Good day, everyone and welcome to the Mack-Cali Realty Corporation First Quarter 2015 Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to the President and Chief Executive Officer, Mr. Mitchell Hersh. Please go ahead, sir.

Thank you, Operator. Good morning everyone. I want to thank you all for joining Mack-Cali’s first quarter 2015 earnings conference call. With me today is Tony Krug, CFO and from our Roseland subsidiary Gabe Shiff, Roseland's Executive Vice President of Finance. On a legal note, I must remind everyone that certain information discussed on this call, may constitute forward-looking statements, within the meaning of the Federal Securities law. Although we believe the estimates reflected in these statements, are based on reasonable assumptions, we cannot give assurance that the anticipated results will be achieved. We refer you to our press release and annual and quarterly reports filed with the SEC for risk factors that could impact the Company. First I'd like to review some of our results and activities for the quarter, and generally, what we are seeing in our markets. Then, Tony will review our financial results, and Gabe will talk to our Roseland and multi-family activities. FFO for the first quarter of 2015 was $0.43 per diluted share. During the quarter, we signed a total of 759,000 square-feet of lease transactions. That included 277,000 square-feet of new leases and of course the remainder being renewals. Our tenant retention rate was almost 65% of outgoing space. And we ended the quarter at 84.3% leased, which is up 10 basis-points from last quarter's results. Rent on renewals, however, rolled-down this quarter by 6.3%, on a cash basis, remaining lease rollovers for 2015 are 7.3% of base rent, or approximately $36 million. Our leasing costs this quarter were $3.85 per square-foot per year. During the quarter, we signed several significant office leases, demonstrating our ability to attract and retain high-quality tenants. We continue to remain focused on growing occupancy within our office portfolio, as well as our continued commitment to capital reinvestment…

Thanks Mitchell. Funds from operation for the first quarter 2015, was $0.43 per diluted share and net loss available to common shareholders was $0.3 per share. For the first quarter, same-store net operating income increased 4.5% on a GAAP basis and 9.4% on cash basis. As Mitchell mentioned, without the effect of last year's harsh winter expenses same-store NOI decreased 2.1% on a GAAP basis and increased 2.2% on a cash basis. Our same-store portfolio for the first quarter consisted of 25.3 million square-feet of commercial space. Our unencumbered portfolio at quarter-end totaled 205-properties, and represents 72.2% of our portfolio, on an NOI basis. In the first quarter, the Company had interest coverage of 2.6 times and fixed charge coverage of 2.2 times. We ended the quarter with approximately $2.1 million of debt with a weighted average interest rate of 5.65%. Currently, we have $64 million drawn on our $600 million unsecured revolving credit facility. We are maintaining our 2015 FFO guidance midpoint of $1.72 per diluted share and the range of $1.66 to $1.78 per share. At the midpoint, our 2015 guidance assumes; percentage lease declining from the current 84.3% to about 81.5% by midyear and up to near 83% by the end of the year; leasing starts of 1.3 million square-feet, for the remaining nine-months of ‘15 versus scheduled lease expirations of 1.6 million square-feet for the remainder of the year. While first quarter same-store net operating income increased, we project the 9% decrease in GAAP net operating income for the balance of ‘15. We also assume $80 million to $85 million in sales, expected sometime around year, and no operating acquisitions are assumed. Please note that under SEC Reg G concerning non-GAAP financial measures, such as FFO, we're required to provide an explanation of why we believe such financial measures are relevant and reconcile them to net income. Available on our Web site at www.mack-cali.com, are our supplemental package and earnings release, which include the information required by Reg G, as well as our 10-K.

Thank you very much, Tony. Now I’m going to turn the call over to Gabe Shiff of Roseland, so he can provide details around our repurposing activities, our repositioning progress and our new development progress.

