Forest City Ratner is seeking a majority investment partner to shell out up to $800 million to help make the Atlantic Yards residential development in Brooklyn a reality.
Published reports last week characterized the new venture as an opportunity to get things moving along more quickly on the 14 residential buildings slated to rise atop an old Long Island Rail Road yard next door to the Brooklyn Nets’ Barclay’s Center.
Sources involved in the negotiations confirmed the validity of the reports and told The Commercial Observer that Forest City Ratner will most likely land an institutional investor, but that the firm is really eyeing just about anybody willing to shell out the $800 million for a 50 to 80 percent stake in the $5 billion project – whether it’s a foreign investment firm, a domestic one, or perhaps a standalone multi-millionaire or billionaire.
The latter have been in the mix before at the development site, as Bruce Ratner and company were previously compelled to sell an 80 percent stake in the Nets and 45 percent of the arena for $223 million to Russian billionaire Mikhail Prokhorov. In April, rapper/entrepreneur Jay-Z sold his reported .15 percent stake in the Nets.
The location of the residential complex, to be built using modular design methods, within the newly bustling Brooklyn sports hub, will likely draw a range of interest, given the ripening economy and success of Barclay’s, sources said.
Real Estate Alert, which broke the news earlier this week, reported that the deal is likely to appeal to pension systems, sovereign wealth funds and large opportunistic investors, noting that Forest City would retain its minority position and stay on as developer.
The residential project will feature roughly 6,400 apartments, across 22 acres, roughly 2,400 of which will be designated as affordable housing.
But delays at the project have angered opponents and even supporters, who considered the housing to be its most critical component due to the 30 percent affordable housing component for poor- and moderate-income families, according to an article in the New York Times.
It noted that Mr. Ratner conceived the concept for the complex, which included the $1 billion Brooklyn Nets’ Barclay’s Center as a centerpiece for the residential component, in 2003, but that an extensive land review, the recession and fierce community opposition led to missteps and years of delays.
The first of the residential buildings, with 363 units, is under construction at Dean Street and Flatbush Avenue, and it’s set to become the world’s tallest modular building.
The Commercial Observer reported earlier this year that the “B2 building” could serve as a catalyst for the growth of modular construction among high-rise and commercial buildings, a market that has exploded elsewhere in the world.
Much of the building is being manufactured in a factory setting, and it will eventually be hauled nearly two miles from the Brooklyn Navy Yard and snapped together on-site.
William Shanahan and Darcy Stacom of CBRE began marketing the stake to investors roughly two weeks ago, sources said. The brokers declined comment.