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...