Thank you, Mitch. On behalf of our Roseland subsidiary, we are pleased to highlight the evolution of our residential portfolio throughout the development cycle. We envision this ongoing transition would generally continuous cash flow and value creation growth for the Company. As detailed in the multi-family rental section of the supplemental, this progress is reflected across all elements of the Mack-Cali's Roseland platform. Specifically, in the first quarter, we sustained strong occupancies and revenues across our approximately 5,000 apartment homes stabilized portfolio. In the first quarter, we achieved success across four communities representing 922 apartment homes in active lease up, including the product that Mitchell just mentioned, a 377 home Station House in Washington D.C., which commence leasing operations towards the end of the first quarter. In the first quarter, construction progressed on 1,462 apartment homes across four communities and on the 786-space commuter parking garage at Port Imperial. Looking forward, in 2015, we forecast lease-up commencements of 591 apartment homes across two communities. We target construction starts from our owned residential portfolio of approximately 1,300 apartment homes across five communities, including comparable projection for 2016. Additionally, we anticipate approval successes from our repurposing of Mack-Cali office holdings to residential use. On an operating basis, the first quarter reflected operating strength across Roseland’s approximately 5,000-home portfolio, which includes 1,042 homes that achieved stabilization in the fourth quarter. This operating portfolio had a lease percentage at quarter end of 97.8%. On a same-store year-over-year basis, a stabilized portfolio of approximately 37 homes, the revenues increased by 4.3%. In 2015, we envision growth of this portfolio with projected stabilization achievements of 544 homes across three communities, including RiverParc in Harrison, New Jersey, Portside at Pier One on the East Boston Waterfront and Estuary Phase II on the Weehawken Waterfront. These three communities…

Thank you very much, Gabe. Appreciate that inside into the multi-family side of our business. And so, as you are all aware, following the Company's Annual Meeting on May 11th, which is just a few weeks away, I will be stepping down from my positions as President, Chief Executive Officer and Director of Mack-Cali Realty Corporation. I am confident that the Board will identify the right leader to continue building on our momentum. You've heard a lot about that momentum here today. And with respect to a CEO, we look forward to providing an update when there is news to report. Until that time, we would very much appreciate your understanding and cooperation, recognizing that the focus of our call today is our financial and operational performance. And I would ask that you limit your questions to those particular topics. So, in that regard, we can now open up the call for questions. Operator?

[Operator Instructions] And we’ll go first to Ross Nussbaum from UBS.

Mitch, I appreciate you wanting to keep this focused on Q1 earnings. But I think folks are a little nervous that there hasn't been a communication as to whether or not there will be a CEO by the time you depart or whether there's going to be an interim CEO. Is there anything you can say on the timing on how that's going to work?

As I mentioned, Ross and I am not trying to be evasive, we'll update the market on our leadership transition plan, once we have news to report which I would expect will be in the near-term. And so, I would say that we should be in a position of talking through the market before the Annual Meeting.

On the office side, it looks like the GSA has about 150,000-foot expiration coming up. Have they given notice or are they staying?

GSA is out with RFPs for about 110,000 of the 140,000 square-feet, which is third quarter 2015 expiration. We are hopeful that we can recapture that 110-ish, but they are out in the marketplace.

Can you remind me, which building are they in?

1400 L Street.

The final question I've got is on the multi-family side. Of the $480 million spend for the six starts that you're planning on doing this year, I think I heard 40% ownership and that your capital obligation would be $46 million. If my math is right, so that's assuming about 75% debt funding, so the $46 million is your equity funding requirement for this project, is that right?

Aside from the hotel, which is the one-off, on our residential portfolio, our core portfolio, we're targeting leverage in the 60% to 65% range on a non-recourse basis. And we're looking to partner the balance of the capital. So that 35% to 40% equity GAAP that we're referring to, will be fill-through in combination of wholly-owned and joint-venture equity structures.

And is that a shift in any regards to strategy because I thought you guys had previously talked about wanting a wholly-owned more the stuff?

The more what we build we can own, that's what we want to accomplish for us. But there are some capital constraints right now, and we have been working with several of our legacy joint-venture partners, institutional joint-venture partners as well as the few new ones, who recognize the value creation of the Roseland platform. And during this transitional period where we have some limitations on our capital, we are not looking to stress the Company. So we are considering these joint-ventures that provide a promoted interest for us for the value creation. And don't subordinate our interest because we are side-by-side pari passu investors.

We’ll go next to Jamie Feldman of Bank of America Merrill Lynch.

I guess just tying up the different changes in the core operating metrics in guidance. So it sounds like you're at least 50 basis points to 100 basis points ahead on your year-end occupancy outlook. And your same-store NOI, I think you said its 9% average for the next three quarters, but you are close to plus 9% in the first quarter. So, I would think your total same-store average goes up, but you maintained your FFO guidance. Can you just help connect all those dots?

We’re slightly ahead on the projections with respect to leased percentages. We have had a couple of wins. Obviously, they are expensive transactions. And so from a GAAP perspective, they’re more beneficial because of the free rent components, and the fact that they don't commence for some period of time in a few of the cases. But yes, we are doing a little better than year-end projection on lease rate percentages. But in fewer metrics, financial metrics, we still, because of the normally created by Prentice-Hall in particular and the anomaly created by some of the utility expanses and other expenses year-over-year, are still projecting about an 8.5% to 9% same-store NOI decline for the remainder of the year.

