December 9, 2020

How Mack-Cali CEO is making health, wellness into top amenity in its properties

Gilmartin: ‘There isn’t anything better you could give your employees than the comfort of knowing that they’re healthy and well, and doing it at no cost to them’

MaryAnne Gilmartin was named interim CEO at Mack-Cali Realty Corp. at the end of July — or, when New Jersey was between surges of the COVID-19 pandemic.

And, while Gilmartin says she has no desire to lose the interim tag (see story here), she has quickly jumped into the role — and has the company moving forward with a number of health and wellness initiatives in its buildings, including Harborside in Jersey City, perhaps the REIT’s biggest point of emphasis as it doubles down on urban office and multifamily.

Sure, there’s the extra cleaning that all landlords are doing. But Gilmartin is looking to offer that deep cleaning to tenants, to have wellness companies as key tenants in mixed-use buildings (perhaps at a discount) and to have facilities that could give COVID tests (and perform other health care needs, such as physicals) on site.

“There isn’t anything better you could give your employees then the comfort of knowing that they’re healthy and well, and doing it at no cost to them,” she said.

Gilmartin spoke earlier this week on a CBRE lunch-and-learn hosted by Vice Chairman Jeffrey Dunne and Executive Vice President Jeremy Neuer. It was moderated by Mary Ann Tighe, CBRE’s CEO for the tri-state area.

Here’s a look at some of her thoughts on health and wellness in Mack-Cali buildings. Her answers are condensed for clarity and space:

On offering (extra) cleaning services

We obviously have been hyperfocused on cleanliness and sanitary measures inside of our office and residential buildings. But what Ed (Guiltanan, senior vice president of leasing) and I have realized is that the tenants are looking for protocols and they’re looking to understand best practices.

So, we’re putting together manuals for our residential portfolio and our commercial portfolio so people can understand exactly what that means. We’re also thinking of leveraging the fact that, if we’re cleaning our lobbies, elevators, common bathrooms, we should be offering the same upgraded services to the tenants themselves, because a lot of our tenants are now having to clean their own spaces above and beyond conditions and specs previously seen. We, as a landlord, should be offering that.

It might be important to offer that to the commercial users inside of our buildings. I think we’re going to want to provide an offering that’s going to be both delivering services that maybe we didn’t offer the tenants (previously), and then a wellness program.

On bringing testing to properties

Right now, during the pandemic, we’ve been bringing testing on-site. You can have COVID testing right in our offices, because we have a partnership with Hackensack Meridian (Health). It’s enormously convenient for people to know that the doctor will come to your office space.

We’re going to make that available to our customer base. I think that’s something we’re going to continue to do in the future. If testing is a fixture of the near-term, workplace environment, we’re going to make sure we deliver on that amenity.

On wellness as an amenity

People want a higher level of service. They want wellness, they want both private and public outdoor space that’s attractive and allows them to work in ways that are much more flexible than just sitting behind a computer all day.

We want to make sure that we have ambulatory care and clinic facilities right there within the Harborside campus so that you can go to the doctor and get your annual checkup without going back to Manhattan and seeing your doctor. Day care, fitness and food is what makes us tick. And, if you can have all of that at your fingertips, I think you’ve got something really special.

On attracting wellness companies

Because we control the environment, if I think we’re not going to drive rents in the retail because it’s much more important that we drive the rents upstairs, I can offer food and beverage operators, fitness companies, day care centers unbelievable value in the real estate — knowing that I’m not looking for the highest rent, I’m looking for those that are the best providers, and then I’ll get paid back on that investment on my commercial space upstairs, if that makes sense.

On capacity, property tech in residential

The tracking is pretty simple through turnstiles. We’re not doing anything more sophisticated than that, but we’re besieged by proptech companies that are coming in and showing us all the gizmos. And a lot of them are really priced competitively, so it’s a no-brainer to do some of this stuff.

On the (residential) side, to do touchless experiences from the moment you walk in the building to your apartment is easy to do. So, I think that’s the way of the future. Why are you touching things if you don’t need to, if it can be done through a mobile app? I think a lot of it in the homes and for residents is going to happen really quickly.

On capacity, property tech in commercial, office

I don’t think that the densities are really a big issue at Harborside, because the space has been industrial space in nature — lots of light, lots of air. We have really nice proportions in terms of the amount of dedicated space per employee.

We don’t have a lot to undo, relative to what’s happened in Manhattan. I think a feature of the future is that space will be much more generous. The days of packing (people) in like sardines? I think those days are behind us. I feel really confident that Mack-Cali doesn’t have a major new term in that in that respect, because the spaces are not overly dense to begin with.

