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Aug. 12, 2013

Pittsburgh’s Liberty Center Complex Sells for $135M

By Adriana Pop, Associate Editor

Forest City Enterprises, Inc. and its partner, Jos. L. Muscarelle, Inc. have completed the sale of the iconic Liberty Center complex in downtown Pittsburgh’s “Golden Triangle.” A subsidiary of Starwood Capital Group of Greenwich, Conn. acquired the property for $135 million. The transaction generated net cash proceeds, at Forest City’s share, of approximately $30 million.

Liberty Center consists of the 27-story Federated Investors office tower and the 616-room Westin Convention Center Hotel. The property also includes a 25,000-square-foot retail shopping arcade, as well as 479 spaces of underground parking. Forest City and Jos. L. Muscarelle owned the complex in a 50/50 partnership.

“This transaction continues our strategic effort to exit non-core products and markets, and to use proceeds from dispositions to improve our balance sheet, and invest in our mature portfolio and entitled development opportunities,” David J. LaRue, Forest City president and chief executive officer, said in a news release. “In addition, the Westin Convention Center was the last remaining hotel in our portfolio, so the sale also marks Forest City’s exit from that business.Our focus going forward continues to be apartment, retail, office and multi-use projects in our core markets.”   

The hotel will continue to operate as a Westin under its long-term management agreement with Starwood Hotels, which is not affiliated with Starwood Capital. Meanwhile, CBRE will manage the approximately 555,600 square feet office tower.

As previously reported by Commercial Property Executive, Forest City’s seven dispositions since the beginning of fiscal 2013 have generated net cash proceeds of approximately $124 million. In fiscal 2012, the company completed 12 dispositions with total net cash proceeds of about $129 million.

Last week, Forest City also finalized the sale of the Higbee Building, an 815,000-square-foot historic property in downtown Cleveland. The buyer was an affiliate of Rock Ohio Caesars Cleveland, which operates the Horseshoe Cleveland casino in the building.

In Pittsburgh, Forest City recently closed on the sale of the 399-room Sheraton Station Square hotel. Station Square Pittsburgh Hotel LLC, a joint venture between Boston-based Pyramid Hotel Group and an affiliate of Glenmont Capital Management, LLC of New York, acquired the property for $61 million.

Photo credits: www.loopnet.com

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