Mack-Cali Realty Corp. is set to acquire Roseland Property Co., allowing one of the country's biggest office landlords to jump into the red-hot apartment sector with one of New Jersey's prominent multifamily builders.
The deal, which may be worth as much as $134.6 million, was announced this morning in a statement by Edison-based Mack-Cali, which will take on the real estate development and management arms of Roseland Partners LLC. Mack-Cali also will acquire Roseland's interests in 11 operating residential and commercial properties and 13 projects that are under development, along with interests or options in several other land parcels.
The size of the transaction is dependent upon a variety of conditions, but includes $115 million in cash, according to the statement.
The agreement calls for Roseland's principals, Marshall Tycher, Brad Klatt and Carl Goldberg, to operate as co-presidents of a newly formed subsidiary called Roseland Management Services LP. Mack-Cali President and CEO Mitchell Hersh will become the division's chairman and chief executive.
Goldberg, who has served as Roseland's managing partner, said the division will "continue to undertake the business model it's undertaken since its inception." Since 1992, the firm has built its portfolio with luxury multifamily and mixed-used projects in urban and transit-oriented areas like Jersey City, Morristown and Weehawken.
"The strategic business plan that Roseland follows at Mack-Cali's direction will be very consistent with what we have done here at Roseland for the previous 20 years," Goldberg, whose firm is based in the Short Hills section of Millburn, said in an interview today.
He said the acquisition "provides a unique opportunity to create an entity that is diversified with huge strengths in two of the more important real estate asset classes." The deal also gives the firms a chance to "really set a template" for operating in the two sectors, he said.
The acquisition comes after about three months of discussions, Goldberg said. He noted he and Hersh have known each other for at least 15 years, and "have had a very positive relationship," participating together in several industry seminars and real estate advisory committees for state government.
The properties acquired by Mack-Cali extend from New Jersey to Massachusetts, including Roseland's flagship Port Imperial development in Weehawken and West New York, the statement said. The portfolio also includes sites along the Jersey City waterfront, where Mack-Cali owns several high-profile office buildings and plans to build its own multifamily project of more than 2,000 units. Roseland has developed more than 40,000 residential units since its founding, according to its website.
Mack-Cali's portfolio includes 169 properties in New Jersey totaling nearly 23 million square feet, along with another 9 million square feet in four other states and Washington, D.C., according to its website. That includes properties in the Harborside Financial Center, in Jersey City, a five-building office portfolio totaling more than 3 million square feet.
In a prepared statement, Hersh said the acquisition "is a fundamental step in a strategic diversification for Mack-Cali," which calls for multifamily to become "a key component of our growth strategy." He also said the company now has "enhanced opportunities to utilize our land bank and repurpose existing assets in a number of locations."
The transaction is expected to close early this quarter, according to the Mack-Cali press release.