Forest City Enterprises has completed the sale of Liberty Center complex in Pittsburgh to a subsidiary of Starwood Capital Group, a leading global private investment firm. Liberty Center includes the 27-story Federated Investors office tower and the 616-room Westin Convention Center Hotel.
The gross selling price was $135 million, and the transaction generated net cash proceeds, at Forest City’s share, of approximately $30 million. Prior to the transaction, the property was owned in a 50/50 partnership by Forest City and Jos. L. Muscarelle, Inc. of Maywood, New Jersey. The hotel will continue to operate as a Westin under a long-term management agreement with Starwood Hotels, which currently manages the hotel and is not affiliated with Starwood Capital. CBRE will manage the office building.
“This transaction continues our strategic effort to exit non-core products and markets, and to use proceeds from dispositions to improve our balance sheet, and invest in our mature portfolio and entitled development opportunities,” said David J. LaRue, Forest City president and chief executive officer. “In addition, the Westin Convention Center was the last remaining hotel in our portfolio, so the sale also marks Forest City’s exit from that business. Our focus going forward continues to be apartment, retail, office and multi-use projects in our core markets.”
In addition to the office building and hotel, Liberty Center includes a 25,000-square-foot retail shopping arcade and underground parking for 479 cars. An enclosed pedestrian bridge connects the hotel with the adjacent David L. Lawrence Convention Center. Starwood plans to improve the tenant and guest experience through substantial near-term renovations to the lobbies, hotel rooms, restaurants and other common areas.
“We are excited to be acquiring this well-performing mixed use asset, which is situated in a market that has increasingly attractive fundamentals,” said Jeff Shuster, Vice President at Starwood Capital. “The Pittsburgh economy is experiencing a renaissance with broad based growth in multiple sectors, including energy, healthcare, technology, education and financial services. This economic expansion has helped raise the downtown Class A office occupancy rate to be among the best in the nation.”