CLEVELAND, Oct. 2, 2017 /PRNewswire/ -- Forest City
Realty Trust, Inc. (NYSE: FCEA) and QIC today announced the
execution of definitive agreements on 10 regional malls in which
QIC will acquire Forest City's
ownership interest. The sales of six of the 10 malls are expected
to close by yearend as third-party consents are obtained. The
remaining four malls will be transferred to QIC under a fixed-price
option and are expected to close as Forest City secures replacement assets or
other opportunities into which it will redeploy its ownership stake
in those malls.
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The overall transaction values the 10 regional malls at
approximately $3.175 billion, or
$1.55 billion at Forest City's share. The first six malls
represent $1.24 billion of value,
approximately $667.5 million at
Forest City's share.
Forest City provided the buyer
$150 million of seller financing for
a period of up to 18 months from closing. Net proceeds for
the first six malls, after transaction costs and seller financing,
will be approximately $180 million.
The remaining four malls represent $1.93
billion of value, approximately $887
million at Forest City's
share. Forest City's overall
share is substantially in line with the company's previous
disclosures about the transaction.
"We are very pleased to achieve this key milestone with our
partner," said David J. LaRue,
Forest City president and chief
executive officer. "This transaction is a win-win for all parties,
as we continue to focus our business on urban residential, office
and mixed-use assets, and QIC acquires full ownership of a U.S.
retail presence with high-quality regional malls in strong
markets.
"As with our recently announced definitive agreement with
Madison International for the disposition of our New York specialty retail portfolio, this
transaction is large and complex, and has required perseverance,
creativity and flexibility from both organizations to bring to
fruition. I thank the teams on both sides for moving the
transaction forward to this important stage," LaRue added.
"QIC and Forest City have been
working closely together to achieve this outcome," said
Steve Leigh, Managing Director of
Global Real Estate for QIC. "QIC is extremely pleased to expand our
operations in the U.S. and will continue to invest in these quality
assets. We welcome the Forest City
operational staff onto our team and are highly confident that we
will be able to replicate our strong Australian operating model
here in the U.S."
The six malls expected to transact by the end of the year are:
The Shops at Northfield Stapleton in Denver, CO, Westchester's Ridge
Hill in Yonkers, NY, The
Shops at Wiregrass in Tampa, FL,
Mall at Robinson in Pittsburgh, PA, Antelope Valley Mall in
Palmdale, CA, and South Bay
Galleria in Redondo Beach, CA. The
remaining four malls, which are expected to transact as
Forest City secures replacement
assets, are: Victoria Gardens in Rancho
Cucamonga, CA, Galleria at Sunset in Henderson, NV, Promenade Temecula in
Temecula, CA, and Short Pump Town
Centre in Richmond, VA. One
additional mall, Charleston Town Center in Charleston, WV, was originally part of the
negotiations, but QIC subsequently made the decision not to acquire
Forest City's ownership
interest.
As part of the transaction, Forest
City is also transferring its retail operating platform,
including most personnel, to QIC. To date, functions including
leasing, marketing, tenant coordination, legal and human resources
have transitioned to QIC. Accounting, property management and
remaining functions will transfer to QIC as additional closings are
achieved.
Forest City and QIC began a
joint venture relationship for a portfolio of Forest City's regional malls in 2013. With the
anticipated dispositions of the regional malls to QIC and the
company's New York specialty
retail centers to Madison International, Forest City will have exited from
substantially all of the shopping center-based retail in its
portfolio.
About Forest City
Forest City Realty Trust, Inc. is a NYSE-listed national real
estate company with $8.2 billion in
consolidated assets. The Company is principally engaged in the
ownership, development, management and acquisition of commercial
and residential real estate throughout the United States. For
more information, visit www.forestcity.net.
About QIC
QIC is a global diversified
alternative investment firm offering infrastructure, real estate,
private equity, liquid strategies and multi-asset investments. It
is one of the largest institutional investment managers in
Australia, with A$82.0 billion (US$62.9/£48.4 billion), [1] in funds
under management, offering infrastructure, real estate, private
equity, liquid strategies and multi-asset investment services. QIC
has over 700 employees and serves more than 110 clients including
governments, pension plans, sovereign wealth funds and insurers,
spanning Australia, Europe, Asia,
Middle East and the US.
Headquartered in Brisbane,
Australia, QIC also has offices in New York, San
Francisco, Los Angeles,
London, Sydney, and Melbourne. For more information, please visit:
www.qic.com.
Safe Harbor Language
Statements made in this news
release that state Forest City's
or its 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
uncertain outcome, impact, effects and results of the Board's
review of operating, strategic, financial and structural
alternatives, the company's ability to carry out future
transactions and strategic investments, as well as the acquisition
related costs, unanticipated difficulties realizing expected
benefits expected when entering into a transaction, the company's
ability to qualify or to remain qualified as a REIT, its ability to
satisfy REIT distribution requirements, the impact of issuing
equity, debt or both, and selling assets to satisfy its future
distributions required as a REIT or to fund capital expenditures,
future growth and expansion initiatives, the impact of the amount
and timing of any future distributions, the impact from complying
with REIT qualification requirements limiting its flexibility or
causing it to forego otherwise attractive opportunities beyond
rental real estate operations, the impact of complying with the
REIT requirements related to hedging, its lack of experience
operating as a REIT, legislative, administrative, regulatory or
other actions affecting REITs, including positions taken by the
Internal Revenue Service, the possibility that the company's Board
of Directors will unilaterally revoke its REIT election, the
possibility that the anticipated benefits of qualifying as a REIT
will not be realized, or will not be realized within the expected
time period, the impact of current lending and capital market
conditions on its liquidity, its ability to finance or refinance
projects or repay its debt, the impact of the slow economic
recovery on the ownership, development and management of its
commercial real estate portfolio, general real estate investment
and development risks, litigation risks, vacancies in its
properties, risks associated with developing and managing
properties in partnership with others, competition, its ability to
renew leases or re-lease spaces as leases expire, illiquidity of
real estate investments, its ability to identify and transact on
chosen strategic alternatives for a portion of its retail
portfolio, bankruptcy or defaults of tenants, anchor store
consolidations or closings, the impact of terrorist acts and other
armed conflicts, its substantial debt leverage and the ability to
obtain and service debt, the impact of restrictions imposed by the
company's revolving credit facility, term loan and senior debt,
exposure to hedging agreements, the level and volatility of
interest rates, the continued availability of tax-exempt government
financing, its ability to receive payment on the notes receivable
issued by Onexim in connection with their purchase of our interests
in the Barclays Center and the Nets, the impact of credit rating
downgrades, effects of uninsured or underinsured losses, effects of
a downgrade or failure of its insurance carriers, environmental
liabilities, competing interests of its directors and executive
officers, the ability to recruit and retain key personnel, risks
associated with the sale of tax credits, downturns in the housing
market, the ability to maintain effective internal controls,
compliance with governmental regulations, increased legislative and
regulatory scrutiny of the financial services industry, changes in
federal, state or local tax laws and international trade
agreements, volatility in the market price of its publicly traded
securities, inflation risks, cybersecurity risks, cyber incidents,
shareholder activism efforts, conflicts of interest, risks related
to its organizational structure including operating through its
Operating Partnership and its UPREIT structure, 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.
[1] As at 30 June 2017
On the
Web:
www.forestcity.net
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SOURCE Forest City Realty Trust, Inc.