Forest City Is Reevaluating Its Retail Holdings

The real estate investment trust has announced that it is in the midst of conducting a strategic review of its malls.

The winds of change continue to blow through the shopping mall and shopping center industry, and that’s leading some of the nation’s leading property holders in that sector to further examine their overall strategy. According to Cleveland.com, we can add Forest City Realty Trust to the list of those who are having a moment of reflection. 

The Cleveland-based real estate investment trust has announced that it is in the midst of conducting a strategic review of its malls and specialty retail properties. While it’s classified as simply a review, it sounds like they may have the answer they are looking for close at hand. 

"Our intent is to exit that business to the great extent," Forest City CEO David LaRue shared on a conference call in response to an analyst’s question.

The company's portfolio currently includes 14 regional malls dotted across the country, as well as 19 specialty retail properties, and retail has long played a significant role in the company’s overall strategy. 

Westfield San Francisco Centre

"Retail has been a part of our company since early in our history, well before we went public in 1960. We still believe in the retail business, the strength of our assets and the quality of our retail associates," said LaRue.  

That being said, the company acknowledges that changes are afoot. If they successfully move on from this part of the portfolio via an asset sale, it’s expected that Forest City will reinvest the proceeds in apartments and office buildings, which have been two areas of focus for the REIT of late. 

"Based upon our own internal review of what has truly been driving us. we came to a decision that this was the right time to explore this opportunity and go through this process and decide if we can come to a transaction now would be a great time to do it," LaRue added. 

We’ll have to wait and see if an asset sale comes to fruition, but Forest City has not been shy about shifting its strategy as the market dictates. In recent years, the company has exited the land business, sold off real estate and slashed debt among a host of other changes, all with an eye towards staying ahead of the curve and adapting to the changing times. 

"We have been on a journey and a transformation since 2012 and doing a lot to focus our business and help, I guess, prove value of the portfolio for the shareholders and ourselves, as part of that shareholder group," said LaRue.

Related shopping malls and stores:

Westfield San Francisco Centre

More about shopping malls in the USA