BPO Caps 2013 With Lease-Heavy Q4

NEW YORK CITY-Brookfield Office Properties capped 2013 with a busy fourth quarter of leasing. The office REIT's funds from operations increased year over year, as did its commercial property net operating income.

“Brookfield closed out a successful year with an extremely active fourth quarter—specifically on the leasing front as we signed 3.9 million square feet of leases globally, more than double our five-year quarterly average,” says Dennis Friedrich, BPO's CEO. “The improving economy and tenant sentiment, coupled with the various growth initiatives we undertook in 2013, set the stage for future advancement and profitability for the company.”

Although BPO is Lower Manhattan's largest office landlord on the strength of such properties as the eight-million-square-foot Brookfield Place New York, nearly a third of the company's Q4 leasing volume came from Ottawa. That was mainly at BPO's Place de Ville I & II, where the company executed a short-term extension and obtained approval from the Treasury Board of Canada Secretariat for an average nine-year lease with Public Works and Government Services Canada of 1,036,000 square feet.

In Manhattan, BPO completed 917,000 square feet of leasing deals during Q4, the largest of which was Jones Day's 330,000-square-foot commitment for 20 years at Brookfield Place. During the quarter, BPO also wrote up 466,000 square feet of leases in Houston; 371,000 square feet in Denver; 370,000 square feet in Washington, DC; 299,000 square feet in Calgary; and 268,000 square feet in Los Angeles.

For 2014, BPO is providing FFO guidance in the range of $0.95 to $1.01 per share, with a mid-point of $0.98 per share. In the offing is Brookfield Property Partners' proposed acquisition of BPO; last month, BPO's board recommended accepting BPY's offer of either 1.0 BPY share or $20.34 in cash per BPO share.