EDISON, NJ-Keystone Property Group will acquire a dozen office properties in northern New Jersey, New York and Connecticut from its joint venture partner Mack-Cali Group for $230.8 million, including $201.7 million in cash. The balance of payment will come in the form of senior and subordinated equity.

Last summer, the two companies agreed to a series of joint ventures and portfolio sales (see previous story) whereby Keystone could expand and strengthen its office portfolio, while Mack-Cali continues shifting its primary focus to multi-family property.

The 2.3 million-square-foot portfolio that Keystone has entered into agreement to purchase includes:

two buildings at 555 and 565 Taxter Road in Taxter Corporate Park in Elmsford, NY, totaling 344,563 square feet
570 Taxter Road in Elmsford, 77,859 square feet
two buildings at 200 and 220 White Plains Road in Talleyrand Office Park in Tarrytown, NY, totaling 175,749 square feet
1717 Route 208 North in Fairlawn, 150,477 square feet
30 Knightsbridge Road in Piscataway, 686,316 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
Soundview Plaza at 1266 East Main Street in Stamford, CT, 179,610 square feet

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 equity position at 570, 555 and 565 Taxter Road.

Mack-Cali and Keystone will jointly provide leasing representation for the portfolio.

This transaction represents the fifth deal in recent years between Keystone and Edison-based Mack-Cali.

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Last year, Keystone acquired 14 commercial office properties and three land parcels in suburban Philadelphia through a joint venture purchase by the two companies

That deal was followed by the purchase of 100 Independence Mall West, a 400,000-square-foot office tower in Philadelphia's Central Business District by a joint venture of Keystone, Mack-Cali and Parkway Corporation.

The year before Keystone had purchased two properties from Mack-Cali: Moorestown Corporate Center in Moorestown and 16-18 Sentry Park West in Blue Bell, PA.

"This latest deal reflects our aggressive strategy to establish a strong, regional presence by expanding our focus on the creation of differentiated, urban-inspired live-work-play destinations in the context of well-located suburban parks," said Bill Glazer, Keystone's president.

Glazer is to appear on the "Industry Leaders" panel at Thursday's Philadelphia RealShare conference at the Union League in Philadelphia.

"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. He said that Keystone is focused on transforming the business environment at its properties to put greater emphasis on lifestyle and shared, collaborative spaces.

Keystone, based in Bala Cynwyd, sponsors and manages a series of opportunistic real estate investment funds.

Mack-Cali is a REIT that owns or has interests in 279 properties, consisting of 267 office and office/flex properties and 12 multi-family rental properties containing over 3,600 residential units, all located in the Northeast.

Instant Insights /

Keystone Takes 12 Mack-Cali Offices for $231M

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