Madison International Acquires $1B NYC Retail Portfolio From Forest City
Madison already owned 49% of Forest City's 12-property, 2.1M SF NYC portfolio, and on Wednesday announced that it had purchased the remaining 51%, for a price tag of $1B. The 95% leased portfolio includes properties in all five boroughs and northern New Jersey, with perhaps none as significant as the Atlantic Terminal Mall and Atlantic Center.
The two retail complexes sit across the street from Barclays Center, which Forest City developed, and the Atlantic Terminal transit hub in Downtown Brooklyn, totaling about 700K SF between them. Madison President Ronald Dickerman told Crain's New York Business he plans to invest tens of millions of dollars to renovate and reposition the two centers to attract a tenant base more reflective of the area's direction.
Part of the renovation will include increased food options and a roof deck to cut a more conspicuous figure for people going to and from the Barclays Center. Dickerman brushed off concerns about investing so much money in a market that a firm as big as Ratner is attempting to exit entirely.
"There's a lot of negative sentiment about retail space right now, but this is very different retail space with dense demographics, low rents and long, in-place leases," Dickerman said. "These spaces are tenanted with stores that work with their neighborhood demographics, and in many cases they're doing off-the-charts sales."
One property that Forest City held back from the deal is a retail complex centered around Madame Tussaud's in Times Square. The company owns a ground lease on the property, but is currently facing legal action from the city over its terms.