In a news release on Wednesday, April 4, Cleveland-based Forest City announced it had concluded the sales to QIC of its stake in Westchester’s Ridge Hill, a 1.2 million-square-foot, open-air regional lifestyle center in Yonkers, N.Y.; The Shops at Wiregrass, a 748,000-square-foot outdoor lifestyle village in Wesley Chapel, Fla.; and Bass Pro Shops Outdoor World at Victoria Gardens in Rancho Cucamonga, Calif.
The real estate investment trust said the gross selling price for what it called the first tranche assets — six regional malls, plus the Bass Pro Shops Outdoor World — was $1.2 billion, or $668 million at Forest City’s share. QIC also assumed Forest City’s share of $335 million in debt on the assets.
David LaRue, Forest City president and CEO, called the closing of the sale of the six retail properties to QIC a milestone.
“The dispositions of our regional malls to QIC, and our specialty retail centers to Madison International Realty, are central to Forest City’s strategic transformation as a focused, urban placemaker, with a strong balance sheet and a portfolio of multifamily, office and mixed-use assets in great markets,” he said in the release.
The remaining four malls in the portfolio are expected to be transferred to QIC under a fixed-price option and to close as Forest City secures replacement assets or other opportunities into which it will redeploy its ownership stake in those malls. Gross option pricing on the second tranche assets is $1.9 billion, or $881.2 million, at Forest City’s share, and includes assumption by QIC of Forest City’s share of $321 million in debt on the assets.
The remaining properties are Victoria Gardens in Rancho Cucamonga, Calif.; Galleria at Sunset in Henderson, Nev.; Promenade Temecula in Temecula, Calif., and Short Pump Town Centre in Richmond, Va.
QIC already manages the last four malls even though a specific date for those sales has not been set, Forest City said, and staff associated with them was also was transferred to QIC.
Forest City said 45 Cleveland-based retail managers, who work in everything from overseeing mall management, leasing, human resources and information technology, recently moved to a suite QIC has established at the Fifth Third Center office building, 600 E. Superior Ave., Cleveland. An additional 200 staffers work at malls across the country.
Forest City also has completed the move of its headquarters and about 400 associates to space in Key Tower, 127 Public Square, from its former headquarters at Terminal Tower, 50 Public Square, which it sold in 2016 to Willoughby-based K&D Group.
The sales are part of Forest City’s quest to strengthen its balance sheet, clarify its governance and simplify its business to garner a stronger stock price. Its portfolio is valued at about $8 billion. The stock was trading at $20.08 at 11:40 a.m. after closing at $20.12 on Tuesday, April 3.