Forest City, Greenland close Pacific Park deal, but no price announced

A Forest City Realty Trust press release yesterday, Forest City, Greenland Close Restructuring of Pacific Park Brooklyn Partnership, indicates, that, as announced in January, Greenland USA would buy all but 5% of Forest City's ownership interest in Pacific Park going forward.

What's missing: any financial numbers, which would allow us to assess whether Forest City is getting decent value or hosting a fire sale.

That excludes 461 Dean, which Forest City developed itself (and sold), and the Barclays Center operating company, owned by Mikhail Prokhorov's companies. And the three buildings jointly developed by Greenland Forest City Partners on a 70/30 basis, with Greenland holding the lead, will remain in that ownership percentage: 38 Sixth Avenue, 535 Carlton and 550 Vanderbilt.

Official opacity

The press release:

Forest City Realty Trust, Inc. (NYSE: FCEA) today announced that it has completed the previously announced restructuring of Greenland Forest City Partners, the company's joint venture with Greenland USA that is developing Pacific Park Brooklyn, a 22-acre mixed-use development in Brooklyn adjacent to the Barclays Center arena. The restructuring takes Greenland USA's ownership interest in the venture from 70 percent to 95 percent going forward, and Forest City's interest from 30 percent to 5 percent. 

With the restructuring, Greenland USA will assume primary responsibility for the remaining development work at Pacific Park. The restructuring does not impact three projects previously developed and completed by the joint venture: 38 Sixth Avenue, 535 Carlton and 550 Vanderbilt. "The restructuring aligns with our strategy of maintaining an overall lower level of development activity, even as we remain fully committed to, and engaged in the joint venture," said David J. LaRue, Forest City president and chief executive officer. "The restructuring also keeps remaining entitled development on track to achieve our shared vision for Pacific Park. Forest City continues to believe strongly in the New York market – one of the strongest and most resilient real estate markets in the country – and we continue to have a significant presence and portfolio there."

What does this mean: "The restructuring aligns with our strategy of maintaining an overall lower level of development activity, even as we remain fully committed to, and engaged in the joint venture"?

The whole point is that they have become less committed to the joint venture. They've even outsourced government relations and public relations to a new company, L&L MAG, formed by former Forest City New York CEO MaryAnne Gilmartin.

Greenland speaks

Greenland USA was not part of the Forest City press release. But GlobeSt.com (drawing on Greenland's press release) offered a quote from Greenland USA head Hu Gang:

“Pacific Park is an important development and we are committed to continuing to deliver the terrific mixed-use community that we have begun to build in the heart of Brooklyn,” says Hu Gang, president and CEO of Greenland USA. “We’re proud of the significant progress we’ve already made—particularly providing much needed affordable housing and local retail—and with the completion of this restructuring are ready to immediately build on this momentum.”

Wait a sec. A good amount of the below-market housing isn't that affordable, which is why they've had to go to the open market. And they haven't yet "provided" any local retail, but rather announced coming tenants.