Asset sales highlight Mack-Cali transaction activity from 2018 into new year

Mack-Cali Realty Corp. has released a transaction update for the year ending in 2018 through Thursday.

“We enter 2019 with a substantially repositioned mixed-use portfolio concentrated on the Jersey City waterfront after entering into or actively negotiating nearly $1.3 billion of transactions. We are delivering on our commitment to exit both non-core assets and non-core markets while enhancing the synergies and quality of the remaining portfolio. Our strategy is clearly tied to the vibrant Jersey City and Port Imperial Waterfront communities where we have a dominant market share and can offer our office users and residents a unique live, work, play value proposition,” CEO Michael DeMarco said.

Jersey City-based Mack-Cali, which develops and manages office and multifamily properties, said in 2018, it completed $384 million non-core asset sales at an average cap rate of 6.3 percent.

In addition, Mack-Cali also is currently negotiating the $487.5 million sale of its remaining 56-building, 3.1 million-square-foot portfolio. The firm said it expects the sale to close in the first half of 2019.

Subsequent to year end, the company said it sold two non-core office properties for $22 million and sold one multifamily property for $35 million.  Mack-Cali also has additional non-core properties under contract, and said it expects to receive approximately $83 million in proceeds from the sales.

A number of this year’s disposition properties are subject to a 1031 Real Estate Exchange, Mack-Cali said, with proceeds used to fund about $402 million of acquisitions currently under contract or in negotiations, including:

  • Soho Lofts, a 377-unit apartment community in Jersey City’s Soho West neighborhood with an average unit size of 1,200 square feet for approximately $263.5 million. Amenities include an infinity pool with cabanas, state of the art fitness center with a multipurpose fitness room, indoor and outdoor theaters, a game room, meditation garden, playground, dog walk, conference rooms and resident lounge.
  • 99 Wood Avenue South, a 272,000 square foot Class A office property for $61.5 million. It is within close access to the New Jersey Transit rail and Amtrak, the Garden State Parkway, and the New Jersey Turnpike. The property is leased by multiple credit tenants including Ernst & Young, Citibank, and Wells Fargo.
  • Consolidation of ownership in M2, a 311-unit operating residential tower on the Jersey City waterfront. Mack-Cali said it intends to acquire Prudential’s 50 percent membership interest and preferred capital account for $77.3 million. Upon closing, Mack-Cali’s ownership in the community will increase to 74.3 percent from 24.3 percent.