETS
|
|
December 31,
|
||
|
(dollars
in thousands)
|
2007
|
2006
|
|
Deferred
leasing costs
|
$202,282
|
$184,175
|
|
Deferred
financing costs
|
22,922
|
21,252
|
|
225,204
|
205,427
|
|
|
Accumulated
amortization
|
(90,482)
|
(76,407)
|
|
Deferred
charges, net
|
134,722
|
129,020
|
|
Notes
receivable
|
11,610
|
11,769
|
|
In-place
lease values and related intangible assets, net
|
64,212
|
58,495
|
|
Prepaid
expenses and other assets, net
|
35,842
|
41,353
|
|
Total
deferred charges and other assets, net
|
$246,386
|
$240,637
|
|
6.
|
RESTRICTED
CASH
|
Restricted cash includes security
deposits for certain of the Company’s properties, and escrow and reserve funds
for debt service, real estate taxes, property insurance, capital improvements,
tenant improvements, and leasing costs established pursuant to certain mortgage
financing arrangements, and is comprised of the
following: (dollars in
thousands)
|
December 31,
|
||
|
2007
|
2006
|
|
|
Security
deposits
|
$ 8,710
|
$ 8,496
|
|
Escrow
and other reserve funds
|
4,903
|
6,952
|
|
Total
restricted cash
|
$13,613
|
$15,448
|
|
7.
|
DISCONTINUED
OPERATIONS
|
On May
10, 2007, the Company sold its 133,000 square-foot office building located at
1000 Bridgeport Avenue in Shelton, Connecticut for net sales proceeds of
approximately $16.4 million and recognized a gain of approximately $2.6 million
on the sale.
On June
11, 2007, the Company sold its 121,250 square-foot office building located at
500 West Putnam Avenue in Greenwich, Connecticut for net sales proceeds of
approximately $54.3 million and recognized a gain of approximately $36.2 million
on the sale.
On July
13, 2007, the Company sold two office buildings in Egg Harbor Township, New
Jersey, totaling 80,344 square feet, for approximately $12.5 million and
recognized a gain of approximately $5.6 million.
The
Company has presented these assets as discontinued operations in its statements
of operations for the periods presented. As the Company sold 300
Westage Business Center Drive in Fishkill, New York, 1510 Lancer Drive in
Moorestown, New Jersey; a Colorado portfolio in various cities throughout
Colorado; and a portfolio in San Francisco, California during the year ended
December 31, 2006, the Company has presented these assets as discontinued
operations in its statements of operations for all periods
presented.
As the
Company sold 300 Westage Business Center Drive in Fishkill, New York; 1510
Lancer Drive in Moorestown, New Jersey; the entire Colorado portfolio; and its
entire California portfolio during the year ended December 31, 2006; and 111
East Shore Road and 600 Community Drive in North Hempstead, New York; 210 South
16th
Street in Omaha, Nebraska; 3600 South Yosemite in Denver Colorado; 201
Willowbrook Boulevard in Wayne, New Jersey; 1122 Alma Road in Richardson, Texas;
and 3 Skyline Drive in Hawthorne, New York during the year ended December 31,
2005; the Company has presented these assets as discontinued operations in the
statement of operations for all periods presented.
88
There are
no properties identified as held for sale as of December 31, 2007.
The following tables summarize income
from discontinued operations (net of minority interest) and the related realized
gains (losses) and unrealized losses on disposition of rental property (net of
minority interest), net for the years ended December 31, 2007, 2006 and
2005: (dollars in
thousands)
|
Year
Ended December 31,
|
|||
|
2007
|
2006
|
2005
|
|
|
Total
revenues
|
$ 3,881
|
$
43,645
|
$
56,667
|
|
Operating
and other expenses
|
(1,638)
|
(18,214)
|
(21,744)
|
|
Depreciation
and amortization
|
(424)
|
(8,853)
|
(14,327)
|
|
Interest
expense (net of interest income)
|
(522)
|
(1,291)
|
(224)
|
|
Minority
interest
|
(240)
|
(3,015)
|
(3,297)
|
|
Income
from discontinued operations (net of minority interest)
|
$
1,057
|
$
12,272
|
$
17,075
|
|
Year
Ended December 31,
|
|||
|
2007
|
2006
|
2005
|
|
|
Realized
gains (losses) on disposition of rental property, net
|
$44,414
|
$
59,605
|
$ 7,136
|
|
Unrealized
losses on disposition of rental property
|
--
|
--
|
(1,613)
|
|
Minority
interest
|
(8,134)
|
(11,890)
|
(1,097)
|
|
Realized
gains (losses) and unrealized losses on disposition
|
|||
|
of
rental property (net of minority interest), net
|
$
36,280
|
$
47,715
|
$ 4,426
|
|
8.
|
SENIOR UNSECURED
NOTES
|
A summary of the Company’s senior
unsecured notes as of December 31, 2007 and 2006 is as
follows: (dollars in
thousands)
|
December
31,
|
Effective
|
||
|
2007
|
2006
|
Rate
(a)
|
|
|
7.250%
Senior Unsecured Notes, due March 15, 2009
|
$ 299,716
|
$ 299,481
|
7.49%
|
|
5.050%
Senior Unsecured Notes, due April 15, 2010
|
149,874
|
149,819
|
5.27%
|
|
7.835%
Senior Unsecured Notes, due December 15, 2010
|
15,000
|
15,000
|
7.95%
|
|
7.750%
Senior Unsecured Notes, due February 15, 2011
|
299,468
|
299,295
|
7.93%
|
|
5.250%
Senior Unsecured Notes, due January 15, 2012
|
99,210
|
99,015
|
5.46%
|
|
6.150%
Senior Unsecured Notes, due December 15, 2012
|
92,472
|
91,981
|
6.89%
|
|
5.820%
Senior Unsecured Notes, due March 15, 2013
|
25,530
|
25,420
|
6.45%
|
|
4.600%
Senior Unsecured Notes, due June 15, 2013
|
99,844
|
99,815
|
4.74%
|
|
5.125%
Senior Unsecured Notes, due February 15, 2014
|
201,468
|
201,708
|
5.11%
|
|
5.125%
Senior Unsecured Notes, due January 15, 2015
|
149,349
|
149,256
|
5.30%
|
|
5.800%
Senior Unsecured Notes, due January 15, 2016
|
200,616
|
200,692
|
5.81%
|
|
Total
Senior Unsecured Notes
|
$1,632,547
|
$1,631,482
|
6.28%
|
|
(a)
Interest rate for unsecured notes reflects effective rate of debt,
including cost of treasury lock agreement (if any), offering and other
transaction costs and the discount on the notes, as
applicable.
|
|||
89
|
9.
|
UNSECURED REVOLVING
CREDIT FACILITY
|
On June
22, 2007, the Company extended and modified its unsecured credit facility with a
group of 23 Lenders. Amongst other modifications, the facility was
extended for an additional two years and matures in June 2011, with an extension
option of one year, which would require a payment of 15 basis points of the then
borrowing capacity of the facility upon exercise. In addition, the
interest rate on outstanding borrowings (not electing the Company’s competitive
bid feature) was reduced by 10 basis points to LIBOR plus 55 basis points at the
BBB/Baa2 pricing level. As of December 31, 2007, the Company’s
outstanding borrowings carried a weighted average interest rate of LIBOR plus 55
basis points.
On
September 21, 2007, the Company exercised an option to expand the borrowing
capacity under its unsecured credit facility from $600 million to $775 million
(further expandable to $800 million).
The
facility has a competitive bid feature, which allows the Company to solicit bids
from lenders under the facility to borrow up to $300 million at interest rates
less than the current LIBOR plus 55 basis point spread. The Company
may also elect an interest rate representing the higher of the lender’s prime
rate or the Federal Funds rate plus 50 basis points. The unsecured facility also
requires a 15 basis point facility fee on the current borrowing capacity payable
quarterly in arrears.
The
interest rate and the facility fee are subject to adjustment, on a sliding
scale, based upon the operating partnership’s unsecured debt
ratings. In the event of a change in the Operating Partnership’s
unsecured debt rating, the interest and facility fee rates will be adjusted in
accordance with the following table:
|
Operating
Partnership’s
|
Interest
Rate –
|
|
|
Unsecured
Debt Ratings:
|
Applicable
Basis Points
|
Facility
Fee
|
|
S&P
Moody’s/Fitch (a)
|
Above
LIBOR
|
Basis
Points
|
|
No
ratings or less than BBB-/Baa3/BBB-
|
100.0
|
25.0
|
|
BBB-/Baa3/BBB-
|
75.0
|
20.0
|
|
BBB/Baa2/BBB
(current)
|
55.0
|
15.0
|
|
BBB+/Baa1/BBB+
|
42.5
|
15.0
|
|
A-/A3/A-
or higher
|
37.5
|
12.5
|
|
(a)
If the Operating Partnership has debt ratings from two rating agencies,
one of which is Standard & Poor’s Rating Services (“S&P”) or
Moody’s Investors Service (“Moody’s”), the rates per the above table shall
be based on the lower of such ratings. If the Operating Partnership has
debt ratings from three rating agencies, one of which is S&P or
Moody’s, the rates per the above table shall be based on the lower of the
two highest ratings. If the Operating Partnership has debt
ratings from only one agency, it will be considered to have no rating or
less than BBB-/Baa3/BBB- per the above
table.
|
||
The terms
of the unsecured facility include certain restrictions and covenants which
limit, among other things, the payment of dividends (as discussed below), the
incurrence of additional indebtedness, the incurrence of liens and the
disposition of real estate properties (to the extent that: (i) such property
dispositions cause the Company to default on any of the financial ratios of the
facility described below, or (ii) the property dispositions are completed while
the Company is under an event of default under the facility, unless, under
certain circumstances, such disposition is being carried out to cure such
default), and which require compliance with financial ratios relating to the
maximum leverage ratio, the maximum amount of secured indebtedness, the minimum
amount of tangible net worth, the minimum amount of fixed charge coverage, the
maximum amount of unsecured indebtedness, the minimum amount of unencumbered
property interest coverage and certain investment limitations. The
dividend restriction referred to above provides that, if an event of default has
occurred and is continuing, the Company will not make any excess distributions
with respect to common stock or other common equity interests except to enable
the Company to continue to qualify as a REIT under the Code.
The
lending group for the credit facility consists of: JPMorgan Chase Bank, N.A., as
administrative agent (the “Agent”); Bank of America, N.A., as syndication agent;
Scotiabanc, Inc., Wachovia Bank, National Association, and Wells Fargo Bank,
National Association, as documentation agents; SunTrust Bank, as senior managing
agent; US Bank National Association, Citicorp North America, Inc. and PNC Bank,
National Association, as managing agents; and Bank of China, New York Branch,
The Bank of New York; Chevy Chase Bank, F.S.B., The Royal Bank of Scotland PLC,
Mizuho Corporate Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. (Successor
by merger to UFJ Bank Limited), North Fork Bank, Bank Hapoalim B.M., Comerica
Bank, Chang Hwa Commercial Bank, Ltd., New York Branch, First Commercial Bank,
New York Agency, Mega International Commercial Bank Co. Ltd., New York Branch,
Deutsche Bank Trust Company Americas and Hua Nan Commercial Bank, New York
Agency, as participants.
90
SUMMARY
As of
December 31, 2007 and 2006, the Company had outstanding borrowings of $250
million and $145 million, respectively, under its unsecured revolving credit
facility.
|
10.
|
MORTGAGES, LOANS
PAYABLE AND OTHER
OBLIGATIONS
|
The
Company has mortgages, loans payable and other obligations which primarily
consist of various loans collateralized by certain of the Company’s rental
properties. As of December 31, 2007, 19 of the Company’s properties,
with a total book value of approximately $548 million, are encumbered by the
Company’s mortgages and loans payable. Payments on mortgages, loans
payable and other obligations are generally due in monthly installments of
principal and interest, or interest only.
A summary of the Company’s mortgages,
loans payable and other obligations as of December 31, 2007 and 2006 is as
follows: (dollars in
thousands)
|
Effective
|
Principal
Balance at
|
|||||||
|
Interest
|
December
31,
|
|||||||
|
Property
Name
|
Lender
|
Rate
(a)
|
2007
|
2006
|
Maturity
|
|||
|
Mack-Cali
Airport
|
Allstate
Life Insurance Co.
|
7.05%
|
--
|
$ 9,422
|
04/01/07
(b)
|
|||
|
6303
Ivy Lane
|
State
Farm Life Insurance Co.
|
5.57%
|
--
|
6,020
|
07/01/07
(c)
|
|||
|
6404
Ivy Lane
|
Wachovia
CMBS
|
5.58%
|
$
13,029
|
13,665
|
08/01/08
|
|||
|
Assumed
obligations
|
Various
|
4.92%
|
27,657
|
38,742
|
05/01/09
(d)
|
|||
|
Various
(e)
|
Prudential
Insurance Co.
|
4.84%
|
150,000
|
150,000
|
01/15/10
|
|||
|
105
Challenger Road
|
Archon
Financial CMBS
|
6.24%
|
18,968
|
18,748
|
06/06/10
|
|||
|
2200
Renaissance Boulevard
|
Wachovia
CMBS
|
5.89%
|
17,442
|
17,819
|
12/01/12
|
|||
|
Soundview
Plaza
|
Morgan
Stanley CMBS
|
6.02%
|
17,575
|
18,013
|
01/01/13
|
|||
|
9200
Edmonston Road
|
Principal
Commercial Funding, L.L.C.
|
5.53%
|
5,096
|
5,232
|
05/01/13
|
|||
|
6305
Ivy Lane
|
John
Hancock Life Insurance Co.
|
5.53%
|
7,098
|
7,285
|
01/01/14
|
|||
|
395
West Passaic
|
State
Farm Life Insurance Co.
|
6.00%
|
12,596
|
12,996
|
05/01/14
|
|||
|
6301
Ivy Lane
|
John
Hancock Life Insurance Co.
|
5.52%
|
6,655
|
6,821
|
07/01/14
|
|||
|
35
Waterview
|
Wachovia
CMBS
|
6.35%
|
20,104
|
20,318
|
08/11/14
|
|||
|
500
West Putnam Avenue
|
New
York Life Ins. Co.
|
5.57%
|
--
|
25,000
|
01/10/16
(f)
|
|||
|
23
Main Street
|
JP
Morgan CMBS
|
5.59%
|
32,968
|
33,396
|
09/01/18
|
|||
|
Total
Mortgages, loans payable and other obligations:
|
$329,188
|
$383,477
|
||||||
|
(a)
Effective interest rate for mortgages loans payable and other obligations
reflects effective rate of debt, including deferred financing costs,
comprised of the cost of terminated treasury lock agreements (if any),
debt initiation costs and other transaction costs, as
applicable.
|
||||||||
|
(b)
On February 5, 2007, the Company repaid this mortgage loan at par, using
available cash.
|
||||||||
|
(c)
On February 15, 2007, the Company repaid this mortgage loan at par, using
available cash.
|
||||||||
|
(d)
The obligations mature at various times through May 2009.
|
||||||||
|
(e)
Mortgage is collateralized by seven properties.
|
||||||||
|
(f)
On June 11, 2007, the Company assigned this loan with the sale of the
property and the purchaser assumed this obligation..
|
||||||||
SCHEDULED
PRINCIPAL PAYMENTS
Scheduled principal payments and
related weighted average annual interest rates for the Company’s senior
unsecured notes (see Note 8), unsecured revolving credit facility and mortgages,
loans payable and other obligations as of December 31, 2007 are as follows:
(dollars in
thousands)
91
|
Weighted
Avg.
|
||||
|
Scheduled
|
Principal
|
Interest
Rate of
|
||
|
Period
|
Amortization
|
Maturities
|
Total
|
Future
Repayments (a)
|
|
2008
|
$21,191
|
$ 12,563
|
$ 33,754
|
5.21%
|
|
2009
|
11,471
|
300,000
|
311,471
|
7.40%
|
|
2010
|
2,583
|
334,500
|
337,083
|
5.26%
|
|
2011
|
2,745
|
550,000
|
552,745
|
6.84%
|
|
2012
|
2,864
|
210,148
|
213,012
|
6.13%
|
|
Thereafter
|
5,702
|
760,618
|
766,320
|
5.41%
|
|
Sub-total
|
46,556
|
2,167,829
|
2,214,385
|
6.08%
|
|
Adjustment
for unamortized debt
|
||||
|
discount/premium,
net, as of
|
||||
|
December
31, 2007
|
(2,650)
|
0
|
(2,650)
|
|
|
Totals/Weighted
Average
|
$43,906
|
$2,167,829
|
$2,211,735
|
6.08%
|
|
(a)
|
Actual
weighted average LIBOR contract rates relating to the Company’s
outstanding debt as of December 31, 2007 of 5.01 percent was used in
calculating revolving credit facility and other variable rate debt
interest rates.
|
CASH
PAID FOR INTEREST AND INTEREST CAPITALIZED
Cash paid
for interest for the years ended December 31, 2007, 2006 and 2005 was
$128,678,000, $132,904,000, and $115,359,000, respectively. Interest
capitalized by the Company for the years ended December 31, 2007, 2006 and 2005
was $5,101,000, $6,058,000 and $5,518,000, respectively.
SUMMARY
OF INDEBTEDNESS
As of
December 31, 2007 the Company’s total indebtedness of $2,211,735,000 (weighted
average interest rate of 6.08 percent) was comprised of $250,000,000 of
revolving credit facility borrowings (weighted average rate of 5.55 percent) and
fixed rate debt and other obligations of $1,961,735,000 (weighted average rate
of 6.15 percent).
As of
December 31, 2006, the Company’s total indebtedness of $2,159,959,000 (weighted
average interest rate of 6.11 percent) was comprised of $145,000,000 of
revolving credit facility borrowings (weighted average rate of 5.76 percent) and
fixed rate debt and other obligations of $2,014,959,000 (weighted average rate
of 6.14 percent).
|
11.
|
MINORITY
INTERESTS
|
OPERATING
PARTNERSHIP
Minority
interests in the accompanying consolidated financial statements relate to (i)
preferred units (“Preferred Units”) and common units in the Operating
Partnership, held by parties other than the Company, and (ii) interests in
consolidated joint ventures for the portion of such properties not owned by the
Company.
Preferred
Units
The
Operating Partnership has one class of outstanding Preferred Units, the Series C
Preferred Units, and one class of Preferred Units, the Series B Preferred Units,
which were converted to common units on June 13, 2005, each of which are
described as follows:
Series
C
In
connection with the Company’s issuance of $25 million of Series C cumulative
redeemable perpetual preferred stock, the Company acquired from the Operating
Partnership $25 million of Series C Preferred Units (the “Series C Preferred
Units”), which have terms essentially identical to the Series C preferred
stock. See Note 16: Stockholders’ Equity – Preferred
Stock.
92
Series
B
The
Series B Preferred Units had a stated value of $1,000 per unit and were
preferred as to assets over any class of common units or other class of
preferred units of the Company, based on circumstances per the applicable unit
certificates. The quarterly distribution on each Series B Preferred
Unit was an amount equal to the greater of (i) $16.875 (representing 6.75
percent of the Series B Preferred Unit stated value of an annualized basis) or
(ii) the quarterly distribution attributable to a Series B Preferred Unit
determined as if such unit had been converted into common units, subject to
adjustment for customary anti-dilution rights.
On June
13, 2005, the Operating Partnership caused the mandatory conversion (the
“Conversion”) of all 215,018 outstanding Series B Preferred Units into
6,205,425.72 Common Units. Each Series B Preferred Unit was converted
into whole and fractional Common Units equal to (x) the $1,000 stated value,
divided by (y) the conversion price of $34.65. A description of the
rights, preferences and privileges of the Common Units is set forth
below.
Common
Units
Certain individuals and entities own
common units in the Operating Partnership. A common unit and a share
of common stock of the Company have substantially the same economic
characteristics in as much as they effectively share equally in the net income
or loss of the Operating Partnership. Common units are redeemable by
the common unitholders at their option, subject to certain restrictions, on the
basis of one common unit for either one share of common stock or cash equal to
the fair market value of a share at the time of the redemption. The
Company has the option to deliver shares of common stock in exchange for all or
any portion of the cash requested. The common unitholders may not put
the units for cash to the Company or the Operating Partnership. When
a unitholder redeems a common unit, minority interest in the Operating
Partnership is reduced and the Company’s investment in the Operating Partnership
is increased.
