Teaching Note | HBS Case Collection | November 2013

8 Spruce Street

by Arthur I Segel


The case begins in March 2009 during the depths of the recession with Forest City Ratner (FCR) Companies, a New York City based developer, facing the decision to halt construction half-way on 8 Spruce Street, the tallest residential tower in the Western Hemisphere, or continue to build to 76 stories. It includes background on FCR, protagonist MaryAnne Gilmartin and the Vision for 8 Spruce. It traces the origins of the development from site acquisition in 2004 to early challenges including an early lawsuit, loss of a major tenant and change in asset type to completely residential. It details discussion on the choice to use world-renowned architect Frank Gehry. Finally, the case presents the proposed development, including complete development budget and projected returns for the first 38 stories. It examines financing concerns, development in tenuous market circumstances, condo versus rental units for floors 38-76 and a consumer perspective to buy versus rent units. Ultimately, the protagonist must decide to halt construction or continue construction as either condo or rental.

Keywords: real estate; Investment; Real Estate Industry; Japan;


Segel, Arthur I. "8 Spruce Street." Harvard Business School Teaching Note 214-051, November 2013.