Brookfield to acquire Forest City for $6.8B

Deal is valued at $11.4B

“The Suitor” by Beda Francesco, feat. Brookfield’s Bruce Flatt
“The Suitor” by Beda Francesco, feat. Brookfield’s Bruce Flatt

After a false start, Brookfield Asset Management has agreed to buy Forest City Realty Trust for $6.8 billion.

Brookfield will acquire the real estate investment trust for $25.35 per share in cash — 10 percent higher than share prices on Monday, Bloomberg reported. The deal is valued at $11.4 billion, including debt.

Four months ago, Forest City announced that it wouldn’t pursue a sale after failed negotiations with two companies, including Brookfield. At the time, the REIT said an agreement with a “financial investor” — likely Brookfield — was held up by certain pre-conditions that Forest City wouldn’t agree to.

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But Bloomberg reported last month that Brookfield and Forest City had restarted talks. Forest City’s portfolio includes 8,500 multifamily units and 10.8 million square feet of office space.

This deal is yet another in a series of major changes for Forest City this year. In January, MaryAnne Gilmartin stepped down as CEO of Forest City New York to form her own development company, L&L MAG. Around the same time, Forest City announced that it was selling nearly all of its remaining stake in Pacific Park, bringing Greenland USA’s interest in the mega-development up to 95 percent.

This marks Brookfield’s second major acquisition of a real estate company this year. Last week, U.S. mall owner GGP agreed to Brookfield’s $15 billion buyout offer. [Bloomberg] — Kathryn Brenzel