CLEVELAND—Forest City Realty Trust, Inc. reached an important milestone today in its exit from shopping center retail. The Cleveland-based firm completed the sale of its interest in Westchester's Ridge Hill, a 1.2 million-square-foot, open-air regional lifestyle center in Yonkers, NY; The Shops at Wiregrass, a 748,000-square-foot outdoor lifestyle village in Wesley Chapel, FL; and Bass Pro Shops Outdoor World at Victoria Gardens in Rancho Cucamonga, CA.
The sale of the two lifestyle centers were the fifth and sixth of Forest City's previously announced 10-mall portfolio transaction with QIC. The gross selling price for the first group of properties – six regional malls, plus the bass pro shop – was $1.243 billion. Forest City's share was $667.5 million and includes assumption by QIC of Forest City's share of debt on the assets of $335 million.
“The dispositions of our regional malls to QIC, and our specialty retail centers to Madison International Realty,” says David J. LaRue, Forest City president and chief executive officer, “are central to Forest City's strategic transformation as a focused, urban placemaker with a strong balance sheet and an exceptional portfolio of multifamily, office and mixed-use assets in great markets.”
Forest City and QIC teamed up in 2013. That multibillion dollar deal was the first US direct investment for the Australian institutional investment manager and part of a long-term investment strategy.
Forest City expects to transfer the remaining four malls in the portfolio to QIC under a fixed-price option and to close once it secures replacement assets or other opportunities into which it will redeploy its ownership stake in those malls. Gross option pricing on these assets is $1.932 billion, or $881.2 million, at Forest City's share, and includes assumption by QIC of Forest City's share of the debt on the four assets of $321 million.
QIC has assumed management of all 10 of the malls, including the phase two assets. And Forest City have already transferred its associates in management and leasing, tenant coordination and property operations as well as associates in human resources, accounting and information technology, to QIC.
The final four malls in the portfolio 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.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
