Mack-Cali sells 4-building Short Hills office portfolio to Birch for $255M

Mack-Cali Realty Corp. has sold a four-building office portfolio in Short Hills to the Birch Group for $255 million, the two announced this week.

“This transaction represents yet another significant step toward simplifying our company through the disposition of suburban office properties, while generating liquidity to pay down corporate debt and strengthen our balance sheet,” Mack-Cali CEO Mahbod Nia said in a prepared statement.

The four buildings, which total approximately 843,300 square feet, include:

  • 51 JFK Parkway, 260,750 square feet, 86.9% leased;
  • 101 JFK Parkway, 197,196 square feet, 98.4% leased;
  • 103 JFK Parkway, 123,000 square feet, 100% leased;
  • 150 JFK Parkway, 262,354 square feet, 51.5% leased.

Mack-Cali said it would see about $100 million in net proceeds from the deal, which it expects to use to pay down unsecured corporate debt during the second quarter of the year.

“The Short Hills disposition continues our strong sales momentum in the suburban office market and reinforces our ability to achieve our goals at a solid pace without sacrificing value,” Ricardo Cardoso, Mack-Cali’s executive vice president and chief investment officer, said in a statement. “While we have reached a significant milestone in our sales process, we continue to work diligently to finalize terms on our remaining noncore commercial assets.”

The portfolio represents the New York-based Birch Group’s first activity in the Short Hills submarket, the firm said.

“This portfolio offers a unique opportunity to reposition historically high-performing properties back to best-in-class assets, which is a hallmark of the Birch Group’s strategy,” founder and CEO Mark Meisner said in a statement. “Short Hills is known for its incomparable prestige that manifests in heightened expectations among the regional tenant base.”

Cushman & Wakefield’s capital markets team arranged the transaction. David Bernhaut led the assignment along with Andy Merin, Gary Gabriel, Frank DiTommaso and Seth Zuidema, in conjunction with Adam Spies and Kevin Donner. They were supported by an equity, debt & structured finance team of John Alascio, Alex Hernandez, Chuck Kohaut and T.J. Sullivan.

The Birch Group will retain Cushman & Wakefield as the exclusive leasing agent for the properties.

It also said it plans design enhancements, led by Gensler, at the portfolio — complementing $15.2 million in recently completed renovations by Mack-Cali.