By Linda OʼFlanagan
The big Mack-Cali office sell-off is underway with Onyx Equities, Taconic Capital Advisors and Axonic Capital paying $285 million for two of the REITs suburban office properties.
Mack-Caliʼs new Shareholder Value Committee last week announced it would sell the REIT’s entire six million s/f suburban office portfolio.
The board approved the immediate sale of 2.4 million s/f in Parsippany and Madison, NJ, to Onyx Equities, in partnership with Taconic Capital Advisors, and Axonic Capital for an aggregate purchase price of $285 million in cash and approximately $3.5 million of assumed lease obligations. Mack-Cali plans to use the sales proceeds to pay down its corporate-level, unsecured indebtedness. The Value Committee was formed last summer after shareholders surprised analysts by voting with activist investors Bow Street to oust Mack family members from the board and replace them with new blood.
Bow Street’s nominees Alan Batkin, Frederic Cumenal, MaryAnne Gilmartin and Nori Gerardo Lietz set about working with fellow directors to on a strategy to create value for shareholders after several years of the stock trading at a valuation below the value of its assets.
The Jersey City-based REIT had been worked aggressively to shed non-core office buildings to focus on key multifamily assets.
In a statement issued this week, Mack-Cali said it now expects to complete the sale of its entire suburban office portfolio in 2020. After the completion of the suburban portfolio sale, Mack-Cali’s entire holdings will consist of its waterfront class A office portfolio of five million square feet and the Roseland multi-family operations.
“Going forward, the board will continue to consider the recommendations provided by the Shareholder Value Committee regarding available alternatives for maximizing stockholder value,” said the statement.