As published on CoStar
Mack-Cali Plans Apartment Project on 1.4 Acres Near Hudson River Waterfront
Mack-Cali Realty has put its money where its mouth is when it comes to the apartment market in Jersey City, New Jersey. It's paying $67 million for less than 2 acres downtown where it plans to construct an 804-unit building.
The residential arm of Mack-Cali, a real estate investment trust based in Jersey City, forked over that price for a 1.4-acre parcel at 107 Morgan St., according to CoStar data. The site, a surface parking lot about the size of 1 1/2 football fields, was sold by its longtime owner, Long Island Realty of Great Neck, New York, according to CoStar.
The $67 million land purchase is in line with Mack-Cali's portfolio repositioning over the past four years under CEO Michael DeMarco. It demonstrates the demand for apartments in revitalized Jersey City, which has become a popular and convenient site for Manhattan commuters to live and has its own fair share of businesses, including offices for financial consultant Merrill, analytics firm Dun & Bradstreet and accounting giant KPMG.
Mack-Cali has shed its older suburban office properties and concentrated on bulking up its office and multifamily holdings on the Hudson River waterfront. As part of that strategy, the REIT has been on a spending spree. In April, Mack-Cali closed on the $264 million purchase of Soho Lofts, a 377-unit apartment complex in Jersey City. And in June, it executed an agreement to acquire Liberty Towers, a 648-unit community in Jersey City, for $409 million, which could end up being the largest multifamily sale in New Jersey this year.
Mack-Cali didn't respond to requests for comment on the acquisition, which was made by its multifamily division, Roseland Residential Trust, or where it stood in terms of getting city approvals for the project. The mayor's office said the city hasn't received any filings detailing the project.
But a top Roseland official and the REIT briefly referenced the purchase and their plans for the plot of land during a second-quarter earnings presentation this month.
During Mack-Cali's second-quarter conference call, Roseland Chairman Marshall Tycher said the company had closed on its purchase of 107 Morgan. At closing, the note on the land was retired for $46 million, leaving $21 million to fund from open 1031 tax-deferred exchanges and other sources, the REIT said.
Prior to the acquisition, Roseland had owned the encumbered mortgage on 107 Morgan and always had plans to purchase and develop the vacant land, CoStar research shows.
"We are finalizing approvals for an approximate 800-unit development in one of Jersey City's prime submarkets," Tycher told Wall Street analysts.
In supplemental second-quarter data, Mack-Cali said it plans to develop 804 apartments on Morgan Street.