Brookfield’s nixed mall redevelopment may signal strategy shift

Real estate giant entered Vermont project in 2017 with plans for apartments, office tower

TRD NATIONAL /
Aug.August 04, 2020 01:30 PM
Brookfield Property Partners CEO Brian Kingston and Burlington Mayor Miro Weinberger (Brookfield; Weinberger by Vermont National Guard)

Brookfield Property Partners CEO Brian Kingston and Burlington Mayor Miro Weinberger (Brookfield; Weinberger by Vermont National Guard)

A tough economic environment has led Brookfield Property Partners to cancel plans to redevelop a mall in Burlington, Vermont, and local officials aren’t happy.

Brookfield became involved in the project in 2017, with plans to build apartments and a 10-story office tower on the now-empty site. But last month, it sold its interest in the project to local partner Devonwood Investors.

“We made a lot of progress over the past three years, completing the assembly of the site and progressing approvals,” a Brookfield spokeswoman told the Wall Street Journal, “but the long-term nature of the next phase of this development doesn’t fit with our funds mandate.”

Burlington Mayor Miro Weinberger criticized the investment giant’s decision to pull out without bringing a new partner to replace it, calling it “a breach of faith and a betrayal of trust.” The city issued a letter of default to Brookfield on July 22 and plans to pursue damages.

“They understand that their reputation is at stake here,” Weinberger said. Brookfield says that its development agreement allowed it to sell its interest, but the city disagrees.

In a 2018 investor presentation, Brookfield named the Burlington project as an example of its strategy of transforming struggling malls by shrinking the retail footprint and adding office and residential uses.

But analysts say Brookfield’s redevelopment strategy may not be feasible in the current economic environment.

“Tenants are likely slower to take up space now,” said Alexander Goldfarb, a senior research analyst at Piper Sandler Cos. “There is no rush to complete a new hotel or add new restaurants.”

Brookfield is continuing its mixed-use redevelopment of the Stonestown Galleria in San Francisco, and counts Manhattan’s Brookfield Place among its prior mixed-use successes. [WSJ] — Kevin Sun

 

Related Articles

arrow_forward_ios
Brookfield’s Brian Kingston and 14100 Northwest 60th Avenue (Google Maps)

Brookfield snags Miami Lakes warehouse for $22M

Brookfield snags Miami Lakes warehouse for $22M
Diane Von Furstenberg, Brookfield Properties Bruce Flatt, and the DVF store in the Shops at Merrick Park (Getty, Google Maps)

Brookfield seeks to evict Diane Von Furstenberg at Merrick Park

Brookfield seeks to evict Diane Von Furstenberg at Merrick Park
Brookfield Asset Management CEO Bruce Flatt and 700 Banyan Trail (Credit: Google Maps)

Brookfield pays $32M for Boca Raton industrial building

Brookfield pays $32M for Boca Raton industrial building
Diplomat Beach Resort Hollywood and a map of the proposed land usage

Major expansion of Diplomat Hotel in Hollywood gets initial OK

Major expansion of Diplomat Hotel in Hollywood gets initial OK
Brookfield’s massive Virginia mixed-use project will have 1.5K resi units

Brookfield’s massive Virginia mixed-use project will have 1.5K resi units

Brookfield’s massive Virginia mixed-use project will have 1.5K resi units
Cadre seeks at least $100M from SoftBank

Cadre seeks at least $100M from SoftBank

Cadre seeks at least $100M from SoftBank
Sandeep Mathrani’s golden parachute from Brookfield-GGP deal could be worth as much as $189M

Sandeep Mathrani’s golden parachute from Brookfield-GGP deal could be worth as much as $189M

Sandeep Mathrani’s golden parachute from Brookfield-GGP deal could be worth as much as $189M
Brookfield partners with CalPERS and CBRE on GGP acquisition

Brookfield partners with CalPERS and CBRE on GGP acquisition

Brookfield partners with CalPERS and CBRE on GGP acquisition
arrow_forward_ios

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

Loading...