Jonathan Rose pays $500M for Forest City’s affordable arm

Portfolio includes about 8,500 units across seven states

TRD New York /
Mar.March 01, 2017 01:00 PM

Jonathan Rose (credit: STUDIO SCRIVO) and David LaRue

Jonathan Rose Companies is about to double its portfolio with the purchase of Forest City Realty Trust’s affordable housing business. The deal is valued at more than $500 million.

The developer will acquire 48 affordable housing communities with nearly 8,500 units across seven states, the Wall Street Journal reported. The sales are expected to close throughout the first and second quarter of 2017.

Many of the buildings are in need of repair, and Rose plans to invest $1 million to $15 million worth of repairs at each property.

“I’m not the only one who has figured out that affordable housing is a great investment and frankly there is a very competitive market,” Jonathan Rose told the Journal. “The … work that we’re doing gives us a bidding advantage.”

Rose said about 10 to 20 percent of the renovation costs will be financed with low-income housing tax credits. The company also assumed the debt on the assets.

Earlier this month, Rose’s company was selected to build a 751,000-square-foot mixed-use development in East Harlem. The company will be working alongside L+M Development Partners on the project, which will include 163 permanently affordable apartments and 79 units for senior citizens.

The latest deal is part of Forest City’s efforts to shed parts of its portfolio in order to focus on market-rate apartments and office space. The real estate investment trust had a tempestuous 2016. Bruce and Charles Ratner resigned from the board, and other structural changes took place at the urging of activist investors who said the shares were grossly undervalued. Late last year, REIT executives also announced a $307.6 million impairment — a drop in asset value — largely due to shortcomings at Pacific Park Brooklyn. [WSJ] — Kathryn Brenzel 

Related Articles

A rendering of 165 Broome Street (Credit: Handel Architects)

Nonprofit plans affordable housing development near Essex Crossing

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag

As the years go by_A look back at 17 years of real estate history

A look back at 17 years of real estate history

250th Issue

The Real Deal celebrates 250 issues

From left: Publisher and founder Amir Korangy, Editor-in-chief Stuart Elliott and VP of Corporate Development Yoav Barilan

TRD’s founders share war stories from over the years

 NYCHA CEO Gregory Russ and NYCHA houses (Credit: Minneapolis Public Housing Authority and Getty Images)

NYCHA head: Agency now needs $40B in repairs

Neir’s Tavern (Credit: Google Maps)

City’s oldest bar, of “Goodfellas” fame, gets last-minute lifeline

Neir's Tavern (Credit: Google Maps)

Landlord to bar owner: You don’t have to go home but you can’t stay here