NEW YORK — Madison International Realty is buying 51% interest in 12 retail properties in the NYC area for $1.0 billion from Cleveland-based Forest City Realty Trust.
Madison already owns a 49% stake in the properties which include: Atlantic Center in Brooklyn (pictured above), a retail strip on 42nd St. near Times Square in Manhattan; Harlem Square and Brooklyn Commons. The 12 prime retail properties total 2.1 million square feet in Manhattan, Brooklyn, Queens, the Bronx, Staten Island and Northern New Jersey (collectively the “NYC Portfolio”).
The acquisition of the 95% leased NYC Portfolio represents an opportunity for Madison to become one of the largest retail landlords in New York City with a portfolio that has exhibited prolonged stability due to the dense demographic composition of its location and proximity to extraordinary demand drivers such as Barclays Center. Madison believes that brick and mortar stores located in high density growth areas in major markets will continue to thrive despite the problems in retail nationwide.
“This transaction is strategic for both Madison and Forest City, and fits well with our investment strategy of executing large scale equity investments to create ‘win/win’ outcomes for our partners and investors. The retail centers in the NYCPortfolio are in densely-populated, well-trafficked areas that offer significant opportunity for continued value creation,” said Ronald Dickerman, President and Founder of Madison. Dickerman continues, “We are pleased to have assisted our partner, Forest City, in accomplishing this important milestone.”
Madison will engage Cushman & Wakefield as the third-party property management and leasing team for the NYCPortfolio. Madison is considering the potential redevelopment of Atlantic Terminal Mall and Atlantic Center, two properties located directly across Atlantic Avenue from the Barclays Center Arena and on top of New York City’s third largest transportation hub – Atlantic Terminal.
The final transaction closing is expected to be completed in the fourth quarter of 2017.