Flex to become 'mainstream' post-pandemic; Mack-Cali to sell $1B of NJ assets

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

The pandemic accelerated demand for flexible workspaces, and the sector is expected to take an even larger share of the overall market and become "a critical and mainstream element of commercial real estate," according to JLL.

JLL's Global Flex Space report in November showed that 41% of tenants expect to increase their use of short-term workspaces as part of a post-pandemic work strategy. Reasons include the flexibility offered compared with fixed long-term lease commitments. Additional occupier motivations include workforce mobility and capital expenditure savings.

The structural increase in demand, meanwhile, is expected to persuade landlords and building owners to offer flexibility and hospitality services in their portfolios to help increase foot traffic, generate leasing prospects and deliver modern amenities to tenants within this new space, Ben Munn, global head of flex at JLL, said. With increasing awareness and adoption, flex space is forecast to become a fully integrated offering not just in traditional office buildings but also in other property types, such as retail shopping centers and multi-housing developments.

Property moves

* Mack-Cali Realty Corp. is seeking more than $1 billion for the sale of its portfolio comprising four office buildings and two hotels in New Jersey, Bloomberg News reported Dec. 7, citing a person familiar with the matter. The planned sale comes as the company said it will transition into a pure-play multifamily real estate investment trust and rebrand the business as Veris Residential Inc., according to the report.

* Innovo Property Group is set to acquire the HSBC Tower in Manhattan, N.Y., from Israeli company Property & Building Corp. Ltd. for $855 million, Reuters reported. The seller said it would incur a $45 million net loss from the transaction after costs, based on the $864 million book value of the property as of Sept. 30.

* SL Green Realty Corp. sold a 25% stake in the $2.3 billion One Madison Ave. development in Manhattan, N.Y., to an international buyer. The landlord retained a 25.5% stake in the property, which is expected to receive at least $259.3 million in aggregate equity from the stake's buyer.

New opportunities

* Office REIT Columbia Property Trust Inc. closed its $3.9 billion merger with Pacific Investment Management Co. LLC, or Pimco. The deal was finalized Dec. 8.

* The Canada Pension Plan Investment Board launched a 95/5 joint venture with Greystar Real Estate Partners LLC to develop and buy purpose-built single-family rental homes across the U.S. The companies committed approximately US$840 million of equity in the partnership.

* Property management company Asset Living acquired JMG Realty Inc. for an undisclosed amount. The transaction will give Asset Living more than 20,000 additional multifamily units in the Southeast U.S. as well as a new corporate office in Atlanta.

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