Brookfield to spin off asset management business

Toronto-based firm to create entity controlling fee-generating assets including real estate

New York /
May.May 11, 2022 12:10 PM
Brookfield's Bruce Flatt (Brookfield, iStock)

Brookfield’s Bruce Flatt (Brookfield, iStock)

Brookfield Asset Management is planning to spin off its asset management business.

The Toronto-based investment manager plans a new entity that will control Brookfield’s fee-generating assets including real estate, infrastructure, credit, private equity and renewable energy, Insider and Bloomberg reported, citing people familiar with the matter.

Brookfield’s goal is to allow investment in a publicly traded entity that generates and is separate from Brookfield’s $50 billion in directly owned assets. Brookfield CEO Bruce Flatt previously told investors a spinoff could create a company worth up to $100 billion.

Brookfield is among the largest commercial landlords in major U.S. markets such as L.A. and New York. Its New York City portfolio includes One Manhattan West, New York by Gehry and the Eugene rental complex. It also took on a massive retail portfolio when it acquired mall operator GGP in 2018.

But the company’s byzantine corporate structure has made it a tough sell to investors. Brookfield has relied on subsidiaries that generate fees for the parent company. Its property arm, Brookfield Property Partners, was taken private last year. The company never saw much growth in its stock price. Analysts questioned some of the company’s valuations and grew concerned about whether it would be able to sustain its lucrative dividend payments.

Despite major risks to the office sector, Brookfield’s New York portfolio has not experienced much distress. Blackstone bought a 49 percent stake in ​​One Manhattan West in a deal valuing the 67-story office building at $2.85 billion. Brookfield recently put the 50-story One New York Plaza on the market. The 50-year-old office building will be a test of investors’ appetite for older Class A office properties.

[Bloomberg, Insider] — Keith Larsen


Related Articles

arrow_forward_ios
Vorea Principal's Peter Papamichael with 10-04 Borden Ave (Vorea Group, iStock)
Skydiver lands first NYC location in Long Island City
Skydiver lands first NYC location in Long Island City
Two Trees Management's Jed Walentas and 50 West 23rd Street (Walentas/via Marc Skrivo, Google Maps, iStock)
Trustpilot takes 34k sf at Two Trees’ Midtown South building
Trustpilot takes 34k sf at Two Trees’ Midtown South building
Bruce Brickman and 35-11 9th Street (Young Jewish Professionals, Google Maps)
Astoria cigar factory converted to offices highlighted NYC i-sales last week
Astoria cigar factory converted to offices highlighted NYC i-sales last week
BlackRock's Larry Fink, with 98 Riverside Drive (BlackRock)
BlackRock sells stabilized UWS rental for $90M after landmark designation
BlackRock sells stabilized UWS rental for $90M after landmark designation
Eli Elefant and 452 5th Avenue (IAVA, Property Building Corp)
PBC nears $385M loan for HSBC tower after sale to Innovo collapses
PBC nears $385M loan for HSBC tower after sale to Innovo collapses
Vornado CEO Steven Roth and One Penn Plaza (Vornado Realty Trust)
Health insurer takes 70k sf for HQ in Vornado’s One Penn Plaza
Health insurer takes 70k sf for HQ in Vornado’s One Penn Plaza
From left: Scott Rechler and 5 Times Square; Marc Holliday, Steven Roth and 280 Park Avenue (Getty Images, Eden, Janine and Jim from New York City - via Wikimedia Commons)
Swell of maturing debt pressures office owners
Swell of maturing debt pressures office owners
(photos by Joe Lovinger/The Real Deal)
Day 2 of ICSC: Retailers button up to network, prep for uncertain future
Day 2 of ICSC: Retailers button up to network, prep for uncertain future
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...