NEW YORK, NY – December 21, 2012 – Forest City Ratner Companies, a subsidiary of Forest City Enterprises, Inc., the INDURE Fund, a commingled real estate fund managed by National Real Estate Advisors (NREA), and TIAA-CREF, a leading financial services provider, today announced that TIAA-CREF has acquired a 49 percent equity ownership in the residential portion of New York by Gehry at Eight Spruce Street, the award-winning Frank Gehry-designed building, that has redefined the New York City skyline.
This transaction values the 76-story, 898-unit high rise at $1.05 billion. Original partners Forest City and NREA are retaining 26 and 25 percent stakes, respectively. Prior to TIAA-CREF’s investment, Forest City was 51 percent equity owner and NREA 49 percent.
“The valuation of this tower is the result of a tremendous amount of planning and care, with respect to everything from site selection to the building’s world-class design and top-tier amenities and management. Our goal has been to bring condominium-quality living to the luxury rental market, and it is clear today that we have succeeded,” said Bruce C. Ratner, Chairman and CEO of Forest City Ratner Companies. “Frank Gehry’s first-ever skyscraper has truly transformed the skyline, becoming a “vertical city” that emblemizes the vitality of Lower Manhattan as a burgeoning live-work neighborhood. It’s wonderful to co-invest with an institution like TIAA-CREF in this endeavor.”
Real estate provides investors an opportunity to create long-term growth and diversification and a potentially stronger hedge against inflation compared to publicly traded equities and fixed income investments. Historically, apartment assets outperform the NCRIEF property index more frequently than any other real estate sector.1
“We believe that high-quality multi-family assets in cities with the strongest demographics such as New York can be powerful additions to our well-diversified real estate portfolios,” said Phil McAndrews, head of real estate transactions and joint ventures, TIAA-CREF. “The opportunity to invest in state-of-the-art, high-rise urban apartment complexes can be rare and we look forward to working with Forest City to maximize the value of this asset for our clients over the long-term.”
Jeffrey J. Kanne, President and CEO of National Real Estate Advisors, said that National was “very pleased to be broadening our partnership to include one of the country’s preeminent real estate investors. We believe the high quality of our new partnership is reflective of the extraordinary quality of New York by Gehry and we look forward to working together for many years to come.”
“This transaction between Forest City, National Real Estate Advisors and TIAA-CREF is truly befitting of New York by Gehry, one of the world’s most iconic residential towers. This was a rare and outstanding institutional investment opportunity to acquire an ownership position in a high-performing, prestigious property with one of the country's finest developers.” said Darcy Stacom, CBRE Vice Chairman.
TIAA-CREF owns more than $19 billion of primarily high-quality properties in the office, retail, industrial and multifamily sectors across the United States, Canada and Western Europe as of September 30, 2012.
About New York by Gehry at Eight Spruce Street
New York by Gehry at Eight Spruce Street, the tallest all-residential building in America, opened in 2011 to global acclaim. With its curving exterior curtain wall comprised of 10,000 unique steel panels, the tower is a major addition to the Manhattan skyline, existing in lively conversation with nearby landmarks—the Woolworth Building and the Brooklyn Bridge. Marking its opening in 2011, New York Times architecture critic declared New York by Gehry the “finest skyscraper to rise in New York” in nearly a half-century. The building’s 898 units include family-friendly two and three bedroom apartments, as well as three remarkable penthouses.
Gehry’s design carries the drama of the exterior curtain wall movement into residents’ private spaces, the building’s folds result in some 200 unique apartment layouts. Where the façade undulates outward, large free-form bay windows that change location from floor to floor make the most of the building’s unique site, allowing for unobstructed panoramic views in every direction.
In a rare arrangement, Frank Gehry not only designed the building’s exhilarating façade but all of the interiors and amenity spaces, curating all finishes and fixtures. Residents of New York by Gehry have exclusive access to a host of lifestyle services from a full-service concierge, on-site valet services to health, wellness, social and entertainment amenities across 22,000 square-feet of indoor and outdoor space. These amenity spaces are alive with robust programming tailored to tenant and family interests.
The mixed-use development includes a five-story, 100,000-square-foot Spruce Street School, as well as doctors’ offices for physicians associated with New York Downtown Hospital. There is 26,000 square feet of below-grade parking for 175 cars for hospital use.
Another highlight of New York by Gehry is its ground floor outdoor open space, two beautifully-landscaped public plazas totaling 15,000-square-feet, designed by Field Operations, the creative force behind Manhattan's High Line, in collaboration with Dutch horticulturist Piet Oudolf, who collaborated with Gehry on Chicago’s Millennium Park.
About Forest City Ratner Companies
Forest City Ratner Companies (FCRC), a wholly owned subsidiary of Forest City Enterprises, Inc., owns and operates 34 properties in the New York metropolitan area. Forest City Enterprises is an NYSE-listed national real estate company with $10.7 billion in total assets. FCRC properties include the Renzo Piano-designed New York Times headquarters in Midtown Manhattan; MetroTech Center in Downtown Brooklyn, the 1.3 million square foot Westchester’s Ridge Hill regional shopping center in Yonkers; and the 18,000-seat Barclays Center arena in Brooklyn, part of the $4.9 billion Atlantic Yards mixed-use project currently in construction. For more information, visit http://www.forestcity.net.
About NREA and INDURE
National Real Estate Advisors, LLC (www. natadvisors.com) is an independent real estate advisor specializing in real estate investments on behalf of large institutional investors. National manages nearly $2 billion of client capital and invests based on its “Build-to-Core” philosophy, carefully selecting development projects to add to the core of its portfolio. The strategy is designed to create a modern portfolio with lasting value.
The IBEW-NECA Diversified Underwritten Real Estate Fund (INDURE) is an open-ended commingled real estate investment fund managed by NREA which invests equity and debt in institutional quality, geographically-diversified properties nationwide.
TIAA-CREF (www.tiaa-cref.org) is a national financial services organization with $495 billion in assets under management (as of 9/30/2012) and is the leading provider of retirement services in the academic, research, medical and cultural fields.
Forest City Ratner Companies
Michele de Milly/Joyce Baumgarten
Abby Aylman Cohen
1 Based on NCREIF NPI Index and individual sector indices, the apartment sector outperforms the total NPI with a higher frequency than any other sector on a quarterly basis since its inception in first quarter 1978, at 64 percent of the time.
TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.
Past performance does not guarantee future results.
Real estate investments are subject to various risks, including fluctuations in property values, higher expenses or lower income than expected, and potential environmental problems and liability.
The TIAA General Account is an insurance company account and does not present an investment return, and is not available to investors.