Forest City selling (its 51% of) Brooklyn malls, other retail properties, to focus on mixed-use projects
That means a sale of the majority stake in the Atlantic Terminal and Atlantic Center malls opposite the Barclays Center, and a presence in retail limited to mixed-use, "placemaking" projects.
That includes retail in places like the MetroTech office park and includes Pacific Park Brooklyn, so, despite no discussion of the paused proposal to build a glitzy mall at Site 5, currently home to Modell's and P.C. Richard, I assume that's still the plan.
But Atlantic Yards/Pacific Park, it seems, remains something of an anomaly.
Forest City's New York-area retail properties include Westchester's Ridge Hill, among regional lifestyle centers; Atlantic Center, Atlantic Terminal Mall, Brooklyn Commons, Castle Center, East River Plaza, Harlem Center, Queens Place, Shops at Atlantic Center Site V, Shops at Bruckner Boulevard, Shops at Northern Boulevard, among urban retail; and East River Plaza and Shops at Gun Hill Road, among big box retail (which has overlap).
LaRue, speaking yesterday to investment analysts, said "our strength and competitive advantage in urban, mixed-use placemaking aligns better with apartments, office and amenity retail rather than standalone retail centers or regional malls."
He added that "our pipeline of entitlements concentrated in placemaking projects totals more than 20 million square feet," calling it "a significant growth opportunity."
A good chunk of entitlement is with Atlantic Yards/Pacific Park, more than 6 million square feet, but I'm not sure if they count all of it, since they're not the majority owner any more.
Asked if this planned sale of retail replaced the company's (actually, the joint venture's) aim to sell three development sites at Pacific Park (B4, B12, B13), LaRue said no, and provided no details on progress. "We are going to proceed with that discussion and see how that plays out."
The executives were not asked if Forest City still plans residential towers above the Atlantic Center mall, a plan that surfaced in 2006.
I doubt they'd simply give up that entitlement. In fact, in what may be a hint of long-gestating plans, Atlantic Center is cross-listed in Forest City's category of residential retail, which contains this general description:
Forest City develops and manages premier residential communities in major markets across the country. Many of our properties feature convenient retail options for our residents.
Forest City CFO Bob O'Brien said that the sale price would be well above the company's basis in cost, so likely the proceeds would be redeployed into mixed-use projects to avoid capital gains and to be tax-efficient.
Shedding most of its retail properties would be a landmark shift for Forest City, which opened its first community shopping center in 1948 and its first regional mall in 1962. Today, the company's portfolio includes 14 regional malls across the country and 19 specialty retail properties, including entertainment-and-shopping complexes in New York City.
....The company, which is in the midst of a headquarters search, doesn't have a retail footprint in Cleveland anymore. Earlier this year, Forest City sold the Avenue at Tower City, its mall in the heart of downtown, to affiliates of Bedrock, a Detroit-based real estate company that's part of the Rock Ventures family of businesses formed by billionaire and Cleveland Cavaliers majority owner Dan Gilbert.