111 River St. in Hoboken — Courtesy: CBRE
By Joshua Burd
Mack-Cali Realty Corp. has agreed to sell a nearly 570,000-square-foot office building in Hoboken for more than $240 million, the real estate investment trust said this week.
The company disclosed the pending deal for the 13-story property, 111 River St., as part of its first quarter earnings release. An undisclosed institutional buyer is under contract to acquire the 566,215-square-foot complex for $244.5 million, or $432 per square foot.
The building carries a $150 million mortgage that the buyer would assume, the REIT said. Currently 80 percent leased, the asset is Mack-Cali’s lone office building in Hoboken and is the longtime home of publisher John Wiley & Sons, among other tenants.
JLL marketed the property on the REIT’s behalf.
During the company’s earnings call on Thursday, Mack-Cali CEO Michael DeMarco noted that the company has been largely focused on shedding its suburban assets, but was also marketing properties such as 111 River and 101 Hudson St. in Jersey City.
“I wanted to market the suburbs, which we did, and we’re working through that,” DeMarco said. “I also felt that I wanted to be able to transact, if we could, on some waterfront assets to lighten our load. We looked at assets that were good assets but weren’t core to the strategy, which basically has the multifamily as the core and then Harborside (in Jersey City), because of the zoning and the retail components basically built into it.”
Mack-Cali acquired 111 River St. in spring 2016 from Equity Commonwealth, paying $235 million at the time as it sought to expand its presence along the Hudson waterfront. Originally built by SJP Properties, the property is part of the master-planned Waterfront Corporate Center complex that is just blocks from Hoboken Terminal.
The property is also subject to a ground lease with the Port Authority of New York and New Jersey, DeMarco said Thursday. He added that he expects the transaction to close in August, barring any additional impacts to the economy from the COVID-19 pandemic.
Discussing the company’s other high-profile transactions, DeMarco also updated investors on a plan to sell its high-end suburban office buildings. The REIT’s previously announced deal to sell its office holdings in Parsippany and Madison, which total about 2.4 million square feet, is now slated to close in two phases as the buyers modify their capital structure.
The first phase, which comprises 12 buildings with 1.9 million square feet, is now scheduled to close by June 2020 at a gross sales price of $200 million, Mack-Cali said. The sale of the remaining three properties, which span 500,000 square feet, is scheduled to close in the fourth quarter at a gross sales price of $85 million.
A partnership led by Onyx Equities LLC is slated to acquire the portfolio. Mack-Cali, meantime, is also selling office portfolios in the Monmouth, Short Hills and Metropark submarkets, with those transactions slated to close in late 2020 or early 2021.
Additionally, Mack-Cali said it has five properties totaling 774,000 square feet in various stages of the sales process, largely in the Princeton submarket, with closings anticipated to occur in the third and fourth quarters of 2020.