Soho Lofts in Jersey City — Courtesy: Manhattan Building Co.
By Joshua Burd
Mack-Cali Realty Corp. is in talks to acquire one of Jersey City’s newest luxury residential properties while adding to its office holdings in the Metropark submarket, the latest among several transactions announced Thursday by the real estate investment trust.
After a year in which the company sold $384 million worth of noncore assets, Mack-Cali is now aiming to sell several other properties, including a 56-building, 3.1 million-square-foot flex portfolio that it expects to generate about $487.5 million. The dispositions will pave the way for new acquisitions for which it is under contract or in negotiations, as it continues to reposition its residential and office portfolio.
In Jersey City, the REIT is in negotiations to acquire Soho Lofts, a newly delivered and stabilized 377-unit apartment community near the Hoboken border, for about $263.5 million, according to a news release. The luxury complex at 273 16th St. includes a host of high-end amenities and is part of the city’s emerging Soho neighborhood.
Mack-Cali’s pending acquisitions also include 99 Wood Ave. South, a 272,000-square-foot, Class A office property in the Iselin section of Woodbridge. The property, which would have a $61.5 million purchase price, is located adjacent to the company’s 101 Wood Ave. South property and would bring its presence in Metropark to about 32.7 percent of the submarket.
CEO Michael DeMarco noted that the building is within walking distance of NJ Transit rail and Amtrak service and is near the Garden State Parkway and New Jersey Turnpike, while it is leased to tenants such as Ernst & Young, Citibank and Wells Fargo.
Meantime, the REIT expects to consolidate its ownership in M2, an existing 311-unit residential tower along the Jersey City waterfront, the news release said. Based on a gross asset valuation of $195 million, Mack-Cali intends to acquire Prudential’s 50 percent membership interest and preferred capital account for about $77.3 million, which will increase its ownership in the community to 74.3 percent from 24.3 percent.
The activity follows another busy year for the Jersey City-based company. Mack-Cali’s sales in 2018 included the first phase of its flex portfolio, which went for $70.3 million, while the sale of its remaining 56-building flex portfolio is slated to close in the first half of 2019.
Subsequent to year-end, the company also sold two noncore office properties for $22 million and one multifamily property for $35 million, DeMarco said. And it is under contract to sell additional properties for an expected $83 million in proceeds.
Many of the 2019 disposition properties will be used as part of a 1031 like-kind exchange and will fund about $402 million of its pending acquisitions.
“We enter 2019 with a substantially repositioned mixed-use portfolio concentrated on the Jersey City waterfront after entering into or actively negotiating nearly $1.3 billion of transactions,” DeMarco said. “We are delivering on our commitment to exit both noncore assets and noncore markets while enhancing the synergies and quality of the remaining portfolio.
“Our strategy is clearly tied to the vibrant Jersey City and Port Imperial waterfront communities where we have a dominant market share and can offer our office users and residents a unique live, work, play value proposition.”
