S&P whacks Brookfield Property

S&P said it lowered its ratings for Brookfield Property Partners LP (BPY) and its subsidiary Brookfield Properties Retail Holding LLC (BPR) to BB from BBB-. The agency also sliced BPY’s unsecured notes to BB- from BB+ and assigned a 5 recovery rating (rounded estimate: 10%) to the notes and BPR’s senior secured notes to B+ from BB+ and assigned a 6 recovery rating (rounded estimate 5%). Finally, S&P cut the preferred shares rating to B from BB.

“Secular headwinds in the office sector have weakened our assessment of BPY's business risk. BPY owns one of the largest real estate portfolios of any rated real estate company, with approximately $130 billion in total assets. Moreover, we view the company's high-quality properties and its diversification across product type and geography favorably,” S&P said in a statement.

The agency said it forecasts the troubles facing the commercial office real estate market to persist over the next several years.

The outlook is negative.

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