Unit
Transactions
The following table sets forth the
changes in minority interest which relate to the Series B Preferred Units and
common units in the Operating Partnership for the years ended December 31, 2007,
2006 and 2005: (dollars
in thousands)
|
Series
B
|
Series
B
|
||||
|
Preferred
|
Common
|
Preferred
|
Common
|
||
|
Units
|
Units
|
Unitholders
|
Unitholders
|
Total
|
|
|
Balance
at January 1, 2005
|
215,018
|
7,616,447
|
$220,547
|
$196,308
|
$416,855
|
|
Net income
|
--
|
--
|
3,909
|
18,722
|
22,631
|
|
Distributions
|
--
|
--
|
(3,909)
|
(30,754)
|
(34,663)
|
|
Conversion of Preferred
Units
|
|||||
|
into common units
|
(215,018)
|
6,205,426
|
(220,547)
|
220,547
|
--
|
|
Issuance of common
units
|
--
|
63,328
|
--
|
2,786
|
2,786
|
|
Redemption of
common
|
|||||
|
units for shares
of
|
|||||
|
common stock
|
--
|
(234,762)
|
--
|
(6,790)
|
(6,790)
|
|
Balance
at December 31, 2005
|
--
|
13,650,439
|
--
|
$400,819
|
$400,819
|
|
Net income
|
--
|
--
|
--
|
35,026
|
35,026
|
|
Distributions
|
--
|
--
|
--
|
(38,585)
|
(38,585)
|
|
Issuance of common
units
|
--
|
2,167,053
|
--
|
97,517
|
97,517
|
|
Redemption of
common
|
|||||
|
units for shares
of
|
|||||
|
common stock
|
--
|
(475,209)
|
--
|
(14,674)
|
(14,674)
|
|
Balance
at December 31, 2006
|
--
|
15,342,283
|
--
|
$480,103
|
$480,103
|
|
Net income
|
--
|
--
|
--
|
24,500
|
24,500
|
|
Distributions
|
--
|
--
|
--
|
(38,788)
|
(38,788)
|
|
Issuance of common
units
|
--
|
114,911
|
--
|
5,244
|
5,244
|
|
Redemption of
common
|
|||||
|
units for shares
of
|
|||||
|
common stock
|
--
|
(471,656)
|
--
|
(14,623)
|
(14,623)
|
|
Balance
at December 31, 2007
|
--
|
14,985,538
|
--
|
$456,436
|
$456,436
|
93
Minority
Interest Ownership
As of
December 31, 2007 and December 31, 2006, the minority interest common
unitholders owned 18.5 percent and 19.6 percent of the Operating Partnership,
respectively.
CONSOLIDATED
JOINT VENTURES
The
Company has ownership interests in certain joint ventures which it
consolidates. Various entities and/or individuals hold minority
interests in many of these ventures.
|
12.
|
EMPLOYEE BENEFIT
401(k) PLANS
|
Employees
of the Company who meet certain minimum age and period of service requirements
are eligible to participate in a 401(k) defined contribution plan (the “401(k)
Plan”). The 401(k) Plan allows eligible employees to defer from 1 to
30 percent of their annual compensation, subject to certain limitations imposed
by federal law. The amounts contributed by employees are immediately
vested and non-forfeitable. The Company, at management’s discretion,
may match employee contributions and/or make discretionary
contributions. Total expense recognized by the Company for the 401(k)
Plan for each of the three years ended December 31, 2007, 2006 and 2005 was
$400,000.
All
employees of the Gale Company and other affiliated participating employers,
other than certain employees who are represented for collective bargaining
purposes by a labor organization, who meet certain minimum age and period of
service requirements are eligible to participate in a 401(k) defined
contribution plan (the “Gale Plan”). The Gale Plan allows eligible
employees to defer from their annual compensation, the maximum amount permitted
under federal law. The amounts contributed by employees are
immediately vested and non-forfeitable. The Gale Company or the
participant’s employer matches the employee’s deferral at the rate of 50 percent
on the first six percent of the employee’s annual compensation for employees who
have at least 1,000 hours of service and are employed on the last day of the
plan year. In addition, the Company, at management’s discretion, may
make discretionary contributions. Participants become 50 percent
vested in employer contributions after two years of service and become 100
percent vested after three years of service. Effective April 1, 2007,
the Gale Plan was merged into the 401(k) Plan. In accordance with the
Gale/Green transactions, the Company continued to make matching contributions to
former Gale Plan participants under the Gale Plan matching contribution formula
through the payroll period ending May 4, 2007. Moreover, federal law
requires the Company to preserve (i) the Gale Plan vesting schedule for certain
Gale Plan participants with three or more years of service as of May 4, 2007 and
(ii) certain benefits previously offered under the Gale Plan. Total
expense recognized after the completion of the Gale/Green Transactions by the
Company for the Gale Plan for the years ended December 31, 2007 and 2006 was
$111,000 and $370,000, respectively.
|
13.
|
DISCLOSURE OF FAIR
VALUE OF FINANCIAL
INSTRUMENTS
|
The
following disclosure of estimated fair value was determined by management using
available market information and appropriate valuation
methodologies. However, considerable judgment is necessary to
interpret market data and develop estimated fair value. Accordingly,
the estimates presented herein are not necessarily indicative of the amounts the
Company could realize on disposition of the financial instruments at December
31, 2007 and 2006. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.
Cash
equivalents, marketable securities, receivables, accounts payable, and accrued
expenses and other liabilities are carried at amounts which reasonably
approximate their fair values as of December 31, 2007 and 2006.
The fair
value of the fixed-rate mortgage debt and unsecured notes as of December 31,
2007 and 2006 approximated the book value of approximately $2.0 billion as of
December 31, 2007 and 2006. The fair value of the mortgage debt and
the unsecured notes was determined by discounting the future contractual
interest and principal payments by a market rate.
Disclosure
about fair value of financial instruments is based on pertinent information
available to management as of December 31, 2007 and 2006. Although
management is not aware of any factors that would significantly affect the fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since December 31, 2007 and current estimates of
fair value may differ significantly from the amounts presented
herein.
94
|
14.
|
COMMITMENTS AND
CONTINGENCIES
|
TAX
ABATEMENT AGREEMENTS
Harborside
Financial Center
Pursuant
to agreements with the City of Jersey City, New Jersey, the Company is required
to make payments in lieu of property taxes (“PILOT”) on certain of its
properties located in Jersey City, as follows:
The
Harborside Plaza 4-A agreement, which commenced in 2000, is for a term of 20
years. The PILOT is equal to two percent of Total Project costs, as
defined, and increases by 10 percent in years 7, 10 and 13 and by 50 percent in
year 16. Total Project costs, as defined, are $45.5
million. The PILOT totaled $1,001,000 for the year ended December 31,
2007 and $910,000 for each of the years ended December 31, 2006 and
2005.
The
Harborside Plaza 5 agreement, as amended, which commenced in 2002 upon
substantial completion of the property, as defined, is for a term of 20
years. The PILOT is equal to two percent of Total Project
Costs. Total Project Costs, as defined, are $159.6
million. The PILOT totaled $3.2 million for each of the years ended
December 31, 2007, 2006 and 2005.
At the
conclusion of the above-referenced PILOT agreements, it is expected that the
properties will be assessed by the municipality and be subject to real estate
taxes at the then prevailing rates.
LITIGATION
The
Company is a defendant in litigation arising in the normal course of its
business activities. Management does not believe that the ultimate
resolution of these matters will have a materially adverse effect upon the
Company’s financial condition taken as whole.
GROUND
LEASE AGREEMENTS
Future minimum rental payments under
the terms of all non-cancelable ground leases under which the Company is the
lessee, as of December 31, 2007, are as follows: (dollars in
thousands)
|
Year
|
Amount
|
|
2008
|
$ 486
|
|
2009
|
501
|
|
2010
|
501
|
|
2011
|
501
|
|
2012
|
501
|
|
2013
through 2084
|
34,952
|
|
Total
|
$37,442
|
Ground
lease expense incurred by the Company during the years ended December 31, 2007,
2006 and 2005 amounted to $663,000, $698,000 and $606,000,
respectively.
OTHER
The
Company may not dispose of or distribute certain of its properties, currently
comprising 11 properties with an aggregate net book value of approximately
$208.1 million, which were originally contributed by the sellers of certain
properties to the Company, without the express written consent of a
representative of the contributors of such properties, except in a manner which
does not result in recognition of any built-in-gain (which may result in an
income tax liability) or which reimburses the appropriate members for the tax
consequences of the recognition of such built-in-gains. These transfer
restrictions are scheduled to expire periodically through 2016.
Additionally, the Company may not dispose of or distribute two properties with
an aggregate net book value of approximately $12.8 million, which were
originally contributed by members of the Cali Group (which includes John R.
Cali, director, and John J. Cali, a former director) under similar terms and
conditions, for which such restrictions are scheduled to expire in June 2008.
The aforementioned restrictions do not apply in the event that the Company sells
all of its properties or in connection with a sale transaction which the
Company’s Board of Directors determines is reasonably necessary to satisfy a
material monetary default on any unsecured debt, judgment or liability of the
Company or to cure any material monetary default on any mortgage secured by a
property. Upon expiration, the Company generally is required to use
commercially reasonable efforts to prevent any sale, transfer or other
disposition of the subject properties from resulting in the recognition of
built-in gain to the contributors of the properties. 124 of the Company’s
properties which were originally contributed by members of either the Mack Group
(which includes William L. Mack, Chairman of the Company’s Board of Directors;
David S. Mack, director; Earle I. Mack, a former director; and Mitchell E.
Hersh, president, chief executive officer and director), the Robert Martin Group
(which includes Martin S. Berger, director; Robert F. Weinberg, a former
director; and Timothy M. Jones, former president), the Cali Group (which
includes John R. Cali, director, and John J. Cali, a former director) or certain
other common unitholders, with an aggregate net book value of approximately $1.9
billion, have lapsed restrictions and are subject to these
conditions.
95
|
15.
|
TENANT
LEASES
|
The
Properties are leased to tenants under operating leases with various expiration
dates through 2026. Substantially all of the leases provide for
annual base rents plus recoveries and escalation charges based upon the tenant’s
proportionate share of and/or increases in real estate taxes and certain
operating costs, as defined, and the pass-through of charges for electrical
usage.
Future minimum rentals to be received
under non-cancelable operating leases at December 31, 2007 are as
follows: (dollars in
thousands)
|
Year
|
Amount
|
|
2008
|
$ 574,203
|
|
2009
|
540,826
|
|
2010
|
478,828
|
|
2011
|
410,746
|
|
2012
|
342,727
|
|
2013
and thereafter
|
1,068,116
|
|
Total
|
$3,415,446
|
|
16.
|
STOCKHOLDERS’
EQUITY
|
To
maintain its qualification as a REIT, not more than 50 percent in value of the
outstanding shares of the Company may be owned, directly or indirectly, by five
or fewer individuals at any time during the last half of any taxable year of the
Company, other than its initial taxable year (defined to include certain
entities), applying certain constructive ownership rules. To help
ensure that the Company will not fail this test, the Company’s Articles of
Incorporation provide for, among other things, certain restrictions on the
transfer of common stock to prevent further concentration of stock
ownership. Moreover, to evidence compliance with these requirements,
the Company must maintain records that disclose the actual ownership of its
outstanding common stock and demands written statements each year from the
holders of record of designated percentages of its common stock requesting the
disclosure of the beneficial owners of such common stock.
COMMON
STOCK
On
February 7, 2007, the Company completed an underwritten offer and sale of
4,650,000 shares of its common stock and used the net proceeds, which totaled
approximately $252 million (after offering costs), primarily to pay down its
outstanding borrowings under the Company’s revolving credit facility and general
corporate purposes.
PREFERRED
STOCK
On March
14, 2003, in a publicly registered transaction with a single institutional
buyer, the Company completed the sale and issuance of 10,000 shares of
eight-percent Series C cumulative redeemable perpetual preferred stock (“Series
C Preferred Stock”) in the form of 1,000,000 depositary shares ($25 stated value
per depositary share). Each depositary share represents 1/100th of a
share of Series C Preferred Stock. The Company received net proceeds
of approximately $24.8 million from the sale. See Note 11: Minority
Interests – Operating Partnership – Preferred Units.
96
The
Series C Preferred Stock has preference rights with respect to liquidation and
distributions over the common stock. Holders of the Series C Preferred Stock,
except under certain limited conditions, will not be entitled to vote on any
matters. In the event of a cumulative arrearage equal to six
quarterly dividends, holders of the Series C Preferred Stock will have the right
to elect two additional members to serve on the Company’s Board of Directors
until dividends have been paid in full. At December 31, 2007, there
were no dividends in arrears. The Company may issue unlimited
additional preferred stock ranking on a parity with the Series C Preferred Stock
but may not issue any preferred stock senior to the Series C Preferred Stock
without the consent of two-thirds of its holders. The Series C
Preferred Stock is essentially on an equivalent basis in priority with the
Preferred Units.
Except
under certain conditions relating to the Company’s qualification as a REIT, the
Series C Preferred Stock is not redeemable prior to March 14,
2008. On and after such date, the Series C Preferred Stock will be
redeemable at the option of the Company, in whole or in part, at $25 per
depositary share, plus accrued and unpaid dividends.
SHARE
REPURCHASE PROGRAM
On
September 12, 2007, the Board of Directors authorized an increase to the
Company’s repurchase program under which the Company was permitted to purchase
up to $150 million of the Company’s outstanding common stock (“Repurchase
Program”). During the year ended December 31, 2007 and through
February 8, 2008, the Company purchased and retired 2,893,630 shares of its
outstanding common stock for an aggregate cost of approximately $104
million. The Company has a remaining authorization to repurchase up
to approximately $46 million of its outstanding common stock, which it may
repurchase from time to time in open market transactions at prevailing prices or
through privately negotiated transactions.
DIVIDEND
REINVESTMENT AND STOCK PURCHASE PLAN
The
Company has a dividend reinvestment and stock purchase plan, which commenced in
March 1999.
SHAREHOLDER
RIGHTS PLAN
On June
10, 1999, the Board of Directors of the Company authorized a dividend
distribution of one preferred share purchase right (“Right”) for each
outstanding share of common stock which were distributed to all holders of
record of the common stock on July 6, 1999. Each Right entitles the
registered holder to purchase from the Company one one-thousandth of a share of
Series A junior participating preferred stock, par value $0.01 per share
(“Preferred Shares”), at a price of $100.00 per one one-thousandth of a
Preferred Share (“Purchase Price”), subject to adjustment as provided in the
rights agreement. The Rights expire on July 6, 2009, unless the
expiration date is extended or the Right is redeemed or exchanged earlier by the
Company.
The
Rights are attached to each share of common stock. The Rights are
generally exercisable only if a person or group becomes the beneficial owner of
15 percent or more of the outstanding common stock or announces a tender offer
for 15 percent or more of the outstanding common stock (“Acquiring
Person”). In the event that a person or group becomes an Acquiring
Person, each holder of a Right will have the right to receive, upon exercise,
common stock having a market value equal to two times the Purchase Price of the
Right.
STOCK
OPTION PLANS
In May
2004, the Company established the 2004 Incentive Stock Plan under which a total
of 2,500,000 shares have been reserved for issuance. No options have
been granted through December 31, 2007 under this plan. In September
2000, the Company established the 2000 Employee Stock Option Plan (“2000
Employee Plan”) and the Amended and Restated 2000 Director Stock Option Plan
(“2000 Director Plan”). In May 2002, shareholders of the Company
approved amendments to both plans to increase the total shares reserved for
issuance under both of the 2000 plans from 2,700,000 to 4,350,000 shares of the
Company’s common stock (from 2,500,000 to 4,000,000 shares under the 2000
Employee Plan and from 200,000 to 350,000 shares under the 2000 Director
Plan). In 1994, and as subsequently amended, the Company established
the Mack-Cali Employee Stock Option Plan (“Employee Plan”) and the Mack-Cali
Director Stock Option Plan (“Director Plan”) under which a total of 5,380,188
shares (subject to adjustment) of the Company’s common stock had been reserved
for issuance (4,980,188 shares under the Employee Plan and 400,000 shares under
the Director Plan). As the Employee Plan and Director Plan expired in
2004, stock options may no longer be issued under those plans. Stock
options granted under the Employee Plan in 1994 and 1995 became exercisable over
a three-year period. Stock options granted under the 2000 Employee
Plan and those options granted subsequent to 1995 under the Employee Plan become
exercisable over a five-year period. All stock options granted under
both the 2000 Director Plan and Director Plan become exercisable in one
year. All options were granted at the fair market value at the dates
of grant and have terms of ten years. As of December 31, 2007 and
December 31, 2006, the stock options outstanding had a weighted average
remaining contractual life of approximately 4.1 and 4.7 years,
respectively. Stock options exercisable at December 31, 2007 and
December 31, 2006 had a weighted average remaining contractual life of
approximately 4.0 and 4.5 years, respectively.
97
Information
regarding the Company’s stock option plans is summarized below:
|
Weighted
|
Aggregate
|
||
|
Shares
|
Average
|
Intrinsic
|
|
|
Under
|
Exercise
|
Value
|
|
|
Options
|
Price
|
$(000’s)
|
|
|
Outstanding
at January 1, 2005
|
1,703,631
|
$29.31
|
|
|
Granted
|
5,000
|
$45.47
|
|
|
Exercised
|
(574,506)
|
$28.92
|
|
|
Lapsed
or canceled
|
(50,540)
|
$28.60
|
|
|
Outstanding
at December 31, 2005
|
1,083,585
|
$29.63
|
|
|
Exercised
|
(352,699)
|
$29.65
|
|
|
Lapsed
or canceled
|
(40,580)
|
$28.53
|
|
|
Outstanding
at December 31, 2006
|
690,306
|
$29.68
|
|
|
Exercised
|
(132,770)
|
$28.63
|
|
|
Lapsed
or canceled
|
(59,805)
|
$37.44
|
|
|
Outstanding
at December 31, 2007 ($26.75 – $45.47)
|
497,731
|
$29.03
|
$ 2,776
|
|
Options
exercisable at December 31, 2006
|
571,026
|
$29.94
|
$12,017
|
|
Options
exercisable at December 31, 2007
|
497,731
|
$29.03
|
$ 2,474
|
|
Available
for grant at December 31, 2006
|
4,547,214
|
||
|
Available
for grant at December 31, 2007
|
4,537,574
|
The
weighted average fair value of options granted during 2005 was $3.62 per option.
The fair value of each significant option grant is estimated on the date of
grant using the Black-Scholes model. The following weighted average
assumptions are included in the Company’s fair value calculations of stock
options granted during the year ended December 31, 2005.
|
Expected
life (in years)
|
6
|
||
|
Risk-free
interest rate
|
3.97%
|
||
|
Volatility
|
15.00%
|
||
|
Dividend
yield
|
5.54%
|
No stock
options were granted during the year ended December 31, 2007 and
2006.
Cash
received from options exercised under all stock option plans was $3.8 million,
$10.5 million and $16.6 million for the years ended December 31, 2007, 2006 and
2005, respectively. The total intrinsic value of options exercised
during the years ended December 31, 2007, 2006 and 2005 was $3.2 million, $6.2
million and $9.1 million, respectively. The Company has a policy of
issuing new shares to satisfy stock option exercises.
The
Company recognized stock options expense of $132,000, $465,000 and $448,000 for
the years ended December 31, 2007, 2006 and 2005, respectively. As of
December 31, 2007, the Company had $11.7 million of total unrecognized
compensation cost related to unvested stock compensation granted under the
Company’s stock compensation plans. That cost is expected to be
recognized over a weighted average period of 4.5 years.
98
STOCK
COMPENSATION
The
Company has granted stock awards (“Restricted Stock Awards”) to officers,
certain other employees, and non-employee members of the Board of Directors of
the Company, which allow the holders to each receive a certain amount of shares
of the Company’s common stock generally over a one to five-year vesting period
and generally based on time and service, of which 170,811 shares were
outstanding at December 31, 2007. Of the outstanding Restricted Stock
Awards granted to executive officers and senior management, 49,673 are
contingent upon the Company meeting certain performance and/or stock price
appreciation objectives. All Restricted Stock Awards provided to the
officers and certain other employees were granted under the 2000 Employee Plan
and the Employee Plan. Restricted Stock Awards granted to directors
were granted under the 2000 Director Plan.
Information
regarding the Restricted Stock Awards is summarized below:
|
Weighted-Average
|
||
|
Grant
– Date
|
||
|
Shares
|
Fair
Value
|
|
|
Outstanding
at January 1, 2005
|
198,703
|
$ 33.19
|
|
Granted
(a)
|
165,660
|
$ 43.41
|
|
Vested
|
(109,419)
|
$ 40.36
|
|
Forfeited
|
(8,000)
|
$ 43.85
|
|
Outstanding
at December 31, 2005
|
246,944
|
$ 37.17
|
|
Granted
(b)
|
81,034
|
$ 52.94
|
|
Vested
|
(102,808)
|
$ 43.72
|
|
Forfeited
|
(8,550)
|
$ 43.59
|
|
Outstanding
at December 31, 2006
|
216,620
|
$ 39.78
|
|
Granted
(c)
|
113,118
|
$ 36.29
|
|
Vested
|
(158,927)
|
$ 42.10
|
|
Outstanding
at December 31, 2007
|
170,811
|
$ 35.32
|
|
(a)
Included in the 165,660 Restricted Stock Awards granted in 2005 were
37,960 awards granted to the Company’s four executive officers, Mitchell
E. Hersh, Barry Lefkowitz, Roger W. Thomas and Michael
Grossman.
|
||
|
(b)
Included in the 81,034 Restricted Stock Awards granted in 2006 were 67,834
awards granted to the Company’s five executive officers, Mitchell E.
