David LaRue, president and CEO of Forest City Enterprises, Inc. (NYSE: FCE.A), joined REIT.com for a CEO Spotlight video interview during REITWeek 2014: NAREIT’s Investor Forum, held in New York.
Forest City owns, operates and develops properties in the office, multifamily, and retail sectors. LaRue analyzed some of the major trends in each of the company’s sectors.
“We’re very positive on the office piece of our portfolio,” LaRue said.
He pointed out that some of the challenges seen in the office sector last year were based upon a single building - One PierrePont Plaza in Brooklyn, N.Y. - where a major tenant vacated in the beginning of 2013. “We spent last year releasing the space and have made great strides in getting that done,” he said.
“When we look at the strength of the New York market in general, coupled with our life science market in Cambridge, Ma., we see very positive trends for that piece of our portfolio,” LaRue added.
Turning to the multifamily sector, LaRue pointed to a number of new projects that provide the opportunity to “create value.”
B2 BKLYN, the first residential building constructed at Atlantic Yards, Brooklyn, has encountered some delays, LaRue noted. B2 BKLYN is designed to be the world’s tallest modular building, he said: “We have proved that this type of technology does work.”
However, getting the factory up to speed has taken longer than anticipated, “but overall we’re going to have a beautiful asset,” LaRue said.
On the retail front, the company was impacted by poor winter weather, he said. However, LaRue stressed that remerchandising efforts that started last year, and have continued into 2014, are likely to produce positive results.
“I think that the ultimate goal of delivering that service , and particular tenant, to the market where the demand exists is what is going to play out across our portfolio, “ LaRue said.
“Shopper demand is there and I think the supply constraints will just continue to boost demand for our space,” he added.