Keystone JV to Buy 2 MSF Office Portfolio for $231M from Mack-Cali

Keystone Property Group and Mack-Cali Realty have joined forces again, committing to the establishment of various joint ventures through which Keystone will acquire a 2.3 million-square-foot Tri-State office portfolio from Mack-Cali in a transaction valued at $231 million.

Soundview Plaza Stamford ConnKeystone Property Group and Mack-Cali Realty Corp. have joined forces again. The companies recently committed to the establishment of various joint ventures through which Keystone will acquire a 2.3 million-square-foot Tri-State office portfolio from Mack-Cali in a transaction valued at approximately $230.8 million.

More than half the 12-building collection’s square footage is located in Northern New Jersey, and the property at 30 Knightsbridge Rd. in Piscataway accounts for approximately 686,300 square feet of the total, making it the largest property in the group. The remaining assets in the Garden State include 412 Mt. Kemble Rd., a 477,800-square-foot complex in Morris Township; the 150,500-square-foot building at 1717 Route 208 North in Fairlawn; and in Montvale, a 200,400-square-foot group of three buildings carrying the addresses of 470, 400 and 530 Chestnut Ridge Rd.  Another five properties in the portfolio are located in New York and include the buildings at 555 and 565 Taxter Rd. in Elmsford, which account for a total of 344,600 square feet; another Elmsford property, 570 Taxter Rd., featuring 77,900 square feet; and 200 and 220 White Plains Rd. in Tarrytown, which totals 175,700 square feet. And rounding out the portfolio is Soundview Plaza, a 179,600-square-foot asset in Stamford, Conn., for which Mack-Cali paid $33 million in 2002.

Per terms of the agreement between Keystone and Mack-Cali, the portfolio will be purchased with roughly $201.7 million in cold-hard cash, in addition to senior and subordinated equity.

“This latest deal reflects our aggressive strategy to establish a strong, regional presence by expanding our focus on the creation of differentiated, urban-inspired live-work-play destinations in the context of well-located suburban parks,” Bill Glazer, president of Keystone, saidd in a prepared statement. For Mack-Cali’s part, the portfolio sale marks another move in the company’s bid to redeploy capital into its multi-family platform. Mack-Cali’s future involvement with the assets will include participation in management fees for the portfolio and a portion of value creation, as well as the custody of a senior pari-passu equity position at the Taxter Rd. properties in New York. Mack-Cali and Keystone will handle leasing representation for the properties as a team.

Keystone and Mack-Cali have been down this partnership path before. Among the most recent such transactions was the August 2013 closing of a joint venture involving Keystone’s acquisition of a suburban Philadelphia portfolio consisting of 15 institutional-quality office properties totaling 1.7 million square feet and three land parcels from Mack-Cali for $233 million.