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NEW YORK CITY-After acquiring the US office assets of publicly-traded REIT Trizec Properties in 2006 for $9 billion, Brookfield Office Properties Inc.’s joint venture partner, the Blackstone Group, has exercised its call option on 18 of the office properties it manages in the JV. The deal is in exchange for 100% of its interests in the 38-property portfolio of Brookfield-managed assets, SEC filings show. In exercising the call option, Blackstone retired its share of the joint venture debt and assumed the property-specific debt on its managed assets, according to Brookfield.
Under the original JV agreement, Brookfield granted the put/call option on its non-managed properties, with the lion’s share in Southern California and three in New York City. “When the joint venture was originally put together as part of a vehicle to acquire Trizec back in 2006, this was part of that agreement, and just in 2011, this was their opportunity to exercise it,” a spokesman for Brookfield tells GlobeSt.com. “It was something that was always kind of expected.”
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The properties include 1065 Avenue of Americas, 1411 Broadway and 1460 Broadway in Midtown Manhattan; and in California, the properties include the Howard Hughes Tower, Wachovia Center, Northpoint, Westwood Center and the Arden Towers at Sorrento, among others, the spokesman says.
The Trizec portfolio consists of 48 office properties comprising 26 million square feet in nine US markets, located in Atlanta, Houston, Los Angeles, New York, San Diego and Washington DC, GlobeSt.com previously reported. Under the original agreement, Brookfield and Blackstone acquired all the outstanding shares of common stock of Trizec Properties that were not owned by Trizec Canada at $29.01 per share in cash. In addition, Brookfield acquired the entire outstanding subordinate voting shares and multiple voting shares of Trizec Canada at $30.97 per share in cash. After acquisition financing, Brookfield’s share of the transaction equity was approximately $400 million. The JV agreement created a combined equity value of $4.8 billion.
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