The Real Deal New York

Urban multifamily is where it’s at: Brookfield

Office giant sees opportunities in rental markets in big cities

November 05, 2015 02:25PM
By Konrad Putzier

From left: Brookfield's global head of real estate Ric Clark and renderings of Greenpoint Landing

From left: Brookfield’s global head of real estate Ric Clark and renderings of Greenpoint Landing

Amid demographic shifts and a drop in homeownership, Brookfield Property Partners is the latest real estate giant to double down on urban multifamily properties.

“We think expanding what we’ve been doing in multifamily to urban areas is a really smart thing to do,” a company executive said on an earnings call Thursday. Population growth in cities, declining homeownership and comparatively low capital expenditures all make rental housing an attractive investment, the executive added.

Behind the story:
Brookfield Property Partners

Last week, the Toronto-based real estate investment trust bought a portion of the Greenpoint Landing project from Tower Group and will co-develop two rental towers with nearly 800 units at a total cost of $630M. Last year, the firm went into contract for a 3,962-unit Putnam rental portfolio in Upper Manhattan for $1 billion. Brookfield also has several mixed-use towers in the works at Manhattan West, an $8.6 billion mixed-use redevelopment in partnership with the Qatar Investment Authority.

In total, Brookfield has 3,100 residential units in development across several countries. Its total assets now stand at $65 billion. Its funds from operations (FFO) – a measure of earnings that includes depreciation and amortization – grew to $218 million from $198 million in the last quarter.

Other major investors upping their bets on urban rental housing include the Blackstone Group, which is buying Stuyvesant Town-Peter Cooper Village for $5.3 billion and earlier this year dished out $700 million for the Caiola family’s Manhattan rental portfolio.