5/8/2012 | By Carisa Chappell
Brookfield Office Properties (NYSE: BPO) announced new roles and promotions within its executive management team on May 3 in anticipation of the launch of majority owner Brookfield Asset Management's global real estate portfolio.
Current CEO Ric Clark was named chairman of the board of Brookfield Office Properties, relinquishing his title as CEO of the New York-based office REIT. Clark will now become CEO of the new entity, Brookfield Property Partners (BPY).
Dennis Friedrich, the current president and global chief investment officer who's been with the company for more than 10 years, will take Clark's place and become the CEO of Brookfield Office Properties. The changes will become effective on July 1.
Brookfield Asset Management, owner of Brookfield Office Properties, plans to introduce its global portfolio of commercial and other types of real estate as the new public entity, Brookfield Property Partners. That prompted the personnel moves, according to Andrew Willis, senior vice president of communications of Brookfield Asset Management.
"The launch of BPY is part of Brookfield Asset Management's long-held strategy of maximizing its business flexibility by having flagship, global public companies in each major investment sector, supported by flagship private funds," Willis said. "On launch, Brookfield Property Partners will hold a 50 percent stake in Brookfield Office Properties."
Brookfield Office Properties will maintain its focus as an owner and operator of high-quality office properties in high-growth and high-barrier-to-entry markets. Willis said the mandate at Brookfield Property Partners will be much broader.
"The portfolio will consist of high-quality shopping malls, multifamily and industrial assets, along with iconic office properties held through its stake in BPO," explained Willis, adding that Brookfield Office Properties will continue to have the first priority in any office property investment.
The new Brookfield entity is being formed following strong performances from Brookfield Infrastructure Partners, which was spun off in 2008 and has delivered an 18 percent annual return since inception, and Brookfield Renewable Energy Partners, which has earned an annual return of 14 percent since its predecessor was created in 1999, according to Willis.
Willis said investors can expect Brookfield Property Partners to offer income, growth and diversified exposure to commercial property assets, with assets under management of $72 billion. Initially, Brookfield Asset Management shareholders will receive a 10% stake in BPY, while the Brookfield Asset Management will continue to hold a 90% stake.
Tom Farley, Brookfield Office Property's president and global chief operating officer, will become the sole president of Brookfield Office. He will also continue in his role as global chief operating officer, overseeing asset management, leasing and property operating initiatives.
Mark Brown will assume Friedrich's responsibilities as global chief investment officer.