NEW YORK CITY-Having launched work on its Manhattan West mixed-use development here last month, Brookfield Office Properties on Friday marked the successful close of the previous quarter and year. BPO reported a year-over-year increase in funds from operations for both the fourth quarter of 2012 and the twelve months that ended Dec. 31. The same could be said about BPO’s commercial property NOI for both Q4 and the year as a whole.
“It was another successful year for Brookfield Office Properties, characterized by solid leasing achievements, expansion into new target markets and the advancement of several major development projects,” Dennis Friedrich, CEO of BPO, says in a statement. “We are poised to reap substantial benefits from these initiatives in 2013 and beyond as the economy continues its gradual improvement.”
FFO for Q4 was $170 million, or $0.30 per diluted common share, compared with $151 million or $0.26 per diluted common share during the same period in 2011. For the 12 months that ended Dec. 31, FFO increased to $650 from $640 million the year prior.
Commercial property NOI for Q4 rose to $346 million compared to $305 million the year prior. For the year, the increase was to $1.35 billion from $1.01 billion in ‘11. Net income dipped to $1.29 billion for the year from $1.69 million the year prior, although Q4 net income was up marginally to $342 million from $338 million in the same quarter last year.
Q4 saw 1.6 million square feet of leasing at an average net rent of $33.65 per square foot, a 35% increase over expiring net rents in the period. The portfolio occupancy rate finished the quarter at 92%. Full-year leasing totaled 6.8 million square feet. Among the largest leases during Q4 were a new 16-year deal for 134,000 square feet at 1 Liberty Plaza in Lower Manhattan, a five-year lease renewal with Cooley LLP for 106,000 at 1114 Ave. of the Americas and a three-year renewal with Hilcorp for 146,000 square feet at 1201 Louisiana St. in Houston.
For full-year 2013, BPO is offering FFO guidance in the range of $1.16 to $1.20 per share, with a mid-point of $670 million or $1.18 per share. The company says the primary assumptions for the mid-point of this guidance range include a 3% income in same-store commercial NOI; a decrease in portfolio occupancy to 91% by year’s end, a projection driven in part by the expiration of Bank of America’s inherited Merrill Lynch space at Brookfield Place, formerly the World Financial Center; and an exchange rate that assumes a stronger British pound and stronger Canadian and Australian dollars.