Brookfield Delays Payments While Asking Tenants To Pay Up

Asset manager Brookfield, which owns stakes in numerous malls, is demanding retailers pay back rent even as the Toronto-based investment group has missed mortgage payments, the Financial Times reported Sunday (June 21).

Merchants who lease kiosks and small stores inside Brookfield malls have been told to pay rent for April and May, a time when they were forced to close, sources familiar with the discussions told the paper.

The tenants, who requested anonymity, said they have asked for until next year to come up with the payments. In response, Brookfield has asked them to provide extensive financial information, including personal tax returns for 2019 and 2020, the merchants told the Times.

A half dozen tenants wrote a letter to management at one of the Canadian group’s shopping centers seeking help, the report said.

“I will not address the merits of your ‘petition,’ ” a Brookfield lawyer responded.

The attorney added that confidentiality clauses in leases “could be deemed a default of your agreement with Brookfield.”

In a request for comment, Brookfield said 75 percent of its tenants have requested changes to their leases. The company said it had talked with all of them and they are prioritizing small businesses given their scale and immediate cash flow requirements.

“We are now focused on national tenants,” Brookfield told the Financial Times. “We have also been in active dialogue with our lenders given the subsequent impact this situation has had on our cash flow.”

Brookfield has asked lenders, who are owed payments on a dozen of its malls, to suspend them, according to sources the report said.

Last month, Brookfield Properties’ chief financial officer Bryan Davis told investors  “we have been in front of all of our lenders and just requested 12-month extensions.”

In response to a question from The Real Deal last week about retail rents, Brian Kingston, Brookfield Property Partners CEO acknowledged there are challenges with rent collections for April and May.

“But we’ve reopened close to 100 of our shopping centers already,” he said. “As those centers get back to operating, we expect those collections to recover.”

Last month, Brookfield planned to spend $5 billion to help get the industry back on track after the coronavirus pandemic.

The funds, managed by Ron Bloom, managing partner and vice chairman of Brookfield’s private equity arm, said the focus would be on helping small businesses get back on their feet.

“We believe this is a critical component to getting the economy moving again, and we would like to partner with companies and entrepreneurs that can draw on our capital and expertise to stabilize and grow their business,” Bloom said.