Brookfield to Create Commercial Real Estate Giant

Brookfield to Create Commercial Real Estate Giant

Commercial News » North America Commercial News Edition | By WPJ Staff | September 30, 2013 11:26 AM ET

Brookfield Property Partners is proposing to spend about $5 billion to buy out the portion of Canada-based Brookfield Office Property it doesn't already own, in a deal that would create one of the largest commercial real estate companies in the world.

Bermuda-based Brookfield Property estimates it would control about $45 billion in total assets, including 330 million square feet of office, retail and industrial space on four continents, if the deal is approved by Toronto-based Brookfield Office shareholders. Brookfield is offering $19.34 per common share for the represents a 15 percent premium on Brookfield Office's stock price on Sept. 27.

Brookfield already owns 51 percent of Brookfield Office.

"The combination of these leading commercial real estate platforms will create a diversified portfolio of best-in-class real estate for investors seeking attractive risk-adjusted returns, through income and capital appreciation," Ric Clark, chief executive officer of Brookfield Property Group, said in a statement.

"In addition, we believe this transaction will consolidate our global office properties under one platform and substantially increase Brookfield Property Partners' public float which should help accelerate our growth strategy."

Brookfield said it intends to finance the cash portion of the offer through an acquisition facility with a syndicate of banks. The company "will consider a number of alternatives, including asset sales, asset level debt financings and issuances of corporate debt, preferred stock and/or equity," according to the release.

 Brookfield Asset Management spun off Brookfield Property Partners earlier this year to focus on commercial property.

Brookfield Office's list of assets include lower Manhattan's Brookfield Place; the 72-story First Canadian Place in Toronto; Bank of America Plaza in Los Angeles; and Houston's Allen Center complex. Brookfield Office is in the process of buying MPG Office Trust Inc., which would make it the largest office owner in downtown Los Angeles, Bloomberg reports.

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