CLEVELAND, Dec. 21, 2012 /PRNewswire/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced the completion of a recapitalization of New York by Gehry at Eight Spruce Street, the company's Frank Gehry-designed, luxury residential tower in Lower Manhattan.
The transaction values the 76-story, 898-unit high rise at $1.05 billion. TIAA-CREF, a national financial services organization, becomes a 49 percent equity owner in the residential portion of the building, with original partners Forest City and National Real Estate Advisors (NREA) retaining 26 and 25 percent stakes, respectively. Prior to the recapitalization, Forest City and NREA owned 51 and 49 percent, respectively. Forest City expects to receive proceeds from the recapitalization of approximately $120 million.
"We're thrilled to welcome TIAA-CREF into the ownership of this world-class property," said David J. LaRue, Forest City president and chief executive officer. "This transaction, and the commitment of a partner of the stature of TIAA-CREF, is testament to the tremendous value created by the development of this unique property. In less than two years since opening, New York by Gehry at Eight Spruce Street has become world-renowned for its striking design, receiving international acclaim and major architecture awards, and has become a symbol for the resurgence of Lower Manhattan. We salute our New York team, led by Bruce Ratner, for the tremendous effort involved in planning and executing this outstanding project. This outcome is a direct reflection of their skill, creativity and dedication.""We believe that high-quality, multi-family assets in cities with the strongest demographics such as New York can be powerful additions to our well-diversified real estate portfolios," said Phil McAndrews, head of real estate transactions and joint ventures, TIAA-CREF. "The opportunity to invest in state-of-the-art, high-rise urban apartment complexes can be rare and we look forward to working with Forest City to maximize the value of this asset for our clients over the long term." Jeffrey J. Kanne, President and CEO of National Real Estate Advisors, said, "We are very pleased to be broadening our partnership to include one of the country's preeminent real estate investors. We believe the high quality of our new partnership is reflective of the extraordinary quality of New York by Gehry and we look forward to working together for many years to come." About Forest CityForest City Enterprises, Inc. is an NYSE-listed national real estate company with $10.7 billion in total assets. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. For more information, visit http://www.forestcity.net. Safe Harbor Language Statements made in this news release that state the Forest City Enterprises' or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the impact of current lending and capital market conditions on its liquidity, ability to finance or refinance projects and repay its debt, the impact of the current economic environment on its ownership, development and management of its real estate portfolio, general real estate investment and development risks, vacancies in its properties, the strategic decision to reposition or divest portions of the company's land business, further downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, international activities, the impact of terrorist acts, risks associated with an investment in a professional sports team, its substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by its credit facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, the impact of credit rating downgrades, effects of uninsured or underinsured losses, effects of a downgrade or failure of its insurance carriers, environmental liabilities, conflicts of interest, risks associated with the sale of tax credits, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, volatility in the market price of its publicly traded securities, inflation risks, litigation risks, cybersecurity risks and cyber incidents, as well as other risks listed from time to time in the company's SEC filings, including but not limited to, the company's annual and quarterly reports.
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