Brookfield Launches Foreclosure Procedures

WASHINGTON, DC-Brookfield Properties is launching foreclosureproceedings on Tishman Speyer’s office portfolio in the DC area,according to a report in the Wall Street Journal over the weekend.According to the news report, Tishman is pushing back, with plans torestructure its $570 million in debt for the 20-building localportfolio. Tishman could not be reached over the weekend for commentby GlobeSt.com. A Tishman spokesperson told the Journal that the company is confident it can implement a restructuring to maintain its ownership.

Tishman Speyer has not settled on an exact strategy as to how it will do this, a source tells GlobeSt.com. However it is going to happen within the next two months. The company issued a general statement that accussed Brookfield of trying to pressure its ownership group by starting the foreclosure proceedings. “The portfolio has terrific assets and we are not surprised Brookfield wants them,” the statement noted. “That said, we have the funds needed to restructure the portfolio debt and we’re confident that we canimplement a restructuring that will maintain our partnership’s ownership.”

In February, Brookfield Properties acquired the debt associated withTishman Speyer’s DC portfolio. Brookfield was reported tohave bought the debt in a loan-to-own structure that would give thecompany significant leverage in the restructuring process, possiblyallowing it to buy assets if they are auctioned off in a bankruptcy.