Continuing with the effort to diversify its business and
venture into the multifamily apartment sector,
Mack-Cali Realty Corp.
) - a real estate investment trust (REIT) - disclosed the
acquisition of 200-unit multi-family residential properties in
New Brunswick, N.J. The company shelled out $41.1 million for
purchasing the properties from an affiliate of Ironstate
Known as Riverwatch Commons and Richmond Court, the
three-building properties are 95% leased and includes studio, and
one- and two-bedroom luxury apartments. Located near the NJ
TRANSIT train station, offering accessibility to the NJ Turnpike,
I-287, and Route 18, the property is in proximity to shopping
centers, restaurants, nightlife, theaters, Johnson &
Johnson's headquarters, and Rutgers University. The property is
offering a good amenity package and Mack-Cali's Roseland
subsidiary is in charge of managing and leasing the property.
With the continued weakness in the company's core office
markets, Mack-Cali has been divesting a notable part of its
office portfolio and targeting to expand its holdings in the
multi-family residential sector that has traditionally been more
of a stable product type. The growth in the echo boomers
population is particularly expected to drive the demand for these
In tandem with this, recently Mack-Cali and Fisher Brothers
formed a joint venture to purchase a 377-unit multi-family
residential development project in Washington, D.C. Mack-Cali
will shell out around $46.5 million for acquiring a 50% stake in
Moreover, in November, Mack-Cali disclosed the acquisition of
a 159-unit multi-family residential property - Park Square - in
Rahway, N.J., for $46.5 million from Landmark Companies of
Keasbey, N.J. Earlier this year, Mack-Cali also acquired Alterra
at Overlook Ridge 1A and 1B - luxury multi-family properties
containing 722 rental units in the master planned community of
Overlook Ridge in Revere and Malden, Mass., from a joint venture
of Prudential Insurance Company of America, an operational arm of
Prudential Financial Inc.
While the portfolio repositioning efforts through multifamily
apartment buyouts and office assets divestiture are encouraging,
we believe that the aggressive disposition efforts are continuing
to have a dilutive impact on its financials in the near-to-medium
term. Moreover, with rents on the renewals rolling down in its
core office portfolio, this Zacks Rank #4 (Sell) stock lacks
sufficient growth momentum. But we believe that these strategic
initiatives will benefit Mack-Cali in the long run.
However, investors interested in the REIT industry may
consider stocks like
Getty Realty Corp.
Sabra Health Care REIT, Inc.
). Both these stocks carry a Zacks Rank #1 (Strong Buy).
MACK CALI CORP (CLI): Free Stock Analysis
GETTY REALTY CP (GTY): Free Stock Analysis
PRUDENTIAL FINL (PRU): Free Stock Analysis
SABRA HEALTHCR (SBRA): Free Stock Analysis
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