Brookfield Sells Stake in NYC Real Estate for About $1.4 Billion

(Bloomberg) -- Brookfield Property Partners LP has sold a 28 percent stake in a portfolio of Manhattan office and multifamily buildings, giving it proceeds of about $1.4 billion.

The company, which is the publicly traded real estate arm of Brookfield Asset Management Inc., plans to sell an additional 7 percent stake in the portfolio to institutional investors by the end of the year or in early 2019, for total proceeds of about $1.8 billion, executives said on Brookfield Property’s second-quarter earnings call Wednesday. The initial interest was sold after the quarter ended. The portfolio encompasses all of the company’s core holdings in Manhattan, in addition to One Manhattan West and the first of its residential towers in Brooklyn’s Greenpoint neighborhood.

“We’re bringing in institutional investors to partner with us, and then rather than bringing them one building at a time, it’s really bringing them in across the entire portfolio,” Chief Executive Officer Brian Kingston said on the conference call. Brookfield made a similar move with its investments in Washington, D.C., a few years ago, he said.

The undeveloped properties Brookfield owns aren’t included in the portfolio, and neither is its office building at 300 Madison Ave. because it still has a self-amortizing mortgage on it. The price for the stake is roughly in line with international accounting standards for the properties, Brookfield executives said.

The sale follows Brookfield Property’s decision to buy U.S. mall owner GGP Inc. in a deal valued at about $15 billion earlier this year. Executives said on Wednesday that they expect that transaction to to close by the end of August. On Tuesday, Brookfield Asset Management agreed to acquire Forest City Realty Trust Inc. for $6.8 billion through one of its private real estate funds, in which Brookfield Property is a sizable investor.

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