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Brookfield Asset Management Buys Forest City Realty Trust

The $11.4 billion deal was struck after activist investors Starboard Value and Scopia Capital Management helped shake up Forest City’s board.

Brookfield Asset Management has agreed to buy Forest City Realty Trust, a developer whose New York properties include apartments in Tribeca and the Atlantic Terminal Mall in Brooklyn, for $11.4 billion including debt.

Brookfield said Tuesday that it’s paying $25.35 a share for the real estate, valuing the company at about $6.8 billion. Activist investors Starboard Value and Scopia Capital Management, which own about 14 percent of Forest City’s shares, have agreed to vote in favor of the deal, according to the statement. 

The Cleveland, Ohio-based real estate investment firm is being acquired about four months after completing a strategic review and entering an agreement with Starboard and Scopia to overhaul its board. The purchase price represents a 26.6 percent premium over Forest City's closing share price on June 15, the day before the market began speculating about acquisition talks with Brookfield.

“Forest City has created a high-quality portfolio of operating and development assets over its 100-year history,” Brian Kingston, chief executive officer of Brookfield Property Group, said in the statement. 

Forest City owns office space, life science assets, and multifamily units in U.S. cities such as New York, Cambridge, Massachusetts, and San Francisco, as well as large-scale development projects.

Brookfield, an alternative asset manager with $285 billion under management, focuses on investments in real estate, renewable power, infrastructure, and private equity. The firm expects its real estate investment fund will complete the purchase of Forest City during the fourth quarter. 

Forest City’s shares were trading at $25 each at midday on Tuesday, an 8.6 percent jump from yesterday’s close.

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