Merrill Cuts Mack-Cali Rating

Analyst Steve Sakwa says two real estate deals appear to have fallen through

Merrill Lynch lowered its investment rating on Mack-Cali Realty (CLI ), a real estate investment trust, to near and long term accumulate from buy, as a couple of real estate deals appear to have collapsed. Analyst Steve Sakwa said two handshake deals to lease remaining space at its new Harborside Plaza 5 project fell through. He said that as a result, pre-leasing on this project budged modestly, rising to 40% in the third quarter from 18% in the first quarter. Given the slowdown in economy, he now assumes it will not start contributing to earnings per share figures until early 2003.

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