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Forest City Invests $7M in Master-Planned Community

HOUSTON-A subsidiary of Forest City Enterprises Inc. has invested $7 million in Woodforest, a 3,000-acre master-planned community developed by Johnson Development Corp.

By Jennifer Duell Popovec | Updated on April 01, 2010

HOUSTON-A subsidiary of Forest City Enterprises Inc. has invested $7 million in Woodforest, a 3,000-acre master-planned community developed by Johnson Development Corp. The Cleveland, Ohio-based company’s investment helped to secure the extension of an existing construction loan with a local bank and to acquire an existing mezzanine loan.

As result, the company now owns a 54 percent share of the project, according to Jeff Linton, head of corporate communications for Forest City. “This is a different role for us,” he tells GlobeSt. “We are clearly holding debt on the project and in a technical sense we are providing financing, but this newly created partnership will also provide an opportunity for us to use our planned community expertise.”

Forest City acquired the mezzanine loan at a discount from a lender that needed to liquidate its real estate loan portfolio, Litton says. He declined to the name the lender, but noted that Forest City has previously pursued distressed debt opportunities.

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