Mack-Cali Sheds Non-Core Asset, Aims for Premium Properties - Analyst Blog

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Mack-Cali Realty Corporation ( CLI ) disclosed the divestiture of commercial office property in Montebello, NY for around $28.3 million. The move comes as part of the company's efforts to shed its non-core properties and invest the proceeds in strategic premium assets.

The sold asset, positioned at 400 Rella Boulevard, is a three-story building spanning 195,375-square-foot. This 75.8% leased property was the only asset of Mack-Cali in Rockland County. Notably, Cushman & Wakefield represented this real estate investment trust (REIT) in the deal.

As a matter of fact, Mack-Cali has been divesting a substantial part of its office portfolio amid continued weakness in the company's core office markets. Last week, the company disposed 3 New Jersey office properties to a joint venture led by Keystone Property Group for around $71.6 million (Read: Mack-Cali Sheds Office Assets, Reuses Cap in Multi-Family ).

Such transactions helped the company reap decent capital, which it is redeploying to expand its holdings in the multi-family residential sector that has traditionally been more of a stable product type.

While Mack-Cali's venture into the multi-family residential sector is expected to drive long-term growth, in the short run, the aggressive disposition of office assets is anticipated to continue to lead to earnings dilution.

Mack-Cali currently carries a Zacks Rank #4 (Sell). However, investors interested in the REIT industry may consider stocks like Chatham Lodging Trust ( CLDT ), Terreno Realty Corp. ( TRNO ) and Parkway Properties Inc. ( PKY ). All these stocks carry a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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