Subsidiaries of Forest City will retain 51% of the seven buildings and serve as asset and property manager for the JV. Six buildings will be involve din the first-stage closing worth $610 million with the $58-million seventh building close coming in Q2 of 2010. The buildings are part of the larger University Park complex and are currently 100% leased.
Forest City tells Globest.com that the main driver was to create liquidity, which has been part of its strategy outlined in 2008. However, market conditions were not amenable for this until recently. Charles A. Ratner, president and CEO of Forest City, says in a statement, "It also positions us with a strong capital partner who can help us grow our life science business."
The University Park complex is a sprawling 27-acre, mixed-use campus adjacent to the Massachusetts Institute of Technology campus here. The campus covers 2.3 million square feet, which is comprised of, including the life science buildings, a 210-room hotel, 674 residential units, a grocery store, restaurants and retail. Although seven buildings are involved in the JV, a total of 10 are part of the campus.
The secured buildings are Jackson Building at 26 Landsdowne which totals, 99,000 square feet; 35 Landsdowne at 202,000 square feet; 40 Landsdowne at 215,000 square feet; the 122,000-square-foot 65/80 Landsdowne; the 145,000-square-foot 88 Sidney St.; and the MIT Millennium Building, 45/75 Sidney St. which comes to 277,000 square feet. The seventh building is the Richards Building, 64 Sidney St., which is 126,000 square feet.
Since demand for space in this area is traditionally high, Health Care REIT believes the assets in question will create "above average NOI growth," says Health Care REIT's CEO George L. Chapman. UBS Investment Bank and Eastdil Secured LLC were financial advisors and Goulston & Storrs were legal advisor to Forest City for this transaction.
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