CLEVELAND, OH - Forest City Enterprises, Inc., announced the creation of a joint venture with Bernstein Management Corporation for ownership of three residential multifamily properties, totaling 1,340 rental units, in the Washington, D.C. metropolitan area. Forest City expects to realize proceeds of approximately $34 million from the creation of the joint venture. The transaction equates to a cap rate of 6.5 percent based on 2009 net operating income for the properties.
The three properties – the 549-unit Grand in North Bethesda, Md. the 385-unit Lenox Club in Arlington, Va., and the 406-unit Lenox Park in Silver Springs, Md. – are part of Forest City's portfolio of residential multifamily properties. Each company's joint venture entity will own 50 percent of Forest City's prior stake in the properties. Existing minority partners in the three properties are unaffected by the joint venture transaction. Forest City, through its Residential Management business unit, will continue to lease and manage the three properties on behalf of the joint venture.
"The creation of this joint venture is an important step in our strategy of capturing value and generating liquidity from within our portfolio," said Charles A. Ratner, Forest City president and chief executive officer. "The continuing strength of the multifamily rental market in the Washington, D.C. area, and the quality of these assets, together with early signs of an economic recovery, made this the right time to bring this venture to fruition. We're proud to partner with Bernstein on these fine properties."
Bernstein Management Corporation is a private company principally engaged in the acquisition, management and development of commercial and residential properties in the Washington, D.C. metropolitan area.
Forest City Enterprises, Inc., is an $11.9 billion NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States.
Source: Forest City Enterprises