“We're in the process of changing the company and part of that process has made it more attractive,” Mack-Cali chief executive officer Michael DeMarco tells GlobeSt.com exclusively. “We're going to be valued higher because of the things we've done. What they really want to do is put the company into play, which will not be the case. We're running the business and always looking out for the best interests of the stockholders.”

“We think Mack-Cali is trapped,” says Akiva Katz, managing partner of Bow Street, who also spoke exclusively with GlobeSt.com. “The company is clearly undervalued, but we don't think the undervaluation can be resolved in its current structure.”

Mack-Cali's bifurcation into commercial and multifamily residential real estate is hampering proper valuation, Katz says. “Diverse asset pools do not trade well in the public markets,” he says. “The company is unable to maximize value either on the commercial side of its business or on the residential side of the business.”

Because of insufficient cash flow, Mack-Cali has needed to rely on joint venture partners in its residential projects, which Katz says is dilutive to shareholders.

“On the other side, they have real vacancy issues, and fixing those vacancy issues requires time and CapEx,” says Katz. The company says its core office properties were 80.9% leased at the end of the first quarter, compared with 83.1% for the same quarter last year.

DeMarco says Mack-Cali offered to discuss with Bow Street adding two of Bow Street's candidates to the company board, but Katz says that while his group appreciated the offer, they didn't find it sufficient.

“Ultimately, we don't believe, I guess, that two board members as a part of a board with a mandate that is unchanged is what the company needs,” Katz says. “We've said publicly we think the only path forward here is one where they commit to consider all strategic alternatives in a fulsome transparent process, and thus far they've refused to do that.”

“The Company believes that Bow Street's unwillingness to engage in good faith discussions to amicably resolve this matter, including rejecting Mack-Cali's proposal to add two of Bow Street's independent director candidates to the Board, further underscores that its true objective is to profit at the expense of Mack-Cali and its other stockholders,” Mack-Cali says in a press statement accompanying its proxy filing. “Under the leadership of the Mack-Cali Board of Directors and management team, the Company is successfully executing on its portfolio transformation and waterfront strategy to create a leading asset portfolio with strong NAV. By taking advantage of market dynamics in the Company's office portfolio and continuing to execute on Mack-Cali's multifamily development pipeline, the Company is well-positioned to accelerate earnings growth and narrow the gap between Mack-Cali's NAV and stock price. Mack-Cali is confident that continuing to execute the Company's strategic plan is the best way to maximize stockholder value at this time.”

Correction, 5/2/2019, 8:34 a.m.: Because of an editing error, an earlier version of this story identified the dissident shareholder organization as “Bow Street Investors.” The company's name is actually Bow Street LLC. (GlobeSt.com style omits the LLC designation in stories.)