How the Keystone-Mack-Cali deal came together

Keystone Property Group and Mack-Cali Realty Corp. had done deals before.

In late, 2012, Keystone bought the Moorestown Corporate Center in Moorestown, N.J., from the New Jersey real estate investment trust.

“It was a very good transaction,” said Bill Glazer, president of Keystone. “It went seamlessly. Then, they were considering selling other buildings in Pennsylvania and we talked.”

This past spring, Mack-Cali decided it wanted to unload 16 and 18 Sentry Park West in Blue Bell, Pa. One building, 16 Sentry Park West totaled 93,093 square feet and 18 Sentry totaled 95,010 square feet.

“We got together and rather than do a straight purchase became partners in that transaction,” Glazer said.

Those two transactions laid the foundation for Mack-Cali and Keystone to strike in July a $233 million sale of 15 office properties totaling 1.7 million square feet in Philadelphia’s western suburbs. Mack-Cali has kept an interest in the portfolio.

“They are exceptionally strategic for us,” Glazer said. “They are very well positioned for both us and Mack-Cali to really accomplish what is the most exciting part of the story.”

And, that, for Glazer is combining Mack-Cali’s institutional and financial backing with Keystone’s entrepreneurial bent. For Mack-Cali, they get windfall to help fund its new strategy to expand into the multifamily market. For Keystone, it propels the Bala Cynwyd, Pa., real estate company into a dominant position as a suburban landlord though in buildings that need some TLC. The portfolio includes:

• 150 Monument Road, Bala Cynwyd, Pa., totaling 125,783 square feet;

• Four buildings at 1000 – 1235 Westlakes Drive in Westlakes Office Park in Berwyn, Pa., totaling 444,350 square feet;

• Three buildings at 4 and 5 Sentry Park in Blue Bell, Pa., totaling 193,930 square feet;

• 100 – 300 Stevens Drive in Airport Business Center in Lester, Pa., totaling 371,000 square feet;

• 1000 Madison Ave. in Lower Providence, Pa., totaling 100,700 square feet;

• Rose Tree Corporate Center I and II at 1400 N. Providence Road in Media, Pa., totaling 260,000 square feet;

• One Plymouth Meeting at 502 W. Germantown Pike in Plymouth Meeting, Pa., totaling 167,748 square feet; and

• Three development parcels in Lester, Media and Berwyn. Mack-Cali retains a site in Bala Cynwyd where it intends to construct an apartment building.

Keystone is now coming up with a plan to invest in upgrades to the buildings and adding tenant amenities to them.

Source: Philadelphia Business Journal