Mack-Cali Realty Corporation CLI and its Roseland subsidiary are planning to develop a luxury multi-family community at 709 Chestnut Street in Philadelphia, PA, in a joint venture partnership with Parkway Corporation. In this respect, the company has inked an agreement in principle with Parkway.
The move comes on Mack-Cali’s plans to capitalize on the growing demand for multi-family communities in the region. Construction is scheduled to begin by 2015 end. This newest development project on the east end of Chestnut Street is expected to draw millennials and empty nesters as tenants.
The region historically witnessed substantially fewer redevelopments than the Street’s west end. But city initiatives in recent times, including a targeted cutback in business taxes as well as a revamped zoning arrangement, permitted a healthy mix of commercial and residential uses in the region. This, in turn, led to the recent spell of activity and quick transformation.
As per its initial plan, this multi-family community at 709 Chestnut Street is expected to be a 32-story building with 300 luxury apartments and more than 11,000 square feet of indoor and outdoor amenity space. It also includes the proposal for developing an automated 125-car parking garage.
The multi-family residential sector has traditionally been more of a stable product type and, therefore, expansion into this sector is a strategic fit for the real estate investment trust (“REIT”), Mack-Cali. In fact, the rise in demand for apartments driven by millenials and improving multi-family fundamentals, promises bright prospects for Mack-Cali, and we expect the company’s net operating income and cash flows to gain momentum, going forward.
Apart from this, Mack-Cali and Roseland, in partnership with Keystone Property Group, are planning new luxury apartments at The Curtis, situated near the 709 Chestnut Street property.
Moreover, Mack-Cali joined Keystone and Parkway for redevelopment work at 100 Independence Mall West. The companies have invested more than $20 million in this property. We believe such efforts would add value to the properties and help the company generate more cash flows.
Mack-Cali currently has a Zacks Rank #3 (Hold). Investors interested in the REIT may consider stocks like CareTrust REIT, Inc. CTRE, CoreSite Realty Corp. COR and Gladstone Land Corp. LAND. All these stocks sport a Zacks Rank #1 (Strong Buy).
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