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Forest City completes conversion of ownership in 10 New York City specialty retail centers

CLEVELAND, Dec. 22, 2017 /PRNewswire/ -- Forest City Realty Trust, Inc. (NYSE: FCEA) today announced the closing of the conversion of its common ownership interest to preferred interest in 10 specialty retail centers in the New York City metropolitan area.  

Forest City logo (PRNewsfoto/Forest City Realty Trust, Inc.)

The closing covers 10 of the 13 centers that are part of a joint venture between Forest City and Madison International Realty, LLC. Closings on the conversion of Forest City's common interest in two other centers in the portfolio – Shops at Northern Boulevard and Queens Place – are expected by the end of the first quarter of 2018 as remaining lender matters are addressed. Final closings on each of the individual centers are expected to occur as Forest City secures replacement assets into which to redeploy its preferred interest. The last center in the joint venture, the 42nd Street retail/entertainment complex, is expected to transact at a later date upon resolution of the ground lease dispute with the City of New York.

"We are very pleased to achieve this key milestone in executing our strategic plan and delivering on our commitment to create value," said David J. LaRue, Forest City president and chief executive officer. "As we identify opportunities to redeploy our interest from this portfolio, we will continue to focus on high-quality urban residential, office and mixed-use assets in our major core markets.

"I want to thank our partner, Madison International Realty, and our own internal team for the perseverance, creativity and flexibility required to bring this complex transaction to this important stage of completion," LaRue added.

As previously disclosed, the overall transaction values the 12 centers (excluding 42nd Street) at approximately $450 million at Forest City's 51 percent share and reflects an approximate 5 percent cap rate on 2016 net operating income.

The 10 retail centers that are part today's announced closings are Shops at Gun Hill Road (Waring), Shops at Gun Hill Road (Ely) and Castle Center in the Bronx, Harlem Center in Manhattan, The Heights, Atlantic Terminal Mall and Atlantic Center in Brooklyn, Forest Avenue and Shops at Richmond Avenue in Staten Island, and Columbia Park Center in North Bergen, New Jersey.

About Forest City

Forest City Realty Trust, Inc. is a NYSE-listed national real estate company with $8.1 billion in consolidated assets. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate throughout the United States.  For more information, visit www.forestcity.net.

Safe Harbor Language

Statements made in this news release that state the company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the uncertain outcome, impact, effects and results of the company's Board of Directors' review of operating, strategic, financial and structural alternatives, the company's ability to carry out future transactions and strategic investments, as well as the acquisition related costs, unanticipated difficulties realizing benefits expected when entering into a transaction, the company's ability to qualify or to remain qualified as a REIT, its ability to satisfy REIT distribution requirements, the impact of issuing equity, debt or both, and selling assets to satisfy its future distributions required as a REIT or to fund capital expenditures, future growth and expansion initiatives, the impact of the amount and timing of any future distributions, the impact from complying with REIT qualification requirements limiting its flexibility or causing it to forego otherwise attractive opportunities beyond rental real estate operations, the impact of complying with the REIT requirements related to hedging, its lack of experience operating as a REIT, legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the Internal Revenue Service, the possibility that the company's Board of Directors will unilaterally revoke its REIT election, the possibility that the anticipated benefits of qualifying as a REIT will not be realized, or will not be realized within the expected time period, the impact of current lending and capital market conditions on its liquidity, its ability to finance or refinance projects or repay its debt, the impact of the slow economic recovery on the ownership, development and management of its commercial real estate portfolio, general real estate investment and development risks, litigation risks, vacancies in its properties, risks associated with developing and managing properties in partnership with others, competition, its ability to renew leases or re-lease spaces as leases expire, illiquidity of real estate investments, its ability to identify and transact on chosen strategic alternatives for a portion of its retail portfolio, bankruptcy or defaults of tenants, anchor store consolidations or closings, the impact of terrorist acts and other armed conflicts, its substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by the company's revolving credit facility, term loan and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, its ability to receive payment on the notes receivable issued by Onexim in connection with their purchase of our interests in the Barclays Center and the Nets, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of its insurance carriers, environmental liabilities, competing interests of its directors and executive officers, the ability to recruit and retain key personnel, risks associated with the sale of tax credits, downturns in the housing market, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, changes in federal, state or local tax laws and international trade agreements, volatility in the market price of its publicly traded securities, inflation risks, cybersecurity risks, cyber incidents, shareholder activism efforts, conflicts of interest, risks related to its organizational structure including operating through its Operating Partnership and its UPREIT structure, as well as other risks listed from time to time in the company's SEC filings, including but not limited to, the company's annual and quarterly reports.

 

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SOURCE Forest City Realty Trust, Inc.

Mike Lonsway, Executive Vice President - Planning, 216-416-3325; Jeff Linton, Senior Vice President - Corporate Communication, 216-416-3558