Brookfield Office Properties Inc T.BPO.PR.A

Brian Kingston, CEO of BPY

[Carena]

Good morning,

Just reviewing the insider transaction reports this morning and thought I would summarize what the CEO of BPY, Brian Kingston, has been focused on this year and in a very organized manner, I should say.  All the while we loyal BPY/BPO preferred shareholders have faced massive declines in value.

June 16, 2023, Sold 300,000 BN shares @ USD$33.45, proceeds of USD$10 million
Sept 15, 2023, Sold 500,000 BN shares @USD$36.10, proceeds of USD$18 million
Dec 15, 2023, Sold 233,950 BN shares @USD$39.15, proceeds of USD$9 million

Total proceeds into his bank account of USD$37 million!

My summary comments:

(i) USD$37 million is C$50 million and with this he could have purchased 70% of the entire issue my favourite BPO preferred share N series and earn 13% ROI forever.   And he has purchased not 1 share of the N series or any of the BPO series or BPY series for that matter.  Absolute disgrace.

(ii) It is a terrible compensation practice to reward an executive at the BN level with BN stock options/shares as the analyst community assigns a value of zero to BPY in their respective BN share price targets.  Zero!  It would be totally fine if he was selling his BPO shares or BPY preferred shares at 50% losses or more.  

(iii) He seems to be on a plan to dispose of shares on the 15th of the last month every quarter, in a very organized manner.  How ridiculous.  

(iv) The BN Investor Day was Sept 12 and here he was selling loads of BN shares just 3 days after he presented on BPY and I guess he forgot to mention about the upcoming downgrade to Junk of BPY.  

(v) Where is he or anybody needing USD$37 million in his/her life?  Especially as "his" company is in distress?

I can only assume he is on the way out the door.  

Have a great day,
Carena

[pierrelebel]

Good morning. "Total proceeds into his bank account of USD$37 million!" Is it possible that he used the proceeds of his BN sales to purchases BAM shares (he currently owns $63 million dollars worth of BAM)?

[Carena]

Good morning Pierre, He has not purchased any BAM shares.  In fact he has sold 280,000 shares for proceeds of USD$10 million this year.  So add another USD$10 million to the pile. Also be sure, when he sells shares, it is not like he bought the shares personally.  It is from the exercise of stock options as part of compensation. I have nothing against these executives getting

[pierrelebel]

Hi Carena.  You wrote "... he could have purchased 70% of the entire issue my favourite BPO preferred share N series and earn 13% ROI forever. " Frankly, I do not expect large shareholders (insiders) to buy preferred shares in companies in which I have interest.  These guys go for growth, not income. More so for a young man like Brian who is only 49. Also, it is important to

[Carena]

Hi again Pierre, I was not suggesting he allocate all his capital to the N series or whatever.  I was trying to make the connection of the magnitude of the capital that he has monetized just this year relative to the value of an entire series of preferred shares that were issued under his watch.   I am merely suggesting it would be entirely appropriate he allocate a meaningful

[rodbhar]

Maybe most of us would be better off if BPO prefs stayed cheap. I just reinvested my Q4 dividends in more shares. Imagine being able to do that for years at these prices?

[Carena]

Hi Rodbhar, I do not disagree with you at all. My griping here about Kingston selling stock is that I added significant capital to positions all year long taking the positivity from Flatt and Kingston on the state of BPY. And then they did not go to war against the S&P on the rating and now we own preferred shares that are "junk".  They threw in the towel on the small

[rodbhar]

Carena, I understand your frustration. To maintain confidence, I think the one number most worth following is the growth in NOI of the Core portfolio (BN's Core as shown in the Supplemental). How the Core does determines the safety of the prefs and NOI is the most important fundamental measure of how those properties are preforming. In 2023 the same-property growth of NOI of the Core was high

[Carena]

Good morning Rod, You are a voice of reason and logical.  I think what you are really saying is that Bruce Flatt's "Tale of Two Cities" narrative needs to stay intact or the safety of our BPO prefs are in danger.  I agree 100%.  You seem very comfortable relying on the BN supplemental.  I am less so until the BPY financials make much more sense to me.  I