UPDATED, June 14, 2021, 3:24 p.m.: Mack-Cali’s retreat from the suburban office market rolls on.
The New Jersey-based real estate investment trust — which has been aggressively divesting office properties in the state in recent months — announced Monday that it has sold River Centre, a 640,000-square-foot, six-building portfolio in Red Bank for $84 million.
The buyer is First Mile Properties, an affiliate of New York-based retail developer Crown Acquisitions, which said it intends to make tech- and sustainability-focused upgrades to the campus to attract new tenants.
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Under its ownership, Mack-Cali had updated common areas of the office complex, while transforming one of the buildings into an amenity center, featuring a new fitness center, a tenant lounge, cafe and outdoor area. The complex, located just off the Garden State Parkway, is currently 66 percent leased, according to Mack-Cali.
First Mile Properties partner Toby Yedid said his firm believes in the future of suburban offices such as River Centre because of their convenient proximity to the homes of corporate officers.
“These office campuses are in the backyards of these executives,” Yedid said. “It’s a lot easier to get there instead of having to drive all the way into the city or take public transportation.”
Mack-Cali, on the other hand, has been on a selling spree in recent years in an effort to exit the suburban New Jersey office market in what it termed a “simplification” of its portfolio.
Monday’s deal comes after the April sale of a Short Hills office portfolio to the Birch Group for $255 million as well as the March offloading of a four-building Metropark complex to Opal Holdings, a New York-based REIT, for $254 million.
The Red Bank complex was Mack-Cali’s final suburban office portfolio, it said Monday.
In a statement, Mack-Cali CEO Mahbod Nia said the company is focused on concluding the remaining asset sales to streamline the business and will use the proceeds of the sale to pay down its debt.
Nia became CEO in March, about six months after a boardroom shakeup that preceded the exit of Mack-Cali’s previous CEO, Michael DeMarco, after five years.
This story has been updated to include a statement from Toby Yedid.