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Mack-Cali sells $160M office portfolio to Onyx JV

Mack-Cali has sold its 10-building Morris County, NJ, office portfolio for $160 million to a joint venture of Onyx Equities, Taconic Capital Advisors, Axonic Capital and Machine Investment Group.

The portfolio consists of nine buildings in Parsippany and one in Madison comprising 1.5 million square foot of office space.

Over the past few years, Onyx has acquired a number of Mack-Cali office buildings as the REIT has implemented a strategic repositioning into the multifamily market.

In 2017, it purchased five buildings from Mack-Cali in partnership with Garrison. The buildings included 61 South Paramus Road, 15 East Midland Ave. and 461 From Road in Paramus, along with 365 and 395 West Passaic St. in Rochelle Park.

“Onyx is excited to close its second large portfolio with Mack-Cali and we look forward to implementing our typical value add capital improvement business plan in order to upgrade assets that we already feel are some of the best in Morris County,” said Stephen Sullivan, Chief Investment Officer of Onyx Equities.

STEPHEN SULLIVAN

“Our goal is to continue to attract tenants already in the suburbs and also potential relocations out of New York City who desire both a superior product and the best locations.”

Onyx is one of the largest office landlords in New Jersey and the largest landlord in Bergen County, NJ.

The acquisition venture believes this portfolio will be well-positioned to capitalize on tenants already in the suburbs looking for high quality space as well as potential tenant relocations from New York City due to Covid-19. 

The Morris County properties are part of a $330 million portfolio of suburban office assets Mack-Cali is off-loading.

In April 2020, it sold 111 River Street, a 566,000 s/f office building in Hoboken, NJ, for $244.5 million, or $432 psf.

In its 2Q 2020 report, the company gave an update on the process, noting it had executed an amendment to its agreement to sell 11 buildings in Morris County for a gross purchase price of $167.6 million. It sold one of the buildings, 3 Giralda Farms, a vacant 141,000 s/f office building in Madison, NJ for $8 million.

Phase 2, scheduled to close in fourth quarter 2020, includes four buildings in Morris County for a gross purchase price of $105.8 million.

The remaining office portfolios in Monmouth, Short Hills and MetroPark are expected to close either in the fourth quarter of 2020 or early 2021.

The sales comes as Mack-Cali looks for a new CEO following the ouster of longtime boss Michael J. DeMarco and a board shakeup after shareholders backed a plan by minority investors Bow Street for new leadership and a redirection of the company from a “single-minded” pursuit of a multifamily waterfront strategy that has driven its FFO down.”

MARYANNE GILMARTIN

Over the summer, former Forest City chief MaryAnne Gilmartin, was named Interim CEO. In the company’s 2Q report, said she, “We remain committed to ensuring that our tenants, our communities, and our team remain healthy as we work to overcome the challenges associated with the COVID-19 pandemic.

“We have great assets, strong operations, and a solid financial core. In the coming quarters, my focus will be to empower the organization to provide excellent service to our tenants, dispose  of non-core assets, collect rents, retain tenants and lease up our New Jersey waterfront properties in order to build long-term value for our shareholders.”

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