The economic fallout of the COVID-19 pandemic has brought real estate-related issues like mortgage and rent payments — and the ability to make them — to the forefront.
Mack-Cali Realty Corp., the office and residential developer and owner based in Jersey City, offered a glimpse at what the sector looks like with an update on its rental collections and other activities across its portfolio.
The real estate investment trust said that, as of April 20 — 12 days after Gov. Phil Murphy’s executive order stopped non-essential construction, among other requirements — it had collected 90% of office rent for the month of April and 96% of residential tenant rent. (Mack-Cali did note that past performance is not indicative of future results.)
“We are living in an unprecedented time, and our organization has made appropriate adjustments to help our residents, tenants and community navigate the COVID-19 pandemic,” CEO Michael DeMarco said in a prepared statement. “Operationally, we have implemented the recommended protocols to facilitate the health and safety of our tenants, residents and employees. We have taken the necessary precautions across all of our properties to ensure we can provide essential services to our tenants and residents in a safe and timely manner. We also have tried to provide help wherever we can for those who are dealing with this crisis, and will continue to do so in the upcoming months.”
Office and residential rent
Mack-Cali said office tenants generally pay rent by April 15, and most of the outstanding 10% for April is comprised of payments in process or from tenants who are not on the regular schedule. It said tenants representing only 6% of billings have asked for some form of rent relief.
The company has a current leasing rate of 95% across its multifamily portfolio, and said most of the outstanding 4% of payments are from tenants seeking a payment plan.
Hotels and construction
Only one of Mack-Cali’s three hotel properties remains open, with an average occupancy rate at the Residence Inn at Port Imperial of 65%. The hotel has donated 25% of its rooms to health care workers — a number not included in the occupancy rate.
Mack-Cali’s Roseland unit has five residential projects under construction, with one in Massachusetts on pace to be completed in the next six months. Three of the other four properties, all in New Jersey, have seen construction activity reduced in line with Murphy’s order. The fourth, in Jersey City, is exempt from the order. The company said it had been ahead of schedule with building, so delivery delays may not be extensive.