Mack-Cali Realty Corporation has entered into agreements to form various joint ventures with a fund sponsored by Keystone Property Group to facilitate the sale of Mack-Cali’s 15 commercial office properties and three land parcels located throughout Suburban Philadelphia.
The portfolio will be sold for approximately $233 million: $201 million in cash, a $10 million mortgage secured by One Plymouth Meeting, and subordinated interests in the portfolio with capital accounts aggregating $22 million.
Mack-Cali shall participate in management fees and 50 percent of value creation above certain hurdle rates. Mack-Cali will also receive majority interest in a land parcel in Bala Cynwyd, Pennsylvania, for multi-family residential development.
As part of the transaction, Mack-Cali retains the rights to subdivide and develop multi-family residential units at 150 Monument Road in Bala Cynwyd.
The portfolio of assets includes approximately 1.663 million square feet of existing office properties and land that can accommodate future development of approximately 162,000 s/f. The company anticipates a late 2013 closing.
Mack-Cali previously sold its Moorestown Corporate Center in Moorestown, New Jersey, and its 16 and 18 Sentry Park West in Blue Bell, Pennsylvania, to Keystone.
Mitchell E. Hersh, president and chief executive officer of Mack-Cali, commented, “My relationship with Keystone has afforded us the opportunity to make this transaction happen.
“It offers our Roseland subsidiary an opportunity to develop additional luxury multi-family properties that are in line with our reputation for building best in class residential at the gateway to the Main Line in Philadelphia. In addition, Mack-Cali will have the opportunity to redeploy the proceeds from this sale into more strategic growth opportunities.”
Added Keystone Property Group president and CEO Bill Glazer: “This acquisition is a very strategic venture for Keystone, and an expansion of an important relationship with an exceptional partner.
“Mack-Cali has assembled a portfolio of superbly located, institutional assets, and this acquisition benefits both Keystone and the partnership with Mack-Cali by adding economies of scale, increased market penetration, and synergies with our existing portfolio. Moreover, Keystone’s core competencies and entrepreneurial redevelopment expertise position our team strongly to create additional value throughout the portfolio.”