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December 13, 2010
Forest City nears selling stake in NYC retail portfolio
Forest City executives said the sale would involve a 49% stake in a portfolio that includes 15 New York properties; the portfolio is 96% leased and executives declined to name the buyer.
CrainsCleveland.com via Crain's NY Business
by Stan Bullard
Looks like money is still a little tight at Forest City.
Executives at Forest City Enterprises Inc. said in a conference call today that the company is close to selling a minority interest in its New York City retail properties and will exit the hotel market.
The measures are the latest to surface in the two-year odyssey by the Cleveland-based real estate developer to increase liquidity and to reduce debt to clean up its balance sheet. Forest City Ratner, a wholly owned subsidiary, currently owns and operates 11 million square feet of commercial property in the New York metro area.
...Charles Ratner, Forest City's chief executive, described the prospective investors as retail-oriented real estate investment trusts and real estate funds. However, he said the company would not disclose a prospective price, nor would it identify the properties or the prospective joint venture partners by name. Unlike a sale, a joint venture allows a company to continue to reap management and leasing fees on properties and to enjoy future gains from the properties if their fortunes improve.
Forest City developed its retail portfolio in New York over the last two decades by introducing large-format stores such as OfficeMax, Staples, Old Navy and H&M to the boroughs.
We commonly call those "big-box retailers."
“We remain cautious, but also very confident,” Mr. Ratner said, though he noted problems remain in the economy.
Indeed, the company in its earnings report issued Thursday, Dec. 9, reported impairment charges totaling $77 million that soured the improved performance of its properties and revenues in the quarter that ended Oct. 31.
NoLandGrab: Let's see, they've already partnered up with a billionaire Russian oligarch and they're trying to sell green cards to wealthy Chinese investors. How about a Middle Eastern sultan or an African dictator?
Posted by eric at December 13, 2010 10:32 AM