Mack-Cali Realty Corp. has completed the final piece of a $231 million deal to sell 12 office buildings in New Jersey, New York and Connecticut to a joint venture led by Keystone Property Group, the companies said Thursday.
The joint venture closed on the acquisition of six office properties in Elmsford and Tarrytown, N.Y., and Stamford, Conn., according to a news release. The Edison-based real estate investment trust sold the buildings for a total of roughly $91.5 million.
Mack-Cali announced in February that it would sell the 2.3 million-square-foot office portfolio, which includes New Jersey buildings in Fair Lawn, Piscataway, Morris Township and Montvale. The deal, the fifth transaction between the companies since 2012, is part of Mack-Cali’s push to sell non-core office buildings and grow its footprint in the multifamily sector.
Earlier this year, Keystone closed on the five New Jersey office properties, which include 17-17 Route 208 North in Fair Lawn, 412 Mt. Kemble Ave. in Morris Township, 30 Knightsbridge Road in Piscataway, 470 Chestnut Ridge Road in Woodcliff Lake and 530 Chestnut Ridge Road in Woodcliff Lake.
Keystone plans to reinvest in all of the properties through redevelopment, capital investment and upgrades to each site, the news release said. Mack-Cali also will have a role with the buildings going forward as part of its agreement with Keystone, including management fees for the portfolio.
The agreement also calls for Mack-Cali to get “a percentage of value creation above certain hurdle rates, and retain a senior pari-passu equity position at 555, 565 and 570 Taxter Road (in Elmsford),” the news release said.
“This closing completes our acquisition of the Tri-State portfolio with Mack-Cali, and marks an important step in the strategic expansion of our regional footprint with the purchase of well-located commercial properties where we believe we can create value," Bill Glazer, Keystone’s president, said in a prepared statement. "We look forward to executing on our reinvestment strategy for these assets to solidify their strong position in the marketplace.”
In a separate statement, Mack-Cali CEO Mitchell E. Hersh said the company was “extremely pleased to have completed this portfolio deal with Keystone. This transaction allows us to make marked progress on our strategy to redeploy capital into our growing multifamily platform, while continuing to benefit from the upside and management fees from these assets."
Jon Mikula and Jim Cadranell from HFF's New Jersey office arranged financing on behalf of the buyer.
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