NEW YORK CITY—Forest City Enterprises, the mastermind that built Barclays Center—an entertainment arena and home of the Brooklyn Nets basketball team—is putting its 55% stake in the asset up for sale, Street & Smith's Sports Business Journal reports. Investment bank Evercore Partners is repping the developer in the sale.
In a statement sent to GlobeSt.com by a Forest City spokesperson, the company says, “Our goal is to identify a strategic partner as we continue to capitalize on the great performance of Barclays Center and the promise of Nassau Coliseum. The current management team will continue in its existing role."
Still, that pace is still well below initial projections, which envisioned more than $70 million in annual operating income, notes the Wall Street Journal. Forest City says it expects operating income to continue growing as it reduces expenses associated with the launch and becomes more efficient in managing the arena.
Forest City has been shedding its holdings at Pacific Park, the large complex of which Barclays is a part, where the company also is planning 6,400 multifamily units and an office building. The company sold a 70% stake in the apartment and office development earlier this year to China's Greenland Holding Group.
The arena's top valuation is $750 million, based on its annual cash flow of more than $30 million, according to investment banking sources who spoke with the sports publication. In recent reports about Los Angeles Dodgers baseball team owner Guggenheim Partners' possible interest in joining forces with Nets owners, the arena's value had been estimated at $1.1 billion. The arena cost $1 billion to construct.
The controlling owners of the Nets own the other 45% stake in the brown, circular arena building, which was designed by SHoP Architects. It also will become home to the New York Islanders hockey team's home starting next year.
Last spring, Forest City put its 20% stake in the Nets team up for sale but hasn't found any takers. The company sold 80% of the team to Russian billionaire Mikhail Prokhorov in 2009, who also owns a 45% stake in Barclays Center, the Wall Street Journal notes.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
