Mack-Cali to buy back $250M in debt, refi 101 Hudson in JC

Office REIT seeks to lower financing costs

New York /
Sep.September 12, 2016 12:47 PM

Mack-Cali Realty Corporation wants to buy back $250 million worth of high-yield debt early as part of an effort to reduce its financing costs, the real estate investment trust announced Monday.

The company sent investors a tender offer to buy senior unsecured notes carrying an interest rate of 7.75 percent that don’t expire until 2019. Michael DeMarco, president of Mack-Cali, told The Real Deal that the firm plans to refinance the notes with a new $250 million mortgage on its Jersey City office building at 101 Hudson Street, at a floating rate of currently around 3 percent.

The move is part of an effort to “reduce credit costs through refinancing opportunities in 2016 and 2017,” according to a separate statement, and DeMarco said the company will announce more refinancings in the future.

Mack-Cali is an owner of suburban office properties and multifamily buildings, primarily in New Jersey. While most other REITs saw their stock prices soar in the years after the 2009 recession, Mack-Cali struggled amid a broader swoon in suburban commercial real estate. Between April 2010 and May 2015 its share price fell by more than half, from $35.17 to $16.90. Last June, Brookfield Property Partners TRData LogoTINY veteran Mitch Rudin took over as CEO, replacing Mitchell Hersh, and DeMarco became president and COO.

In September 2015, the new leadership announced a strategic plan that includes a reduction in debt costs and investment in capital improvements at its office properties. The stock price has since recovered to $27.90 as of Monday.

Last month, activist investor Jonathan Litt resigned from Mack-Cali’s board, which he had joined in 2014.


Related Articles

arrow_forward_ios
Mayor Steven Fulop (Mayor Steven Fulop)
Jersey City needs developers to make its inclusionary housing work
Jersey City needs developers to make its inclusionary housing work
Marcus & Millichap Associate David Ferber in front of part of the 30-building, 319-unit portfolio concentrated in Jersey City (Marcus and Millichap, iStock)
Hot rental market boosts NJ multifamily despite rate hikes
Hot rental market boosts NJ multifamily despite rate hikes
Jersey City mayor Steven Fulop, Kushner Companies' Nicole Kushner Meyer and render of One Journal Square (Getty Images, Kushner Companies)
“Charlie, we did it”: Kushner breaks ground on long-delayed towers
“Charlie, we did it”: Kushner breaks ground on long-delayed towers
5000 Corporate Court in Holtsville, NY (JLL, iStock)
Tri-state deal roundup: RXR, Veris, CBRE, Lidl make waves
Tri-state deal roundup: RXR, Veris, CBRE, Lidl make waves
3 New York Avenue in Jersey City, NJ (Google Maps, iStock)
Developers land $97M for Jersey City multifamily
Developers land $97M for Jersey City multifamily
15 Exchange Place in Jersey City (LoopNet)
Jersey City office building sells for $48M
Jersey City office building sells for $48M
Interior of 75 Park Lane in Jersey City (China Construction America)
$5.7M condo sale smashes Jersey City record
$5.7M condo sale smashes Jersey City record
Rendering of 711 Montgomery Street (Marchetto Higgins, Stieve Architects)
Brooklyn investor nabs $95M construction financing for Jersey City high-rise
Brooklyn investor nabs $95M construction financing for Jersey City high-rise
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...