Mack-Cali selling Madison, Parsippany holdings for $285M — and plans to sell entire suburban holdings in 2020

Mack-Cali Realty Corp. announced Thursday it is selling its entire Madison and Parsippany office holdings to Onyx Equities for $285 million.

The sale is part of a bigger move, as the company announced it is looking to sell its entire suburban office portfolio by the end of 2020 — totaling approximately 6.6 million square feet of space, including approximately 2.4 million square feet in the Onyx deal.

The announcement came during the real estate investment trust’s regularly scheduled board meeting — and is the result of a recommendation of the shareholder value committee that the company set up earlier this year.

The sale of the Madison and Parsippany holdings, which make up approximately 36% of the company’s suburban footage, was a stunner.

Onyx Equities, in partnership with Taconic Capital Advisors and Axonic Capital, paid an aggregate purchase price of approximately $285 million in cash and approximately $3.5 million of assumed lease obligations.

Mack-Cali said it plans to use the available sales proceeds to pay down its corporate-level, unsecured indebtedness.

After the completion of the suburban portfolio sale, Mack-Cali said its entire holdings will consist of its waterfront Class A office portfolio, totaling approximately 5 million square feet, and the Roseland multifamily operations.

As previously announced, the Mack-Cali board formed the shareholder value committee comprised of four independent directors following the company’s 2019 annual meeting to review its strategic direction and make a recommendation to the full board. Goldman Sachs served as financial adviser to the committee.