This transaction is expected to be completed in the third quarter of 2010 following the receipt of third party consents and approvals.
Brookfield Properties will fund the transaction from available liquidity of US$1.3 billion and from a US$750 million subordinate bridge acquisition facility from Brookfield Asset Management, which will be repaid from the completion of some or all of the following: asset sales, including a sell down of Brookfield Properties’ equity interest in its publicly-listed company Brookfield Office Properties Canada (TSX: BOX.UN), or other financing or capital activities.
A supplemental information package relating to this transaction is available on Brookfield Properties’ website at www.brookfieldproperties.com.
Residential Operations DispositionAs a further step in the strategy of converting Brookfield Properties into a global pure play office company, the company announced that it intends to divest of its residential land and housing division. To this end, Brookfield Properties intends to commence discussions with Brookfield Homes Corporation (NYSE: BHS) regarding the possible merger of these operations with Brookfield Homes. Should the merger proceed, Brookfield Properties’ equity interest in the residential business would be converted into a listed security in the merged entity which Brookfield Properties would then dispose of through an offering to its shareholders. Brookfield Asset Management would commit to acquire any shares of the merged entity that are not otherwise subscribed for in the offering, thereby ensuring that Brookfield Properties will successfully dispose of its residential interests and receive full proceeds. The above transaction would complete Brookfield Properties’ process of divesting of its residential land and housing business that commenced with the initial creation and distribution of Brookfield Homes in 2003. At the time, the current, largely Canadian business was relatively small and therefore retained within Brookfield Properties. Since that time, the operation has grown substantially and Brookfield Properties now believes that it is appropriate to separate the businesses, serving the dual purpose of furthering the strategic repositioning of Brookfield Properties and enhancing the value of the residential business through the creation of a diversified North American residential land and housing company.