CPE’s 2018 Office Property Executive of the Year
- Jun 25, 2019
Senior Managing Partner, Brookfield Property Group, and CEO, Brookfield Property Partner
Chief Strategist: Kingston has been with New York- and Toronto-based Brookfield for 17 years and has been CEO for three. Prior to his current roles, Kingston was CEO of Brookfield Office Properties Australia, CEO of Prime Infrastructure and CFO of Multiplex.
Brookfield by the Numbers: Brookfield Property Group has 285 investment professionals,17,000 operating employees and 30 offices in the U.S., Canada, Brazil, the U.K. and Europe, and Asia-Pacific. Brookfield Property Group has approximately $171 billion in total real estate assets under management and is the real estate arm of Brookfield Asset Management, an alternative asset manager with more than $330 billion in assets under management.
Mega Acquisitions: Brookfield completed the acquisition of GGP for $15 billion at the end of August while also introducing its new listed U.S. REIT: Brookfield Property REIT Inc. A second blockbuster deal closed in early December with a Brookield real estate fund acquiring Forest City Realty Trust for $6.8 billion.
Strategic Dispositions: Concurrent with the closing of the GGP transaction, Brookfield sold $4.2 billion of equity in retail centers to joint-venture partners. It plans to raise as much as $2.5 billion from this portfolio over the next 18 to 24 months to further offset the GGP deal. Other sales included two fully leased Canadian office assets for C$450 million (about $342 million): Queen’s Quay Terminal in Toronto and Jean Edmonds Towers in Ottawa. And it recently disposed of its North American and European industrial business, IDI Gazeley, generating a $1.3 billion return on an original investment of $400 million.
Multifamily Growth: Brookfield’s multifamily portfolio, which is New York-centric, has grown with the recent delivery of 844-unit The Eugene at Manhattan West and 359-unit One Blue Slip in Greenpoint, Brooklyn, both luxury rental towers. It also acquired interests in Waterside Plaza, a four-tower, 1,471-unit residential complex on Manhattan’s East Side, as well as a mixed-use development site in the Bronx where it will develop a seven-tower, 1,300-unit waterfront development. In London, Brookfield has 2,500 apartments under development, including 1,100 rental units.
Core Office: FFO in the third quarter rose 8 percent over last year to $136 million, driven primarily by leasing activity in downtown New York and Washington, D.C. Total occupancy climbed 20 basis points over the same period to 92.9 percent on 2.2 million square feet of leasing. Brookfield launched the third and final phase of the Bay Adelaide Centre in Toronto. Bay Adelaide North will be anchored by Scotiabank, which is taking 420,000 square feet, or half the building.
Retail Redux: With nearly 10 million square feet of leasing executed or committed through third quarter 2018, Brookfield reports that leasing by non-traditional tenants, like Life Time Fitness, has not abated, while internet-only businesses, such as Wayfair and Warby Parker, continue to open physical stores. Space previously occupied by department stores is still being repositioned for live, work and play uses: cinemas, restaurants, entertainment venues, residential and hotels. The legacy GGP portfolio ended the quarter 95.6 percent leased.
— Sibley Fleming
CEO, The Related Cos.
Developer’s Developer: For the past quarter century, Blau has directed and overseen new developments worth more than $20 billion in almost every sector of the real estate industry. He joined privately held Related, based in New York City, in 1989 as an analyst and rose to associate and then vice president. In 2000, he became president, and in 2012, he took over the CEO spot from founder Stephen Ross.
The Numbers: Related has more than $50 billion in assets owned or under development, with offices and major developments in Boston, Chicago, Los Angeles, San Francisco, South Florida, Washington, D.C., Abu Dhabi and London and more than 3,500 employees.
Topping Out: In July, Related and Oxford Properties Group announced that 30 Hudson Yards, the second-tallest building in New York City, topped out at 1,296 feet. The 90-story, Kohn Pedersen Fox-designed office tower is part of Hudson Yards, an entirely new neighborhood bringing more than 18 million square feet of mixed-use development to Manhattan’s West Side. The observation deck will be the highest outdoor observation deck in the Western Hemisphere, rising more than 1,100 feet in the air and extending 65 feet from the building. Tenants in the 2.6 million-square-foot LEED Gold skyscraper include Kohlberg, Kravis & Roberts; WarnerMedia and its subsidiaries CNN, HBO, Warner Bros. and Turner; and Wells Fargo Securities.
Grand Financing: In November 2018, Related closed on $630 million in construction financing with Deutsche Bank for its massive The Grand project in downtown Los Angeles. The $1 billion complex, designed by architect Frank Gehry and being developed in partnership with CORE USA, is slated for completion in late 2021.
Luxury Senior Housing: Related entered into a new joint venture with Atria Senior Living to develop, own and operate more than $3 billion of modern, urban communities catering to seniors looking to live in major cities. The initial development pipeline includes sites in New York City, San Francisco, Boston, Los Angeles, Miami and Washington, D.C., among others. “Our new focus on senior living represents a culmination of our efforts and now means that Related can offer best-in-class housing options for every stage of life,” Blau stated.
Preserving Affordability: The company acquired 7,837 affordable housing units from Apartment Investment and Management Co. for $590 million, making Related one of the nation’s largest affordable preservationists.
Community Service: NAIOP Massachusetts selected Related Beal to receive its 2018 Distinguished Real Estate Award for achievements in real estate, charitable activities and community betterment, calling it a “driving force in Boston’s real estate market, transforming historic neighborhoods and reshaping key sections of the city, including North Station, Beacon Hill, Post Office Square, South End, Kenmore Square and the Seaport District.” Among its standout achievements, Related Beal developed The Beverly, Boston’s first 100 percent workforce and affordable housing development in 25 years, and revitalized the city’s historic Lovejoy Wharf with new luxury waterfront condominiums. — Therese Fitzgerald
Equity Owner & Executive Chairman, Clarion Partners
Founder: Furnary led the 2011 management buyout of Clarion Partners from ING Group after a 12-year affiliation. In 2016, he directed the sale of an interest in the firm to Legg Mason, with Clarion becoming Legg Mason’s global real estate investment platform. Furnary helped found Clarion Partners in 1982 and has been responsible for the firm’s strategic direction ever since. He began working in real estate in 1974.
Big Deals: Clarion Partners finished 2018 with some impressive office buys. It purchased Plaza Yarrow Bay, a 279,924-square-foot Class A office building near Seattle, from Kilroy Realty for $135 million and 114 W. 41st St., a 349,274-million-square-foot property in Midtown Manhattan, from Blackstone’s EQ Office affiliate for $282 million. On the office development front, Clarion Partners LLC and Trammell Crow broke ground on the first phase of The Center at Needham Ranch, a business park in Santa Clarita, Calif., that will occupy 132 acres, and acquired 109.7 acres for the third phase of Jefferson Mill Business Park in metro Atlanta. The company—in conjunction with L&L Holdings—also fully pre-leased 390 Madison Ave., a 390,000-square-foot, 32-story Midtown Manhattan office property that underwent a full-scale renovation and reconfiguration. — Therese Fitzgerald