The Real Deal New York

Forest City considers merger amid activist investor pressure

Jonathan Litt has been pushing for a sale
September 11, 2017 06:30PM

From left: David LaRue, a rendering of the western part of Pacific Park and Jonathan Litt

Forest City Realty Trust is considering a shakeup of the company, including a possible merger or sale of its assets, amid pressure from an activist investor.

The Cleveland-based company said in a statement Monday that it “has commenced a process to consider a broad range of alternatives to enhance stockholder value, including, but not limited to, an accelerated and enhanced operating plan, structural alternatives for the company’s assets, and potential merger, acquisition or sale transactions.”

The company, whose New York subsidiary is currently co-developing the Pacific Park megadevelopment in Brooklyn, has already made several changes to the company over the past year. In December, cousins Bruce and Charles Ratner resigned from the company’s board and the REIT scrapped a dual-share structure that gave the Ratner family voting control. Earlier this year, Forest City sold its affordable housing portfolio to Jonathan Rose Companies and its stake in a New York City retail portfolio to Madison International Realty. And over the summer, it scrubbed the Ratner name from its New York subsidiary, changing it from Forest City Ratner Companies to Forest City New York.

But activist investor Jonathan Litt has been pushing for further changes and said in April that Forest City would get several bids if it put itself up for sale, Bloomberg reported. The Real Deal recently broke down the challenges facing Pacific Park, which Forest City is developing in partnership with Greenland Group. [Bloomberg] — Konrad Putzier