Hersh, Barry Lefkowitz, Roger W. Thomas, Michael Grossman and Mark
Yeager.
|
||
|
(c)
Included in the 113,118 Restricted Stock Awards granted in 2007 were
82,518 awards granted to the Company’s five executive officers, Mitchell
E. Hersh, Barry Lefkowitz, Roger W. Thomas, Michael Grossman and Mark
Yeager.
|
||
On
September 12, 2007, the Board of Directors of the Company approved the
recommendations and ratified the determinations of the Executive Compensation
and Option Committee of the Board of Directors (the “Committee”) with respect to
new Restricted Stock Awards totaling 230,586 shares for its executive
officers.
The
Restricted Stock Awards may vest commencing January 1, 2009, with the number of
Restricted Stock Awards scheduled to be vested and earned on each vesting date
on an annual basis over a five to seven year vesting schedule, with each annual
vesting of each tranche of Restricted Stock Awards is subject to the attainment
of annual performance goals to be set by the Committee for each year. In
connection with the authorization of the Restricted Stock Awards, the Company
also authorized the entering into of tax gross-up agreements with each of the
executive officers.
DEFERRED
STOCK COMPENSATION PLAN FOR DIRECTORS
The
Deferred Compensation Plan for Directors, which commenced January 1, 1999,
allows non-employee directors of the Company to elect to defer up to 100 percent
of their annual retainer fee into deferred stock units. The deferred
stock units are convertible into an equal number of shares of common stock upon
the directors’ termination of service from the Board of Directors or a change in
control of the Company, as defined in the plan. Deferred stock units
are credited to each director quarterly using the closing price of the Company’s
common stock on the applicable dividend record date for the respective
quarter. Each participating director’s account is also credited for
an equivalent amount of deferred stock units based on the dividend rate for each
quarter.
99
During
the years ended December 31, 2007, 2006 and 2005, 8,054, 6,266 and 6,655
deferred stock units were earned, respectively. As of December 31,
2007 and 2006, there were 44,179 and 37,263 director stock units outstanding,
respectively.
EARNINGS
PER SHARE
Basic EPS
excludes dilution and is computed by dividing net income available to common
shareholders by the weighted average number of shares outstanding for the
period. Diluted EPS reflects the potential dilution that could occur
if securities or other contracts to issue common stock were exercised or
converted into common stock.
The following information presents the
Company’s results for the years ended December 31, 2007, 2006 and 2005 in
accordance with FASB No. 128: (dollars in
thousands)
|
Year
Ended December 31,
|
|||
|
Computation
of Basic EPS
|
2007
|
2006
|
2005
|
|
Income
from continuing operations
|
$ 73,129
|
$ 84,679
|
$ 73,987
|
|
Deduct: Preferred
stock dividends
|
(2,000)
|
(2,000)
|
(2,000)
|
|
Income
from continuing operations available to common
shareholders
|
71,129
|
82,679
|
71,987
|
|
Income
from discontinued operations
|
37,337
|
59,987
|
21,501
|
|
Net
income available to common shareholders
|
$108,466
|
$142,666
|
$ 93,488
|
|
Weighted
average common shares
|
67,026
|
62,237
|
61,477
|
|
Basic
EPS:
|
|||
|
Income
from continuing operations
|
$ 1.06
|
$ 1.33
|
$ 1.17
|
|
Income
from discontinued operations
|
0.56
|
0.96
|
0.35
|
|
Net
income available to common shareholders
|
$ 1.62
|
$ 2.29
|
$ 1.52
|
|
Year
Ended December 31,
|
|||
|
Computation
of Diluted EPS
|
2007
|
2006
|
2005
|
|
Income
from continuing operations available to common
shareholders
|
$ 71,129
|
$ 82,679
|
$ 71,987
|
|
Add: Income
from continuing operations attributable to
|
|
||
|
Operating
Partnership – common units
|
16,126
|
20,121
|
14,329
|
|
Income
from continuing operations for diluted earnings per share
|
87,255
|
102,800
|
86,316
|
|
Income
from discontinued operations for diluted earnings per
share
|
45,711
|
74,892
|
25,894
|
|
Net
income available to common shareholders
|
$132,966
|
$177,692
|
$112,210
|
|
Weighted
average common shares
|
82,500
|
77,901
|
74,189
|
|
Diluted
EPS:
|
|||
|
Income
from continuing operations
|
$ 1.06
|
$ 1.32
|
$ 1.16
|
|
Income
from discontinued operations
|
0.55
|
0.96
|
0.35
|
|
Net
income available to common shareholders
|
$ 1.61
|
$ 2.28
|
$ 1.51
|
100
The
following schedule reconciles the shares used in the basic EPS calculation to
the shares used in the diluted EPS calculation:
|
Year
Ended December 31,
|
|||
|
2007
|
2006
|
2005
|
|
|
Basic
EPS shares
|
67,026
|
62,237
|
61,477
|
|
Add:
Operating Partnership – common units
|
15,190
|
15,286
|
12,252
|
|
Stock
options
|
185
|
310
|
401
|
|
Restricted
Stock Awards
|
99
|
68
|
59
|
|
Stock
Warrants
|
--
|
--
|
--
|
|
Diluted
EPS Shares
|
82,500
|
77,901
|
74,189
|
Not
included in the computations of diluted EPS were 5,000, 0, and 1,507 stock
options as such securities were anti-dilutive during the years ended December
31, 2007, 2006 and 2005, respectively. Also excluded from diluted EPS
computations was 1,530,105 Series B Preferred Units, on an as converted basis
into common units, as such securities were anti-dilutive during the year ended
December 31, 2005. Unvested restricted stock outstanding as of
December 31, 2007, 2006 and 2005 were 170,811, 216,620 and 246,944,
respectively.
101
|
17.
|
SEGMENT
REPORTING
|
The
Company operates in two business segments: (i) real estate and (ii) construction
services. The Company provides leasing, property and facilities
management, acquisition, development, construction and tenant-related services
for its portfolio. In May 2006, in conjunction with the Company’s
acquisition of the Gale Company and related businesses, the Company acquired a
business specializing solely in construction and related services whose
operations comprise the Company’s construction services segment. The
Company had no revenues from foreign countries recorded for the year ended
December 31, 2007. Included in the Company’s revenues for the year
ended December 31, 2006 was $4,806,000 derived from foreign
countries. The Company had no long lived assets in foreign locations
as of December 31, 2007 and 2006. The accounting policies of the
segments are the same as those described in Note 2: Significant Accounting
Policies, excluding depreciation and amortization.
The
Company evaluates performance based upon net operating income from the combined
properties in the real estate segment and net operating income from its
construction services segment.
102
Selected
results of operations for the years ended December 31, 2007, 2006 and 2005 and
selected asset information as of December 31, 2007 and 2006 regarding the
Company’s operating segments are as follows: (dollars in
thousands)
|
Real
Estate
|
Construction
Services
|
Corporate
&
Other (d)
|
Total
Company
|
||
|
Total
revenues:
|
|||||
|
2007
|
$ 716,932
|
$97,951
|
$ (6,533)
|
$ 808,350
|
|
|
2006
|
668,297
|
56,582
|
7,133
|
732,012
|
|
|
2005
|
589,242
|
--
|
2,749
|
591,991
|
|
|
Total
operating and interest expenses (a):
|
|||||
|
2007
|
$ 263,175
|
$96,699
|
$
170,382
|
$ 530,256
|
(e)
|
|
2006
|
257,688
|
55,871
|
174,694
|
488,253
|
(f)
|
|
2005
|
207,522
|
--
|
150,682
|
358,204
|
(g)
|
|
Equity
in earnings of unconsolidated
|
|||||
|
joint
ventures:
|
|||||
|
2007
|
$ (5,918)
|
--
|
--
|
$ (
5,918)
|
|
|
2006
|
(5,556)
|
--
|
--
|
(5,556)
|
|
|
2005
|
248
|
--
|
--
|
248
|
|
|
Net
operating income (b):
|
|||||
|
2007
|
$ 447,839
|
$ 1,252
|
$(176,915)
|
$ 272,176
|
(e)
|
|
2006
|
405,053
|
711
|
(167,561)
|
238,203
|
(f)
|
|
2005
|
381,968
|
--
|
(147,933)
|
234,035
|
(g)
|
|
Total
assets:
|
|||||
|
2007
|
$4,633,500
|
$35,019
|
$ (75,317)
|
$4,593,202
|
|
|
2006
|
4,281,222
|
28,353
|
113,314
|
4,422,889
|
|
|
Total
long-lived assets (c):
|
|||||
|
2007
|
$4,268,260
|
--
|
$ (1,017)
|
$4,267,243
|
|
|
2006
|
4,036,393
|
--
|
1,550
|
4,037,943
|
|
|
(a)
|
Total
operating and interest expenses represent the sum
of: real estate taxes; utilities; operating services;
direct construction costs; real estate services salaries, wages and other
costs; general and administrative and interest expense (net of interest
income). All interest expense, net of interest income, (including for
property-level mortgages) is excluded from segment amounts and classified
in Corporate & Other for all
periods.
|
|
(b)
|
Net
operating income represents total revenues less total operating and
interest expenses [as defined in Note (a)], plus equity in earnings (loss)
of unconsolidated joint ventures, for the
period.
|
|
(c)
|
Long-lived
assets are comprised of net investment in rental property, unbilled rents
receivable and investments in unconsolidated joint
ventures.
|
|
(d)
|
Corporate
& Other represents all corporate-level items (including interest and
other investment income, interest expense and non-property general and
administrative expense) as well as intercompany eliminations necessary to
reconcile to consolidated Company
totals.
|
|
(e)
|
Excludes
$183,564 of depreciation and
amortization.
|
|
(f)
|
Excludes
$159,096 of depreciation and
amortization.
|
|
(g)
|
Excludes
$141,771 of depreciation and
amortization.
|
103
|
18.
|
RELATED PARTY
TRANSACTIONS
|
William
L. Mack, Chairman of the Board of Directors of the Company (“W. Mack”), David S.
Mack, a director of the Company, and Earle I. Mack, a former director of the
Company (“E. Mack”), are the executive officers, directors and stockholders of a
corporation that leases approximately 7,801 square feet at one of the Company’s
office properties, which is scheduled to expire in November 2008. The
Company has recognized $233,000, $228,000 and $242,000 in revenue
under this lease for the years ended December 31, 2007, 2006 and 2005,
respectively, and had no accounts receivable from the corporation as of December
31, 2007 and 2006.
The
Company has conducted business with certain entities (“RMC Entity” or “RMC
Entities”), whose principals include Timothy M. Jones, Martin S. Berger and
Robert F. Weinberg, each of whom are affiliated with the Company as the former
president of the Company, a current member of the Board of Directors and a
former member of the Board of Directors of the Company,
respectively. In connection with the Company’s acquisition of 65
Class A properties from The Robert Martin Company (“Robert Martin”) on January
31, 1997, as subsequently modified, the Company granted Robert Martin the right
to designate one seat on the Company’s Board of Directors (“RM Board Seat”),
which right has since expired. The RM Board Seat had historically
been shared between Robert F. Weinberg and Martin S. Berger, each of whom had
agreed that, for so long as either of them serves on the Board of Directors,
that such board seat would be rotated among Mr. Berger and
Mr. Weinberg annually at the time of each annual meeting of
stockholders. At the Company’s 2003 annual meeting of stockholders,
Mr. Berger was elected to the Board of Directors and he continued to share his
board seat with Mr. Weinberg. At the Company’s 2006 annual meeting of
stockholders, Mr. Weinberg was elected to the Board of Directors and he resigned
after the Company’s 2007 annual meeting of stockholder and Mr. Berger was
appointed to his board seat. The business that the Company has
conducted with RMC Entities was as follows:
|
(1)
|
The
Company provides management, leasing and construction-related services to
properties in which RMC Entities have an ownership
interest. The Company recognized approximately $2 million, $2
million and $1.1 million in revenue from RMC Entities for the years ended
December 31, 2007, 2006 and 2005, respectively. As of December
31, 2007 and 2006, respectively, the Company had $319,000 and $131,000
accounts receivable from RMC
Entities.
|
|
(2)
|
An
RMC Entity leased space at one of the Company’s office properties for
approximately 3,330 square feet, which, after a three-year renewal and
expansion signed with the Company in 2005, now leases 4,860 square feet
which is scheduled to expire in October 2008. The Company has
recognized $132,000, $119,000 and $89,000, in revenue under this lease for
the years ended December 31, 2007, 2006 and 2005, respectively, and had
zero accounts receivable due from the RMC Entity, as of December 31, 2007
and 2006, respectively.
|
Through
June 2007, Mr. Berger held a 24 percent interest, acted as chairman and chief
executive officer, Mr. Weinberg also held a 24 percent interest and was a
director, and W. Mack held a nine percent interest and was a director of City
and Suburban Federal Savings Bank and/or one of its affiliates, which leases a
12,842 square feet of space at one of the Company’s office properties, which was
scheduled to expire in April 2013. In July 2007, Messrs. Berger,
Weinberg and Mack sold their interests and no longer are directors of City and
Suburban Federal Savings Bank and/or its affiliates. The Company
recognized $190,000, $404,000 and $396,000 in revenue under the leases for the
years ended December 31, 2007, 2006 and 2005, respectively, and had no accounts
receivable from the company as of December 31, 2007 and 2006.
Pursuant
to an agreement between the Company and certain members and associates of the
Cali family executed June 27, 2000, John J. Cali served as the Chairman Emeritus
and a Board member of the Company, and as a consultant to the Company and was
paid an annual salary of $150,000 from June 27, 2000 through June 27,
2003. Additionally, the Company provided office space and
administrative support to John J. Cali and Ed Leshowitz, his business partner
(the “Cali Group”). Such services were in effect from June 27, 2000
through June 27, 2004. From June 27, 2004 through June 26, 2005, the
Company agreed to provide office space at no cost to the Cali
Group. The Company also provides administrative support and related
services for which it was reimbursed $192,000, $184,000 and $115,000 from the
Cali Group for the years ended December 31, 2007, 2006 and 2005,
respectively. On June 27, 2005, an affiliate of the Cali Group
entered into a three-year lease for 1,825 square feet of space at one of the
Company’s office properties, which is scheduled to expire at the end of 2011. On
September 18, 2006, an affiliate of the Cali Group entered into another lease
agreement for 806 additional square feet, in the same building, commencing on
December 29, 2006, which is scheduled to expire at the end of
2011. The Company recognized approximately $68,000, $47,000 and
$24,000 in total revenue under the leases for the year ended December 31, 2007,
2006 and 2005, respectively, and had no accounts receivable from the affiliate
as of December 31, 2007 and 2006.
104
|
19.
|
IMPACT OF
RECENTLY-ISSUED ACCOUNTING
STANDARDS
|
FASB
Statement No. 157 (“FASB No. 157”), Fair Value
Measurements
FASB No.
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles (GAAP), and expands disclosures about
fair value measurements. FASB No. 157 applies under other accounting
pronouncements that require or permit fair value measurements, FASB having
previously concluded in those accounting pronouncements that fair value is their
relevant measurement attribute. Accordingly, this FASB No. 157 does
not require any new fair value measurements. However, for some
entities, the application of this FASB No. 157 will change current
practice. This statement is effective for financial statements for
fiscal years beginning after November 15, 2007. The Company does not
expect that the implementation of FASB No. 157 will have a material effect on
the Company’s consolidated financial position or results of
operations.
FINANCIAL
ACCOUNTING STANDARDS BOARD (FASB) Statement No. 159 (“FASB No.
159”), The Fair Value
Option for Financial Assets and Financial Liabilities—Including an amendment of
FASB Statement No. 115
FASB No.
159 permits entities to choose to measure many financial instruments and certain
other items at fair value. The objective is to improve financial
reporting by providing entities with the opportunity to mitigate volatility in
reported earnings caused by measuring related assets and liabilities differently
without having to apply complex hedge accounting provisions. FASB No.
159 is expected to expand the use of fair value measurement, which is consistent
with FASB’s long-term measurement objectives for accounting for financial
instruments. This Statement applies to all entities, including
not-for-profit organizations. Most of the provisions of this
Statement apply only to entities that elect the fair value
option. However, the amendment to FASB Statement No. 115, Accounting for Certain Investments
in Debt and Equity Securities, applies to all entities with
available-for-sale and trading securities. Some requirements apply
differently to entities that do not report net income.
The
following are eligible items for the measurement option established by FASB No.
159.
|
1.
|
Recognized
financial assets and financial liabilities
except:
|
|
a.
|
An
investment in a subsidiary that the entity is required to
consolidate;
|
|
b.
|
An
interest in a variable interest entity that the entity is required to
consolidate;
|
|
c.
|
Employers’
and plans’ obligations (or assets representing net overfunded positions)
for pension benefits, other postretirement benefits (including health care
and life insurance benefits), postemployment benefits, employee stock
option and stock purchase plans, and other forms of deferred compensation
arrangements, as defined in FASB Statements No. 35, Accounting and Reporting by
Defined Benefit Pension Plans, No. 87, Employers’ Accounting for
Pensions, No. 106, Employers’ Accounting for
Postretirement Benefits Other Than Pensions, No. 112, Employers’ Accounting for
Postemployment Benefits, No. 123 (revised December 2004), Share-Based Payment,
No. 43, Accounting for
Compensated Absences, No. 146, Accounting for Costs
Associated with Exit or Disposal Activities, and No. 158, Employers’ Accounting for
Defined Benefit Pension and Other Postretirement Plans, and APB
Opinion No. 12, Omnibus
Opinion—1967;
|
|
d.
|
Financial
assets and financial liabilities recognized under leases as defined in
FASB Statement No. 13, Accounting for Leases
(This exception does not apply to a guarantee of a third-party lease
obligation or a contingent obligation arising from a cancelled
lease.);
|
|
e.
|
Deposit
liabilities, withdrawable on demand, of banks, savings and loan
associations, credit unions, and other similar depository institutions;
and
|
|
f.
|
Financial
instruments that are, in whole or in part, classified by the issuer as a
component of shareholder’s equity (including “temporary
equity”). An example is a convertible debt security with a
noncontingent beneficial conversion
feature.
|
|
2.
|
Firm
commitments that would otherwise not be recognized at inception and that
involve only financial instruments.
|
|
3.
|
Nonfinancial
insurance contracts and warranties that the insurer can settle by paying a
third party to provide those goods or
services.
|
|
4.
|
Host
financial instruments resulting from separation of an embedded
nonfinancial derivative instrument from a nonfinancial hybrid
instrument.
|
105
The fair
value option established by FASB No. 159 permits all entities to choose to
measure eligible items at fair value at specified election dates. A
business entity shall report unrealized gains and losses on items for which the
fair value option has been elected in earnings (or another performance indicator
if the business entity does not report earnings) at each subsequent reporting
date. FASB No. 159 is effective as of the beginning of an entity’s
first fiscal year that begins after November 15, 2007. The Company does
not expect that the implementation of FASB No. 159 will have a material effect
on the Company’s consolidated financial position or results of
operations.
FASB
Statement No. 141(R) – (revised 2007), (“FASB No. 141(R)”), Business
Combinations
In
December 2007, the FASB issued FASB No. 141(R) which establishes principles
and requirements for how the acquirer shall recognize and measure in its
financial statements the identifiable assets acquired, liabilities assumed, any
noncontrolling interest in the acquiree and goodwill acquired in a business
combination. This statement is effective for business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. The Company is
currently assessing the potential impact that the adoption of FASB No. 141(R)
will have on its financial position and results of operations.
FASB
Statement No. 160 (“FASB No. 160”), Noncontrolling Interests in
Consolidated Financial Statements — an Amendment of ARB
No. 51
In
December 2007, the FASB issued No. 160, which establishes and expands accounting
and reporting standards for minority interests, which will be recharacterized as
noncontrolling interests, in a subsidiary and the deconsolidation of a
subsidiary. FASB 160 is effective for business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. This statement is effective
for fiscal years beginning on or after December 15, 2008. The Company
is currently assessing the potential impact that the adoption of FASB No. 160
will have on its financial position and results of operations.
