Brookfield Property Partners Agrees to $6.5B Sale

The company is moving closer to going private three months after a non-binding, $5.9 billion offer.
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Brookfield Property Partners’ board has agreed to a deal with Brookfield Asset Management Inc. in which Brookfield will acquire 100 percent of BPY’s limited partnership units for a total consideration of $6.5 billion. The announcement comes roughly three months after BPY, one of Brookfield’s four affiliates, received a non-binding purchase proposal for $5.9 billion.

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Brookfield’s enhanced offer amounts to $18.17 per BPY unit. Lazard Frères & Co. LLC, tapped by BPY to serve as independent valuator and financial adviser to its special committee, has determined the fair market value of a BPY unit to be between in the range of $14.00 to $18.50, implying a total enterprise value of $67.6 billion to $72.1 billion. Ultimately, BPY unitholders will have the option to receive the aforementioned $18.17 in cash per unit, 0.3979 of a Brookfield class A limited voting share or 0.7268 of a BPY preferred unit with a liquidation preference of $25.00 per unit.

Explaining the benefits of the agreement in a prepared statement, Nick Goodman, CFO of Brookfield Asset Management, said: “Not only can unitholders choose to receive a meaningful portion of their consideration in cash at a significant premium, but they will also have the option to remain invested in the future upside of our real estate business and alternative asset management franchise.”

The offer remains subject to approval by BPY’s public unitholders as well as other customary closing conditions. If all goes as planned, the transaction will close in the third quarter of 2021.

Portfolio promise

Goodman also noted in prepared remarks that the proposed transaction would allow for greater optionality in how Brookfield manages its portfolio of high-quality real estate assets.

Brookfield continues to grow its collection of premier properties even amid market turbulence. In November 2020, the global alternative asset manager purchased Block 16, a 325,000-square-foot office building leased in its entirety to Facebook in the Seattle suburb of Bellevue, Wash., for $365 million.

More recently, in February 2021, a fund managed by Brookfield inked a deal to acquire a 25 percent interest in Tower 46, a commercial condominium segment of a premier Midtown Manhattan office high-rise. BPY also turned heads in early 2020 with its acquisition of 25 percent of fast fashion retailer Forever 21.