And then you had mentioned 80 million to 85 million of dispositions. Can you just talk a little bit about what you're seeing in the disposition market in terms of capital interest in both of the assets? You see that maybe talk about both the Hudson Waterfront and even more suburban New Jersey, well, any changes in demand?

With regard to the suburban assets, we’re seeing pretty good demand for the long-term net lease fixed income type investment pool. And so, we are out in the market with our second phase of Wyndham. And we anticipate doing well with that sale on a similar basis to what we did with Phase I, Phase II, slightly smaller than Phase I. And that's in our view a near-term event. So you are looking at low 6% cap-rates. But per square-foot numbers that are somewhere in the $390 to $400 square-foot range. With respect to your more commodity type suburban assets, it really depends -- there has not been a lot of transactional activity. But what has traded are under leased assets where your paying very-very little for the bones as it were and then have to invest considerable amount of money. But the unfortunate part is that the market still remained quite challenged from a demand side equation, there has been very limited incremental demand. Some of the exciting successful transaction set we reported. This quarter our result of tenants looking to reach-back to consolidate their own infrastructure take a little less space than they previously had and in some cases move down the street and were to the beneficiary. So we're very happy about that. But there has been very little incremental demand. With respect to the Waterfront, again the trend towards urbanization is very real. And so, the Waterfront, in my view, is a just a matter of time, sort of not in it but a wind. We’ll have much greater successes on leasing-up our vacancies down on the Waterfront. We’re investing significant capital in the common area renovations in Harborside Plazas 1, 2 and 3. We're well into the construction. It's actually on a video-cam that you can access to see the status of our construction on URL Phase 1, which is very exciting dynamic multi-family rental home project that is really going to be state-of-the-art and highly amenitized and we believe very attractive to particularly in this case; the millennium work force, which can support all this businesses; New Jersey is still maintains its as of right grow New Jersey benefits to try to attract employment. And so, we think that the Waterfront has all the makings and ingredients of the mixed uses that represent the new way companies are doing business. And so, does that sort of answer it Jamie?

Yes, that’s helpful.

We'll take our next question from Vincent Chao with Deutsche Bank.

Just want to follow-up, I know you said there was not really much incremental demand that you're seeing, but some consolidation and you're sort of benefiting from that. And you previously talked about sort of meeting the market. But just curious have you guys done anything different in your sort of leasing strategies to try to attract some of that moving shares, if you will?

Yes, we have. We have, in some cases, broaden the use of our buildings to include, what I would say non-traditional office usage, but done it within a very high caliber way to include medical uses. And I would say that there has been more growth in healthcare, insurance, because of some of the changing landscape in, particularly health insurance and benefits. And so, we've adapted both our marketing and our bricks-and-motor, in some cases, to include those uses. In some instances that requires overlay zoning in communities, because the yesteryear that specific zones for office and research and zones for medical. But as these communities recognize throughout, particularly this suburban landscape, that times are changing and tax basis will erode and have eroded. As a result of the real fee change that’s occurred. And when lots of these towns had corporate headquarters, not on like Prentice-Hall or not like Mercedes-Benz and Mountville, who has moved now to Atlanta Georgia, they understand that to be competitive and to have a fertile tax base to support their standard of living, quality of life and school systems, they need to be flexible. So, we've seen more and more of these communities do that. In some instances -- or embraced that thought process. In some instances, we are repurposing our land, where we believe that the asset that we have on a particular site and we have several of these. But I'm not going to be specific about which communities and municipalities, because it's in our interest and our shareholders’ interest to get our approvals to the point where they are non- appealable and we don’t have to deal with people coming out of the wood-work, trying to start to struck our process because of competitive issues. But we are taking several of our assets that can be much more valuable, as both multi-family and in some -- in a few cases with a mixed used component to include some office and include some small segment of retail. And demolish those buildings and build beautiful new residential communities. So, I would say yes, we are at the forefront of transition and adapting our portfolio to be able to be more responsive and create greater value for our shareholders. And we're laser focused on that.

And the incremental cost to make these changes, is this showing up sort of in a [TI line] or?

No, that’s a capital line on new construction, if you will.

Just on the CMBS, the Wells Fargo CMBS loan, any update on that?

No, still working on that.

We'll take our next question from John Bajani from Green Street Advisors.

Mitchell I just want to clarify real-quick, the 8.5% to 9% same-store NOI decline you mentioned for 2015. Is that a GAAP or a cash number?

GAAP number.

Can you share what that is on a cash basis?

It's not going to vary that much.

I guess related to that, are there any outstanding risks or concerns that you’d highlight, that led you not increase FFO guidance, despite the better than expected start to the year you've had, on the leashing front?

