Mack-Cali Realty Corporation CLI, the Edison, New Jersey-based real estate investment trust (“REIT”), reaped around $81.4 million from the sale of its commercial office property located at 14 Sylvan Way, Parsippany, NJ. The divestiture of the property, situated in Mack-Cali Business Campus, depicts the company’s strategy to reinvest the proceeds toward other growth initiatives.

Mack-Cali sold the 203,506-square-foot, three-story class A office property to Griffin Capital Essential Asset REIT II, Inc., the privately-held, Los Angeles-based investment and management company. Besides the sale price, Griffin will also bear the responsibility of around $2 million in tenant improvement allowance, going forward. Notably, developed in 2013, 14 Sylvan Way had been fully leased to Wyndham.

As a matter of fact, Mack-Cali, which has around 2,000 commercial tenants from diverse industries, boasts a strong presence in high barrier-to-entry markets in the Northeast region of the U.S. The company currently owns or has interests in 280 properties, all located in the Northeast – 261 office and office/flex properties (30.7 million square feet) and 19 multi-family rental properties (5,700 residential units).

Amid choppy environment in its core suburban office markets over the past several quarters, the company has been divesting a notable part of its office and office/flex assets and redeploying the sale proceeds for funding other growth opportunities. With the latest divestiture, we believe the company intends to unlock value in its assets as well as reap capital for growth needs.
 
Mack-Cali currently has a Zacks Rank #4 (Sell).

Investors interested in the REIT industry may consider stocks like Arbor Realty Trust Inc. ABR, Strategic Hotels & Resorts, Inc. BEE and CareTrust REIT, Inc. CTRE. While both Arbor Realty Trust and Strategic Hotels & Resorts sport a Zacks Rank #1 (Strong Buy), CareTrust REIT holds a Zacks Rank #2 (Buy).

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