TribLIVE

| News


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

Forest City eyes offers for Pittsburgh malls, hotels

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

Daily Photo Galleries

Friday, Feb. 10, 2012
 

Forest City Enterprises Inc. will consider offers for high-profile properties it owns in Pittsburgh, such as Station Square, The Westin Convention Center hotel and The Mall at Robinson, as part of a strategic plan to improve its financial results, the company said.

The Cleveland-based real estate developer said it will sell specialty retail centers in "non-core" markets and focus on rental properties in big cities that do not include Cleveland and Pittsburgh, where it has operated for years and also owns the Sheraton at Station Square hotel on the South Shore and other rental apartment properties.

"No decision has been made on any specific property. There are no immediate plans to divest anything in the Pittsburgh market, which is a legacy market, similar to Cleveland, our headquarters city. However, if the opportunity arose where an offer was made on a property, which meets our appropriate market value, we would consider it," Forest City spokesman Jeff Linton said on Thursday.

Forest City's new, four-year strategic plan will focus on "rental products -- apartments, office and retail -- in core markets, New York, Washington, D.C., Boston, Dallas, Los Angeles, San Francisco and Denver," said CEO David J. LaRue in a statement.

Pittsburgh real estate experts said the strategy would make the company's properties here targets for acquirers.

"If Forest City decides to sell either The Mall at Robinson or Station Square, the buyer will probably be a major developer of retail facilities," said David Glickstein, vice president of Grubb & Ellis in Pittsburgh. "The buyer will probably treat the asset as Forest City has done, with very little if any change in the operation."

The Mall at Robinson is a Class A super regional mall and could attract buyers, such as CBL Properties of Chattanooga, Tenn., owner of the Monroeville Mall and the Westmoreland Mall, Glickstein said.

Glickstein described Station Square, where Forest City also owns the Landmark Building, as a secondary retail facility: one that is nice but not in the same category as The Mall at Robinson.

Arthur Ziegler, president of the Pittsburgh History & Landmarks Foundation, which has its headquarters at Station Square and was the seller of the property to Forest City, said he has not yet been contacted by the owner but looks forward to learning their plans for the complex.

He declined to discuss what impact the sale of the complex would have on its tenants, but said he does not expect any problem with a new owner.

In the past year, Forest City sold two of four hotels it owned. It sold the Ritz-Carlton Cleveland in Cleveland for $36.5 million to a subsidiary, Rock Ohio Caesars LLC, and the Charleston Marriott in Charleston, W.Va., for $25.5 million to Inland American Real Estate Trust Inc.

The remaining two hotels Forest City owns are The Westin Convention Center hotel at Liberty Center, Downtown, and the Sheraton at Station Square.

Forest City's focus on apartments, office and retail properties leaves in question the future of five residential properties the developer owns in the region.

They are federally assisted apartments such as Citizen's Plaza in New Kensington, Coraopolis Towers in Coraopolis, Donora Towers in Donora, Connellsville Towers in Connellsville, and the senior housing Perrytown Place on Highland Pines Drive, North Hills.

Forest City also plans to get out of the land development business. That does not affect the Pittsburgh region because the company did not purchase raw land here that it developed in subdivisions and lots and sold to homebuilders.

The company has 35 active projects primarily located in the Southwest, Texas, the Carolinas and Ohio. As of Sept. 30, the value of these lands was listed at about $340 million.

"The company would consider selling off the holdings as whole portfolio sale, regional portfolio sale or individual sale," said LaRue.

 

 
 


Show commenting policy

Most-Read News

Subscribe today! Click here for our subscription offers.