CLEVELAND, March 29, 2011 /PRNewswire/ --Forest City
Enterprises, Inc. (NYSE: FCEA and FCEB) and Madison International
Realty, LLC today announced the creation and closing of joint
ventures for ownership of a portfolio of Forest City's urban retail
centers in the New York City
metropolitan area.
(Logo: http://photos.prnewswire.com/prnh/20080515/FRSTCTYLOGO
)
Under the terms of the joint ventures, an affiliated entity of
Madison International Realty will enter into existing partnerships
in 15 mature retail and entertainment properties that are valued by
this transaction at $851.5 million,
including $499.9 million of debt.
Madison will receive a 49 percent
equity interest in the partnerships in exchange for an investment
of $172.3 million in cash.
Subsidiaries of Forest City will retain 51 percent equity interest,
will serve as asset and property manager, and will manage leasing
for the joint ventures. The transaction's implied valuation
represents a 6.9 percent cap rate on 2010 net operating income for
the properties.
"We're pleased to complete these joint ventures with Madison
International Realty," said Charles A.
Ratner, Forest City president and chief executive officer.
"Today's announcement demonstrates both the significant value
represented in our mature portfolio, and our continuing ability to
create liquidity by monetizing select elements of that portfolio.
This transaction also positions us with an experienced and
well-respected real estate investor in Madison, and we look forward to exploring
other mutually beneficial opportunities with them in the future. I
want to congratulate our entire transaction team, led by
Bruce Ratner and Andy Silberfein in our Brooklyn office, for their creativity and hard
work in making these joint ventures a reality."
"These are high-quality, productive specialty centers in good
locations in one of the strongest markets in the country," said
Ronald Dickerman, president and
founder of Madison International Realty. "We believe these assets
have the ability to generate above average NOI growth in this
under-retailed market. We are also pleased to establish this
relationship with Forest City, a premier developer, owner and
manager of commercial and residential real estate. They are
committed to New York as a core
urban market and are continuing to create value with great projects
here and across the country."
The properties included in the transaction are: the 42nd Street
Retail and Entertainment Complex and Harlem Center (retail
component) in Manhattan; Atlantic
Center, Atlantic Terminal (retail component) and The Heights in
Brooklyn; Queens Place, Steinway
Street Theatres and Shops at Northern Boulevard in Queens; Shops at Bruckner Boulevard, Castle
Center and Shops at Gun Hill Road in the Bronx; Shops at Richmond Avenue and Forest
Avenue Cinemas on Staten Island;
and Columbia Park in North Bergen, New
Jersey.
About Forest City
Forest City Enterprises, Inc. is an NYSE-listed national real
estate company with $11.8 billion in
total assets. The Company is principally engaged in the ownership,
development, management and acquisition of commercial and
residential real estate and land throughout the United States. For more information, visit
http://www.forestcity.net.
About Madison International
Founded in 1996, Madison International is a real estate private
equity firm focused on providing secondary equity capital for
Partner Replacements and Recapitalizations of Class A properties
and portfolios located throughout the U.S., U.K. and Western Europe.
Safe Harbor Language
Statements made in this news release that state Forest City
Enterprises' or Forest City management's intentions, hopes,
beliefs, expectations or predictions of the future are
forward-looking statements. Forest City'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 impact of current lending and
capital market conditions on its liquidity, ability to finance or
refinance projects and repay its debt, the impact of the current
economic environment on its ownership, development and management
of its real estate portfolio, general real estate investment and
development risks, vacancies in its properties, further downturns
in the housing market, competition, illiquidity of real estate
investments, bankruptcy or defaults of tenants, anchor store
consolidations or closings, international activities, the impact of
terrorist acts, risks associated with an investment in a
professional sports team, its substantial debt leverage and the
ability to obtain and service debt, the impact of restrictions
imposed by its credit facility and senior debt, exposure to hedging
agreements, the level and volatility of interest rates, the
continued availability of tax-exempt government financing, the
impact of credit rating downgrades, effects of uninsured or
underinsured losses, environmental liabilities, conflicts of
interest, risks associated with the sale of tax credits, risks
associated with developing and managing properties in partnership
with others, the ability to maintain effective internal controls,
compliance with governmental regulations, increased legislative and
regulatory scrutiny of the financial services industry, volatility
in the market price of its publicly traded securities, litigation
risks, as well as other risks listed from time to time in Forest
City's SEC filings, including but not limited to, Forest City's
annual and quarterly reports.
ON THE WEB
www.forestcity.net
www.madisonint.com
SOURCE Forest City Enterprises, Inc.