Cleveland-based Forest City Enterprises, which owns several buildings in MIT’s Technology Park and was once interested in Cambridge’s trouble NorthPoint development, has reported a net loss of $30.7 million for the full year ended Jan. 31, compared to a net loss of $113.2 million in 2008.
For the fourth quarter of 2009, the company reported net earnings of $6.2 million compared with a net loss of $45.3 million in the fourth quarter of 2008. Revenues for the year ended Jan. 31, were $1.26 billion, a 1.8 percent decrease compared with prior year revenues.
During 2009, Forest City capitalized on firming asset pricing in key real estate segments, including a $668 million joint venture with Health Care REIT Inc. for ownership of seven life science office buildings at Forest City’s University Park at MIT project in Cambridge.
The transaction’s implied valuation represents a 7.6 percent cap rate on projected 2010 net operating income for the properties, according to a statement.
"In the context of conditions impacting real estate and the broader economy, 2009 was a successful year for the company. We overcame significant challenges to achieve record full-year total EBDT (earnings before depreciation, amortization and deferred taxes), an improved balance sheet, reduced recourse debt, substantive cost reductions, successful project openings and major development project milestones," said Charles A. Ratner, Forest City president and chief executive officer. "Along the way, we also addressed approximately $1.6 billion of property-level, non-recourse debt maturities. In addition, at the end of fiscal 2009 and continuing into early 2010, we executed a series of asset sales and joint ventures at attractive cap rates to take advantage of value in our portfolio, to further bolster our liquidity and to create new long-term strategic partnerships."
He added: "These accomplishments were made possible by continued adherence to the five strategies we implemented in the third quarter of 2008 to address financial and economic turmoil in the market and the real estate industry. Since then, virtually every major action taken by our company has been driven by these strategies: curtailing development and focusing on our portfolio; driving costs out of the business; generating liquidity from our portfolio and in the capital markets; proactively managing debt maturities; and selectively taking advantage of opportunities created by market dislocations."
