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Mack-Cali continues practice of selling N.J. office properties

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Mack-Cali Realty Corp. is quickly making good on a promise to prune its office portfolio to generate fresh capital, with the company announcing today it has sold yet another suburban office property in the region.

The latest sale for the Edison-based real estate investment trust was of a 63,000-square-foot building at 51 Imclone Drive, in Branchburg, according to a news release. Mack-Cali sold the two-story property to an unnamed buyer for $6.3 million.

The transaction is at least the third in the past month by the longtime office giant, which aims to recycle the proceeds largely into its growing multifamily portfolio. In recent weeks, the company announced the sales of a 77,000-square-foot building in Clifton and two properties in suburban Philadelphia.

“I think it’s a smart strategy,” said Jose Cruz, senior managing director in the Florham Park office of HFF, the mortgage banking firm. “I think a lot of owners are looking at their portfolio today to see ... where opportunities lie and where they can take advantage of things. They’re going to redeploy the proceeds to other options.”

Cruz noted that “it’s a varied list” of properties that Mack-Cali is selling, ranging up to the $72 million sale of the Sanofi U.S. headquarters in April. When it ponders selling a property, he said, the company has likely considered whether it can enhance the value of the site or whether the submarket has the potential to grow.

“And someone else may see that growth that Mack-Cali doesn’t, and vice versa, which is why these assets end up trading,” Cruz said. “I don’t think there’s anything specific in terms of a disposition plan, other than if a deal makes sense, they’ll do it.”

Mack-Cali has been clear about its intention to sell so-called noncore assets and reinvest in multifamily. The company effectively rolled out that strategy in a big way last fall, when it acquired Roseland Property Co.

Since then, Mack-Cali has announced eight property sales, according to a recent presentation for stockholders. The company already has completed seven transactions this year, compared to two in all of 2012.

In a quarterly earnings call in April, President and CEO Mitchell E. Hersh said the company believes it can generate such opportunities “in some of our secondary markets. And when I say secondary, it’s not that I am calling them inferior. I am saying secondary in terms of our core.”

“What we are not looking at selling is Jersey City,” he added, referring to its properties along the Hudson waterfront. “We are not looking at selling our major presence in, for example, Parsippany, Morris County — places where we really have dominant positions and can help shape markets as they begin to recover.”

The company owns or has interests in 273 properties in the Northeast, according to the press release. That includes 264 office sites totaling 30.5 million square feet and nine multifamily properties containing more than 3,300 units.

Joshua Burd

Joshua Burd

Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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