The shopping mall and shopping center industry is experiencing significant change, prompting some of the nation’s top property holders to reassess 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 conducting a strategic review of its malls and specialty retail properties. Despite categorizing it as merely a review, it appears they may have the solution they seek at their disposal.
“We intend to exit that business to a 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.
“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 internal review of what has truly been driving us. We decided 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 intending to stay ahead of the curve and adapt 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 the value of the portfolio for the shareholders and ourselves as part of that shareholder group,” said LaRue.
