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Bow Street pushes four more members on Mack-Cali

The battle between Mack-Cali and Bow Street took another turn today as the minority shareholder made a call for new leadership at the REIT and named a slate of new nominees for the board.

Bow Street’s nominees include its own Akiva Katz, Mahbod Nia, Tammy Jones and Howard Stern as well as the four directors shareholders elected at the 2019 Annual Meeting – Alan Batkin, Frederic Cumenal, MaryAnne Gilmartin, and Nori Gerardo Lietz.

Mack-Cali announced last week that it doesn’t plan to re-nominate the four Bow Street–nominated directors elected to its board at last year’s shareholder meeting. The New Jersey–based REIT claimed the four, who joined after a proxy contest with Bow Street last year, “sought to advance Bow Street’s self-interested agenda,” which it claims includes a “fire sale” of the company’s properties.

Last year, shareholders elected Alan Batkin, Frederic Cumenal, MaryAnne Gilmartin and Nori Gerardo Lietz to the board. Bow Street, which owns roughly 4.5 percent of Mack-Cali, is hoping a board majority will help sway major decisions on the future of the company, including its call for the ouster of CEO Michael Demarco.

In its latest letter to shareholders, Bow Street said, “Despite their best efforts, the four directors elected by shareholders last year could not overwhelm the obstructive behavior of the entrenched majority. A board comprised of a majority of truly independent directors … is required to effectuate meaningful change.”

Accusing CEO Michael DeMarco of mismanagement of the REIT, the investors wrote, “While he frequently congratulates himself for Mack-Cali’s ‘comprehensive transformation,’ the numbers tell a decidedly different story. Since Mr. DeMarco joined the company, Mack-Cali’s operations have deteriorated by virtually every relevant metric.

“After decades of under-performance and mismanagement, new leadership is required to create value at Mack-Cali.”

Bow Street has criticized Mack-Cali’s inability to increase is net asset value over the past five years by its “ single-minded”  pursuit of a multifamily waterfront strategy that has driven its FFO down 40 percent since 2017.

Last week, Mack-Cali announced the sale of another office building and reported that the bulk of its tenants are paying rent through the coronavirus pandemic. The apartment and office REIT collected 90 and 96 per cent of office and residential tenant rent for April 2020, respectively.

The company has $330 million of suburban office assets under contract. Its Roseland multi-family platform will account for more than two thirds of its overall net operating income (NOI) once those sales close.

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