Mack-Cali Realty Corporation ( CLI ), in collaboration with Keystone Property Group through their affiliates, acquired Curtis Center in Philadelphia for $125 million with plans to reposition the property into a dynamic, mixed-use environment. This all-cash deal comes as part of Mack-Cali's effort to enhance its multi-family rental platform.
Spanning around 885,000 square feet of space, this iconic building has a broad mix of commercial tenants. It has ground-floor retailers while General Services Administration (GSA) serves as the building's anchor tenant.
The reposition plan calls for conversion of around 90,000 square feet of current office space inside the building into 90 luxury rental apartments. Moreover, there are prospects for additional housing with office lease expires and further space becoming vacant.
The property would also undergo a number of other renovations so that overall, they complement its central office and residential components. While an affiliate of Keystone would be in charge of managing the office and retail part of the building, Roseland - the subsidiary of Mack-Cali - would conduct the design, construction, leasing and management of the residential part.
As a matter of fact, amid weakness in its core office markets, Mack-Cali is currently focusing on expanding its holdings in the multi-family residential sector that has traditionally been more of a stable product type. Particularly, this acquisition would help Mack-Cali to capitalize on the growing Philadelphia housing market. It serves as one of the regions popular center for entertainment, culture and transport.
Mack-Cali currently sports a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like The GEO Group, Inc. ( GEO ), Parkway Properties Inc. ( PKY ) and Terreno Realty Corp. ( TRNO ). All these stocks carry a Zacks Rank #1 (Strong Buy).