Mack-Cali Enters Into Development and Acquisition Agreement With AAA
10/20/2005 Category: Leasing and Development
Company to Develop Operations Center for AAA; Acquire AAA Land and Buildings; and Redevelop Acquired Buildings
Cranford, New Jersey--October 20, 2005--Mack-Cali Realty Corporation (NYSE: CLI) today announced that it has entered into a development and acquisition agreement with AAA Mid-Atlantic. The agreement includes Mack-Cali's development of an operations center for AAA and its acquisition of land and buildings from AAA, all in Hamilton Township, New Jersey.
Mack-Cali will develop for AAA a three-story, 120,000 square-foot class A office building on a 21.6 acre land site at Mack-Cali's Horizon Center Business Park. AAA has pre-leased the building, which it will use as an operations center, for 15 years. Construction on the build-to-suit project is expected to be completed in the third quarter of 2006. (A ground breaking ceremony is being held at the site today with Hamilton Township Mayor Glen Gilmore; Donald R. Gagnon, executive vice president and chief operating officer of AAA Mid-Atlantic; and Mitchell E. Hersh, president and chief executive officer of Mack-Cali.)
Upon completion of the new building for AAA, Mack-Cali will acquire from AAA three office and office/flex buildings totaling 83,762 square feet and land for the development of an additional 243,000 square feet of commercial space. Mack-Cali plans to redevelop each of the acquired properties.
The properties to be acquired consist of:
- A 33,962 square-foot office building on 9.5 acres of land at 2 South Gold Drive. The site can be redeveloped to accommodate up to 120,000 square feet of commercial space. AAA will lease back 8,790 square feet at the building for 10 years.
- A 13,800 square-foot office/flex building located at 6 South Gold Drive. PARS Engineering leases 7,915 square feet at the building.
- A 36,000 square-foot office building with 17 acres of land at 3 and 5 AAA Drive. The site can be redeveloped to accommodate up to 161,000 square feet of commercial space.
- A 2.4 acre land parcel at 6 AAA Drive for the development of 32,000 square feet of commercial space.
Mitchell E. Hersh, president and chief executive officer of Mack-Cali, commented, "This transaction allows us to accomplish several objectives: we will accommodate AAA's needs to consolidate and expand its operations; secure a new long-term lease with a top quality tenant; and increase our presence in Mercer County, one of Mack-Cali's core Northeast submarkets."
"Our agreement with Mack-Cali enables AAA Mid-Atlantic to keep its workforce in Hamilton and continue to provide world-class service and products to our members and the traveling public. We look forward to this next step in our company's growth and expansion," said Donald R. Gagnon, executive vice president and chief operating officer, AAA Mid-Atlantic.
Robert Bull, Philip Lipper and Michael Kennedy of Studley represented AAA Mid-Atlantic in the transaction. The architect for the project is Fletcher Thompson.
Mack-Cali Realty Corporation is a fully-integrated, self-administered, self-managed real estate investment trust (REIT) providing management, leasing, development, construction and other tenant-related services for its class A real estate portfolio. Mack-Cali currently owns or has interests in 271 properties, primarily office and office/flex buildings located in the Northeast, totaling approximately 30.2 million square feet. The properties enable the Company to provide a full complement of real estate opportunities to its diverse base of approximately 2,100 tenants. Additional information on Mack-Cali Realty Corporation is available on the Company's website at www.mack-cali.com.
AAA Mid-Atlantic serves 990,000 members in 11 counties in New Jersey and a total of 3.6 million members in Washington, D.C.; Maryland; Virginia; Delaware; Pennsylvania; and New Jersey. It provides a wide range of automotive, insurance, travel, and financial services through its 50-plus retail branches, regional operations centers, and the Internet at www.aaamidatlantic.com.
Statements made in this press release may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements can be identified by the use of words such as "may," "will," "should," "expect," "anticipate," "estimate," "continue," or comparable terminology. Such forward-looking statements are inherently subject to certain risks, trends and uncertainties, many of which the Company cannot predict with accuracy and some of which the Company might not even anticipate, and involve factors that may cause actual results to differ materially from those projected or suggested. Readers are cautioned not to place undue reliance on these forward-looking statements and are advised to consider the factors listed above together with the additional factors under the headings "Disclosure Regarding Forward-Looking Statements" and "Risk Factors" in the Company's Annual Reports on Form 10-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.