Brookfield Asset Management Inc. and institutional partners announced a proposal by Brookfield Property Partners L.P. to acquire all of the limited partnership units that it does not already own for $5.9 billion.
Brookfield entities own Christiana Mall south of Newark. The deal would take the asset management unit private and make it less subject to investor pressure in a rocky retail environment.
Nick Goodman, CFO of Brookfield Asset Management stated, “The offer presents an excellent opportunity for BPY unitholders to either monetize their units in cash at a premium to recent trading prices, continue to invest with us in the upside of the portfolio via Brookfield shares, or select BPY preferred units designed for income-oriented investors who would like to maintain similar dividend income which they receive from BPY today in a preferred instrument, based on what is best for them.”
He continued, “The privatization will allow us to have greater flexibility in operating the portfolio and realizing the intrinsic value of BPY’s high-quality assets.”
Brookfield owns a number of “trophy mall” properties including Christiana Mall, which over the years had one of the highest sales per square foot in the nation, thanks in part to Delaware’s lack of a sales tax.
Even top malls have felt the pain of the Covid-19 pandemic and changing retail patterns, with restaurant and retail departures, as well as some tenants getting behind on rent or using bankruptcy proceedings to exit their lease deals.
Christiana Mall, which was developed by Delaware Valley-based Rubin family interests , ended up under the General Growth Properties umbrella. The Rubins sold their share of the mall, reportedly for a hefty $200 million.
Following rapid expansion, GGP underwent bankruptcy proceedings but kept Christiana Mall out of the filing since it was undergoing an expansion and renovation project during the financial crisis of 2009. Brookfield, with a broad portfolio of office and retail properties purchased GGP.
Mall giants Brookfield and Simon, the largest U.S. mall operator and the owner of Dover Mall, to purchase JCPenney Co. Penney’s CEO who guided the retailer through bankruptcy proceedings abruptly departed late last year. An affiliated company with Brookfield and Simon also owns specialty retailers with mall locations