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December 8, 2020
The Real Deal

MAG Partners, Safanad form new joint venture

MAG Partners will bring the development experience, and Safanad will bring the capital.

That’s the setup of a new joint venture between the companies, which is targeting $2 to $3 billion worth of deals, the firms told The Real Deal. Eventually, the joint venture will pursue ground-up development, but in the short-term, it is looking at distressed properties and projects, as well as building conversion opportunities.

The companies are already working together on a 479-unit rental building at 241 West 28th Street in Chelsea. The firms, along with partners Atalaya Capital Management and Qualitas, secured a $173 million construction loan for the project in October.

MaryAnne Gilmartin launched MAG Partners, a spin-off from the firm she formed with L&L Holding’s David Levinson and Robert Lapidus, in December 2019. Gilmartin noted that while her priority since leaving Forest City Ratner in 2018 has been new development, the pandemic has shifted her focus. She described the new arrangement —which will acquire sites and pursue deals as a general partner — as “MAG Partners fueled by Safanad.”

Safanad, a private equity firm that launched in 2009, tapped Oxford Properties Group’s Andrew Trickett in 2018 to help grow its New York real estate operations. Trickett called the joint venture with MAG a “convergence of capital and expertise.”

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December 7, 2020

Gilmartin confirms ‘interim’ CEO tag, says there will be new day-to-day leadership at Mack-Cali in 2021

Mack-Cali Realty Corp. interim CEO MaryAnne Gilmartin talked about the past, present and future of the real estate investment trust Monday during a webinar. And, while she said she will continue to have a major role in the company, Gilmartin made it clear that she does not intend to remove the “interim” tag from her title.

“I’m not 100% clear on the timeline, but in 2021 there will be new day-to-day leadership inside of Mack-Cali and I will go back to being chair of the board,” she said.

Gilmartin, who has stepped away from her job as founder and CEO of MAG Partners in New York City to run Mack-Cali, talked about where she saw the Jersey City-based REIT going during a lunch-and-learn webinar moderated by Mary Ann Tighe, CBRE’s CEO for the tri-state area. It was hosted by CBRE Vice Chairman Jeffrey Dunne and CBRE Executive Vice President Jeremy Neuer.

“My decision to serve as interim CEO was not something I anticipated doing,” Gilmartin said. “I was convinced of it when I was asked by the board to do it because it had a timeline associated with it.

“I knew that it was a bit of a rabbit hole and would require substantially all of my time, but that it wouldn’t be something like Hotel California — you can check in, but you can’t check out.”

Gilmartin said she remains committed to Mack-Cali — and that serving as interim CEO will allow her to do a better job as chair.

“My commitment to the company is solid,” she said. “I’m deeply loyal to the team. And I believe, as chair, I will be able to serve people and the shareholders effectively and mightily because I’ve been the interim CEO.

“The nice thing is, I’ve had the opportunity to do this. I will be able to stay with the story and see it out through its completion, and I also get to go home again to my team at MAG Partners, where we have a capital source, we’ve got a building on 28th Street that we’re coming out of the ground building in West Chelsea and we see lots of opportunity through the pandemic.”

Gilmartin said she sees similar opportunity at Mack-Cali.

“I guess the safest thing I can say is that changes are afoot and that we are not going to look the way we look today in three years, if we have anything to say about it,” she said.

And, while it’s no secret that the firm wants to sell off its suburban assets, Gilmartin said there will not be a fire sale — regardless of what public pressure the company may face to do so.

“Selling segments in the business or (joint venturing), or bringing in new capital, just for the sake of satisfying the rally call for change, is not wise,” she said. “You can’t run the company based on what the analysts are saying has to happen. You basically have to look at the company and say, ‘We definitely need to change it up a little bit.’

“Selling suburban is a strategy to make the balance sheet simpler and to produce proceeds so that we can shore up the balance sheet and increase liquidity and reduce debt — those things make a ton of sense. And I believe, all through 2021, we will sell a billion dollars of assets and that will make a meaningful difference on the company’s bottom line.”

That would make for a different company, too.

“You’re left with a residential business that is robust and has extraordinary value,” she said. “And we can keep doing that. We can supersize that portfolio and be a bigger, better version of ourselves. And/or we can be a commercial company that extracts the value that we know exists on the waterfront and we could JV with other commercial operators and owners and be a bigger, better version of ourselves as a commercial landlord. I think either of those two things are possible.

“Having two businesses — a residential business and a commercial business — is a really nice story of diversification, particularly if it’s mostly urban. So, I don’t see it impossible that the company is a commercial and residential landlord. But it has to have a healthier balance sheet, has to have better execution and it needs to have access to greater sources of capital.”