Brookfield may convert some of lower-level office space at namesake LoMa complex

TRD New York /
Jul.July 26, 2013 06:45 PM

Brookfield Office Properties has shifted its attention to its international real estate holdings, marking a quiet period for its New York City real estate activity, with the exception of a $1 billion refinancing deal at the 8 million-square-foot Brookfield Place. The Toronto-based real estate investment trust may also look to convert some of the lower-level office space at its namesake complex to other use, such as retail.

“The economics have been attractive relative to straightforward office use,” CEO Dennis Friedrich said, speaking from Brookfield’s London office during its second-quarter earnings call.

Friedrich singled out major development projects in Calgary, Canada and Perth, Australia, as highlights for the firm in the second quarter, as well as an acquisition of two London office buildings. But in New York, talk mostly revolved around Brookfield Place, where Friedrich said the REIT would use the major transit improvements in the area as a lure for potential tenants.

“The progress on the transit pavilion and the retail amenities coming online are assisting with our office leasing efforts,” Friedrich said.

Leases at Brookfield Place with Scotiabank – which will be moving from the company’s One Liberty Place –, Oppenheimer, Hunter Roberts Construction and Equinox Fitness signed in the quarter had helped Brookfield fill the vast void left by outgoing tenant Merrill Lynch, Friedrich added. The remaining expiring Merrill space now stands at about 2.7 million square feet, he said.

Brookfield remained in talks with two major tenants to lease about 1.5 million square feet of that remaining space, Friedrich said, but declined to comment further. In May, law firm Jones Day was close to taking 400,000 square feet at the 34-story, 1.7-million-square-foot tower at 4 Brookfield Place, it was previously reported.

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