This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Brookfield Real Estate Services Inc. Reports Second Quarter 2013 Results And Monthly Dividend

Stocks in this article: BRE

TORONTO, Aug. 7, 2013 /CNW/ - Brookfield Real Estate Services Inc. (the Company) (TSX: BRE), a leading provider of services to residential real estate brokers and their REALTORS ®1 signed a renewed Management Services Agreement during the quarter, and today announced that cash flow from operations ("CFFO") for the three and six months ended June 30, 2013 was $6.6 million or $0.51 per Restricted Voting Share ("Share") and $12.1 million or $0.95 per Share, respectively, as compared to $7.4 million or $0.57 per Share and $12.9 million or $1.01 per Share, respectively, for the same period in 2012.

Management Services Agreement Since 2003, the Company has been managed pursuant to a ten-year Management Services Agreement (the "MSA") with the Brookfield Real Estate Services Manager Limited (the "Manager"), a subsidiary of Brookfield Asset Management Inc. This agreement had recently been extended to December 31, 2013, allowing a Special Committee of the Board of Directors of the Company along with external advisors to conduct a thorough review and assessment of alternatives in advance the expiry of the term of the current agreement. Entering into a renewed MSA with the Manager was determined to be the best possible option at this time, as it builds upon the strong existing relationship between the Company and Brookfield and maintains consistency in a vital part of the infrastructure to the Company.

On June 28, 2013, the Company announced that it will be continuing its relationship with the Manager under an amended and restated MSA effective January 1, 2014. The agreement provides new growth opportunities for the Company and enhances the value of Canada's premier real estate services brands, including Royal LePage, Johnston & Daniel and the Via Capitale Real Estate Network.

"The changes to the agreement all provide significant benefit to shareholders," said Spencer Enright, President and Chief Executive Officer of Brookfield Real Estate Services Manager Limited. "With the new MSA in place, we will see a close alignment of the Manager and Company goals, reduced management fees, a new incentive arrangement emphasizing organic agent growth, and the ability to grow market share while safeguarding the existing return on investment."

Under the new MSA : (1) the management fee has been standardized to 20% across all brands as compared to 20% for Royal LePage and 30% for Via Capitale under the existing MSA; (2) the Manager can earn a new incentive fee for organic growth which closely aligns the Manager and the Company's goals with growing the underlying network of Agents, with the fee being calculated in accordance with the formula for incremental franchises based on the average annual royalty fees per Agent; (3) the Manager has the ability to sell other branded Canadian franchises to the Company; and (4) the following three changes were made to the manner in which amounts paid to the Manager for incremental franchisee contracts are determined : (i) the discount factor was standardized to 7.5% , (ii) the final purchase price is based on the average annual royalties earned over two years, and (iii) the 20% holdback on the initial purchase price for the incremental franchise contracts is paid over two years.

1 of 3

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs