launching a $4-billion consortium to invest in under-performing real estate.
Gross proceeds from the sale are expected to total $902.5 million, according to a release. The underwriters, which include RBC Capital Markets, Citi, Deutsche Bank Securities and TD Securities, have the option of purchasing up to 7.125 million additional shares. That would bring gross proceeds up to approximately $1 billion, the release states. Closing on the public offering is slated for August 21.
Brookfield Asset Management's purchase of 47.5 million shares is intended to maintain its 51% voting interest in Brookfield Properties as the number of the company's outstanding shares is increased. Proceeds from the stock offering will be used for "general corporate purposes," including refinancing and investment purposes, the release states. Brookfield Properties refinanced $450 million of its debt in the second quarter, according to a prospectus on the new stock offering.
Separately, Brookfield announced Tuesday that it was partnering with "a number of institutional real estate investors," each of which has allocated between $300 million and $1 billion. Brookfield itself has allocated $1 billion to the venture.
In a release, Brookfield says the consortium will invest in equity and debt in under-valued real estate companies or real estate portfolios where value can be created for stakeholders "in a variety of ways." These include financial and operational restructuring, strategic direction or sponsorship, portfolio repositioning, redevelopment or other active asset management.
Investments will be targeted at corporate property restructurings with a minimum equity commitment of $500 million, the release states. Opportunities will be pursued "on a global basis, but with a focus on North America, Europe and Australasia," according to the release.
Ric Clark, CEO of Brookfield Properties, says in a statement that the consortium represents "the next step in our global property growth plan, as it combines our strength as one of the world's leading real estate operating companies with our extensive expertise in corporate restructurings and strategic acquisitions." Brookfield did not name the institutional partners in the consortium, nor did it say whether it has already identified opportunities. A Brookfield Properties spokeswoman did not respond to GlobeSt.com's inquiries by deadline.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
