Forest City completes buyout of equity partner interest in Brooklyn apartment project

CLEVELAND, Oct. 6, 2014 /PRNewswire/ -- Forest City Enterprises, Inc., (NYSE: FCEA and FCEB) today announced that it has completed the acquisition of the interest of its equity partner, the Arizona State Retirement System (ASRS), in B2 BKLYN, a 363-unit high-rise modular apartment building at Pacific Park Brooklyn. Work recently ceased on the project when the construction contractor, Skanska USA, shut down construction at the property and closed the factory being used to build the modular units. The project is now the subject of litigation between the company and Skanska.

The buyout of ASRS's equity interest to date, for which Forest City paid $40.5 million, removes B2 BKLYN from the $400 million residential development fund between ASRS and Forest City. The company also assumed ASRS share of the debt on B2.

"We felt it was prudent to make this incremental investment now, rather than cloud the future of the fund as a result of litigation related to a single property," said David J. LaRue, Forest City president and chief executive officer. "In addition, because this investment makes Forest City the 100 percent equity owner of B2, we will have greater flexibility as we drive to restart work at the building site and the modular factory, and to get the hundreds of affected men and women back to work.

"Our relationship with ASRS continues to be very strong, and both organizations remain bullish on the Brooklyn market," LaRue added. "Together, Forest City and ASRS continue to move the fund forward with additional multifamily opportunities in core markets around the country."

Forest City and ASRS recently closed on two new projects in the fund.  The first is Arris (formerly Parcel N) at The Yards in Washington, D.C.  Arris is expected to have 327 apartment units with 19,000 square feet of street-level retail, at a total cost (at 100 percent) of $142.7 million.  The second is Blossom Plaza, which is expected to have 237 apartment units above 18,500 square feet of street-level retail in Los Angeles' Chinatown neighborhood, at a total cost of $106.7 million.  Arris is expected to open in the first quarter of 2016, with Blossom Plaza expected to open in the second quarter of 2016.

2175 Market Street in San Francisco, an 88-unit apartment community in that city's vibrant Upper Market neighborhood, will be the first completed property in the fund when it opens this fall.

Forest City expects to announce additional projects in the ASRS development fund by yearend 2014.

About Forest City
Forest City Enterprises, Inc. is an NYSE-listed national real estate company with $8.6 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 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 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 commercial real estate portfolio, general real estate investment and development risks, using modular construction as a new construction methodology and investing in a facility to produce modular units, 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 of owning and operating an arena, 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, effects of a downgrade or failure of its insurance carriers, 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, changes in federal, state or local tax laws, volatility in the market price of its publicly traded securities, inflation risks, litigation risks, cybersecurity risks and cyber incidents, 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.

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SOURCE Forest City Enterprises, Inc.