Cali executive addresses NACORE on REITS.
Speaking to an audience of about 200 members of the real estate industry, Rizk explained that a REIT provides a company with various tools necessary for significant growth. Cali Realty Corporation, formerly known as Cali Associates, a 45-year-old real estate company based in Cranford, NJ, completed its initial public offering on August 25, 1994 and is now listed on the New York Stock Exchange.
"I'm asked countless times why Cali became a real estate investment trust," said Rizk. "The answer is options."
In general, Rizk noted that as a public company Cali can benefit from a substantial line of credit, additional lenders, and increased visibility, all which create new opportunities and more alternatives for the real estate company's growth. He further explained that as a public company there are a number of "currencies" other than simply cash that can be utilized for real estate acquisition: publicly traded stock; partnership units that are convertible into publicly traded stock; bonds, also convertible into stock; and stock options.
A REIT structure can also provide a higher level of comfort to lending institutions. A consolidated balance sheet, low levels of debt and the public reporting process help satisfy the goals of potential lenders.
Cali Realty Corporation is only one of four pure office REITs nationwide, and the first one in New Jersey, according to Rizk, who at 37 years old is one of the youngest presidents of a New York Stock Exchange company.
Founded in 1949 by two brothers, John J. and Angelo R. Cali, and a friend/associate Edward Leshowitz, the name Cali has become synonymous with quality office properties. The company owns 12 "Class A" office buildings (about 94 percent leased) encompassing nearly 2.2 million net rentable square feet located in Northern and Central New Jersey, including the new Clock Tower building in Cranford; the International Financial Tower in Jersey City; and the Cali Corporate Center at Woodcliff Lake.
By going public, the company increased its visibility and its potential for growth. The REIT structure allows Cali to seek out and move quickly on the acquisition of promising office properties within the New Jersey marketplace.
The young president also advised that a company can only achieve success if the management team has the creative ability and insight to use the REIT vehicle and the capital markets in ways that will provide it with a competitive edge.
Rizk added, "The REIT has given us new tools to take our business to the next level."
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|Title Annotation:||Thomas A. Rizk of Cali Realty Corp., International Association of Corporate Real Estate Executives, real estate investment trusts|
|Publication:||Real Estate Weekly|
|Date:||Jan 18, 1995|
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