Mack-Cali Realty Corp.’s Harborside complex in Jersey City — Courtesy: Mack-Cali
By Joshua Burd
Mack-Cali Realty Corp. has named its new CEO, while announcing that MaryAnne Gilmartin has stepped down as board chair after leading the search for the new top executive.
The Jersey City-based real estate investment trust announced Wednesday that Mahbod Nia will take over as CEO effective March 8. Nia, who has served as a director of the company since June 2020, brings more than 20 years of real estate industry experience, having most recently served as CEO of NorthStar Realty Europe Corp.
He will succeed Gilmartin, who has served as interim CEO since the ouster last summer of former chief executive Michael DeMarco. Mack-Cali also said Wednesday that Gilmartin will serve as special adviser to ensure a smooth transition but has relinquished her post as board chair and will not run for re-election to the board at its 2021 annual meeting.
The move will allow for the election of an independent board chair in accordance with the applicable New York Stock Exchange independence guidelines, the REIT said. Gilmartin will remain a director through the annual meeting and then return to her full-time role as CEO of MAG Partners.
The board, meantime, has appointed Tammy K. Jones, its lead independent director, as board chair, effective immediately.
“The powerful combination of Mahbod’s experience as a successful CEO of a public REIT and deep familiarity with Mack-Cali having served on the board, will enable him to hit the ground running,” Jones said. “His proven management expertise and track record of creating shareholder value — most recently as CEO of NRE, through repositioning, leasing and transacting in the sector — make him the ideal executive to lead Mack-Cali forward. On behalf of the board, I would like to thank MaryAnne for her steady leadership, navigating Mack-Cali through one of the most uncertain times in history.
“I am honored that the board has entrusted me to follow in her footsteps and will ensure Mack-Cali continues to make thoughtful, strategic decisions grounded in strong corporate governance and designed to prioritize the needs of its shareholders.”
The announcements come roughly eight months after a dissident investor group led by Bow Street LLC, a hedge fund, won a proxy battle and took control of the REIT’s board. That led to the departure of seven of Mack-Cali’s 11 board members, in a battle that stemmed from the company’s financial struggles and a sprawling suburban office portfolio that had become a drag on its business.
Gilmartin soon took over as board chair and then interim CEO after the company parted ways with DeMarco, who had moved in recent years to pare the company’s office holdings. She said on several occasions that she had no plans to stay on as CEO in a permanent role.
“I joined Mack-Cali to drive change in an organization with great potential, and we have done that, meaningfully improving leadership and governance to enhance shareholder value,” Gilmartin said. “The achievements of the past year are among the highlights of my career, empowering the company’s talented team to execute the board’s strategy in a safe and productive manner during an unprecedented pandemic.
“I am pleased to pass the baton to Mahbod and Tammy, and I am confident they will build on this foundation to maximize value for all Mack-Cali stakeholders. I look forward to helping ensure a smooth transition and then returning my full focus to MAG Partners.”
Nia’s appointment follows a comprehensive search for a permanent CEO that was conducted by the executive search firm Ferguson Partners LP, which worked in consultation with the board’s search committee. The REIT said that, during his tenure at NRE, Nia oversaw a strategic transformation that drove per share net asset value growth of over 40 percent through a series of value enhancing property level and corporate initiatives.
The initiatives included a major simplification of the business, a reduction in leverage from 58 percent to 40 percent loan to value, realization of significant G&A expense savings and substantial leasing activity across the portfolio, according to a news release. Those moves culminated in the successful sale of NRE to AXA Investment Managers.
“I am thrilled to lead Mack-Cali through this next chapter,” Nia said. Having worked with the company in my capacity as a board member, it is clear to me that there are numerous parallels between the situation at Mack-Cali and the one we encountered at NRE. I believe there is substantial value embedded within Mack-Cali, and, together with the board, we are well positioned to navigate the path to unlocking that value for shareholders over time.”
In connection with his appointment as CEO, Nia will be granted 950,000 stock options within five days after his start date that will have an exercise price equal to the closing price of the company’s common stock on the date of grant, the news release said. The stock options will vest in one-third increments on each of the first three anniversaries of the date of grant, subject to earlier vesting on certain termination events. The award is an employment “inducement award” that is intended to comply with New York Stock Exchange Rule 303A.08.
Prior to NRE, Nia served as managing director and head of European investments at NorthStar Asset Management Group, where he established and rapidly grew the company’s European investment platform to $2.6 billion in assets under management across nine countries and five asset classes, the news release said. He subsequently oversaw the platform’s spin-off to create NRE in 2015 as well as the sale of the company.
Nia has also held roles at Colony Capital Inc., Goldman Sachs and Citigroup Inc. and Salomon Brothers. He holds a degree in economics for business from the University of Westminster and a master’s in economics and finance from Warwick Business School.
For her part, Jones has served as the lead independent director of Mack-Cali since last June. She is the co-founder and CEO of Basis Investment Group, a multi-strategy commercial real estate investment manager that deploys capital on behalf of some of the largest public pension plans, sovereigns and family offices in the country.
She has more than 25 years of real estate experience investing and lending across the capital stack and all property types with a focus on multifamily and office, Mack-Cali said. In addition to several other director roles, Jones also chairs the Real Estate Executive Council, a trade organization dedicated to creating a pipeline of diversity in commercial real estate.
Akiva Katz, a director on the board and managing partner of Bow Street LLC, said Mack-Cali remains in good hands after Gilmartin’s stewardship in recent months.
“In her capacity as director, chair and — when called upon — interim CEO, MaryAnne has been a tireless advocate for Mack-Cali shareholders,” Katz said. “She has created value through strategic dispositions, restructured and redesigned Mack-Cali’s leasing strategy, and remained steadfast in her commitment to the company and its stakeholders over the past two years.
“Shareholders have been fortunate to have MaryAnne in their corner and could not ask for individuals better suited than Mahbod and Tammy to chart Mack-Cali’s path forward.”