CLEVELAND, Sept. 11, 2013 /PRNewswire/ -- Forest City Enterprises, Inc., (NYSE: FCEA and FCEB) today announced the completion and partial closing of its previously announced joint ventures with QIC, one of the largest institutional investment managers in Australia, to recapitalize and invest in a portfolio of eight of Forest City's regional retail malls. Seven of the individual joint ventures closed on September 10 and the eighth is expected to close by the end of September.
The overall transaction values the portfolio at a total of $2.05 billion, representing a cap rate of approximately 5.75 percent on forecasted 2013 net operating income. Forest City expects to generate total liquidity of approximately $350 million, after transaction costs. Sales at the eight malls currently average approximately $500 per square foot, on a rolling 12-month basis.
"This strategic capital partnership with QIC is our largest such initiative to date, and an exciting opportunity to work with an experienced global investor to enhance these already strong retail centers," said David J. LaRue, Forest City president and chief executive officer. "We look forward to building a mutually beneficial, long-term relationship that creates value for both of our organizations."
Forest City plans to use a majority of the liquidity from the transaction to reduce debt, but also expects to use a portion to fund expansion, renovation and other reinvestment initiatives at a number of the malls.
The eight properties being joint ventured are Victoria Gardens in Rancho Cucamonga, California, Charleston Town Center in Charleston, West Virginia, Mall at Robinson near Pittsburgh, Pennsylvania, Promenade in Temecula, California, Galleria at Sunset in Henderson, Nevada, Antelope Valley Mall in Palmdale, California, Short Pump Town Center in Richmond, Virginia, and South Bay Galleria in Redondo Beach, California.
About Forest City Forest City Enterprises, Inc. is an NYSE-listed national real estate company with $10.7 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 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, the strategic decision to reposition or divest portions of the company's land business, 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, 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, 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.