Jones Lang LaSalle

UPDATE: Mack-Cali/Gale Deal Goes Under Contract
By Eric Peterson
Last updated: March 14, 2006 10:14am

CRANFORD, NJ-The deal for Mack-Cali Realty Corp. to acquire most of the Florham Park, NJ-based Gale Co., which GlobeSt.com first reported in February, is under contract. The former will acquire the Gale Real Estate Services Co. and approximately 2.8 million sf of office properties in New Jersey, and officials of both companies expect the deal to close next month.

Under the terms of the signed agreement, Mack-Cali will buy the Gale Real Estate Services Co. for $12 million in cash, $10 million in common operating partnership units and as much as $18 million in additional cash based on an earn-out formula. The REIT will also acquire from Gale affiliates stakes in certain development/joint ventures with institutional investors on terms to be determined prior to closing.

Mack-Cali will also acquire substantially all of the ownership interests in 13 class A office properties, valued at $378 million and amounting to 1.9 million sf in New Jersey. Included in the total is 343 Thornall St. in Edison, in which Mack-Cali had earlier indicated to would acquire only a half interest.

Finally, Mack-Cali will pick up one-half ownership interests in seven class A office buildings, valued at $127.5 million. The seven properties total some 900,000 sf and are situated in Northern and Central New Jersey.

According to a statement issued by Mack-Cali, “the transactions will be financed through a combination of the assumption of, and placement of new, mortgage debt, credit facility drawings, cash and the issuance of common operating partnership units.”