EDISON, NJ—Mack-Cali Realty Corp. announced this morning it will acquire Roseland Partners, one of the largest multi-family developers and operators in the Northeast, shelling out up to $134.6 million to stake its claim in the sector.
Roseland’s principals, Marshall Tycher, Brad Klatt and Carl Goldberg, will become co-presidents of a newly formed subsidiary of Mack-Cali, called Roseland Management Services, according to Mack-Cali CEO Mitchell Hersh.
Edison-based Mack-Cali acquires Roseland’s interests in six existing properties with a total of 1,769 apartments – including the sprawling Port Imperial complex along the Hudson Riverfront. It also adds a four-unit condo property and four commercial properties with a total of about 212,000 square feet.
Furthermore, Mack-Cali, which has up to now been solely a commercial office and retail developer, takes on Roseland’s 13 projects in progress, which include:
* Nine multi-family properties that will have a total of 2,149 apartments, and
* Interests or options in land parcels that can support another 5,980 apartments, plus 736,000 square feet of commercial space, and a 321-key hotel.
In addition, two garages with a total of 1,591 parking spaces that are under way and two retail properties with a total of 35,400 square feet are a part of the acquisition package.
The majority of these properties and projects are located in New Jersey along the waterfront and at transit-oriented sites, although Roseland’s portfolio does stretch all the way to Massachusetts.
Mack-Cali’s Hersh said Tuesday that, “The acquisition of Roseland is a fundamental step in a strategic diversification for Mack-Cali wherein multfamily residential will be a key component of our growth strategy.” Mack-Cali has previously announced they will collaborate on building an apartment tower at Mack-Cali’s Harborside Financial Center in Jersey City with Hoboken, NJ-based Ironstate Development.
The price of the acquisition of the entire company will be adjusted, according to certain specified conditions, Hersh said. At closing, the company will provide $115 million in cash and assume $4 million of Roseland’s debt. Another $15.6 million will be provided in “earn-out” payments over three years in which the Roseland principals serve as co-presidents of the subsidiary, and Hersh serves as chairman and chief executive.
Hersh noted that the move allows Mack-Cali to free up its existing land bank and “repurpose” assets at a number of sites.
The transaction, to be financed through Mack-Cali’s $600 million unsecured revolving credit facility, is expected to close this month.
On behalf of the Roseland principals, Carl Goldberg said in a statement that, “The opportunities created with Mack-Cali’s strong balance sheet together with strategically located land parcels with a similar footprint to Roseland, as well as the relationships that Mack-Cali and we have within our markets, offer unparalleled opportunities to expand our business platform in a powerful way.”
FTI Consulting and Eastdil Secured served as advisors on the transaction. Dennis Block of Greenberg Traurig represented Mack-Cali and Stanley Schwartz of Orloff Lowenbach Stifelman & Seigel represented Roseland.
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