Shareholders Okay Forest City REIT Plan

CLEVELAND—Forest City Enterprises said Tuesday afternoon that its shareholders approved all of the proposals related to the company's planned REIT conversion. Upon completion of the conversion, effective this coming Jan. 1, Forest City Realty Trust will continue to trade on the New York Stock Exchange under the symbols FCEA and FCEB.

Company chairman Charles A. Ratner calls the vote at a special meeting of shareholders “an important moment in Forest City's history and a major milestone in our ongoing transformation. In more than 90 years since our founding, including 55 years as a publicly traded company, Forest City has constantly evolved and reinvented itself.” Tuesday's shareholder vote, he adds, “marks another exciting chapter in that story.”

When the REIT conversion plan was announced this past January, David LaRue, the Cleveland-based company's president and CEO, said that implementing the company's strategic plan over the past three years had “substantially transformed Forest City” from being primarily a developer to having “a balanced focus on owning, operating and developing high-quality properties in core urban markets. During that time, we have significantly improved our balance sheet, focused our portfolio through non-core asset sales, reduced development exposure, raised cost-effective capital through financial partnerships and simplified our business.”

LaRue called Forest City's operating portfolio “undervalued” while being “well positioned to benefit from strong growth in the key urban markets where we are focused.” Citing a pipeline of additional opportunities in those markets, he said the company would continue leveraging its core competencies while reshaping the business, improving its balance sheet and preparing for a REIT conversion.

More recently, Forest City unveiled a new organizational structure intended to better align with its strategies and signature strength in urban, mixed-use real estate, while also increasing efficiency and improving operating margins. Announced last month, the new structure eliminates Forest City's current strategic business units, organized primarily around asset type—retail, office and apartments. In their place will be an organization built around function, i.e. operations, development and support services.