Office REIT Pulls Up Texas Stakes

Mack-Cali Realty Corp., an office REIT with 29.2 million sq. ft. of properties chiefly located in the Northeast, has sold two Texas office properties for a total of $39.1 million. The two towers encompass 554,330 sq. ft. of office space divided between Dallas and San Antonio. A third Mack-Cali office building in Richardson, Texas is under contract to sell for $2.4 million. The buyer was a joint venture between Centennial Real Estate Corp. and Praedium Group. New York-based Praedium Group, a closely held real estate investment firm, focuses on value-add deals throughout the U.S.

"The sale of these buildings — which are Mack-Cali’s only remaining wholly owned assets in Texas — demonstrates our continued progress in selling assets in non-core markets that do not fit our strategic profile," said Mitchell Hersh, president and CEO of Mack-Cali.

The Dallas office property, TriWest Plaza, is a 367,018 sq. ft. building with 81.8% occupancy. Mack-Cali bought TriWest Plaza in 1997. In San Antonio, the 187,312 sq. ft. Century Building is 90.6% leased. The third property, which is under contract to sell, is Santa Fe Plaza, a vacant 82,576 sq. ft. office building.

"We look forward to redeploying the proceeds of such transactions into opportunities in our core Northeast and mid-Atlantic markets," said Hersh.

Mack-Cali will continue to sell assets in non-core markets such as Denver during the next few years, according to Hersh. Mack-Cali owns 20 office buildings encompassing 1.6 million sq. ft. in the Mile High City. Hersh indicated that these properties will likely be sold in a few years.

While Mack-Cali will no longer be the sole owner of any properties in Texas, the REIT will still maintain a 20% interest in a Houston office tower. Prudential Real Estate Investors also has an interest in that property, according to Hersh.

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