Brookfield Property Partners L.P.

The company operates in the real estate industry, focusing on being a leading global owner and operator of high-quality real estate. Its business model revolves around owning, operating, and investing in commercial properties, both directly and through operating entities. The company generates revenue primarily through rental payments from tenants across its diversified portfolio. The business is structured into three core segments: Office, Retail, and LP Investments, with a Corporate segment for overhead. The company's primary investment is a 36% managing general partnership unit interest in Brookfield Property L.P. (the "Operating Partnership") ¹, which grants it control over the Operating Partnership's activities.

The company's competitive position is influenced by factors such as rental rates, property quality, design, location, total number and geographic distribution of properties, management and operational expertise, and the landlord's financial position. The company believes its size, scope, and the quality of its properties enable it to compete effectively for tenants in local markets. In the retail sector, competition also arises from alternative shopping options, including online shopping. The filing does not explicitly name primary competitors or disclose specific market share figures.

The core business model involves generating revenue from commercial property operations, hospitality operations, and investment activities. The revenue mix includes contractual tenant rent payments from commercial properties, which are generally long-term in nature with an average term of approximately six years ². The LP Investments segment, unlike Office and Retail, has a defined hold period and typically generates the majority of profits from realization events, such as asset sales or full investment exits. Capital invested in LP Investments is recycled over time, with proceeds reinvested in future Brookfield-sponsored funds.

The Office portfolio comprises 67 million leasable square feet across 110 office assets ³ in major commercial markets globally, including New York, London, Dubai, Toronto, and Berlin. This portfolio includes 16 "Super Core" office and ancillary mixed-use complexes ⁴ in global gateway cities, intended for long-term holding, as well as "Core Plus" and "Value Add" / "Opportunistic" assets for shorter-term monetization. Consolidated NOI for the Office segment was $860 million ⁵ in 2025, while unconsolidated NOI was $545 million ⁶.

The Retail portfolio consists of 99 million leasable square feet across 96 malls and urban retail properties ⁷ in the United States. This includes 18 "Super Core" retail centers ⁸ in attractive U.S. markets like Honolulu and Las Vegas, which represent the majority of equity attributable to Unitholders in this segment. Similar to Office, it also contains "Core Plus" and "Value Add" / "Opportunistic" retail assets for shorter-term monetization. Consolidated NOI for the Retail segment was $953 million ⁹ in 2025, and unconsolidated NOI was $747 million ¹⁰.

The LP Investments portfolio includes equity invested in Brookfield-sponsored real estate opportunity funds, targeting high-quality assets with operational upside across various real estate sectors such as office, retail, multifamily, logistics, hospitality, life science, student housing, and manufactured housing. The company holds a 31% interest in BSREP I, a 26% interest in BSREP II, a 5% interest in BSREP III, and a 10% interest in BSREP IV ¹¹. It also has a blended 30% interest in two value-add multifamily funds and a blended 33% interest in a series of real estate debt funds ¹². NOI for the LP Investments segment was $1,712 million ¹³ in 2025.

For the fiscal year ended December 31, 2025, the company reported a total revenue of $7,147 million ¹⁴, a net loss of $305 million ¹⁵, and FFO of $(420) million ¹⁶. Commercial property revenue was $4,703 million ¹⁷, and direct commercial property expense was $1,894 million ¹⁸. Hospitality revenue was $1,641 million ¹⁹, with direct hospitality expense of $1,195 million ²⁰. Investment and other revenue stood at $803 million ²¹, and investment and other expense was $160 million ²². Interest expense was $3,530 million ²³, and general and administrative expense was $1,225 million ²⁴. Fair value losses, net, were $173 million ²⁵. The share of net earnings from equity accounted investments was $882 million ²⁶. Total assets were $99,280 million ²⁷, cash and cash equivalents were $1,859 million ²⁸, and total debt obligations were $46,230 million ²⁹. Equity attributable to Unitholders was $23,206 million ³⁰.

Comparing 2025 to 2024, total revenue decreased by $1,964 million ³¹ from $9,111 million ³² to $7,147 million ¹⁴. Commercial property revenue decreased by $1,258 million ³³, and direct commercial property expense decreased by $487 million ³⁴. Hospitality revenue decreased by $716 million ³⁵, and direct hospitality expense decreased by $690 million ³⁶. Interest expense decreased by $1,234 million ³⁷, primarily due to the deconsolidation of BSREP IV and India REIT, which accounted for $1,188 million ³⁸ of the decrease, along with corporate and term debt paydowns. General and administrative expense decreased by $166 million ³⁹. Net loss improved from $1,997 million ⁴⁰ in 2024 to $305 million ¹⁵ in 2025. Fair value losses, net, decreased from $692 million ⁴¹ in 2024 to $173 million ²⁵ in 2025. Share of net earnings from equity accounted investments increased by $551 million ⁴² from $331 million ⁴³ in 2024 to $882 million ²⁶ in 2025.

Significant operational developments during 2025 included the sale of 68 manufactured housing communities in the U.S. for approximately $1,356 million ⁴⁴ and three malls in the U.S. for approximately $162 million ⁴⁵ from the BSREP II fund. The company acquired a portfolio of six housing assets in Sweden and Finland for approximately €158 million ($184 million) ⁴⁶, two logistics portfolios in the U.S. for approximately $326 million ⁴⁷, a hotel in the United Arab Emirates for approximately AED1,032 million ($281 million) ⁴⁸, and a logistics portfolio in Sweden for approximately SEK2,047 million ($216 million) ⁴⁹. A portfolio of hostel assets across Europe was acquired for total consideration of €329 million ($376 million) ⁵⁰. The company sold thirteen hotels in the U.S. for approximately $119 million ⁵¹ and a logistics asset in Spain for approximately €164 million ($188 million) ⁵². An office asset in Australia was sold for approximately A$441 million ($276 million) ⁵³. On March 18, 2025, a partial interest in Brookfield India Real Estate Trust was sold for net proceeds of $102 million ⁵⁴, leading to its deconsolidation.

