Madison International Realty, a real estate private equity firm, has acquired a five percent ownership stake in Mack-Cali Realty Corporation (CLI), holding approximately 4.5 million shares.
“We acquired the shares at what we believe to be a discount to net asset value (NAV), and we believe Mack-Cali holds material upside potential. We see a significant discrepancy between how the public market is pricing the company’s shares and our private valuation,” said Ronald Dickerman, President of Madison International Realty.
“The company has articulated and is executing a transition to become a focused play on prime office and multi-family residential properties on the New Jersey waterfront and is committed to closing the NAV discount in its shares.
“The company has divested, and has stated that it will continue to divest, legacy suburban and flex assets to focus on office and multi-family directly across the Hudson River from Manhattan, Brookfield Place and Hudson Yards, and offers its prime space at a significantly discounted rent,” Dickerman said.
Based in Jersey City, Mack-Cali is an owner, manager and developer of five million square feet of office space and 4,400 multi-family units on the New Jersey waterfront, with entitlements to build 7,000 additional units.
The company is leading development, leasing and activation initiatives for Harborside, a master-planned destination composed of class A office, luxury apartments, retail, restaurants, and public spaces.
Mack Cali Realty has a market capitalization of $1.87 billion. Last month, it paid a $0.20 stock dividend representing a yield of 3.86%.
Madison International Realty specializes in acquiring private ownership stakes, joint venture positions, and listed property shares in prime properties and portfolios in major markets in the US, UK and Western Europe. It invests in listed real estate companies owning high-quality portfolios trading at discounts to net asset value. Other Madison REIT investments have included GGP Inc., TIER REIT, Monogram Residential Trust, Inc., Alexander’s Inc. and Songbird Estates.
“Mack-Cali fits well with our differentiated strategy of effectuating investments in listed property companies owning prime portfolios that we believe are trading at outsized discounts to NAV,” Dickerman said.
Hedge funds and other institutional investors own 98.65% of Mack-Cali’s stock.