Mack-Cali Realty Corp. CLI recently announced the acquisition of 3 Sylvan Way, a three-story, class A office property, spanning 417.241 square feet and located in Parsippany, NJ.
3 Sylvan Way, which features 50,000-square feet floor plates with a saw-tooth design, is the latest addition to Mack-Cali Business Campus. The latter consists of 15 class A office properties covering approximately 2.1 million square feet.
The company plans to build an “interconnected three-building mini campus” by repositioning the recently acquired 3 Sylvan Way office building, along with One and 5 Sylvan Way bought previously.
Moreover, these buildings are expected to undergo varied renovations, inlcuding “lobby renovations, the creation of a full-service fitness center with yoga rooms and a golf simulator, an upgraded business-class conference center, and numerous dining options, including a full-service cafe and coffee bar.”
The latest acquisition is expected to be accretive to overall portfolio and create value for its tenants. As such, the company expects renovation plans to drive higher leasing rates, going forward.
Given Mack-Cali’s recent emphasis on transit-oriented real estate properties, Mack-Cali Business Campus’ convenient location at the confluence of I-287 and routes 10 and 202, as well as its proximity to the Morris Plain train station, make it a core portfolio holding for this Edison-based office real estate investment trust (“REIT”).
Separately, the company announced the closure of a $350-million unsecured term loan, scheduled to mature in Jan 2019, and carrying two 1-year extension options. Interest rate on the loan is fixed at LIBOR plus 140 basis points, and currently stands at 3.12%.
Notably, loan proceeds were utilized by the REIT to meet outstanding borrowings on its $600-million unsecured credit facility; and repay 5.8% unsecured bonds worth $200 million. More importantly, the new borrowing represents significant interest savings over the above-mentioned unsecured bond scheduled to mature on Jan 16.
Mack-Cali currently carries a Zacks Rank #1 (Strong Buy).
Investors interested in the REIT space may also consider stocks like Arbor Realty Trust Inc. ABR, Crown Castle International Corp. CCI and Easterly Government Properties, Inc. DEA. All three stocks sport the same Zacks Rank as Mack-Cali.
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