BALA CYNWYD, PA. AND EDISON, N.J. — Keystone Property Group has agreed to acquire 12 office properties in the Tri-State area for $230.8 million from Mack-Cali Realty Corp. (NYSE: CLI). Keystone and Mack-Cali will form various joint ventures under which Keystone will pay $201.7 million in cash and the balance in the form of senior and subordinated equity.
The portfolio totals 2.3 million square feet in New York, New Jersey and Connecticut.
The deal will be the fifth transaction between Keystone and Mack-Cali in the last three years. In 2012 and 2013, Keystone acquired single office properties in Moorestown, N.J. and Blue Bell, Pa.; a portfolio of 14 office properties in suburban Philadelphia; and the 400,000-square-foot 100 Independence Mall West in the Philadelphia CBD, all from Mack-Cali via joint venture.
“We continue to expand our relationship with Mack-Cali, leveraging the strengths of the partnership’s distinct capabilities to fill a void in the market for next-generation work environment that enable tenants to attract and retain top talent,” says Bill Glazer, president of Keystone.
The Tri-State portfolio includes three buildings in Elmsford, N.Y.; two buildings in Tarrytown, N.Y.; three buildings in Montvale, N.J.; and one building each in Fairlawn, N.J.; Piscataway N.J.; Morris Township, N.J.; and Stamford, Conn. The largest of the properties is 30 Knightsbridge Road in Piscataway, which totals 686,316 square feet.
Keystone’s stated objective is to invest in high-quality commercial assets and reposition those properties as urban-inspired, live-work-play business environments.
“Today’s workplaces need to foster today’s new and different ways of working in order for companies to remain competitive,” says Glazer. “That means transforming the business environment to put greater emphasis on lifestyle and shared, collaborative spaces that appeal to a wide variety of professionals.”
As part of the Tri-State transaction joint venture, Mack-Cali will participate in management fees for the portfolio and a percentage of value creation above certain hurdle rates. The REIT will also retain a senior pari-passu equity position in the Elmsford properties.
Bala Cynwyd, Pa.-based Keystone and Edison, N.J.-based Mack-Cali will jointly provide leasing representation going forward. Mack-Cali’s stock price closed at $22.57 per share on Feb. 25, down from $27.51 per share a year ago.
— John McCurdy