Brookfield Property Preferreds: The Trend Is Not Your Friend

Summary

  • Brookfield Property Partners LP preferred shares were downgraded to "Sell" due to high debt levels and a declining FFO.
  • Q2-2023 saw FFO remain negative even though there was marginal improvement in office occupancy levels.
  • Refinancing will be challenging, and mortgage defaults are expected to increase.
  • Don't chase the double digit yields.
  • Looking for option income ideas that focus on capital preservation? I offer this and much more at my exclusive investing ideas service, Conservative Income Portfolio. Learn More »
Brookfield Place, still referred to as the World Financial Center, located in the Battery Park City neighborhood of Manhattan, New York City

MNStudio/iStock Editorial via Getty Images

On our last coverage of Brookfield Property Partners LP publicly traded preferred shares, we gave it an upgrade of sorts to account for the price decline.

Our take is that we are probably looking at an 20X debt to EBITDA

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This article was written by

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Trapping Value is a team of analysts with over 40 years of combined experience generating options income while also focusing on capital preservation. They run the investing group Conservative Income Portfolio in partnership with Preferred Stock Trader. The investing group features two income-generating portfolios and a bond ladder.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

We own some Brookfield Corp preferred shares.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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