Atlantic Yards/Pacific Park Report

I wrote yesterday about how Bruce Ratner's cousins had formed two separate real-estate ventures, The Max Collaborative and Uplands, organized on familial lines, after their nationally traded, family-controlled company, Forest City Realty Trust (originally Forest City Enterprises), was absorbed in 2018 by the conglomerate Brookfield Asset Management. It's notable how the history of Forest City Enterprises, as told  by The Max Collaborative (TMC), diminishes and obscures Bruce Ratner's role as head of the New York subsidiary, Forest City Ratner Companies (later Forest City New York), responsible for some of the nationally-traded company's signature achievements, in its largest market.. As shown in the screenshot at right, TMC makes just one mention of Bruce--his departure from the corporate board. He's almost disappeared. The dis seems deliberate. I can only speculate why. Partly it may be to emphasize the collective achievements of those currently running TMC, thus ...

The 370-unit Broadleaf is a collaboration between Uplands and The Max Collaborative  If Bruce Ratner is retired from the real-estate business, concentrating on philanthropy as Chairman (since June 2014) of the  Museum of Jewish Heritage—A Living Memorial to the Holocaust)  and a board member of the Memorial-Sloan Kettering Cancer, his cousins and their progeny have taken the assets they got from the 2018 sale of Forest City Realty Trust (formerly Forest City Enterprises) and deployed them back into real estate. (Bruce Ratner's children didn't go into real estate, and his longtime deputy and successor as Forest City Ratner/Forest City New York CEO, MaryAnne Gilmartin, formed her own company,  MAG Partners , with several former colleagues.)  The descendants of Max Ratner, one of the first-generation members of the clan in Cleveland, have formed Shaker Heights, OH-based  The Max Collaborative , while the progeny of second-generation Albert Ratner (s...

The New York Times on 7/29/19 published Emily Badger's  How ‘Developer’ Became Such a Dirty Word , subtitled "It’s a demonized group, yet there are few solutions for the housing shortage that don’t at least partly involve more development." That's true, and it's also true that time tends to buff the development examples of the past in our memory--consider the adulation toward Rockefeller Center, which during its time, as author Daniel Okrent described , was the product of political clout and public relations wizardry. But the latter tactics are part of why developers today provoke significant skepticism, a theme largely absent from the article--though not the comments. but seriously, the question is not "are all developers bad?" It is "who benefits?" and "who controls the process? — Oksana (@OksanaMironov) July 29, 2019 Most important, developers don't get paid until project is finished & sold/leased. In some metros, th...

There's not a ton of detail/insight in public statements by the buyer of Forest City Realty Trust before the 12/7/18 closing of the purchase , but, for the record, here's a recap, from Brookfield, plus last week's post-closing statements, which were even more optimistic. The key phrase is "we look forward to creating further value in this business by leveraging our unique mixed-use real estate and placemaking expertise with the portfolio." The unspoken addendum may be: "we have deeper pockets and more patience." Emphases added. 8/1/18, Brookfield Property Partners Q2  Letter to Unitholders : New Investments Earlier this week, a Brookfield real estate investment fund entered into an agreement with Forest City Realty Trust (NYSE: FCEA) – an $11.4 billion diversified U.S. REIT – to acquire all of the shares of Forest City for $25.35/share. BPY is a 25% limited partnership investor in this fund. Forest City has created a high-quality portfolio of op...

There it is, number 6 on Bisnow's  The Biggest NYC Real Estate Stories Of 2018 : 6. Brookfield Buys Forest City, Becomes New York's Largest Property Owner Brookfield, following a buying spree this year, is now the biggest [commercial] landlord in the city. With the acquisition of Forest City [Realty Trust], the Canadian giant announced this month that it now owns 25 office properties in New York City comprising 26M SF. RXR Realty is second in the city with 24.6M SF, and SL Green, long the city's top office owner, has 23.9M SF after a year of being a net seller of properties, according to Crain's data. Vornado is in fourth place with 23.5M SF. The purchase of Forest City is one of several major moves Brookfield made this year. It also bought GGP, the second-largest U.S. mall owner... Yes, that's kind of big news, even if it focuses on Forest City's office properties, not its far smaller residential/mixed-use holdings. So why didn't the Brookfield acquisitio...

