Replies to post #17 on Mack-Cali Realty Corp. (CLI)

[Enterprising Investor]

Property Deal of the Week: Where Everyone Walks to Work (9/08/15)

Repurposing office parks for residential use puts employees near job sites

By Robyn A. Friedman

Corporate office parks, suburban campuses created by companies decades ago to escape cities, are being reimagined as small versions of the urban-style communities they once avoided.

The latest example is in Minnetonka, Minn., a suburb of Minneapolis. There, Roers Investments LLC and CPM Cos. want to demolish two vacant warehouses to build a 274-unit luxury-apartment project in the middle of the 600-acre Opus II Business Park.

The $62 million development, which will include a fitness center, rooftop patio, fire pit and underground, heated parking, will feature apartments with monthly rents that range from $1,155 for a studio to $2,520 for a two-bedroom unit.

Adding apartments to corporate parks has numerous advantages for developers, according to Maureen McAvey, a senior resident fellow at the Urban Land Institute in Washington. First, most corporate parks are owned by a single entity, making it easier for developers to aggregate the parcels needed to build. With land increasingly scarce in urban and suburban locations, business parks have an abundance of underused space. Corporate parks also usually have easy access to major highways and mass transit, as well as infrastructure such as roads and utilities, which make redevelopment easier and less expensive.

“Virtually every major city in the country is getting strangled by congestion, so the opportunity to live near where you work is attractive to virtually everyone of all age groups,” Ms. McAvey said.

Ms. McAvey said that, in general, government officials have been supportive of redevelopment, because it increases the tax base. Their concern, she says, is infrastructure—whether substantial new traffic can be accommodated in the immediate neighborhood of the redevelopment. But in many cases, she said, “because these corporate parks were originally situated near freeways and major arterials, often infrastructure is not a major problem.”

Brian Roers, owner of Roers Investments, a real-estate firm based in Long Lake, Minn., said the development site, about a 15-minute drive from downtown Minneapolis, also is attractive because it is heavily wooded, with walking and bike paths and ponds. “It is one of the most peaceful sites in Minneapolis, and you would have no idea that you’re a quarter mile from two of the busiest roads in the area,” he said.

The park is also a major employment center—home to such companies as UnitedHealth Group Inc., Digi International Inc. and Communications Systems Inc. —and is close to a light rail system, allowing future tenants to either walk or bike to work nearby or commute downtown with ease.

Jim DePietro, senior vice president of industrial services at commercial brokerage CBRE Group Inc. in Minneapolis, said he expects retail businesses to come next to Opus II. “We’ve found higher and better uses for the properties, and I think some will be reallocated toward retail to service the people who will be living here,” he said.

Another developer adding apartments to a business park is Jamie Danburg, president of Boca Raton, Fla.-based Danburg Management Corp. Mr. Danburg is developing a 282-unit luxury apartment project within the Park at Broken Sound, a 700-acre corporate park in Boca Raton—where raw land is hard to find. Three residential projects are already approved for the park, which has 5.2 million square feet of office space.

Mr. Danburg’s project, where rents will range from $1,775 to $3,100, will have numerous amenities, including a gym, yoga studio, theater, a pool with cabanas, and bicycle-repair stations. The apartments will be within walking or biking distance of major employers and a commuter railroad. “We’re improving on what already exists rather than pushing farther west,” Mr. Danburg said.

Richard P. Robinson, executive director of the Institutional Property Advisors division at brokerage Marcus & Millichap in Boston, said he knows of several apartment projects under development in commercial parks or industrial areas in the Greater Boston area. He said rents are 5% to 8% higher at these properties than at comparable apartments in suburban locations. “You get a rent boost, not only because the residents are living within walking distance of work, but also because they are new properties and the developers increase the amenity level in them,” he said.

Walkability adds value, even to commercial properties. According to data firm Real Capital Analytics, prices for properties in central business districts have risen 125% over the past decade, but suburban properties that are also considered highly walkable are up 43%. Comparatively, prices are up just 21% to 22% for properties in suburban locations that are somewhat walkable or car-dependent.

But while living close to work may be a boon for many tenants, it isn’t for everybody. “Anything that can increase traffic is always a problem with existing residents of a site,” said Ms. McAvey of the Urban Land Institute. “And if it’s a truly industrial site, there may be some concerns by the industrial users that, once residents are introduced, they can object to truck traffic and delivery schedules.”

http://www.wsj.com/articles/property-deal-of-the-week-where-everyone-walks-to-work-1441755235

[Enterprising Investor]

Investor Presentation (9/10/15):

https://www.mack-cali.com/media/790766/Mack-CaliInvestorDayPresentation91015.pdf

[Enterprising Investor]

Mack-Cali Announces $365.5 Million In Property Disposition Agreements During First Quarter (3/15/16)

EDISON, N.J., March 15, 2016 /PRNewswire/ -- Mack-Cali Realty Corporation (NYSE: CLI) today announced that during the first quarter of this year the Company has reached agreements to sell assets in Washington, D.C. and Manhattan for approximately $365.5 million. The sales are part of the $750 million goal for dispositions outlined last year in the Company's strategic plan and represent the Company's exit out of these markets. Mack-Cali is exiting non-core markets in order to pay down debt, fund capital expenditures, and increase holdings in waterfront and transit-based locations, if available, as well as renovate and reposition existing assets.

"These deals bring us halfway to our goal of $750 million in dispositions. We are proud to have made this much progress so early in the year," said Michael J. DeMarco, Mack-Cali president. "With these sales the Company is well positioned to push ahead with our strategic plan and ultimately to return significant value for our investors."

The disposition agreements consist of:

• 125 Broad Street, New York, N.Y.: Mack-Cali signed a contract to sell the Company's ownership in the building for approximately $202 million.

• 1201 Connecticut Avenue, NW, Washington, D.C.: The Company signed a contract to sell the building for approximately $93 million.

• 1400 L Street, NW, Washington, D.C.: Mack-Cali signed an agreement to sell this property for approximately $70.5 million.

These dispositions are not yet finalized, subject to closing conditions and covenants; however, the Company expects $400 million in total sales to close by June 2016, while an additional $350 million in sales are expected to be completed by October 2016.

About Mack-Cali Realty Corporation

Mack-Cali Realty Corporation is a fully integrated, self-administered, self-managed real estate investment trust (REIT) providing management, leasing, development, and other tenant-related services for its two-platform operations of waterfront and transit-based office and luxury multi-family assets. Mack-Cali owns or has interests in 274 properties, consisting of 146 office and 109 flex properties totaling approximately 30 million square feet and 19 multi-family rental properties containing approximately 5,700 residential units and a pipeline of approximately 11,000 units, all located in the Northeast. Mack-Cali strives to provide its tenants and residents with the most innovative communities that empower them to re-imagine the way they work and live.

Additional information on Mack-Cali Realty Corporation and the commercial real estate properties and multi-family residential communities available for lease can be found on the Company's website at www.mack-cali.com.

http://www.prnewswire.com/news-releases/mack-cali-announces-3655-million-in-property-disposition-agreements-during-first-quarter-300236145.html