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Forest City Sells 49% Stake in New York Retail Portfolio for $172.3M

Madison International Realty Completes Equity Investment
April 4, 2011
Madison International Realty has purchased a 49-percent partial interest stake in the New York retail and entertainment portfolio belonging to Forest City Enterprises, Inc. (NYSE: FCE-A) for $172.3 million.

Subsidiaries of Forest City, an $11.8 billion real estate company based in Cleveland, will continue to handle asset management, property management and leasing. NY-based Madison will acquire 49-percent interest in the portfolio in exchange for its all-cash investment.

The shopping centers, movie theaters and entertainment venues across New York City, Long Island and Northern New Jersey are valued at $851.5 million at time of sale, and carry $499.9 million in debt. This valuation implies a 6.9% capitalization rate based on 2010 net operating income of the centers. The buyer believes these assets could yield above-average NOI in these under-retailed markets.

The properties involved in the transaction include:
  • The 42nd Street Retail and Entertainment Complex, totaling 306,000 square feet in Manhattan.

  • Harlem Center, totaling 126,000 square feet in Manhattan.

  • Atlantic Center, totaling 393,713 square feet in Brooklyn.

  • Atlantic Terminal, with a retail component totaling 373,000 square feet in Brooklyn.

  • The Heights, totaling 102,177 square feet in Brooklyn.

  • Queens Place, totaling 455,000 square feet in Queens.

  • Steinway Street Theatres and Shops, totaling 84,000 square feet in Queens.

  • Shops at Northern Boulevard, totaling 218,059 square feet in Queens.

  • Shops at Bruckner Boulevard, totaling 113,485 square feet in the Bronx.

  • Castle Center, totaling 63,000 square feet in the Bronx.

  • Shops at Gun Hill Road, totaling 147,000 square feet in the Bronx.

  • Shops at Richmond Avenue, totaling 76,000 square feet on Staten Island.

  • Forest Avenue Cinemas, totaling 70,000 square feet on Staten Island.

  • Columbia Park, a two-building retail center with more than 255,000 square feet in North Bergen, NJ.

Please see CoStar COMPS #2080008 for additional information on this transaction.
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