Mack-Cali Realty Corp rporation May 2019 1
This presentation should be read in connection with our Annual Report on Form 10-K for the year ended December 31, 2018. Statements made in this presentation may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of words such as "may," "will," "plan," "potential," "projected," "should," "expect," "anticipate," "estimate," "target," "continue" or comparable terminology. Forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate, and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the heading "Disclosure Regarding Forward-Looking Statements" and "Risk Factors" in our annual reports on Form 10-K, as may be supplemented or amended by our quarterly reports on Form 10-Q, which are incorporated herein by reference. We assume no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise. 2
Today’s Agenda 1. 1. Ex Executive Sum Summary ry 2. Situation Background: Bow Street’s Proposal 2. 3. Bo 3. Bow St Street's 's Cam Campaign 4. Mack- Cali’s Plan to Deliver Stockholder Value 4. 5. 5. Your Board’s Commitment to to In Investor St Stewardship 6. 6. Con Concluding Remarks Harbors rsid ide e Transfo form rmatio tion 3
Bow Str Street is is Engaged in in a a Se Self lf-Interested Cam ampaig ign to Fac acil ilit itate Its Its Gr Grossly ly In Inadequate Proposed Transactio ion Bow Street has nominated four candidates for election to the Mack-Cali Board in a clear attempt to facilitate its grossly inadequate, illusory and unworkable proposed transaction at the expense of all other Mack-Cali Stockholders • Bow Street and David Werner Real Estate Investments ("DWREI") have submitted a proposal they claim will provide stockholders with “immediate value” of up to $27-$29 per share The Mack-Cali Board, after careful review and in consultation with its financial and legal advisors, unanimously determined that the proposal was not in the best interests of stockholders. The Board concluded that the proposal: • Grossly undervalues Mack- Cali’s core office portfolio by ~$1 billion • Significantly overstates the value that would be delivered to Mack-Cali stockholders in respect of the Company’s residential business by potentially as much as ~$675 million • Does not provide for transaction financing or reference the prospect therefor or address the related material costs and expenses, including tax exposure in excess of $400 million Bow Street is now engaged in a campaign of false and misleading statements meant to deceive stockholders into supporting its nominees and advance its self-interested proposal Bow Street’s Proxy Contest Is An Attempt To Force Its Prop roposal To To Acq cquire Mac ack- Cali’s Valuable Assets For An n Ina nadequate Price rice to to Th The e De Detr triment t Of All Othe ther Mac ack-Cali Sto Stockholders 4
Bow Street’s Objectives are Not Aligned with Mack -Cali li St Stockhold lders Bow Street has changed its public narrative to divert attention from its poorly-received and self-interested proposal • Bow Street is now looking to force a “fire sale” of Mack -Cali before full value can be unlocked • Bow Street’s new focus on an immediate sale process is an attempt to disguise its self -interested objectives and realize a quick profit on its recent investment to the detriment of long-term Mack-Cali investors At a meeting with the Company on March 27, 2019, Bow Street indicated it would be willing to withdraw its director nominations if the Company agreed to sell certain of its office properties to Bow Street and DWREI at a “wholesale price” • This underscores the self-interested nature of Bow Street’s “greenmail” approach Mack- Cali’s Board and management engaged with Bow Street in an effort to avoid a costly, distracting proxy contest, but Bow Street rejected the Company’s good faith offer to add to the Board two new independent directors from Bow Street’s proposed slate The Mac Th ack-Cali Bo Board rd is op open to to al all op opport rtunities to to max aximize stoc tockholder r val value. . The Board is not not ope open, however, to transactions such as the one proposed by Bow Street and DWREI, which would sho hortc tchange Mack-Cali stoc tockholders and prevent them from realizing the full value potential of the Company’s ongoing asset portfolio transformation and the successful execution of our Waterfront Strategy. 5
