Brookfield buys Trizec firms for $4.8 billion
CHICAGO — Brookfield Properties Corp. said Monday it will acquire Trizec Properties and its Canadian arm for $4.8 billion in a commercial property deal creating one of North America’s largest landlords.
Investment firm The Blackstone Group joined Brookfield in the purchase, which is expected to close in the third or fourth quarter. In addition to what is being paid for Trizec shares, Brookfield will assume $4.1 billion in Trizec debt.
The deal highlights just how hot the U.S. office market remains even as residential real estate loses some of its sizzle.
It will nearly double the size of Brookfield, which already included the World Financial Center in Manhattan and other former holdings of Toronto’s Reichmann family, whose Olympia & York real estate empire stumbled after developing the massive Canary Wharf project in London.
The transaction also ends the successful run of Trizec as an independent company, which is controlled by flamboyant Canadian Chairman Peter Munk, who also chairs the world’s leading gold producer in Barrick Gold Corp. After moving its headquarters from Canada to New York because of tax issues, and then Chicago, Trizec grew to become the second-largest office real estate investment trust in the United States behind Equity Office Properties Trust.
Toronto-based Brookfield, part of Canada’s Brascan mining conglomerate, has 67 office buildings totaling 48 million square feet in downtown New York City, Boston and Washington, D.C., as well as cities in Canada. Chicago-based Trizec is nearly as large, with 61 office properties totaling 40 million square feet in seven U.S. markets.
Under the agreement, Brookfield will buy all outstanding shares of Trizec not owned by Trizec Canada for $29.01 per share in cash, an 18 percent premium over the stock’s closing price this past Friday.
Brookfield will acquire all outstanding voting shares and multiple voting shares of Trizec Canada for $30.97 in cash, a 30 percent premium over the closing price of Trizec Canada’s subordinate voting shares price on Friday.