FCRC Markets Big Stake in Atlantic Yards

NEW YORK CITY-Forest City Ratner Cos. has hired CBRE to market a stake of up to 80% in its $5-billion Atlantic Yards mixed-use development in Downtown Brooklyn, an industry source confirms. Real Estate Alert first reported earlier this week that the Brooklyn-based unit of Forest City Enterprises had tapped the investment sales team of Darcy Stacom and William Shanahan, both vice chairmen at CBRE.

In an interview with the New York Times on Thursday, FCRC CEO MaryAnne Gilmartin said proceeds from the sale would help the company move forward on development of some long-delayed components of the project. “The money will be invested in the Atlantic Yards project,” Gilmartin told the Times. “We'll retain our position as the managing member. It's exciting; it raises the possibility that we'll be able to accelerate vertical development there.”

First conceived in 2003 and delayed by both eminent-domain lawsuits and the recession, Atlantic Yards currently consists of the Barclays Center arena, which opened last September, and a 32-story apartment building now under construction, which will be the world's tallest modular residential tower when completed. Eventually it will encompass 14 multifamily towers with 6,000 apartment units.

Paul Adornato, an analyst at BMO Capital Markets, told the Times that the possible sale of an Atlantic Yards stake was “consistent” with FCRC's modus operandi. “They'll take all the risk at the early stage of a project,” Adoranto was quoted as saying. “Once they create value, they look to monetize that by bringing in investors. The layup will be to build the rest of the Yards as the market allows.”

In December 2009, FCRC sold an 80% stake in the Nets basketball franchise, which is based at Barclays Center, and a 45% share of the arena itself, to Mikhail Prokhorov's Onexim Group for $223 million. After work on the modular tower began, FCRC took on a partner, the Arizona State Retirement System.