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Forest City Closes on $250 Million in Financing for Waterfront Project in Southwest D.C.

September 23, 2008

CLEVELAND, Sept. 23 /PRNewswire-FirstCall/ — Forest City Enterprises, Inc. announced today that it has closed on $250 million in construction financing for the initial phase of its Waterfront Station project in Southwest Washington, D.C.

(Logo: http://www.newscom.com/cgi-bin/prnh/20080515/FRSTCTYLOGO )

Waterfront Station, on M Street SW at 4th Street, is a mixed-use redevelopment that will include office, residential and retail components. The site is adjacent to the Waterfront/Southeastern University MetroRail station.

The financing includes the project’s first two buildings, totaling 628,000 square feet of office and ground-level retail space. The office component is fully leased to the District of Columbia for various governmental offices, and the retail component will include a Safeway supermarket, a CVS pharmacy, and other retail tenants.

“Closing this non-recourse financing in the midst of current credit-market conditions is a testament to a strong project in an excellent location, as well as to Forest City’s sponsorship, its partners and a great group of lenders,” said Charles A. Ratner, Forest City president and chief executive officer. “Waterfront Station is poised to become a leading mixed-use property in Southwest D.C., and a catalyst for further redevelopment and economic revitalization within this quadrant of the District.

“This project reflects Forest City’s ongoing presence in and commitment to Washington, D.C., which is a core market for our Company,” Ratner said. “Together with The Yards, our mixed-use redevelopment of the former Navy Yards on the Anacostia River in Southeast D.C., these projects afford us a range of multiphase development opportunities for the future, and are also contributing to the ongoing vitality of this great market.”

Institutions participating in the financing included Bank of New York Mellon, which will serve as administrative agent for the lenders, Bank of Ireland, Wachovia, PB Capital and Landesbank Baden-Wurttemberg, New York Branch.

At full build-out, Waterfront Station is expected to include 1.2 million square feet of office space, 1,000 residential units and a minimum of 110,000 square feet of stores and restaurants. The project is being developed by Waterfront Associates, a joint venture between affiliates of Forest City Washington, Inc., Bresler & Reiner, Inc. and Vornado/Charles E. Smith.

About Forest City

Forest City Enterprises, Inc., is a $10.9 billion NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States.

Safe Harbor Language

Statements made in this news release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements. The Company’s actual results could differ materially from those expressed or implied in such forward-looking statements due to various risks, uncertainties and other factors. Real estate development risks and factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, the inability to secure sufficient financing on favorable terms, construction risks, including delays or cost overruns, increases in commodity costs, the inability to obtain required governmental permits and authorizations, the inability to secure tenants or anchors for the project, the withdrawal of a prospective anchor or project partner, opposition from third parties, competition in the target market, economic conditions in the target market, the adverse impact of environmental matters, softening of the housing market, and other risk factors as disclosed from time to time in the Company’s SEC filings, including but not limited to, the Company’s annual and quarterly reports.

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20080515/FRSTCTYLOGOAP Archive: http://photoarchive.ap.org/PRN Photo Desk, photodesk@prnewswire.com

Forest City Enterprises, Inc.

CONTACT: Robert O’Brien, Executive Vice President, Chief FinancialOfficer, +1-216-621-6060, Thomas Kmiecik, Assistant Treasurer,+1-216-621-6060, Jeff Linton, Vice President, Corporate Communication,+1-216-621-6060, all of Forest City

Web site: http://www.forestcity.net/




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