Building-related issues in Los Angeles and Washington, Bruce Flatt wrote in the letter
Brookfield Corp. CEO Bruce Flatt has sought to quell investor concerns about commercial real estate, saying their properties are well-funded and higher interest rates will have less negative impact.
The alternative property manager has defaulted on mortgages on office buildings in Los Angeles and around Washington, but Flatt said the problems are “not related to those properties” and are not important to the Toronto-based company’s massive real estate business.
“When you own 7,000 properties, it is impossible not to make a few mistakes,” Flatt said in a May 11 letter to investors accompanying first-quarter results. “But we have always prided ourselves on being extremely responsible borrowers and our reputation in the capital markets sets us apart.”
He said the company has completed $12 billion in office funding since March 2020 and has minimal debt maturing this year — and “interest due on mortgages.” in many of the same cases as interest rates are about to expire”.
Brookfield is one of the world’s largest owners of high-end office real estate, with a portfolio that includes New York’s Manhattan West and London’s Canary Wharf. Commercial landlords in major cities around the world are being squeezed by higher borrowing costs and lower occupancy rates, as many companies continue to allow employees to work remotely at least for sale. time.
Brookfield Corp. said distributed earnings for the first quarter fell 2% to $1.16 billion from a year earlier. Earnings at Brookfield Real Estate Group fell 34% to $145 million, down slightly due to strong insurance unit profits.
Brookfield cuts real estate holdings amid market swoon
Bay Street analyst says Canadian bank earnings at risk due to exposure to office real estate
On May 10, Brookfield’s wealth management reported that chargeable capital in real estate fell 5% to $98 billion. Changes in market valuation accounted for $1.8 billion — or two percent — of the drop.
Postmedia is committed to maintaining a vibrant yet civil forum for discussion and encourages all readers to share their views on our articles. Comments can take up to an hour to moderate before appearing on the site. We ask that you keep your comments relevant and respectful. We’ve turned on email notifications—you’ll now receive an email if you receive a response to your comment, there’s an update to a comment thread you follow, or if a user you follow comments on. Our Visit Community guide for more information and details on how to adjust email settings.
Join the conversation