Brookfield Office Properties Inc T.BPO.P.A

RE:What other Reit grew their balance sheet $19 Billion in 2023

[pierrelebel]

Crazy - apples and oranges.  This board is meant to discuss BPO preferred shares, not REITs

Keep in mind what S&P did in late December 2023 and why they did it:

BPO Downgraded to P-4 by S&P

S&P Global Ratings has announced:

• Brookfield Property Partners L.P.’s (BPY) credit quality has been impaired by persistent secular headwinds within its office segment and deteriorating metrics related to higher financing costs.
  Therefore, we lowered the issuer credit ratings on both BPY and Brookfield Properties Retail (BPR; a core subsidiary within BPY’s group structure) to ‘BB’ from ‘BBB-‘.
• We also lowered the issue-level rating on BPY’s unsecured notes to ‘BB-‘ from ‘BB+’ and assigned a ‘5’ recovery rating (rounded estimate: 10%) to the notes.
• In addition, we lowered the issue-level rating on BPR’s senior secured notes to ‘B+’ from ‘BB+’ and assigned a ‘6’ recovery rating (rounded estimate: 5%) to the notes.
• Lastly, we lowered our rating on the company’s preferred shares to ‘B’ from ‘BB’ to reflect increased subordination risk for speculative-grade issuers.
• The negative outlook reflects our view that BPY’s liquidity could be pressured by upcoming recourse maturities over the next two years, while secular headwinds within the office segment could further deteriorate its operating performance.

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Now that is the real world we live in. Many financial institutions (and ETFs) will NOT buy BPO preferred shares as long as they maintain a low credit rating.

And that is a good thing as it gives individual retail investors the opportunity to buy and get a very decent yield, well above average.

We should be happy with the yield. To expect BPO preferred shares to be redeemed at par is dreaming in Technicolor! It will NOT happen.

I am glad Brookfield decided to initiate a share buyback. I do not expect them to complete a 10% purchase (very few companies ever do) but it helps create a floor under the market price.

As far as the "$19 billion increase in the balance sheet", that is something different. Way way back in 1961 when I entered University of Montreal (Hautes Etudes Commerciales) my first book (thick green cover) was "Fondamentals of Accounting". I loved that book and eventually came to understand its content.
Over sixty years later I still know how to read financial statements.

A company raising money, lots of money, for joint ventures and partnerships, is great BUT such actions do not increase the common shareholders equity or the value of preferred shares of a subsidiary.