106
|
20.
|
CONDENSED QUARTERLY
FINANCIAL INFORMATION (unaudited)
|
The following summarizes the condensed
quarterly financial information for the Company: (dollars in
thousands)
|
Quarter
Ended 2007:
|
December
31
|
September
30
|
June
30
|
March
31
|
|
Total
revenues
|
$201,682
|
$212,881
|
$200,530
|
$193,257
|
|
Operating
and other expenses
|
67,281
|
71,462
|
66,529
|
65,641
|
|
Direct
construction costs
|
19,155
|
22,479
|
22,634
|
20,911
|
|
General
and administrative
|
14,811
|
13,411
|
12,870
|
11,070
|
|
Depreciation
and amortization
|
48,500
|
49,790
|
43,823
|
41,451
|
|
Total expenses
|
149,747
|
157,142
|
145,856
|
139,073
|
|
Operating
Income
|
51,935
|
55,739
|
54,674
|
54,184
|
|
Interest
expense
|
(32,240)
|
(32,163)
|
(31,333)
|
(30,936)
|
|
Interest
and other investment income
|
497
|
985
|
1,571
|
1,617
|
|
Equity
in earnings (loss) of unconsolidated
|
||||
|
joint ventures
|
(432)
|
(1,559)
|
(1,696)
|
(2,231)
|
|
Minority
interest in consolidated joint ventures
|
151
|
51
|
214
|
227
|
|
Gain
on sale of investment in marketable securities
|
--
|
--
|
--
|
--
|
|
Gain
on sale of investment in unconsolidated
|
||||
|
joint ventures
|
--
|
--
|
--
|
--
|
|
Gain/(loss)
on sale of land and other assets
|
--
|
--
|
--
|
--
|
|
Total other (expense)
income
|
(32,024)
|
(32,686)
|
(31,244)
|
(31,323)
|
|
Income
from continuing operations before minority
|
||||
|
interest in Operating
Partnership
|
19,911
|
23,053
|
23,430
|
22,861
|
|
Minority
interest in Operating Partnership
|
(3,562)
|
(4,146)
|
(4,197)
|
(4,221)
|
|
Income
from continuing operations
|
16,349
|
18,907
|
19,233
|
18,640
|
|
Discontinued
operations (net of minority interest):
|
||||
|
Income from discontinued
operations
|
--
|
20
|
598
|
439
|
|
Realized gains (losses) and
unrealized losses
|
||||
|
on disposition of
rental property, net
|
--
|
4,533
|
31,747
|
--
|
|
Total
discontinued operations, net
|
--
|
4,553
|
32,345
|
439
|
|
Net
income
|
16,349
|
23,460
|
51,578
|
19,079
|
|
Preferred stock
dividends
|
(500)
|
(500)
|
(500)
|
(500)
|
|
Net
income available to common shareholders
|
$ 15,849
|
$ 22,960
|
$ 51,078
|
$ 18,579
|
|
Basic
earnings per common share:
|
||||
|
Income
from continuing operations
|
$ 0.24
|
$ 0.27
|
$ 0.28
|
$ 0.27
|
|
Discontinued
operations
|
--
|
0.07
|
0.48
|
0.01
|
|
Net
income available to common shareholders
|
$ 0.24
|
$ 0.34
|
$ 0.76
|
$ 0.28
|
|
Diluted
earnings per common share:
|
||||
|
Income
from continuing operations
|
$ 0.24
|
$ 0.27
|
$ 0.28
|
$ 0.27
|
|
Discontinued
operations
|
--
|
0.07
|
0.47
|
0.01
|
|
Net
income available to common shareholders
|
$ 0.24
|
$ 0.34
|
$ 0.75
|
$ 0.28
|
|
Dividends
declared per common share
|
$ 0.64
|
$ 0.64
|
$ 0.64
|
$ 0.64
|
107
|
Quarter
Ended 2006:
|
December
31
|
September
30
|
June
30
|
March
31
|
|
Total
revenues
|
$
196,082
|
$
201,252
|
$
182,789
|
$
151,889
|
|
Operating
and other expenses
|
67,134
|
70,895
|
60,256
|
55,382
|
|
Direct
construction costs
|
18,454
|
22,569
|
12,579
|
--
|
|
General
and administrative
|
16,280
|
12,173
|
11,846
|
8,775
|
|
Depreciation
and amortization
|
43,415
|
39,726
|
39,476
|
36,479
|
|
Total expenses
|
145,283
|
145,363
|
124,157
|
100,636
|
|
Operating
Income
|
50,799
|
55,889
|
58,632
|
51,253
|
|
Interest
expense
|
(35,390)
|
(35,466)
|
(33,034)
|
(31,075)
|
|
Interest
and other investment income
|
696
|
514
|
399
|
1,446
|
|
Equity
in earnings (loss) of unconsolidated
|
||||
|
joint ventures
|
(200)
|
(4,757)
|
(846)
|
247
|
|
Minority
interest in consolidated joint ventures
|
75
|
113
|
30
|
--
|
|
Gain
on sale of investment in marketable securities
|
--
|
--
|
--
|
15,060
|
|
Gain
on sale of investment in unconsolidated
|
||||
|
joint ventures
|
10,831
|
--
|
--
|
--
|
|
Gain/(loss)
on sale of land and other assets
|
(416)
|
--
|
--
|
--
|
|
Total other (expense)
income
|
(24,404)
|
(39,596)
|
(33,451)
|
(14,322)
|
|
Income
from continuing operations before minority
|
||||
|
interest in Operating
Partnership
|
26,395
|
16,293
|
25,181
|
36,931
|
|
Minority
interest in Operating Partnership
|
(5,162)
|
(3,169)
|
(4,950)
|
(6,840)
|
|
Income
from continuing operations
|
21,233
|
13,124
|
20,231
|
30,091
|
|
Discontinued
operations (net of minority interest):
|
||||
|
Income from discontinued
operations
|
2,897
|
3,387
|
2,982
|
3,006
|
|
Realized gains (losses) and
unrealized losses
|
||||
|
on disposition of
rental property, net
|
43,794
|
--
|
3,921
|
--
|
|
Total
discontinued operations, net
|
46,691
|
3,387
|
6,903
|
3,006
|
|
Net
income
|
67,924
|
16,511
|
27,134
|
33,097
|
|
Preferred stock
dividends
|
(500)
|
(500)
|
(500)
|
(500)
|
|
Net
income available to common shareholders
|
$ 67,424
|
$ 16,011
|
$ 26,634
|
$ 32,597
|
|
Basic
earnings per common share:
|
||||
|
Income
from continuing operations
|
$ 0.33
|
$ 0.20
|
$ 0.32
|
$ 0.48
|
|
Discontinued
operations
|
0.75
|
0.06
|
0.11
|
0.04
|
|
Net
income available to common shareholders
|
$ 1.08
|
$ 0.26
|
$ 0.43
|
$ 0.52
|
|
Diluted
earnings per common share:
|
||||
|
Income
from continuing operations
|
$ 0.32
|
$ 0.20
|
$ 0.32
|
$ 0.48
|
|
Discontinued
operations
|
0.75
|
0.06
|
0.11
|
0.04
|
|
Net
income available to common shareholders
|
$ 1.07
|
$ 0.26
|
$ 0.43
|
$ 0.52
|
|
Dividends
declared per common share
|
$ 0.64
|
$ 0.64
|
$ 0.63
|
$ 0.63
|
108
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
NEW
JERSEY
|
||||||||||||||||||||||||
|
Bergen
County
|
||||||||||||||||||||||||
|
Fair
Lawn
|
||||||||||||||||||||||||
|
17-17
Rte 208 North (O)
|
1987
|
1995
|
--
|
3,067
|
19,415
|
2,628
|
3,067
|
22,043
|
25,110
|
8,075
|
||||||||||||||
|
Fort
Lee
|
||||||||||||||||||||||||
|
One
Bridge Plaza (O)
|
1981
|
1996
|
--
|
2,439
|
24,462
|
4,876
|
2,439
|
29,338
|
31,777
|
7,591
|
||||||||||||||
|
2115
Linwood Avenue (O)
|
1981
|
1998
|
--
|
474
|
4,419
|
3,772
|
474
|
8,191
|
8,665
|
1,767
|
||||||||||||||
|
Little
Ferry
|
||||||||||||||||||||||||
|
200
Riser Road (O)
|
1974
|
1997
|
--
|
3,888
|
15,551
|
575
|
3,888
|
16,126
|
20,014
|
4,209
|
||||||||||||||
|
Montvale
|
||||||||||||||||||||||||
|
95
Chestnut Ridge Road (O)
|
1975
|
1997
|
--
|
1,227
|
4,907
|
718
|
1,227
|
5,625
|
6,852
|
1,664
|
||||||||||||||
|
135
Chestnut Ridge Road (O)
|
1981
|
1997
|
--
|
2,587
|
10,350
|
2,305
|
2,588
|
12,654
|
15,242
|
3,901
|
||||||||||||||
|
Paramus
|
||||||||||||||||||||||||
|
15
East Midland Avenue (O)
|
1988
|
1997
|
20,600
|
10,375
|
41,497
|
520
|
10,374
|
42,018
|
52,392
|
10,439
|
||||||||||||||
|
461
From Road (O)
|
1988
|
1997
|
--
|
13,194
|
52,778
|
264
|
13,194
|
53,042
|
66,236
|
13,340
|
||||||||||||||
|
650
From Road (O)
|
1978
|
1997
|
25,600
|
10,487
|
41,949
|
6,378
|
10,487
|
48,327
|
58,814
|
13,687
|
||||||||||||||
|
140
East Ridgewood
|
||||||||||||||||||||||||
|
Avenue
(O)
|
1981
|
1997
|
16,100
|
7,932
|
31,463
|
4,619
|
7,932
|
36,082
|
44,014
|
9,141
|
||||||||||||||
|
61
South Paramus Avenue (O)
|
1985
|
1997
|
20,800
|
9,005
|
36,018
|
6,245
|
9,005
|
42,263
|
51,268
|
11,005
|
||||||||||||||
|
Ridgefield
Park
|
||||||||||||||||||||||||
|
105
Challenger Road (O)
|
--
|
2006
|
18,968
|
4,714
|
29,768
|
--
|
4,714
|
29,768
|
34,482
|
1,764
|
||||||||||||||
|
Rochelle
Park
|
||||||||||||||||||||||||
|
120
Passaic Street (O)
|
1972
|
1997
|
--
|
1,354
|
5,415
|
102
|
1,357
|
5,514
|
6,871
|
1,402
|
||||||||||||||
|
365
West Passaic Street (O)
|
1976
|
1997
|
12,250
|
4,148
|
16,592
|
3,472
|
4,148
|
20,064
|
24,212
|
5,463
|
||||||||||||||
|
395
West Passaic Street (O)
|
1979
|
2006
|
12,596
|
2,550
|
17,131
|
394
|
2,550
|
17,525
|
20,075
|
970
|
||||||||||||||
|
Upper
Saddle River
|
--
|
|||||||||||||||||||||||
|
1
Lake Street (O)
|
1994
|
1997
|
35,550
|
13,952
|
55,812
|
51
|
13,953
|
55,862
|
69,815
|
14,023
|
||||||||||||||
|
10
Mountainview Road (O)
|
1986
|
1998
|
--
|
4,240
|
20,485
|
2,522
|
4,240
|
23,007
|
27,247
|
5,827
|
||||||||||||||
|
Woodcliff
Lake
|
||||||||||||||||||||||||
|
400
Chestnut Ridge Road (O)
|
1982
|
1997
|
--
|
4,201
|
16,802
|
5,080
|
4,201
|
21,882
|
26,083
|
5,943
|
||||||||||||||
|
470
Chestnut Ridge Road (O)
|
1987
|
1997
|
--
|
2,346
|
9,385
|
1,213
|
2,346
|
10,598
|
12,944
|
2,364
|
||||||||||||||
|
530
Chestnut Ridge Road (O)
|
1986
|
1997
|
--
|
1,860
|
7,441
|
3
|
1,860
|
7,444
|
9,304
|
1,869
|
||||||||||||||
|
300
Tice Boulevard (O)
|
1991
|
1996
|
--
|
5,424
|
29,688
|
3,116
|
5,424
|
32,804
|
38,228
|
9,821
|
||||||||||||||
|
50
Tice Boulevard (O)
|
1984
|
1994
|
19,100
|
4,500
|
--
|
25,739
|
4,500
|
25,739
|
30,239
|
14,455
|
||||||||||||||
109
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
Burlington
County
|
||||||||||||||||||||||||
|
Burlington
|
||||||||||||||||||||||||
|
3
Terri Lane (F)
|
1991
|
1998
|
--
|
652
|
3,433
|
1,744
|
658
|
5,171
|
5,829
|
1,538
|
||||||||||||||
|
5
Terri Lane (F)
|
1992
|
1998
|
--
|
564
|
3,792
|
2,146
|
569
|
5,933
|
6,502
|
1,948
|
||||||||||||||
|
Moorestown
|
||||||||||||||||||||||||
|
2
Commerce Drive (F)
|
1986
|
1999
|
--
|
723
|
2,893
|
471
|
723
|
3,364
|
4,087
|
667
|
||||||||||||||
|
101
Commerce Drive (F)
|
1988
|
1998
|
--
|
422
|
3,528
|
437
|
426
|
3,961
|
4,387
|
1,009
|
||||||||||||||
|
102
Commerce Drive (F)
|
1987
|
1999
|
--
|
389
|
1,554
|
321
|
389
|
1,875
|
2,264
|
419
|
||||||||||||||
|
201
Commerce Drive (F)
|
1986
|
1998
|
--
|
254
|
1,694
|
502
|
258
|
2,192
|
2,450
|
664
|
||||||||||||||
|
202
Commerce Drive (F)
|
1988
|
1999
|
--
|
490
|
1,963
|
455
|
490
|
2,418
|
2,908
|
600
|
||||||||||||||
|
1
Executive Drive (F)
|
1989
|
1998
|
--
|
226
|
1,453
|
418
|
228
|
1,869
|
2,097
|
577
|
||||||||||||||
|
2
Executive Drive (F)
|
1988
|
2000
|
--
|
801
|
3,206
|
905
|
801
|
4,111
|
4,912
|
942
|
||||||||||||||
|
101
Executive Drive (F)
|
1990
|
1998
|
--
|
241
|
2,262
|
557
|
244
|
2,816
|
3,060
|
744
|
||||||||||||||
|
102
Executive Drive (F)
|
1990
|
1998
|
--
|
353
|
3,607
|
217
|
357
|
3,820
|
4,177
|
1,027
|
||||||||||||||
|
225
Executive Drive (F)
|
1990
|
1998
|
--
|
323
|
2,477
|
482
|
326
|
2,956
|
3,282
|
823
|
||||||||||||||
|
97
Foster Road (F)
|
1982
|
1998
|
--
|
208
|
1,382
|
310
|
211
|
1,689
|
1,900
|
450
|
||||||||||||||
|
1507
Lancer Drive (F)
|
1995
|
1998
|
--
|
119
|
1,106
|
51
|
120
|
1,156
|
1,276
|
299
|
||||||||||||||
|
840
North Lenola Road (F)
|
1995
|
1998
|
--
|
329
|
2,366
|
527
|
333
|
2,889
|
3,222
|
879
|
||||||||||||||
|
844
North Lenola Road (F)
|
1995
|
1998
|
--
|
239
|
1,714
|
260
|
241
|
1,972
|
2,213
|
602
|
||||||||||||||
|
915
North Lenola Road (F)
|
1998
|
2000
|
--
|
508
|
2,034
|
285
|
508
|
2,319
|
2,827
|
621
|
||||||||||||||
|
1245
North Church Street (F)
|
1998
|
2001
|
--
|
691
|
2,810
|
17
|
691
|
2,827
|
3,518
|
477
|
||||||||||||||
|
1247
North Church Street (F)
|
1998
|
2001
|
--
|
805
|
3,269
|
205
|
805
|
3,474
|
4,279
|
602
|
||||||||||||||
|
1256
North Church (F)
|
1984
|
1998
|
--
|
354
|
3,098
|
532
|
357
|
3,627
|
3,984
|
1,158
|
||||||||||||||
|
224
Strawbridge Drive (O)
|
1984
|
1997
|
--
|
766
|
4,335
|
3,846
|
767
|
8,180
|
8,947
|
2,989
|
||||||||||||||
|
228
Strawbridge Drive (O)
|
1984
|
1997
|
--
|
766
|
4,334
|
2,208
|
767
|
6,541
|
7,308
|
1,855
|
||||||||||||||
|
232
Strawbridge Drive (O)
|
1986
|
2004
|
--
|
1,521
|
7,076
|
1,935
|
1,521
|
9,011
|
10,532
|
891
|
||||||||||||||
|
2
Twosome Drive (F)
|
2000
|
2001
|
--
|
701
|
2,807
|
18
|
701
|
2,825
|
3,526
|
471
|
||||||||||||||
|
30
Twosome Drive (F)
|
1997
|
1998
|
--
|
234
|
1,954
|
424
|
236
|
2,376
|
2,612
|
574
|
||||||||||||||
|
31
Twosome Drive (F)
|
1998
|
2001
|
--
|
815
|
3,276
|
102
|
815
|
3,378
|
4,193
|
588
|
||||||||||||||
|
40
Twosome Drive (F)
|
1996
|
1998
|
--
|
297
|
2,393
|
274
|
301
|
2,663
|
2,964
|
784
|
||||||||||||||
|
41
Twosome Drive (F)
|
1998
|
2001
|
--
|
605
|
2,459
|
43
|
605
|
2,502
|
3,107
|
435
|
||||||||||||||
|
50
Twosome Drive (F)
|
1997
|
1998
|
--
|
301
|
2,330
|
120
|
304
|
2,447
|
2,751
|
680
|
||||||||||||||
|
West
Deptford
|
||||||||||||||||||||||||
|
1451
Metropolitan Drive (F)
|
1996
|
1998
|
--
|
203
|
1,189
|
30
|
206
|
1,216
|
1,422
|
327
|
||||||||||||||
|
Essex
County
|
||||||||||||||||||||||||
|
Millburn
|
||||||||||||||||||||||||
|
150
J.F. Kennedy Parkway (O)
|
1980
|
1997
|
--
|
12,606
|
50,425
|
8,620
|
12,606
|
59,045
|
71,651
|
15,958
|
||||||||||||||
110
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
Roseland
|
||||||||||||||||||||||||
|
101
Eisenhower Parkway (O)
|
1980
|
1994
|
--
|
228
|
--
|
15,969
|
228
|
15,969
|
16,197
|
10,288
|
||||||||||||||
|
103
Eisenhower Parkway (O)
|
1985
|
1994
|
--
|
--
|
--
|
14,971
|
2,300
|
12,671
|
14,971
|
7,353
|
||||||||||||||
|
105
Eisenhower Parkway (O)
|
2001
|
2001
|
--
|
4,430
|
42,898
|
2,363
|
--
|
49,691
|
49,691
|
10,701
|
||||||||||||||
|
Hudson
County
|
||||||||||||||||||||||||
|
Jersey
City
|
||||||||||||||||||||||||
|
Harborside
Financial Center
|
||||||||||||||||||||||||
|
Plaza
1 (O)
|
1983
|
1996
|
--
|
3,923
|
51,013
|
25,709
|
3,923
|
76,722
|
80,645
|
15,176
|
||||||||||||||
|
Harborside
Financial Center
|
||||||||||||||||||||||||
|
Plaza
2 (O)
|
1990
|
1996
|
--
|
17,655
|
101,546
|
16,663
|
15,057
|
120,807
|
135,864
|
34,410
|
||||||||||||||
|
Harborside
Financial Center
|
||||||||||||||||||||||||
|
Plaza
3 (O)
|
1990
|
1996
|
--
|
17,655
|
101,878
|
16,332
|
15,058
|
120,807
|
135,865
|
34,411
|
||||||||||||||
|
Harborside
Financial Center
|
||||||||||||||||||||||||
|
Plaza
4A (O)
|
2000
|
2000
|
--
|
1,244
|
56,144
|
8,722
|
1,244
|
64,866
|
66,110
|
13,574
|
||||||||||||||
|
Harborside
Financial Center
|
||||||||||||||||||||||||
|
Plaza
5 (O)
|
2002
|
2002
|
--
|
6,218
|
170,682
|
55,712
|
5,705
|
226,907
|
232,612
|
34,175
|
||||||||||||||
|
101
Hudson Street (O)
|
1992
|
2004
|
--
|
45,530
|
271,376
|
4,422
|
45,530
|
275,798
|
321,328
|
27,024
|
||||||||||||||
|
Mercer
County
|
||||||||||||||||||||||||
|
Hamilton
Township
|
||||||||||||||||||||||||
|
3
AAA Drive (O)
|
1981
|
2007
|
--
|
242
|
3,218
|
346
|
242
|
3,564
|
3,806
