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New Jersey Office Owner Targets $1 Billion in Property Sales

Mack-Cali Realty Corp. is aiming to sell four office buildings and two hotels in New Jersey and become a pure-play multifamily REIT.

(Bloomberg)—Mack-Cali Realty Corp. is selling its portfolio of offices and hotels as it pivots to owning apartment buildings.

The Jersey City-based real estate investment trust is targeting more than $1 billion for four office buildings and two hotels in New Jersey, according to a person familiar with the matter.

That includes office properties at Jersey City’s Harborside development, where Inc. was close to signing a major lease before the deal fell apart last month.

Mack-Cali, which faced pressure from activist investors, has overhauled its leadership as it shifts away from suburban offices toward apartment buildings.

“We believe that continuing to focus and ultimately becoming a pure-play multifamily REIT will help our position and valuation in the public markets,” Chief Executive Officer Mahbod Nia, who took over in March, said in an interview. “The intention is to exit the remaining office assets.”

The REIT is formally changing its name to Veris Residential Inc., effective Dec. 10, according to a statement Tuesday.

The move “is an important milestone following the transformative steps the company has taken since the reconstitution of the board of directors,” Chair Tammy K. Jones said in the statement. “As we look ahead, we remain committed to maximizing long-term value for our shareholders.”

Mack-Cali shares had gained 43% this year through Monday. They were trading at $17.99 at 10:53 a.m. New York time, up 1%.

Last month, Mack-Cali said it was under contract to sell two New Jersey offices for $590 million. And as it tries to unload the remaining buildings at Harborside, it’s focused on finding tenants for those redeveloped properties.

While the pandemic has stunted demand for offices, tech and finance companies have explored the site given the relative discounts to Manhattan rents and state tax incentives, Nia said.

“Half the battle with Harborside is just getting over and seeing the campus, how accessible and easy it is to get to, and then realizing the benefits of doing that,” he said. “We do need the return to office to really gain some momentum.”

© 2021 Bloomberg L.P.

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