Forest City Profit Slips

CLEVELAND-Forest City Enterprises earned $12.9 million, or 13 cents per share, compared with $37.3 million, or 37 cents per share in the third quarter of 2004. Sales rose to $291.2 million compared with $250.3 million for the comparable period in 2004.

Net earnings were down for both the third quarter and for the year to date “primarily due to the timing of dispositions of operating properties,” the company said. Charles Ratner, president and CEO of Forest City Enterprises, said that the third-quarter results were in line with expectations and that, “Despite timing issues that have affected the comparison of our year-to-date numbers, we believe these results will be more than offset by a strong performance in the fourth quarter.”

Forest City, known in the retail world as a developer and operator of shopping centers throughout the country, also owns, develops and manages other types of commercial and residential properties throughout the US. The company said in its third-quarter financial report that it has completed all projects that it said it would complete this year and that it is on track with future developments.

In Forest City’s retail properties, occupancies edged up to 93.3% compared with 92.3% last year. In October it opened the $149 million Simi Valley Town Center in Simi Valley, CA.

The 660,000-sf Simi Valley center features anchor tenants Macy’s and Robinsons-May, with more than 110 premier specialty shops including Anthropologie, Abercrombie & Fitch, Coach, Ann Taylor Loft and Urban Outfitters, and six restaurants including California Pizza Kitchen and Dakota’s Great Steakhouse. The development is 90% leased and “traffic is strong,” Forest City says.

In the Chicago suburb of Bolingbrook, IKEA opened a new 310,000-sf store that is the first phase of Forest City’s adjacent 698,000-sf, $109.3 million Bolingbrook Town Center. The project is an open-air regional lifestyle center that will feature Macy’s and Bass Pro Shops Outdoor World when it is completed in 2007.

In Denver, the company’s Northfield at Stapleton property opened a Super Target and a Circuit City as the first anchors at the 1.1-million-sf lifestyle retail center. Nearby, a 186,000-sf Bass Pro Shops also opened in November.

Forest City’s development pipeline at the end of the third quarter included three retail developments among 13 projects of various property types under construction, with seven of those scheduled to open in 2006. The retail projects include the one-million-sf San Francisco Centre-Emporium in downtown San Francisco.

Retail also will be part of the Village at Gulfstream Park, a 55-acre mixed-use project in Hallandale, FL for which the company entered a joint venture partnership agreement in October with Magna Entertainment Corp. The planned first phase includes a lifestyle shopping center along with, residential, hotel and entertainment elements.