Forest City, Greenland Strike JV Deal for Atlantic Yards
- Oct 11, 2013
In a bid to jump-start one of the nation’s biggest development projects, Forest City Enterprises Inc.’s New York City affiliate has struck a deal with a Chinese investment company to develop the Atlantic Yards project in downtown Brooklyn, the companies announced Friday morning.
Forest City Ratner Cos. L.L.C. and Greenland Group Co. of Shanghai signed a non-binding memorandum of understanding covering the first and second phases of the 22-acre mixed-use project (pictured in artist’s rendering). Greenland would acquire a 70 percent stake in Atlantic Yards and become its co-developer. Its investment would not include the project’s initial residential tower or Barclays Center, the 19,000-seat sports and entertainment arena that is home to the National Basketball Association’s Brooklyn Nets. In addition to its development and investment role, Forest City Ratner would continue to oversee the project’s day-to-day activities.
“This partnership would allow us to deliver the 6,400 units of housing, including 2,250 units of affordable housing, to market more expeditiously, which is important for Brooklyn and the entire city,” said Forest City’s executive chairman, Bruce Ratner, in a prepared statement.
The proposed joint venture promises to further raise the American profile of one of China’s leading real estate players. Greenland Group has 70-plus projects in China to its credit and is one of that nation’s leaders in large-scale transit-oriented development. Atlantic Yards would mark the firm’s second U.S. investment. As CPE reported on July 30, Greenland Group bought a stake in Metropolis, a planned 1.7 million-square-foot project in downtown Los Angeles. Greenland will invest $1 billion in the project, which it is developing with its joint-venture partner, the California State Teachers’ Retirement System.
Friday’s announcement is the latest in a series of moves by Forest City to secure infusions of capital from an international partner. On Sept. 11, the REIT disclosed that it had wrapped a deal with QIC, an Australian institutional investment manager, to recapitalize seven regional malls and expected to close on an eighth mall by the end of September. Four of the properties are in California, and other locations include Pennsylvania, Virginia, West Virginia and Nevada. Forest City estimated last month that it would garner $350 million in proceeds from the deal after transaction costs.