Recapitalization Values 76-Story, Eight Spruce Street, at $1.05 Billion

Press Release | December 21, 2012
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Forest City Enterprises, Inc. today announced the completion of a recapitalization of New York by Gehry at Eight Spruce Street, the company’s Frank Gehry-designed, luxury residential tower in Lower Manhattan.

The transaction values the 76-story, 898-unit high rise at $1.05 billion. TIAA-CREF, a national financial services organization, becomes a 49 percent equity owner in the residential portion of the building, with original partners Forest City and National Real Estate Advisors (NREA) retaining 26 and 25 percent stakes, respectively.  Prior to the recapitalization, Forest City and NREA owned 51 and 49 percent, respectively.  Forest City expects to receive proceeds from the recapitalization of approximately $120 million.

“We’re thrilled to welcome TIAA-CREF into the ownership of this world-class property,” said David J. LaRue , Forest City president and chief executive officer. “This transaction, and the commitment of a partner of the stature of TIAA-CREF, is testament to the tremendous value created by the development of this unique property.  In less than two years since opening, New York by Gehry at Eight Spruce Street has become world-renowned for its striking design, receiving international acclaim and major architecture awards, and has become a symbol for the resurgence of Lower Manhattan. We salute our New York team, led by Bruce Ratner , for the tremendous effort involved in planning and executing this outstanding project. This outcome is a direct reflection of their skill, creativity and dedication.”

“We believe that high-quality, multi-family assets in cities with the strongest demographics such as New York can be powerful additions to our well-diversified real estate portfolios,” said Phil McAndrews , head of real estate transactions and joint ventures, TIAA-CREF.  “The opportunity to invest in state-of-the-art, high-rise urban apartment complexes can be rare and we look forward to working with Forest City to maximize the value of this asset for our clients over the long term.”

Jeffrey J. Kanne , President and CEO of National Real Estate Advisors, said, “We are very pleased to be broadening our partnership to include one of the country’s preeminent real estate investors.  We believe the high quality of our new partnership is reflective of the extraordinary quality of New York by Gehry and we look forward to working together for many years to come.”

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