Author Topic: BAM - Brookfield Asset Management  (Read 509170 times)

villainx

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Re: BAM - Brookfield Asset Management
« Reply #210 on: May 13, 2017, 07:14:45 PM »
Quote

In 2003, we sold a 49% equity interest to a client for a further $200 million. At the time, a $900 million total value for the property seemed high, and this allowed us to redeploy the capital elsewhere. Over the years, further leasing success, capital improvements and higher rental rates increased the value of the property further and we increased the mortgage on the property again to $800 million. We received another $150 million of cash from this financing. Finally, in this latest transaction we sold the entire building for $2.2 billion. Net of the $800 million mortgage, we received proceeds of $1.4 billion, which was distributed to us and our client.

In total, we received $1.5 billion of cash from our initial $140 million investment or more than 10 times our initial equity investment. This included refinancing proceeds of $350 million, sale proceeds of $850 million, and $300 million of cash distributions from this property, which are net of tenant inducement and capital expenditures invested back into the property.

Hmm... I wonder what the difference would have been if they never sold that 49% interest.  Was the redeployed money put to better use than just leaving it in the property?


no_free_lunch

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Re: BAM - Brookfield Asset Management
« Reply #211 on: May 13, 2017, 08:06:29 PM »
They would have made 3x their money if they hadn't sold that interest.  However if they had invested the $200M in 2003 into BAM stock they would have made an additional 6-7x their money.  Or to look at the actual number, in 2003 they sold for $200M a $70M initial investment, invested subsequently in bam stock it would have grown to $1.2-1.4B, plus spinoffs and any dividends.  I don't know if that's what they did with the money but using their stock as a proxy seems reasonable.  I think they made a good capital allocation decision there.
« Last Edit: May 13, 2017, 08:10:57 PM by no_free_lunch »

doughishere

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Re: BAM - Brookfield Asset Management
« Reply #212 on: May 14, 2017, 05:58:13 AM »
Yeah it was interesting. Buffett was asked about Retail RE the other weekend. This and I think Third ave was not bullish on the sector but said they were hunting there.

I think even amazon is opening up stores here in chicago. Edit: http://www.chicagotribune.com/business/ct-amazon-bookstore-chicago-opening-0320-biz-20170318-story.html

Edit: There are stores opening up. http://www.businessinsider.com/retailers-opening-new-stores-this-year-2017-5

Third Ave: http://thirdave.com/wp-content/uploads/2017/04/Q1-2017-Real-Estate-March-31-2017-1.pdf
« Last Edit: May 14, 2017, 02:06:54 PM by doughishere »

villainx

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Re: BAM - Brookfield Asset Management
« Reply #213 on: May 15, 2017, 02:33:43 PM »
Anyone actively following or owning Brookfield group of companies, I have a question?  BBU recently closed on water facility in Brazil that - I guess - fits right in to BIP's wheelhouse.  BIP bought a water utility in Peru recently.  Does this seem odd allocation of which company buys the Brazil water management company?

bearprowler6

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Re: BAM - Brookfield Asset Management
« Reply #214 on: May 15, 2017, 04:03:04 PM »
BIP vs BBU----different aspects of water focused businesses.

This recent Motley Fool article may be of interest:

https://www.fool.com/investing/2017/04/05/i-still-cant-believe-brookfield-infrastructure-par.aspx


Bottom line---buy all the Brookfield related entities and keep buying---BAM, BBU, BIP, BEP and BPY.

villainx

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Re: BAM - Brookfield Asset Management
« Reply #215 on: May 15, 2017, 05:04:32 PM »
BIP vs BBU----different aspects of water focused businesses.

Different aspect but the Peru and Brazil water biz both seem much closer to infrastructure than ... I'm not sure what BBU's focus is.

?

bearprowler6

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Re: BAM - Brookfield Asset Management
« Reply #216 on: May 15, 2017, 06:14:28 PM »
BIP vs BBU----different aspects of water focused businesses.

Different aspect but the Peru and Brazil water biz both seem much closer to infrastructure than ... I'm not sure what BBU's focus is.

?

Why doyou presume that BBU has a focus? BBU is the publically traded private equity partnership of the Brookfield Group. Expect a wide variety of quality businesses to make their way into BBU over time without any specific focus which differs from BIP (infrastructure), BEP (renewable energy) and BPY (real estate).

It may be worth asking Brookfield (they have very helpful investor relations teams) why the Brazilian water infrastructure was bought by BBU and not by BIP? Although water infrastructure has not been a main focus of BIP up until now. The BIP web site is very helpful in understanding BIP's infrastructure focus and geographic emphasis.

 

Gregmal

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Re: BAM - Brookfield Asset Management
« Reply #217 on: May 15, 2017, 06:59:36 PM »
Just curious as this seems to be a popular name here; what is the case for this vs a BX or KKR?

Jurgis

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LongTermView

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Re: BAM - Brookfield Asset Management
« Reply #219 on: June 22, 2017, 12:53:04 PM »
Thanks for the link, I enjoyed listening. Not sure what I'll be doing with Trisura.