Brookfield ready to invest millions in U.S. malls

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This article was published 24/02/2010 (5211 days ago), so information in it may no longer be current.

TORONTO — Brookfield Asset Management Inc. wants to take a slice of the lucrative shopping mall industry with an offer to invest US$2.63 billion in General Growth Properties Inc., the Chicago-based owner of 200 malls throughout the U.S.

Toronto-based Brookfield (TSX:BAM.A), one of Canada’s largest property-management companies, said Wednesday it hopes to move its portfolio into a new realm in the U.S., where it owns an extensive portfolio of high-rise office properties.

The move comes after Brookfield executives said they were looking to chase high-quality assets from debt-stressed owners.

General Growth filed for bankruptcy protection last year after buckling under billions of dollars in debt it racked up during a massive expansion. Brookfield’s offer will form the starting point of a court-supervised auction process.

“A company like General Growth has high quality assets, they’re well-managed,” Brookfield spokesman Denis Couture said.

“The problem they’ve encountered, which explains why they’re in bankruptcy proceedings today… is the combination of poor timing with acquisitions and the credit crunch, which made refinancing very difficult, if not impossible.”

Brookfield is offering $2.5 billion cash for new shares in privately held General Growth Properties Inc., and would also invest a further $125 million in shares of a new company to be formed by carving out General Growth’s non-core holdings.

Shares in Brookfield closed up 13 cents at C$24.04 in Wednesday trading on the TSE.

— The Canadian Press