Mack-Cali Realty Corp. will sell 12 office buildings, including six in New Jersey, to Keystone Property Group under a $230.8 million deal announced Tuesday.
The deal, the fifth transaction between Mack-Cali and Keystone since 2012, is a joint venture that involves some 2.3 million square feet in New Jersey, New York and Connecticut, the companies said in a news release. The Garden State portfolio includes buildings in Fairlawn, Piscataway, Morris Township and Montvale.
The move is the latest by Mack-Cali, the Edison-based real estate investment trust, in its push to sell non-core office buildings and grow its footprint in the multifamily sector. For Keystone, it's part of a strategy to establish a strong regional presence by creating "urban-inspired, live-work-play destinations in the context of well-located suburban parks," company President Bill Glazer said in a prepared statement.
"The profound impact that technology is having on how today's professionals work is drastically changing the commercial real estate requirements of modern companies," Glazer said. "Today's workplaces need to foster these new and different ways of working in order for companies to remain competitive, which means transforming the business environment to put greater emphasis on lifestyle and shared, collaborative spaces that appeal to a wide variety of professionals."
Mack-Cali described the following terms for the deal:
"Through its partnership with Keystone, Mack-Cali will participate in management fees for the portfolio and a percentage of value creation above certain hurdle rates, and retain a senior pari-passu equity position at 570, 555 and 565 Taxter Road. As part of the transaction, Mack-Cali and Keystone will jointly provide leasing representation for the portfolio."
Last year, Keystone closed on its acquisition of 14 office properties and three land parcels in suburban Philadelphia, under a $233 million deal with the REIT.
Keystone, based in Bala Cynwyd, Pa., also acquired 100 Independence Mall West, a 400,000-square-foot office building in Philadelphia's central business district, along properties in Moorestown and Blue Bell, Pa., in 2012.
"This transaction is another step forward in our strategy to redeploy capital into our multifamily platform, while participating in the upside that will be created by the repositioning of this portfolio," Mitchell E. Hersh, Mack-Cali's president and CEO, said in a prepared statement. "We look forward to building on our partnership with Keystone and further strengthening our market position by drawing on the synergies of our collective expertise and relationships."
The largest building in the portfolio is 30 Knightsbridge Road in Piscataway, a 686,316-square-foot property. It also includes the following:
- 1717 Route 208 North in Fairlawn, 150,477 square feet
- 412 Mt. Kemble Road in Morris Township, 477,843 square feet
- Three buildings at 470, 400 and 530 Chestnut Ridge Road in Montvale, totaling 200,444 square feet
- Two buildings at 555 and 565 Taxter Road in Taxter Corporate Park in Elmsford, N.Y., totaling 344,563 square feet
- 570 Taxter Road in Elmsford N.Y., 77,859 square feet
- Two buildings at 200 and 220 White Plains Road in Talleyrand Office Park in Tarrytown, N.Y., totaling 175,749 square feet
- Soundview Plaza at 1266 East Main Street in Stamford, Conn., totaling 179,610 square feet