In compliance with its ongoing non-strategic assets divestiture activity, Mack-Cali Realty Corporation (CLI) sold a N.J.-based property for around $6.2 million. Moreover, the company aims to redeploy the obtained amount for funding other strategic growth prospects. The 2-story property sold by Mack-Cali is situated in Branchburg in Somerset County. It spans 63,213 square feet and is occupied by a single tenant.
Notably, declining occupancies and average asking rents are plausible concerns for Mack-Cali due to the tough office market environment in many states such as N.J. Hence, in the midst of the current unimpressive demand for office space, Mack-Cali has been focusing on expanding its multifamily apartment portfolio.
The New Jersey office market is still recovering from the impact of Hurricane Sandy as well as statewide corporate consolidations. According to Jones Lang LaSalle Inc. (JLL), overall average asking rental rates rose only 3.5% to $24.47 per square foot in first-quarter 2013 from $23.65 in fourth-quarter 2012. This justifies Mack-Cali’s decision to dispose several non-core assets, especially those in N.J.
In connection to its repositioning strategy, last month, the company divested a Clifton-based office building to a joint venture of Gottesman Real Estate Partners and Mountain Development Corp. (MDC) for $5.8 million. Furthermore, in the same month, it sold Little Ferry-based asset – Mack-Cali Airport property – for about $32.3 million.
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