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To diversify its portfolio and venture into the multifamily apartment sector, Mack-Cali Realty Corp. (CLI - Free Report) – a real estate investment trust (REIT) – disclosed the acquisition of a 159-unit multi-family property in Rahway, NJ. The company shelled out $46.5 million for purchasing the asset from Landmark Companies of Keasbey, NJ.

Known as Park Square, this is a two-building property that is currently 94% leased and includes one- and two-bedroom luxury apartments, a parking garage and 6,000 square feet of retail space.

Located near the Rahway train station, offering accessibility to the Liberty International Airport and Manhattan as well as the Jersey Shore, the property is offering a good amenity package and Mack-Cali's Roseland subsidiary is in charge of managing and leasing the property.

Notably, in the midst of the continued weakness in the company's core office markets, Mack-Cali has been divesting a notable part of its office portfolio and focusing on expanding its holdings in the multi-family residential sector that has traditionally been more of a stable product type. The growth in the echo boomers population is particularly expected to drive the demand for these properties.  

As part of the strategic diversification, Mack-Cali acquired Roseland Properties –the premier luxury multi-family developer, owner, and manager – in Oct 2012. In 2013, the company acquired Alterra at Overlook Ridge 1A and 1B – luxury multi-family properties containing 722 rental units in the master planned community of Overlook Ridge in Revere and Malden, Mass. Mack-Cali acquired Alterra 1A and 1B from a joint venture of Prudential Insurance Company of America, an operational arm of Prudential Financial Inc. (PRU - Free Report) .

However, we note that although the company is aiming at strengthening its portfolio base through multifamily apartment buyouts and office assets divestiture, its aggressive disposition efforts had a dilutive impact on its third-quarter 2013 financials. But we believe that these strategic initiatives will benefit Mack-Cali in the long run.

Mack-Cali currently carries a Zacks Rank #4 (Sell). However, some better-ranked REIT stocks include Sabra Health Care REIT, Inc. (SBRA - Free Report) and Ventas, Inc. (VTR - Free Report) . While Sabra Health Care holds a Zacks Rank #1 (Strong Buy), Ventas carries a Zacks Rank #2 (Buy).

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