Mack-Cali Realty Corp. this week announced that in a joint venture with JPMorgan Chase’s Special Situation Property Fund and Gale International it has acquired a stake in a seven-building, class A office and office/R&D portfolio in the Boston suburbs.
The properties, totaling 666,697 square feet, were purchased for $53.6 million.
The investment is Mack-Cali’s first in the Boston market, extending its presence northward. The company already is a major office property owner in the Washington, D.C.- to-Connecticut corridor, with a dominant presence in its home state of New Jersey.
The properties are located in Andover, Bedford and Billerica, Mass., in the Route 495 North submarket of Greater Boston, and were 58.8 percent leased to eight tenants at the time of purchase. Tenants include Alliance Imaging, CGI, Eastman Kodak, GN NetTest, Navisite, Aastra Telecom, and EM4.
The Special Situation Property Fund owns 70 percent of the venture, with an entity of Mack-Cali and Gale International owning 30 percent. Of the Mack-Cali/Gale International entity, Mack-Cali owns 83.3 percent. The joint venture agreement includes a promoted structure allowing for the Mack-Cali and Gale International entity to achieve a 50 percent interest based on internal rate of return thresholds. Mack-Cali and Gale International will provide management, leasing and construction services for the portfolio and will receive all fees associated with those services.
With the completion of this transaction, Mack-Cali, a real estate investment trust, now owns or has interests in 304 properties totaling 34.3 million square feet, primarily located in the Northeast and Mid-Atlantic regions from Washington, D.C., north to Boston.
The venture will also invest approximately $4.4 million in the portfolio for building improvements.