Our Boa oard of of Dir irectors is is Commit itted to o Ensu surin ing Str Strong Cor orporate Go Governance Prac actic ices An And Maxim imiz izin ing Valu lue For All All St Stockhold lders Sin Since 2016 2016, th the Boar Board has has pur pursued a a refreshment pr program, including ad adding 2 2 ne new directors dir s in 2016 2016 an and 2 2 ot others in 2019 2019, an and has has com ommitted to to rep eplace at t lea east 2 2 ad additio ional dir directors in 2020 2020, thereby rep epla lacing a a maj ajorit ity of of the Boar Board Mack-Cali is s meth thodic icall lly an and suc success ssfull lly executin ing on on a a strategic ic transformatio ion Ins Install lled ne new man anagement lea eadership tea team led by y Mic ichael J. . De DeMarco in n Ju June 2015 2015 On Ongoing investm tment into the New Jer Jersey Waterfront, a a hig high barr barrier to to en entry ry mark arket that su supports attractive liv ive / wor ork / pla play init itiativ ives Con Continued bu busin iness s pla plan execution cr creates a a ru runway for or strong ear earnings-growth an and opportunitie op ies to to nar narrow the trading dis discount to to ne net t asse asset t valu alue (“NAV”) in the next two yea ears The Boar Board is s fu fully lly en engaged an and ope open to to an any an and all all op opti tions to to maximize valu alue for or all all sto tockholders; ho however, , the Bo Boar ard is s op oppos osed to to a a “fire sale” or a sale of assets at a a “wholesale” price 6
Waterfr front t Str trategy: Mack ck-Cali is is Th The Leading Residential & Offi fice Owner Alo long New Jersey’s Waterfront Valu lue Thesis Strategy St Ex Executio ion Proposition Access to Acc o Ne New York ork & NJ Waterfr NJ front t tr tran ansit Dominate cor ore Con oncentr trated pr professional hu hubs, hubs wil hu will exp xperience su submarkets, tak ake e investment al along hig high unparalleled gr un growth as as dis discount to o NY NYC, roo oom adv advantage of of barr barrier-to to-entry ry mor ore se seek valu alue, to o gr grow as as mil illennials op operational syn ynergies mar arkets start art fam amil ilies, tax x connectivity & benefits be space sp Waterfront Presence Residential Units (1) : Office Buildings (2) : 4,41 ,419 7 Office SF (2) : Residential Land (Units): 6,23 ,238 4,88 ,884,193 Office Market Share: 29% 29% Residential Market Share Today: 12% 12% In-Construction Hotel Keys 208 208 Operating Hotel Keys 514 514 7 (1) Includes operating (2,996 units) & in-construction (1,423 units). Excludes 372 key Hotel. (2) Excludes GWB Portfolio: 1 Bridge Plaza (200,000 SF).
Dual Pla latf tforms Form One Str trategy Re Resid identia ial Off Offic ice $5.7bn bn Tota tal En Ente terprise e Va Value $3.6bn bn 7,77 7,770 11 11.7m .7mm Net et As Asset t Va Value Operating Residential Units / Keys SF Office Space 96 96.4% .4% 84 84.2% .2% % Leased Residential Units % Leased (Excl. Non-Core) 2,155 (1) 2,15 9.9% 9.9% 30.9% 30 .9% In-Construction Residential Units / Keys Cash / GAAP Rental Rate Roll-Up (Excl. Non-Core) $38.8 $3 8.85 $4 $45.0 5.00 16% 16% 6.22 .22% Mack-Cali Market Premium In-Construction Average Development Yield Waterfront Avg Base Rents vs. Market Asking Rent $3 $32.2 2.21 $3 $33.0 3.00 3% 3% $47.0 $4 7.09 Mack-Cali Market P remiu m Average Waterfront Rent PSF Suburban Avg Base Rents vs. Market Asking Rent 12% 12% 29% 29% Residential Waterfront Market Share Office Waterfront Market Share Waterfront represents 60% of the Company’s NAV 8 (1) Excludes The Residence Inn (164 keys).
Today’s Agenda 1. 1. Ex Executive Sum Summary ry 2. Situation Background: Bow Street’s Proposal 2. 3. Bo 3. Bow St Street's 's Cam Campaign 4. Mack- Cali’s Plan to Deliver Stockholder Value 4. 5. 5. Your Board’s Commitment to to In Investor St Stewardship 6. 6. Con Concluding Remarks Harbors rsid ide e Transfo form rmatio tion 9
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