John, we’ve studied the numbers very carefully. And we're talking about a couple of pennies. And I’d rather have more visibility. And we still have nine-months to go in the year. And if we feel that there should be any adjustment, let’s say after next quarter, we’ll revisit it. But at the moment, we’re pretty comfortable with our midpoint. And at the most, we’re talking a penny or two.

There seems to be an improvement in the investment sales environment, even in tertiary and fundamentally challenged markets in recent months. Are you observing the same in your markets? And could that influence your thoughts regarding distribution plans beyond the Wyndham property?

Well, I would say that the -- first of all, in the suburban markets, unfortunately that we’re operating in, it’s kind of a food fight for tenants. There seems to be a lot of liquidity, both you have the investors who purchase buildings for, call it $30 to $50 a square-foot in some instances empty buildings and are able to secure financing with institutions that give them capital to attract tenants at very low numbers. And so, all was not what it seems, there is very little incremental job growth in the suburban markets. It's quite the contrary if you read about all the consolidation that's occurring in the industries that have historically been the life-line and the engine of the growth of this suburban markets, that being telecommunications, that being pharmaceuticals, they’re eating each other up, as we speak. And so, that's really what's occurring in the suburban markets. Certainly, I'm sure that the Board will continue to revisit and look at strategic options and alternatives with the new leadership team. That will come into place in the near future. And see if they think differently or have altered their thought-process regarding this subject.

Just one last one on the succession front, is there contingency plan if your successors is not named in-time for the Annual Meeting?

Yes.

Is there anything you can discuss?

I mean, let's put it this way that the contingency plan is that the Company will not go leaderless as of the Annual Meeting.

We’ll go next to Michael Bilerman from Citi.

I was just curious, as I think about the asset sales and 125 brought down in the financial district, whether that would be anything that potentially you could dispose of given values in New York and potentially using that as capital as to buyback the stock, or do something to fund development with?

We have talked about that asset at the Board. And the determination of the Board is at the present time that we are not a seller of that particular asset. That notwithstanding reaming lease term, the downtown area gets better every day as a lifestyle, or live work play environment. And you've obviously – you’re there and I know you follow these trends very-very carefully. And that this recently -- yesterday discussion of New York City has moved south and west. And so, it's a determination at present time by the Board that we want to be part of that marketplace.

But I guess it's a single condo interest in downtown New York. Your stock clearly is not getting the value for, if you were to strip that out, the discount would go even wider. So I'm curious why wouldn't the Board want to try to accelerate and harvest more value creation at this point?

What I -- at the risk of redundancy, I have raised the concept that the Board so far has deliberated and made the determination. I'm sure that we will revisit the discussion from time-to-time.

Can you give us an update on the two Keystone JVs? Occupancies are still around 81% each for the two portfolios. What the plans are in terms of capital, the Keystone is putting in place, what's the prognosis for leasing? And therefore your 45 million of outstanding preferred notes in terms of the eventual -- in terms of potentially getting that or refinancing that based on the success that they have in repositioning and leasing up those assets?

I’d be happy to talk about that. As a matter of fact, just maybe before yesterday, Bill Glazer, who heads up Keystone was here in Edison and met with some of the leasing executives and teams. So, with regard to Philadelphia, let me say that, specifically, 100 independent small west, we have outsourced financing at the present time. Now that asset is completely stabilized, the GSA is under construction and the Beer Garden is operating full fields. And it's a magnificent project. So we're out for a refinancing package that essential will be sufficient in our view to take out our equity, which is not a lot, in that particular asset. And we are also well underway with completing design, documents -- constructions documents to begin the renovation -- the residential component of the residential of Curtis. So, that’s all going on right now. With respect to the TriState portfolio, which is -- the two assets in New Jersey, in central New Jersey, the couple of up in Bergen County, Fair Lawn and Woodcliff Lake and then Westchester, and one asset in Stanford, the teams -- and it’s the Mack-Cali leasing teams who are working very hard on capturing occupancy. In New Jersey, we have made progress with up in Bergen County, with KPMG, and those are relatively small assets. In Piscataway, we have a, fortunately, tenant who is a healthcare insurer, who has just acquired by one of the four or five largest healthcare insurers who have no presence in the state. And so, we're looking -- we just signed an expansion with them on behalf of Keystone and we're looking at a very significant further expansion in that asset. And so, I would say that the teams have been extremely active in what has been a very challenged market. And we're comfortable with, at some point, recapturing more of our capital. Certainly, where we've invested pari passu, we’re very confident of that. And in some of, what I'll call the residual interest more of the promoted interest, we expect -- it might take a little longer than originally projected because of the continued headwinds in some of these markets but we are making progress. And Keystone is utilizing our services for leasing property -- construction services as well, so it is generating some income for us from that perspective.

