Mack-Cali to Sell Remaining Suburban NY/NJ Office Portfolio

Real Estate In-Depth | December 26, 2019

1 Water St., White Plains

JERSEY CITY, NJ—The Board of Directors of Mack-Cali Realty Corp. has voted to sell the company’s 6.6-million-square-foot suburban office portfolio located in New York, New Jersey and Connecticut.

The company’s sole office holding outside of New York City in New York State is the firm’s 1 Water St. office building in White Plains. The four-story building adjacent to the White Plains Mall, which will be razed soon in a major redevelopment project, totals 45,700 square feet of office space.

Across the border in Connecticut, Mack-Cali is the owner of the Stamford Executive Park complex. The majority of the office holdings to be sold are located throughout the state of New Jersey.

In connection with its suburban office portfolio initiative, Mack-Cali reported it had sold two suburban office portfolios totaling approximately 2.4 million square feet of office space in Parsippany and Madison, NJ to Onyx Equities, LLC in partnership with Taconic Capital Advisors, L.P. and Axonic Capital LLC. The sale announced on Dec. 19 totals approximately $285 million in cash and approximately $3.5 million of assumed lease obligations.

That portfolio makes up approximately 36% of the square footage of the company’s suburban holdings. Mack-Cali stated that it expects to sell the remainder of its suburban office holdings totaling approximately 4.2 million square feet in 2020.

After the completion of the suburban portfolio sale, Mack-Cali’s entire holdings will consist of its waterfront class A office portfolio of approximately 5.0 million square feet and the Roseland multi-family operations.

The decision to sell is suburban office portfolio was based on a report and recommendations the Board of Directors received earlier this month from the Shareholder Value Committee and its financial advisors regarding the company’s strategic direction and alternatives for maximizing stockholder value. The company plans to use the available sales proceeds to pay down its corporate-level, unsecured debt.

Mack-Cali made a splash in the suburban office market in the spring of this year when it sold 3.1 million square feet of office-flex space in Westchester and Fairfield County, CT to Robert Martin Co. in a deal valued at $487.5 million. Click Here to read article on sale.

Earlier this year, a joint venture of Onyx Equities, LLC and Garrison Investment Group acquired 650 From Road, a 373,420-square-foot office building in Paramus, from Mack-Cali Realty.

Recently, New York City-based PAG Investments acquired the 330,00-square-foot 5 Wood Hollow Road office building in Paramus from Mack-Cali Realty Corp. and the joint venture of Aspen Real Estate of Freehold, NJ and Devli Real Estate of New York City acquired the 100% leased 3600 Route 66 office building in Neptune, NJ from Mack-Cali Realty in a deal valued at $26 million.