The Real Deal New York

Brookfield in talks to take over GGP

Canadian investor already owns 34% of retail REIT
November 07, 2017 06:00PM

From left: Ric Clark, Sandeep Mathrani and 685 Fifth Avenue (Credit: Getty Images and Thor Equities)

UPDATED, Wednesday, Nov. 8 at 10:20 a.m.: Brookfield Asset Management is in early talks to buy General Growth Properties and take the retail real estate investment trust private.

The Toronto-based real estate giant already owns 34 percent of GGP’s shares, after increasing its stake from 29 percent in the third quarter. The two firms discussed Brookfield buying all of GGP’s remaining shares at a 10 percent to 15 percent premium, a source told Bloomberg. The REIT’s stock price rose roughly 16 percent on Tuesday.

Brookfield first invested in GGP in 2010, as part of a deal that pulled the Chicago-based mall owner out of bankruptcy. Though the REIT owns several pricy assets in the Big Apple, including 685 Fifth Avenue in partnership with Thor Equities, it has struggled amid a countrywide retail malaise. Its share price fell by roughly 40 percent between July 2016 and last week.

In late October, Brookfield put office tower One Liberty Plaza on the market. It could fetch as much as $1.6 billion. [Bloomberg]Konrad Putzier

Correction: A prior version of this story erroneously stated GGP partnered with Jeff Sutton on 685 Fifth; it is actually Thor Equities.