The Water Tower Place mall in Chicago and Brookfield Property Partners CEO Ric Clark (Credit: Gabe Popa via Flickr and Getty Images)
Brookfield Property Partners is wasting no time with its plan to turn around General Growth Properties, the massive shopping mall real estate investment trust it bought for $14.8 billion last month.
Toronto-based Brookfield plans to expand GGP’s best performing malls with additional stores, and repurpose poorly performing malls by adding housing, office space or hotels, according to the Wall Street Journal.
Battered by diminishing revenue, many mall owners nationwide are transforming their assets, turning the hulking properties into office space, housing and hotels.
In Los Angeles, Hudson Pacific Properties and Macerich are spending $475 million to convert much of the 500,000-square-foot Westside Pavilion into a creative office space.
In Brookfield’s case, it plans to bring in partial owners for some of GGP’s 125 properties. It has has already sold around $4 billion in stakes in some GGP properties to partners, according to the Journal. It could sell an additional $2 billion more over the next couple of years to help fund development on sites it considers underutilized.
“These are some of the best malls in America and probably in the world,” said Brookfield CEO Brian Kingston. “We don’t want to sell them necessarily. Our preference is always the partnership model.”
Some in the industry have criticized Brookfield’s deal to acquire GGP, saying it underpaid. But others saw few options for the struggling Chicago-based REIT. [Wall Street Journal] — Dennis Lynch
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