KBRA Credit Profile Releases Research – Brookfield Property Partners Walks Away From CMBS Malls Ahead of Acquisition

NEW YORK--(BUSINESS WIRE)--KBRA Credit Profile (KCP), a division of KBRA Analytics, releases a special report on mall loans sponsored by Brookfield Property Partners (BPY) and the pending acquisition of BPY by Canada-based Brookfield Asset Management (BAM). KCP examined its $725 billion coverage universe of over 1,100 CMBS transactions and identified 77 malls collateralizing 73 loans—$14.65 billion by allocated loan amount (ALA)—across 106 transactions with exposure to BPY sponsorship. Twenty ($2.16 billion) of the 73 loans were in special servicing as of the April 2021 remittance, including three ($174.6 million) wherein BPY has stipulated to friendly foreclosure: Florence Mall ($90 million), Bayshore Mall ($43.6 million) and Pierre Bossier Mall ($41 million). Additionally, it was reported that negotiations were underway for seven other specially serviced loans ($797.8 million) regarding potential friendly foreclosures.

BAM recently announced that it reached an agreement to acquire all the limited partnership units of BPY not already owned by BAM, valued at $6.5 billion ($18.17/BPY unit). The acquisition is expected to close in Q3 2021; however, the transaction remains subject to the approval of a majority of BPY public unitholders as well as the Ontario Superior Court of Justice. The parent company believes the acquisition will afford it greater operational flexibility of BPY and an opportunity to preserve the portfolio’s intrinsic value as CRE markets normalize.

Click here to view the report.

Related Publications

• Sizing Up CMBS Exposure to Simon Property Group (November 2020)
• Coronavirus (COVID-19) Impact: Deepening Cracks in the Mall Wall (April 2020)

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KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.