MORRIS TOWNSHIP, NJ–In the continuing shakeout of a joint-venture agreement between Keystone Property Group of Pennsylvania and Edison-based Mack-Cali Realty Corp., Keystone has closed on purchase of the 412 Mt Kemble Ave. office complex here, paying $45.4 million.
Last week, the companies closed on Keystone's acquisition of three other office properties from Mack-Cali's New Jersey portfolio. (see story here.)
The trades are part of a series of moves allowing Keystone to expand and strengthen its office portfolio, while Mack-Cali continues shifting its primary focus to multi-family property. (see story on the joint venture agreement here).
The 412 Mt. Kemble Ave. property, set at the center of Morris County's corporate corridor, is comprised of three, three-story buildings with a total of 475,100 square feet, including a large block of headquarters-quality space. The buildings are connected by two full-height atriums.
Keystone says it will invest $5.9 million in the property to improve building systems and infrastructure, amenities, and overall “curb appeal.”
“412 Mt. Kemble Avenue fits ideally with our mission to invest thoughtfully and strategically in well-located assets that can be reinvigorated through reinvestment,” said Bill Glazer, Keystone's president. While New Jersey's office market generally continues to struggle with high vacancy, Glazer pointed to 412 Mt. Kemble as having a “high upside, with the opportunity to lease in the highly desirable corporate corridor in Morris County.”
The properties that Keystone acquired from the Mack-Cali portfolio earlier this month include 30 Knightsbridge Rd. in Piscataway, 470 Chestnut Ridge Rd. in Woodcliff Lake, and 530 Chestnut Ridge Rd. in Woodcliff Lake.
Through its innovative partnership deal with Keystone, Mack-Cali is to receive a share of value created over certain thresholds. Mack-Cali is to handle leasing of the portfolio and share in management fees. “We are confident that, through an aggressive leasing initiative, the partnership can effectively capitalize on this property's prime market position,” said Mitchell E. Hersh, the REIT's president and CEO.
Hersh reiterated after the latest closing that the joint-venture arrangement allows his company to” continue to invest in more strategic growth opportunities,” employing its Roseland division to develop multi-family and mixed-use projects – in concert with Keystone or other partners and on its own.
The Morris Township office offers an array of tenant amenities, including a fitness center, café, executive parking garage, and dual power feeds.
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