Current Report Filing (8-k)

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.