Forest City Forms $668M JV

CAMBRIDGE, MA-Cleveland-based Forest City Enterprises, Inc. is forming a joint venture with Health Care REIT, Inc. revolving around seven life science buildings at University Park here. Health Care will obtain 49% interest of the seven buildings by investing $170 million in cash, after which the joint venture will assume $320 million of secured debt on the property.

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.”