Jul. 31--Real estate investment trust Mack-Cali Realty Corp. said second-quarter net income rose 11 percent to $20.4 million, or 28 cents a share from $18.3 million, or 28 cents, from the same period last year on lower energy costs in the quarter. The company's shares rose.

The increased earnings for New Jersey's largest office landlord come at a difficult time for commercial real estate, as layoffs and cutbacks have led companies to shed office space, decreasing landlords' rental incomes.

Mack-Cali's stock added 97 cents, or 3.6 percent, to $27.84, Thursday in New York Stock Exchange trading.

"Tenants are still delaying decision-making and making commitments, but we're seeing a slight uptick in leasing in the some of the markets that we operate in," Mitchell Hersh, president and chief executive officer, said in a statement Thursday.

Mack-Cali, which owns more than 4 million square feet of office space in Bergen County, noted new leases and renewals in the second quarter, which helped prop up its second-quarter revenue of $189.3 million, a 2 percent decline from $192.8 million a year ago.

Among the deals was a renewal of a lease for 13,122 square feet, for five years, at 365 W. Passaic Street in Rochelle Park by Stantec Consulting Services Inc., which provides architectural and engineering services.

While revenue slipped slightly, the company's costs fell further. Mack-Cali spent $131.2 million in expenses in the second quarter, a 6 percent decline from the same period a year ago, because of decreased energy costs due to the cooler-than-expected weather and lower rates, Hersh said in a conference call with analysts.

Mack-Cali also reported increased funds from operations, or FFO, a common measure of performance for real estate investment trusts. The company reported $76.5 million in funds from operations in the second quarter, or 87 cents a share, compared with $75.2 million, or 93 cents, in the same period a year ago. (The per-share earnings are lower because the company issued more stock between the two quarters.) The 87 cents per share funds from operations number topped Wall Street analysts' estimates of 81 cents.

In Thursday's morning conference call, Hersh was asked if the FBI's arrests in New Jersey last week might present negative fallout or opportunities. The FBI arrested 44 suspects -- including three mayors and two assemblymen -- in a probe of money laundering and alleged public corruption, much of it related to possible bribery related to residential real estate development.

While the investigation wouldn't likely present any real-estate opportunities, Hersh said the scandal and associated negative publicity weren't good for the state's image. "All that stuff, if you will, is bad for business," he said. "But it'll blow over."

E-mail: tangel@northjersey.com

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