Mack-Cali to sell entire suburban office portfolio

Mack-Cali Realty Corp. plans to sell its entire suburban office portfolio, totaling approximately 6.6 million square feet of office space, in 2020.

After the completion of the suburban portfolio sale, Mack-Cali”™s entire holdings will consist of its waterfront Class A office portfolio of approximately 5 million square feet and its multifamily operations within its Roseland Residential Trust division. Mack-Cali acquired that company in 2012.

Based in Jersey City, Mack-Cali has 69 commercial real estate properties in New York totaling approximately 5 million square feet. Those include 1 Water St. in White Plains.

In January, Mack-Cali sold the Elmsford Distribution Center for $70.25 million to Realterm Logistics. In March, it sold a portfolio of Westchester and Fairfield County properties to RMC Acquisition Entity LLC, an affiliate of the Robert Martin Co. LLC, for $487.5 million. Those properties included addresses at Westchester Plaza, Executive Boulevard and Clearbrook Road in Elmsford, Skyline Drive in Hawthorne, and Odell Plaza, Executive Boulevard and Corporate Boulevard in Yonkers, as well as Stamford Executive Park in that Connecticut city.

Concurrent with the announcement that it is getting out of the suburban office market, Mack-Cali said it was selling two suburban office portfolios consisting of approximately 2.4 million square feet of office space in Parsippany and Madison, New Jersey, to Onyx Equities LLC in partnership with Taconic Capital Advisors LP and Axonic Capital LLC, for an aggregate purchase price of approximately $285 million in cash and approximately $3.5 million of assumed lease obligations.

The company said it plans to use the available sales proceeds to pay down its corporate-level, unsecured indebtedness. Mack-Cali has a market capitalization of $1.8 billion and total debt of $3.2 billion as of the end of September.

Going unremarked upon were reports that UDR Inc., a publicly traded real estate investment trust that invests in apartments, is exploring a combination with Mack-Cali. UDR is in talks about partnering on its bid for Mack-Cali with investment firm Rizk Ventures CEO Thomas Rizk, and has contacted Mack-Cali to express its interest, the sources said. Rizk was CEO of Mack-Cali from 1997 to 1999, and previously led Cali Realty, whose 1997 merger with Mack Co. created Mack-Cali.

UDR and Rizk are discussing whether to make an offer for the entirety of Mack-Cali, using debt financing to help fund the deal, two of the sources said.