Forest City Makes Barclays Center a Taxable Subsidiary Before REIT Conversion Vote
On Oct. 20, Forest City shareholders will be voting to reorganize the Ohio-based corporation into a Maryland corporation to make it eligible as a REIT. This would make it exempt from federal corporate income taxes on distributions.
Forest City would have to distribute at least 90% of its REIT taxable income each year, excluding any TRSs. According to Forest City, those assets include condo developments at Pacific Park, ownership interest in the Barclays Center and the Brooklyn Nets.
The corporation is trying to unload its 20% ownership in the Nets and 55% ownership interest in the arena, so a sale could be finalized before the vote or by end of the year. [AYR]