"According to research compiled by UNITE HERE, at least $5.8 billion of Brookfield affiliates' office and retail loans are either in default, have been surrendered to lenders, or are at risk of default according to analysts and industry press.
The financial health of Brookfield's commercial real estate holdings may be of particular interest to current or potential policyholders of American National Insurance Group, the Texas-based insurer acquired by Brookfield in 2022. UNITE HERE's research has uncovered over $1 billion in debt instruments that appear to be related to Brookfield's real estate holdings on American National's 2022 sworn Annual Statement. These include bonds issued by three entities related to Brookfield Property Partners (formerly BPY), which Brookfield took private in 2021 after BPY suffered over $2 billion in losses in 2020; and bonds issued by Canary Wharf Group Investment Holdings, the London office complex jointly owned by Brookfield and Qatar's sovereign wealth fund and which had its bond rating downgraded to junk in June 2023 by Moody's. "
Wondered what your thoughts are as it relates to BN.
American National Insurance Group, the Texas-based insurer acquired by Brookfield in 2022. The majority of these investments are listed on American National's sworn annual statement as "unaffiliated," despite being classified in other filings as affiliated investments. The investments were classified as "unaffiliated" after the Texas Department of Insurance (TDI) approved, with certain conditions, a Disclaimer of Affiliation filed by Brookfield Asset Management (NYSE: BAM
Carl
This issue has been raised before, nearly a year ago, and discussed here. BN, through BAM, manages a lot of money for third parties. Some of these are real estate funds. There have been some defaults, but the exposure to the Brookfield Group has not been significant. On a default of course there are reduced assets and thus lower fees, but the company's direct exposure is not as quoted. Last year the company's fund's specificially let two buildings go into bankruptcy, and advised fund investors of this months before the action, and it was 'partly' a negotiating tactic. Office vacancies have certainly increased, and BN/BAM are not completely immune here, but its direct exposure is not close to the 'headline' numbers. To put in context, BN has $441B in assets. Even if it was exposed to full $5.8B (and it is not) it would be less than 1.5% of its assets.