CLEVELAND, May 4, 2015 /PRNewswire/ -- Forest
City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced that
it has entered into a share purchase and redemption agreement with
Health Care REIT, Inc. (NYSE: HCN) to acquire Health Care REIT's 49
percent equity interest in seven life-science office properties and
two parking facilities at University Park at MIT, a mixed-use life-science office campus
developed by Forest City, in Cambridge,
Massachusetts. The two companies entered into a 51/49 equity
joint venture for the properties in early 2010.
The redemption price is $573.5
million, less Health Care REIT's 49 percent of the
outstanding debt on the properties. At closing, which is
expected to occur no later than September
30, 2015, the net redemption price, net of debt and other
closing adjustments, is anticipated to be approximately
$400 million. The estimated cash on
cost yield of this investment is approximately 5.25 percent, based
on forward 12-month net operating income, adjusted for the
stabilization of 88 Sidney Street, one of the seven office
buildings.
"University Park is one of our most valuable and productive
urban, mixed-use projects, and our five-year partnership with
Health Care REIT has been productive and mutually beneficial," said
David J. LaRue, Forest City
president and chief executive officer. "Acquiring full equity
ownership of these assets not only gives us greater control and
flexibility, but also enhances our ability to create shareholder
value. The transaction aligns with our strategy of concentrating
our investments in high-quality assets in key urban markets,
reduces the number of operating assets we own through joint
ventures, and both strengthens and simplifies our portfolio."
University Park is a 27-acre, mixed-use campus developed by
Forest City immediately adjacent to the Massachusetts Institute of Technology in
Cambridge. The project includes
ten life-science office buildings (including one under
construction) totaling more than 1.7 million square feet, as well
as 530 apartment units in four multifamily properties. Park
amenities include a landscaped commons, a 210-room hotel, a grocery
store, restaurants and neighborhood retail. MIT is the ground lessor for the entire University
Park project.
The acquisition is subject to several closing conditions. The
company has paid a significant, non-refundable cash deposit, which
would be forfeited in the event the company fails to complete the
acquisition, other than due to the failure of certain closing
conditions to be met.
The seven buildings included in this transaction are 26
Landsdowne Street, 64 Sidney Street, 35 Landsdowne Street, 40
Landsdowne Street, 45/75 Sidney Street, 65/80 Landsdowne Street,
and 88 Sidney Street.
Corporate Description
Forest City Enterprises, Inc. is an NYSE-listed national real
estate company with $8.8 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 failure to obtain the
necessary financing to complete the acquisition, failure to obtain
certain approvals required, failure to meet any of our other
closing conditions and failure to achieve anticipated benefits of
the transaction, as well as other risks described in the Company's
quarterly report on Form 10-Q for the period ended March 31, 2015.
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SOURCE Forest City Enterprises, Inc.