The Real Deal New York

JLL REIT buys stake in 15-building retail package

$1.3B portfolio includes Atlantic Terminal and Madame Tussauds New York

January 07, 2016 06:05PM
By Mark Maurer Twitter_logo_blue copy

Forest City Retail

From left: 234 West 42nd Street in Times Square and Atlantic Terminal Mall in Fort Greene (inset: JLL’s Allan Swaringen)

A JLL real estate investment trust closed on the purchase of 13.7 percent stake in a 15-building retail portfolio across the five boroughs and New Jersey owned by Forest City Enterprises and Ronald Dickerman’s Madison International Realty, valuing the package at $1.3 billion.

JLL Income Property Trust bought the stake from Madison International, which owned 49 percent of the portfolio prior to the deal. Forest City, which developed many of the properties, retains 51 percent.

The portfolio spans a total of 2.7 million square feet and includes several marquee retail locations such as the Atlantic Terminal and Atlantic Center shopping malls in Brooklyn’s Fort Greene neighborhood. The 311,000-square-foot retail component of the large hotel-and-retail property at 234 West 42nd Street in Times Square is home to the multiplex AMC Empire 25 and popular wax museum Madame Tussauds New York.

JLL Income Property Trust, a non-listed real estate investment trust that is a subsidiary of the Chicago-based commercial brokerage, paid about $165 million for the stake, including assumption of existing in-place debt.

Dickerman said JLL was already serving as an adviser and an investor with a very small interest on the properties.

Atlantic Center and Atlantic Terminal are the largest assets in the package, boasting 400,000 square feet and 370,000 square feet respectively. Other locations include Harlem Center, Queens Place in Elmhurst and Shops at Northern Boulevard in Long Island City. Collectively, the 15 properties are about 98.5 percent leased, according to JLL. There is a diverse array of tenants – from Burlington Coat Factory to Old Navy to Chuck E. Cheese.

Allan Swaringen, CEO of the JLL REIT said the investment allowed the firm to complement its suburban retail portfolio with properties in “irreplaceable urban infill locations in the densest metropolitan area in the U.S.”

Late last year, Forest City, which is now itself a REIT, finalized its deal to sell its stake in Barclays Center and the Brooklyn Nets to Russian billionaire Mikhail Prokhorov.