Forest City says it will consider a sale, merger or other alternatives to enhance shareholder value

Cleveland-based Forest City Realty Trust Inc., which owns properties in Northern and Central Virginia, announced Tuesday it is beginning a process to consider alternatives, including a sale or merger, to enhance stockholder value.

Such alternatives could include “an accelerated and enhanced operating plan, structural alternatives for the company’s assets, and potential merger, acquisition or sale transactions,” Forest City said in a statement.

“The board believes thoroughly evaluating all alternatives, while simultaneously continuing to execute on our current strategies and supporting our associates in doing so, are the appropriate steps to assess how best to unlock stockholder value,” James A. Ratner, non-executive chairman of the board, said in a statement.

He added that over the last several years, “we have made substantial progress transforming Forest City by focusing on core urban markets and products, reducing complexity, paying down debt, driving operational excellence and enhancing our corporate governance structure.”

The company is reportedly under pressure from an activist shareholder. While making clear that Forest City is open to potential additional changes, the company said the review many not result in a change or transaction. “Although the Board of Directors expects to proceed in a timely manner, there is no timetable for completion of the review process. Nor does Forest City plan to comment further on the progress or status of the review unless the company determines that further disclosure is appropriate or required by law.”

Lazard and Goldman, Sachs & Co., LLC will serve as financial advisors to the company in the evaluation process. Forest City has retained Sullivan & Cromwell LLP as legal counsel.
Forest City is a national real estate company with $8.2 billion in consolidated assets. It’s principally engaged in the ownership, development, management and acquisition of commercial, residential and mixed-use real estate in key urban markets. 

In the greater Washington, D.C. market, a subsidiary, Forest City Washington, is the developer of the Yards in Capitol Riverfront, and the remaking of Ballston Common in Rosslyn. 

In the Richmond market, another subsidiary, Forest City Enterprises employs about 35 people. They oversee a portfolio that includes Short Pump Town Center in Henrico County, in which Forest City has a 34 percent ownership interest; the Tobacco Row loft apartments in downtown Richmond and 12 office properties of about 750,000 square feet.