Liberty Towers in Jersey City
By Joshua Burd
Mack-Cali Realty Corp. is selling two Boston-area properties for a combined $411.5 million as part of a 1031 exchange involving a recently acquired luxury apartment complex in Jersey City.
The real estate investment trust on Monday announced that it was under contract to sell the two Massachusetts multifamily properties, Chase at Overlook Ridge and Alterra at Overlook Ridge, which were developed by its Roseland Residential Trust subsidiary in 2014 and 2008, respectively. Rockpoint Group LLC is acquiring the complexes, with the transaction slated to close by the end of October.
The announcement follows Mack-Cali’s recently completed purchase of Liberty Towers, a two-building, 648-unit complex along the Jersey City waterfront. The deal was the first piece of a 1031 like-kind exchange that will total more than $820 million in value, with the Boston-area deal serving as the second piece.
Proceeds from the sale of the Overlook properties will be used to fund the REIT’s purchase of Liberty Towers, according to a news release. The $409 million acquisition was initially financed with a $232 million mortgage and the company’s line of credit, but the returns from the Overlook properties will be used to repay the company’s line.
The moves continue Mack-Cali’s recent effort to strengthen its holdings in Jersey City, the site of its headquarters, and pare down its portfolio in noncore markets.
“We are pleased to further add to our portfolio on the highly desirable Jersey City waterfront through the efficient sale of a portion of our Boston multifamily properties and the purchase of Liberty Towers,” Mack-Cali CEO Michael J. DeMarco said. “This transaction allows us to further concentrate our capital on the waterfront where we believe our market share and operating familiarity with the community should allow us to enhance the performance of Liberty Towers.”
Mack-Cali also announced Monday that it expects to receive the $2.6 million of proceeds associated with the sale of a tax credit tied to Urby, a 762-unit tower in Jersey City that opened in 2017 under a joint venture with Ironstate Development. The REIT expects to realize the proceeds in the fourth quarter of 2019.