CLEVELAND and BROOKLYN, New York, Aug. 20 /PRNewswire-FirstCall/ -- Forest City Enterprises, Inc. announced today that it's New York-based subsidiary, Forest City Ratner Companies, has closed on $167 million in construction financing for 80 DeKalb, a 335,000-square-foot residential building on DeKalb Avenue in downtown Brooklyn.
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The 34-story, Costas Kondylis-designed building is the first residential tower constructed by Forest City in Brooklyn. It is designed to achieve LEED certification and will include 73 affordable and 292 market-rate rental units, making it the first 80/20 development in Brooklyn financed with bonds issued by the New York State Housing Finance Agency.
"This is an exciting project," said Charles A. Ratner, Forest City president and chief executive officer. "It is a magnificent building at a great location that will provide both affordable and market-rate apartment homes. It's also a tribute to our New York team and the relationships they have built in both the public-sector and private-sector financing community."
The New York State Housing Finance Agency selected 80 DeKalb to receive $109.5 million in tax-exempt bonds and $27.5 million in taxable bonds. The lending institutions involved in the transaction were Wachovia Bank, N.A., and Helaba (both co-agents providing the credit enhancement to the $137 million in bonds issued by HFA), as well as the National Electrical Benefit Fund, which provided a $10 million mezzanine loan and $20 million of credit enhancement.
Major construction on the building began in July and it is expected to open for leasing during the summer of 2009.
Update on 2008 and 2009 maturities
Along with the announcement of the 80 DeKalb financing, the Company also provided an update on the status of upcoming loan maturities due in both 2008 and 2009.
Of total 2008 maturities of $903 million at the Company's pro-rata share ($842 million at full consolidation) reported on January 31, 2008, more than 90 percent have been addressed to date through closed loans, scheduled amortization, committed refinancings or available extensions. In other 2008 financings, the Company has also secured to date more than $1.3 billion at the Company's share ($1.1 billion at full consolidation) in closed or committed loans for financings related to its development and acquisition pipeline in addition to early financings of future loan maturities on existing properties.
Looking ahead to 2009, of the $690 million in scheduled maturities at the Company's share ($482 million at full consolidation) reported on January 31, 2008, approximately 60 percent have been addressed to date, either through closed loans, scheduled amortization or available extensions
"We continue to manage our maturities effectively, recycling capital from our portfolio where prudent to apply to other strategic uses," Ratner said. "We also continue to achieve success in accessing non-recourse financing to fund development and strategic acquisitions based on our track record and long-term relationships with lenders. Financing continues to be available for well-conceived and well-sponsored projects and properties in solid markets with good demographics, both in our portfolio and in our development pipeline."
About Forest City
Forest City Enterprises, Inc., is a $10.5 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.
Safe Harbor Language
Statements made in this news release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The Company's actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, general real estate development and investment risks including lack of satisfactory financing, construction and lease-up delays and cost overruns, dependence on rental income from real property, reliance on major tenants, the effect of economic and market conditions on a nationwide basis as well as in our primary markets, vacancies in our properties, downturns in the housing market, competition, illiquidity of real estate investments, bankruptcy or defaults of tenants, department store consolidations, international activities, the impact of terrorist acts, risks associated with an investment in and operation of a professional sports team, conflicts of interests, our substantial debt leverage and the ability to obtain and service debt, the impact of restrictions imposed by our credit facility, the level and volatility of interest rates, the continued availability of tax-exempt government financing, effects of uninsured or underinsured losses, environmental liabilities, risks associated with developing and managing properties in partnership with others, the ability to maintain effective internal controls, compliance with governmental regulations, changes in market conditions, litigation risks, and other risk factors as disclosed from time to time in the Company's SEC filings, including but not limited to, the Company's annual and quarterly reports.
