Boston-based REIT RockPoint Group has acquired a $300 million stake in Mack-Cali unit, Roseland Residential Trust.
Once Roseland is funded, RockPoint would gain a 17 percent interest in the firm. Mack-Cali, which acquired Roseland for $134.6 million in 2012, would retain an 83 percent share. RockPoint will inject the $300 million into Roseland over the next two years. Half of the total will be due at closing.
The transaction, which places an equity value of $1.23 billion on Roseland, provides Mack-Cali the option to invest another $200 million into its subsidiary.
“This will allow us to complete our 2017 and 2018 starts and therefore de-stress Mack-Cali’s balance sheet going forward. The Roseland platform will require additional equity over time and we believe very strongly that we have multiple options to fund those needs,” said Michael DeMarco, Mack-Cali’s president and COO, during an earnings call last week.
Roseland, which has Manhattan properties Echelon Chelsea, 2130 Adam Clayton Powell, Jr. Boulevard in Harlem and Riverbank West in its portfolio, finished 2016 with 96.3 percent occupancy in its stabilized residential portfolio. One of its newest projects, the 762-unit Jersey City Urby, launched leasing activities last week. Marshall Tycher, the chairman of Roseland, said that his firm signed eleven leases on the first day at $58 per square foot. According to DeMarco, his firm’s partnership with RockPoint may be short-lived. “They are not looking at this as something they want to own for 30 years,” he said.
“It is in the best interest of the entity. They do not look at things and say, ‘Well, this is what we need to do. We want to own this because it is part of why we want to own it.”
Roseland recently bought out its joint venture partners to gain full ownership of two Jersey City properties. The company bought an additional 50 percent interest in Plaza 8/9 for $57.1 million. It executed a similar deal for the Monaco, a 523-unit project. The deal, which is expected to close next quarter, was valued at $315 million.
