Waterfront Corporate Center One, 111 River St., Hoboken, NJ

EDISON, NJ—In one of the largest commercial transactions in Hoboken, Mack-Cali Realty Corp. is acquiring the 566,215 square-foot 111 River St. from Equity Commonwealth, a Chicago-based REIT, for $235 million.

Continuing its previously announced strategic repositioning of its portfolio, Mack-Cali says it has sold $300 million worth of assets so far this year, and expects to sell another $70 million by mid-May. Mack-Cali says it has reached agreement on another $63 million of sales, and is still seeking to sell another $230 million in assets. The proceeds from these dispositions will be used to pay down debt, fund development, and purchase suitable acquisitions.

“The sum total of this activity demonstrates clear progress toward achieving the strategic objectives we laid out for the company,” says Michael J. DeMarco, Mack-Cali president. “These moves reflect our disciplined approach to capital allocation and balance sheet maintenance while ensuring maximum earnings growth and pushing our stock price to over our NAV. The net effect of these transactions is estimated to be nine cents of earnings accretion for a full year on a GAAP basis and three cents on a cash basis.”

The year to date sales include 1201 Connecticut Avenue, NW in Washington, DC, for $93 million and 125 Broad Street in downtown Manhattan, sold this week for approximately $202 million, in a move to exit both the Manhattan and DC markets.

Mack-Cali also paid off a $63.3 million, 10.26 percent mortgage secured by four New Jersey office properties at a substantial discount using sale proceeds.

The company is acquiring two class A office assets for approximately $317 million in Hoboken, and Metropark in Edison, NJ, totaling approximately 800,000 square feet. Mack-Cali has also acquired three smaller assets for approximately $34 million. The acquisitions and repayment of debt total approximately $414 million.

The acquisitions include:

111 River Street in Hoboken, NJ, also known as the Waterfront Corporate Center One, a 13-story, 566,215-square-foot class A office property built in 2002, is Mack-Cali's first acquisition in the successful, high barrier-to-entry Hoboken market. With this acquisition, Mack-Cali will own approximately 25 percent of the Hudson River Waterfront class A office market. The acquisition is expected to close in June.
101 Wood Avenue South in Metropark in Edison, NJ, will be purchased for $82.3 million. This 10-story, 262,835-square-foot class A office building is located in the highly successful Metropark class A submarket. This is Mack-Cali's second acquisition in Metropark and with this purchase the company will own approximately 20 percent of the Metropark submarket. The acquisition is expected to close in May.

Mack-Cali says the Borough of Upper Saddle River has agreed to amend its zoning to provide for the development of for-sale residential homes on the company's One Lake Street property. As a result, the company expects to sell the bulk of the property – approximately 38 acres – to a major home developer, which will construct both market rate and affordable housing units. The remainder of the 47-acre property will be sold to the borough for the future construction of municipal offices and sports fields. The sales price is expected to be about $43 million, and the company says it probably will complete the transaction in early 2017.

“Acquiring properties that meet with the company's strategic plan's goals of creating a portfolio with long-term growth is one of our continuing goals. Both 111 River Street and 101 Wood Avenue will be among the top five office buildings we own,” says DeMarco. “Both buildings are in key markets where we have seen rents rising in the short term and believe will continue to rise over the long term and have in-place rents that are substantially below market.”

As previously reported by GlobeSt.com, the acquisitions/dispositions and debt repayment are part of Mack-Cali's broad-based portfolio realignment announced as part of its strategic plan last September to focus on balance sheet management while and increasing holdings in waterfront and transit-based locations. To achieve this realignment, the company has set a goal of $750 million in dispositions to help raise capital for reduction in debt, fund development, and key acquisitions.

Mack-Cali also paid off a $63.3 million, 10.26 percent mortgage secured by four New Jersey office properties at a substantial discount using sale proceeds.

The acquisitions include:

111 River Street in Hoboken, NJ, also known as the Waterfront Corporate Center One, a 13-story, 566,215-square-foot class A office property built in 2002, is Mack-Cali's first acquisition in the successful, high barrier-to-entry Hoboken market. With this acquisition, Mack-Cali will own approximately 25 percent of the Hudson River Waterfront class A office market. The acquisition is expected to close in June.
101 Wood Avenue South in Metropark in Edison, NJ, will be purchased for $82.3 million. This 10-story, 262,835-square-foot class A office building is located in the highly successful Metropark class A submarket. This is Mack-Cali's second acquisition in Metropark and with this purchase the company will own approximately 20 percent of the Metropark submarket. The acquisition is expected to close in May.

Instant Insights /

Mack-Cali Pays $235M for 111 River St. in Hoboken, Makes Other Asset Sales and Buys

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