|
54
|
||||||||||||||
|
100
Horizon Drive (F)
|
1989
|
1995
|
--
|
205
|
1,676
|
83
|
172
|
1,792
|
1,964
|
554
|
||||||||||||||
|
200
Horizon Drive (F)
|
1991
|
1995
|
--
|
205
|
3,027
|
213
|
205
|
3,240
|
3,445
|
1,060
|
||||||||||||||
|
300
Horizon Drive (F)
|
1989
|
1995
|
--
|
379
|
4,355
|
1,104
|
379
|
5,459
|
5,838
|
1,834
|
||||||||||||||
|
500
Horizon Drive (F)
|
1990
|
1995
|
--
|
379
|
3,395
|
641
|
344
|
4,071
|
4,415
|
1,353
|
||||||||||||||
|
600
Horizon Drive (F)
|
2002
|
2002
|
--
|
--
|
7,549
|
651
|
685
|
7,515
|
8,200
|
955
|
||||||||||||||
|
700
Horizon Drive (O)
|
2007
|
2007
|
--
|
490
|
43
|
16,990
|
1,355
|
16,168
|
17,523
|
238
|
||||||||||||||
|
2
South Gold Drive (O)
|
1974
|
2007
|
--
|
476
|
3,487
|
25
|
476
|
3,512
|
3,988
|
58
|
||||||||||||||
|
Princeton
|
||||||||||||||||||||||||
|
103
Carnegie Center (O)
|
1984
|
1996
|
--
|
2,566
|
7,868
|
2,025
|
2,566
|
9,893
|
12,459
|
3,152
|
||||||||||||||
|
100
Overlook Center (O)
|
1988
|
1997
|
--
|
2,378
|
21,754
|
4,468
|
2,378
|
26,222
|
28,600
|
7,108
|
||||||||||||||
|
5
Vaughn Drive (O)
|
1987
|
1995
|
--
|
657
|
9,800
|
1,732
|
657
|
11,532
|
12,189
|
4,181
|
||||||||||||||
|
Middlesex
County
|
||||||||||||||||||||||||
|
East
Brunswick
|
||||||||||||||||||||||||
|
377
Summerhill Road (O)
|
1977
|
1997
|
--
|
649
|
2,594
|
374
|
649
|
2,968
|
3,617
|
751
|
||||||||||||||
|
Edison
|
||||||||||||||||||||||||
|
343
Thornall Street (O)
|
1991
|
2006
|
--
|
6,027
|
39,101
|
4,620
|
6,027
|
43,721
|
49,748
|
2,212
|
||||||||||||||
|
Piscataway
|
||||||||||||||||||||||||
|
30
Knightsbridge Road,
|
||||||||||||||||||||||||
|
Building
3 (O)
|
1977
|
2004
|
--
|
1,030
|
7,269
|
316
|
1,034
|
7,581
|
8,615
|
657
|
||||||||||||||
|
30
Knightsbridge Road,
|
||||||||||||||||||||||||
|
Building
4 (O)
|
1977
|
2004
|
--
|
1,433
|
10,121
|
344
|
1,429
|
10,469
|
11,898
|
908
|
||||||||||||||
111
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
30
Knightsbridge Road,
|
||||||||||||||||||||||||
|
Building
5 (O)
|
1977
|
2004
|
--
|
2,979
|
21,035
|
6,898
|
2,979
|
27,933
|
30,912
|
2,543
|
||||||||||||||
|
30
Knightsbridge Road,
|
||||||||||||||||||||||||
|
Building
6 (O)
|
1977
|
2004
|
--
|
448
|
3,161
|
4,469
|
448
|
7,630
|
8,078
|
426
|
||||||||||||||
|
Plainsboro
|
||||||||||||||||||||||||
|
500
College Road East (O)
|
1984
|
1998
|
--
|
614
|
20,626
|
1,514
|
614
|
22,140
|
22,754
|
5,482
|
||||||||||||||
|
South
Brunswick
|
||||||||||||||||||||||||
|
3
Independence Way (O)
|
1983
|
1997
|
--
|
1,997
|
11,391
|
1,307
|
1,997
|
12,698
|
14,695
|
3,379
|
||||||||||||||
|
Woodbridge
|
||||||||||||||||||||||||
|
581
Main Street (O)
|
1991
|
1997
|
--
|
3,237
|
12,949
|
24,217
|
8,115
|
32,288
|
40,403
|
7,446
|
||||||||||||||
|
Monmouth
County
|
||||||||||||||||||||||||
|
Middletown
|
||||||||||||||||||||||||
|
23
Main Street (O)
|
1977
|
2005
|
32,968
|
4,336
|
19,544
|
8,903
|
4,336
|
28,447
|
32,783
|
2,739
|
||||||||||||||
|
2
Paragon Way (O)
|
1989
|
2005
|
--
|
999
|
4,619
|
763
|
999
|
5,382
|
6,381
|
617
|
||||||||||||||
|
3
Paragon Way (O)
|
1991
|
2005
|
--
|
1,423
|
6,041
|
1,693
|
1,423
|
7,734
|
9,157
|
582
|
||||||||||||||
|
4
Paragon Way (O)
|
2002
|
2005
|
--
|
1,961
|
8,827
|
43
|
1,961
|
8,870
|
10,831
|
1,172
|
||||||||||||||
|
One
River Center,
|
||||||||||||||||||||||||
|
Building
1 (O)
|
1983
|
2004
|
--
|
3,070
|
17,414
|
2,104
|
2,451
|
20,137
|
22,588
|
2,235
|
||||||||||||||
|
One
River Center,
|
||||||||||||||||||||||||
|
Building
2 (O)
|
1983
|
2004
|
--
|
2,468
|
15,043
|
971
|
2,452
|
16,030
|
18,482
|
1,273
|
||||||||||||||
|
One
River Center,
|
||||||||||||||||||||||||
|
Building
3 (O)
|
1984
|
2004
|
--
|
4,051
|
24,790
|
4,358
|
4,627
|
28,572
|
33,199
|
2,273
|
||||||||||||||
|
100
Willowbrook Road (O)
|
1988
|
2005
|
--
|
1,264
|
5,573
|
772
|
1,264
|
6,345
|
7,609
|
576
|
||||||||||||||
|
Neptune
|
||||||||||||||||||||||||
|
3600
Route 66 (O)
|
1989
|
1995
|
--
|
1,098
|
18,146
|
1,462
|
1,098
|
19,608
|
20,706
|
5,728
|
||||||||||||||
|
Wall
Township
|
||||||||||||||||||||||||
|
1305
Campus Parkway (O)
|
1988
|
1995
|
--
|
335
|
2,560
|
482
|
335
|
3,042
|
3,377
|
830
|
||||||||||||||
|
1325
Campus Parkway (F)
|
1988
|
1995
|
--
|
270
|
2,928
|
1,337
|
270
|
4,265
|
4,535
|
1,713
|
||||||||||||||
|
1340
Campus Parkway (F)
|
1992
|
1995
|
--
|
489
|
4,621
|
1,664
|
489
|
6,285
|
6,774
|
1,882
|
||||||||||||||
|
1345
Campus Parkway (F)
|
1995
|
1997
|
--
|
1,023
|
5,703
|
1,558
|
1,024
|
7,260
|
8,284
|
2,449
|
||||||||||||||
|
1350
Campus Parkway (O)
|
1990
|
1995
|
--
|
454
|
7,134
|
1,046
|
454
|
8,180
|
8,634
|
2,597
|
||||||||||||||
|
1433
Highway 34 (F)
|
1985
|
1995
|
--
|
889
|
4,321
|
1,040
|
889
|
5,361
|
6,250
|
1,587
|
||||||||||||||
|
1320
Wyckoff Avenue (F)
|
1986
|
1995
|
--
|
255
|
1,285
|
68
|
255
|
1,353
|
1,608
|
405
|
||||||||||||||
|
1324
Wyckoff Avenue (F)
|
1987
|
1995
|
--
|
230
|
1,439
|
246
|
230
|
1,685
|
1,915
|
500
|
||||||||||||||
112
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
Morris
County
|
||||||||||||||||||||||||
|
Florham
Park
|
||||||||||||||||||||||||
|
325
Columbia Parkway (O)
|
1987
|
1994
|
--
|
1,564
|
--
|
14,847
|
1,564
|
14,847
|
16,411
|
7,400
|
||||||||||||||
|
Morris
Plains
|
||||||||||||||||||||||||
|
250
Johnson Road (O)
|
1977
|
1997
|
--
|
2,004
|
8,016
|
1,175
|
2,004
|
9,191
|
11,195
|
2,354
|
||||||||||||||
|
201
Littleton Road (O)
|
1979
|
1997
|
--
|
2,407
|
9,627
|
1,096
|
2,407
|
10,723
|
13,130
|
2,916
|
||||||||||||||
|
Morris
Township
|
||||||||||||||||||||||||
|
412
Mt. Kemble Avenue (O)
|
1985
|
2004
|
--
|
4,360
|
33,167
|
5,884
|
4,360
|
39,051
|
43,411
|
3,286
|
||||||||||||||
|
Parsippany
|
||||||||||||||||||||||||
|
4
Campus Drive (O)
|
1983
|
2001
|
--
|
5,213
|
20,984
|
1,665
|
5,213
|
22,649
|
27,862
|
4,160
|
||||||||||||||
|
6
Campus Drive (O)
|
1983
|
2001
|
--
|
4,411
|
17,796
|
2,604
|
4,411
|
20,400
|
24,811
|
3,927
|
||||||||||||||
|
7
Campus Drive (O)
|
1982
|
1998
|
--
|
1,932
|
27,788
|
2,176
|
1,932
|
29,964
|
31,896
|
6,893
|
||||||||||||||
|
8
Campus Drive (O)
|
1987
|
1998
|
--
|
1,865
|
35,456
|
4,123
|
1,865
|
39,579
|
41,444
|
10,685
|
||||||||||||||
|
9
Campus Drive (O)
|
1983
|
2001
|
--
|
3,277
|
11,796
|
17,370
|
5,842
|
26,601
|
32,443
|
6,710
|
||||||||||||||
|
4
Century Drive (O)
|
1981
|
2004
|
--
|
1,787
|
9,575
|
1,067
|
1,787
|
10,642
|
12,429
|
974
|
||||||||||||||
|
5
Century Drive (O)
|
1981
|
2004
|
--
|
1,762
|
9,341
|
446
|
1,762
|
9,787
|
11,549
|
718
|
||||||||||||||
|
6
Century Drive (O)
|
1981
|
2004
|
--
|
1,289
|
6,848
|
2,596
|
1,289
|
9,444
|
10,733
|
946
|
||||||||||||||
|
2
Dryden Way (O)
|
1990
|
1998
|
--
|
778
|
420
|
110
|
778
|
530
|
1,308
|
116
|
||||||||||||||
|
4
Gatehall Drive (O)
|
1988
|
2000
|
--
|
8,452
|
33,929
|
3,810
|
8,452
|
37,739
|
46,191
|
7,630
|
||||||||||||||
|
2
Hilton Court (O)
|
1991
|
1998
|
--
|
1,971
|
32,007
|
3,069
|
1,971
|
35,076
|
37,047
|
9,201
|
||||||||||||||
|
1633
Littleton Road (O)
|
1978
|
2002
|
--
|
2,283
|
9,550
|
163
|
2,355
|
9,641
|
11,996
|
1,807
|
||||||||||||||
|
600
Parsippany Road (O)
|
1978
|
1994
|
--
|
1,257
|
5,594
|
3,128
|
1,257
|
8,722
|
9,979
|
2,954
|
||||||||||||||
|
1
Sylvan Way (O)
|
1989
|
1998
|
--
|
1,689
|
24,699
|
394
|
1,021
|
25,761
|
26,782
|
7,794
|
||||||||||||||
|
5
Sylvan Way (O)
|
1989
|
1998
|
--
|
1,160
|
25,214
|
2,250
|
1,161
|
27,463
|
28,624
|
7,037
|
||||||||||||||
|
7
Sylvan Way (O)
|
1987
|
1998
|
--
|
2,084
|
26,083
|
2,092
|
2,084
|
28,175
|
30,259
|
7,521
|
||||||||||||||
|
35
Waterview Boulevard (O)
|
1990
|
2006
|
20,104
|
5,133
|
28,059
|
605
|
5,133
|
28,664
|
33,797
|
1,762
|
||||||||||||||
|
5
Wood Hollow Road (O)
|
1979
|
2004
|
--
|
5,302
|
26,488
|
12,578
|
5,302
|
39,066
|
44,368
|
3,592
|
||||||||||||||
|
Passaic
County
|
||||||||||||||||||||||||
|
Clifton
|
||||||||||||||||||||||||
|
777
Passaic Avenue (O)
|
1983
|
1994
|
--
|
--
|
--
|
6,981
|
1,100
|
5,881
|
6,981
|
3,147
|
||||||||||||||
|
Totowa
|
||||||||||||||||||||||||
|
1
Center Court (F)
|
1999
|
1999
|
--
|
270
|
1,824
|
627
|
270
|
2,451
|
2,721
|
971
|
||||||||||||||
|
2
Center Court (F)
|
1998
|
1998
|
--
|
191
|
--
|
2,255
|
191
|
2,255
|
2,446
|
519
|
||||||||||||||
|
11
Commerce Way (F)
|
1989
|
1995
|
--
|
586
|
2,986
|
95
|
586
|
3,081
|
3,667
|
960
|
||||||||||||||
|
20
Commerce Way (F)
|
1992
|
1995
|
--
|
516
|
3,108
|
81
|
516
|
3,189
|
3,705
|
978
|
||||||||||||||
|
29
Commerce Way (F)
|
1990
|
1995
|
--
|
586
|
3,092
|
950
|
586
|
4,042
|
4,628
|
1,467
|
||||||||||||||
|
40
Commerce Way (F)
|
1987
|
1995
|
--
|
516
|
3,260
|
85
|
516
|
3,345
|
3,861
|
1,012
|
||||||||||||||
|
45
Commerce Way (F)
|
1992
|
1995
|
--
|
536
|
3,379
|
515
|
536
|
3,894
|
4,430
|
1,192
|
||||||||||||||
|
60
Commerce Way (F)
|
1988
|
1995
|
--
|
526
|
3,257
|
431
|
526
|
3,688
|
4,214
|
1,231
|
||||||||||||||
113
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
80
Commerce Way (F)
|
1996
|
1996
|
--
|
227
|
--
|
1,513
|
453
|
1,287
|
1,740
|
480
|
||||||||||||||
|
100
Commerce Way (F)
|
1996
|
1996
|
--
|
226
|
--
|
1,060
|
--
|
1,286
|
1,286
|
480
|
||||||||||||||
|
120
Commerce Way (F)
|
1994
|
1995
|
--
|
228
|
--
|
1,574
|
457
|
1,345
|
1,802
|
414
|
||||||||||||||
|
140
Commerce Way (F)
|
1994
|
1995
|
--
|
229
|
--
|
1,016
|
--
|
1,245
|
1,245
|
414
|
||||||||||||||
|
999
Riverview Drive (O)
|
1988
|
1995
|
--
|
476
|
6,024
|
626
|
476
|
6,650
|
7,126
|
2,143
|
||||||||||||||
|
Somerset
County
|
||||||||||||||||||||||||
|
Basking
Ridge
|
||||||||||||||||||||||||
|
106
Allen Road (O)
|
2000
|
2000
|
--
|
3,853
|
14,465
|
3,806
|
4,093
|
18,031
|
22,124
|
5,407
|
||||||||||||||
|
222
Mt. Airy Road (O)
|
1986
|
1996
|
--
|
775
|
3,636
|
2,162
|
775
|
5,798
|
6,573
|
1,461
|
||||||||||||||
|
233
Mt. Airy Road (O)
|
1987
|
1996
|
--
|
1,034
|
5,033
|
1,646
|
1,034
|
6,679
|
7,713
|
2,384
|
||||||||||||||
|
Bridgewater
|
||||||||||||||||||||||||
|
721
Route 202/206 (O)
|
1989
|
1997
|
--
|
6,730
|
26,919
|
8,278
|
6,730
|
35,197
|
41,927
|
7,094
|
||||||||||||||
|
Union
County
|
||||||||||||||||||||||||
|
Clark
|
||||||||||||||||||||||||
|
100
Walnut Avenue (O)
|
1985
|
1994
|
--
|
--
|
--
|
16,750
|
1,822
|
14,928
|
16,750
|
8,494
|
||||||||||||||
|
Cranford
|
||||||||||||||||||||||||
|
6
Commerce Drive (O)
|
1973
|
1994
|
--
|
250
|
--
|
2,948
|
250
|
2,948
|
3,198
|
1,895
|
||||||||||||||
|
11
Commerce Drive (O)
|
1981
|
1994
|
--
|
470
|
--
|
5,749
|
470
|
5,749
|
6,219
|
3,559
|
||||||||||||||
|
12
Commerce Drive (O)
|
1967
|
1997
|
--
|
887
|
3,549
|
1,851
|
887
|
5,400
|
6,287
|
1,723
|
||||||||||||||
|
14
Commerce Drive (O)
|
1971
|
2003
|
--
|
1,283
|
6,344
|
49
|
1,283
|
6,393
|
7,676
|
683
|
||||||||||||||
|
20
Commerce Drive (O)
|
1990
|
1994
|
--
|
2,346
|
--
|
20,714
|
2,346
|
20,714
|
23,060
|
8,425
|
||||||||||||||
|
25
Commerce Drive (O)
|
1971
|
2002
|
--
|
1,520
|
6,186
|
320
|
1,520
|
6,506
|
8,026
|
1,651
|
||||||||||||||
|
65
Jackson Drive (O)
|
1984
|
1994
|
--
|
541
|
--
|
6,374
|
542
|
6,373
|
6,915
|
3,367
|
||||||||||||||
|
New
Providence
|
||||||||||||||||||||||||
|
890
Mountain Road (O)
|
1977
|
1997
|
--
|
2,796
|
11,185
|
5,021
|
3,765
|
15,237
|
19,002
|
3,803
|
||||||||||||||
|
NEW
YORK
|
||||||||||||||||||||||||
|
New
York County
|
||||||||||||||||||||||||
|
New
York
|
||||||||||||||||||||||||
|
125
Broad Street (O)
|
1970
|
2007
|
50,191
|
207,002
|
7,309
|
50,191
|
214,311
|
264,502
|
4,135
|
|||||||||||||||
|
Rockland
County
|
||||||||||||||||||||||||
|
Suffern
|
||||||||||||||||||||||||
|
400
Rella Boulevard (O)
|
1988
|
1995
|
--
|
1,090
|
13,412
|
3,019
|
1,090
|
16,431
|
17,521
|
5,836
|
||||||||||||||
|
Westchester
County
|
||||||||||||||||||||||||
|
Elmsford
|
||||||||||||||||||||||||
|
11
Clearbrook Road (F)
|
1974
|
1997
|
--
|
149
|
2,159
|
425
|
149
|
2,584
|
2,733
|
699
|
||||||||||||||
|
75
Clearbrook Road (F)
|
1990
|
1997
|
--
|
2,314
|
4,716
|
107
|
2,314
|
4,823
|
7,137
|
1,306
|
||||||||||||||
|
100
Clearbrook Road (O)
|
1975
|
1997
|
--
|
220
|
5,366
|
1,262
|
220
|
6,628
|
6,848
|
1,893
|
||||||||||||||
|
125
Clearbrook Road (F)
|
2002
|
2002
|
--
|
1,055
|
3,676
|
(51)
|
1,055
|
3,625
|
4,680
|
931
|
||||||||||||||
|
150
Clearbrook Road (F)
|
1975
|
1997
|
--
|
497
|
7,030
|
1,198
|
497
|
8,228
|
8,725
|
2,241
|
||||||||||||||
114
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
175
Clearbrook Road (F)
|
1973
|
1997
|
--
|
655
|
7,473
|
907
|
655
|
8,380
|
9,035
|
2,444
|
||||||||||||||
|
200
Clearbrook Road (F)
|
1974
|
1997
|
--
|
579
|
6,620
|
1,031
|
579
|
7,651
|
8,230
|
2,273
|
||||||||||||||
|
250
Clearbrook Road (F)
|
1973
|
1997
|
--
|
867
|
8,647
|
1,476
|
867
|
10,123
|
10,990
|
2,927
|
||||||||||||||
|
50
Executive Boulevard (F)
|
1969
|
1997
|
--
|
237
|
2,617
|
235
|
237
|
2,852
|
3,089
|
749
|
||||||||||||||
|
77
Executive Boulevard (F)
|
1977
|
1997
|
--
|
34
|
1,104
|
154
|
34
|
1,258
|
1,292
|
374
|
||||||||||||||
|
85
Executive Boulevard (F)
|
1968
|
1997
|
--
|
155
|
2,507
|
539
|
155
|
3,046
|
3,201
|
798
|
||||||||||||||
|
101
Executive Boulevard (O)
|
1971
|
1997
|
--
|
267
|
5,838
|
868
|
267
|
6,706
|
6,973
|
1,884
|
||||||||||||||
|
300
Executive Boulevard (F)
|
1970
|
1997
|
--
|
460
|
3,609
|
322
|
460
|
3,931
|
4,391
|
1,058
|
||||||||||||||
|
350
Executive Boulevard (F)
|
1970
|
1997
|
--
|
100
|
1,793
|
153
|
100
|
1,946
|
2,046
|
618
|
||||||||||||||
|
399
Executive Boulevard (F)
|
1962
|
1997
|
--
|
531
|
7,191
|
62
|
531
|
7,253
|
7,784
|
1,977
|
||||||||||||||
|
400
Executive Boulevard (F)
|
1970
|
1997
|
--
|
2,202
|
1,846
|
450
|
2,202
|
2,296
|
4,498
|
783
|
||||||||||||||
|
500
Executive Boulevard (F)
|
1970
|
1997
|
--
|
258
|
4,183
|
781
|
258
|
4,964
|
5,222
|
1,563
|
||||||||||||||
|
525
Executive Boulevard (F)
|
1972
|
1997
|
--
|
345
|
5,499
|
724
|
345
|
6,223
|
6,568
|
1,856
|
||||||||||||||
|
700
Executive Boulevard (L)
|
N/A
|
1997
|
--
|
970
|
--
|
--
|
970
|
--
|
970
|
--
|
||||||||||||||
|
3
