Losses, But Smaller, In Brookfield’s $98B Property Portfolio

The division of Brookfield that owns a huge portfolio of offices, malls and stakes in funds made a loss in the second quarter of the year — albeit a loss much smaller than the same time last year. 

Brookfield Property Partners comprises $98B of assets directly owned by Brookfield, including stakes in funds managed by Brookfield Asset Management. 

The division reported a $46M loss for Q2 compared with a $789M loss the previous year. Those figures include revenue from the property it owns and movements in the value of its portfolio, as well as costs of running the assets. 

The narrower loss was mainly attributed to stakes in funds it owned increasing in value this year as opposed to declining last year. It is also paying less interest on debt than a year ago. 

Net income in its 68M SF, 117-asset office portfolio dropped from $241M in Q2 2024 to $200M, primarily due to assets being sold. 

Occupancy was broadly flat at 84% of the office properties consolidated on Brookfield Properties’ balance sheet. The $18B of offices in the portfolio for which it provided a valuation update fell about $200M. 

The valuation in its 100M SF, 97-asset mall portfolio was broadly flat, falling $13M, but again net operating income dropped from $241M to $231M. This was also reportedly because of asset sales. 

Net operating income from the stakes in funds it owns increased by $45M, and net income, which includes valuation movements, swung from a $506M loss to a $99M gain. The stakes include a share of opportunity funds, multifamily funds and debt funds managed by Brookfield Asset Management. 

The results also gave an update on Brookfield Properties’ refinancing profile. The company has $48B of debt, and it is not paying interest on 3% of that, it said. It has $6B of loans maturing in 2025 and $11.5B maturing in 2026.