Analysts: Brookfield’s ‘Lowball’ Offer Threatens Retail Industry Property Values Nationwide

Brookfield Property Partners may have set a new standard for the valuation of high-end malls.

Toronto-based asset manager Brookfield, which already owns a 34% stake in mall owner and operator GGP Inc., has offered to purchase the remaining stake for $23 per share. The offer was approximately 21% higher than GGP’s closing price the day before reports broke about Brookfield potentially acquiring the company. Shares have since climbed to $23.77, Bloomberg reports.

Rumors swirled Monday about the potential part-cash, party-equity deal but the official offer has been met with disparagement by some Wall Street analysts who said it is a discount to the actual worth of GGP's high-end mall portfolio. 

During a conference call in October, Brookfield Chief Financial Officer Bryan Davis had valued the shares closer to $30, Bloomberg reports.

If Brookfield’s offer is accepted by GGP, Bloomberg analysts predict it could also be a negative indication about the falling value of even premium malls. This could result in repricing over the whole segment, putting many assets in the already struggling sector at risk.

According to other analysts, this could simply be the first step in a negotiation process that could garner additional bidders and a higher price.

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