UPDATE 1- Mack-Cali Q3 FFO beats Street, ups FY09 FFO view

* Q3 FFO $0.81/shr beats est $0.76/shr

* Consolidated portfolio 90 pct leased, down from Q2

* Raises FY09 FFO outlook

Oct 29 (Reuters) - Commercial real estate investment trust Mack-Cali Realty Corp (CLI.N) posted better-than expected third-quarter funds from operations, helped by lower operating expenses, and raised its fiscal 2009 FFO outlook.

For 2009, the Edison, New Jersey-based REIT sees FFO of $3.25 to $3.29 a share, up from its prior forecast of $3.15 to $3.25 a share.

Analysts on average, were expecting the company to report FFO of $3.21 a share, according to Thomson Reuters I/B/E/S.

For 2010, it expects FFO of $2.80 to $3 a share, compared with Wall Street estimates of $2.92 a share.

For the latest quarter ended Sept. 30, Mack-Cali reported FFO of $75 million, or 81 cents a share, compared with $82.1 million, or $1.02 a share a year earlier.

Analysts were expecting the REIT to post FFO of 76 cents a share.

Operating expenses dropped by almost 7 percent to $135.6 million.

Consolidated in-service portfolio was 90 percent leased for the quarter, compared with 90.6 percent in the previous sequential quarter.

Shares of the company were up 74 cents at $31.01, in morning trade Thursday on the New York Stock Exchange. (Reporting by Biswarup Gooptu in Bangalore; Editing by Aradhana Aravindan)