Fitch's View of Mack-Cali's Multifamily Assets & Management Venture Improves Incrementally

NEW YORK--()--Mack-Cali Realty Corporation's (Mack-Cali) recently-held multifamily-focused analyst day formally introduced the investment community to its Roseland subsidiary's senior management, assets and long-term strategy. Following a review of the information provided, Fitch Ratings views Mack-Cali's multifamily foray incrementally more positively as a result of the quality of the assets and management.

Roseland's Assets and Management

The Roseland-developed assets are generally well located, high quality multifamily properties in the greater New York / New Jersey metro area. Increasing ownership in existing and future to-be consolidated assets will improve the quality of CLI's assets compared to the still-challenged suburban office portfolio. Additionally, the planning, development and operational expertise of Roseland's management team enable CLI to enter a new sector with a strong platform.

Managing the Transition

Fitch does not forecast that multifamily will comprise a material percentage of Mack-Cali's portfolio or net operating income for the foreseeable future; therefore, Fitch will consider Mack-Cali's leverage in the context of a 'BBB' rated suburban office REIT as opposed to a hybrid office/multifamily REIT that could have higher leverage at a given rating category. How Mack-Cali plans to effectuate the transition while maintaining appropriate credit metrics despite weak suburban office fundamentals will be a key determinant for ratings momentum. In that vein, management highlighted the commitment to maintain an investment-grade rating, and Fitch recognizes the company's track record of conservative balance sheet management.

Fitch currently rates CLI and Mack-Cali Realty, L.P. (collectively, Mack-Cali) as follows:

Mack-Cali Realty Corporation:

--Issuer Default Rating (IDR) 'BBB'.

Mack-Cali Realty, L.P.:

--IDR 'BBB';

--Unsecured revolving credit facility 'BBB';

--Senior unsecured notes 'BBB'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Criteria for Rating U.S. Equity REITs and REOCs,' Feb. 26, 2013;

--'Recovery Rating and Notching Criteria for Equity REITs,' Nov. 12, 2012;

--'Corporate Rating Methodology,' Aug. 8, 2012;

--'Parent and Subsidiary Rating Linkage,' Aug. 8, 2012.

Applicable Criteria and Related Research

Criteria for Rating U.S. Equity REITs and REOCs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=700091

Recovery Ratings and Notching Criteria for Equity REITs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=693751

Corporate Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=684460

Parent and Subsidiary Rating Linkage

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=685552

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.

Contacts

Fitch Ratings
Primary Analyst
Britton Costa, +1-212-908-0524
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
George Hoglund, CFA, +1-212-908-9149
Associate Director
or
Committee Chairperson
Eileen Fahey, +1-312-368-5468
Managing Director
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Britton Costa, +1-212-908-0524
Associate Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
George Hoglund, CFA, +1-212-908-9149
Associate Director
or
Committee Chairperson
Eileen Fahey, +1-312-368-5468
Managing Director
or
Media Relations
Sandro Scenga, +1-212-908-0278
sandro.scenga@fitchratings.com