An upgraded lobby is among the recent improvements at 7 Sylvan Way in Parsippany and several other buildings in Mack-Cali Realty Corp.’s suburban office portfolio. — Courtesy: Mack-Cali
By Joshua Burd
Mack-Cali Realty Corp. has agreed to sell 2.4 million square feet of office space in Parsippany and Madison to a joint venture led by Onyx Equities LLC, in a $288.5 million deal that sets up a plan to shed its entire suburban office portfolio.
The real estate investment trust announced Thursday that, based on recommendations from its board of directors, it would sell the Parsippany and Madison portfolios to a partnership of Onyx, Taconic Capital Advisors LP and Axonic Capital LLC, for an aggregate purchase price of $285 million in cash and $3.5 million of assumed lease obligations. It said it now plans to use the available sales proceeds to pay down its corporate-level, unsecured indebtedness.
The transaction is the first step of Mack-Cali’s plan to sell its suburban office assets, as approved by its board on Dec. 17, according to a news release. The company expects to sell its entire suburban profile in 2020, leaving it with 5 million square feet of Class A waterfront office space and its Roseland Residential Trust portfolio.
The Parsippany and Madison buildings account for about 36 percent of its suburban office holdings, which total 6.8 million square feet. The move follows the arrival of four new independent directors earlier this year, leading to recommendations that the company explore the sale of its suburban assets.
Goldman Sachs & Co. LLC served as financial adviser to the Shareholder Value Committee.