Forest City Announces Creation of Partnership For Financing and Development of 3,000-Acre, Houston-Area Planned Community

CLEVELAND, April 1 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. (NYSE: FCE.A and FCE.B) today announced the creation of a partnership with Johnson Development to provide capital for the financing and development of Woodforest, an active, 3,000-acre master planned community in suburban Houston, Texas.

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A subsidiary of Forest City invested a total of approximately $7 million to help secure the extension of an existing development financing facility with a local Houston bank, and to acquire an existing mezzanine loan at a discount from a prior lender that has exited the market.  The development financing facility will remain in place to fund future development of lots in Woodforest.  Forest City will have a majority combined ownership interest in the venture.  

"This partnership enables us to acquire debt at a very significant discount and participate over the long term in a great project in one of the strongest single-family home markets in the United States," said Charles A. Ratner, Forest City president and chief executive officer.  "This is an excellent example of our strategy of capitalizing on opportunities created by market conditions.  It also expands our presence in the Texas market, where fundamentals in the single-family home market have held relatively steady and the longer-term outlook remains very positive."

Woodforest is located in southern Montgomery County, north of Houston.  The project is zoned for approximately 5,700 units.  Five home builders are currently active in the project and have model homes in place.  The project is being developed around the 27-hole Woodforest Golf Club that opened in 2001 and has been rated one of the top courses in the state.  

About Forest City

Forest City Enterprises, Inc. is a $11.9 billion NYSE-listed national real estate company. 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 www.forestcity.net.

Safe Harbor Language

Statements made in this news release that state the Company's or 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 our liquidity, ability to finance or refinance projects and repay our debt, the impact of the current economic environment on our ownership, development and management of our real estate portfolio, general real estate investment and development risks, liquidity risks we could face if we do not close the transaction with Onexim Group to create a strategic partnership for our Brooklyn Atlantic Yards project, vacancies in our 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, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our 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 our 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.