Jones Lang LaSalle
UPDATE: Mack-Cali Negotiating for Gale Takeover
By Eric Peterson
Last updated: February 15, 2006 08:59am
CRANFORD, NJ-Discussions between Mack-Cali Realty, based here, and the Florham Park-based Gale Co. about the former buying a 3.5 million-sf office portfolio from the latter have evolved into negotiations about a complete takeover, GlobeSt.com has learned. Representatives of both companies declined to comment on the developing story, but industry sources say a formal announcement could be made before the end of this week.
As reported by GlobeSt.com, the privately held Gale and partner SL Green effectively put the 4.7-million-sf Bellemead portfolio, the remaining holdings of the defunct Bellemead Development Corp., on the market this past November, and Mack-Cali is said to have emerged as the frontrunner among eight bidders, including several institutions. Sources say that once final talks were under way, the negotiating landscape changed dramatically.
The sale price for the Bellemead portfolio was reportedly in the $550 million, and sources now say a number in the $550-million to $600-million range will take the entire Gale organization. Sources say that number will buy out Gale’s share of its existing holdings, while the company’s institutional backers would maintain their existing shares in the properties. Also as part of the deal, Mack-Cali would assume Gale’s debt and pay upwards of $15 million a year to keep Gale’s building management arm in operation.
If it happens, the deal would add approximately 35 million sf to Mack-Cali’s holdings, more than doubling its existing portfolio of approximately 30 million sf of office and office/flex space. It would also put the REIT back into markets it has aggressively tried to get out of, namely California and Texas.
Several years ago, Mack-Cali broke off negotiations to acquire Prentiss Properties and at the same time began selling off its own holdings in the western US to focus on its core markets in the Northeast. The deal with Gale, if done, would also take Mack-Cali into uncharted waters, namely South Korea and the UK, where Gale has major interests, all of which could result in yet another sell-off of non-core market properties by the REIT.
UPDATE: Mack-Cali Negotiating for Gale Takeover
By Eric Peterson
Last updated: February 15, 2006 08:59am
CRANFORD, NJ-Discussions between Mack-Cali Realty, based here, and the Florham Park-based Gale Co. about the former buying a 3.5 million-sf office portfolio from the latter have evolved into negotiations about a complete takeover, GlobeSt.com has learned. Representatives of both companies declined to comment on the developing story, but industry sources say a formal announcement could be made before the end of this week.
As reported by GlobeSt.com, the privately held Gale and partner SL Green effectively put the 4.7-million-sf Bellemead portfolio, the remaining holdings of the defunct Bellemead Development Corp., on the market this past November, and Mack-Cali is said to have emerged as the frontrunner among eight bidders, including several institutions. Sources say that once final talks were under way, the negotiating landscape changed dramatically.
The sale price for the Bellemead portfolio was reportedly in the $550 million, and sources now say a number in the $550-million to $600-million range will take the entire Gale organization. Sources say that number will buy out Gale’s share of its existing holdings, while the company’s institutional backers would maintain their existing shares in the properties. Also as part of the deal, Mack-Cali would assume Gale’s debt and pay upwards of $15 million a year to keep Gale’s building management arm in operation.
If it happens, the deal would add approximately 35 million sf to Mack-Cali’s holdings, more than doubling its existing portfolio of approximately 30 million sf of office and office/flex space. It would also put the REIT back into markets it has aggressively tried to get out of, namely California and Texas.
Several years ago, Mack-Cali broke off negotiations to acquire Prentiss Properties and at the same time began selling off its own holdings in the western US to focus on its core markets in the Northeast. The deal with Gale, if done, would also take Mack-Cali into uncharted waters, namely South Korea and the UK, where Gale has major interests, all of which could result in yet another sell-off of non-core market properties by the REIT.
posted by Jones Lang LaSalle NJ News Blog at 10:26 AM
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