A couple of interesting passages in the 12/9/18 corporate obituary for Forest City Enterprises/Forest City Realty Trust (now part of Brookfield Asset Management ) in Crain's Cleveland Business, The lights go out for Forest City : The ability to spot opportunities and spend years making them a reality distinguished the company, especially when its projects took it to new markets. For example, when Forest City began developing MetroTech in Brooklyn, the borough was not seen as a New York office market. With seven buildings there now, it helped set the stage for Brooklyn's rebirth. Over the years, it would do that again and again in new locations, such as in a venture with MIT in Boston, remaking the former Navy Yards on the Potomac in Washington, D.C., an old rail yard in Chicago and the Presidio former Army barracks in San Francisco. I'd point out that those opportunities were usually public-private partnerships, so they had a high barrier to entry. (Also see my March 201...

First, half of the executive team goes , then the company identity vaporizes, as Forest City has now been absorbed by Brookfield, with the transaction closing yesterday. At right is the message on Forest City's home page : For nearly a century, Forest City has owned, developed and managed dynamic commercial, residential and mixed-use real estate in core markets across the United States. In November 2018, the company announced that its stockholders approved the acquisition of Forest City by a real estate investment fund of Brookfield Asset Management, a global leader in alternative asset management. The transaction closed on December 7, 2018. Forest City’s property portfolio is now managed by Brookfield Properties, a global, best-in-class real estate operating company. Here's the Brookfield press release yesterday, Brookfield Completes Acquisition of Forest City Realty Trust : NEW YORK and CLEVELAND, Dec. 07, 2018 (GLOBE NEWSWIRE) -- Brookfield Asset Management Inc. (“Br...

The absolute end of Forest City Realty Trust, and thus Forest City New York, is nigh, as the Plan Dealer reported yesterday action from the new owners:  Brookfield cuts jobs, including top executives, at Forest City as acquisition looms . About 75 executives in FCRT's headquarters have been let go, with another 35 on short-term extensions, which will cut management from 350 people to 240 by next summer. The transaction, approved by Forest City shareholders 11/15/18, is expected to be complete today, the newspaper reported. While workers at various Forest City properties will be retained, it's unclear what will happen to executives at Forest City's major subsidiaries, in places like New York and Washington, DC. It is clear that the name will gone. The firm will be called Brookfield Properties. That raises a question about the joint venture to build Atlantic Yards/Pacific Park, owned only 5% by Forest City going forward, currently called  Greenland Forest City Partners....

Corporate responsibility reports, which document efforts toward gender equity, better governance, energy efficiency, and more, can burnish a company's brand both externally and internally, while pointing toward better performance. But such reports can also serve as window dressing, especially when they lack candor or mislead. Consider the two most recent annual reports from Cleveland-based Forest City Realty Trust (formerly Forest City Enterprises), whose New York subsidiary was the original developer of the Atlantic Yards megaproject in Brooklyn, and which retains a tiny 5% share going forward of what is now called Pacific Park Brooklyn. "As a focused urban placemaker, Forest City has a well-rounded ESG (environmental, social and governance) program that helps us proactively address the issues that matter most to our stakeholders," said David J. LaRue, president and CEO, in a 6/26/18  press release . Well, maybe. Passages regarding minority contracting and affor...

Despite the significant questions  raised by former CEO and co-Chairman Al Ratner, a lawsuit, as well as a deeply divided board, Forest City Realty Trust shareholders, in votes totaled yesterday, weren't swayed from approving an acquisition by Brookfield Asset Management. So when the acquisition is completed, by 12/10/18, it will mark the end of a standalone company founded in 1920 , as Forest City will become a part of a much larger corporation. As detailed in previous articles, Forest City was considered undervalued, due to the complexity of its business, an atypical corporate structure (for most of its existence, not a real estate investment trust, or REIT), and a two-class share structure that left the founding Ratner extended family in control. That share structure and a family controlled board was looked at critically by experts in corporate governance. Over the last few years, Forest City streamlined its operations, for example lowering debt and risk, turned over some ...