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Atlantic Yards/Pacific Park graphic: what's built/what's coming + FAQ (pinned post)

Forest City was "bullish" on Atlantic Yards. Greenland's now "bullish" on New York. Is that just bull?

Let's recall a September 2015 quote from MaryAnne Gilmartin, then CEO of Forest City Ratner.

"There are very few sites in New York City that offer the density, the access, and neighborhoods, that this site offers," she said of Pacific Park. "So we're bullish on Brooklyn, and super bullish on Pacific Park Brooklyn."

If so, as I wrote, that raises the question of why Forest City wasn't willing to hold onto the project in full, but instead sold 70% of the project going forward (minus the Barclays Center and 461 Dean) to Greenland USA. (Obviously, Cleveland--aka parent Forest City Realty Trust, or FCRT--had different priorities.)

And now that Forest City New York has announced plans to sell all but 5% of its remaining stake going forward to Greenland, it's way less bullish. Indeed, the conversion of parent Forest City Enterprises into FCRT, a REIT (real estate investment trust) ,means it no longer wants to pursue risky development. And Gilmartin has left to start a new firm, L&L MAG.

Oh, well. To quote the long-departed Forest City executive Jim Stuckey, "Projects change, markets change."

And what about Greenland?

So let's look at the Real Deal's 1/23/18 overview of Pacific Park, with a similar quote from Greenland:
“These large-scale projects are our expertise,” said Scott Solish, director of development at Greenland and a former executive at the New York City Economic Development Corporation. “We’re very bullish on the New York market.”
Well, maybe they are. At least Greenland's not a REIT.

But it may well be that Greenland's in for a dime, in for a dollar or, as a source told the Real Deal, they "felt that they were already very pregnant, and they had to do this.”

I would bet they're getting a good deal from Forest City, which wants to get out. (We won't know the terms until Forest City reports to shareholders, probably around midyear.) And Greenland may have different profit and institutional goals from the typical American firm, wanting to make a splash in the world's media capital. (Remember that "Skyscraper Specialist from China" billboard?)

Greenland somewhat wobbly?

Indeed, as the Real Deal points out, Chinese developers have pulled back on U.S. projects, "in part due to pressure from the Chinese government to limit the amount of capital flowing out of the country."

Meanwhile, Greenland has replaced the broker on its Metropolis condo project in Los Angeles, has pulled out of a planned project in North Hollywood, and may be looking to sell its share of a project in South San Francisco. 

Also, a report from bond ratings agency Moody's suggests the firm has high debt leverage, which signals caution about new borrowing.

So Greenland likely will not be developing Atlantic Yards/Pacific Park from a posture of generous spending. It will look to make a hard bargain with Forest City and to negotiate subsidies and support--especially in terms of affordable housing--from city and state officials.

Gilmartin newly bullish

In a video interview that's part of a Commercial Observer interview, Gilmartin expressed enthusiasm for her new firm, "And I've been capital constrained for some time. Pacific Park's been a story about limited capital investment going forward, and so, with all the headwinds associated with that project, I feel I have tremendous tailwinds that are lifting us up and driving us forward into the future."

"Capital constrained" apparently trumped "bullish."

"We're not catching a wave," Gilmartin said of L&L MAG. "We're building through cycles. And when markets correct, and there are downturns, there's tremendous opportunity for folks like us. Because we look for ways to pick up land, to put together projects that take a very long time, so when the cycle comes back, you're ready. So what I like is, we're going to hit all product types. We can be extremely opportunistic because we know how to build so many types of buildings. And on top of that, we're in the greatest city in the world. So I think there are going to be are short-term big wins, there's going to be low-hanging fruit, and there's going to be those long labors of love. And remember, public-private partnerships have been a big part of my career. And that's something again--remember, when markets shift and downturns happen, the public sector steps up, and there's tremendous opportunity. So I'm bullish. I'm bullish, because I'm really in it for the long haul."

So she's bullish again. Just in a new corporate structure.

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