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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): November 5, 2020

 

 

 

Brookfield Property REIT Inc.

(Exact name of registrant as specified in its charter)

  

Delaware   001-34948   27-2963337
(State or other jurisdiction of incorporation)   (Commission File Number)   (IRS Employer Identification No.)

  

250 Vesey Street, 15th Floor, New York, NY   10281
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (212) 417-7000

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

  

Title of each class   Trading Symbol(s)   Name of each exchange on which
Registered
Class A Stock, par value $0.1 per share   BPYU   Nasdaq Global Select Market
6.375% Series A Cumulative Perpetual Redeemable Preferred Stock, par value $0.01 per share   BPYUP   Nasdaq Global Select Market

 

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act or Rule 12b-2 of the Exchange Act.

 

Emerging growth company  ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

  

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On November 6, 2020 Brookfield Property REIT Inc. (the “Company”) disclosed the following financial information:

 

The following is the Company’s balance sheet as at September 30, 2020 and December 31, 2019.

 

Brookfield Property REIT Inc.

 

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

    September 30, 2020     December 31, 2019  
    (Dollars in thousands, except share and per share amounts)  
Assets:                
Investment in real estate:                
Land   $ 3,719,749     $ 3,659,595  
Buildings and equipment     14,225,715       14,020,589  
Less accumulated depreciation     (2,917,298 )     (2,569,911 )
Construction in progress     235,186       160,443  
Net property and equipment     15,263,352       15,270,716  
Investment in and loans to/from Unconsolidated Real Estate Affiliates     4,461,997       4,634,292  
Net investment in real estate     19,725,349       19,905,008  
Cash and cash equivalents     173,341       197,829  
Accounts receivable, net     563,612       234,928  
Notes receivable, net     44,572       76,310  
Deferred expenses, net     166,956       188,591  
Prepaid expenses and other assets     757,832       745,060  
Deferred tax assets, net     620,058       625,660  
Total assets   $ 22,051,720     $ 21,973,386  
Liabilities:                
Mortgages, notes and loans payable   $ 16,330,129     $ 15,902,894  
Investment in Unconsolidated Real Estate Affiliates     131,201       125,565  
Accounts payable and accrued expenses     1,025,044       1,027,130  
Dividend payable     454       21  
Junior subordinated notes     206,200       206,200  
Total liabilities     17,693,028       17,261,810  
Redeemable equity interests     890,464       1,354,234  
Redeemable noncontrolling interests     61,670       62,235  
Total redeemable interests     952,134       1,416,469  
Equity:                
Total stockholders' equity     1,969,268       1,762,367  
Noncontrolling interests     1,437,290       1,532,740  
Total equity     3,406,558       3,295,107  
Total liabilities, redeemable interests and equity   $ 22,051,720     $ 21,973,386  

 

 

 

 

The following is the Company’s income statement for the three and nine months ended September 30, 2020 and September 30, 2019.

 

Brookfield Property REIT Inc.

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

    Three Months Ended September 30, 2020     Nine Months Ended September 30, 2020  
    2020     2019     2020     2019  
    (Dollars in thousands, except per share amounts)  
Revenues:                                
Rental revenues, net   $ 326,707     $ 317,469     $ 1,019,609     $ 954,728  
Management fees and other corporate revenues     28,923       44,206       90,826       123,444  
Other     11,353       13,450       34,643       34,368  
Total revenues     366,983       375,125       1,145,078       1,112,540  
Operating Expenses:                                
Real estate taxes     51,054       43,726       147,517       126,955  
Property maintenance costs     6,640       6,297       22,200       22,693  
Marketing     1,197       965       3,602       2,790  
Other property operating costs     51,471       45,271       138,554       129,768  
Property management and other costs     62,836       59,042       181,335       174,339  
General and administrative     5,753       4,929       15,645       15,661  
Costs related to the BPY Transaction     —       —       —       9,179  
Provision for impairment     —       38,794       71,455       223,142  
Depreciation and amortization     165,200       120,249       485,442       357,429  
Total operating expenses     344,151       319,273       1,065,750       1,061,956  
Interest and dividend income     1,969       12,138       5,828       23,451  
Interest expense     (164,443 )     (180,755 )     (507,209 )     (494,306 )
Gain (loss) on extinguishment of debt     —       (27,542 )     14,320       (27,542 )
Gain (loss) from changes in control of investment properties and other, net     —       39,712       (15,433 )     39,712  
Loss before income taxes, equity in income (loss) of Unconsolidated Real Estate Affiliates and related gain on investment, and allocation to noncontrolling interests     (139,642 )     (100,595 )     (423,166 )     (408,101 )
Benefit from (provision for) income taxes     (5,808 )     14,021       (4,596 )     6,068  
Equity in income (loss) of Unconsolidated Real Estate Affiliates     (44,155 )     16,145       (105,424 )     434  
Unconsolidated Real Estate Affiliates - (loss) gain on investment, net     (645 )     33,640       10,882       137,994  
Net loss     (190,250 )     (36,789 )     (522,304 )     (263,605 )
Allocation to noncontrolling interests     19,630       3,366       60,807       34,617  
Net loss attributable to Brookfield Property REIT Inc.   $ (170,620 )   $ (33,423 )   $ (461,497 )   $ (228,988 )

 

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

On November 5, 2020, the Board of Directors of the Company (the “Board”) appointed Michael J. Warren to the Board. Mr. Warren is Global Managing Director of Albright Stonebridge Group, a premier strategic advisory firm advising senior executives on their mission-critical business priorities across the globe. He serves on the boards of Commonfund, Walker and Dunlop, MAXIMUS, is a trustee of the Yale University Corporation and the Yale Endowment Investment Committee.

 

Concurrent with Mr. Warren’s appointment, Scott Cutler resigned as a director of the Company. Mr. Cutler will be joining the board of affiliate company Brookfield Renewable Partners (NYSE, TSX: BEP).

 

Effective as of November 5, 2020, Mr. Warren will become eligible to receive the standard compensation provided by the Company to its other independent directors.

 

Consistent with the Joint Governance Agreement, dated as of August 28, 2018, among the Company, Brookfield Property Partners L.P., Brookfield Property Partners Limited (the “BPY General Partner”) and BP US REIT LLC, Mr. Warren will also serve as a member of the board of directors of the BPY General Partner.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  BROOKFIELD PROPERTY REIT INC.
   
November 6, 2020 By: /s/ Michelle Campbell
  Name: Michelle Campbell
  Title: Secretary

 

 

 

 

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