FOREST CITY ENTERS INTO JV WITH HEALTH CARE REIT AT UNIVERSITY PARK

CAMBRIDGE, MASS. Ń In its second big announcement in less than a week, Forest City Enterprises has entered into a $668 million joint venture with Health Care REIT for the ownership of the University Park mixed-use campus in Cambridge. Under the terms of the agreement, Health Care REIT will acquire a 49 percent interest in seven of the campus' 10 life science buildings. Health Care REIT will invest $170 million in cash into the joint venture and will assume $320 million in secured debt for the seven buildings. Six of the seven buildings will be closed on today, with the seventh building closing during the second quarter. Forest City will retain a 51 percent ownership stake in the seven buildings as well as its original ownership stakes in the other three buildings. The transaction's implied value represents a 7.6 cap rate in 2010 net operating income. Earlier this week, it was reported that Forest City would be entering into a joint venture with Bernstein Management in which Bernstein purchased a 50 percent interest in a portfolio of three Washington, D.C.-area multifamily towers. While it is coincidence that the two transactions closed within such close proximity to each other, the deals do signify an important change in the market. With these last two [announcements], what we've seen is the beginning of firming prices, particularly in high-quality markets like Boston and Washington, D.C., says Jeff Linton, vice president of corporate communications for Forest City. University Park is situated on 27 acres adjacent to the Massachusetts Institute of Technology (MIT). In addition to the 10 life sciences buildings, the campus contains a 210-room hotel, 674 residential units, a grocery store, and restaurant and retail space. MIT is the ground lessor for the entire project. Ń Coleman Wood