Owners of offices in the New York City suburbs are competing with urban properties by adding building features and amenities that will attract tenants, especially companies seeking to recruit millennials. They are adding glass facades for better light, space for restaurants and cafes, bike-share programs, walking trails and -- in Mack-Cali Realty's case -- a 70,000-square-foot fitness club.
Workspace Property Trust has purchased the Pennsylvania Business Campus from Malvern's Liberty Property Trust, paying $245.3 million for the 41-building complex in Horsham, Pa. Workspace, headed by former Mack-Cali Realty CEO Thomas Rizk, is building a portfolio of suburban real estate in the northeastern US. While Rizk says it seems to be "a counterintuitive play," he believes the market is undervaluing these assets.
Mack-Cali Realty's new leaders are promising shareholders changes including stepped-up sales of underperforming suburban office buildings, and they vow better communication with investors, analysts and the public. "People didn't want to deal with us because it was unpleasant," says Michael DeMarco, the new president.
A Mack-Cali partnership is seeking approval to build a 300-unit, 32-story apartment tower in Philadelphia. Construction is expected to start at the end of the year. The project is part of Mack-Cali's move from suburban offices to apartment and mixed-use development.