CLEVELAND, Aug. 20 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that a subsidiary closed a $46.1 million HUD-insured mortgage loan for Foundry Lofts, a 170-unit, 80/20 multifamily apartment building at The Yards, Forest City's mixed-use project in southeast Washington, D.C.
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"This financing is an important milestone for The Yards for several reasons," said Charles A. Ratner, Forest City president and chief executive officer. "It is the beginning of active construction on our first building at The Yards. It also demonstrates the strength of the public/private partnership that has persevered through difficult financial and economic conditions. Most important, we believe it marks the start of a new period of economic revitalization and opportunity for this neighborhood and all of southeast D.C."
"Foundry Lofts is also significant for us as a company," Ratner added. "With the exception of the Barclays Center arena in Brooklyn, this is the first new construction we have started in two years. Throughout the recession and into the current recovery, we've consistently stated that we would only start a project when there was a combination of market demand and available financing. The D.C. market has held up very well during the downturn, giving us confidence in the market. The innovative financing behind this project provided the other necessary piece. The project also highlights the significant entitlements we hold in quality markets that enable us to move forward on projects as markets and financing allow."
The 41-year financing, at a 4.66 percent interest rate (before mortgage insurance), was completed through a risk-sharing program between the District of Columbia Housing Finance Agency and the U.S. Department of Housing and Urban Development, and was funded by a total of $47.7 million of New Issue Bond Program (NIBP) bonds. The NIBP program, which was implemented as part of the Housing and Economic Recovery Act of 2008, is designed to help provide market liquidity for bonds that housing finance agencies use to provide financing.
The Yards is located on 42 acres along the Anacostia River in the Capital Riverfront District adjacent to Nationals Park, the home of the Washington Nationals major-league baseball team. At full build-out, The Yards is expected to have a total of approximately 5.5 million square feet of development, including nearly 3,000 units of residential multifamily housing, 1.8 million square feet of office space and up to 400,000 square feet of retail space.
The Yards will also feature a 5.5-acre public park that will be a gathering place and recreational focus for the entire community. Forest City broke ground on the publicly funded park in May 2009. A formal grand-opening ceremony for the completed park is planned for September 7, 2010.
About Forest City
Forest City Enterprises, Inc. is an NYSE-listed national real estate company with $11.5 billion in total assets. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. For more information, visit http://www.forestcity.net/.
Safe Harbor language
Statements made in this news release that state the Company's or its management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The Company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the impact of current lending and capital market conditions on its liquidity, ability to finance or refinance projects and repay its debt, the impact of the current economic environment on its ownership, development and management of its real estate portfolio, general real estate investment and development risks, vacancies in its properties, further downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, anchor store consolidations or closings, international activities, the impact of terrorist acts, risks associated with an investment in a professional sports team, its substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by its credit facility and senior debt, exposure to hedging agreements, the level and volatility of interest rates, the continued availability of tax-exempt government financing, the impact of credit rating downgrades, effects of uninsured or underinsured losses, environmental liabilities, conflicts of interest, risks associated with the sale of tax credits, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, increased legislative and regulatory scrutiny of the financial services industry, volatility in the market price of its publicly traded securities, litigation risks, as well as other risks listed from time to time in the Company's SEC filings, including but not limited to, the Company's annual and quarterly reports.
SOURCE Forest City Enterprises, Inc.
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