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.
“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.”
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.”