Odell Plaza (O)
|
1984
|
2003
|
--
|
1,322
|
4,777
|
2,100
|
1,322
|
6,877
|
8,199
|
1,061
|
||||||||||||||
|
5
Skyline Drive (F)
|
1980
|
2001
|
--
|
2,219
|
8,916
|
1,555
|
2,219
|
10,471
|
12,690
|
2,157
|
||||||||||||||
|
6
Skyline Drive (F)
|
1980
|
2001
|
--
|
740
|
2,971
|
24
|
740
|
2,995
|
3,735
|
949
|
||||||||||||||
|
555
Taxter Road (O)
|
1986
|
2000
|
--
|
4,285
|
17,205
|
5,603
|
4,285
|
22,808
|
27,093
|
4,980
|
||||||||||||||
|
565
Taxter Road (O)
|
1988
|
2000
|
--
|
4,285
|
17,205
|
3,580
|
4,233
|
20,837
|
25,070
|
4,620
|
||||||||||||||
|
570
Taxter Road (O)
|
1972
|
1997
|
--
|
438
|
6,078
|
951
|
438
|
7,029
|
7,467
|
2,208
|
||||||||||||||
|
1
Warehouse Lane (I)
|
1957
|
1997
|
--
|
3
|
268
|
234
|
3
|
502
|
505
|
124
|
||||||||||||||
|
2
Warehouse Lane (I)
|
1957
|
1997
|
--
|
4
|
672
|
188
|
4
|
860
|
864
|
309
|
||||||||||||||
|
3
Warehouse Lane (I)
|
1957
|
1997
|
--
|
21
|
1,948
|
526
|
21
|
2,474
|
2,495
|
784
|
||||||||||||||
|
4
Warehouse Lane (I)
|
1957
|
1997
|
--
|
84
|
13,393
|
2,704
|
85
|
16,096
|
16,181
|
4,435
|
||||||||||||||
|
5
Warehouse Lane (I)
|
1957
|
1997
|
--
|
19
|
4,804
|
1,436
|
19
|
6,240
|
6,259
|
1,703
|
||||||||||||||
|
6
Warehouse Lane (I)
|
1982
|
1997
|
--
|
10
|
4,419
|
328
|
10
|
4,747
|
4,757
|
1,279
|
||||||||||||||
|
1
Westchester Plaza (F)
|
1967
|
1997
|
--
|
199
|
2,023
|
187
|
199
|
2,210
|
2,409
|
618
|
||||||||||||||
|
2
Westchester Plaza (F)
|
1968
|
1997
|
--
|
234
|
2,726
|
226
|
234
|
2,952
|
3,186
|
805
|
||||||||||||||
|
3
Westchester Plaza (F)
|
1969
|
1997
|
--
|
655
|
7,936
|
527
|
655
|
8,463
|
9,118
|
2,415
|
||||||||||||||
|
4
Westchester Plaza (F)
|
1969
|
1997
|
--
|
320
|
3,729
|
404
|
320
|
4,133
|
4,453
|
1,083
|
||||||||||||||
|
5
Westchester Plaza (F)
|
1969
|
1997
|
--
|
118
|
1,949
|
200
|
118
|
2,149
|
2,267
|
691
|
||||||||||||||
|
6
Westchester Plaza (F)
|
1968
|
1997
|
--
|
164
|
1,998
|
226
|
164
|
2,224
|
2,388
|
691
|
||||||||||||||
|
7
Westchester Plaza (F)
|
1972
|
1997
|
--
|
286
|
4,321
|
214
|
286
|
4,535
|
4,821
|
1,237
|
||||||||||||||
|
8
Westchester Plaza (F)
|
1971
|
1997
|
--
|
447
|
5,262
|
995
|
447
|
6,257
|
6,704
|
1,675
|
||||||||||||||
|
Hawthorne
|
|
|||||||||||||||||||||||
|
200
Saw Mill River Road (F)
|
1965
|
1997
|
--
|
353
|
3,353
|
487
|
353
|
3,840
|
4,193
|
1,105
|
||||||||||||||
|
1
Skyline Drive (O)
|
1980
|
1997
|
--
|
66
|
1,711
|
301
|
66
|
2,012
|
2,078
|
571
|
||||||||||||||
|
2
Skyline Drive (O)
|
1987
|
1997
|
--
|
109
|
3,128
|
471
|
109
|
3,599
|
3,708
|
1,154
|
||||||||||||||
|
4
Skyline Drive (F)
|
1987
|
1997
|
--
|
363
|
7,513
|
1,738
|
363
|
9,251
|
9,614
|
2,615
|
||||||||||||||
|
7
Skyline Drive (O)
|
1987
|
1998
|
--
|
330
|
13,013
|
1,440
|
330
|
14,453
|
14,783
|
3,706
|
||||||||||||||
115
|
MACK-CALI
REALTY CORPORATION
|
||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
||||||||||||||||||||||||
|
December
31, 2007
|
||||||||||||||||||||||||
|
(dollars
in thousands)
|
||||||||||||||||||||||||
|
SCHEDULE
III
|
||||||||||||||||||||||||
|
Gross
Amount at Which
|
||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
|||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
|||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
||||||||||||||
|
8
Skyline Drive (F)
|
1985
|
1997
|
--
|
212
|
4,410
|
1,967
|
212
|
6,377
|
6,589
|
2,251
|
||||||||||||||
|
10
Skyline Drive (F)
|
1985
|
1997
|
--
|
134
|
2,799
|
605
|
134
|
3,404
|
3,538
|
830
|
||||||||||||||
|
11
Skyline Drive (F)
|
1989
|
1997
|
--
|
--
|
4,788
|
430
|
--
|
5,218
|
5,218
|
1,580
|
||||||||||||||
|
12
Skyline Drive (F)
|
1999
|
1999
|
--
|
1,562
|
3,254
|
1,142
|
1,320
|
4,638
|
5,958
|
1,536
|
||||||||||||||
|
14
Skyline Drive (L)
|
N/A
|
2002
|
--
|
964
|
16
|
980
|
--
|
980
|
--
|
|||||||||||||||
|
15
Skyline Drive (F)
|
1989
|
1997
|
--
|
--
|
7,449
|
344
|
7,793
|
7,793
|
2,233
|
|||||||||||||||
|
16
Skyline Drive (L)
|
N/A
|
2002
|
--
|
850
|
--
|
31
|
881
|
--
|
881
|
--
|
||||||||||||||
|
17
Skyline Drive (O)
|
1989
|
1997
|
--
|
--
|
7,269
|
776
|
--
|
8,045
|
8,045
|
2,051
|
||||||||||||||
|
19
Skyline Drive (O)
|
1982
|
1997
|
--
|
2,355
|
34,254
|
3,536
|
2,356
|
37,789
|
40,145
|
12,185
|
||||||||||||||
|
Tarrytown
|
|
|||||||||||||||||||||||
|
200
White Plains Road (O)
|
1982
|
1997
|
--
|
378
|
8,367
|
1,258
|
378
|
9,625
|
10,003
|
2,666
|
||||||||||||||
|
220
White Plains Road (O)
|
1984
|
1997
|
--
|
367
|
8,112
|
1,246
|
367
|
9,358
|
9,725
|
2,591
|
||||||||||||||
|
230
White Plains Road (R)
|
1984
|
1997
|
--
|
124
|
1,845
|
107
|
124
|
1,952
|
2,076
|
508
|
||||||||||||||
|
White
Plains
|
|
|||||||||||||||||||||||
|
1
Barker Avenue (O)
|
1975
|
1997
|
--
|
208
|
9,629
|
1,145
|
207
|
10,775
|
10,982
|
3,074
|
||||||||||||||
|
3
Barker Avenue (O)
|
1983
|
1997
|
--
|
122
|
7,864
|
2,003
|
122
|
9,867
|
9,989
|
3,071
|
||||||||||||||
|
50
Main Street (O)
|
1985
|
1997
|
--
|
564
|
48,105
|
7,642
|
564
|
55,747
|
56,311
|
16,029
|
||||||||||||||
|
11
Martine Avenue (O)
|
1987
|
1997
|
--
|
127
|
26,833
|
4,896
|
127
|
31,729
|
31,856
|
9,740
|
||||||||||||||
|
1
Water Street (O)
|
1979
|
1997
|
--
|
211
|
5,382
|
1,177
|
211
|
6,559
|
6,770
|
1,906
|
||||||||||||||
|
Yonkers
|
|
|||||||||||||||||||||||
|
100
Corporate Boulevard (F)
|
1987
|
1997
|
--
|
602
|
9,910
|
870
|
602
|
10,780
|
11,382
|
3,152
|
||||||||||||||
|
200
Corporate Boulevard
|
||||||||||||||||||||||||
|
South
(F)
|
1990
|
1997
|
--
|
502
|
7,575
|
456
|
502
|
8,031
|
8,533
|
2,146
|
||||||||||||||
|
250
Corporate Boulevard
|
||||||||||||||||||||||||
|
South
(L)
|
N/A
|
2002
|
--
|
1,028
|
--
|
255
|
1,139
|
144
|
1,283
|
|||||||||||||||
|
1
Enterprise Boulevard (L)
|
N/A
|
1997
|
--
|
1,379
|
--
|
1
|
1,380
|
--
|
1,380
|
--
|
||||||||||||||
|
1
Executive Boulevard (O)
|
1982
|
1997
|
--
|
1,104
|
11,904
|
2,021
|
1,105
|
13,924
|
15,029
|
4,055
|
||||||||||||||
|
2
Executive Plaza (R)
|
1986
|
1997
|
--
|
89
|
2,439
|
3
|
89
|
2,442
|
2,531
|
666
|
||||||||||||||
|
3
Executive Plaza (O)
|
1987
|
1997
|
--
|
385
|
6,256
|
1,728
|
385
|
7,984
|
8,369
|
2,753
|
||||||||||||||
|
4
Executive Plaza (F)
|
1986
|
1997
|
--
|
584
|
6,134
|
1,859
|
584
|
7,993
|
8,577
|
2,348
|
||||||||||||||
|
6
Executive Plaza (F)
|
1987
|
1997
|
--
|
546
|
7,246
|
384
|
546
|
7,630
|
8,176
|
2,119
|
||||||||||||||
|
1
Odell Plaza (F)
|
1980
|
1997
|
--
|
1,206
|
6,815
|
880
|
1,206
|
7,695
|
8,901
|
2,100
|
||||||||||||||
|
5
Odell Plaza (F)
|
1983
|
1997
|
--
|
331
|
2,988
|
270
|
331
|
3,258
|
3,589
|
902
|
||||||||||||||
|
7
Odell Plaza (F)
|
1984
|
1997
|
--
|
419
|
4,418
|
470
|
419
|
4,888
|
5,307
|
1,307
|
||||||||||||||
|
PENNSYLVANIA
|
||||||||||||||||||||||||
|
Chester
County
|
||||||||||||||||||||||||
|
Berwyn
|
||||||||||||||||||||||||
|
1000
Westlakes Drive (O)
|
1989
|
1997
|
--
|
619
|
9,016
|
570
|
619
|
9,586
|
10,205
|
2,768
|
||||||||||||||
|
1055
Westlakes Drive (O)
|
1990
|
1997
|
--
|
1,951
|
19,046
|
4,218
|
1,951
|
23,264
|
25,215
|
7,164
|
||||||||||||||
116
|
MACK-CALI
REALTY CORPORATION
|
|||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
|||||||||||||||||||||||||
|
December
31, 2007
|
|||||||||||||||||||||||||
|
(dollars
in thousands)
|
|||||||||||||||||||||||||
|
SCHEDULE
III
|
|||||||||||||||||||||||||
|
Gross
Amount at Which
|
|||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
||||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
|||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
||||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
|||||||||||||||
|
1205
Westlakes Drive (O)
|
1988
|
1997
|
--
|
1,323
|
20,098
|
2,643
|
1,323
|
22,741
|
24,064
|
6,275
|
|||||||||||||||
|
1235
Westlakes Drive (O)
|
1986
|
1997
|
--
|
1,417
|
21,215
|
3,433
|
1,418
|
24,647
|
26,065
|
6,902
|
|||||||||||||||
|
Delaware
County
|
|||||||||||||||||||||||||
|
Lester
|
|||||||||||||||||||||||||
|
100
Stevens Drive (O)
|
1986
|
1996
|
--
|
1,349
|
10,018
|
3,154
|
1,349
|
13,172
|
14,521
|
4,101
|
|||||||||||||||
|
200
Stevens Drive (O)
|
1987
|
1996
|
--
|
1,644
|
20,186
|
4,748
|
1,644
|
24,934
|
26,578
|
7,752
|
|||||||||||||||
|
300
Stevens Drive (O)
|
1992
|
1996
|
--
|
491
|
9,490
|
1,919
|
491
|
11,409
|
11,900
|
3,683
|
|||||||||||||||
|
Media
|
|||||||||||||||||||||||||
|
1400
Providence Rd,
|
|||||||||||||||||||||||||
|
Center
I (O)
|
1986
|
1996
|
--
|
1,042
|
9,054
|
2,457
|
1,042
|
11,511
|
12,553
|
3,724
|
|||||||||||||||
|
1400
Providence Rd,
|
|||||||||||||||||||||||||
|
Center
II (O)
|
1990
|
1996
|
--
|
1,543
|
16,464
|
3,138
|
1,544
|
19,601
|
21,145
|
6,455
|
|||||||||||||||
|
Montgomery
County
|
|||||||||||||||||||||||||
|
Bala
Cynwyd
|
|||||||||||||||||||||||||
|
150
Monument Road (O)
|
1981
|
2004
|
--
|
2,845
|
14,780
|
3,352
|
2,845
|
18,132
|
20,977
|
1,455
|
|||||||||||||||
|
Blue
Bell
|
|||||||||||||||||||||||||
|
4
Sentry Parkway (O)
|
1982
|
2003
|
--
|
1,749
|
7,721
|
189
|
1,749
|
7,910
|
9,659
|
854
|
|||||||||||||||
|
16
Sentry Parkway (O)
|
1988
|
2002
|
--
|
3,377
|
13,511
|
1,344
|
3,377
|
14,855
|
18,232
|
3,138
|
|||||||||||||||
|
18
Sentry Parkway (O)
|
1988
|
2002
|
--
|
3,515
|
14,062
|
1,544
|
3,515
|
15,606
|
19,121
|
3,172
|
|||||||||||||||
|
King
of Prussia
|
|||||||||||||||||||||||||
|
2200
Renaissance Blvd (O)
|
1985
|
2002
|
22,034
|
5,347
|
21,453
|
2,696
|
5,347
|
24,149
|
29,496
|
5,709
|
|||||||||||||||
|
Lower
Providence
|
|||||||||||||||||||||||||
|
1000
Madison Avenue (O)
|
1990
|
1997
|
--
|
1,713
|
12,559
|
2,539
|
1,714
|
15,097
|
16,811
|
3,887
|
|||||||||||||||
|
Plymouth
Meeting
|
|||||||||||||||||||||||||
|
1150
Plymouth Meeting
|
|||||||||||||||||||||||||
|
Mall
(O)
|
1970
|
1997
|
--
|
125
|
499
|
31,117
|
6,219
|
25,522
|
31,741
|
6,973
|
|||||||||||||||
|
Five
Sentry Parkway East (O)
|
1984
|
1996
|
--
|
642
|
7,992
|
1,306
|
642
|
9,298
|
9,940
|
2,419
|
|||||||||||||||
|
Five
Sentry Parkway West (O)
|
1984
|
1996
|
--
|
268
|
3,334
|
543
|
268
|
3,877
|
4,145
|
957
|
|||||||||||||||
|
CONNETICUT
|
|||||||||||||||||||||||||
|
Fairfield
County
|
|||||||||||||||||||||||||
|
Norwalk
|
|||||||||||||||||||||||||
|
40
Richards Avenue (O)
|
1985
|
1998
|
--
|
1,087
|
18,399
|
3,363
|
1,087
|
21,762
|
22,849
|
5,213
|
|||||||||||||||
|
Stamford
|
|||||||||||||||||||||||||
|
1266
East Main Street (O)
|
1984
|
2002
|
17,575
|
6,638
|
26,567
|
3,565
|
6,638
|
30,132
|
36,770
|
5,499
|
|||||||||||||||
117
|
MACK-CALI
REALTY CORPORATION
|
|||||||||||||||||||||||||
|
REAL
ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
|
|||||||||||||||||||||||||
|
December
31, 2007
|
|||||||||||||||||||||||||
|
(dollars
in thousands)
|
|||||||||||||||||||||||||
|
SCHEDULE
III
|
|||||||||||||||||||||||||
|
Gross
Amount at Which
|
|||||||||||||||||||||||||
|
Costs
|
Carried
at Close of
|
||||||||||||||||||||||||
|
Initial
Costs
|
Capitalized
|
Period
(a)
|
|||||||||||||||||||||||
|
Year
|
Related
|
Building
and
|
Subsequent
|
Building
and
|
Accumulated
|
||||||||||||||||||||
|
Property Location (b)
|
Built
|
Acquired
|
Encumbrances
|
Land
|
Improvements
|
to Acquisition
|
Land
|
Improvements
|
Total
|
Depreciation (c)
|
|||||||||||||||
|
419
West Avenue (F)
|
1986
|
1997
|
--
|
4,538
|
9,246
|
1,241
|
4,538
|
10,487
|
15,025
|
3,131
|
|||||||||||||||
|
500
West Avenue (F)
|
1988
|
1997
|
--
|
415
|
1,679
|
165
|
415
|
1,844
|
2,259
|
564
|
|||||||||||||||
|
550
West Avenue (F)
|
1990
|
1997
|
--
|
1,975
|
3,856
|
59
|
1,975
|
3,915
|
5,890
|
1,057
|
|||||||||||||||
|
600
West Avenue (F)
|
1999
|
1999
|
--
|
2,305
|
2,863
|
839
|
2,305
|
3,702
|
6,007
|
761
|
|||||||||||||||
|
650
West Avenue (F)
|
1998
|
1998
|
--
|
1,328
|
--
|
4,260
|
1,328
|
4,260
|
5,588
|
1,690
|
|||||||||||||||
|
DISTRICT
OF COLUMBIA
|
|||||||||||||||||||||||||
|
Washington,
|
|||||||||||||||||||||||||
|
1201
Connecticut Avenue,
|
|||||||||||||||||||||||||
|
NW
(O)
|
1940
|
1999
|
--
|
14,228
|
18,571
|
3,153
|
14,228
|
21,724
|
35,952
|
4,773
|
|||||||||||||||
|
1400
L Street, NW (O)
|
1987
|
1998
|
--
|
13,054
|
27,423
|
6,441
|
13,054
|
33,864
|
46,918
|
7,570
|
|||||||||||||||
|
MARYLAND
|
|||||||||||||||||||||||||
|
Prince
George’s County
|
|||||||||||||||||||||||||
|
Greenbelt
|
|||||||||||||||||||||||||
|
9200
Edmonston Road (O)
|
1973/03
|
2006
|
5,096
|
1,547
|
4,131
|
51
|
1,547
|
4,182
|
5,729
|
327
|
|||||||||||||||
|
6301
Ivy Lane (O)
|
1979/95
|
2006
|
6,655
|
5,168
|
14,706
|
360
|
5,168
|
15,066
|
20,234
|
1,130
|
|||||||||||||||
|
6303
Ivy Lane (O)
|
1980/03
|
2006
|
--
|
5,115
|
13,860
|
155
|
5,115
|
14,015
|
19,130
|
1,016
|
|||||||||||||||
|
6305
Ivy Lane (O)
|
1982/95
|
2006
|
7,098
|
5,615
|
14,420
|
389
|
5,615
|
14,809
|
20,424
|
1,163
|
|||||||||||||||
|
6404
Ivy Lane (O)
|
1987
|
2006
|
13,029
|
7,578
|
20,785
|
462
|
7,578
|
21,247
|
28,825
|
1,860
|
|||||||||||||||
|
6406
Ivy Lane (O)
|
1991
|
2006
|
--
|
7,514
|
21,152
|
145
|
7,514
|
21,297
|
28,811
|
1,349
|
|||||||||||||||
|
6411
Ivy Lane (O)
|
1984/05
|
2006
|
--
|
6,867
|
17,470
|
337
|
6,867
|
17,807
|
24,674
|
1,393
|
|||||||||||||||
|
Lanham
|
|||||||||||||||||||||||||
|
4200
Parliament Place (O)
|
1989
|
1998
|
--
|
2,114
|
13,546
|
626
|
1,393
|
14,893
|
16,286
|
4,227
|
|||||||||||||||
|
Projects
Under Development
|
|||||||||||||||||||||||||
|
and Developable
Land
|
--
|
122,796
|
17,949
|
--
|
122,796
|
17,949
|
140,745
|
297
|
|||||||||||||||||
|
Furniture,
Fixtures
|
|||||||||||||||||||||||||
|
and
Equipment
|
--
|
--
|
--
|
8,956
|
--
|
8,956
|
8,956
|
6,810
|
|||||||||||||||||
|
TOTALS
|
306,123
|
716,382
|
3,436,947
|
732,100
|
726,253
|
4,159,176
|
4,885,429
|
907,013
|
|||||||||||||||||
|
(a)
|
The
aggregate cost for federal income tax purposes at December 31, 2007 was
approximately $3.0 billion.
|
(b) Legend of Property
Codes:
(O)=Office
Property (R)=Stand-alone
Retail Property
(F)=Office/Flex
Property (L)=Land
Lease
(I)=Industrial/Warehouse
Property
(c) Depreciation
of the buildings and improvements are calculated over lives ranging from the
life of the lease to 40 years.
