Thursday, June 06, 2013

Forest City: new capital may help with New York pipeline (but Crain's doesn't ask about that delayed deck)

So developer Forest City Enterprises took a loss, albeit on items that may not recur, but its subsidiary got Crain's New York Business to bite on the good news. In Forest City Ratner gets cash windfall, Crain's reported yesterday:
Brooklyn-based Forest City Ratner's ambitious plans for new projects looks like they'll be getting a big financial boost. The developer's Cleveland-based parent, Forest City Enterprises, has just inked a deal to sell a 49% stake in eight of its shopping malls nationwide for $425 million. The buyer is QIC, one of Australia's largest institutional investors.
QIC is paying roughly $425 million for its stake in the eight malls... the deal will also generate $330 million in capital for Forest City Enterprises to reinvest elsewhere.
"Cash freed up here can be dedicated to growing Forest City Ratner's pipeline of projects in New York," said a source close to the company, but who noted that just how much money is something that remains to be determined.
Beyond the Atlantic Yards towers in the pipeline, the article mentions the developer's bids for the Seward Park Urban Renewal Area and Nassau Coliseum, as well as vague plans for Queens and potential rehab of the Atlantic Center mall.

All in all, a pretty thin reed for a "source close to the company," which I bet also might be described as "source inside the company" or "source who's paid by the company."

It's not an illegitimate story, but it's not very skeptical, either. Why couldn't Crain's have asked whether the new capital could be used to fulfill the developer's obligation to build a deck over the blighted Vanderbilt Yard?

Another more mixed piece of news, which I reported, is that a mortgage is in default on Forest City's 10 MetroTech, presaging a demolition and a residential build. The default surely is not happy news for Forest City, but the resolution is positive, given Brooklyn's residential market.


No comments:

Post a Comment