Mack-Cali Sheds Remaining CA Assets

CRANFORD, NJ-Mack-Cali Realty Corp., based here, is under contract to sell two office buildings it owns and its 50% share in a third building, all in San Francisco, in separate deals that will mark the REIT’s exit from the California market. The combined sale price of the assets is $167 million.

Specifically, Mack-Cali is selling 760 Market St. and 795 Folsom St. to the San Diego-based Westcore Properties for a combined $126 million. 760 Market St. is an 11-story, 267,446-sf class A building that’s current just more than 78% leased. And 795 Folsom St. is a six-story, 183,445-sf class A building that’s 96% leased.

Separately, Mack-Cali is also selling its 50% interest in Convention Plaza, based on a total building valuation of about $82 million. The 12-story, 306,000-sf building at 201 Third St. is 84% leased. The REIT’s interest is being sold to an entity related to the New York-based Adco Group. A different entity of Adco is Mack-Cali’s current joint venture partner in the asset. Both deals are expected to close in Q4.

“These transactions represent a significant milestone for our company,” says Mitchell E. Hersh, Mack-Cali’s president and CEO. “Not only will they mark our exit from the San Francisco market and California, but they will also be the final step in our strategic plan of exiting the western, non-core markets to focus on opportunities in our core Northeast region. These sales will also allow us to capitalize on the buoyant investment sales market in San Francisco and result in a significant gain in excess of $36 million.”

As reported by GlobeSt.com, Mack-Cali recently exited another western market, specifically, selling its Denver portfolio to Westcore. According to Mack-Cali officials, due diligence has been completed on the deal and closing is expected to occur in early November.