Forest City Closes $167M Financing for Build

BROOKLYN, NY-Locally based Forest City Ratner Cos., the company behind the proposed $4-billion Atlantic Yards Project here, has closed on $167 million in construction financing for 80 DeKalb Ave., a 335,000-sf residential building in Downtown Brooklyn. The 34-story building is the first residential tower constructed by Forest City in Brooklyn.

The building is designed to achieve LEED certification and will include 73 affordable and 292 market-rate rental units, making it the first 80/20 development in Brooklyn financed with bonds issued by the New York State Housing Finance Agency. The New York State Housing Finance Agency selected 80 DeKalb to receive $109.5 million in tax-exempt bonds and $27.5 million in taxable bonds, as GlobeSt.com recently reported.

Charles Ratner, Forest City president and CEO says in a prepared statement that the “will provide both affordable and market-rate apartment homes.” Major construction on the building began in July and it is expected to open for leasing during the summer of 2009. FCRC sources did not respond to further queries by deadline.

The lending institutions involved in the transaction were Wachovia Bank NA, and Helaba–both co-agents providing the credit enhancement to the $137 million in bonds issued by HFA–as well as the National Electrical Benefit Fund, which provided a $10-million mezzanine loan and $20 million of credit enhancement.

FCRC has other loans with upcoming maturities. Of total 2008 maturities of $903 million at the company’s pro-rata share of $842 million at full consolidation, more than 90% have been addressed to date through closed loans, scheduled amortization, committed refinancings or available extensions. In other 2008 financings, the company has also secured to date more than $1.3 billion at the company’s share–$1.1 billion at full consolidation–in closed or committed loans for financings related to its development and acquisition pipeline in addition to early financings of future loan maturities on existing properties.

In 2009, of the $690 million in scheduled maturities at the company’s share–$482 million at full consolidation–approximately 60% have been addressed to date, either through closed loans, scheduled amortization or available extensions. “We continue to manage our maturities effectively, recycling capital from our portfolio where prudent to apply to other strategic uses,” Ratner says in a prepared statement. “Financing continues to be available for well-conceived and well-sponsored projects and properties in solid markets with good demographics, both in our portfolio and in our development pipeline.”