Brookfield Properties Q3 profit falls to US$38M, sees signs economy improving

By The Canadian Press

NEW YORK - Brookfield Properties Corp. (TSX: BPO.TO) reported Thursday a third-quarter profit of US$38 million, down from a year-earlier $174 million when it recorded a $127-million gain on the sale of the TD Canada Trust Tower in Toronto.

The New York-based spinoff of conglomerate Brookfield Asset Management (TSX: BAM-A.TO) said its earnings amounted to eight cents per share, compared with 44 cents per share in the same period of 2008. The TD Canada Trust Tower gain added or 32 cents per share to last year's results.

Brookfield, which reports results in U.S. dollars, said total revenues fell to $657 million from $707 million in the prior-year period but added it saw signs of economic recovery during period and is positioning itself for possible acquisitions.

"During the third quarter we have noticed a sense of optimism that the economy may be at the early stages of a recovery which has positively impacted leasing activity," CEO Ric Clark said in a statement.

"As real estate markets work toward recovery, we have taken additional steps to enhance Brookfield Properties' liquidity position in order to strengthen our balance sheet and to be poised to capitalize on opportunities that may arise."

In August, Brookfield Properties announced a plan to raise $900 million in an offering of shares.

The company said it will issue $450 million in shares to the public and Brookfield Asset Management, which currently has a 51 per cent voting interest in the company, plans to maintain its voting interest.

The financing was announced as Brookfield Asset Management and Brookfield Properties announced a plan to form a $4-billion consortium to invest in under-performing real estate. The consortium will invest in equity and debt in under-valued real estate companies or real estate portfolios with a focus on North America, Europe and Australasia.

In addition to Brookfield, the consortium includes a number of institutional real estate investors who have each allocated between $300 million and $1 billion to the consortium.

Brookfield has allocated $1 billion to the consortium with opportunities in the office sector being funded by Brookfield Properties and opportunities in other sectors being funded by Brookfield Asset Management.

Shares in Brookfield properties were up 14 cents at C$11.01 in morning trading on the Toronto stock market.