And then second question, just in terms of the top tenants, as tenants think about getting ahead of their expiration, both New Jersey City and the competing amount of space that's around, both the downtown in New York, they were probably competing space in New Jersey. If you look at your top tenants here, Deutsche Bank, Forest Research, ICAP, Merrill Lynch, Vonage, all expiring in 2017. Can you give us a little bit of sense in terms of those discussions, probability if the tenants staying, contracting, expanding?

I mean, if only I could. I've had lots of discussions with most of the majors, and it's not directly with them. Some of them are represented, in several cases, by brokers from the big shops that reside literally in the offices, that they’re domiciled in our buildings. I could say that, for example, since you’ve raised Deutsche Bank, we've had some very fertile discussion. We have an exceptional relationship with them. They have a lot of infrastructure in Harborside. And -- but because of extraneous events, that are affecting their thinking, on a global basis, they are just not ready to make a final decision. But I'm very optimistic about the discussions that I've had with them today. Forest, as you know, is part of an acquisition. And it's hard to keep track of these companies, because it seems like they do multiple consolidations and acquisitions on a monthly basis. But I think they're activist right now, and that’s a name of the company. And they actually move people from Long Island and New York City into Harborside. So, I can only tell you that it's very good sign. And yes, we’re engaged in discussion with them. ICAP retained -- did a very broad search and retained a representative from JLL, whom we've done a lot of work with over the years. ICAP has a very massive infrastructure installed in Harborside Plaza 5 that because of the quality of Plaza 5 and actually the infrastructure affecting Jersey City, in of itself never was out of service during Hurricane Sandy. And so, I think that we’re going to see some positive momentum. I can't tell you that they'll keep every square-foot that they have, because they, like so many other firms, are looking at doing more with less. But I'm pretty encouraged by that. Vonage, I have actually a meeting with the CFO and their representatives next Wednesday, to talk about their requirement. They are -- their requirement is shrinking. So, we might have to consider some other situations for the building in terms of multi-tenant. And so that it’s a little bit early in the process. Although, we've been talking to them on and off since September. But I think they’re finally prepared to talk about it seriously now. I could go down the list and give you more, but that's generally what we're seeing in the markets.

That's helpful. And it sounds like, just on the CEO transition that we’re going to get announcement near-term, there may be a transition period. Are you -- I guess, I just want to, it is your last call, if it is, I wanted to wish you best of luck. It's been a pleasure getting to work with you over the number of years. But if you're going to be on the next call, then I can do it then.

Thank you very much, Michael and very gracious of you to say. As far as I can tell you, this will be my last earnings call.

Well. Congratulations, and look forward to speaking to you personally.

Thank you. As do I.

We’ll take our next question from Scott Frost from Bank of America Merrill Lynch Fixed Research.

From the credit side, you had previously said that you would, as usual, enter into discussions with NRSROs in April-May. Have you done so in light of your outlook for the coming year in the context of rating reviews? If not, when is that scheduled, if you can speak about that? If so, how would you characterize those discussions?

You saw that couple of months ago, S&P took some action, and we did not have a review with them. We have been a little bit slow to set up the reviews in anticipation of the leadership transition within the Company, and thought it would more productive, whether or not, I was in attendance to have the new CEO attend as well. So, we really have not had much discussion with the agency. And I think they are comfortable waiting.

And just -- and this probably answers the follow-up question I have. But it looks like the coverage ratio improvement is due to G&A expenses, returning to I guess a more normal level, due to the non-recurrence of severance costs. Is it your sense that agencies would look at the lower level of G&A, as a run-rate in determining your forecasted -- ?

You are exactly right, as a matter of fact. And I think the run rate now at about 44 million, is a good number.

It appears there are no further questions at this time. Mr. Hersh, I'd like to turn the conference back to you for any additional or closing remarks.

Thank you. Well, I want to thank all of you for joining us on today's call, as always, a good call. And the Company and all of the great people that make-up Mack-Cali and Roseland, it's about [650] (ph) of those people. They are a great team and they look forward to working with the executive management team, so that Tony and Gabe and others, will report to you again next quarter. On a personal note, it has been a pleasure working with so many of you over the past 18 years, I can kind of visualize a lot of you when you get on the call with the Q&A. And so I want to wish all of you good luck in the future, and it's been a pleasure. So, thank you.

This does conclude today's conference. We thank you for your participation. You may now disconnect.