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Brookfield Property Partners L.P. T.BPY.UN


Primary Symbol: BPY

Brookfield Property Partners LP owns, operates, and invests in commercial properties in North America, Europe, Australia, and Brazil. The company focuses on being a global owner and operator of real estate, providing investors with diversified exposure to some of the iconic properties and acquiring high-quality assets at a discount to replacement cost or intrinsic value. Its operating segment includes Core Office, Core Retail, LP Investments, and Corporate Segments. The company operates in various sectors such as the office sector, retail sector, industrial, multifamily, hospitality, triple net lease, and the corporate sector. It generates a majority of revenue from the LP Investments segment.


NDAQ:BPY - Post by User

Post by TickBombon Jul 09, 2020 1:38pm
185 Views
Post# 31246452

Caution on Preferred Shares

Caution on Preferred Shares

So I would caution on the prefs because their dividends/distributions/coupon or whatever they are called in these particular instrument are tied to interest rates, not the profitability of the company.  Depending on the structure, they can pay post tax profits that are considered eligible dividends (unlike bonds that pay fully taxable interest).  But if BPY or the office corp doubles its FFO/share, you won't see an increase in distributions.  You may see the price of the preferred go back up closer to par ($25) because investors perceive it to be a less risky investment.  But again that depends on interest rates.

 

So if you are going to invest, I would say you believe 

 

1) Brookfield will pay and not cut the prefs

2) You see interest rates staying the same.  BPO.PR.Y is tied to 70% of the Bank Prime rate.  That is why this is trading in the 6's.  So what if rates go to 0.  70% of 0 is.... you have to read the prospectus to see what happens...

3) You are ok with income not tied to profitability.

4)  You understand the tax implications of the dividend

 

If you didn't think of these factors, this instrument may not be for you...

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