No. of Recommendations: 6
Bloomberg is reporting that Brookfield fired Cushman & Wakefield from handling its U.S. office and logistics listings as punishment for Cushman's decision not to move some of its own offices into a Brookfield tower. Bloomberg describes it as "a big hit for the brokerage firm" that worked on many Brookfield properties:
Brookfield is one of the world's biggest owners of commercial real estate, making it a key client for any brokerage. Cushman had been responsible for leasing office space at major Brookfield properties including New York's Manhattan West development and 660 Fifth Ave.
The move comes after Cushman backed away from a deal to shift some of its offices to Brookfield's redeveloped 660 Fifth Ave. from a spot at 1290 Avenue of the Americas, according to people familiar with the matter who asked not to be identified citing private information.
Cushman has been on a cost-cutting spree amid declines in commercial-property dealmaking over the past year. High borrowing costs and uncertainty around remote-work trends have resulted in fewer transactions in the industry. Cushman's revenue fell 9% in the third quarter from a year ago.
'We're proud of the work and long-standing value our brokerage advisory professionals helped to build into' Brookfield's portfolio, Mike Boonshoft, a Cushman spokesman, said in an emailed statement. 'While completely surprised by this reaction, we consider disciplined management in the best interest of our firm, employees and shareholders.'https://www.bloomberg.com/news/articles/2023-11-02...Brookfield spent $400 million renovating the office tower at 660 Fifth Ave. after bailing out Jared Kushner, who bought it at the top of the market, was underwater and faced a balloon payment in 2018 he couldn't make. There were allegations in the press that it was actually the government of Qatar, a major investor in Brookfield's real estate portfolio, bailing out Kushner in exchange for geopolitical considerations from the U.S. federal administration of which Kushner was a part.
What's interesting about this is the signal it sends about Brookfield's challenges leasing the refurbished building. If demand were great and rental rates rising, which is Brookfield's claim with respect to its New York trophy properties, a prospective tenant pulling out would not be expected to trigger such a spiteful reaction.
Bloomberg said Brookfield had no comment on the report.