The company aims to increase cash flows from its office and retail property activities through continued leasing activity, noting that operating below historical office occupancy levels in the United States presents an opportunity for cash flow expansion through higher occupancy. Management believes that its high-quality, well-located buildings will continue to be in high demand, creating opportunities to increase occupancy levels, lease rates, and cash flows. The company's global scale and operating platforms are seen as a competitive advantage, enabling efficient capital allocation to sectors and geographies with the greatest returns. The business model is described as self-funding, not requiring access to capital markets for continued growth, due to the scale of its stabilized portfolio and balance sheet flexibility.

The company plans to actively recycle capital as assets mature, redeploying proceeds into higher-yielding opportunities to support portfolio growth and enhance returns over time. Given the limited new office and retail development over the last decade, there is an opportunity to advance development inventory in the near term in response to demand in major markets. Additionally, the company continues to reposition and redevelop existing retail properties, particularly high-performing shopping centers in the United States.

The company's principal liquidity needs for the current year and beyond include recurring expenses, debt service requirements, distributions to preferred unitholders, mandatory capital expenditures (including tenant improvements), development costs not covered by construction loans, unfunded committed capital to funds, and investing activities such as property acquisitions and future developments. These needs are planned to be met through cash flows from operations, construction loans, creation of new funds, proceeds from asset sales, proceeds from the sale of non-controlling interests in subsidiaries and properties, and credit facilities and refinancing opportunities.

As of December 31, 2025, the aggregate available borrowing capacity under credit facilities was $5,375 million ⁵⁵. The company expects to refinance the majority of debt obligations maturing in 2026 and 2027 or exercise contractual extension options. Specifically, for the $21,092 million ⁵⁶ of debt obligations maturing in 2026 and 2027, $3,578 million ⁵⁷ for Office, nil for Retail, and $5,021 million ⁵⁸ for LP Investments had extension options. Of the $15,391 million ⁵⁹ in 2026 maturities, approximately $9,550 million ⁶⁰ will be addressed through refinancings, repayments, and other measures subsequent to December 31, 2025, with $5,841 million ⁶¹ having extension options in place.

The company has suspended contractual payments on approximately 3% ⁶² of its non-recourse mortgages, excluding debt obligations on assets in receivership, and is engaging in modification or restructuring discussions with creditors. If these negotiations are unsuccessful, properties securing these loans could be transferred to lenders. Certain development assets with construction facilities may require development waivers subject to protracted work stoppages.

The company faces significant risks including those incidental to real estate ownership and operation, such as economic downturns, local market conditions, changes in interest rates, and competition. The use of debt financing, with highly leveraged assets, increases sensitivity to declines in revenues and increases in expenses and interest rates. Foreign currency risk exists due to operations outside the U.S., and while hedging is employed, its effectiveness is not assured. Liquidity requirements are substantial, and adverse market conditions could impact the ability to fund capital commitments, deleverage, and make distributions. Tenant defaults, bankruptcies, or insolvencies, particularly of anchor tenants, could significantly reduce cash flows and create re-leasing difficulties. Trends in the office real estate industry, including shifts to hybrid or remote work, and competition from online shopping in the retail sector, could negatively impact demand, occupancy, and rental rates. The company is exposed to business disruptions, cybersecurity failures, and data security incidents, which could lead to operational interruptions, data compromise, and reputational damage. Joint ventures and partnerships limit sole control over properties and decisions. Environmental liabilities, health and safety risks, and negative publicity from various sources, including employee misconduct or litigation, could adversely affect financial performance and reputation. The rapid evolution of artificial intelligence technology poses risks of market disruption, increased competition, and heightened cybersecurity threats. Political instability, economic uncertainty, and unfamiliar cultural factors in various jurisdictions, including the Korean Peninsula, the United States, United Kingdom, Brazil, European, Middle East, and Asian markets, could negatively impact financial performance. Inflationary pressures may increase operating costs that cannot be offset by rent increases, and central bank actions to combat inflation could lead to recessionary pressures. The company's status as a "foreign private issuer" under U.S. securities laws and an "SEC foreign issuer" under Canadian securities regulations means it is subject to different disclosure obligations and governance rules compared to domestic registrants, potentially resulting in less publicly available information.

Management's message to shareholders emphasizes the company's goal to be a leading global owner and operator of high-quality real estate, leveraging Brookfield Corporation's primary vehicle for real estate investments across all strategies. The overall tone highlights a focus on strategic capital allocation, operational excellence, and long-term value creation. Management believes that the company's global scale and best-in-class operating platforms provide a unique competitive advantage, allowing for efficient capital allocation to sectors and geographies with the greatest returns. A key strategic priority is to actively recycle capital as assets mature and redeploy proceeds into higher-yielding opportunities, which supports portfolio growth and enhances returns over time. Another strategic priority involves advancing development inventory in the near term, particularly in office and retail, in response to demand in major markets, and continuing to reposition and redevelop existing retail properties, especially high-performing shopping centers in the United States. Management explicitly states that the business model is self-funding and does not require access to capital markets to fund continued growth, given the scale of its stabilized portfolio and balance sheet flexibility.