By Linda O?FLanagan
Mack-Cali Realty Corporation is buying the development and management divisions of Roseland Properties in a deal valued at $134.6 million.
MITCHELL HERSH
The move is part of a plan by the New Jersey based REIT? to diversify its current portfolio of some 300 office and manufacturing buildings along the north east corridor.
Roseland? -? a firm led by principals Marshall Tycher, Brad Klatt and Carl Goldberg ? has amassed a multi-family portfolio of over 40,000 high end homes since its formation in 1992.
Last December, New Jersey?s biggest office landlord announced its intention to build two luxury apartment towers in Jersey City in partnership with the local Ironstate Development.? It will be Mack-Cali?s first foray into the housing market in a decade.
The acquisition of Roseland is ?a fundamental step? in the continued strategic diversification of Mack-Cali wherein multi-family residential will be a key component of growth strategy, said Mitchell Hersh, president and chief executive officer of Mack-Cali Realty Corporation today (Tuesday).
?Beginning with our previously announced Jersey City multi-family residential development at Harborside Financial Center, Mack-Cali will become a significant participant in the multi-family residential sector in supply constrained markets which overlay our class A office and office/flex portfolio.
?Roseland has had a long track record of multi-family value creation and capital growth achievement. This will enhance our opportunities to deploy capital across a strategically positioned portfolio with an integrated platform to address all elements of the real estate development process. As well, we will now have enhanced opportunities to utilize our land bank and repurpose existing assets in a number of locations.?
Mack-Cali Realty Corporation has signed a definitive agreement to acquire the real estate development and management businesses of Roseland Partners, L.L.C. ?and Roseland?s interests in six operating multi-family properties totaling 1,769 apartments, one condo-residential property totaling four units and four commercial properties totaling approximately 212,000 s/f. The deal also includes 13 in-process development projects, which include nine multi-family properties totaling 2,149 apartments, two garages totaling 1,591 parking spaces and two retail properties totaling approximately 35,400 s/f, and interests or options in land parcels which may support approximately 5,980 apartments, approximately 736,000 s/f of commercial space, and a 321-key hotel.
The Port Imperial apartment development in Weehawken, New Jersey.
The locations of the properties extend from New Jersey to Massachusetts. The majority of the properties are located in New Jersey, in particular, at its flagship development at Port Imperial in Weehawken and West New York, in addition to the Jersey City Waterfront and other urban in-fill and transit-oriented locations.
The Roseland business and real property interests will be acquired for aggregate consideration of up to $134.6 million, subject to adjustment, consisting of $115.0 million in cash and approximately $4.0 million of assumed debt at closing and an additional earn-out of up to $15.6 million in cash over the next three years, under certain conditions.
During the three-year earn-out period, each of Roseland?s principals, Marshall Tycher, Brad Klatt and Carl Goldberg, will serve as co-presidents of Roseland Management Services, L.P., a newly formed wholly owned subsidiary of Mack-Cali, pursuant to employment agreements to be executed at closing.
Mitchell E. Hersh will assume the role of chairman and chief executive of Roseland Management Services, L.P.
The transaction will be financed through Mack-Cali?s $600 million unsecured revolving credit facility. The transaction is expected to close early in the fourth quarter of 2012.
On behalf of the Roseland principals, Carl Goldberg commented, ?The opportunities created with Mack-Cali?s strong balance sheet together with strategically located land parcels with a similar footprint to Roseland, as well as the relationships that Mack-Cali and we have within our markets, offer unparalleled opportunities to expand our business platform in a powerful way.?
FTI Consulting and Eastdil Secured served as advisors on the transaction. Dennis Block of Greenberg Traurig represented Mack-Cali and Stanley Schwartz of Orloff Lowenbach Stifelman & Seigel represented Roseland.
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Source: http://www.rew-online.com/2012/10/09/mack-cali-to-buy-roseland-properties/
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