118
MACK-CALI
REALTY CORPORATION
NOTE
TO SCHEDULE III
Changes in rental properties and
accumulated depreciation for the periods ended December 31, 2007, 2006 and 2005
are as follows: (dollars in
thousands)
|
2007
|
2006
|
2005
|
|
|
Rental
Properties
|
|||
|
Balance
at beginning of year
|
$4,573,587
|
$4,491,752
|
$4,160,959
|
|
Additions
|
372,793
|
405,883
|
485,680
|
|
Properties sold
|
(47,394)
|
(313,345)
|
(120,755)
|
|
Retirements/disposals
|
(19,488)
|
(10,703)
|
(34,132)
|
|
Balance
at end of year
|
$4,879,498
|
$4,573,587
|
$4,491,752
|
|
Accumulated
Depreciation
|
|
||
|
Balance
at beginning of year
|
$ 796,793
|
$ 722,980
|
$ 641,626
|
|
Depreciation
expense
|
140,240
|
131,848
|
128,814
|
|
Properties sold
|
(11,224)
|
(53,037)
|
(16,691)
|
|
Retirements/disposals
|
(18,796)
|
(4,998)
|
(30,769)
|
|
Balance
at end of year
|
$ 907,013
|
$ 796,793
|
$ 722,980
|
119
MACK-CALI
REALTY CORPORATION
Signatures
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Mack-Cali Realty
Corporation
(Registrant)
Date:
February 13,
2008 /s/ Barry
Lefkowitz
Barry
Lefkowitz
Executive
Vice President and
Chief
Financial Officer
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated:
|
Name
|
Title
|
Date
|
|
/s/ William L.
Mack
|
Chairman
of the Board
|
February
13, 2008
|
|
William
L. Mack
|
||
|
/s/ Mitchell E.
Hersh
|
President
and Chief Executive
|
February
13, 2008
|
|
Mitchell
E. Hersh
|
Officer
and Director
|
|
|
/s/ Barry
Lefkowitz
|
Executive
Vice President and
|
February
13, 2008
|
|
Barry
Lefkowitz
|
Chief
Financial Officer
|
|
| /s/ Martin S. Berger |
Director
|
February
13, 2008
|
| Martin S. Berger | ||
|
/s/ Alan S.
Bernikow
|
Director
|
February
13, 2008
|
|
Alan
S. Bernikow
|
||
|
/s/ John R.
Cali
|
Director
|
February
13, 2008
|
|
John
R. Cali
|
||
|
/s/ Kenneth M.
Duberstein
|
Director
|
February
13, 2008
|
|
Kenneth
M. Duberstein
|
||
120
|
Name
|
Title
|
Date
|
|
/s/ Nathan
Gantcher
|
Director
|
February
13, 2008
|
|
Nathan
Gantcher
|
|
/s/ David S.
Mack
|
Director
|
February
13, 2008
|
|
David
S. Mack
|
|
/s/ Alan G.
Philibosian
|
Director
|
February
13, 2008
|
|
Alan
G. Philibosian
|
|
/s/ Irvin D.
Reid
|
Director
|
February
13, 2008
|
|
Irvin
D. Reid
|
|
/s/ Vincent Tese
|
Director
|
February
13, 2008
|
|
Vincent
Tese
|
|
/s/ Roy J.
Zuckerberg
|
Director
|
February
13, 2008
|
|
Roy
J. Zuckerberg
|
121
MACK-CALI
REALTY CORPORATION
EXHIBIT
INDEX
|
Exhibit
Number
|
Exhibit Title
|
|
|
3.1
|
Restated
Charter of Mack-Cali Realty Corporation dated June 11, 2001 (filed as
Exhibit 3.1 to the Company’s Form 10-Q dated June 30, 2001
and incorporated herein by reference).
|
|
|
3.2
|
Amended
and Restated Bylaws of Mack-Cali Realty Corporation dated June 10,
1999 (filed as Exhibit 3.2 to the Company’s Form 8-K dated
June 10, 1999 and incorporated herein by
reference).
|
|
|
3.3
|
Amendment
No. 1 to the Amended and Restated Bylaws of Mack-Cali Realty
Corporation dated March 4, 2003, (filed as Exhibit 3.3 to the
Company’s Form 10-Q dated March 31, 2003 and incorporated herein
by reference).
|
|
|
3.4
|
Amendment
No. 2 to the Mack-Cali Realty Corporation Amended and Restated Bylaws
dated May 24, 2006 (filed as Exhibit 3.1 to the Company’s Form 8-K dated
May 24, 2006 and incorporated herein by reference).
|
|
|
3.5
|
Second
Amended and Restated Agreement of Limited Partnership of Mack-Cali Realty,
L.P. dated December 11, 1997 (filed as Exhibit 10.110 to the
Company’s Form 8-K dated December 11, 1997 and incorporated
herein by reference).
|
|
|
3.6
|
Amendment
No. 1 to the Second Amended and Restated Agreement of Limited
Partnership of Mack-Cali Realty, L.P. dated August 21, 1998 (filed as
Exhibit 3.1 to the Company’s and the Operating Partnership’s
Registration Statement on Form S-3, Registration No. 333-57103,
and incorporated herein by reference).
|
|
|
3.7
|
Second
Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Mack-Cali Realty, L.P. dated July 6, 1999 (filed as
Exhibit 10.1 to the Company’s Form 8-K dated July 6, 1999
and incorporated herein by reference).
|
|
|
3.8
|
Third
Amendment to the Second Amended and Restated Agreement of Limited
Partnership of Mack-Cali Realty, L.P. dated September 30, 2003 (filed
as Exhibit 3.7 to the Company’s Form 10-Q dated
September 30, 2003 and incorporated herein by
reference).
|
|
|
3.9
|
Certificate
of Designation of Series B Preferred Operating Partnership Units of
Limited Partnership Interest of Mack-Cali Realty, L.P. (filed as
Exhibit 10.101 to the Company’s Form 8-K dated December 11,
1997 and incorporated herein by reference).
|
|
|
3.10
|
Articles
Supplementary for the 8% Series C Cumulative Redeemable Perpetual
Preferred Stock dated March 11, 2003 (filed as Exhibit 3.1 to
the Company’s Form 8-K dated March 14, 2003 and incorporated
herein by reference).
|
|
|
3.11
|
Certificate
of Designation for the 8% Series C Cumulative Redeemable Perpetual
Preferred Operating Partnership Units dated March 14, 2003 (filed as
Exhibit 3.2 to the Company’s Form 8-K dated March 14, 2003
and incorporated herein by reference).
|
|
122
|
Exhibit
Number
|
Exhibit Title
|
|
|
4.1
|
Amended
and Restated Shareholder Rights Agreement, dated as of March 7, 2000,
between Mack-Cali Realty Corporation and EquiServe Trust Company, N.A., as
Rights Agent (filed as Exhibit 4.1 to the Company’s Form 8-K
dated March 7, 2000 and incorporated herein by
reference).
|
|
|
4.2
|
Amendment
No. 1 to the Amended and Restated Shareholder Rights Agreement, dated
as of June 27, 2000, by and among Mack-Cali Realty Corporation and
EquiServe Trust Company, N.A. (filed as Exhibit 4.1 to the Company’s
Form 8-K dated June 27, 2000 and incorporated herein by
reference).
|
|
|
4.3
|
Indenture
dated as of March 16, 1999, by and among Mack-Cali Realty, L.P., as
issuer, Mack-Cali Realty Corporation, as guarantor, and Wilmington Trust
Company, as trustee (filed as Exhibit 4.1 to the Operating
Partnership’s Form 8-K dated March 16, 1999 and incorporated
herein by reference).
|
|
|
4.4
|
Supplemental
Indenture No. 1 dated as of March 16, 1999, by and among
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Operating Partnership’s
Form 8-K dated March 16, 1999 and incorporated herein by
reference).
|
|
|
4.5
|
Supplemental
Indenture No. 2 dated as of August 2, 1999, by and among
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.4 to the Operating Partnership’s
Form 10-Q dated June 30, 1999 and incorporated herein by
reference).
|
|
|
4.6
|
Supplemental
Indenture No. 3 dated as of December 21, 2000, by and among
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Operating Partnership’s
Form 8-K dated December 21, 2000 and incorporated herein by
reference).
|
|
|
4.7
|
Supplemental
Indenture No. 4 dated as of January 29, 2001, by and among
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Operating Partnership’s
Form 8-K dated January 29, 2001 and incorporated herein by
reference).
|
|
|
4.8
|
Supplemental
Indenture No. 5 dated as of December 20, 2002, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Operating Partnership’s
Form 8-K dated December 20, 2002 and incorporated herein by
reference).
|
|
|
4.9
|
Supplemental
Indenture No. 6 dated as of March 14, 2003, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
March 14, 2003 and incorporated herein by
reference).
|
|
|
4.10
|
Supplemental
Indenture No. 7 dated as of June 12, 2003, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
June 12, 2003 and incorporated herein by
reference).
|
|
|
4.11
|
Supplemental
Indenture No. 8 dated as of February 9, 2004, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
February 9, 2004 and incorporated herein by
reference).
|
|
123
|
Exhibit
Number
|
Exhibit Title
|
|
|
4.12
|
Supplemental
Indenture No. 9 dated as of March 22, 2004, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
March 22, 2004 and incorporated herein by
reference).
|
|
|
4.13
|
Supplemental
Indenture No. 10 dated as of January 25, 2005, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
January 25, 2005 and incorporated herein by
reference).
|
|
|
4.14
|
Supplemental
Indenture No. 11 dated as of April 15, 2005, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
April 15, 2005 and incorporated herein by
reference).
|
|
|
4.15
|
Supplemental
Indenture No. 12 dated as of November 30, 2005, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
November 30, 2005 and incorporated herein by
reference).
|
|
|
4.16
|
Supplemental
Indenture No. 13 dated as of January 24, 2006, by and between
Mack-Cali Realty, L.P., as issuer, and Wilmington Trust Company, as
trustee (filed as Exhibit 4.2 to the Company’s Form 8-K dated
January 18, 2006 and incorporated herein by
reference).
|
|
|
4.17
|
Deposit
Agreement dated March 14, 2003 by and among Mack-Cali Realty
Corporation, EquiServe Trust Company, N.A., and the holders from time to
time of the Depositary Receipts described therein (filed as
Exhibit 4.1 to the Company’s Form 8-K dated March 14, 2003
and incorporated herein by reference).
|
|
|
10.1
|
Amended
and Restated Employment Agreement dated as of July 1, 1999 between
Mitchell E. Hersh and Mack-Cali Realty Corporation (filed as
Exhibit 10.2 to the Company’s Form 10-Q dated June 30, 1999
and incorporated herein by reference).
|
|
|
10.2
|
Second
Amended and Restated Employment Agreement dated as of July 1, 1999
between Barry Lefkowitz and Mack-Cali Realty Corporation (filed as
Exhibit 10.6 to the Company’s Form 10-Q dated June 30, 1999
and incorporated herein by reference).
|
|
|
10.3
|
Second
Amended and Restated Employment Agreement dated as of July 1, 1999
between Roger W. Thomas and Mack-Cali Realty Corporation (filed as
Exhibit 10.7 to the Company’s Form 10-Q dated June 30, 1999
and incorporated herein by reference).
|
|
|
10.4
|
Employment
Agreement dated as of December 5, 2000 between Michael Grossman and
Mack-Cali Realty Corporation (filed as Exhibit 10.5 to the Company’s
Form 10-K for the year ended December 31, 2000 and incorporated
herein by reference).
|
|
|
10.5
|
Employment
Agreement dated as of May 9, 2006 by and between Mark Yeager and
Mack-Cali Realty Corporation (filed as Exhibit 10.15 to the Company’s Form
8-K dated May 9, 2006 and incorporated herein by
reference).
|
|
124
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.6
|
Restricted
Share Award Agreement dated as of July 1, 1999 between Mitchell E.
Hersh and Mack-Cali Realty Corporation (filed as Exhibit 10.8 to the
Company’s Form 10-Q dated June 30, 1999 and incorporated herein
by reference).
|
|
|
10.7
|
Restricted
Share Award Agreement dated as of July 1, 1999 between Barry
Lefkowitz and Mack-Cali Realty Corporation (filed as Exhibit 10.12 to
the Company’s Form 10-Q dated June 30, 1999 and incorporated
herein by reference).
|
|
|
10.8
|
Restricted
Share Award Agreement dated as of July 1, 1999 between Roger W.
Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.13 to
the Company’s Form 10-Q dated June 30, 1999 and incorporated
herein by reference).
|
|
|
10.9
|
Restricted
Share Award Agreement dated as of March 12, 2001 between Roger W.
Thomas and Mack-Cali Realty Corporation (filed as Exhibit 10.10 to
the Company’s Form 10-Q dated March 31, 2001 and incorporated
herein by reference).
|
|
|
10.10
|
Restricted
Share Award Agreement dated as of March 12, 2001 between Michael
Grossman and Mack-Cali Realty Corporation (filed as Exhibit 10.11 to
the Company’s Form 10-Q dated March 31, 2001 and incorporated
herein by reference).
|
|
|
10.11
|
Restricted
Share Award Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.1 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.12
|
Tax
Gross Up Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.2 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.13
|
First
Amendment effective as of January 2, 2003 to the Restricted Share
Award Agreement dated July 1, 1999 between Mack-Cali Realty
Corporation and Mitchell E. Hersh (filed as Exhibit 10.3 to the
Company’s Form 8-K dated January 2, 2003 and incorporated herein
by reference).
|
|
|
10.14
|
Restricted
Share Award Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.7 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.15
|
Tax
Gross Up Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.8 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.16
|
First
Amendment effective as of January 2, 2003 to the Restricted Share
Award Agreement dated July 1, 1999 between Mack-Cali Realty
Corporation and Barry Lefkowitz (filed as Exhibit 10.9 to the
Company’s Form 8-K dated January 2, 2003 and incorporated herein
by reference).
|
|
125
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.17
|
Restricted
Share Award Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.10 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.18
|
Tax
Gross Up Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.11 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.19
|
First
Amendment effective as of January 2, 2003 to the Restricted Share
Award Agreement dated July 1, 1999 between Mack-Cali Realty
Corporation and Roger W. Thomas (filed as Exhibit 10.12 to the
Company’s Form 8-K dated January 2, 2003 and incorporated herein
by reference).
|
|
|
10.20
|
First
Amendment effective as of January 2, 2003 to the Restricted Share
Award Agreement dated March 12, 2001 between Mack-Cali Realty
Corporation and Roger W. Thomas (filed as Exhibit 10.13 to the
Company’s Form 8-K dated January 2, 2003 and incorporated herein
by reference).
|
|
|
10.21
|
Restricted
Share Award Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Michael A. Grossman (filed as
Exhibit 10.14 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.22
|
Tax
Gross Up Agreement effective as of January 2, 2003 by and between
Mack-Cali Realty Corporation and Michael A. Grossman (filed as
Exhibit 10.15 to the Company’s Form 8-K dated January 2,
2003 and incorporated herein by reference).
|
|
|
10.23
|
Restricted
Share Award Agreement dated December 6, 1999 by and between Mack-Cali
Realty Corporation and Michael A. Grossman (filed as Exhibit 10.16 to
the Company’s Form 8-K dated January 2, 2003 and incorporated
herein by reference).
|
|
|
10.24
|
First
Amendment effective as of January 2, 2003 to the Restricted Share
Award Agreement dated December 6, 1999 between Mack-Cali Realty
Corporation and Michael A. Grossman (filed as Exhibit 10.17 to the
Company’s Form 8-K dated January 2, 2003 and incorporated herein
by reference).
|
|
|
10.25
|
First
Amendment effective as of January 2, 2003 to the Restricted Share
Award Agreement dated March 12, 2001 between Mack-Cali Realty
Corporation and Michael A. Grossman (filed as Exhibit 10.18 to the
Company’s Form 8-K dated January 2, 2003 and incorporated herein
by reference).
|
|
|
10.26
|
Restricted
Share Award Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.1 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
126
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.27
|
Tax
Gross Up Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.2 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.28
|
Restricted
Share Award Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.5 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.29
|
Tax
Gross Up Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.6 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.30
|
Restricted
Share Award Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.7 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.31
|
Tax
Gross Up Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.8 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.32
|
Restricted
Share Award Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Michael Grossman (filed as
Exhibit 10.9 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.33
|
Tax
Gross Up Agreement effective as of December 2, 2003 by and between
Mack-Cali Realty Corporation and Michael Grossman (filed as
Exhibit 10.10 to the Company’s Form 8-K dated December 2,
2003 and incorporated herein by reference).
|
|
|
10.34
|
Restricted
Share Award Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.2 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.35
|
Tax
Gross Up Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.3 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.36
|
Restricted
Share Award Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.4 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.37
|
Tax
Gross Up Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.5 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
127
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.38
|
Restricted
Share Award Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.6 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.39
|
Tax
Gross Up Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.7 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.40
|
Restricted
Share Award Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Michael A. Grossman (filed as
Exhibit 10.8 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.41
|
Tax
Gross Up Agreement effective December 7, 2004 by and between
Mack-Cali Realty Corporation and Michael A. Grossman (filed as
Exhibit 10.9 to the Company’s Form 8-K dated December 7,
2004 and incorporated herein by reference).
|
|
|
10.42
|
Restricted
Share Award Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.2 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.43
|
Tax
Gross Up Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Mitchell E. Hersh (filed as
Exhibit 10.3 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.44
|
Restricted
Share Award Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.4 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.45
|
Tax
Gross Up Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Barry Lefkowitz (filed as
Exhibit 10.5 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.46
|
Restricted
Share Award Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.6 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.47
|
Tax
Gross Up Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Roger W. Thomas (filed as
Exhibit 10.7 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.48
|
Restricted
Share Award Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Michael A. Grossman (filed as
Exhibit 10.8 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by
reference).
|
128
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.49
|
Tax
Gross Up Agreement effective December 6, 2005 by and between
Mack-Cali Realty Corporation and Michael A. Grossman (filed as
Exhibit 10.9 to the Company’s Form 8-K dated December 6,
2005 and incorporated herein by reference).
|
|
|
10.50
|
Restricted
Share Award Agreement by and between Mack-Cali Realty Corporation and Mark
Yeager (filed as Exhibit 10.16 to the Company’s Form 8-K dated May 9, 2006
and incorporated herein by reference).
|
|
|
10.51
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.1 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.52
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.2 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.53
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.3 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.54
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mitchell E. Hersh (filed as Exhibit 10.4 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.55
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.5 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.56
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.6 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.57
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.7 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.58
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Barry Lefkowitz (filed as Exhibit 10.8 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
129
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.59
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Roger W. Thomas (filed as Exhibit 10.9 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.60
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Roger W. Thomas (filed as Exhibit 10.10 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.61
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Roger W. Thomas (filed as Exhibit 10.11 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.62
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Roger W. Thomas (filed as Exhibit 10.12 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.63
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Michael A. Grossman (filed as Exhibit 10.13 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.64
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Michael A. Grossman (filed as Exhibit 10.14 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.65
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Michael A. Grossman (filed as Exhibit 10.15 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.66
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Michael A. Grossman (filed as Exhibit 10.16 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.67
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mark Yeager (filed as Exhibit 10.17 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.68
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mark Yeager (filed as Exhibit 10.18 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.69
|
Restricted
Share Award Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mark Yeager (filed as Exhibit 10.19 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
130
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.70
|
Tax
Gross Up Agreement effective December 5, 2006 by and between Mack-Cali
Realty Corporation and Mark Yeager (filed as Exhibit 10.20 to the
Company’s Form 8-K dated December 5, 2006 and incorporated herein by
reference).
|
|
|
10.71
|
Form
of Multi-Year Restricted Share Award Agreement (filed as Exhibit 10.1 to
the Company’s Form 8-K dated September 12, 2007 and incorporated herein by
reference).
|
|
|
10.72
|
Form
of Tax Gross-Up Agreement (filed as Exhibit 10.2 to the Company’s Form 8-K
dated September 12, 2007 and incorporated herein by
reference).
|
|
|
10.73
|
Form
of Restricted Share Award Agreement effective December 4, 2007 by and
between Mack-Cali Realty Corporation and each of Mitchell E. Hersh, Barry
Lefkowitz, Michael Grossman, Mark Yeager and Roger W. Thomas (filed as
Exhibit 10.1 to the Company’s Form 8-K dated December 4, 2007 and
incorporated herein by reference).
|
|
|
10.74
|
Form
of Tax Gross-Up Agreement effective December 4, 2007 by and between
Mack-Cali Realty Corporation and each of Mitchell E. Hersh, Barry
Lefkowitz, Michael Grossman, Mark Yeager and Roger W. Thomas (filed as
Exhibit 10.2 to the Company’s Form 8-K dated December 4, 2007 and
incorporated herein by reference).
|
|
|
10.75
|
Amended
and Restated Revolving Credit Agreement dated as of September 27,
2002, among Mack-Cali Realty, L.P. and JPMorgan Chase Bank, Fleet National
Bank and Other Lenders Which May Become Parties Thereto with JPMorgan
Chase Bank, as administrative agent, swing lender and fronting bank, Fleet
National Bank and Commerzbank AG, New York and Grand Cayman branches as
syndication agents, Bank of America, N.A. and Wells Fargo Bank, National
Association, as documentation agents, and J.P. Morgan Securities Inc. and
Fleet Securities, Inc, as arrangers (filed as Exhibit 10.1 to the
Company’s Form 8-K dated September 27, 2002 and incorporated
herein by reference).
