Thomas quoted BMO Capital Markets analyst Paul Adornato,, who suggested the arena "should fetch at least $1 billion."
Well, actually, it was valued at $825 million for the transaction, and actually has been losing money.
Of course, despite Forest City Ratner's claims that it would exceed the valuation, the company and parent Forest City Enterprises had other drivers for the sale. As Adornato noted, the sale of the arena would lower Forest City's debt, and also help the company transform to an real estate investment trust (REIT).
When the announcement of the sale emerged, only Eliot Brown of the Wall Street Journal called the sale a loss (and I agreed, albeit more tentatively). One commenter chided me for agreeing, saying that other factors, including depreciation, had not been factored in. Well, the $825 million figure is below deprecation value.
Time for revisionism on arena "success"
Perhaps the financial results will prompt some revisionist assessments.
Before the arena opened, on 7/25/12, CBS Local reported, "Even though it doesn’t open until September 28, Ratner feels it’s already a success. Events are booked for more than 200 nights.
While profits are lagging because of the high cost of running the arena, Forest City Ratner executive chairman Bruce Ratner calls the Barclays Center “a great financial success.”Last September, the Commercial Observer declared that Forest City's "crown success in the Big Apple has been the Barclays Center."