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


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

An example of roll-off waste management (Credit: YouTube, iStock)

Big building owners prevent city from dumping container-pickup in trash-collection reform

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Inwood has stayed affordable for a remarkably long time. That could soon change. (Credit: Wikipedia)

Inwood braces for gentrification

Council member Vanessa Gibson (Credit: New York City Council)

Commercial landlords face new fines as City Council passes anti-harassment bill

As House begins impeachment inquiry, here’s what we know about Trump’s Ukraine-real estate ties

Rent reform is propelling a new wave of New York and California investors to Miami (Credit: iStock)

Rent reform in New York, California propels new wave of multifamily investors to Miami

Embattled Prodigy Network CEO Rodrigo Niño to step down