Forest City, Madison International Join Forces

As the $851.5 million partnership was struck, the company had another announcement: president & chief operating officer Joanne Minieri will resign her position to form her own consulting firm. However, she will not entirely separate from her longtime employer, but rather take on the role of consultant on major Forest City projects.

March 30, 2011
By Barbra Murray, Contributing Editor

Courtesy Flickr Creative Commons user mindluge

Forest City Enterprises Inc. and Madison International Realty L.L.C. have partnered on a new endeavor. The companies just established and completed joint ventures for ownership of 15 Forest City-owned urban retail centers in metropolitan New York City. The arrangement values the assets at $851.5 million.

The collection of high-quality properties, all located in solid markets, includes the 42nd Street Retail and Entertainment Complex and the retail component of Harlem Center in Manhattan. Atlantic Center, the Atlantic Terminal retail component and The Heights in Brooklyn are part of the group, as are Queens Place, Steinway Street Theatres and Shops at Northern Boulevard in Queens. The portfolio also encompasses the Bronx’s Shops at Bruckner Boulevard, Castle Center and Shops at Gun Hill Road; Staten Island’s Shops at Richmond Avenue and Forest Avenue Cinemas; and Columbia Park in North Bergen, N.J.

The price tag attached to the Forest City retail centers involved in the deal includes $499.9 million of debt and Madison’s cash contribution of $172.3 million. As per the agreement, Madison gets a 49 percent interest in the joint ventures, leaving Forest City with a 51 percent stake. Additionally, Forest City will function as asset and property manager, as well as manager for the joint venture’s leasing activities.

Forest City’s new partnerships with Madison dovetails with the company’s stated goals for 2011. In a press release on the company’s fiscal year 2010 fourth quarter results, Charles A. Ratner, Forest City president and CEO, describes the deal as a move that continues the firm’s efforts to further strengthen balance sheets and position it for further growth.

Forest City’s announcement of the closing of the Madison joint ventures was followed by other company news. Joanne Minieri, president & chief operating officer of Forest City Enterprises, has decided to resign from her leadership position to hang up her own shingle. Minieri, who joined Forest City in 1995 and took on her most recent role in 2007, will establish her own consulting firm to advise real estate development and financial services companies. Her relationship with her longtime employer, however, is not completely over. Minieri will take on the role of consultant on major Forest City projects.