Ridge Hill Shopping Center to be Acquired By Australian Real Estate Investment Firm

John Jordan | October 2017

The Ridge Hill Shopping Center in Yonkers

YONKERS—Forest City Enterprises is completing two major sale transactions that will for the most part signal its exit from the retail real estate market. Forest City is selling its interest in a host of regional malls and shopping centers, including the highly successful Ridge Hill Shopping Center in Yonkers it opened in 2011.

QIC Global Real Estate announced on Oct. 1 plans to expand its global real estate operations in the United States by acquiring additional interests from joint venture partner, Forest City Enterprises—in 10 U.S. regional shopping malls on behalf of a QIC client. The portfolio is valued at approximately $3.175 billion and Forest City’s share at $1.55 billion.

Net proceeds for the first six malls, after transaction costs and seller financing, will be approximately $180 million. The remaining four malls represent $1.93 billion of value, approximately $887 million at Forest City’s share. Forest City’s overall share is substantially in line with the company’s previous disclosures about the transaction, the company reports.

Alongside the acquisition of interests in the regional malls, the master agreement also expands QIC’s operational presence in the U.S. and includes transferring the FCE retail operating platform in relation to the malls and key retail personnel to QIC.

“QIC and Forest City have been in a very successful joint venture since 2013, and we are pleased to have reached this milestone,” said Steve Leigh, managing director of global real estate for QIC.

The transaction will be completed in two tranches with the transfer of interests in the first six malls expected to be complete by the end of the year. The assets in the first tranche include: the Ridge Hill Shopping Center in Yonkers; The Shops at Northfield Stapleton in Denver, CO; The Shops at Wiregrass in Tampa, FL; The Mall at Robinson in Pittsburgh, PA; Antelope Valley Mall in Palmdale, CA and the South Bay Galleria in Redondo Beach, CA. QIC has an option over the following four malls in the second tranche, which are expected to transact as the parties satisfy certain conditions: Victoria Gardens in Rancho Cucamonga, CA; Galleria at Sunset in Henderson, NV; Promenade Temecula in Temecula, CA; and Short Pump Town Center in Richmond, VA.

“We are building off more than a decade of amassing market intelligence and understanding in the U.S. retail sector. We view the U.S. real estate market and the retail sector in particular as a strong investment opportunity. We are encouraged by the broader economic conditions in the U.S. and the resilience of the consumer as demonstrated by continuing strength in the underlying fundamentals for the portfolio. We understand the importance of regional malls to their local communities and have the capability and the capital to evolve these assets into multi-faceted destinations,” Leigh said.

In late September, Forest City announced it was selling its ownership interest in 12 retail properties in the New York City to partner Madison International Realty for $1 billion.

The properties are located in Manhattan, Brooklyn, Queens, the Bronx, Staten Island and Northern New Jersey. The 12 retail centers part of the transaction with Madison International are: Shops at Gun Hill Road (Waring Ave.), Shops at Gun Hill Road (Ely Ave.) and Castle Center in the Bronx; Harlem Center in Manhattan; Shops at Northern Boulevard and Queens Place in Queens; The Heights, Atlantic Terminal Mall and Atlantic Center in Brooklyn; Forest Avenue and Shops at Richmond Avenue in Staten Island and the Columbia Park Center in North Bergen, NJ.

John Jordan
Editor, Real Estate In-Depth