Brookfield Property Partners L.P. BPY

A Few Random Thoughts.....

[Vette08]

(i) I can say I like the way BPY has traded through this latest bout of market turmoil relative to how it traded through the turmoil last fall when the fear was that rates were heading way up (and now rates are heading way down it seems).  Given BPY's debt levels, lower rates are very meaningful to their cash flow over time.

(ii) BPY's leader of their retail portfolio, Sandeep Mathrani, was on CNBC the other day......this guy talks a very positive story for the BPY retail business but it seems pretty obvious the assets  are not performing as expected (even though the results are not terrible).....this guy has troubled me ever since he has been participating in the BPY quarterly conference calls and his interview on CNBC the other day cemented my view. GGP was a game changing acquisition for BPY and its time for this guy to talk less and just deliver the cash flow.

(iii) I was complaining on this board last year how SPG had been outperforming BPY prior to and during the market turmoil last fall, however, BPY has been outperforming SPG since then and it pays a bigger dividend.  So that is certainly good news.  And the former GGP shareholders who took BPY stock certainly can't complain now.  This should continue as GGP starts to perform better.

Looking forward to seeing what is in store for Investor Day in September.

[Jsboutin]

I thought the retail portfolio was somewhat resilient, do you see any indication to the contrary (when you say it is not performing as expected)? They should be updating investors on the property transformations during the investors' day, which I'm looking forward to, but until then I find it hard to assess the performance from his business unit.

[Vette08]

Hi Jsboutin, I am not sure what you mean by resilient, but to answer your question, the retail FFO has not yet met analyst expectations in every quarter since they closed on GGP but I also get the sense they are facing some unexpected challenges (eg they have been wanting to dispose of more GGP properties to pay down the acquistion debt but such disposals seems to have stopped since last fall

[Vette08]

A quick update to my post in August 2019..... I see Sandeep Mathrani is leaving BPY effective January 31.  The good news is I no longer have to hear this guy tugging at straws on the quarterly conference calls or on silly CNBC interviews........ but on the other hand, it is a clear indication that the GGP assets are not performing as planned when they privatized the company in August 2018..