Forest City Closes $300M in Financings, Including $150M on Two NY Properties

Forest City Enterprises Inc. closed more than $300 million in property-level financings in the quarter ending January 31, 2012, including $150 million on Queens Place and Nine MetroTech, in Brooklyn.

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"These completed loans illustrate two important opportunities in the current lending environment that benefit Forest City," said David J. LaRue, president and chief executive officer. "First, we're able to lock-in attractive, long-term rates that reduce interest expense and thereby improve cash flow at the property level. Second, we are able to selectively pay down loans in exchange for even more favorable rates, giving us an attractive return on the incremental capital invested and advancing our strategy of improving our balance sheet and overall debt metrics."

The financings include:

—Queens Place, New York City. The company closed a 10-year, $87 million loan on this 455,000-sq.-ft., five-level retail center in the heart of the Borough of Queens.

—Nine MetroTech, New York City. The company purchased the existing $75 million loan at a 2.5 percent discount and then closed a new 10-year, $63 million loan. Nine MetroTech is a 317,000-sq.-ft. office building in the MetroTech Center office campus in downtown Brooklyn.

—The Drake Tower, Philadelphia. The company closed a $28 million, 10-year loan. The Drake Tower, formerly a luxury hotel, has 284 apartments and luxury penthouses in center-city Philadelphia.

—The Mall at Robinson, Pittsburgh. Forest City secured a $79 million, six-year financing on this 880,000-sq.-ft. two-level, enclosed regional retail center.

—Post Office Plaza (formerly the M.K. Ferguson Building), Cleveland. The company closed a $15.5 million, 10-year loan on this 476,000-sq.-ft. adaptive-reuse office building at the company's Tower City Center development in downtown Cleveland.

In total through these and other transactions in the fourth quarter, the Company refinanced $303.5 million in mortgage debt and reduced the weighted average interest rate on the in-place financings from 6.32 percent to 4.44 percent. The company's pro-rata share of the debt decreased from $245.5 million to $239.1 million, and the weighted average interest rate decreased from 6.46 percent to 4.42 percent at pro rata.


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