Saturday, February 28, 2015

Another suburban office landlord switches to apartments

With office rentals weak, Mack-Cali invests in multifamily

Another suburban office landlord switches to apartments

Mack-Cali Realty, which owns offices in the Westlakes corporate park in Berwyn, Sentry Park in Blue Bell, Airport Business Center in Lester, Moorestown West Corporate Center, and other suburban office districts along the East Coast, is the latest office landlord to hedge its bets on the weak corporate space market by switching to apartments.

Radnor-based Brandywine Realty Trust, BPG Properties and other local office landlords have also pushed apartment projects in recent months.

Mack-Cali, based in Edison, NJ, has purchased Roseland Property, Secaucus, which owns dozens of New York area apartment complexes and a few others in the Boston and eastern Virginia areas, "for up to $135 million," writes analyst Craig Guttenplan at bond-watchers CreditSights Inc.

Mack-Cali shares"have severely lagged that of its office-focused real estate investment trust peers, owing largely to its concentration in suburban markets which are experiencing arguably the worst fundamentals of any commercial property type," Guttenplan notes.

"Multifamily wil be a key component of its growth strategy going forward... The transaction makes some sense, as it is widely agreed that multifamily fundamentals will materially outperform those of suburban offices for the near future." Though the two businesses aren't particularly complementary, he added.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at or 215 854 5194.

Joseph N. DiStefano
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