|
|
|
10.76
|
Second
Amended and Restated Revolving Credit Agreement among Mack-Cali Realty,
L.P., JPMorgan Chase Bank, N.A., Bank of America, N.A., and other lending
institutions that are or may become a party to the Second Amended and
Restated Revolving Credit Agreement dated as of November 23, 2004
(filed as Exhibit 10.1 to the Company’s Form 8-K dated
November 23, 2004 and incorporated herein by
reference).
|
|
|
10.77
|
Extension
and Modification Agreement dated as of September 16, 2005 by and
among Mack-Cali Realty, L.P., JPMorgan Chase Bank, N.A., as administrative
agent, and the several Lenders Party thereto (filed as Exhibit 10.1
to the Company’s Form 8-K dated September 16, 2005 and
incorporated herein by reference).
|
|
|
10.78
|
Second
Modification Agreement dated as of July 14, 2006 by and among Mack-Cali
Realty, L.P., JPMorgan Chase Bank, N.A., as administrative agent, and the
several Lenders party thereto (filed as Exhibit 10.1 to the Company’s Form
8-K dated July 14, 2006 and incorporated herein by
reference).
|
|
|
10.79
|
Extension
and Third Modification Agreement dated as of June 22, 2007 by and among
Mack-Cali Realty, L.P., JPMorgan Chase Bank, N.A., as administrative
agent, and the several Lenders party thereto. (filed as Exhibit 10.1 to
the Company’s Form 8-K dated June 22, 2007 and incorporated herein by
reference).
|
|
131
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.80
|
Fourth
Modification Agreement dated as of September 21, 2007 by and among Mack
Cali Realty, L.P., JPMorgan Chase Bank, N.A., as administrative agent and
the several Lenders party thereto (filed as Exhibit 10.1 to the Company’s
Form 8-K dated September 21, 2007 and incorporated herein by
reference).
|
|
|
10.81
|
Amended
and Restated Master Loan Agreement dated as of November 12, 2004
among Mack-Cali Realty, L.P., and Affiliates of Mack-Cali Realty
Corporation and Mack-Cali Realty, L.P., as Borrowers, Mack-Cali Realty
Corporation and Mack-Cali Realty L.P., as Guarantors and The Prudential
Insurance Company of America, as Lender (filed as Exhibit 10.1 to the
Company’s Form 8-K dated November 12, 2004 and incorporated
herein by reference).
|
|
|
10.82
|
Contribution
and Exchange Agreement among The MK Contributors, The MK Entities, The
Patriot Contributors, The Patriot Entities, Patriot American Management
and Leasing Corp., Cali Realty, L.P. and Cali Realty Corporation, dated
September 18, 1997 (filed as Exhibit 10.98 to the Company’s
Form 8-K dated September 19, 1997 and incorporated herein by
reference).
|
|
|
10.83
|
First
Amendment to Contribution and Exchange Agreement, dated as of
December 11, 1997, by and among the Company and the Mack Group (filed
as Exhibit 10.99 to the Company’s Form 8-K dated
December 11, 1997 and incorporated herein by
reference).
|
|
|
10.84
|
Employee
Stock Option Plan of Mack-Cali Realty Corporation (filed as
Exhibit 10.1 to the Company’s Post-Effective Amendment No. 1 to
Form S-8, Registration No. 333-44443, and incorporated herein by
reference).
|
|
|
10.85
|
Director
Stock Option Plan of Mack-Cali Realty Corporation (filed as
Exhibit 10.2 to the Company’s Post-Effective Amendment No. 1 to
Form S-8, Registration No. 333-44443, and incorporated herein by
reference).
|
|
|
10.86
|
2000
Employee Stock Option Plan (filed as Exhibit 10.1 to the Company’s
Registration Statement on Form S-8, Registration No. 333-52478,
and incorporated herein by reference), as amended by the First Amendment
to the 2000 Employee Stock Option Plan (filed as Exhibit 10.17 to the
Company’s Form 10-Q dated June 30, 2002 and incorporated herein
by reference).
|
|
|
10.87
|
Amended
and Restated 2000 Director Stock Option Plan (filed as Exhibit 10.2
to the Company’s Post-Effective Amendment No. 1 to Registration
Statement on Form S-8, Registration No. 333-100244, and
incorporated herein by reference).
|
|
|
10.88
|
Mack-Cali
Realty Corporation 2004 Incentive Stock Plan (filed as Exhibit 10.1
to the Company’s Registration Statement on Form S-8, Registration
No. 333-116437, and incorporated herein by
reference).
|
|
|
10.89
|
Deferred
Compensation Plan for Directors (filed as Exhibit 10.1 to the
Company’s Registration Statement on Form S-8, Registration
No. 333-80081, and incorporated herein by
reference).
|
|
132
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.90
|
Form of
Indemnification Agreement by and between Mack-Cali Realty Corporation and
each of William L. Mack, John J. Cali, Mitchell E. Hersh, John R. Cali,
David S. Mack, Martin S. Berger, Alan S. Bernikow, Kenneth M. Duberstein,
Martin D. Gruss, Nathan Gantcher, Vincent Tese, Roy J. Zuckerberg, Alan G.
Philibosian, Irvin D. Reid, Robert F. Weinberg, Barry Lefkowitz, Roger W.
Thomas, Michael A. Grossman, Mark Yeager, Anthony Krug, Dean Cingolani,
Anthony DeCaro Jr., Mark Durno, William Fitzpatrick, John Kropke, Nicholas
Mitarotonda, Jr., Michael Nevins, Virginia Sobol, Albert Spring,
Daniel Wagner, Deborah Franklin, John Marazzo, Christopher DeLorenzo,
Jeffrey Warner, Diane Chayes and James Corrigan (filed as
Exhibit 10.28 to the Company’s Form 10-Q dated
September 30, 2002 and incorporated herein by
reference).
|
|
|
10.91
|
Indemnification
Agreement dated October 22, 2002 by and between Mack-Cali Realty
Corporation and John Crandall (filed as Exhibit 10.29 to the
Company’s Form 10-Q dated September 30, 2002 and incorporated
herein by reference).
|
|
|
10.92
|
Second
Amendment to Contribution and Exchange Agreement, dated as of
June 27, 2000, between RMC Development Company, LLC f/k/a Robert
Martin Company, LLC, Robert Martin Eastview North Company, L.P., the
Company and the Operating Partnership (filed as Exhibit 10.44 to the
Company’s Form 10-K dated December 31, 2002 and incorporated
herein by reference).
|
|
|
10.93
|
Limited
Partnership Agreement of Meadowlands Mills/Mack-Cali Limited Partnership
by and between Meadowlands Mills Limited Partnership, Mack-Cali
Meadowlands Entertainment L.L.C. and Mack-Cali Meadowlands Special L.L.C.
dated November 25, 2003 (filed as Exhibit 10.1 to the Company’s
Form 8-K dated December 3, 2003 and incorporated herein by
reference).
|
|
|
10.94
|
Redevelopment
Agreement by and between the New Jersey Sports and Exposition Authority
and Meadowlands Mills/Mack-Cali Limited Partnership dated December 3,
2003 (filed as Exhibit 10.2 to the Company’s Form 8-K dated
December 3, 2003 and incorporated herein by
reference).
|
|
|
10.95
|
First
Amendment to Redevelopment Agreement by and between the New Jersey Sports
and Exposition Authority and Meadowlands Mills/Mack-Cali Limited
Partnership dated October 5, 2004 (filed as Exhibit 10.54 to the
Company’s Form 10-Q dated September 30, 2004 and incorporated
herein by reference).
|
|
|
10.96
|
Letter
Agreement by and between Mack-Cali Realty Corporation and The Mills
Corporation dated October 5, 2004 (filed as Exhibit 10.55 to the
Company’s Form 10-Q dated September 30, 2004 and incorporated
herein by reference).
|
|
|
10.97
|
First
Amendment to Limited Partnership Agreement of Meadowlands Mills/Mack-Cali
Limited Partnership by and between Meadowlands Mills Limited Partnership,
Mack-Cali Meadowlands Entertainment L.L.C. and Mack-Cali Meadowlands
Special L.L.C. dated as of June 30, 2005 (filed as Exhibit 10.66
to the Company’s Form 10-Q dated June 30, 2005 and incorporated
herein by reference).
|
|
133
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.98
|
Mack-Cali
Rights, Obligations and Option Agreement by and between Meadowlands
Developer Limited Partnership, Meadowlands Limited Partnership,
Meadowlands Developer Holding Corp., Meadowlands Mack-Cali GP, L.L.C.,
Mack-Cali Meadowlands Special, L.L.C., Baseball Meadowlands
Mills/Mack-Cali Limited Partnership, A-B Office Meadowlands Mack-Cali
Limited Partnership, C-D Office Meadowlands Mack-Cali Limited Partnership,
Hotel Meadowlands Mack-Cali Limited Partnership and ERC Meadowlands
Mills/Mack-Cali Limited Partnership dated November 22, 2006 (filed as
Exhibit 10.92 to the Company’s Form 10-K dated December 31, 2006 and
incorporated herein by reference).
|
|
|
10.99
|
Redemption
Agreement by and among Meadowlands Developer Limited Partnership,
Meadowlands Developer Holding Corp., Mack-Cali Meadowlands entertainment
L.L.C., Mack-Cali Meadowlands Special L.L.C., and Meadowlands Limited
Partnership dated November 22, 2006 (filed as Exhibit 10.93 to the
Company’s Form 10-K dated December 31, 2006 and incorporated herein by
reference).
|
|
|
10.100
|
Contribution
and Exchange Agreement by and between Mack-Cali Realty, L.P. and Tenth
Springhill Lake Associates L.L.L.P., Eleventh Springhill Lake Associates
L.L.L.P., Twelfth Springhill Lake Associates L.L.L.P., Fourteenth
Springhill Lake Associates L.L.L.P., each a Maryland limited liability
limited partnership, Greenbelt Associates, a Maryland general partnership,
and Sixteenth Springhill Lake Associates L.L.L.P., a Maryland limited
liability limited partnership, and certain other natural persons, dated as
of November 21, 2005 (filed as Exhibit 10.69 to the Company’s Form
10-K dated December 31, 2005 and incorporated herein by
reference).
|
|
|
10.101
|
Membership
Interest Purchase and Contribution Agreement by and among Mr. Stanley C.
Gale, SCG Holding Corp., Mack-Cali Realty Acquisition Corp. and Mack-Cali
Realty, L.P. dated as of March 7, 2006 (filed as Exhibit 10.1 to the
Company’s Form 8-K dated March 7, 2006 and incorporated herein by
reference).
|
|
|
10.102
|
Amendment
No. 1 to Membership Interest Purchase and Contribution Agreement dated as
of March 31, 2006 (filed as Exhibit 10.1 to the Company’s Form 8-K dated
March 28, 2006 and incorporated herein by reference).
|
|
|
10.103
|
Amendment
No. 2 to Membership Interest Purchase and Contribution Agreement
dated as of May 9, 2006 (filed as Exhibit 10.1 to the Company’s Form
8-K dated May 9, 2006 and incorporated herein by
reference).
|
|
|
10.104
|
Amendment
No. 8 to Membership Interest Purchase and Contribution Agreement by and
among Mr. Stanley C. Gale, SCG Holding Corp., Mack-Cali Realty Acquisition
Corp. and Mack-Cali Realty, L.P. dated as of May 23, 2007 (filed as
Exhibit 10.1 to the Company’s Form 8-K dated May 23,
2007.
|
|
|
10.105
|
Contribution
and Sale Agreement by and among Gale SLG NJ LLC, a Delaware limited
liability company, Gale SLG NJ MEZZ LLC, a Delaware limited liability
company, and Gale SLG RIDGEFIELD MEZZ LLC, a Delaware limited liability
company and Mack-Cali Ventures L.L.C. dated as of March 7, 2006 (filed as
Exhibit 10.2 to the Company’s Form 8-K dated March 7, 2006 and
incorporated herein by reference).
|
|
134
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.106
|
First
Amendment to Contribution and Sale Agreement by and among GALE SLG NJ LLC,
a Delaware limited liability company, GALE SLG NJ MEZZ LLC, a Delaware
limited liability company, and GALE SLG RIDGEFIELD MEZZ LLC, a Delaware
limited liability company, and Mack-Cali Ventures L.L.C., a Delaware
limited liability company, dated as of May 9, 2006 (filed as Exhibit
10.4 to the Company’s Form 8-K dated May 9, 2006 and incorporated herein
by reference).
|
|
|
10.107
|
Non-Portfolio
Property Interest Contribution Agreement by and among Mr. Stanley C.
Gale, Mr. Mark Yeager, GCF II Investor LLC, The Gale Investments
Company, LLC, Gale & Wentworth Vreeland, LLC, Gale Urban
Solutions LLC, MSGW-ONE Campus Investors, LLC, Mack-Cali Realty
Acquisition Corp. and Mack-Cali Realty, L.P. dated as of May 9, 2006
(filed as Exhibit 10.2 to the Company’s Form 8-K dated May 9, 2006 and
incorporated herein by reference).
|
|
|
10.108
|
Loan
Agreement by and among the entities set forth on Exhibit A,
collectively, as Borrowers, and Gramercy Warehouse Funding I LLC, as
Lender, dated May 9, 2006 (filed as Exhibit 10.5 to the Company’s
Form 8-K dated May 9, 2006 and incorporated herein by
reference).
|
|
|
10.109
|
Promissory
Note of One Grande SPE LLC, 1280 Wall SPE LLC, 10 Sylvan SPE LLC, 5
Independence SPE LLC, 1 Independence SPE LLC, and 3 Becker SPE LLC, as
Borrowers, in favor of Gramercy Warehouse Funding I, LLC, as Lender, in
the principal amount of $90,286,551 dated May 9, 2006 (filed as
Exhibit 10.6 to the Company’s Form 8-K dated May 9, 2006 and incorporated
herein by reference).
|
|
|
10.110
|
Mortgage,
Security Agreement and Fixture Filing by and between 4 Becker SPE LLC, as
Borrower, and Wachovia Bank, National Association, as Lender, dated
May 9, 2006 (filed as Exhibit 10.7 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.111
|
Promissory
Note of 4 Becker SPE LLC, as Borrower, in favor of Wachovia Bank, National
Association, as Lender, in the principal amount of $43,000,000 dated
May 9, 2006 (filed as Exhibit 10.8 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.112
|
Mortgage,
Security Agreement and Fixture Filing by and between 210 Clay SPE LLC, as
Borrower, and Wachovia Bank, National Association, as Lender, dated
May 9, 2006 (filed as Exhibit 10.9 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.113
|
Promissory
Note of 210 Clay SPE LLC, as Borrower, in favor of Wachovia Bank, National
Association, as Lender, in the principal amount of $16,000,000 dated
May 9, 2006 (filed as Exhibit 10.10 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.114
|
Mortgage,
Security Agreement and Fixture Filing by and between 5 Becker SPE LLC, as
Borrower, and Wachovia Bank, National Association, as Lender, dated
May 9, 2006 (filed as Exhibit 10.11 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.115
|
Promissory
Note of 5 Becker SPE LLC, as Borrower, in favor of Wachovia Bank, National
Association, as Lender, in the principal amount of $15,500,000 dated
May 9, 2006 (filed as Exhibit 10.12 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.116
|
Mortgage,
Security Agreement and Fixture Filing by and between 51 CHUBB SPE LLC, as
Borrower, and Wachovia Bank, National Association, as Lender, dated
May 9, 2006 (filed as Exhibit 10.13 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
135
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.117
|
Promissory
Note of 51 CHUBB SPE LLC, as Borrower, in favor of Wachovia Bank, National
Association, as Lender, in the principal amount of $4,500,000 dated
May 9, 2006 (filed as Exhibit 10.14 to the Company’s Form 8-K dated
May 9, 2006 and incorporated herein by reference).
|
|
|
10.118
|
Form
of Amended and Restated Limited Liability Company Agreement of
Mack-Green-Gale LLC dated
,
2006 (filed as Exhibit 10.3 to the Company’s Form 8-K dated March 7, 2006
and incorporated herein by reference).
|
|
|
10.119
|
Form of
Limited Liability Company Operating Agreement (filed as Exhibit 10.3 to
the Company’s Form 8-K dated May 9, 2006 and incorporated herein by
reference).
|
|
|
10.120
|
Agreement
of Sale and Purchase dated August 9, 2006 by and between Mack-Cali Realty,
L.P. and Westcore Properties AC, LLC (filed as Exhibit 10.91 to the
Company’s Form 10-Q dated September 30, 2006 and incorporated herein by
reference).
|
|
|
10.121
|
First
Amendment to Agreement of Sale and Purchase dated September 6, 2006 by and
between Mack-Cali Realty, L.P. and Westcore Properties AC, LLC (filed as
Exhibit 10.92 to the Company’s Form 10-Q dated September 30, 2006 and
incorporated herein by reference).
|
|
|
10.122
|
Second
Amendment to Agreement of Sale and Purchase dated September 15, 2006 by
and between Mack-Cali Realty, L.P. and Westcore Properties AC, LLC (filed
as Exhibit 10.93 to the Company’s Form 10-Q dated September 30, 2006 and
incorporated herein by reference).
|
|
|
10.123
|
Agreement
of Sale and Purchase dated September 25, 2006 by and between Phelan Realty
Associates L.P., 795 Folsom Realty Associates L.P. and Westcore Properties
AC, LLC (filed as Exhibit 10.94 to the Company’s Form 10-Q dated September
30, 2006 and incorporated herein by reference).
|
|
|
10.124
|
Membership
Interest Purchase and Contribution Agreement dated as of December 28,
2006, by and among NKFGMS Owners, LLC, The Gale Construction Services
Company, L.L.C., NKFFM Limited Liability Company, Scott Panzer, Ian
Marlow, Newmark & Company Real Estate, Inc. d/b/a Newmark Knight
Frank, and Mack-Cali Realty, L.P (filed as Exhibit 10.117 to the Company’s
Form 10-K dated December 31, 2006 and incorporated herein by
reference).
|
|
|
10.125
|
Operating
Agreement of NKFGMS Owners, LLC (filed as Exhibit 10.118 to the Company’s
Form 10-K dated December 31, 2006 and incorporated herein by
reference).
|
|
|
10.126
|
Loans,
Sale and Services Agreement dated December 28, 2006 by and between Newmark
& Company Real Estate, Inc. d/b/a Newmark Knight Frank, Mack-Cali
Realty, L.P., and Newmark Knight Frank Global Management Services, LLC
(filed as Exhibit 10.119 to the Company’s Form 10-K dated December 31,
2006 and incorporated herein by reference).
|
|
|
10.127
|
Term
Loan Agreement among Mack-Cali Realty, L.P. and JPMorgan Chase Bank, N.A.
as Administrative Agent, J.P. Morgan Securities Inc. as Arranger, and
other lender which may become parties to this Agreement dated November 29,
2006 (filed as Exhibit 10.120 to the Company’s Form 10-K dated December
31, 2006 and incorporated herein by reference).
|
|
136
|
Exhibit
Number
|
Exhibit Title
|
|
|
10.128
|
Agreement
of Purchase and Sale among SLG Broad Street A LLC and SLG Broad Street C
LLC, as Sellers, and M-C Broad 125 A L.L.C. and M-C Broad 125 C L.L.C., as
Purchasers, dated as of March 15, 2007 (filed as Exhibit 10.121 to the
Company’s Form 10-Q dated March 31, 2007 and incorporated herein by
reference).
|
|
|
10.129
|
Agreement
of Purchase and Sale among 500 West Putnam L.L.C., as Seller, and SLG 500
West Putnam LLC, as Purchaser, dated as of March 15, 2007 (filed as
Exhibit 10.122 to the Company’s Form 10-Q dated March 31, 2007 and
incorporated herein by reference).
|
|
|
10.130
|
Letter
Agreement by and between Mack-Cali Realty, L.P., Mack-Cali Realty
Acquisition Corp., Mack-Cali Belmar Realty, LLC, M-C Belmar, LLC, Mr.
Stanley C. Gale, SCG Holding Corp., Mr. Mark Yeager, GCF II Investor LLC,
The Gale Investments Company, LLC, Gale & Wentworth Vreeland, LLC,
Gale Urban Solutions LLC, MSGW-ONE Campus Investors, LLC and
Gale/Yeager Investments LLC dated October 31, 2007 (filed as Exhibit
10.128 to the Company’s Form 10-Q dated September 30, 2007 and
incorporated herein by reference).
|
|
|
21.1*
|
Subsidiaries
of the Company.
|
|
|
23.1*
|
Consent
of PricewaterhouseCoopers LLP, independent registered public accounting
firm.
|
|
|
31.1*
|
Certification
of the Company’s President and Chief Executive Officer, Mitchell E. Hersh,
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
|
|
|
31.2*
|
Certification
of the Company’s Chief Financial Officer, Barry Lefkowitz, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1*
|
Certification
of the Company’s President and Chief Executive Officer, Mitchell E. Hersh,
and the Company’s Chief Financial Officer, Barry Lefkowitz, pursuant to
Section 906 of the Sarbanes-Oxley Act of
2002.
|
*filed
herewith
137