NEW YORK CITY—Forest City Realty Trust Inc. has closed on the sale of what has been touted as one of the tallest modular buildings in the world for $156 million.

The Cleveland-based REIT announced on Wednesday the completion of the sale of 461 Dean St., a 363-unit, 32-story rental apartment building adjacent to the Barclays Center in Brooklyn. 461 Dean St. was 100% owned by Forest City and was not part of the joint venture with Greenland USA that is continuing the development of the Pacific Park Brooklyn (formerly Atlantic Yards) mixed-use project. Phased opening of 461 Dean St. began in the third quarter of 2016. A total of 50% of the property's units are affordable.

Forest City in a press announcement reports the buyer as “an international real estate manager.” GlobeSt.com has confirmed that the buyer is Iowa-based Principal Global Investors.

A CBRE team of Darcy Stacom, chairman; William Shanahan, chairman; and Carl Shorett, first VP, New York Capital Markets; brokered the transaction on behalf of Forest City.

The deal calculated out to a cap rate of approximately 4.5% on estimated 2018 net operating income. Forest City expects net proceeds from the sale of approximately $150 million.

“We're pleased with this transaction, which achieved attractive pricing for this recently stabilized asset, and enables the company to generate significant liquidity to further our deleveraging efforts and other strategic uses,” states David J. LaRue, Forest City president and CEO. “The economics of the sale also reflect the continued health of the Brooklyn multifamily rental market, and the continued value-creation opportunity in the market.”

In January, Greenland USA and Forest City Realty Trust reached an agreement on the restructuring of Greenland Forest City Partners, the joint venture developing Pacific Park Brooklyn. The restructuring increases Greenland USA's ownership interest in the venture from 70% to 95% going forward, and Forest City's interest from 30% to 5%. Greenland Forest City Partners also announced that design work would begin early this year on B4, the next building at Pacific Park, which is expected to break ground in 2019.

Earlier this month, Forest City put an end to speculation and announced that it was not selling the REIT after announcing last year it would consider strategic alternatives. A total of approximately 50 firms had expressed interest in Forest City.

Instant Insights /

Forest City Sells Modular High-Rise in Brooklyn for $156M

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