Forest City Realty Trust and Madison International Realty have signed definitive agreements for Madison’s acquisition of Forest City’s 51% interest in a 2.1-million-square-foot, 12-asset, specialty retail portfolio located throughout Manhattan, Brooklyn, Queens, the Bronx, Staten Island and Northern New Jersey. The gross value is approximately $1 billion. Closing is expected in the fourth quarter.
According to a prepared statement, the transaction is in line with Forest City’s strategy of focusing its portfolio on apartment, office and mixed-use assets in core urban markets. The company revealed in August 2016 that it would explore strategic alternatives for its regional mall and New York specialty retail portfolios.
The release notes that Forest City and Madison have been joint venture partners in the specialty portfolio, in which Madison has a 49% ownership stake, since 2011.
“Today’s announcement is an important step in the ongoing execution of our strategic plan and is another example of delivering on our commitment to create value,” says David J. LaRue, Forest City president and chief executive officer. “Madison International has been a great partner for the past six-plus years in these high-quality assets, and I salute the teams on both sides for bringing this large and complex transaction to fruition.”
According to Ronald Dickerman, president and founder of Madison, the transaction “fits well with our strategy of executing large-scale equity investments to create ‘win/win’ outcomes for our partners and investors. The retail centers in this portfolio are in densely populated, well-trafficked areas that offer significant opportunity for continued value creation. We are pleased to have assisted our partner, Forest City, in accomplishing this important milestone.”
The 12 retail centers that are part of the transaction are Shops at Gun Hill Road (Waring), Shops at Gun Hill Road (Ely) and Castle Center in the Bronx, Harlem Center in Manhattan, Shops at Northern Boulevard and Queens Place in Queens, 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.