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Brookfield Buying Forest City In $11.4B Deal

8 Spruce St. in Lower Manhattan, also known as New York by Gehry, was developed by Forest City and is now owned by Brookfield.

Brookfield has reached a deal to buy Forest City Realty Trust, a blockbuster acquisition that appeared to be dead in the water just a few months ago.

The deal, which is expected to close in the fourth quarter, is valued at $11.4B including debt. Brookfield will acquire Forest City for $25.35/share in the all-cash transaction.

“Forest City has created a high-quality portfolio of operating and development assets over its 100-year history,” Brookfield Property Group CEO Brian Kingston said in a statement. "We look forward to creating further value in these great assets on behalf of our limited partners."

The Forest City portfolio includes 18,500 multifamily units, as well as 10.8M SF of office, life science and retail space in major markets across the country.

The deal follows months-long, on-again, off-again plans for a sale of Forest City. 

Last September, Forest City said it was considering a potential merger or acquisition. But in March, the REIT publicly declared it would not sell after considering the possibility. Instead, nine directors resigned from the board.

The Cleveland-based REIT said it had attracted interest from 50 potential buyers. Brookfield and Equity Commonwealth were reportedly talking to the company about a potential acquisition.

Then, last month, talks between Brookfield and Forest City were said to be back on, with a reported price of $25 to $25.50/share on the table. Brookfield shareholders Starboard Value L.P. and Scopia Capital Management L.P. own a combined 14% of Forest City shares, and have already agreed to approve the transaction.